[manicdee]

Executive Summary (drastically oversimplified):

In a wholesale electricity market we have a market operator who estimates the demand for the near term future and opens the market up to bids for supply.

Suppliers bid a certain capacity for each period, with the operator typically accepting firm supply offers, contingency supply offers, and ancillary service offers in advance. Since some suppliers are “baseload” (ie: unable to adjust output to suit the current level of demand) they will typically bid low to always be paid for their supply. Everyone else will be affected by these bids because the “baseload” operators are typically not only inflexible but also have huge capacity.

In periods where total demand is low relative to total supply capacity, the wholesale bids will drop to low prices. For the baseload suppliers, they would prefer to pay for someone to use their excess power rather than damage their equipment by either turning it off or reducing output below certain minimums. A baseload supplier might, for example, be facing a maintenance cost of a million dollars versus paying the market a hundred thousand to create extra demand for surplus energy. So rather than turn off equipment they will bid negative prices on the wholesale market.

A second cause of negative wholesale prices is established players with large war chests waging economic war against new entrants. They know solar farms have razor thin margins, so it is worth spending a few tens of million dollars to drive the solar farm bankrupt. Enough negative pricing periods during peak solar capacity means the solar farm is not making any money. If the baseload operator knows roughly the breakeven point for the solar farm, they will know how much they have to spend in order to shut the solar farm out of the market and bankrupt them. There are no rules against this kind of activity in the Australian energy market.

[JMTQp8lwXL]

Why do they have to pay someone to take the electricity? I could take a dollar bill and rip it in half (perhaps not legally, but besides the point). I understand there's costs to shutting down a system. So, they might keep it running.

But what I don't get: the electricity producer has to pay someone to take the excess electricity off their hands? The producer can't route the excess to, well... nowhere?

[donw]

I'm going to hazard a guess.

If we assume the numbers for a sort of medium-size nuclear plant, we've got a total power generation of 500MW.

Dumping that kind of power is... hard.

If I haven't missed an order of magnitude, that's enough to boil an Olympic-sized swimming pool in about 25 minutes (500MW to boil 2.5ML of water, assuming STP).

So you'd either need to build and maintain the infrastructure to burn that kind of energy when it isn't needed (not cheap) or just sell the power at a loss (likely cheaper).

[peteretep]

> that's enough to boil an Olympic-sized swimming pool in about 25 minutes

This is in a country that — as I understand it — could definitely do with more desalinated water. How capital intensive can putting a huge kettle element in the sea with something to catch the vapour be?

[flukus]

More desalinated water would be handy, but typically it's not needed anywhere near the salt water and where it is needed more electricity isn't.

[mcv]

So use the energy to pump the water to where it is needed. Use it to generate hydrogen or methane or something to sell as fuel. Mine bitcoin even. It seems weird and wasteful to just shut off free energy.

[Scarblac]

Those are really capital intensive solutions to a problem that occurs only now and then and might stop entirely if the situation changes a bit. In the meantime, to give people a reason to implement them, there is this market mechanism.

[qtplatypus]

One of the projects is to build an interconnect to the snowy mountains. When this happens the power can be used to pump water up hill to fill the hydro electric dams.

[donw]

But can't those plants just pull from the (now cheaper) power on the grid?

[hanniabu]

> Dumping that kind of power is... hard.

Why not route it to a nearby neighborhood? It's free it doesn't matter if a lot is lost in transmission and you don't need to pay somebody to take it.

[teraflop]

Because that nearby neighborhood already has enough power being generated to meet its demand. You can't just send the power somewhere without either increasing demand or reducing other suppliers.

[hanniabu]

> reducing other suppliers

This would be the case, what's wrong with this? It's better than paying people to take your electricity and isn't this how business works? I don't see why they shouldn't be able to increase supply (And hence reduce other suppliers) just because it would ruin the profit margins of others. Unless there's something I'm missing here or not following correctly.

[Scarblac]

What, how? Increase the voltage and damage people's electronics?

