Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

Wind and solar farms are glutting networks more frequently, prompting a market signal for coal plants to shut off

The disruption of grid energy by renewable energy continues to grow, even in places that have touted wind and solar for years. Prices have been driven to ZERO for producers like coal and gas and even hydro in places where wind and solar are plentiful. The problem is though that wind is expensive and the zeros are not passed on to the  ultimate consumer and real energy companies are being forced to bankruptcy. 

We are NOT seeing a refund in our bills or our meters running backwards when this "renewable energy" is being passed on to us. We are only seeing our bills go up. Only hydro and gas plants can ramp up and down to fill the void when wind dies or solar goes dark. This is a dilemma for power producers and something that ISO-NE has been warning us about for some time.

 https://www.bloomberg.com/news/articles/2018-08-06/negative-prices-...

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Comment by Dan McKay on August 9, 2018 at 5:51pm

Does anybody know why Maine has to remain part of the ISO-NE network? Can Maine become part of a Northern Network with Vermont and New Hampshire and, perhaps some of the Canadian Provinces, thus removing ourselves from the distorted market being created by energy hungry giants like Mass. and Conn. ?

Comment by Long Islander on August 9, 2018 at 12:10pm

Jim LaBrecque talked about electricity prices yesterday. If I had the time, which I don't, I'd transcribe it. But if you've not yet listened, it's here on WVOM:

Part A

http://www.wvomfm.com/episode/ghrt-rewind-08-08-energy-matters-a-1430/

Part B

http://www.wvomfm.com/episode/ghrt-rewind-08-08-energy-matters-b-1300/

Comment by Nancy Sosman on August 9, 2018 at 11:44am

Art, not arguing.  I'm with you.

Comment by Art Brigades on August 9, 2018 at 10:49am

Nancy - you’re arguing with someone who agrees with you. My point was simply that nobody in the press mentions that capacity payments have steadily trended upward for the period that the unreliable renewables have, with a dip lower this year. The wholesale market was over $8 billion a few years ago, and the last couple of years it has been half that amount. Meanwhile capacity payments have doubled and tripled, helping to ensure that despite historically low energy prices, nobody’s light bill has reduced. As for maintaining steam or spinning reserve, we can claim that we are displacing or even replacing fossil fuel use in the electricity sector, but it if we are doing so at all, it will never be on a pari passu basis. 

Comment by Nancy Sosman on August 9, 2018 at 10:16am

Traditional generators (oil, gas, nukes, hydro, coal) in the competitive markets (like ISO-NE) get paid for the energy they produce and also get capacity payments. Energy revenue basically covers operating costs and capacity payments cover fixed costs. Some plants only run very few hours per year to meet peak load conditions and wouldn’t survive only on energy revenues. It’s also important for the rest of the fleet, especially when energy market prices are low. In recent years, energy prices have been at historic lows because they’re mainly driven by natural gas prices, and gas prices are low (on an annual average). See the attached from ISO-NE about recent price trends. Also, he’s comparing historically low 2017 energy market prices with historically high 2017 capacity markets prices, which were based on an annual auction that was held in 2014 (we call it the Forward Capacity Market because it’s used to lock in the plants needed for reliability 3 years in advance). Capacity prices go up when the market needs to attract new capacity and in 2014 a number of new (and therefore more expensive) plants cleared the auction. The 2018 auction, for the 2021 capacity year, cleared at less than half of that number. In prior years we’ve had a $9 billion market of which around 1.5 billion was related to capacity…so it changes all the time.

In any case, there’s really no such thing as ‘zero cost’ energy if you are the consumer. We’re paying for it one way or the other because of all the federal and state subsidies that renewables need (they’re not competitive on their own), and we only see negative prices in a very few hours per year. It’s the hidden subsidies that are really the ugly downside because they often show up in our tax bill or hidden in other charges on our electric bill. That’s actually one of the biggest problems with NECEC – it’s being paid for outside the existing competitive market (even though it’s being paid for by Massachusetts ratepayers) but any subsidized resource that comes in to New England hurts the competitive market, and at some point it will fail and we’ll have to go back to some kind of more traditional regulatory model, which will undoubtedly be more expensive for consumers. Also, it’s one thing for society to subsidize emerging technologies (like wind and solar, at least at the beginning), but why should we subsidize traditional generation like large-scale hydroelectric?

He mentions burning fuel to make steam just to keep a plant ready to run in case the ISO needs them. Nothing wrong with that because the ISO does all kinds of things to make sure the system is available to keep the lights on, including keeping certain plants on ‘hot standby.’

Comment by Art Brigades on August 9, 2018 at 8:47am

No mention in the article about the capacity payments that we pay to keep the reliable plants propped up, often burning fuel to maintain steam. In New England this year it’ll be about $3 billion, an amount almost equal to the entire ISO-NE wholesale market sales for the year. The media rarely report this very ugly downside to “zero cost” energy. 

Comment by Barbara Durkin on August 8, 2018 at 1:48pm

Grid-

“People would’ve started worrying about brownouts,” Elchin Mammadov, analyst at Bloomberg Intelligence said. “This shows that relying on wind, solar and batteries to supply the majority of our power is reckless for energy security.”

https://www.bloomberg.com/amp/news/articles/2018-06-07/u-k-wind-dro...

“NERC recently identified a significant need for industry focus on the performance and reliability of inverters and inverter-based resources [wind] connected to the bulk power system...”

http://www.tdworld.com/generation-and-renewables/assuring-reliabili...

Comment by Nancy Sosman on August 8, 2018 at 1:18pm

We occasionally but rarely see negative pricing in New England. It usually happens over night if the wind is blowing hard and there's too much power flowing in to the grid in excess of demand. The ISO uses its pricing algorithm to send a signal for units to shut down, otherwise they actually have to pay to put their power on the grid.

Consumers shouldn't expect power prices to be less than $0 anytime soon since those prices don't really flow into retail power rates. Also, the actual cost of the renewables (the all-in cost including tax subsidies, etc.) means that ratepayers (who are the same people as taxpayers) are paying quite a bit above the market price of power for the environmental attributes of renewable energy, for the most part.

First Prize

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Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT (excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010  http://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?"  http://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” http://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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