Europe faces an unusual problem: ultra-cheap energy
Europe faces an unusual problem: ultra-cheap energy
Europe faces an unusual problem: ultra-cheap energy - https://web.archive.org/web/20240620151949/https://www.economist.com/finance-and-economics/2024/06/20/europe-faces-an-unusual-problem-ultra-cheap-energy
“problem”?
A power companies largest expense is maintaining the grid. If their only product has to be sold at negative prices, then there is no money to pay people to maintain the grid. An under maintained gridgrid can lead to very serious consequences, ref:Texas.
It's almost like energy should be seen as a public service rather than a source of profits. Like education, health, water, etc.
Someone's gotta pay for it in either case
You can have a system where the first few kWh free and then you pay the excess, or you pay it entirely through your taxes. Either way you're obviously paying for it.
Having it as a public service doesn't mean it's free, it means that everyone benefits from it but not everyone pays the same price, and that profit is not the ultimate goal.
Nothing should be a public service.
Yeah, like, just pay for it with your own money you poor fuck. And if you're poor it's probably your own fault, pull yourself up by the bootstrap like my CEO daddy did.
Don't be a poor fuck, problem solved.
As a libertarian, I actually disagree. Natural monopolies should be a public service because the incentives to provide ethical service aren't there. You can't realistically have multiple power companies, so the city/state should provide electricity service.
Power generation could be a private service, since cities can choose their suppliers. They can also generate their own, and private energy would need to compete with that.
Of course you can have multiple power companies in the city! A quick search shows that I can choose from over 10 different energy providers for my home. There's no such thing as a natural monopoly, they only happen when legislation allows them to happen.
No, what you have are 10 different customer support companies. They probably don't own the wires coming to your house, or the substations and power poles and whatnot. Maintaining separate infrastructure for 10 companies isn't practical, so they either own joint ventures that do (less likely) or shift that onto cities and other government entities.
We're doing that with our municipal fiber initiative, the city owns the infrastructure and companies provide service on that infrastructure. I think "service" is a silly thing to compete on (how often do you really need something from your ISP or power company?), especially when they don't own the lines so they can't do much to help, but whatever. I think it's much better for companies to compete on extra services, like providing base power, energy storage, datacenters (going with the ISP example), etc. Then again, it works reasonably well for MVNOs, so I guess there's a chance it's a net positive.
You're wrong. Different companies own different parts of infrastructure, power generation and/or distribution. The system is no different to setting up a grocery shop. Grocery shops don't own farms (usually) or a building they're operating in, yet they can compete efficiently with each other.
As for fibre, again - no issues here. Britain has OpenReach as the main infrastructure manager, which leases it to ISPs, plus there's a selection of independent ISPs who have their own infrastructure.
And even trains can work successfully as proven by the EU.
different parts of infrastructure
So they have a monopoly on a given part of infrastructure. So if a transformer goes down, that company would need to come out and fix it? What happens if they don't fix it promptly? Surely you can't reroute your power lines through a transformer owned by a different company, no?
I don't live in the UK, so I don't know how it works. But I do know it's impractical to have parallel electrical systems. We've done that historically with internet (cable, dsl, and fiber would use separate, parallel infra), and putting in a competing service gets stuck in bureaucracy because existing players don't want competition, which is why many areas only have one or two ISPs (they block new ISPs from rolling out new infra with regulations and whatnot). So I'm guessing that's not happening, which means there's a monopoly at some point.
I could totally be wrong though. What I do know is that the UK has some of the most expensive electricity in the world.
Sounds like a good reason for the state to sponsor some energy intensive environmental work. Like desalination plants or those ungodly carbon capture rigs that are super energy inefficient.
Best I can do is lots and lots of crypto.
In Norway we pay a fixed monthy fee, a fee based on the maximum load we use during the month, in addition to a fixed fee per kWh to the company owning/maintaining the grid in our area. This is in addition to and completely independent of the price we pay to the "power company" based on for example the spot price.
This is the same in the US, but it's possible that the flat fee might not be enough to cover maintenance if kW prices go down. Seems like the solution should be to raise the flat fee, or implement one if it doesn't exist yet.
Grids need to be carefully balanced. If the cost is approaching, or lower than 0 then that means the grid is actually in a critical state. A lot of generators cannot be switched off (or at least not quickly). If more power goes into the grid than is used, then it can destabilise the whole grid and cause a blackout.
The solution to the problem is actually 2 fold. We need more sinks, and a smarter grid.
More sinks is mostly in the form of storage. They buy power when it's cheap, and sell it when the cost spikes. It also extends to other heavy uses. Traditionally, aluminium smelting helps a lot with this. It uses huge amounts of electricity, and and switch on and off rapidly.
We also need a smarter grid. We need homes that know what the grid needs. E.g. electric cars than can actually as local buffers, or air conditioning that times it's draw to help balance the grid.
sell it to who? This is just like saying you'll just find shelter under another tree when enough rain has started making it through the leaves of the one that's sheltering you now.
And that's why it's currently a problem. There's not enough buyers, and not enough capability to switch supply in and out.
Without the price incentives to build large scale storage, it hasn't been done. The problem is that there is a delay between needing the storage, and it actually being built at scale.