Posted by daestrom on February 25, 2007, 6:18 pm
wrote:
<snip>
> So, perhaps during the day, the load is 3800 MW. You run plants A, B, and C
> full output and D at 80%. If someone turns on one more light somewhere, the
> plant that picks up the additional load is the expensive natural gas plant
> at $360/MWh (36 cents/kwh) for that additional load.
Oops, that should be $30/MWh (30 cents/kwh). The production cost for
an additional MW over 12 hours is $360
<snip>
> Turn on one more light at night and the cost of powering it costs just
> $12/MWhr (1.2 cents / kwh). This is all assuming that each plant is able to
> change load at will, any amount at any time. So the daytime versus
> nighttime marginal cost is either 36. cents/kwh or 1.2 cents/kwh. It isn't
> the plant's operational capabilities, it's all in the fixed and marginal
> costs for each plant.
Similar mistake, the production cost for an additional MW over 12
hours is $12, so that's $1/MWh or .1 cents/kwh
So day vs night *marginal* cost is 30 cents/kwh versus .1 cents/kwh
daestrom
Posted by daestrom on February 25, 2007, 4:49 pm
> drydem wrote:
>> wikipedia article on grid energy storage.
> The pumped water example given goes like this: At night, buy
> electricity at 1.5 c/kwh to pump some water to a high elevation, then
> during the day use that water to generate electricity to sell at 4
> c/kwh.
> (the example given says that the pumping process is 75% efficient,
> which I'd like to know how they got that efficiency so high, but
> that's another matter).
> So even with pumping loss, you're still making maybe 2+ c/kwh.
> But the flaw is this. What is the other guy doing burning (or
> consuming) his fuel and only getting 1.5 cents at night in the first
> place? Why doesn't he conserve it too so that he can make more $$$
> during the day by selling it at 4 cents like you're doing?
Because he's already running flat out during the day. And it still isn't
enough to meet demand, so even more expensive sources come on line during
the day. So the 1.5 cent producer runs full out during the day, and has a
choice at night. He can shutdown if there isn't enough load, or sell to the
pumped-storage owner at 1.5 cents. If he can cycle the plant that fast and
1.5 cents doesn't cover his costs, he may choose to shutdown. But if his
production cost is low, say only 1 cent, he may rather stay up and sell at
night at 1.5 and during the day at 4.
But in reality, a base load unit probably has long-term
power-purchasing-agreements (PPA) to sell all his production at a fixed rate
all the time (say, 1.5 cents).
daestrom
Posted by HVAC Guy on February 25, 2007, 9:29 pm
daestrom wrote:
> > What is the other guy doing burning (or consuming) his fuel
> > and only getting 1.5 cents at night in the first place?
> > Why doesn't he conserve it too so that he can make more $$$
> > during the day by selling it at 4 cents like you're doing?
>
> Because he's already running flat out during the day.
So? What does that have to do with anything?
If he's making money at 1.5 cents, then he's making even more at 4
cents.
> And it still isn't enough to meet demand,
That's not his problem.
> he may rather stay up and sell at night at 1.5 and during
> the day at 4.
Yes, he's a real bonehead. Since he's selling his juice cheap to the
guy running the pumped storage plant, the pump can come on line during
the day and the market price is 4 cents. But if the pump wasn't
there, then the spot price would be 6 cents, and the guy running the
other plant would be making MORE money.
Posted by Eeyore on February 25, 2007, 10:55 pm
HVAC Guy wrote:
> daestrom wrote:
> > > What is the other guy doing burning (or consuming) his fuel
> > > and only getting 1.5 cents at night in the first place?
> > > Why doesn't he conserve it too so that he can make more $$$
> > > during the day by selling it at 4 cents like you're doing?
> >
> > Because he's already running flat out during the day.
> So? What does that have to do with anything?
> If he's making money at 1.5 cents, then he's making even more at 4
> cents.
> > And it still isn't enough to meet demand,
> That's not his problem.
> > he may rather stay up and sell at night at 1.5 and during
> > the day at 4.
> Yes, he's a real bonehead. Since he's selling his juice cheap to the
> guy running the pumped storage plant, the pump can come on line during
> the day and the market price is 4 cents. But if the pump wasn't
> there, then the spot price would be 6 cents, and the guy running the
> other plant would be making MORE money.
You don't have a good grasp of business and economics do you ?
Graham
Posted by daestrom on February 28, 2007, 6:15 pm
> daestrom wrote:
>> > What is the other guy doing burning (or consuming) his fuel
>> > and only getting 1.5 cents at night in the first place?
>> > Why doesn't he conserve it too so that he can make more $$$
>> > during the day by selling it at 4 cents like you're doing?
>>
>> Because he's already running flat out during the day.
> So? What does that have to do with anything?
> If he's making money at 1.5 cents, then he's making even more at 4
> cents.
Except not everyone during the day is paying/receiving those 4 cents. Only
the margin producer gets the premium price. But the price comes with a
risk. Some days, if demand isn't so bad, the margin producer doesn't sell
*anything*.
>> And it still isn't enough to meet demand,
> That's not his problem.
>> he may rather stay up and sell at night at 1.5 and during
>> the day at 4.
> Yes, he's a real bonehead. Since he's selling his juice cheap to the
> guy running the pumped storage plant, the pump can come on line during
> the day and the market price is 4 cents. But if the pump wasn't
> there, then the spot price would be 6 cents, and the guy running the
> other plant would be making MORE money.
It's really clear you don't know Jack about buying/selling on the electric
market.
If the 'guy running the other plant' is getting the spot price, then he's on
the margin and may not sell at all most days. If he's getting firm
committments for power purchases, he's not getting the spot price. The
pumped storage guy is getting the spot price *some* days, and other days
they don't generate one MWhr, they sit on a pile of capital expenses with no
revenue.
If the coal plant tries to charge 4 cents during the day, what does he do
when somebody underbids him? I'll tell you what he does, he doesn't sell
anything and doesn't make any money at all.
You can either *lock in* a sale at a low price for 24/7, or take your
chances on the 'spot market'. Sure, some days you might make a great price,
but what about most days? Would you like to make $100 / MWhr 30 days a
year, or sell at $30 / MWhr 24/7 for 365? How often do you think the price
goes up that high?
If the demand isn't there and somebody underbids you, you don't get to make
anything at all.
OTOH, if you have a power-purchase agreement with some large customers, you
negotiate a price to supply them regardless of how heavy or light the day's
demand is. You don't get 'top dollar', but you sell for 24/365.
The pumped storage folks don't make any money on weekends, nor if the
weather is mild and peak demand is not too high.
Now, if you own *both* a base-load plant and some pumped storage, you can do
even better. Or hadn't it occured to you to 'sell' the power to yourself?
If you don't like the price on the market at 2:00 AM, you can hedge your
bets and pump. Then hope that the price tomorrow (or Monday, or whenever)
is good enough to let it the water flow back out. But you have to estimate
things so you win some of the bids, or you end up sitting on your a__ while
others win bids. Of course you're taking a risk that the demand will be
high enough that your bid is accepted. If you're wrong, then you stay home
and watch the bills come in with no revenue.
You figure it out, you're such an expert. Then go explain it to the folks
that have been doing it for years. I'm sure they'll listen to you, you've
got all the answers.
daestrom
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> full output and D at 80%. If someone turns on one more light somewhere, the
> plant that picks up the additional load is the expensive natural gas plant
> at $360/MWh (36 cents/kwh) for that additional load.