A new post at the Energy Institute at Hass blog, Is the Duck Sinking?, discusses the growing appearance of negative pricing in California:
What do the negative prices tell us? At a fundamental level, they tell us that we have too much of a good and suppliers need to pay people to take it off their hands. Right now, California has too much renewable electricity. Emphasizing this point, a recent briefing from the California Independent System Operator [CAISO] noted that renewable “curtailments” were at record levels in March 2017, amounting to over 80 GWh, which is more than a typical day’s worth of solar production that month.
Is there anything to do about the negative prices? Negative prices certainly highlight the value of storage, where the basic idea is to buy low and sell high. Buying when prices are negative is especially lucrative…
Another solution is to expose more retail consumers to wholesale prices, or find other ways to encourage customers to respond to real-time prices. Economists have bemoaned the disconnect between wholesale and retail pricing for years…
If Catherine Wolfram’s post represents a significant concern for curtailments and negative pricing, it’s worth noting the situation in Ontario with Ontario’s system operator, the IESO.
It’s worth noting both because CAISO is noting the curtailment, and negative pricing, and it is acting on it.
This graphic, from the CAISO presentation noted above, shows monthly curtailment in their system: