Inspired by a story in the Wall Street Journal today, here are all the spots in California where the wholesale price of electricity is currently negative:
The Journal explains that this is all due to the rise of renewable energy, mostly solar and wind, which is already widespread in Europe:
The changes sweeping Europe’s electricity markets, which were accelerated by the energy crisis brought on by the war in Ukraine, show what could happen in the U.S. in a few years when renewable capacity reaches a similar scale. In 2023, 44% of EU electricity was generated by renewables, compared with 21% in the U.S.
In some U.S. markets—sunny California, the wind-swept Great Plains, and Texas—zero and negative prices are already common. The wholesale price in Southern California was negative nearly 20% of all hours this year because of the region’s boom in solar-panel installations
This is sadly not the case here in Irvine, but maybe it will be soon. "Too cheap to meter" might finally come true 70 years after it was first promised.¹
¹In fact, six days ago was the 70th anniversary of this phrase. It's attributed to Lewis Strauss, chairman of the Atomic Energy Commission, who you may recall as the villain of the movie Oppenheimer.
Only because we don't have sufficient storage to hold what the renewables generate on their intermittent bases, but still need to keep other sources online because they aren't able to be brought online/taken offline rapidly.
Exactly right. Negative rates are only during the middle of the day when solar generation is highest and the "duck curve" is at the minimum. Wind power at least generates 24 hrs/day, but better storage is needed.
I can't help but notice that the vast majority of those dots are in southern half of the Central Valley, which is to say Kevin McCarthy / Devin Nunes country. And these are the people who actively oppose investment in renewable energy?
(Snark aside, I'm open to responses with a more nuanced take on the dynamic at work here.)
It is probably as much about weather and land acquisition cost as anything else. While that region may be McCarthy/Nunes country, looking at https://en.wikipedia.org/wiki/2022_United_States_House_of_Representatives_elections_in_California suggests that the highest percentage a GOP candidate got was 67%, and several were just in the 50s, which is still not indicative of homogeneous political leanings in the district. And I wouldn't be at all surprised to learn that as with housing, at the state level Sacramento has asserted levels of control/laws/regulations to (try to) combat opposition to sites being developed.
Those SoCentral Valley areas just want cheap and abundant water. They also want their cheap labor force to stay cheap.
Finally we are making better use of the great fusion reactor in the sky. Too cheap to meter indeed - but not fission energy nor terrestrial fusion energy.
But commercial fusion is only ten years away. As it has always been.
Currently. Nice.
Living just south of San Francisco we put 9kW of solar panels on the roof and a 13kWh battery in the basement. We produce much more than we consume.
PG&E should embrace roof top solar, not fight it. They should encourage as many as possible to add solar panels, then put storage batteries in each neighborhood creating many micro-grids. This have a number of benefits including making the state much more resilient in the face of various disasters.
I assume the produce more than you consume is net over the year. How often have you needed to pull from the grid when the battery was drained? Do you still do anything with gas? Heat? Hot water? Cook?
We don’t have a gas hookup. The house is all electric. Usually when you get solar they try to give you enough to break even. Just because I wanted to I had them fill the roof. In the summer we get about 60kWh a day and use about 25kWh. In the winter we still get somewhere around 20-30kWh and use about the same. We just built this house so the insulation is great, all double pane windows. We use the AC for a few hours a day in summer and the heater for a part of the day in the winter. The HVAC is a split zone heat pump so we only heat/cool the rooms we are using. The water heater is also a heat pump. This is the ecocute technology. Very efficient, it uses high pressure CO2 as the working fluid.
A few times we had PG&E cut out on us and were able to operate on our own. We barely knew anything happened.
The battery is mostly used to time shift power from the afternoon to the evening. The battery/inverter can’t handle the draw from the big items like the HVAC and the stove and oven. Everything else is good. The microwave and hotplate still work. So does the fridge.
Home batteries are OK because no one else will do this for you. I think it makes more sense for the utility to put at battery in each neighborhood (50? 100? 200 homes?) because they are better able to manage a large battery and can do that more efficiently than I can at home.
Some of the problems with solar and heat pumps is that homes were designed for central heating, relatively low power electricity and provided with inexpensive gas. Retrofitting an older home can be difficult. The home we knocked down to build this had terrible insulation and a small electrical panel. Some of the house was protected by those old screw-in glass fuses, not even breakers.
Fuses eh? You're lucky the home was not declared historic 🙂
Yeah, the last house I lived in that had fuses nearly was! Two 20a circuits. It was a pain. Neighbor's house did get a historical plaque. The kitchen was added some time in the 30s.
Reminds of when a couple we knew bought the John Adams Squire House in Palo Alto and wanted to upgrade the utilities and add internet.
We had rooftop solar for nine years in St. Louis before we moved east. We had reversible metering, so when we generated more than we consumed, Ameren bought the excess, albeit at about 10% of commercial rates.
"PG&E should embrace roof top solar, not fight it. ..."
Roof top solar has never made economic sense. It only exists because of subsidies and the more it grows the greater the burden these subsidies place on the system.
Solar panels has gotten so inexpensive, and electricity distribution so expensive, that rooftop solar is probably about break even right now without the subsidies especially in new construction where builders can plan roofs to optimize performance. I suspect that the subsidies will go away in the not too distant future.
