It wouldn’t be as problematic if we didn’t have the extreme regulations and mandates which have failed in most areas. Most people it seems like. Though i cannot say if that’s true. But it would seem like most people agree that if solar and wind were exposed. To the same market conditions as hydrocarbons. It would be “more fair” and therefore where it does exist it can be assumed it is only there. Because it is the better option and not forced to exist because of a lack of options.
Let's hope policymakers see sense and require PV and wind to comply with the same rules as everyone else. No more "must run", no more subsidies of one sort or another, bid on the day-ahead market like everyone else, with appropriate penalties for failure to produce.
“We might as reasonably dispute whether it is the upper or the under blade of a pair of scissors that cuts a piece of paper, as whether value is governed by utility or cost of production.” ~ Alfred Marshall
Obviously you care more about the utility of fossil fuels to AI development, and renewables advocates care more about the (social) cost of fossil fuels - global warming.
So you do have to resolve that question before deciding whether it’s a supply or demand problem.
Furthermore, I do agree that renewable advocates often make bad, speculative predictions about the long-term benefits of solar and wind to the grid.
The AI vs global warming question is like that too, but with the same teams on opposite sides of empirical vs speculative. Adding more gas turbines produces certain harms in the long term, which can only be balanced by the speculative benefits of AI.
Anyway, i hope we build more nuclear to reduce this tradeoff!
I am deeply concerned about changing the Earth's atmosphere. I am a lifelong nature lover, but I don't think solar and wind power will work. My goal here is to call balls and strikes as best I can. I see nuclear energy as nearly the ideal solution. Additionally, while I appreciate AI, that is not my concern. The last sentence in my article sums it up: "If we can’t accommodate data centers, what does this imply about the ability to electrify the entire economy?"
This debate about renewables is so tiresome. It has become this all or nothing sort of dialogue with people saying it can never have any long term impact and costs more than it provides - it is just a great example of how there is so little middle ground on any issue. It is also funny to me that two of the largest wind generating states - and their production is big - are republicans “anti renewable” states - Iowa and Texas.
Excellent work. My two watts, Ivanpah was hailed as the savior and future of CAISO in reality it turned out to be its biggest detractor and was closed, now in some profound manner of incompetence they are going to double down on it and keep it in the mix. More proof that supply is to low. The western markets are slightly better off then PJM and ERCOT, but not by much. Should the continued shuttering of coal and hydro continue, that edge evaporates quickly. Couple that with a distaste to build dispatchable power for the reasons listed, the west comes off the edge and goes negative.
Does the use of batteries require double the electricity output? For example, if a solar farm customer needs 1MW, does the farm actually have to produce 2MW to supply the customer and charge the batteries that are needed for power overnight?
Yes, the solar farm has to be overbuilt to charge the batteries and supply electricity simultaneously. The batteries then add an extra cost because they do not produce electricity. Overbuilding is not a problem at first as long as all the energy produced is used or stored. However, as solar power increases, it will eventually be nearly impossible to use or store all of the output, so the surplus will be curtailed. This will also lead to higher costs.
Thank you. Not to mention gas plants capable of powering all customers will be needed for days that the sun is not shining and the batteries are drained, circumstances that are all too common in some parts of the country, especially in winter.
Solar panels generate electricity on cloudy days - just greatly reduced. Pointing that out because it isn’t an off on thing only when it is a sunny day.
Great macro-view of current energy mix and subsequent narratives. Energy 'transition/ALL Of The Above (ALLOTA)' supporters tend to forget capacity and load factors. 1GW of wind is not the same as 1GW of PV+BESS - which isn't the same as 1GW of gas generation, nuclear etc...
If IBRs continue to make up a larger share of the generation mix, the US grid will be weaker and more costly. Unfortunately, political leaders and cultural pundits continue to spout the ALLOTA narratives because it is politically convenient (pleases both camps, relatively) and makes sense to those not familiar with the details.
I am not advocating for a moratorium on IBRs, they are certainly more helpful than not. But the emphasis should be placed on firm/dispatchable generation and not IBRs - that is a tough sell to the Western world for good reason. However, it is shocking how little attention is given to developing economies and China, where firm generation (coal, nukes) is going gangbusters.
Those stats, along with this essay and many others on this platform, should be given to the shotcallers. Thank you for your work.
Well done! I’ve always been curious about electricity prices and utility operations but still know very little. I hope this information reaches those making decisions, though I worry that non-STEM policymakers are the norm when they should be the exception.
Our climate and energy policies have done more harm than climate itself has. We are shooting ourselves in the foot.
No more solar and wind. Move resources to natural gas, nuclear and grid improvements.
It wouldn’t be as problematic if we didn’t have the extreme regulations and mandates which have failed in most areas. Most people it seems like. Though i cannot say if that’s true. But it would seem like most people agree that if solar and wind were exposed. To the same market conditions as hydrocarbons. It would be “more fair” and therefore where it does exist it can be assumed it is only there. Because it is the better option and not forced to exist because of a lack of options.
