The Night They Drove the Price of Electricity Down

Slate ^ | Daniel Gross

[Timpanagos1]

Wind power was so plentiful in Texas that producers sold it at a negative price. What?

Photo by Spencer Platt/Getty Images

In the wee hours of the morning on Sunday, the mighty state of Texas was asleep. The honky-tonks in Austin were shuttered, the air-conditioned office towers of Houston were powered down, and the wind whistled through the dogwood trees and live oaks on the gracious lawns of Preston Hollow. Out in the desolate flats of West Texas, the same wind was turning hundreds of wind turbines, producing tons of electricity at a time when comparatively little supply was needed.

And then a very strange thing happened: The so-called spot price of electricity in Texas fell toward zero, hit zero, and then went negative for several hours. As the Lone Star State slumbered, power producers were paying the state’s electricity system to take electricity off their hands. At one point, the negative price was $8.52 per megawatt hour.

[rstrahan]

If you read through the article, the screwing of the rate payer is that ERCOT buys power at the HIGHEST rate instead of being fiscally responsible and buying at the lowest rates available. As a result, at high demand, rates paid at over $4000 per mwh at peak are common. My son has a 2200 SF home, pays $500+ a month.

So even if wind power can supply at $4.50 mwh, if a power plant wants to charge $4000 mwh, the wind plants get paid at the $4000 mwh rate. The result is the fleecing of the rate payer.

[Vermont Lt]

It’s a wonder someone has not determined when the cost is low to charge battery banks that can be used during the day.

Or are we talking about such huge amounts it would not be practical.

[ViLaLuz]

Then why is my power bill so high?

[BwanaNdege]

Rather then being an example of just how wonderful and planet-saving wind energy can be, this is really an excellent example of the law of Supply & Demand!

Produce electricity when no one needs or wants it and you cannot sell it or even give it away!

[reg45]

Use the excess electricity to make hydrogen. The hydrogen can be stored until needed or burned as fuel or used to power fuel cèlls

[BwanaNdege]

t’s a wonder someone has not determined when the cost is low to charge battery banks that can be used during the day. Or are we talking about such huge amounts it would not be practical.

This is an Australian article, but will give you a good idea of the factors involved.

This is what Tesla's home battery, Powerwall, will cost to run in Australia

[lilypad]

We fly across the country and see these monstrosities. I agree they are a plight. However the libs don’t mind that. Same as smoking is bad, alcohol is bad but smoking dope is good.

[thackney]

FERC has also ruled that Texas power could be exported to the eastern and western grid if that power is DC, but no DC transmission lines have been built. The planned Tres Amigas project and the four Clean Lines Energy Partners projects are DC.

The North Tie and the East Tie are DC connections, Rectifiers and Inverters on either side of the border so that all power transfers are DC.

More info at:
http://www.ercot.com/mktrules/guides/procedures/ERCOT%20DC%20Tie%20Operations%20V3Rev8.doc

[thackney]

Ercot does not buy or sell power. They oversee the transactions but do not own power.

http://www.ercot.com/about

[patq]

“The Night They Drove the Price of Electricity Down”

And all of the people were singing...They went, naaaaa, na na, na na, na na na....

(great, now I can’t get that song out of my head)

[Vermont Lt]

Thanks for the link. Very interesting.

[Ben Ficklin]

Correct but I was talking about the long interstate lines.

Clean Energy Lines projects to Memphis, St Louis, Chicago, and the west coast, as well as Tres Amigas.

I think the problem is that the state agencies have more power than FERC and they want something from the transmission line company before they OK it.

If they want to build an AC line across OK, AR, into TN, they can offer to offload some cheap power to OK city and Little Rock to grease the wheels. But with DC, the high cost of the inverter is prohibitive to offloading cheaply.

Boone Pickens hit the nail on the head in 2006 when he said the govt needs to get out of the way and let the private sector build these lines. Back in those days he was a windmill man.

[KarlInOhio]

At one point, the negative price was $8.52 per megawatt hour.

To put that into terms more people are familiar with, that's negative 0.852 cents per kilowatt-hour. Meanwhile, my contract price is about positive 5.6 cents per kilowatt-hour to the generating company (plus a per kWh delivery fee and a flat connection fee to the local utility).

[TRY ONE]

ERCOT is not ‘officially’ connected to other grids!
[Texas Power Grid is an Island]
The ones you mentioned (LA and one to OK) must be connected via a DC tie then converted to AC again to avoid serious problems with frequency and voltage issues.

[Ozark Tom]

DC interconnects between domains:

http://www.ercot.com/mktrules/guides/procedures/ERCOT%20DC%20Tie%20Operations%20V3Rev8.doc

[okie01]

Thanks or all the good info.

As I recall there was an instance of Central & Southwest -- an Oklahoma generator -- building a plant in Texas, out around Vernon.

They then strung a DC line over the Red River to connect with their own grid in Oklahoma.

The Texas power producers then sent a crew up to the Red and took the DC connection down -- because, if it remained in place, the Texas electricity market would have been subject to federal regulation. And, at the time, it was not.

[Ben Ficklin]

See number 28 and 32

[tbw2]

All the utilities that promise that 100% of their power is wind, 20% green, etc.

[Timpanagos1]

The author was incorrect in his assertion that ERCOT is not connected to other grids and thus failed to explain why the Texas generators, wind and other sources did not or could not sell to utilities in other areas of the country.

[Timpanagos1]

Not a bad business model if you can buy a product at a negative price and sell it at a price that is far above zero.