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Isolated this is a zero sum game in favor of buyers (someone has ti take the electricity), but longer term, this shows there needs to be better greater electric

Isolated this is a zero sum game in favor of buyers (someone has ti take the electricity), but longer term, this shows there needs to be better greater electricity storage solutions available, i.e batteries or similar.

paulsutter 2y ago
Negative prices make storage very practical
- andrewxdiamond 2y ago
  And de-incentivizes supply. A real solution need to be available to balance the supply and demand of power such that the rates on both ends are predictable. A market where a good fluctuates between profitable and not is not one very attractive to investment. Playing the video game Victoria 3 has taught me a lot about healthy markets. You have to play both sides of supply and demand to get to the prices you need
  - topper-123 2y ago
    Negative prices do incentivize storage, because storage will alliw sellers to sell at a time with higher prices (i.e. when demand is greater relative to supply).
    - thecosas 2y ago
      I could see this then pushing more consumers to have their own batteries to store energy when it's inexpensive. Interesting market playing out with energy storage :-)
  - bryanlarsen 2y ago
    Why? If you make a sufficient amount of money in the 5-8pm peak period it can make you strongly profitable despite losing money at noon.
    - Gare 2y ago
      And solar plants, unlike most other plants can be easily and quickly shut off so you don't even need to sell at negative prices.
      - nawitus 2y ago
        Empirically this doesn't seem to happen.
  - bastawhiz 2y ago
    > A market where a good fluctuates between profitable and not is not one very attractive to investment. This is the most wild thing I've ever read on this website. Pick just about any security and you'll see that buying and selling it over time fluctuates between profitable and not profitable. If something was always profitable everyone would do it and get infinitely rich. Arbitrage wouldn't exist. Economies would shut down.
- jerf 2y ago
  Unfortunately you've got a massive term mismatch. You have negative prices today, but a lot of reason to believe that by the time you could bring your storage online the problem will already have resolved itself. Oil briefly went negative a few years ago. If you decided to build a storage business dependent on negative oil prices for profit, you might just be coming online around now, and very much poorer than you were before. (Of course you would in fact have stopped a long time ago.)
  - toomuchtodo 2y ago
    OP is correct. Negative prices stokes battery storage deployment. See California and their ~52GW storage target (currently @ ~10GW), because of negative prices and the duck curve. California utility scale storage soaks up solar during the day (when spot prices approach zero or go negative), and discharges most profitably right after sunset for ~4 hr (but occasionally, right before sunrise when demand is ramping before the sun is up). If spot prices rise during daylight hours, you add more solar generation to push them back down. https://www.gov.ca.gov/2024/04/25/california-achieves-major-clean-energy-victory-10000-megawatts-of-battery-storage/ https://www.gov.ca.gov/2024/04/25/california-achieves-major-... https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/california-energy-storage-system-survey https://www.energy.ca.gov/data-reports/energy-almanac/califo... https://cleantechnica.com/2024/06/02/solar-passes-100-of-power-demand-in-california/ https://cleantechnica.com/2024/06/02/solar-passes-100-of-pow... https://futurism.com/the-byte/california-solar-electricity-prices-negative https://futurism.com/the-byte/california-solar-electricity-p... https://app.electricitymaps.com/zone/US-CAL-CISO?wind=false&solar=false https://app.electricitymaps.com/zone/US-CAL-CISO?wind=false&...
