Welcome to the world of baby-economics where people think a “negative” price is a sign of success. In Simpletown people are cheering. But in the real world a price signal that’s negative tells us that someone is selling something so awful they have to pay someone to take it away. It’s a burden that must be got rid of, like trash.
Germany set to pay customers for electricity usage as renewable energy generation creates huge power surplus — The Independent
Electrons cannot be created nor destroyed. If you make them, you have to deal with them. Negative pricing is a bad thing, a sign of “junk electricity” — a burden. It’s utter nonsense in a free market.
From the outset, I’m skeptical that anyone is actually paying someone to take electricity. If wind farms were coughing up dollars (euro) to “customers” surely they would just disconnect their spinning thingo from the grid? Who wants to be a shareholder in a company that forgets to lock the turbine, or press the “off” switch, and has to pay customers to take its electronic trash? The truth (whatever it is) will turn out to be some variation of an unfree market. Probably the companies pumping the unwanted electricity must be ordered to keep pumping by some government ruling, or subsidized by people (taxpayers or bill payers) who have no choice.
The headlines are occurring this week because a nasty storm hit Europe over the weekend. Sadly at least five are dead, but wind farms made out like bandits… and someone got robbed. But who?
Here’s Bloomberg with a headline that customers got “free energy”:
A stormy weekend led to free electricity in Germany as wind generation reached a record, forcing power producers to pay customers the most since Christmas 2012 to use electricity. Power prices turned negative as wind output reached 39,409 megawatts on Saturday, equivalent to the output of about 40 nuclear reactors. To keep the grid supply and demand in balance, negative prices encourage producers to either shut power stations or else pay consumers to take the extra electricity off the network.
Spot the contradiction. Was it “free” or were they paid? Think about how stupid the situation is if people are paid to take electricity. It would be in their interest to do a “Power Hour” and turn on the pool pump, the air con, the heaters, the oven, the hot taps, and let them run while dollars add up in their account. Tell me again how this helps the environment?
The Green Optimistic (sic) thinks this is not just a good thing, but a historic glowing “new world” where “modern economics has hit the wall”. I think someone has just sold Nicolas Say a perpetual motion machine:
Wind Power Just Overtook All Other Forms of Electrical Generation
This morning in Germany, wind power created the need to pay consumers to use electricity. This is probably some sort of historic event, but if you take a step back, it isn’t hard to see how wind and solar power could shatter the world as we know it.
Amazing.
A Not So Brave New World
Here is the thing, for my whole life I have been told that everything costs money, there are huge problems that involve endless wars against poor people, and that money for sure doesn’t grow on trees.
I have come to find out, that today, all of this might be high grade bull$#&%.
He goes on to outlay his plan for the Germans to get rich by mining bitcoins with “free electricity”. Good luck with that plan.
UPDATE: Ho! Czech’s so unhappy with “free energy” they are cutting off surges at the border
Thanks to ROM in comment #5 we find out that this “historic” moment may be partly because the Czech’s have got fed up with Germany dumping the excess wind power into their grid and have spent about $70m installing phase shifters on the borders to stop “disruptive surges”. So intermittent power is sometimes so worthless that other nations would rather spend money to reduce spikes of “free electricity” that could potentially cause a black out.
ROM: “…the Czechs have installed phase shifters in their grid system at their borders as the Poles are also doing. Which means that the Germans are now stuck with their own crazy wind generated s***
The Czechs have installed their first batch of phase shifters which can block the flow of German energy when and if required to keep the Czech and Polish grids stable, on their grid systems at their national borders and which own the Czech’s case, became operational in September this year.
And it certainly is not admitted by the renewable energy pimps…. but now the Germans are getting stuck in their own self created grid instability and can no longer export that instability into neighbouring nations grids.
Czech TSO commissions final phase shifters on German border
S&P Global Platts: “The main aim of the phase shifters is to prevent disruptive surges of electricity from Germany, mainly caused by wind power production in the north directed to some of the main sources of domestic demand in the south.
The Czech Republic has been threatened in the past with blackouts because of such disruptive surges. Phase shifters are already operating on the Polish side of the joint Polish-German border to deal with similar problems.”
In the meantime, in Germany, where wind farms are producing electron-trash, they’ve just built the largest turbine anywhere in the world at 246m. Great timing guys.
Germany has spent $222b on renewables subsidies
Money forcibly taken from consumers:
[New York Times] Germany has spent an estimated 189 billion euros, or about $222 billion, since 2000 on renewable energy subsidies.
But renewable energy subsidies are financed through electric bills, meaning that Energiewende is a big part of the reason prices for consumers have doubled since 2000.
Julian Hermneuwöhner … a 27-year-old computer science student, said his family paid an additional €800 a year because of Energiewende.
As TdeF pointed out in comments, this is like the situation in Australia where the RET subsidy ends up coming from consumers, not from tax revenue. Customers are only paying this fee because they have no choice, as they would in a free market.
[In Australia] The ‘government’ pays nothing. The LGCs and STCs are Carbon Certificates which are theft from fossil fuel electricity retailers and so from all the other electricity users. This is the RET scheme. It is buried in everyone’s electricity bills. Even those who use solar. So is the pay in tariff for unwanted lunchtime solar.
What’s the point? The unfree market isn’t reducing CO2 anyway. (And it wouldn’t help if it did).
Double-useless for everyone, except the renewables-crony-industry:
But emissions have been stuck at roughly 2009 levels, and rose last year, as coal-fired plants fill a void left by Germany’s decision to abandon nuclear power. That has raised questions — and anger — over a program meant to make the country’s power sector greener.
Why Aren’t Renewables Decreasing Germany’s Carbon Emissions?
Germany’s carbon emissions are not declining much, despite renewables increasing to almost 30% of the country’s power mix this year (see figure below), and over 50% of its installed capacity. Unfortunately, coal has also increased to about 30% and, along with power purchases from France and other countries in Europe, is used to load-follow, or buffer, the intermittency of the renewables.
Germany’s carbon emissions per person actually rose slightly in 2013 and 2015. The country produces much more electricity than it needs and is not addressing oil in the transportation sector.