“Last year, Texas overtook California in large-scale solar power capacity. When huge amounts of solar power rush onto the grid, batteries tend to follow. Now, Texas is building more grid batteries than California, the longtime undisputed leader in clean energy storage.”
While I don’t think the way Texas has the regulations setup is a good idea, one has to look more at the ‘whole picture’ and do the math. Is the low cost periods low enough that when you get ‘gouged’ by the spikes, what was the total average cost? If the spikes are taken as a average over time, then maybe it works out in the consumer’s favor or at worst break even, then it might be worth it. Or maybe it doesn’t But I honestly don’t know. I don’t have the numbers in front of me to do the math, I’m a 1000+ miles away from Texas.
Edit to add: I don’t know just how much extra electricity Texas will need to buy, but I would assume they will be buying a noticeable amount. And the cost of electricity is VERY expensive in the spot market. It’s why my co-op is doing major upgrades to the hydro-electric dam. To increase the efficiency and reduce the need to buy expensive spot market power.
And without a good way to store the excess power generated, solar and wind aren’t very good for peak loads. You can’t merely flip a switch and spool up more power than a solar panel or wind generator can produce. Clouds reduce efficiency, insufficient or too much winds shut down wind generators. And despite having more alternative generation than everyone’s hero - California, it still not enough to carry the whole load. Consumers are raising demand far faster than enough infrastructure can be built out to supply that demand. So for peak loads, natural gas generators are used because they can be turned on and off quickly as needed. This adds excess cost.
The installation of storage batteries farms is fantastic. But it will take time and it will add cost to consumers electric bill.
And despite some tankie’s beliefs, nothing is free - it all costs something. I’m a member of a tiny rural electric co-op. The co-op needs to make a profit to afford maintenance and upgrades to our tiny grid. Our power is generated by a hydro-electric dam and my rates have gone up this year to to cover the costs of some major maintenance on the dam and the addition of 3 new linemen to keep the electricity flowing to my heat pump that the co-op incentivizes and highly encourages.
Its wholesale prices, it’s what they do. Same in Europe same in Australia.
Texas looks fairly middle of the pack with decreasing prices. Compare it to another state with high levels of renewable and California is second highest after some islands and has increasing prices.
So, this is definitely good from an infrastructure perspective. But because the infrastructure is all privately owned and operated in pursuit of profit, the cost problem isn’t solved by the new capital.
Much like with all the new natural gas electric plants, these battery centers simply exist to exploit the short periods of time in which Texas electricity prices jump from $25 Mwh to $3000 Mwh. As the cartels sink their claws deeper into the retail market, the possibility of enormous price spikes increase, with base loads falling and surge pricing becoming much more common.
It’s not a cartel risk. It’s a supply and demand equation.
Cartels love industries with inelastic demand.
It’s just market prices.
Markets aren’t magic. Prices are a consequence of human decisions. And if you can withhold electricity from the grid to maximize returns (by forming a cartel with other producers) you can drive those prices up when people can least afford to reduce consumption.
Isn’t it tonnes of different people, farmers and such.
Farmers and such are not selling power on the Texas wholesale electric grid, no.
Reducing supply is just going to mean to make less money.
Because fossil fuel supplies are limited, you can often make more money selling a small amount onto the market at a high price than a large amount onto the market at a low price.
So weird that other states are able to avoid such ridiculous price swings and are able to mitigate most of the downtime caused by extreme weather disruptions than Texas is unable to handle.
why? what mechanism forces them to lower prices? the same that keep corporate profits at record highs year after year? we recently saw just how silly the idea of competition making anything cheaper is when every, even tho, there was no reason for doing so, started upping the prices of groceries, because they could.
But this website has the lowest economic literacy I have ever seen. It’s really dangerous that people might think the majority know what they are talking about.
This does bring up kind of an interesting question for me at least.
I would expect that a significant contributor to the surge prices is from HVAC units and similar needing to work harder/etc. My brain also feels like solar panels are likely to work better when it’s warmer, but I realize that I don’t have any proof of that or know how that would work beyond ‘when hot, feels like more sun rays, more sun rays good for solar?’.
On to the question, do solar panels work better in warmer temperatures and does output of solar panels scale anywhere close to comparatively with ambient temperature and/or need for HVAC and similar systems?
I would expect that a significant contributor to the surge prices is from HVAC units and similar needing to work harder/etc.