  - AaronFriel 2y ago
    Oil prices went negative due to an exogenous, rare event shocking demand. No one expected that would recur. (And indeed, many people did try to figure out how to store oil in one-off vessels, short term leases for storage, etc., though I don't know if anyone succeeded.) Solar panel production on the other hand is exponential and growing much faster than overall power consumption. It can be very, very favorable to build batteries and that's why grid scale battery production is taking off. There is in fact a storage business dependent on energy arbitrage over time, it's lucrative, and all indications suggest it will continue to be lucrative for many years to come.
bastawhiz 2y ago
The prices being negative is literally the incentive to build storage.
- netrus 2y ago
  Just to add to that: Any fluctuation in prices works to incentivise storage, negative prices are not so special in that regard. Negative prices allow for some weird actions to become profitable - like starting an empty washing machine, turning in the light in an empty room or needlessly heating some water tank. Basically everything we are used to think of as waste. It sounds absurd, but it's not really a big deal.
- rurban 2y ago
  And even better, the incentive to expand the grid. The market is easy to control, because the money flows via the internet. But how to transport the energy? Without a proper grid not possible. The various countries block the expansion for political reasons. They would loose their power.
gpm 2y ago
Alternatively this is an economic opportunity for any industry that can usefully make use of intermittent free* energy. * Long term I have to imagine this is just "cheap" because there's got to be tons of industries that can use intermittent free energy.
- olejorgenb 2y ago
  Such industries need to be have low enough capital cost as well
  - gpm 2y ago
    Sure, or more precisely they need to be able to draw a box around the power intensive step where they can cheaply store a buffer of the inputs and outputs, and have excess capacity for that step. Like I'm not an expert on fertilizer production, but it seems pretty likely to me that you could draw that box around ammonia production and build out capacity that relatively cheaply, while leaving what I imagine to be the more operationally complex and capital intensive steps of extracting phosphates (via sulphiric and phosphoric acid) and potassium (which has nitric and sulphiric acid as biproducts), and combining that nitric acid with the ammonia (into ammonium nitrate) alone. In some cases if you have excess production capacity (because you have unpredictable or seasonal load and you aren't currently at a peak) you don't necessarily even need more production capacity at all, just the ability to store a bit more of the inputs and outputs in a buffer.
- stoperaticless 2y ago
  I argue that the number of such industries is and will be low. Usually clients want consistency in the output. (they depend on the product/service) Business owner usually wants consistency in employee/machinery output. (They cost money) To me it seems that only low priority computation (incl. con-coins) is such industry. (Investment kind of reused, and relatively few employees) There will be some shift to adjust to intermitency (e.g. Worker hours might be shifted to the time when solar generates the most energy to take advantage of the price)

