The WSJ article doesn't properly explain where the negative prices come from. It only briefly mentions "subsidies", but I don't think that is a complete explanation.
My understanding is that the negative prices come from a tension between long-term agreements and short term markets.
For example, a solar or wind farm may enter into an agreement with a company which promises to buy all the produced energy over a certain period, at a fixed price per MWh. (In practice this seems to be implemented as a "contract for difference", but it amounts to the same thing.)
The buyer does this because they estimate that it will result in a cheaper energy bill overall. Even if they sometimes have to pay for energy they don't need. And even if they sometimes have to pay a positive price while the short term market prices are negative.
The seller is then shielded from short term prices, and will continue to produce and get paid for energy which isn't needed. The price signal isn't getting through.
If it would turn out that balancing the grid becomes problematic, then I think this could be fixed with regulations that forces some of the short term price signals to always "get through".
E.g. on the producer side, it could be forbidden to get paid a positive price for energy produced when the short term price is negative. On the consumer side, certain types of consumption that can be scheduled (like charging an EV) could be forced to use a contract that follows the short term market price.
There's a problem though: it's nice to be paid to consume, but it's not so nice to pay to produce. The return on investment calculus for power generation, especially solar and wind becomes trickier, which means the project financing becomes more expensive. Then fewer projects get greenlighted, despite solar panels being cheaper and cheaper.
This is where V2G comes into play. Charge your EVs for free during excessive generation and sell it back during peak demand. Sounds too good to be true, but there's nothing stopping this from becoming a regular, normal event.
You don't even need V2G (which requires still-rare bidirectional charging hardware) to benefit from free/negative electricity prices. Simple V1G (AKA grid-interactive smart charging) will do the job, and since there's no extra hardware it's just a software update away for many existing EVs.
1. Charge your EVs for free during excessive generation.
2. There is no step 2.
This avoids adding extra (relatively costly) cycles to your EV battery, since you only do charging you were already going to do anyway. This improves economics for the owner, because the price "spread" no longer needs to cover battery wear-and-tear.
Even if you have onboard V2G hardware, there will be lots of cases where a "Just Do The Right Thing" algorithm would choose to only delay charging (no back-feeding to the grid), since the predicted price spread is less than the battery cycle cost.
My house (8 rooms and office) in south eu is on the grid and with 4 aircons on day and night (in summer at least; in winter for heat if it's too cold) and the other usual stuff, we have had dropping electricity prices, so much that panels really make no sense except for the off grid aspect.
Kind of spam I think because it is not even a new or interesting info. More kind of the usual opinion piece that waste thousands of words for a content that should fit in a single paragraph.
'KERKDRIEL, the Netherlands—For much of the spring and summer, Jeroen van Diesen got paid for using electricity.
Sometimes his neighbors came over to power up too, generating even more cash.
Van Diesen’s situation reflects the strange, new dynamics of electricity that could soon become the norm in many parts of the world: A big increase in wind and solar power has pushed wholesale prices to zero or below for many hours of the year, spurring a sea change in the way people use power—based on whether the sun is shining or the wind is blowing.
Most people pay a fixed price for each kilowatt-hour of electricity they consume throughout the day. The price is set by their power company and only changes at infrequent intervals—once a week, a month or even only once a year.
Van Diesen, a software salesman, recently signed up to receive electricity from two providers that charge him the hourly price on the Dutch wholesale power market, rather than a fixed price that resets monthly or annually. When the price of electricity falls low enough, smart meters in his house begin charging his two electric cars.'
Oh and in Finland there's a separate per-kWh fee to the local electricity network operator for transferring the electricity, so the breakeven point is somewhere around -4 c/kWh.
> Van Diesen, a software salesman, recently signed up to receive electricity from two providers that charge him the hourly price on the Dutch wholesale power market, rather than a fixed price that resets monthly or annually.
Didn't this kind of thing result in some people in Texas getting electricity bills for tens of thousands of dollars a few years ago?
The WSJ article doesn't properly explain where the negative prices come from. It only briefly mentions "subsidies", but I don't think that is a complete explanation.
My understanding is that the negative prices come from a tension between long-term agreements and short term markets.
For example, a solar or wind farm may enter into an agreement with a company which promises to buy all the produced energy over a certain period, at a fixed price per MWh. (In practice this seems to be implemented as a "contract for difference", but it amounts to the same thing.)
The buyer does this because they estimate that it will result in a cheaper energy bill overall. Even if they sometimes have to pay for energy they don't need. And even if they sometimes have to pay a positive price while the short term market prices are negative.
The seller is then shielded from short term prices, and will continue to produce and get paid for energy which isn't needed. The price signal isn't getting through.
If it would turn out that balancing the grid becomes problematic, then I think this could be fixed with regulations that forces some of the short term price signals to always "get through".
