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:
And here are my estimates for monthly curtailment of renewables on Ontario (note the Y-axis scale is 5 times greater):
Ontario may well see April set a record for curtailment of “renewables”, according to my estimates, and Ontario’s record will be at a level about 5 times higher than California’s record.
Over the first 23 days of April 2017 the IESO’s market failed to achieve a positive Hourly Ontario Energy Price (HOEP) 294 times – or 53% of all hours.
The CAISO presentation credits an Energy Imbalance Market with limiting curtailment.
Ontario’s system operator, the IESO, has been noisy about improving intertie operations with adjacent markets for many years, and the provinces next long term plan will promise savings from doing so – but the IESO isn’t clearly communicating on curtailment, or negative pricing.
CAISO is – before their situation gets 5 times worse.
Perhaps there’s a connection between transparency and meaningful concern.