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In reply to the discussion: The impossible just happened in Texas [View all]A HERETIC I AM
(24,386 posts)7. And here's the real reason;
That gave wind-farm owners a great incentive to lower their prices. The data shows that the clearing price in the real-time market went from $17.40 per megawatt-hour for the interval ending 12:15 a.m., to zero for the interval ending 1:45 a.m. Then it went into negative territory and stayed at zero or less until about 8:15 a.m. For the interval that ended 5:45 a.m., the real-time price of electricity in Texas was minus $8.52 per megawatt-hour.
How could this be? I mean, even the most efficient producer couldn't afford to provide electricity free or pay someone to take it.
Well, there's one more wrinkle. Typically, wind is bid at the lowest prices because you don't need fuel, it doesn't really cost that much money to keep wind turbines moving once they have been built. But wind operators have another advantage over generators that use coal or natural gas: A federal production tax credit of 2.3 cents per kilowatt-hour that applies to every kilowatt of power produced.
And that means that even if wind operators give the power away or offer the system money to take it, they still receive a tax credit equal to $23 per megawatt-hour. Those tax credits have a monetary value either to the wind-farm owner or to a third party that might want to buy them.
As a result, in periods of slack overall demand and high wind production, it makes all the economic sense in the world for wind-farm owners to offer to sell lots of power into the system at negative prices.
Only in Texas, folks. Only in Texas.
How could this be? I mean, even the most efficient producer couldn't afford to provide electricity free or pay someone to take it.
Well, there's one more wrinkle. Typically, wind is bid at the lowest prices because you don't need fuel, it doesn't really cost that much money to keep wind turbines moving once they have been built. But wind operators have another advantage over generators that use coal or natural gas: A federal production tax credit of 2.3 cents per kilowatt-hour that applies to every kilowatt of power produced.
And that means that even if wind operators give the power away or offer the system money to take it, they still receive a tax credit equal to $23 per megawatt-hour. Those tax credits have a monetary value either to the wind-farm owner or to a third party that might want to buy them.
As a result, in periods of slack overall demand and high wind production, it makes all the economic sense in the world for wind-farm owners to offer to sell lots of power into the system at negative prices.
Only in Texas, folks. Only in Texas.
So this phenomena was facilitated by a US Government tax subsidy.
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Lots of thing! Could be exported, could be stored, but the point is the abundant energy everywhere.
Fred Sanders
Sep 2015
#37
Our port off loads wind turbine blades everyday now. You see them going out by rail and truck all
Dustlawyer
Sep 2015
#34
And only in Texas because Texas' power grid is self-contained and aren't linked with . . .
brush
Sep 2015
#56
Sounds like a "windfall" profit for those shorting the Southwest electricity futures market.
leveymg
Sep 2015
#26
Saying in that area: The wind is always blowing sand, except when it's blowing ice.
Eleanors38
Sep 2015
#30
Pickens is right, the government should build the lines like Ike did the interstates . . .
brush
Sep 2015
#57
Gosh. Imagine what would happen if this was how it was around the whole country?
Octafish
Sep 2015
#48
I don't see any Hillary logos in this thread. Is she against wind power? nm
rhett o rick
Sep 2015
#50
Wind farms having to pay for producing electricity is a good thing for renewables? (nt)
Recursion
Sep 2015
#76