The price of a stabilized green power grid is very steep, one could say it is like a “hockey stick”
Story submitted by Eric Worrall (h/t John Droz)
Coal and gas electricity companies are being paid up to 400x times the wholesale price of power, in return for helping to stabilize the German electricity grid.
According to Bloomberg, “Germany’s push toward renewable energy is causing so many drops and surges from wind and solar power that the government is paying more utilities than ever to help stabilize the country’s electricity grid.”
“At the beginning, this market counted for only a small portion of our earnings,” said Hartmuth Fenn, the head of intraday, market access and dispatch at Vattenfall AB, Sweden’s biggest utility. “Today, we earn 10 percent of our plant profits in the balancing market”.
Given that lignite coal plants are also playing this game, according to Bloomberg, and lignite plants are famously inflexible, you have to wonder exactly how fossil fuel plants are providing the required flexibility.
One interesting possibility is that the CO2 belching fossil fuel utility companies are spinning their generators up to full power, and are simply discarding vast amounts of excess energy, until solar or wind output drops – so they can be ready to dump extra capacity onto the grid at a moment’s notice.
At 400x wholesale rate, they could afford to burn away gigawatts of power as waste heat, and still make a handsome profit from the “balancing” fee for whatever energy they actually supply to the grid.
The graph above is from this article at No Tricks Zone, which is reporting on the effects on consumers in Germany.
The price of a stabilized green power grid is very steep, one could say it is like a “hockey stick”. – I like your kind of humour! 😀
The French must be loving it
And what has happened to co2 emissions in Germany since going strongly green? That’s right, they are still increasing. What a bloody joke.
>>Caleb says:
July 28, 2014 at 9:51 am
It is hard to believe Germans can be so impractical.<<
The explanation for this amazing stupidity can be found in history: Germans are very prone to simple ideologies with an easy scapegoat, and when they have embraced a new ideology – in this case: Climate-Alarmism because of "evil" CO2 – they can't help themselves and must serve that ideology to the bitter end…
It's a pity, but that's their national psychology.
“…One interesting possibility is that the CO2 belching fossil fuel utility companies are spinning their generators up to full power, and are simply discarding vast amounts of excess energy, until solar or wind output drops – so they can be ready to dump extra capacity onto the grid at a moment’s notice….”
That is not possible. Generator cannot generate electricity and dump it on a “dump site”.
What is done is that there is a excess capacity in the grid running as “spinning reserve”.
The spinnig reserve condition requires that the entire power plant is running, boiler at full pressure, turbine at full speed synchronised but at zero power produced and exported to the grid. This stand by condition consumes about 20% of coal at full power.
Power plant can be loaded from spinning reserve to full load in the matter of minutes. Basically what is needed to increase of the coal flow.
(just an engineer’s take on it)
Pierre Gosselin (No tricks Zone) posted this 10 months ago. What you are observing is the absolute power of the market. It is now ( in Germany) profitable for “fossil fuel” generators to withhold their products from the market until the (inevitable) failure of the ” renewables” to deliver
raises the price. They are reaching the point at which it is cheaper to “waste” the renewable input altogether at the feed in tariff as the price of grid stability exceeds the contract price of the renewables. This was always inevitable and marks the point at which “mitigation” becomes impossible without the cost becoming transparent to all. This actually is ” the beginning of the end” for the CAGW narrative.
In reply to:
>>Caleb says:
July 28, 2014 at 9:51 am
It is hard to believe Germans can be so impractical.<<
1) Why Germany has the option to waste money on green scams
The Germans have the short term option of irrational actions due to their export surplus to the their idiotic EU partners. When Germany had their own currency an export surplus created a currency imbalance which made Germany goods more expensive which worked to stop the imbalance. The EU common currency is the reason why Spain has 25.6% unemployment and Germany 5.1%.
2) Limitation of intermediate energy sources
The green scams are scams as energy storage is required to enable intermittent power sources to provide power 24/7. Without energy storage wind and solar energy can only reduce CO2 emissions by roughly 10% to 20%. Power storage increases the cost of intermittent power sources by 5 to 6 times. Siemens for example has a cartoon picture showing solar energy used to convert water and CO2 to methane and then the methane is burned in turbines. That is absurdity more expensive than a nuclear power plant.
It should be noted that the high energy goods and materials are now supplied to the EU from the US and Asia which in part explains the EU CO2 reduction.
3) Total cost and political/policy implications to significantly reduce CO2 emissions.
It is interesting that green parties have not discussed what is required to significantly reduce world CO2 emissions.
To reduce CO2 emissions below around 50% requires a complete change to nuclear power (all countries) and war like restrictions on life in every country, such as the banning of air travel, banning of recreation houses, and population control/reduction. That is not going to happen.
“At the beginning, this market counted for only a small portion of our earnings,” said Hartmuth Fenn, the head of intraday, market access and dispatch at Vattenfall AB, Sweden’s biggest utility. “Today, we earn 10 percent of our plant profits in the balancing market” in Germany, he said by phone from Hamburg July 22.
