Solar farm has to switch off every second day due to negative prices
reneweconomy.com.auI'm not a fan of most reporting of these negative price events.
First, they rarely explain why the price is negative. As the article explains, solar can switch itself off, so it's nothing physical about solar that can cause negative prices, as all solar can switch itself off before it goes negative it would bottom out at zero for those reasons.
In most cases I've seen so far, contractual agreements with gas, coal or nuclear (who struggle to switch themselves off quickly without hurting themselves) have been the reasons for negative pricing and the grid wasn't actually at 100% renewable at the time of the curtailment. In other words, solar switches itself off, while other, dirtier plants get fined (negative price!) for demanding that they be allowed to still run.
In South Australia they're doing pretty well on renewable, so it's possible they actually are at 100% renewable at these times (would be good for the stories to clarify). If that's the case then the negative price is most likely caused by subsidies to wind that are paid per generation. If the subsidies to two renewable plants are different then one will bid the other off the market at that point since the price can go down to the opposite of the subsidy before they make an actual loss.
All in all, these negative prices are useful market signals. I wish the weren't covered by journalists who seem to think negative numbers are taboo for some reason.
The fact that it's the same plant that gets switched off repeatedly (rather than all solar reducing output) makes me think this is either a contractual thing that only affects its owner or a regional transmission thing that only affects its geographic location. Again, would be nice for stories to find out which.
The thing about a coal, gas or nuclear plant is that they can't switch off as fast as solar. Solar can switch off in the span of a microsecond without much of an issue.
A coal/gas/nuclear plant might actually need the entire day to shut down operation to 0 kW output. And probably needs a day to get back to full operation. So in cases of negative prices, a solar energy producer can do the sensible thing and switch off while a plant operator will probably try to weather it.
Coal and nuclear plants are slow to switch off, but gas plants are usually reasonably fast.
Only the less efficient "peaker plants".
I agree. Negative prices make perfect sense in electricity markets, and journalism does a bad job at explaining it.
Supply and demand must always be in equilibrium in real time with electricity (forgetting storage / batteries for a second). If there is more supply than demand or vice versa, then you have instability in the grid and can have blackouts. Those electrons have to go somewhere. This is in contrast to virtually any other good where you can store the good in a warehouse and smooth it supply intertemporaly.
Thus, if there is a big drop in demand or it's simply too sunny / windy of a day, there can be too much supply.
To incentivize reducing supply quickly enough, sometimes prices have to go negative. This is in part because some supply simply cannot reduce quickly (e.g. nuclear) and are still happy to operate in zero price situations bc either they have no marginal cost of generation (solar, wind) or the cost of reducing generation and increasing it back up is high (nuclear, coal).
Thus, there simply might not be enough plants that have the characteristics where they can scale down quickly AND have a marginal cost of generation such that they would turn off when prices go to zero (e.g. combined cycle natural gas plants can turn on and off very quickly and don't want to be on when the price falls below the cost of the gas used to generate electricity, but Australia doesn't have enough of them to absorb a supply decrease as prices fall). Alternatively, the subsidies that you mention shift the break even point into negative prices territory.
Either was, negative is needed to incentivize solar and wind to turn off or else there would be a blackout from oversupply.
Thankfully, this all gets solved with energy storage and all the slow, dirty systems that stay on will be priced out by more nimble renewables and rapid energy storage. Bc then that excess supply is stored and arbitraged to higher price times (when the sun isn't shining and wind isn't blowing). Then prices should always be positive (so long as there is available storage). If the storage is full though, prices could again go negative. Without a place to put those electrons, they quickly go from a good to an externality. It's almost like how we'll pay a musician to perform, but if your neighbor is blasting music at 3am. Without someone willing to consume and pay for those electrons, they literally are just causing trouble for all the other electrons that we do want to consume.
It in part why you can't simply just create significant generation and hook it into the grid anywhere without working with the grid operator. AC power, dude. We don't control where those electrons flow directionally. So you adding too much power somewhere can really destabilize the system.
> "combined cycle natural gas plants can turn on and off very quickly"
Response/ramp times for CCGTs are not particularly quick. Typically they need 15 minutes notice to initial grid synchronisation, a further 60-80 minutes to reach full power output from a "warm" start, and up to several hours from a "cold" start. That's much better than coal-fired plants which need many hours of notice, but still likely to be too slow to respond to unexpected grid imbalances without additional support.
Natural gas "peaker" plants typically use less-efficient but faster responding OCGTs for that reason.
some supply simply cannot reduce quickly (e.g. nuclear)
What is it about nuclear that makes it impossible to reduce as fast as gas or coal? From my layman's point of view, they all use comparable (steam) turbines to power the actual generators, so I would expect them to be equally capable of disengaging the generator from the turbine.
Is this perhaps due to design decisions, or simply a size problem? A foolish question perhaps, but I don't have more knowledge to draw from.
The nuclear part of the reactor is slow to react to control input. Even when completely switched off it produces hundreds of megawatts of thermal energy. This is what doomed the Fukushima reactor. After the earthquake it was technically switched off, but required a lot of cooling as the nuclear reactions continue to go on even with the control rods completely extended. But with the failure of the power supply there was not enough cooling and the reactor eventually melted. Theoretically it should have been possible to passively cool this reactor, but due to operators mistake, one important valve was in the wrong position for that.
Beyond shutting down slowly, nuclear reactors are even slower to start up again. So after a complete shutdown it can take up to two weeks to put a reactor back into full production.
It is conceiveable to build nuclear reactors which are a bit quicker to ramp up and down - I guess more like the reactors of nuclear submarines, but our existing reactors are not suiteable for that, as this was not a requirement when they were designed. They were designed to be combined with quicker providers like gas and water plants.
I don't think you answered the question. The way I read it was "Why can't the nuclear power plant simply vent the steam they create instead of turning turbines with it?" In order to switch off power generation, even if the reactor is still creating thermal energy.
That could possibly done, but then, no one had created such a design yet. It is also not trivial to cool in the gigawatt range. Actually, many power plants even run into cooling issues in some time of the year, as they often rely on local rives to provide the cooling and the water supply as well as maximum water temperatures (animal and plant live) limit their cooling capacity in normal operations.
In Belgium there were even streetlights being installed along all highways to use up nuclear energy when the grid was not consuming it.
