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by triplepoint217 942 days ago
The nice thing is as long as these markets stay reasonably competitive, economics can figure out what to do with excess renewables.

When renewables are in excess, the spot (instantaneous) energy price will drop to near zero (or sometimes negative in weird situations). That is good for existing (short term) batteries (they can recharge cheaply), but it will also provide price signals to people considering investing in longer term storage (since their cost of energy could be near zero, they only have to recoup the costs of building and operating the storage).
2 comments
marcosdumay 942 days ago
> the spot (instantaneous) energy price will drop to near zero

Yes, and that means generation will become unprofitable.

We seem to be a decade or so away from the point where the investment on generation can't be decided by direct ROI. And nobody is preparing for this. Governments need a long time to regulate that kind of thing... so we can expect some problems on the near future.

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triplepoint217 942 days ago
I think Renewables (especially solar) tend to be fairly easy to cutail (stop generating) and can probably avoid generating much during negative prices. I'd guess the negative prices will probably mostly hit legacy assets that don't have that ability.
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JumpCrisscross 942 days ago
> that means generation will become unprofitable

For that time period. At the same time, using energy becomes supremely profitable. This isn’t a weird quirk of the power markets; compute time is also instantaneous. It’s just less noticeable because we haven’t unified a market for it. These are amply solvable problems.

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marcosdumay 942 days ago
> For that time period.

For the time period that the most common generators generate the most energy. By itself, that guarantees that there won't be enough investment to create excess renewables. Or at least that markets won't make that investment.

If you want excess renewables (and they are a safety and security necessity), you need to fund it by something that isn't interested on direct ROI.

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JumpCrisscross 942 days ago
> If you want excess renewables

Sure, agreed. I don’t think this is something we should necessarily want. But if it is, it would require subsidy.

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s1artibartfast 942 days ago
>since their cost of energy could be near zero, they only have to recoup the costs of building and operating the storage

If cost of storage and operation is lower than battery operators can sell it for, then eventually the cost producers will sell at will increase. It will be interesting to watch

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