Comment by sandworm101 | Hacker News Reader

Comment by sandworm101 | Hacker News Reader

So this isn't a free market. This negative price is the result of an artificial market created by government subsidies.

If someone is selling something at negative prices, then there is a business opportunity for someone to buy that product and throw it away. Someone could setup a giant space heater to do nothing more than absorb electricity. The windfarms would pay this entity to keep buying power at no cost until the price approached the subsidy. Perhaps a steel mill or aluminum smelter could be paid to fire up another furnace for no other reason than to suck up power. I'm all for free markets and green energy subsidies, but I am totally against waste.

Hopefully some market actor will appear with the ability to store and resell energy. That might be homes with batteries and net metering.

No. The article states that electricity is sold at the highest bid to meet the demand, and that wind was only supplying up to 40% of the demand. I.e. It is the coal and nuclear power plants that are also bidding negative.

The market is working, to such an extend that during times of extreme oversupply power generators have to assess if they will temporarily turn down production (which has a cost, especially for coal/nuclear, as they are difficult to switch), or if instead they are willing to pay people to take the electricity.

Yes, without subsidies, wind would probably minimum bid at a $0/MWh, but that would still leave fuel based producers running at negative marginal cost.

What's missing in this market is flexible demand. I'm pretty sure if our appliances would spin up real time at low prices that it would be almost impossible to hit negative prices again, as demand will rise much more rapidly in response to lowering electricity prices.

Your giant space heater would make a tiny amount of money for an hour or so in the middle of the night, every once in a blue moon when a dip in demand and a spike in supply happen to overlap, taking advantage of the fact that the other (oil, hydro and nuclear) power plants can't power down and back up at such short notice.

If this happens all the time, it will drive the average price of power down, and power hungry industries will move there, but steel mills and aluminum smelters can't move around the country at a few minutes notice.

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