So extrapolating from what you said, these negative price events should incentivise energy storage solutions. Which arguably seems to be a good thing for the network. I suppose it should not be a surprise that the use of a thing incetivises the infrastructure necessary to make it more efficient, but it still does surprise me ;-)
So as awesome as the wind production tax credits are in creating many GW of wind power (in the US at least), it did result in many wind farms being able to submit offers that are artificially low. That lowers price signals for everyone else too and causes market distortion.
That market distortion is the whole idea. Similar to a carbon tax, it's intended to correct for the market distortion of externalities from pollution and carbon.
If we just left the market alone it would make inefficient decisions. It's not perfect but it's moving things in the right direction.
I think your point misses part of the market's intent. If you want the market to act correctly, you have to model the carbon or greenhouse constraint in the opmization.
That way you'll send the proper price signals and incentivize new generation or other assets (badly needed in much of the US). What we're currently doing fixes one problem and causes another. This is why ERCOT is having to do things like add in a $9000/MWh ORDC (among other reasons). The prices are just too low.
Towards the end of the article there is discussion of coming factors that may eliminate the negative price shutdowns: a) construction of grid interconnects to New South Wales, and b) new pumped hydro storage to enable time shifting (i.e. using daytime power to enable nighttime generation).
> In most cases I've seen so far, contractual agreements with gas, coal or nuclear (who struggle to switch themselves off quickly without hurting themselves) have been the reasons for negative pricing and the grid wasn't actually at 100% renewable at the time of the curtailment. In other words, solar switches itself off, while other, dirtier plants get fined (negative price!) for demanding that they be allowed to still run.
No contracts or fines are necessary. The plant is making the power and dangerous or expensive things will happen if nobody takes it. So they pay for it to be disposed of.
> "No contracts or fines are necessary. The plant is making the power ... So they pay for it to be disposed of."
They only pay if they are selling into the market at the market rate. Often, large operators will have some or all of their output contracted to buyers at a fixed contractual rate, so they are not affected by negative prices.
Also, they're hedged with the day ahead price.
Agree with all your points.
South Australia gets additional energy from grid interconnections from other states, and it's gas turbine power plant at Torrens Island. Additional power from other sources like diesel generators when required
https://www.sa.gov.au/topics/energy-and-environment/energy-s...
In South Australia (SA) there's a few market-specific reasons why floor prices (here -$1000/MWh) occur:
1. Older wind farms have PPAs (essentially a swap) that have no floor. They make the strike price regardless of the market price, so they bid at floor to ensure dispatch.
2. System strength constraints [0] usually limit the amount of wind and solar in SA when there is a lot of intermittent generation (SA is never 100% wind and solar because of this). Because of the way constraints are implemented, these generators are incentivised to bid at floor to ensure maximum dispatch. If everyone bids their capacity to floor, everyone gets turned down 'equally'. If you bid above floor (say at your marginal running cost), you get turned down more (and probably off completely).
3. The market operator (AEMO) also routinely intervenes in the market, directing gas generation to remain on for system strength. AEMO strangely implements this with two separate prices [1]. One for dispatch (accounting for the intervention) and one for payment (an estimated price without intervention). It's often the case that the dispatch price is at floor, again incentivising everyone to bid at floor to ensure dispatch, while the payment price is at or above $0/MWh.
This usually results in a very delicate market where a large amount of capacity is bid at floor (-$1000/MWh) and the next bid is usually at or above $0/MWh. A reduction in demand (hello rooftop PV) causes the price to fall off a cliff. The other thing to remember here is the settlement price (the actual price that is paid to generators) is an average of the six 5-minute dispatch prices over a half hour which can distort 5-minute price signals (there is a rule change fixing this coming into effect in 2021).
Negative prices are definitely useful, but in this case I think these issues distort the signals. I'm not sure what the solution is, there is some talk of a market redesign [2] (but I'm not sure that's a great solution either).
[0]: https://www.aemo.com.au/Media-Centre/South-Australia-System-...
[1]: https://aemo.com.au/-/media/Files/Stakeholder_Consultation/C...
[2]: http://www.coagenergycouncil.gov.au/publications/post-2025-m...
If I'm reading your comment right then the negative price is mostly a an accounting fiction.
If solar farms are bidding -1000, but not getting paid that (i.e. not paying that) when they deliver power, just using it as a placeholder like null, then the price isn't actually -1000.
EXPLANATION: Some power sources can’t be shut down and restarted quickly and cost-efficiently. If the cost of stopping and restarting plant is higher than the cost of selling energy at a negative price for some time, prices go negative.
This kind of price fluctuation can increase the overall cost of energy production. We need cost effective power storage solutions and better electric grids to make renewable more effective.
An explanation of the mechanics of how I'd have to pay somebody else to take my electricity (e.g., a negative rate) would be helpful.
As prices approaches 0, I could take the excess electricity and say, mine cryptocurrency. Is nobody considering the arbitrage opportunities here? Take the 0-cost electricity, move water up a hill, and convert it back to electric when it's needed, etc.
Anything you could do it with it would have capital costs. Maybe it's transient enough that that money would be better invested elsewhere. Like, if you only run your cryptocurrency mining when the price is negative, your capital is stuck in an idle asset most of the time, and if you run it all the time, it's the average price you want to consider, not the minimum price (even if the minimum price is negative), and my guess is that Australian electricity isn't cheaper on average than other kinds of power other places (especially places with lax environmental regulation).
Another way to think about it: uses like those you propose that can soak up excess energy in the grid are exactly why energy markets are allowed to float, and even to go negative. If there's a surplus, they want you to use it, and if it were economical to store it and sell it back to the power company later, both they and you would benefit. That this isn't common suggests that it isn't economical.
> and my guess is that Australian electricity isn't cheaper on average
South Australian electricity is actually some of the most expensive in the world due to incredibly high transmission costs.
Historically South Australia has generally had the most expensive electricity in Australia.
The Australian Energy Minister, Mr Frydenberg has even placed some of that blame on the SA Government's and it's "self-inflicted wounds" on deciding to transition away from coal to clean energy.
However, in the article above has there is a link to this page:
https://reneweconomy.com.au/south-australia-had-lowest-cost-...
which states:
The renewable energy state of South Australia recorded the lowest prices in Australia’s main grid in October, a month when it sourced well over half of its it's electricity supply from wind and solar.
That would suggests that transition to clean energy is working out just fine.
Multi-megawatt electric heaters don't cost much. In fact, I could make a backyard megawatt power sink in an afternoon for just a few hundred bucks. 1 mile of 22 AWG bare copper wire strung through the air should do the job. When turned on, watch the whole lot glow red hot like a big space heater.
