Comment by Retric
2 years ago
You achieve similar results by simply charging such customers current market rates. Nobody is going to be mining Bitcoin while paying 2.50$/kWh.
That’s the objection, it’s simply a waste of money.
2 years ago
You achieve similar results by simply charging such customers current market rates. Nobody is going to be mining Bitcoin while paying 2.50$/kWh.
That’s the objection, it’s simply a waste of money.
It's so weird because I thought the whole point of ERCOT was to be a market and use market forces to solve everything.
So why are they paying bitcoin miners to turn off, rather than just charging them market rates at all times and letting them decide for themselves?
I feel like I'm missing something here.
Electricity markets are not just spot prices. There's sub-markets for being available to respond to emergencies.
The UK system: https://www.nationalgrideso.com/industry-information/balanci...
It seems you'd be eligible for "quick reserve" if you could turn on or off >1MW of response within one minute. Ideal for batteries. Includes a "standby" fee paid hourly to cover having the system "armed".
(It seems unlikely that either the bitcoin operation or their electricity meter could manage sub-minute response times to changes in prices alone? I'm not exactly sure how metering and payment works at grid level and how granular it is)
The Texas and UK power market are actually very similar in construction and operation.
It certainly could
The last couple years of evidence suggests that keeping the grid up requires a certain amount of central planning. On one hand, the frequency must remain relatively stable, globally. On the other, consumers don't want to deal with every fluctuation of the price (as they found out when they were exposed to the spike prices during spring '21). On principle, Texas is going to make sure that the energy sector is taken care of financially, so we end up in the situation we're in: Advertise the grid as market-purely as you can, engage in just enough planning to keep it up and the money flowing.
The gap between actual unfettered market forces and what gets implemented in American capitalism is where the grift happens. IE, ostensibly set up a free market to satisfy the ideologues but make sure there are carveout deals so cronyism has room to hand out favors.
Don't forget the guy in 2021 who told investors he will keep the prices as high as possible for as long as possible during that winter storm.
You are missing something. That like all neoliberal idiots who claim to use "dur markets" as a catch all solution, they are dishonest bad faith actors looking to filter money and power to their friends, not make anything better for anyone. I imagine you'd find quite easily the tax payer money is filtered to companies they own or are friends of.
This is a pretty common scam among neoliberals that I don't know how it's still a mystery to people. "Dur freedum markets good!" or whatever populist lies to get elected then crank up subsidies to your friends. A tale as old as time.
Right up there with "defund state institutions and then point to their dilapidated state as evidence of their inherent failure". Nhs in the uk for an easy example.
Anytime government assets go to private hands there’s always some back room deals going on. Though it strange seeing neoliberal used when it’s usually the conservatives pushing this agenda in the US, that’s what it’s called.
https://en.wikipedia.org/wiki/Neoliberalism
You don’t get the same outcome.
Consider the payment as the cost of maintaining demand during periods where you don’t want it.
It's like a factory that can only produce 100 widgets each week, nothing more or less. Ideally you want to always sell 100 widgets each week (supply = demand). You could build a smaller factor that only makes 60 widgets, but the cost per widget would be 50% higher and at market rates you can't make enough money to justify the investment.
So what you do is build the 100 widget factory and you sign up a customer who will always buy 40 widgets each week, and the remaining 60 widgets you sell to smaller customers.
If suddenly the demand from smaller customers hits 90 widgets one week, you don't want to just cut off the 40 widget customer and say "tough shit", because they may not come back and you're stuck with 40 widgets each week you can't sell.
So you pay them money in exchange for accepting a lower supply of widgets that week.
Even with the payments, net-net you’re better off because during the 50 weeks per year when smaller customers only buy 60 widgets, overall your set up is more efficient.
“If suddenly the demand from smaller customers hits 90 widgets one week.”
Demand and price are linked. If you’re selling 40 units a week at 10$ and demand increase to 90 units @ 10$ that doesn’t force you to sell at 10$, you can spike prices to 50$ and suddenly people aren’t trying to buy 90 units.
But this is demand like residential A/C. It's not good business to deny those customers electricity.
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If prices were perfectly liquid and symmetrical, sure. Unfortunately they're not and the system is pretty complex. There's a bunch of different ways to purchase energy and not all of them are sensitive to realtime price.
Establishing a separate mechanism to compensate "virtual" generation (via load reduction) works no matter what pricing structure I use for my typical energy purchases.