That’s one end of the equation. But the other end is in how we’re replacing coal plants with natural gas plants.
Coal plants are significantly slower to respond to market demand (on the scale of hours to increase/decrease supply), so they need to be run at a higher output on a longer time frame as electricity demands rise. Because ERCOT auctions electricity demand in 15 minute intervals, coal plants can’t meet a short spike in demand before its come and gone. Natural gas plants don’t have this problem. They can sit on their reserve fuel until the prices peak and then flood the grid with electricity on short notice.
As coal plant profitability sinks relative to gas plant cartels, the volume of electricity we produce becomes more and more easy to rig within the ERCOT auction markets. HVACs going into overdrive in the evening (typically between 3-7pm) signal a potential spike in demand. But gas plant operators get to wait until the electricity auction realizes those high prices, rather than producing electricity in advance and hoping you get to ride a wave through sunset.
do solar panels work better in warmer temperatures and does output of solar panels scale anywhere close to comparatively with ambient temperature and/or need for HVAC and similar systems?
A lot of the heat in cities like Houston comes from the humidity combined with the sun, so a bit of breeze can drastically impact the gross demand for electricity. Meanwhile, electric components of all sorts (photovoltaics included) perform worse in the heat. Breeze can also impact electricity available from wind turbines, which further shift prices.
Batteries can help renewable energy companies hedge against peak production relative to peak consumption. But, again, a private market maker still wants to chase the highest returns. So putting a bunch of quick-to-discharge batteries on a grid alongside quick-to-ramp-up natural gas turbines means… more cartel price fixing.
“Last year, Texas overtook California in large-scale solar power capacity. When huge amounts of solar power rush onto the grid, batteries tend to follow. Now, Texas is building more grid batteries than California, the longtime undisputed leader in clean energy storage.”
https://www.canarymedia.com/articles/energy-storage/texas-will-add-more-grid-batteries-than-any-other-state-in-2024
You didn’t answer their question though. You gave an example of how power companies are doing, not how texans are doing.
Also, if Texas is having record solar installations, why is power so expensive?
While I don’t think the way Texas has the regulations setup is a good idea, one has to look more at the ‘whole picture’ and do the math. Is the low cost periods low enough that when you get ‘gouged’ by the spikes, what was the total average cost? If the spikes are taken as a average over time, then maybe it works out in the consumer’s favor or at worst break even, then it might be worth it. Or maybe it doesn’t But I honestly don’t know. I don’t have the numbers in front of me to do the math, I’m a 1000+ miles away from Texas.
Edit to add: I don’t know just how much extra electricity Texas will need to buy, but I would assume they will be buying a noticeable amount. And the cost of electricity is VERY expensive in the spot market. It’s why my co-op is doing major upgrades to the hydro-electric dam. To increase the efficiency and reduce the need to buy expensive spot market power.
And without a good way to store the excess power generated, solar and wind aren’t very good for peak loads. You can’t merely flip a switch and spool up more power than a solar panel or wind generator can produce. Clouds reduce efficiency, insufficient or too much winds shut down wind generators. And despite having more alternative generation than everyone’s hero - California, it still not enough to carry the whole load. Consumers are raising demand far faster than enough infrastructure can be built out to supply that demand. So for peak loads, natural gas generators are used because they can be turned on and off quickly as needed. This adds excess cost.
The installation of storage batteries farms is fantastic. But it will take time and it will add cost to consumers electric bill.
And despite some tankie’s beliefs, nothing is free - it all costs something. I’m a member of a tiny rural electric co-op. The co-op needs to make a profit to afford maintenance and upgrades to our tiny grid. Our power is generated by a hydro-electric dam and my rates have gone up this year to to cover the costs of some major maintenance on the dam and the addition of 3 new linemen to keep the electricity flowing to my heat pump that the co-op incentivizes and highly encourages.
@puppy @Wanderer Greed?
Its wholesale prices, it’s what they do. Same in Europe same in Australia.
Texas looks fairly middle of the pack with decreasing prices. Compare it to another state with high levels of renewable and California is second highest after some islands and has increasing prices.
https://www.cnet.com/home/energy-and-utilities/electricity-rates-by-state/
So, this is definitely good from an infrastructure perspective. But because the infrastructure is all privately owned and operated in pursuit of profit, the cost problem isn’t solved by the new capital.