The reason people don't do this is that the cost of a grid interconnect (the paperwork, approvals, etc.) outweighs the profit from the very short periods of time the price really is negative.
There are older bitcoin ASIC miners that aren't nearly as efficient but if you are getting totally free electricity... definately an opportunity here.
Yes this happens.
Yea shutting off anything that is producing free electricity to keep a market price stable is moronic....
It's not to protect market price, it's to protect the grid. You basically need to use as much power as you produce, if this becomes imbalanced, you damage the grid.
In this case, demand is lower than supply, so either you decrease the supply (shutting down the solar farm here), or increase the demand (lower the price). Because this is transient, and some powerplants (e.g. nuclear) take time and effort to shut down, for those operators it is cheaper to pay you to use their energy during those times (negative prices), than to shutdown/restart when needed.
Executive Summary (drastically oversimplified):
In a wholesale electricity market we have a market operator who estimates the demand for the near term future and opens the market up to bids for supply.
Suppliers bid a certain capacity for each period, with the operator typically accepting firm supply offers, contingency supply offers, and ancillary service offers in advance. Since some suppliers are “baseload” (ie: unable to adjust output to suit the current level of demand) they will typically bid low to always be paid for their supply. Everyone else will be affected by these bids because the “baseload” operators are typically not only inflexible but also have huge capacity.
In periods where total demand is low relative to total supply capacity, the wholesale bids will drop to low prices. For the baseload suppliers, they would prefer to pay for someone to use their excess power rather than damage their equipment by either turning it off or reducing output below certain minimums. A baseload supplier might, for example, be facing a maintenance cost of a million dollars versus paying the market a hundred thousand to create extra demand for surplus energy. So rather than turn off equipment they will bid negative prices on the wholesale market.
A second cause of negative wholesale prices is established players with large war chests waging economic war against new entrants. They know solar farms have razor thin margins, so it is worth spending a few tens of million dollars to drive the solar farm bankrupt. Enough negative pricing periods during peak solar capacity means the solar farm is not making any money. If the baseload operator knows roughly the breakeven point for the solar farm, they will know how much they have to spend in order to shut the solar farm out of the market and bankrupt them. There are no rules against this kind of activity in the Australian energy market.
Why do they have to pay someone to take the electricity? I could take a dollar bill and rip it in half (perhaps not legally, but besides the point). I understand there's costs to shutting down a system. So, they might keep it running.
But what I don't get: the electricity producer has to pay someone to take the excess electricity off their hands? The producer can't route the excess to, well... nowhere?
I'm going to hazard a guess.
If we assume the numbers for a sort of medium-size nuclear plant, we've got a total power generation of 500MW.
Dumping that kind of power is... hard.
If I haven't missed an order of magnitude, that's enough to boil an Olympic-sized swimming pool in about 25 minutes (500MW to boil 2.5ML of water, assuming STP).
So you'd either need to build and maintain the infrastructure to burn that kind of energy when it isn't needed (not cheap) or just sell the power at a loss (likely cheaper).
> that's enough to boil an Olympic-sized swimming pool in about 25 minutes
This is in a country that — as I understand it — could definitely do with more desalinated water. How capital intensive can putting a huge kettle element in the sea with something to catch the vapour be?
More desalinated water would be handy, but typically it's not needed anywhere near the salt water and where it is needed more electricity isn't.
So use the energy to pump the water to where it is needed. Use it to generate hydrogen or methane or something to sell as fuel. Mine bitcoin even. It seems weird and wasteful to just shut off free energy.
Those are really capital intensive solutions to a problem that occurs only now and then and might stop entirely if the situation changes a bit. In the meantime, to give people a reason to implement them, there is this market mechanism.
One of the projects is to build an interconnect to the snowy mountains. When this happens the power can be used to pump water up hill to fill the hydro electric dams.
But can't those plants just pull from the (now cheaper) power on the grid?
> Dumping that kind of power is... hard.
Why not route it to a nearby neighborhood? It's free it doesn't matter if a lot is lost in transmission and you don't need to pay somebody to take it.
Because that nearby neighborhood already has enough power being generated to meet its demand. You can't just send the power somewhere without either increasing demand or reducing other suppliers.
> reducing other suppliers
This would be the case, what's wrong with this? It's better than paying people to take your electricity and isn't this how business works? I don't see why they shouldn't be able to increase supply (And hence reduce other suppliers) just because it would ruin the profit margins of others. Unless there's something I'm missing here or not following correctly.
What, how? Increase the voltage and damage people's electronics?
Not at that levels of output. With large enough machines it's "we're going to spend X to spin everything down, do maintenance checks, spin back up" vs "we're going to pay you X/2 so you take the output and we can keep going". The X may be spent on extra workers, on extra maintenance, on replacement for posts that wear out faster, etc. It's the cost of unusual operation.
And once you're generating there's no great way to just "disconnect" in many cases. If you disconnect the load, the charge still has to go somewhere. Preferably not into nearby equipment. Even the safety switches are non-trivial when dealing with high power - if you break a cable connection, the electric arc will still keep them connected.
This makes me wonder how do you stop generating with a solar farm that is made of PV panels. They're entirely passive, right? The light hits them and they output electricity. How do you stop them?
I guess the process is somehow invertible, and once reached a certain static charge each panel stops absorbing energy?
In which case you're sort of already dumping the (non)produced energy in the environment- as heat, on each single panel?
Photons excite electrons. If a photon doesn't have enough energy it will be reflected.
It's electricity. Break the circuit and it stops flowing.
When I stop a turbine I'm not simply breaking the circuit- I stop converting some fuel into energy, and keep it for later. If I break the circuit on a solar panel, the "fuel" keeps hitting the panel anyway. I guess the panel just reaches a different thermal equilibrium. Which is the same as dumping the energy in the ground, only more distributed.
According to this https://physics.stackexchange.com/a/71445:
> Electric power is the product of voltage and current. If there is no external circuit, there can be no current and thus no electric power can be delivered by the panel, i.e., the "electricity" is never developed and thus, there is no need to consider "where it goes".
There's also an interesting discussion in the linked post in more depth about electron hole-pairs.
My takeaway is that the temperature in the panel will not rise due to it absorbing any power that would otherwise go down the wires were the circuit complete.
Thanks for the find! The second comment to the first answer says:
"The equilibrium temperature of the connected panel should be slightly lower than the disconnected panel, because those hole recombinations introduce heat. But the efficiency is only something like 12% to begin with. So the temperature difference isn't like the difference between a white and black surface. More like the difference between a dark and slightly darker surface"
Some baseload devices can’t really be realistically switched off. Some of these turbines run for decades.