[viraptor]

Not at that levels of output. With large enough machines it's "we're going to spend X to spin everything down, do maintenance checks, spin back up" vs "we're going to pay you X/2 so you take the output and we can keep going". The X may be spent on extra workers, on extra maintenance, on replacement for posts that wear out faster, etc. It's the cost of unusual operation.

And once you're generating there's no great way to just "disconnect" in many cases. If you disconnect the load, the charge still has to go somewhere. Preferably not into nearby equipment. Even the safety switches are non-trivial when dealing with high power - if you break a cable connection, the electric arc will still keep them connected.

[Udik]

This makes me wonder how do you stop generating with a solar farm that is made of PV panels. They're entirely passive, right? The light hits them and they output electricity. How do you stop them?

I guess the process is somehow invertible, and once reached a certain static charge each panel stops absorbing energy?

In which case you're sort of already dumping the (non)produced energy in the environment- as heat, on each single panel?

[imtringued]

Photons excite electrons. If a photon doesn't have enough energy it will be reflected.

[beachy]

It's electricity. Break the circuit and it stops flowing.

[Udik]

When I stop a turbine I'm not simply breaking the circuit- I stop converting some fuel into energy, and keep it for later. If I break the circuit on a solar panel, the "fuel" keeps hitting the panel anyway. I guess the panel just reaches a different thermal equilibrium. Which is the same as dumping the energy in the ground, only more distributed.

[beachy]

According to this https://physics.stackexchange.com/a/71445:

> Electric power is the product of voltage and current. If there is no external circuit, there can be no current and thus no electric power can be delivered by the panel, i.e., the "electricity" is never developed and thus, there is no need to consider "where it goes".

There's also an interesting discussion in the linked post in more depth about electron hole-pairs.

My takeaway is that the temperature in the panel will not rise due to it absorbing any power that would otherwise go down the wires were the circuit complete.

[gumby]

Some baseload devices can’t really be realistically switched off. Some of these turbines run for decades.

[james_s_tayler]

If I remember correctly there are rules that the estimated demand and actual generation have to match pretty closely and the overage can only be within a few percent tolerance. You're not allowed to just generate electricity that there isn't demand for.

[taneq]

1. Energy can neither be created nor destroyed.

In practical terms the energy has to go somewhere. Maybe they could build massive dump resistors to burn off the energy that way but doing so would only increase load on everything (shortening component lives) for no gain.

[iguy]

Those giant cooling towers that are most people's image of a power station are almost exactly this. They are a giant system for dumping heat into the air, usually (but not always) by evaporating water.

(The heat being dumped is usually low-temperature waste heat, not final output.)

[taneq]

Those giant cooling towers are pretty expensive and the water to run them can cause significant damage to the local ecosystem if it raises the temperature of whatever water body they draw from. It's a lot easier to just turn off the energy sources (such as solar) that can be turned off without ill effect.

[iguy]

Sure they are expensive. That's why the coal plants are willing to bid a negative price for their power, to have someone else deal with it. Rather than paying to build another tower.

The negative bids aren't coming from suppliers who can easily turn off, they have already turned off at this point.

And, cooling towers don't work by pumping hot water back into a lake. No need for a tower for that. They work by evaporating it, which lets you dump both the heat up to 100C, plus the latent heat of liquid -> gas.

[Scarblac]

No, electricity can't be routed to nowhere, that's not how the grid works. The amount produced and the amount used have to stay in balance.

There is a bit of leeway in that turbine power stations will run a little bit slower or faster depending on exact use (resulting in a grid frequency a little bit faster or slower than 50Hz) but the difference has to be made up quickly.

(not an expert, this is badly remembered from Internet articles so probably hurts to read for real experts, I'm sorry. But I hope I got the gist sort of right.)

[steve_gh]

And what happens when a solar farm goes bankrupt? Its major operating overhead is servicing the loans for the initial capital cost. So all that will happen is that the bank will take possession of the solar farm. It will still be producing cheap power, and it will now be owned by an organisation with very deep pockets!