E.g. on the producer side, it could be forbidden to get paid a positive price for energy produced when the short term price is negative. On the consumer side, certain types of consumption that can be scheduled (like charging an EV) could be forced to use a contract that follows the short term market price.
I wrote about this phenomenon 4 years ago: https://blog.ifost.org.au/2020/09/something-funny-is-about-t...
There's a problem though: it's nice to be paid to consume, but it's not so nice to pay to produce. The return on investment calculus for power generation, especially solar and wind becomes trickier, which means the project financing becomes more expensive. Then fewer projects get greenlighted, despite solar panels being cheaper and cheaper.
This is where V2G comes into play. Charge your EVs for free during excessive generation and sell it back during peak demand. Sounds too good to be true, but there's nothing stopping this from becoming a regular, normal event.
V2G gets all the buzzword points, but...
You don't even need V2G (which requires still-rare bidirectional charging hardware) to benefit from free/negative electricity prices. Simple V1G (AKA grid-interactive smart charging) will do the job, and since there's no extra hardware it's just a software update away for many existing EVs.
1. Charge your EVs for free during excessive generation.
2. There is no step 2.
This avoids adding extra (relatively costly) cycles to your EV battery, since you only do charging you were already going to do anyway. This improves economics for the owner, because the price "spread" no longer needs to cover battery wear-and-tear.
Even if you have onboard V2G hardware, there will be lots of cases where a "Just Do The Right Thing" algorithm would choose to only delay charging (no back-feeding to the grid), since the predicted price spread is less than the battery cycle cost.
https://www.wsj.com/business/energy-oil/electricity-that-cos...
Here's an article about Australia charging households with solar power for putting power back into the grid:
https://www.theguardian.com/australia-news/article/2024/may/...
Meanwhile, in California, PG&E charges you 50¢/kWh
This will more and more entice individuals and businesses to store this cheap electricity in batteries connected to the grid ( mainly through https://en.wikipedia.org/wiki/Vehicle-to-grid ) or to transport it far away with tolerable losses ( https://en.wikipedia.org/wiki/High-voltage_direct_current ), compensating a growing part of the effects of renewables' "intermittent" production.
My house (8 rooms and office) in south eu is on the grid and with 4 aircons on day and night (in summer at least; in winter for heat if it's too cold) and the other usual stuff, we have had dropping electricity prices, so much that panels really make no sense except for the off grid aspect.
There’s a lot of WSJ articles all of a sudden, all of them seemingly paywalled.
‘is this some sort of DDOS attack or are there just a lot of interesting articles that have come out in the past few hours?
Or have I fallen prey to a statistical anomaly?
Kind of spam I think because it is not even a new or interesting info. More kind of the usual opinion piece that waste thousands of words for a content that should fit in a single paragraph.
All WSJ articles are paywalled. I consider links to paywalled information advertisement for a paywall and treat them as such.
'KERKDRIEL, the Netherlands—For much of the spring and summer, Jeroen van Diesen got paid for using electricity.
Sometimes his neighbors came over to power up too, generating even more cash.
Van Diesen’s situation reflects the strange, new dynamics of electricity that could soon become the norm in many parts of the world: A big increase in wind and solar power has pushed wholesale prices to zero or below for many hours of the year, spurring a sea change in the way people use power—based on whether the sun is shining or the wind is blowing.
Most people pay a fixed price for each kilowatt-hour of electricity they consume throughout the day. The price is set by their power company and only changes at infrequent intervals—once a week, a month or even only once a year.
Van Diesen, a software salesman, recently signed up to receive electricity from two providers that charge him the hourly price on the Dutch wholesale power market, rather than a fixed price that resets monthly or annually. When the price of electricity falls low enough, smart meters in his house begin charging his two electric cars.'
...
Some context based on recent history (EU/Finland perspective):
- On average the market electricity contracts are cheaper than flat-rate contracts
- Day-to-day (and hour-to-hour) variation can be huge; yesterday evening it was 32 c/kWh, tomorrow it'll be about 2-3 c/kWh for most of the day.
- You know the day-ahead prices around noon (UTC), so you can plan ahead.
- EU has a wholesale electricity price cap; not sure what's the current value but it was 500 c/kWh a while ago. Plus taxes, probably.
Oh and in Finland there's a separate per-kWh fee to the local electricity network operator for transferring the electricity, so the breakeven point is somewhere around -4 c/kWh.
> Van Diesen, a software salesman, recently signed up to receive electricity from two providers that charge him the hourly price on the Dutch wholesale power market, rather than a fixed price that resets monthly or annually.
Didn't this kind of thing result in some people in Texas getting electricity bills for tens of thousands of dollars a few years ago?
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