paulsutter 2y ago

Negative prices make storage very practical

andrewxdiamond 2y ago
And de-incentivizes supply. A real solution need to be available to balance the supply and demand of power such that the rates on both ends are predictable. A market where a good fluctuates between profitable and not is not one very attractive to investment. Playing the video game Victoria 3 has taught me a lot about healthy markets. You have to play both sides of supply and demand to get to the prices you need
- topper-123 2y ago
  Negative prices do incentivize storage, because storage will alliw sellers to sell at a time with higher prices (i.e. when demand is greater relative to supply).
  - thecosas 2y ago
    I could see this then pushing more consumers to have their own batteries to store energy when it's inexpensive. Interesting market playing out with energy storage :-)
- bryanlarsen 2y ago
  Why? If you make a sufficient amount of money in the 5-8pm peak period it can make you strongly profitable despite losing money at noon.
  - Gare 2y ago
    And solar plants, unlike most other plants can be easily and quickly shut off so you don't even need to sell at negative prices.
    - nawitus 2y ago
      Empirically this doesn't seem to happen.
- bastawhiz 2y ago
  > A market where a good fluctuates between profitable and not is not one very attractive to investment. This is the most wild thing I've ever read on this website. Pick just about any security and you'll see that buying and selling it over time fluctuates between profitable and not profitable. If something was always profitable everyone would do it and get infinitely rich. Arbitrage wouldn't exist. Economies would shut down.
jerf 2y ago
Unfortunately you've got a massive term mismatch. You have negative prices today, but a lot of reason to believe that by the time you could bring your storage online the problem will already have resolved itself. Oil briefly went negative a few years ago. If you decided to build a storage business dependent on negative oil prices for profit, you might just be coming online around now, and very much poorer than you were before. (Of course you would in fact have stopped a long time ago.)
- toomuchtodo 2y ago
  OP is correct. Negative prices stokes battery storage deployment. See California and their ~52GW storage target (currently @ ~10GW), because of negative prices and the duck curve. California utility scale storage soaks up solar during the day (when spot prices approach zero or go negative), and discharges most profitably right after sunset for ~4 hr (but occasionally, right before sunrise when demand is ramping before the sun is up). If spot prices rise during daylight hours, you add more solar generation to push them back down. https://www.gov.ca.gov/2024/04/25/california-achieves-major-clean-energy-victory-10000-megawatts-of-battery-storage/ https://www.gov.ca.gov/2024/04/25/california-achieves-major-... https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/california-energy-storage-system-survey https://www.energy.ca.gov/data-reports/energy-almanac/califo... https://cleantechnica.com/2024/06/02/solar-passes-100-of-power-demand-in-california/ https://cleantechnica.com/2024/06/02/solar-passes-100-of-pow... https://futurism.com/the-byte/california-solar-electricity-prices-negative https://futurism.com/the-byte/california-solar-electricity-p... https://app.electricitymaps.com/zone/US-CAL-CISO?wind=false&solar=false https://app.electricitymaps.com/zone/US-CAL-CISO?wind=false&...
- AaronFriel 2y ago
  Oil prices went negative due to an exogenous, rare event shocking demand. No one expected that would recur. (And indeed, many people did try to figure out how to store oil in one-off vessels, short term leases for storage, etc., though I don't know if anyone succeeded.) Solar panel production on the other hand is exponential and growing much faster than overall power consumption. It can be very, very favorable to build batteries and that's why grid scale battery production is taking off. There is in fact a storage business dependent on energy arbitrage over time, it's lucrative, and all indications suggest it will continue to be lucrative for many years to come.

bastawhiz 2y ago

The prices being negative is literally the incentive to build storage.

netrus 2y ago
Just to add to that: Any fluctuation in prices works to incentivise storage, negative prices are not so special in that regard. Negative prices allow for some weird actions to become profitable - like starting an empty washing machine, turning in the light in an empty room or needlessly heating some water tank. Basically everything we are used to think of as waste. It sounds absurd, but it's not really a big deal.
rurban 2y ago
And even better, the incentive to expand the grid. The market is easy to control, because the money flows via the internet. But how to transport the energy? Without a proper grid not possible. The various countries block the expansion for political reasons. They would loose their power.

gpm 2y ago

Alternatively this is an economic opportunity for any industry that can usefully make use of intermittent free* energy. * Long term I have to imagine this is just "cheap" because there's got to be tons of industries that can use intermittent free energy.

olejorgenb 2y ago
Such industries need to be have low enough capital cost as well
- gpm 2y ago
  Sure, or more precisely they need to be able to draw a box around the power intensive step where they can cheaply store a buffer of the inputs and outputs, and have excess capacity for that step. Like I'm not an expert on fertilizer production, but it seems pretty likely to me that you could draw that box around ammonia production and build out capacity that relatively cheaply, while leaving what I imagine to be the more operationally complex and capital intensive steps of extracting phosphates (via sulphiric and phosphoric acid) and potassium (which has nitric and sulphiric acid as biproducts), and combining that nitric acid with the ammonia (into ammonium nitrate) alone. In some cases if you have excess production capacity (because you have unpredictable or seasonal load and you aren't currently at a peak) you don't necessarily even need more production capacity at all, just the ability to store a bit more of the inputs and outputs in a buffer.
stoperaticless 2y ago
I argue that the number of such industries is and will be low. Usually clients want consistency in the output. (they depend on the product/service) Business owner usually wants consistency in employee/machinery output. (They cost money) To me it seems that only low priority computation (incl. con-coins) is such industry. (Investment kind of reused, and relatively few employees) There will be some shift to adjust to intermitency (e.g. Worker hours might be shifted to the time when solar generates the most energy to take advantage of the price)