If I remember correctly there are rules that the estimated demand and actual generation have to match pretty closely and the overage can only be within a few percent tolerance. You're not allowed to just generate electricity that there isn't demand for.
1. Energy can neither be created nor destroyed.
In practical terms the energy has to go somewhere. Maybe they could build massive dump resistors to burn off the energy that way but doing so would only increase load on everything (shortening component lives) for no gain.
Those giant cooling towers that are most people's image of a power station are almost exactly this. They are a giant system for dumping heat into the air, usually (but not always) by evaporating water.
(The heat being dumped is usually low-temperature waste heat, not final output.)
Those giant cooling towers are pretty expensive and the water to run them can cause significant damage to the local ecosystem if it raises the temperature of whatever water body they draw from. It's a lot easier to just turn off the energy sources (such as solar) that can be turned off without ill effect.
Sure they are expensive. That's why the coal plants are willing to bid a negative price for their power, to have someone else deal with it. Rather than paying to build another tower.
The negative bids aren't coming from suppliers who can easily turn off, they have already turned off at this point.
And, cooling towers don't work by pumping hot water back into a lake. No need for a tower for that. They work by evaporating it, which lets you dump both the heat up to 100C, plus the latent heat of liquid -> gas.
No, electricity can't be routed to nowhere, that's not how the grid works. The amount produced and the amount used have to stay in balance.
There is a bit of leeway in that turbine power stations will run a little bit slower or faster depending on exact use (resulting in a grid frequency a little bit faster or slower than 50Hz) but the difference has to be made up quickly.
(not an expert, this is badly remembered from Internet articles so probably hurts to read for real experts, I'm sorry. But I hope I got the gist sort of right.)
And what happens when a solar farm goes bankrupt? Its major operating overhead is servicing the loans for the initial capital cost. So all that will happen is that the bank will take possession of the solar farm. It will still be producing cheap power, and it will now be owned by an organisation with very deep pockets!
On the grid there are lots of different types of producers (solar, diesel, wind, nuclear, etc.). Each has its strengths/weaknesses. A big weakness of nuclear plants is that it's very expensive to turn them off. So much so that when electricity demand temporarily goes down (and with it prices), it is actually more profitable for them to continue keep the plant running but pay someone to offset their excess production.
There are people that arbitrage this--moving water up a hill is actually how many of them do it.
This stuff is really confusing. My brother trades electricity and has explained it to me numerous times and it's still a little fuzzy.
The problems are also not always technical. In CA I've read articles with descriptions of similar moments where power needs to be shutoff from renewable sources and/or offloaded from the grid, but in part because contracts locked in priority for some fossil-fuel peaking plants over renweable sources.
> An explanation of the mechanics of how I'd have to pay somebody else to take my electricity (e.g., a negative rate) would be helpful.
Sure. Let's say you have a million people producing a glut of electricity on sunny days from 11am to 2pm, when there is not a lot of demand. So there's massive overproduction and you need to create a financial incentive to incentivize the overproducers to pull back. So you have negative rates. It's as simple as that.
How much you can charge has nothing to do with your cost. Your amortized cost of providing excess power every sunny mid-day might be extravagant. That is no matter as far as the market is concerned.
Solar energy production still costs a lot. But there's tons of articles claiming that it's now cheaper than pretty much every other energy source. Yes, it's cheaper to buy at noon in sunny areas during some months because of economics. That doesn't mean it's cheaper to produce and supply though.
South Australian here - In South Australia keep in mind commercial scale solar is also generating against residential rooftop solar which is sold back via a feed in tarrif to the generator at a contracted fixed rate. The generators have to pay for (and take) this power. In some cases 20 year contracts where signed some time ago with feed-in tariffs much higher than what they ever should have been. This has resulted in early adapters making thousands in cash every year from residential solar (and still doing so). Everyone else is paying for it of course. Feed-in tarrifs available for contracts signed today are much lower, but some of these contracts still have a few years to run. Without more storage solar will continue to reduce reliability and add costs.
People do, we have snowy hydro who normally correct these negative prices by pumping water uphill into a dam. They then double dip on profits by generating when the cost is positive. Very profitable operation although the initial infrastructure cost is high.
The grid needs to maintain supply within certain levels.
If you produce more than your share, someone else needs to shutdown.
Shutting down certain power sources (e.g. coal) comes at a non zero cost. Someone still has to pay the power plant that needs to shutdown or send people home unexpectedly. These plants might be have pre secured contracts to sell at a given price over a given time period further adding to the cost of shutting off their supply.
Some more info here:
https://www.epexspot.com/en/company-info/basics_of_the_power...
The article mentions there are pumped hydro projects that could be used soon and others that are coming online. OTOH perhaps you are talking about smaller-scale pumped hydro on individual farms with access to enough water. I suppose the viability of that would depend on how easy it is for the farms to access real-time prices and turn on the pumps based on prices.
> convert it back to electric when it's needed
FTA: "Tailem Bend is also considering a battery storage..." and links to https://reneweconomy.com.au/tailem-bend-solar-farm-officiall... which adds "Vena Energy also has plans for a Tailem Bend Battery Energy Storage Project."
It happens when high inflexible power generation meets low demand. Some power sources can’t be shut down and restarted in a quickly and cost-efficiently. If the cost of stopping and restarting their plant is higher than the costs of selling energy at a negative price for some time, prices go negative.
Did you read the article? It goes into reasonable detail on why they don't necessarily do that.
Can’t they discharge it for free? Why do they have to pay to send it into the grid?
The crypto one won’t work because there would only be free electricity half of the time, and the water idea is good but it takes immense capex and time to make
The grid has to finely balance supply and demand. You can't just dump power into the grid. If you did the grid frequency would increase out of spec and it could damage connected equipment and machinery.
Water storage would only work if there is a steep mountain or big hill nearby.
Another way to look at negitive pricing is the grid is paying industrial users to burn as much power as they can.
I think the dominant question here is, "I have this machinery that produces electricity, and it's hooked up to the grid. Why can't I also hook it up to the ground, and -- during periods of negative prices -- send the electricity into the ground instead of the grid?" Nobody charges you to ground your wires.
The ground is a poor load and also there's a finite amount of energy you can dump into it because every watt that goes in gets turned into heat, you'd liquify the ground very quickly at the multi MW scale.
