Not sure if it's discussed in the paper but apparently in Australia there have already been recorded instances of batteries charging with negative price electricity and then selling back that electricity at a still negative but closer to zero price and so profiting.
When I first heard it, it seemed wild that they couldn't hold on for the price to go back above zero, but I guess if we're talking high frequency trading it makes more sense. They might have bought and sold many times while the price is different levels of negative before switching to charging up in preparation for the later price rises.
As you know, negative electricity prices mean that someone is willing to pay you to dispose of electricity they need to generate for some reason. For example, a conventional steam-turbine-based electricity plant might prefer to just keep running for a brief period of time when demand is low, rather than subject their equipment to a power cycle, which increases their maintenance costs. There's other, dumber, examples based on stupid contracts and badly designed solar... but this example is a reasonable one that exists for good engineering reasons.
The battery provider in this circumstance is profiting from their ability to accept power when demand to dispose of electricity is particularly high. When that need goes down, they can reasonably profit by dumping that energy on someone else who is also able to dispose of the electricity. But at a lower cost. E.g. imagine an big industrial refrigerated storage facility that can consume some excess energy by supercooling their refrigerators. But they can't consume unlimited excess energy, because at some point their warehouse just gets too cold, and they don't have unlimited refrigeration capacity anyway.
So in this simplified example, the battery storage service is getting paid a lot of money to quickly absorb a lot of energy, which they then dump more slowly to the refrigerated warehouse (and similar providers) as the surplus diminishes, in anticipation of another surplus in the near future.
If one is incentivized (eg, paid) to burn power, then sure: One can burn power and reap the incentive. It can happen in any market. The producer has so much abundance of a thing, for whatever reason they do, that they're willing to pay others to get rid of it for them.
It can even happen productively: "Hey, they're paying us to run the heat! Turn the glass kiln on so we can get a head start on tomorrow."
Or "Hey, they're paying us to charge our batteries! Let's charge them!"
It can also be "Hey, they're paying us to run resistive heaters! Turn on the artificial sun!"
Whatever it is: If the demand satisfies the supply, then the supplier is satiated. And then the price can go back to something more-profitable for that supplier.
> It can also be "Hey, they're paying us to run resistive heaters! Turn on the artificial sun!"
It may be difficult to dump all the heat at scale. You probably need a huge cooler with fans to get active air flow. Or a water tower (that requires water) (There are regulation about extracting water from a river and returning it too hot).
Is it possible to build one of this heat dumping facilities in a zone where there is permanent snow? (Ignoring environmental and moral concerns.)
PS: Seriously, heating a swimming pool may be a nice application.
It definitely is sometimes difficult to dump power at scale. That's the source of the surplus and resulting negative price.
But it doesn't have to be big. A negative price is still a negative price, even on a small scale.
So, for instance: At home, I have electric hot water. I have some baseboard heaters in parts of the house (that I never actually use, but which I could use). I have central aircon.
All of these things could stand to be automated just for automation's sake, and that's something I'll probably do some day even with the fixed-rate electricity I buy right now.
With automation and price feeds, it's a programmatic no-brainer to switch on the electric baseboards on during the heating season during negative price events and get paid some non-zero amount to get ahead on the temperature game.
During the cooling season, I can probably stand to get paid to supercool the house for awhile.
And during any season: I normally run my electric water heater at a fairly low temperature because that's more efficient, but I'll cheerfully accept money to temporarily raise its temperature.
Or if I had an EV: Maybe I might normally like to keep it at 70% SoC for battery health, but if it's plugged in and the price is negative then I might cheerfully run it up to 85 or 90% or more.
So anyway, it's hypothetically pretty easy for an individual like me to dump a few kiloWatts in a useful way.
A thousand such people make it easy to dump a few megaWatts.
A million such people make it easy to dump a few gigaWatts. (And a million sounds like a lot, until one counts the eventuality of smartly-connected EVs.)
> It may be difficult to dump all the heat at scale. You probably need a huge cooler with fans to get active air flow. Or a water tower (that requires water) (There are regulation about extracting water from a river and returning it too hot).
You could probably just boil off your water, instead of returning any?
It would be funny, to use the steam to generate electricity.
> You could probably just boil off your water, instead of returning any?