The trough is too big. The insanity cannot be stopped as long as we continue to slop the hogs. -GAH-
janus:
I think your choice of alias is honest in that your post at July 28, 2014 at 12:01 pm is two-faced.
You say
Really? You think that?
Then perhaps you can explain this example from Western Power. It says
It explains why there is “additional fuel consumption” and how that is costed.
Thanking you in anticipation of your clarification.
Richard
Not sure where you got the 400x (400% ?) from. From your link to ‘No Tricks Zone’ it appears the price of electricity has ‘only’ increased by 67% since 1998 (about 100% since 2000 when the price was lowest). The price of EEG (backup to ‘renewables’) has increased from 0.68 cents per kW-h in 2004 to 6.24 cents per kW-h, nearly 1000%, and that’s the price added to each kW-h of electricity, not just the backup.
J. Swift says:
July 28, 2014 at 11:11 am
” Meanwhile in England we have just demolished the cooling towers of Didcot coal-fired power station as it is sacrificed to appease the great green goddess”.
————-
There is a greater irony in that story . The fields, hedgerows and footpaths around Didcot ( a misfit of a small industrial town in the largely rural Thames Valley thanks to Brunel’s choice of it as a railway centre) were once full of majestic elm trees – I remember them well . All gone now because of Dutch elm disease , a fungal disease vectored by beetles and introduced into England on imported American logs .
Didcot coal fired power station is being replaced as a power source by the use of wood fired power stations elsewhere in England – using wood imported from the USA.
There are other newly observed diseases affecting british trees : ash , oak and chestnut , attributed also to imports of diseased timber.
So we are going to rely for power on importing a huge tonnage of , probably uninspected, timber of dubious origin in order to satisfy the fantasies of the environmentalists who appear to have no interest in preserving our own natural habitat.
Meanwhile, I believe that the ships carrying this cargo to our shores will be passed mid Atlantic by similar ships taking Norwegian wood chips to Canadian biomass power stations.
“Whom the gods wish to destroy they first make mad.”
Green windpower at work.
Green windpower not at work.
It’s worse than we thought!
Fortunately the problem of unequal input from wind and solar that is causing current problems will be resolved naturally in a couple of months as the solar panels will in effect stop working as autumn approaches and light levels drop away sharply.
Tonyb
@Joseph Murphy says: July 28, 2014 at 10:28 am
+100 , those who don’t know history are doomed to repeat it, those who do are doomed to watch those who don’t on the six o’clock green energy MSM news (or something like that).
@David Larsen says: July 28, 2014 at 10:37 am
-100, those two world wars, I don’t associate with the smartest.
ERCOT, the primary grid regulatory agency agency in Texas is doing the same thing. What surprises me is the reason; older steam units being retired over the next few years and not because of wind or solar. Typical grid costs for 1 megawatt of electricity varies between $25 (1 AM) and $57 (5 PM). But starting this year ERCOT will pay peaker plant operators up to $5000 per megawatt if the grid reaches over 90% of available capacity, that’s almost 100 times the base rate, Starting next rear the price rises to $9000 or about 160 times the base rate.
From FuelFix.com
http://fuelfix.com/blog/2014/07/10/new-peaking-power-units-coming-to-texas/
“the grid gets electricity from a “significant number of old steam plants that are 40-plus years old. About 8 percent of the total capacity to the grid is expected to be retired by 2019.
In early June, the Public Utility Commission gave electricity generators more incentive to build when it raised the wholesale electricity price cap to $7,000 per megawatt hour. The cap is the highest price at which power can be sold into the market at times of peak demand.
The cap is scheduled to go to $9,000 per megawatt hour in 2015.”
At least one energy provider is looking at the problem in a different way. Rather than pay 100+ times more for electricity during peak demand periods they are trying a new market based solution called Ambit Energy Power Payback. Under the program, customers in Texas who have Smart Meters will receive advance notification of an impending period of extreme electricity demand. They then have the opportunity to cut back on their electricity use during the specified time. If their electricity usage during this time is lower than their average from the same time period over the previous five weekdays, they receive a bill credit of $1.00 for every kilowatt-hour saved.
http://www.heraldonline.com/2014/07/28/6180161/ambit-energy-introduces-power.html?sp=/100/773/385/
According to this story, the northeast U.S. is in for some tough times as politicians and activists have been attacking the generation of electricity:
http://spectator.org/articles/60007/get-ready-new-england-power-shortage
According to William Tucker, It looks like this winter will be the one where we all see what green policies in the US have done.
400 PERCENT, not 400X’s. Minor error, but worth fixing. (Of course the big error is the “renewable push” causing a 4’s increase in 10 years.)
