Want Free Electricity? Move to Texas
By Samantha Solomon, Editor-in-Chief, Commodities
The unfit happened on Sep 20. In a center of a night, a mark cost of electricity in Texas fell next 0 and strike -$8.52 per megawatt hour during a lowest point.
The cost hovered around 0 or reduction until around 8:15 AM when people started waking adult and regulating power to make their morning coffee and check a news.
Why would providers in a state in adore with a giveaway marketplace sell a product for no cost? Well, it’s partially due to Texas’ vast commissioned wind ability – 12,625 megawatts, to be exact.
Surprising, we know, though this oil-rich state got 9% of a electricity from wind power in 2014. Of course, we can’t control when a wind blows. That’s one of a power source’s downfalls and because storage is so necessary.
Last week, a wind was clever in a center of a night, when power direct was during a lowest. All other energy producers tempered their prolongation and violent wind power dominated a energy mix.
No One’s Like Texas
Now, Texas also has an surprising energy marketplace structure. Of a 48 continental states, Texas is a usually “electricity island.”
You see, many states are partial of vast informal networks, definition energy is common opposite state lines. But Texas’ grid is self-contained. This means it isn’t influenced by blackouts in adjacent states, though also that is has to use all a electricity it produces.
The grid is run by a Electric Reliability Council of Texas (ERCOT), that has set adult a difficult continual auction system.
As reported by Slate, “Every 5 minutes, power generators in a state electronically bid into ERCOT’s real-time market, charity to yield chunks of energy during sold prices. ERCOT fills a open needs by selecting a bids that are cheapest and that make a many clarity from a grid-management perspective . . . Every 15 minutes, a bids settle during a tip cost paid for electricity supposed in a round.”
This multiple of factors – vast amounts of wind power, an electricity island, and continual behest – led to a disastrous price. Demand was low, a wind was blowing, and providers could usually sell to ERCOT.
On tip of that, wind power producers automatically get sovereign subsidies for each kilowatt produced. So, they had each inducement to sell for as low as possible.
Seems like Texas needs to get some electricity storage. And maybe Texans need to start waking adult in a center of a night to do their laundry, run their dishwashers, and watch TV.