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How Wind and Politics Pushed the Price of Texas Electricity Below Zero
Slate dissects the strange circumstances that led the price of electricity in Texas to briefly dip not just to zero, but into negative territory, reaching at one point negative $8.52 per megawatt hour. Why? A combination of being an "electricity island" with only weak ties to the surrounding state's grids; strong wind in a state that's sprouted thousands of windmills; and infrastructure design that means the only real buyer for most electricity producers' output is ERCOT, the Electric Reliability Council of Texas. (One of the comments attached to the story notes that Texas is not completely isolated from the national grid, but it's still markedly isolated.) A slice: Demand fell—at 4 a.m., the amount of electricity needed in the state was about 45 percent lower than the evening peak. The wind was blowing consistently—much later in the day Texas would establish a new instantaneous wind generation record. At 3 a.m., wind was supplying about 30 percent of the state’s electricity, as this daily wind integration report shows. And because the state is an electricity island, all the power produced by the state’s wind farms could only be sold to ERCOT, not grids elsewhere in the country.
Which is great news! Texas is ahead of the world now in being prepared for the huge increase in electricity usage that good electric cars will cause.
You missed the part where this happened at 4AM.
Electric cars can be pre-programmed to charge at any time. My wife has a Tesla, and hers is set to start charging at 2am. Our house has a smart-meter that records time-of-use, and our rates are lower at night.
Negative prices have persisted in Texas and elsewhere for the past decade; this is not news. It is a function of the tax credit, but also a lack of transmission. When transmission is not available from wind resource areas, the prices will be negative there (and higher on the other end), reflecting the fact that wind has to back down because it can't go anywhere. There are also instances where there is simply more power than there is demand over an entire area, but this not as common; that scenario is actually a bigger problem in California due to the buildout of solar (for which there is no production tax credit, notably). Negative pricing was much worse in Texas a few years ago before they built a backbone transmission system to get wind from West Texas to load in the east. There is no doubt that the spot price of energy on average is lowered by wind; utilities nationwide are signing contracts at $20/MWh or less, well below today's average spot price, fixed for 20+ years. Interesting aside - even before there was much wind, prices in the Pacific Northwest would typically go negative for a few hours in the spring when coal needed to be paid to back down to accommodate spring runoff through the hydro system.
Speaking as someone who lived in Texas for 5 years. I saw more Teslas there than anywhere else I have traveled. Not being able to sell them in the state has done nothing to stop people from getting them. Every single grocery store has electric chargers out in front, as well as every apartment complex. Just on one street I could have had access to over 15 chargers. Electric cars were very popular in Dallas.
"There are lies, there are damn lies, and there are statistics"