Again, I hate to be a cynic, but this is a country that brought you: (Drum roll..) TWO, count them TWO World Wars! A country which, after being completely rebuilt by the good old USA, produces a bunch of whiney, self centered children who can only drink beer and complain about the “cowboys” in the USA, while we foot the bill for holding “Ivan” at bay (big mistake, that..)
SO, now they want to destroy themselves? My concern is where???
The solution for the Germans is to simply run the base load plants all the time and supply 100% of the electricity to satisfy the market. Pay for any green electricity from wind turbines of photovoltaic sources and dump it. It will be cheaper in the long run considering power grid damage from fluctuations and economic loss from power outages.
Richardscourteney – you are being unfair to Janus and may have misunderstood him. Janus and Jud have it perfectly correct. Minute to minute imbalances on an electric grid are dealt with by spinning reserves ( interconnected generators running but not fully loaded) as they both explain. The A.C. grid is synchronous so the generators must be running at full speed (synchronised) with temperatures and pressures at operating levels to quickly “ramp” and preserve system frequency when the renewables reduce thier output or drop off the system. This costs in terms of capital, operation and maintenance and some significant fuel burn for a thermal unit. Not “full load” but perhaps as much as 20% depending on the unit – exactly as Janus stated. This is all part of the large hidden cost of interconnecting renewables – and the reason that the claimed CO2 savings are illusory. No green policy advocate will ever talk about this reality of system integration ( possibly because they have no idea of what it takes to run an electric system).
Richard
Germany has the advantage in a single monetary system, the Euro. Germany is also building more coal plants, while using the EU directives to shut down coal and nuclear in the rest of Europe. Germany appoints interim governments in bankrupt countries receiving bail-outs. Germany appointed Mr. Juncker, the new President of the European Commission.
Now did we not fight two world wars to prevent a German-dominated Europe?
richardscourtney says:
July 28, 2014 at 12:32 pm
I, too, fail to understand your objection to Janus’ post. He highlights that spinning reserve, while in reserve mode, is burning significant fuel (20% of full, he says) with no power output. That’s 0% efficiency in that period. Even if converted quickly to full power mode at peak efficiency, the average efficiency will be significantly lowered.
Richard:
At July 28, 2014 at 1:43 pm you say to me
NO! Absolutely not! Janus was economical with the truth.
If the effect of spinning reserve were to reduce fuel (i.e. coal) usage (Janus said by 80%) then the resulting reduction to CO2 emissions would be the justification for the costly ‘renewables’. But the net effect of spinning reserve is to INCREASE the fuel used and, thus, the CO2 emissions.
I quoted Janus verbatim, then cited, linked and quoted an example of a report from a power operator which explains that the spinning reserve increases fuel usage, then I asked him/her/them to resolve the issue.
This link jumps to my post so people can assess the matter for themselves.
Richard
What’s sad is that the energy cost increase was foreseeable. Solar panels are covered in snow (it can still snow in March) and the days are shorter in the winter (when ou need energy the most), the wind don’t blow steadily and all of the above has maintenance costs like any other energy producing system. Ahem the sun and wind ain’t as free as advertised.
Do you really need to be a scientist and run projection models on super computers to see the obvious?
“At the beginning, this market counted for only a small portion of our earnings …Today, we earn 10 percent of our plant profits in the balancing market” in Germany”
There is nothing new in the above statement.
The newest power stations are usually the most efficient on the system (setting aside the distortion of gov’t policy and subsidy for a moment).
The condition of the newest power stations means better technical performance on measures like maximum capacity, thermal efficiency, and operating reliability. Investors may delay design features for flexible operation, and there may be a smaller staff compliment. It should be no surprise that a young power station may not be particularly flexible, and earns little from flexible services.
As a power station ages, technical degradation reduces thermal efficiency, maximum capacity and reliability. Competitive advantage is steadily lost to the latest crop of younger, more efficient power stations.
Not all power stations can enjoy life in the base load segment of the market: demand fluctuates and somebody has to respond (or the system would collapse on over-frequency). Let’s say 50% of the power station have to respond.
The market can thrash-out who stays in the base load market using price differentials. High prices when demand is highest, and low prices in off-peak periods. For many generators, the low prices in the off-peak periods will be loss-making (otherwise the market would not give anybody the incentive to do respond – and the system would collapse). The least efficient power stations (highest cost per unit) are least able to suffer the off-peak losses.
There comes a stage in a power station’s life when it has enjoyed life in the base load market, but the losses in the off-peak are increasing and the operator faces a choice: either adapt to a flexible operating regime (avoid those losses), or close
Unless there are particular reasons to prevent flexible operation, will be able to increase profit through flexible operation. This will usually involve capital investments for flexibility (such addtional automation) and a period of training/learning as plant managers figure out how to deliver flexible services reliably.
To conclude – there is nothing new in power stations earning income from flexibility when previously they enjoyed base load operation. It is a natural progression in the station’s life and the market striving to minimise cost/maximise the utility of the assets.