Let's hope policymakers see sense and require PV and wind to comply with the same rules as everyone else. No more "must run", no more subsidies of one sort or another, bid on the day-ahead market like everyone else, with appropriate penalties for failure to produce.
I'm not holding my breath, though.
“We might as reasonably dispute whether it is the upper or the under blade of a pair of scissors that cuts a piece of paper, as whether value is governed by utility or cost of production.” ~ Alfred Marshall
Obviously you care more about the utility of fossil fuels to AI development, and renewables advocates care more about the (social) cost of fossil fuels - global warming.
So you do have to resolve that question before deciding whether it’s a supply or demand problem.
Furthermore, I do agree that renewable advocates often make bad, speculative predictions about the long-term benefits of solar and wind to the grid.
The AI vs global warming question is like that too, but with the same teams on opposite sides of empirical vs speculative. Adding more gas turbines produces certain harms in the long term, which can only be balanced by the speculative benefits of AI.
Anyway, i hope we build more nuclear to reduce this tradeoff!
I am deeply concerned about changing the Earth's atmosphere. I am a lifelong nature lover, but I don't think solar and wind power will work. My goal here is to call balls and strikes as best I can. I see nuclear energy as nearly the ideal solution. Additionally, while I appreciate AI, that is not my concern. The last sentence in my article sums it up: "If we can’t accommodate data centers, what does this imply about the ability to electrify the entire economy?"
Pretty much. The ability for us to have a suitable supply of energy is fundamental to the continued growth of our countries and a species.
There’s a difference in emissions between building more gas turbines to electrify the existing economy and building them to accelerate AI development.
This debate about renewables is so tiresome. It has become this all or nothing sort of dialogue with people saying it can never have any long term impact and costs more than it provides - it is just a great example of how there is so little middle ground on any issue. It is also funny to me that two of the largest wind generating states - and their production is big - are republicans “anti renewable” states - Iowa and Texas.
Very good article. It was comprehensive, nderstandable, and included some new insights.
Excellent work. My two watts, Ivanpah was hailed as the savior and future of CAISO in reality it turned out to be its biggest detractor and was closed, now in some profound manner of incompetence they are going to double down on it and keep it in the mix. More proof that supply is to low. The western markets are slightly better off then PJM and ERCOT, but not by much. Should the continued shuttering of coal and hydro continue, that edge evaporates quickly. Couple that with a distaste to build dispatchable power for the reasons listed, the west comes off the edge and goes negative.
Please, please, please start all your Y-axis charts at zero. You have at least two that do not start at zero and make my hackles go up.
Other than that, very good article.
Does the use of batteries require double the electricity output? For example, if a solar farm customer needs 1MW, does the farm actually have to produce 2MW to supply the customer and charge the batteries that are needed for power overnight?
Yes, the solar farm has to be overbuilt to charge the batteries and supply electricity simultaneously. The batteries then add an extra cost because they do not produce electricity. Overbuilding is not a problem at first as long as all the energy produced is used or stored. However, as solar power increases, it will eventually be nearly impossible to use or store all of the output, so the surplus will be curtailed. This will also lead to higher costs.
Thank you. Not to mention gas plants capable of powering all customers will be needed for days that the sun is not shining and the batteries are drained, circumstances that are all too common in some parts of the country, especially in winter.
Solar panels generate electricity on cloudy days - just greatly reduced. Pointing that out because it isn’t an off on thing only when it is a sunny day.
Great macro-view of current energy mix and subsequent narratives. Energy 'transition/ALL Of The Above (ALLOTA)' supporters tend to forget capacity and load factors. 1GW of wind is not the same as 1GW of PV+BESS - which isn't the same as 1GW of gas generation, nuclear etc...
If IBRs continue to make up a larger share of the generation mix, the US grid will be weaker and more costly. Unfortunately, political leaders and cultural pundits continue to spout the ALLOTA narratives because it is politically convenient (pleases both camps, relatively) and makes sense to those not familiar with the details.
I am not advocating for a moratorium on IBRs, they are certainly more helpful than not. But the emphasis should be placed on firm/dispatchable generation and not IBRs - that is a tough sell to the Western world for good reason. However, it is shocking how little attention is given to developing economies and China, where firm generation (coal, nukes) is going gangbusters.
Those stats, along with this essay and many others on this platform, should be given to the shotcallers. Thank you for your work.
Well done! I’ve always been curious about electricity prices and utility operations but still know very little. I hope this information reaches those making decisions, though I worry that non-STEM policymakers are the norm when they should be the exception.
You might find things of interest in Prof. Brett Christophers's book "The Price Is Wrong".
It's about the European experience more than the US one, but the problems are the same. And they are difficult problems.
https://www.amazon.com/Price-Wrong-Capitalism-Wont-Planet/dp/1804292303