Much like with all the new natural gas electric plants, these battery centers simply exist to exploit the short periods of time in which Texas electricity prices jump from $25 Mwh to $3000 Mwh. As the cartels sink their claws deeper into the retail market, the possibility of enormous price spikes increase, with base loads falling and surge pricing becoming much more common.
It’s not a cartel risk. It’s a supply and demand equation. More supply means lower prices.
It’s just market prices.
Cartels love industries with inelastic demand.
Markets aren’t magic. Prices are a consequence of human decisions. And if you can withhold electricity from the grid to maximize returns (by forming a cartel with other producers) you can drive those prices up when people can least afford to reduce consumption.
Isn’t it tonnes of different people, farmers and such. Too many for a cartel to form. Reducing supply is just going to mean to make less money.
Batteries are making the grid a lot more elastic.
Farmers and such are not selling power on the Texas wholesale electric grid, no.
Because fossil fuel supplies are limited, you can often make more money selling a small amount onto the market at a high price than a large amount onto the market at a low price.
Some people ideas of capitalism are so warped.
If there is an energy cartel report them.
I’ll notify Ken Paxton right away. I’m sure he’ll get right on it.
Well done. Don’t forgot to attach your evidence.
So weird that other states are able to avoid such ridiculous price swings and are able to mitigate most of the downtime caused by extreme weather disruptions than Texas is unable to handle.
And yet prices still surged 1600%
The higher the percentage, the greater the incentive.
why would you think that any of this effects prices?
It should reduce the costs, but Texas is so fucked…
why? what mechanism forces them to lower prices? the same that keep corporate profits at record highs year after year? we recently saw just how silly the idea of competition making anything cheaper is when every, even tho, there was no reason for doing so, started upping the prices of groceries, because they could.
You are free… to pay as much as you possibly can for electricity.
what kind of woke liberal socialism is this?
don’t they know those solar power panels will use up all the sun! What will happen when we run out of sun?! /s
Probably the same thing that will happen to all the athletes once they run out of their finite lifetime supply of energy :(
Its just free market capitalism.
They also have more than double the wind power of any other state.
Thats not capitalism. Capitalism doesnt involve that evil demonrat satan technology like wind and solar! /s
Just because people in Texas are wrong about what capitalism is doesn’t mean people on this website can’t also be wrong, quite often even more so.
You must be a blast at parties.
Only when it’s really well organised fun.
But this website has the lowest economic literacy I have ever seen. It’s really dangerous that people might think the majority know what they are talking about.
This does bring up kind of an interesting question for me at least.
I would expect that a significant contributor to the surge prices is from HVAC units and similar needing to work harder/etc. My brain also feels like solar panels are likely to work better when it’s warmer, but I realize that I don’t have any proof of that or know how that would work beyond ‘when hot, feels like more sun rays, more sun rays good for solar?’.
On to the question, do solar panels work better in warmer temperatures and does output of solar panels scale anywhere close to comparatively with ambient temperature and/or need for HVAC and similar systems?
That’s one end of the equation. But the other end is in how we’re replacing coal plants with natural gas plants.
Coal plants are significantly slower to respond to market demand (on the scale of hours to increase/decrease supply), so they need to be run at a higher output on a longer time frame as electricity demands rise. Because ERCOT auctions electricity demand in 15 minute intervals, coal plants can’t meet a short spike in demand before its come and gone. Natural gas plants don’t have this problem. They can sit on their reserve fuel until the prices peak and then flood the grid with electricity on short notice.
As coal plant profitability sinks relative to gas plant cartels, the volume of electricity we produce becomes more and more easy to rig within the ERCOT auction markets. HVACs going into overdrive in the evening (typically between 3-7pm) signal a potential spike in demand. But gas plant operators get to wait until the electricity auction realizes those high prices, rather than producing electricity in advance and hoping you get to ride a wave through sunset.
A lot of the heat in cities like Houston comes from the humidity combined with the sun, so a bit of breeze can drastically impact the gross demand for electricity. Meanwhile, electric components of all sorts (photovoltaics included) perform worse in the heat. Breeze can also impact electricity available from wind turbines, which further shift prices.
Batteries can help renewable energy companies hedge against peak production relative to peak consumption. But, again, a private market maker still wants to chase the highest returns. So putting a bunch of quick-to-discharge batteries on a grid alongside quick-to-ramp-up natural gas turbines means… more cartel price fixing.
Solar works worse in higher temps
Is this all solar or just PVCs?
Seems good for industry and bad for the actual populous, considering things like this can still happen lol.