Well, I don't know. Let's think about how you would turn off solar panels. I remember hearing about solar panels (~10 years ago?) that would actually break under very-sunny-but-zero-load conditions, so I did some research using queries like 'solar panels without load' and am led to think that this isn't usually a huge problem (with regular/modern panels?). But physically speaking, unless you cover the solar panels with a blanket, the amount of incoming sunlight won't decrease, and when you aren't turning that into electric power, it'll turn into some more heat.
If your solar panels are on an open circuit with no way to generate electric power, I guess the amount of heat produced in the panels would be roughly equivalent to the heat produced by other dark objects -- which may or may not be too hot. If you keep turning the sunlight into power to route some of that energy into the ground, that may be a lot if you're doing that in a single spot, but I don't think it would be impossible to come up with a workable grounding system.
That said, I'd be very interested to hear how a large solar farm like this turns off their panels.
Likely if they need to most of them can turn the panels away from maximum sunlight and that would take care of the turning off/full light no load problems. Same with the molten salt tower systems, just just the aim on the mirrors.
We routinely dump lightning bolts right into the ground and they go well beyond multiple megawatts. They're very brief, but if lightning took ten seconds to strike, it would still provide several dozen megawatts of power. How quickly would we be melting the ground at the multi-MW scale? How many lightning bolts would it take before the ground around my house melted and flowed downhill?
Lightning bolts do in fact melt the ground (see fulgurite), and they take at most about 0.2 seconds.
Yes very localized and for a very short amount of time and most of the energy radiated away into the surroundings, including the atmosphere
At that point, isn't it cheaper, safer and easier to turn off the machine? The machine being on has no value, only producing energy being consumed on the grid has value.
The value of the machine being on is precisely that you avoid the costs of turning it off and then turning it back on. Those can be considerable, depending on what machine you're talking about.
How does excess electricity impact the frequency?
It's not really excess electricity, but excess energy, and it's an artefact of how traditional power generation works: You generate electricity by creating rotation and using that rotation to drive a generator. Now, it's basic physics (conservation of energy) that if you add energy into a rotating system, it will spin faster and faster with every bit of energy you add, because the energy is transformed into kinetic energy of the rotation. The only way to prevent that speeding up of the rotation is to take energy out of the system--which, in the case of an electric generator you would usually do by connecting it to an electric load, i.e., the grid. But if demand is too low, you are removing energy from the rotation at a lower rate than it is added back from the mechanical drive side, so the net energy in the rotation increases and thus the speed of the rotation increases and thus the frequency of the electricity output increases.
Essentially, electric load is what brakes electric generators, if you take off the brakes but keep the motor running, they'll speed up.
My guess is that load acts as an inertial mass that adds drag to the turbines. Think of cycling downhill at the same power used when going uphill: you’ll spin like a crazy fool
I thought voltage needs to increase because a differential is required to add power to the network.
Hmm has anyone experimented with variable frequency transmission and solid state frequency synthesizing power transformers?
So you might be able to increase all the turbines from 50 to 70. That will absorb the excess power for a moment. Then you're maxed out and still need to shed just as much power as before.
So it doesn't help in any significant way, you have to set up a more complicated grid with very expensive transformers, and it requires you to design all your turbines to be twice as strong.
> Can’t they discharge it for free?
Yes they can and should and that's why they have to pay since there is a mitigation cost to handling the excess.
> Why do they have to pay to send it into the grid?
Because it's bad when there is a glut of overproduction.
They mentioned moving water uphill with the Wivenhoe pumped hydro which is about 3000km away in Qld. This is also where the NSW interconnect will help as most pumped hydro is in NSW.
tl;dr: the Australian grid is working on a faulty system because of politics. This is not a technical limitation there.
I'm not sure I understand, in what system would this not happen?
You can say that the goverment should store the extra electricity but that's not as easy as it sounds. Most things need very specific geographical or technical conditions for pumped hydro, compressed air energy storage, boreholes, hydrogen, molten salts.
So in what system wouldn't this happen?
If you have a way for consumers to bid for zero-price electricity, there are many things that can increase demand now and give reduced demand later when prices are higher. Everyone has a domestic freezer. If the freezer is smart, when prices reach zero, it can switch on and decrease the temperature another 10C. When prices are higher, it won't need to run as it warms up slowly. Similarly with domestic hot water - just run the temperature up another 10C. People are creative: if you given them intermittent free electricity, they'll find a use. The main problem though is that this reduces demand when prices are above zero. While this is good for the environment, it's not good for the electricity industry.
How much money does it cost to build this out to every house, compared to what it saves? And do people want their electricity prices to vary over the day? If you have a lower cost part of the day then you have to charge more the rest of the time, all else equal.
These spot price contracts for end users do exist in many places (don't know about SA specifically). They haven't been particularly popular; I guess most people are scared about the other side of the coin, will I accidentally drain my bank account if I do my laundry when prices are at the roof limit?
It probably works best when you only have some sockets in a home that are on spot price contracts. And on those sockets, you have plugged in a washer/freezer/AC that is smart enough to receive spot price information and turn on and off as prices rise or fall. We're not quite there with all the pieces of the puzzle, but it's all technically possible now and likely much cheaper than using batteries to load-shift.
> in what system wouldn't this happen?
In any system designed by half-competent engineers, instead of by politicians who hate renewable energy for ideological reasons.
Be specific. How would it work differently? (Assume the designer of the system is trying to deliver reliable power without wasting a lot of money.)
If you suppose a well-designed grid, I really doubt that free electricity is something that clients would refuse. Electricity is valuable, at any time of the day. There is no reason for it to go below zero.
Sure, storing energy is hard but spending it is easy.
Hell, give me free electricity and I will be running a pyrolysis rig, making biofuel for free.
No, it's not always valuable. If you get free electricity for an hour, some days of the week, then your giant biofuel plant spends a lot of time sitting idle.
It's not obvious that your mostly-idle plant is a better business than a much smaller one which runs all the time. The costs of building and maintaining the thing are real too. (Not to mention needing to design the plant to ramp up to full production in minutes, while a more traditional one might spend a day warming up all the pieces to operating temperature.)
> It's not obvious that your mostly-idle plant is a better business than a much smaller one which runs all the time.
This process is usually not profitable because of the energy cost it requires. This is why I am proposing it as a way to absorb energy surplus. But I am only talking about what would happen if you got electricity at zero cost. At negative costs, even crazier things would happen.
