Call me stupid, but why don’t they just charge enough to cover costs and a bit of profit? The current pricing model is broken if you can’t run a solar plant profitably.
Because who would pay 10 cents per kilowatt hour when there’s someone else who will pay someone to take that energy off their hands?
The problem is caused when the market clearing price is lower than the cost it took to produce it, and some of those costs are in the past.
It’s like getting a boat and going fishing. If you pay $10,000 for the cost of the trip, and bring back $8,000 worth of fish, you can’t just force people buy them from you for a 25% markup.
The state of California has a great live and historical dashboard of power production and consumption that you can click around in to get an intuitive sense of where the problems arise. We have more batteries than anywhere else in the world but it’s still nowhere near enough. CAISO daily outlook
Edit: the supply dashboard is more useful for this discussion: CAISO supply
It takes hours to days to start, stop, or change nuclear and coal generation rates. You can’t just turn it on and off as needed. If you need coal or nuclear to meet overnight demand, you have to leave it running during the day as well. If you need 2MW of power overnight and 5MW during the day, you can only add 3MW of solar generation before you are putting too much power on the grid. If your solar puts out 5MW, you have to find out something to do with the extra 2MW that your nuclear plant needs to output continuously.
If you size your solar plants to produce 3MW in the middle of winter, then in summer they are putting out about 9MW. What can you do with the 6MW excess?
There is no single solution to manage every issue, but the single most important is “demand shaping”. We need to reduce demands that can only be met with baseload generation. We need to move that demand to peak solar production times. We need to increase daytime demand to incentivize greater investment into solar. We need east/west transmission lines across every continent, shifting power from wherever the sun is up to wherever the sun is down.
Storage has to be a very distant second. Every 1 MW we time shift from night to day takes 2MW of load off the grid.
Call me stupid, but why don’t they just charge enough to cover costs and a bit of profit? The current pricing model is broken if you can’t run a solar plant profitably.
Because who would pay 10 cents per kilowatt hour when there’s someone else who will pay someone to take that energy off their hands?
The problem is caused when the market clearing price is lower than the cost it took to produce it, and some of those costs are in the past.
It’s like getting a boat and going fishing. If you pay $10,000 for the cost of the trip, and bring back $8,000 worth of fish, you can’t just force people buy them from you for a 25% markup.
The state of California has a great live and historical dashboard of power production and consumption that you can click around in to get an intuitive sense of where the problems arise. We have more batteries than anywhere else in the world but it’s still nowhere near enough. CAISO daily outlook
Edit: the supply dashboard is more useful for this discussion: CAISO supply
It takes hours to days to start, stop, or change nuclear and coal generation rates. You can’t just turn it on and off as needed. If you need coal or nuclear to meet overnight demand, you have to leave it running during the day as well. If you need 2MW of power overnight and 5MW during the day, you can only add 3MW of solar generation before you are putting too much power on the grid. If your solar puts out 5MW, you have to find out something to do with the extra 2MW that your nuclear plant needs to output continuously.
If you size your solar plants to produce 3MW in the middle of winter, then in summer they are putting out about 9MW. What can you do with the 6MW excess?
There is no single solution to manage every issue, but the single most important is “demand shaping”. We need to reduce demands that can only be met with baseload generation. We need to move that demand to peak solar production times. We need to increase daytime demand to incentivize greater investment into solar. We need east/west transmission lines across every continent, shifting power from wherever the sun is up to wherever the sun is down.
Storage has to be a very distant second. Every 1 MW we time shift from night to day takes 2MW of load off the grid.