"Solar panels has gotten so inexpensive, and electricity distribution so expensive, that rooftop solar is probably about break even right now ..."
I doubt it. Electricity rates have gone up in part to fund the subsidies. And unless you are disconnected from the grid entirely the cost to maintain a connection to your house is about the same whether you draw from the grid one day a year or 365 days a year. Current rates don't reflect this economic reality.
The major energy infrastructure companies are spending a lot of time and money trying to spread this message. Convice the public (and more imortantly, local regulators) is certainly a key part of maintaining their market share and future revenue streams.
This convenient messaging isnt really true and is almost always used in deliberately misleading ways.
The giveaway is framing free energy as a 'burden'. It is not a burden to anyone but the people with long term financial interests in the previously existing infrastructure and the executive bonuses tied to the (previously) nearly guaranteed returns associated with that infrastructure.
Rooftop solar has been better than break even in most of the country for twenty years.
It goes like this: a solar install costs under $3k per kilowatt production.
But it operates every day for 30 years - slowly getting worse, yes, and never totally getting the nameplate amount, but... it never actually stops unless it's dark out. So in the summer you get energy on twelve hours of the day and in the winter you get a few hours a day. So say, per kilowatt production, you get an average of five per day.
That means over thirty years, your cost was 5¢ per kilowatt.
This is bunk, James.
It's beat retail prices in most of the US for twenty years.
One of the issues we have is the current infrastructure is largely built as one way only. Sending electricity back to the grid creates huge issues with outdated infrastructure. There's also that pesky profit motive thing as well, all the California IOUs have shareholders that demand ever increasing profitability. Somebody has to pay for that, and that would be all of us who live in California.
Which is why PG&E, SoCal Edison, and SDG&E wanted to pay the wholesale price for excess electricity, which they got, and a grid connection charge for home solar installations which they haven't gotten (yet).
There's also the fact that if you send power back to the grid then you are using grid equipment - power lines and all the substation gear - that were built and are maintained by the utility, and they need to be paid for that.
Think about it: the people who sell gasoline to the gas station don't get the same price that we pay for it. It's the same principle with electric utilities, though with a lot more regulation on things.
Great time to charge your car!
Alas, Kevin can’t do that…
😉
That's what I did this afternoon. I'm running on sunshine!
Song cue!!! (works for both walking or running on sunshine)
The most important building code change we should do isn't to require solar, but to require whole-house batteries.
True. However the problem is that of, say a typical charge per kwh only 30% tops, is the cost of electricity’s, with the rest the cost of getting the electricity to your house. This is why unless the utilities are converted to another revenue stream to pay for “the grid” (other than charging users) we are not going to use all this great renewable energy which we could easily use. I have 48 panels and 3 power walls and two EVs so I have done the math.
Have we solved the issue of how to maintain the grid if power companies don’t make money? I’m no fan of the power companies, but I’m just curious.
Replace them with electric co-operatives or state owned utilities. In the 1930s the private utilities had no interest in providing electricity to rural areas of South Carolina where way more than 50% of the people lived. State government and FDR's New Deal worked together to create a state owned utility that generated power and was dedicated to getting it to the people that didn't have it.
Santee-Cooper (as it is known) has screwed up from time to time. It maintained a too long love of coal and screwed up building a nuclear plant. But it still is in business, still owned by the State, and still providing pretty cheap electricity to customers directly and thru rural electric co-ops. It doesn't need to turn a profit, just not go broke. Its mere existence has to temper the demands of the local for-profit utilities.
Remedial question…what exactly does this mean? The chart says $13.34 is the marginal energy cost. What exactly does that mean?
I suspect that is the wholesale rate for electricity in $/MWh.
It's the last paid price of a block of electricity in the wholesale market from a source.
Is this why my kWh charge from SCE is up 50% since 2020?
Utilities incur costs other than power generation: capital costs for new lines, replacement, insurance, climate mitigation, etc. That's what you're paying for, above the utility's average cost per MWh from the prior year, in your current bill.
I'm surprised how little attention it seems to be getting from a lot of the tech folks (with the exception of Casey Handmer). Lots of complaining about nuclear power being treated unfairly while solar is revolutionizing energy - like someone seeing planes advance by leaps and bounds in the 1940s and then stubbornly turning around and saying, "No man, airships - airships are the way to go!"
Nuclear is the dream of energy infrastructure execs and shareholders.
A massive, subsidized public investment that will lock-in a 20-50 year pipeline of guranteed private returns. Its not the only way, but it is the biggest and the best.
The private/corporate messaging on these is strong.
Exactly.
It's never be too cheap to meter because those meters tell you want the load is so you can actually supply it.
Otherwise the system would repeatedly collapse.
Grid instability kicks in when approximately thirty percent of the power comes from numerous independent sources. No way around that one unless the grid receives some fairly radical upgrades. Which will cost. A lot. So no, not energy too cheap to meter.
Per the nerds at Vox, the price of grid storage batteries is now 1/30th what it was in 1991. And that price is still dropping like a rock. The rate of installation of grid storage batteries is currently doubling every year.
So yes, there is a way around this one.