The reality, is that, to my knowledge, the Australian grid does not "sell" electricity for negative prices, it only "buys" it. If it were to pay clients to absorb electricity, I would just dissipate heat in well ventilated radiators, make a ton of steam, and make a show of giant tesla coils. Radiators can be made out of scrap metal, it really is a small investment that can lie dormant at no cost if negative electricity prices only happen 5% of the time.
Could you please show the calculation of what it costs to build and maintain such a scrap metal radiator thing, and how much money you would have made with such a device over the last 12 months?
"dissipate heat in well ventilated radiators": you've just invented a https://en.wikipedia.org/wiki/Cooling_tower , often the largest building at a power plant.
There are economic involved. Long term, it pays to have many variable load generation in the grid, because they are cheap and environment friendly.
But a net needs to be handled exactly to match supply to cost, and demand has a large random component that no-one foresee perfectly.
Hence, negative prices are a normal feature of balancing demand and supply, which is a technical necessity not to have black-outs and brown-outs or, in this case, damage expensive base-load powerplants during emergency shut-downs.
I wish these prices were reflected to the consumer. Electricity bills in South Australia are ridiculous, and as a renter you don't have the luxury of installing solar panels.
The "retail" cost of power is always going to be higher than the "manufacturer wholesale" price, due to the cost of operating the grid.
Also, while I don't know details of the Australian electrical market, if it's anything like most of the world the consumer prices are regulated -- you don't get deep discounts during "cheap electricity" hours, but you also don't pay incredibly high rates during the days when e.g. people are running air conditioning during a heat wave and a couple major power plants had to be taken offline for emergency maintenance work simultaneously.
I'm not sure how South Australia works, but I think in general you pay for the cost of electricity generated (here going to zero) AND for the infrastructure required to get it to your house.
In part that's why rooftop solar is hazardous for a grid in high amounts- you don't pay the infrastructure price half the time, but the infrastructure still has to be there for you.
Indeed -- so called "net metering" ignores the fact that the costs are driven by both consumption and capacity. Providing a 400A supply to a house is expensive even if you never draw any power, because the utility has to be ready to provide the power.
The reason for net metering (other than it being a cheap hack to take advantage of just rewinding a standard power meter) is that the energy from the houses is valuable to the grid in lots of ways (e.g. in reducing peak generation and transmission demand).
It doesn't ignore those costs you mention, it just also doesn't ignore the benefits. In some jurisdictions the benefit exceed the money the householders are being paid (it varies depending on how dirty the grid is, when peak load happens etc.).
For whatever reason, like negative prices, this attack on net metering appears to resonate well with people who don't like renewables, but it's just a talking point from utilities who see the ability to increase their own profit by taking but not paying for that benefit via political shenanigans.
Apparently the idea that electricity can be differently valuable at different times of the day or year is something that ordinary people are insulated from, so paying an average seems normal, but getting paid an average seems crazy. But it's not something being argued against from a wider economic standpoint of efficiency, as it is literally a good thing, that's why people proposed it in the first place and continue to support it.
When I was looking I saw a fair few rental properties advertise that they have solar installed and that you will not have to pay electricity bills for reasonable usage. It was still a minority of properties set up like this but I imagine in the future many more will have solar since it will make them highly desirable.
I'm in SA and I'm currently looking at getting solar panels and maybe a battery because we have the highest cost of electricity in the country. I'd like to know why we have the highest when the price seems to be going negative every other day?
Historically it has been expensive because S.A. was always reliant on a lot of gas and imports.
More recently though - if consumers have been willing to pay that much, then the private monopoly that runs the distribution network and the private companies that run the generators and retailers don’t really have much incentive to drop prices...
The market reacts quite quickly if a company is going bankrupt; so assume for the sake of argument that all the electricity producers in the market are turning at least a small profit.
If power prices are negative but the provider is making a profit, then at some other time prices will have to be very high to bring the average price sold positive.
I assume that is what is happening here. I don't have a lot of respect for SA's electricity strategy, but it may work out. At least there are interesting opportunities if anyone can think of a way of profitably sinking vast amounts of power; there has to be something useful that can be done. Ironically in this case, using more power might reduce power prices because the providers don't need to charge as much in off-peak times.
So perhaps they should drop the costs to encourage more usage and thereby also reduce the wholesale cost.
Bunch of stuff they should be doing; negative power prices are an economic emergency. If your lot can figure out something that works for consumers I'm sure we'll start copying it up and down the east coast. I'm glad it was NT doing this expensive experiment and not NSW; for all that we've mucked up our electricity markets something shocking.
Wholesale is only around 30% of what you pay. Distribution takes 40%, and retail (customer support and sending bills) is the other 30%
As for why it's what way... probably regulatory capture
Not knowing anything, but making an educated guess. Transmission costs?
Possibly - but NSW, QLD & TAS are well known to have "gold plated" their network and still have lower cost than here.
Storage is definitely the wise answer here, as the article mentions.
The fun answer here is giant crypto farm.
Smart air-condition and cooling is also a possibility, a here Finland we have started to piloting programs where heating is smart so houses are heated more when electricity prices are low.
That reminds me of the so called "Niedertarif-Speicherheizung" (storage heater) that were installed until the 80s here in Germany. They used the comparatively cheaper energy during the nighttime to heat up and then emit the heat during the day. They were controlled by the energy provider to turn on when the energy price was low.
An answer that no-one seems to have thought of is a liberalized energy market where non physical traders are allowed, and allowed to deliberately take themselves to imbalance.
To be clear: this is literally what the US has. I suspect @ourlordcaffeine knows this, but for anyone else reading it.
UK as well
Even the giant crypto farm is a type of energy storage - as long as you can afterwards sell coins to buy electricity.
Long distance power transmission can face losses of around 10% per mile.
But if you turn power into coins at point A, then use coins to buy power at point B, maybe you have transmission losses that don't scale with distance?
Yeah I had thought surely they can find a use for free electricity rather than just turning it off
They should accelerate a particle with it.
EDIT: Whip it around in circles with giant electromagnets.
Free electricity that turns off half the time and run basically randomly for the other half? Without a battery it’s useless, and you have to pay for that battery. Treating the electric grid as a battery shouldn’t be free. It’s just in this case they found the cost of battery to be greater than the value of the electricity they’re creating.
This island uses water as a battery: https://www.youtube.com/watch?v=eG4Q4kXal_U , when there's a lot of wind spinning the wind turbines, they pump up water up a mountain, and when it's less windy they let the water fall through a hydroelectric plant...