You get a lot of salt residue that you have to dispose. The usual nuclear plant tower [1] evaporates most of the water to dump heat, but returns a small part of it to avoid collecting salt. But it has to be not to hot nor too salty to avoid killing the fishes.
Btw, many passenger trains have something like that as well, especially in the metro or tube: the stations are deliberately built slightly higher than the normal lines, so that you can convert kinetic and potential energy back and forth.
People do - but the actual answer to your question is as you’re implying: it’s not as simple as “you get paid to consume”.
There are negative spot prices in Europe all the time - but they are not usually negative enough to make up for the grid fees and taxes. Or they are in countries like Germany that hasn’t rolled out smart meters, so consumers have no way to access spot prices
If it was so profitable, why wouldn't the electricity utility do it themselves? Certainly, they have the scale, infrastructure, and pricing power to do it.
Oh, that's right. This is supposed to be wealth transfer.
If you find a hundred dollars on the ground you don't pick it up because in an efficient market somebody else would have already picked it up, hence it can't be real?
Even if the arbitrage exists, it does not mean you are equipped to profit from it. Furthermore, the rapid installation of battery capacity means that the profit margin for this activity is likely to dwindle as more entrants try and do the same thing.
What do you mean by electricity utility? Which organisation specifically? The electrical supply is usually formed of multiple organisations with different responsibilities, which usually works pretty well, but it generally means that e.g. storage, transmission, and generation are not one single organisation.
Yes, including because firms at one level of the supply chain (eg, transmission) are in many countries precluded from operating in another level (eg, generation).
Someone at the generation facility ran the numbers and found that the grid was able to dispose of excess energy for peanuts but installing and maintaining a dedicated electronic load cost more than peanuts.
I'd recommend digging elsewhere for conspiracy bait. This is a mild curiosity at best.
This is why we don’t move data center load to the coldest available data center to reduce the AC power fraction of the cost. The cost of electricity is a significant fraction of the overall cost but not high enough to make up for stranded assets. Computers not running during their best years is expensive.
But I’m not sure that’s entirely correct, and maybe it’s time to revisit this.
Any system that is selling responsiveness as part of their service has to keep a certain amount of equipment sitting idle. That’s just how queuing theory works. So while you cannot move all server load to the coldest available zone, we should still be able to run that center near capacity and use the hottest one for all reserve capacity.
Power plants also have to deal with fines for exceeding emissions limits, but I suspect the problem here is that Bayesian analysis tells them that if a plant has to kick on early for some reason (early school release day, or another plant exceeded a maintenance window), it will still be needed for sure an hour from now, so it’s better to leave it running for 45 minutes doing nothing than to cycle it.
Exactly. There are genuine economic/engineering reasons for negative prices to occasionally exist. But in a well-designed, well-run, grid price will be negative only a small minority of the time. It just doesn't make sense to install a bunch of expensive equipment to provide this service when sufficient capacity exists from "happy accidents" like spare battery storage.
In the long run, better managed solar and wind should make negative prices a fairly rare event.
Once you sign up customers for 'cheaper electricity, but you have to agree to the occasional loadshedding', you can probably also sign them up for a bit of 'oh, and please burn some more electricity, when we tell you to'.
The former is already happening and useful, the latter would be a relatively simple and easy add-on that could be used to offer ever so slightly cheaper electricity.
Your electric utility could be doing this if they were more forward thinking and installed grid scale batteries, but that's not their business model so they don't do it.
Well, if other people are allowed to install batteries, then it might be fine that the utility isn't doing that. They don't need to do everything themselves.
One reason, that I understand has applied in Germany, is when taxes are applied both to the electricity the storage firm buys and to that which it sells. This puts a damper on the whole thing unrelated to any actual technical or economic realities.
> and then selling back that electricity at a still negative but closer to zero price and so profiting.
How is it not better to discharge the batteries instead? I guess if you don't have that hardware option integrated into the platform maybe, but otherwise...
When I first heard it, it seemed wild that they couldn't hold on for the price to go back above zero, but I guess if we're talking high frequency trading it makes more sense. They might have bought and sold many times while the price is different levels of negative before switching to charging up in preparation for the later price rises.
And the round trip inefficiency helps too.