[epistasis]

The design of the energy markets will determine how free energy can be, as well as if there are any of the arbitrage opportunities I talked about.

The round trip efficiency of hydrogen is already something of a concern for grid backup power, as far as I know, ans that's only slightly less than 50%.

As storage costs decrease, those moments in time when there's oversupply of energy from solar and wind will become shorter and fewer. And (at least to me) it's really unclear what market designs will be viable if we were to have, say, 3x-5x oversupply of energy capacity so that renewables' minimums still meet our needs, and what new energy uses people will come up with when the can by intermittent energy for half a cent a kWh or something.

[jeffbee]

I think you're missing the forest for the trees. The surplus we are going to have of renewable power is going to be huge. We are going to build way more than we need for peak grid demand, because we are going to need as much as we can get our hands on for direct air carbon capture. Our peak electric facilities are going to be phenomenally large, and the storage we need to cover the overnight grid is going to be a very minor cost component by comparison.

[epistasis]

Honestly, I'm so thrilled to find another person that realizes that we have a future of super abundant, cheap energy from renewables. That really makes my day!!

I totally agree that our peak energy outputs are going to be be absolutely massive, and for the past five years have been trying to think of the implications.

One of these is that it becomes impossible for solar or for wind to survive on its own with our current market clearing mechanisms. Which for those that don't know, works something like an auction where generators each say "I can provide X megawatts at Y $/MW" and then the operators sort the bids and choose all the operators needed to meet demand, and pay everyone at the highest bid that cleared. What happens in these markets when there's oversupply is that prices go to zero. (Or even negative. When generators have external income sources from producing generation, they will pay to put power on the grid if they can get more from those other sources).

When price on the grid is free, the solar and wind farms aren't making any money. Which means that they need to recoup all their capital costs in those hours where energy is not overproduced, but every other solar and wind generator is going to be in the same boat during those low supply times, and I don't know yet if there's a market equilibrium that will both allow pure generators to survive and for customers to not revolt and override this market mechanism.

This means that either 1) every single solar and wind farm will need to incorporate storage in order to be able to ever recoup their investment, is 2) market design has to change.

If it's 1), then in that case, the inputs to storage can't be free, because a combined generator/storage arbitrage agent, you have to value your generation at some cost, because you paid free capital costs and airs depreciating.

If it's 2), then I think any market design is going to require payments for energy even when there's oversupply. I don't see how a market design with long periods of zero-cost energy can survive (though I would love to see one, it's quite likely I'm not imaginative enough for that!)!

[laurencerowe]

I think every solar installation will end up incorporating storage so they can share the same grid interconnection. But if enough storage is built it will act as a kind of arbitrage smoothing out the pricing peaks and troughs throughout the day.