> Free electricity that turns off half the time and run basically randomly for the other half? Without a battery it’s useless
I can't imagine that's true. Spot instances come to mind.
I keep coming back to electrowinning iron. When I search for papers it looks like people have started working on it again in the last ten years. I think it's not particularly high tech. Intermittent tolerant and scalable.
In SA there are some pump-hydro storage projects in the pipeline which should smooth out some of these variations.
Good stuff. I was wondering if maybe a desalination plant could work..
Adelaide has a desal plant. It was even in the news today: https://www.abc.net.au/news/2019-11-07/how-will-the-sa-desal...
How? Or was that meant ironically?
Desalination plants use a lot of power, but it's not obvious to me how to use it to store power.
The idea there isn't that you store power but rather that you only run the plant when power is cheap (and then keep a large enough fresh water reservoir to serve demand until the next cheap electricity arrives). Demand management rather than supply management, effectively.
Yeah, the problem is that it's not easy to store very large amounts of water (at least not near where the Adelaide Desalination plant is).
I believe they can pump the water up into the hill, so I guess it's not entirely out of the question.
Decal plant when the power is cheap and well water the rest of the time?
The solution is to deregulate the market and allow multiple companies to buy and sell electricity. The problem here is not an over supply but poorly regulated demand that causes energy to be priced higher than is justified; mainly to protect expensive sources of energy such as coal and gas plants.
The basic issue is not that there is no demand but that it is unevenly spread. People turn on their ACs when they get home after work. Peak demand is in the evening when the sun is about to go behind the horizon. Peak supply is in the late morning and early afternoon when people are at work.
So, all you need is tuneable demand. Say you had a web service that simply announces the current price of electricity that updates in real time based on your production capacity and a whole bunch of things that can turn themselves on/off based on that price. Whenever there is excess demand it just continues to drop that price until demand picks up. Now say you have an apartment complex with a lot of batteries in the basement and a bit of simple electronics that controls the charging behavior based on the price several energy providers (why limit to one). Now basically you have an energy sink that charges cheaply that automatically picks the cheapest provider.
Now imagine that battery has some overcapacity that can be sold back to the grid when prices are highest (aka. demand is high). Now you have an apartment building that buys energy when it is cheap and sells energy when it is expensive and it has enough capacity to serve its own needs.
Add EVs to the mix and battery to the grid technology and you have a mobile battery capacity that when it is not driving around can be plugged in to act both as an energy source and sink as well.
Now make the rest of the energy available to industrial users that can install their own solar panels and you have even more supply and demand.
The key bottleneck in this system is the current oligarchy that controls prices: the existing energy companies. They make the most profit when prices are high. They don't mind buying in some excess capacity cheaply but they have no incentive to do that when they don't need it. And since they control the market, there's nobody else to sell it to. Worse, since they have fixed cost associated with legacy plants, they have to keep prices high to prevent those becoming loss leaders. The whole system is geared towards protectionism rather than efficiency. Once you create an open market for energy, that's no longer sustainable.
What you're describing is known as a smart grid in the industry (https://en.wikipedia.org/wiki/Smart_grid).
I can't speak for other countries but Australia has quite a few initiatives for progressing toward a smart grid but it simply takes time.
Here is some info:
https://arena.gov.au/projects/?project-value-start=0&project...
Your analysis completely ignores the capital costs associated with building out a variable demand system. Every battery built will tie up a certain amount of money into fixing grid pricing variability, as well as depreciate in value and usefulness over time.
If electric overproduction is an infrequent enough condition, it may well be cheaper to waste energy than to build a battery that just sits there 300+ days a year doing nothing.
It doesn't ignore it but the premise of capital cost is that it then gives you access to potential gains. That breaks down if you are dependent on selling to a monopolist that sets prices based on their own needs rather than the market needs. In this case, local energy providers get protective about their more costly infrastructure when faced with homeowners supplying cheaper energy to the point where they charge negatively.
Right now the power market is weird because people are deliberately installing less solar than they need/want because their local energy providers are simply refusing to buy the excess energy beyond a certain number of kwh. And since they are the only party you could feasibly sell to, a lot of homeowners simply install less capacity.
Think about it, you've got engineers on the roof to install solar panels, wires, inverters, etc. and the panel cost is only a small portion of the overall cost. Why would you cap your installation at 4kwh when your needs are closer to 10 kwh and you have room for 20 kwh? That's exactly what's happening in a lot of places.
Capital cost vs. captial gains is what normally dictates these things except we are talking about effective monpolies where the monopolist is protecting their prior investments and can choose to deny access to the market for everyone else. It's basically forcing consumers to help them turn a good ROI on already obsolete investments that should rightfully be killed ASAP otherwise.
Sounds like someone needs a small aluminum smelter?
Australia has some of the worlds largest aluminium smelters. Unfortunately they are on the south east side of the country and the places that have the negative price events are in the north and south west.
The long term solution is to connect the grids together so the places with an excess of supply are connected to the places with an excess of demand.
Or hydrolysis.
That's even better -- I imagine that those systems can turn on and off much more quickly than smelters.
Might want to buy some of the Power Miners:
As chips reach the limits of the cutting edge tech, the only advantage will be how expensive your electricity is rather than replacing chips every 12 months
Why waste energy on a system that's designed to grow increasingly inefficient over time (Crypto PoW mining), when you could simply store the energy or use it on something that is helpful to the local community, as in food or manufacturing?
Because the whole premise is that you don't really have a way to store or use that energy in other ways. Then converting it into cryptomoney makes sense- then you can use that crypto to buy things which are helpful to the local community- even things that are produced on the other side of the world, where your energy could never reach.
An interesting thought is that of using that crypto exclusively to buy energy when the prices are non-negative. But I'm not sure that makes sense from an economic point of view, it's a snake biting its tail.
Depends of your investment. You could always deploy on those sites old miners where the ROI is already paid off - so it's always better than them being thrown away.
You can move miners easily between inefficent sources of energy. Water, dams, etc... not that much. Using current battery technology would be too nefast for the environment.
Why work for money when you can volunteer your time instead to the local community?
Is that simple?
I think there is a fundamental flaw in the whole discussion. We are doing alternative energy for two reasons:
1. As a means for alternative cheap energy; 2. As a means to gain independence from imported energy (oil, coal); 3. As a means to protect the environment
If a solar farm has to be switched off, because the power can not be sold, apparently 1.) has dominance over 2 and 3. If environment protection would have precedence, consumers should be forced to consume higher priced energy?
Question: what happens to the solar energy when PVs are disconnected? I presume reflected or absorbed as heat, but is a PV under load cooler/less reflective?
Yes, a disconnected panel runs slightly hotter.
Would it be cost effective to have vats of aluminum oxide sitting idle, waiting for these negative pricing events? The raw material is cheap, and the electrodes are only worn away when actively smelting. With interest rates so low, the idle capital may not be a major impact to profitability.
I'll add my ideas to the others for using the excess power:
1. drill a big storage hole of some kind. Surely Australia could use a gigantic underground reservoir 2. install a plant next to the solar farm and make compressed gases from the atmosphere
It's a PV farm, they could just take parts of the PV grid offline instead of playing arbitrage games such as paying others to take their power or trying to build storage systems (though any half-smart PV solar farm has some minor storage on-site.) It's not like the entire system is hooked to a singular large MPPT controller. They aren't bound by the typical issues of energy generation which nuclear or constant hydro-electric have.
BTW: Did you know solar panels can self-immolate if seriously defective during manufacture?
It isn’t the PV farm that is paying people to take there power. It is the baseline coal generators.
The article makes it abundantly clear that this is not the case. The first three paragraphs alone have most of the effective article impact.
"When Australia’s renewable energy portfolio reached its important milestone on Wednesday of providing 50 per cent of the main grid’s demand for the first time, one solar farm couldn’t be part of the fun, and had to look on from the sidelines.
The sight of wind and solar farms being switched off when wholesale electricity prices fall into negative territory has become increasingly common over the last few months, particularly in Queensland and South Australia.
But the facility that appears to have been affected the most has been the 95MW Tailem Bend solar farm in South Australia, owned by Vena Energy and operating since earlier this year."
Further reading shows that coal plants rarely need to shut down as evidenced by:
"It’s common to see wind and solar farms switch off when prices go into negative territory, or get close to zero. It happens either because their off-take agreements oblige them to do so, or because they are “merchant” facilities that take the spot price and don’t want to be paying other parties to take their output if prices do go negative."
Coal generators almost NEVER pay for arbitrage in Australia because of various specific agreements (and limits to the arbitrage that is possible in many areas.) It is almost the exclusive domain of wind and solar plants.
This doesn't make a ton of sense and the article is so poorly written it's hard to understand what's going on.
Buy some Tesla Megapacks, install some DC fast chargers on-site and sell electricity for 0.2$/KWh or so all day long.
https://www.abc.net.au/news/2018-04-06/tesla-battery-outperf...
"The world's biggest lithium-ion battery — built by tech billionaire Elon Musk's company Tesla last year — has survived its first summer in South Australia's mid-north."
"And according to a new report by the Australian Energy Market Operator (AEMO), it's outperforming coal and gas generators on some key measures."
"AEMO says the Hornsdale Power Reserve is capable of charging at a rate of 80 megawatts and discharging at 100 megawatts."
"It has a storage capacity of 129 megawatt hours."
"That means it could operate for about 75 minutes at full capacity."
Ah, if only the professional electrical engineers had thought of batteries. Thank goodness there are software developers to tell them what to do.
It seems almost silly that we can generate more energy than we can use some, but not all of, the time.
Inconsistency has been the known challenge of renewable for decades.
You also need to duplicate the entire energy production infrastructure so that we can operate on 100% fossil fuels if the wind isnt blowing and the sun isnt shining.
What's more annoying is we can provide that energy for virtually free, but because it doesn't make someone else profits it gets switched off.
EDIT: just to clarify: I mean I wish that solar could be socialised and made into a social commodity.
We're becoming increasing dependent on electricity as time passes, almost to the point it'll be difficult to live well without it. If that ever becomes the case, I would want to see a social effort to ensure electricity becomes available to all, just like health care and drinking water.
I also understand that there are costs involved with providing these services, but again: social commodity. That means taxes and everyone chips in to ensure we have these resources available to all so that all can benefit and live equally.
why would they pay for someone else to use their energy? It just eats into their profits and means that their normal customers have to pay more for the solar energy.
I think the power grid should be socialised and electricity handed out for free, especially given our increasing dependency on it. Solar is technically "free" energy given there's nothing to setup and maintain except the infrastructure, versus coal/oil/gas which requires mining, refining and transportation of materials before you get to the generating and delivery parts of the process.
It may be almost free to produce the energy with the infrastructure you have, but it's still limited: there's only so much power available. So how would you allocate it?
> We're becoming increasing dependent on electricity as time passes, almost to the point it'll be difficult to live well without it. If that ever becomes the case, I would want to see a social effort to ensure electricity becomes available to all, just like health care and drinking water.
I think we're already at that point, which is why many countries have subsidized electricity rates for low-income households.
Overloading the grid isn't a good idea, generally speaking
If the grid were smarter it could schedule demand for the excessive production times. It could be used, for example, in render farms or other non-time-critical high load batch operations.
Some places have flexible pricing, where electricity costs more at certain times, which allows users of electricity to do this. I don't think it should be the grids responsability to do that kind of scheduling. It would be nice if everywhere we had some kind of hourly pricing adjustment that would fluxuate within some predefined price range, then you could hook into the grids api to determine when to run your appliances.
At a wholesale there is flexible pricing. The grid has to do that sort of scheduling because if more power is put into the network then is consumed then systems get damaged.
This is also why the turbine based systems that coal and hydro systems are so important to the stability of the grid. The physical momentum of the spinning metal stores considerable energy and can smooth over short lived inbalences in power consumption.
They perform that role right now, but you could replace them with much much cheaper flywheels.
Some kind of real time pricing api would do wonders. I wonder how we would solve the issue of having a bunch of devices waiting for the price to drop under $x and as soon as it does all of these scheduled devices kick in to action causing the price to immediately shoot up. Probably need some way to distribute price cheap times so not everyone gets it at the same hour.
Something similar already happens with natural gas in manufacturing. You can either sign a contract to lock in a rate, or pay as the price changes. If you are a factory that makes a good that you can stockpile (like sand), it makes sense to run more in cheaper parts of the year.
(Same thing also happens with iron / steel. I would assume electricity is the same, but I don’t have much knowledge. )
That's exactly what this is, but at the wholesale level. The price is so flexible that it sometimes goes negative.
I think this is a great news, there's now a financial incentive to invest into storage
‘Solar farm can switch off every second day in case of negative prices’
Instead of switching off, why not just mine crypto?
Probably because crypto miner ASICs are not cost effective when run only every once in a while.