There are basically two places in earth that have a power market structured like Texas, Texas and the United Kingdom.
We have an extraordinary reliance on wind and solar, and broadly insufficient thermal generation to deal with generation falloff.
To be clear - I think wind and solar are great, and we should build more, but you also need a sizable amount of thermal generation (preferably nuclear) to provide for base load.
I also don't think thermal can be replaced readily with gas turbine, battery, pumped storage, or other forms of rapid spin up equipment.
Bitcoin (as what is effectively a big resistor) is useful as a artificial price support, to keep the market price at or above the marginal cost to generate power via a thermal plant. Essentially artificial static - but easy to shed - demand.
To explain further, bulk power buyers buy their power often directly from a nearby source and site their facilities near those points, but they purchase power at fixed rates. When market price at those interconnection points rises above the price they paid, they're can be forced to shut down and resell that power back into the market pool.
The losses from shutting dorm bitcoin are limited to production losses during the shutdown, and there is no loss of already made inventory, or other secondary losses like process startup and shutdown for a refinery, semiconductor fab, or other kinds of manufacturing which product a physical good.
I probably wouldn't have picked a market power system like Texas, but it's here, it's what we have, and these kinds of weird market incentives are needed to make it operate correctly (absent a rate of return pricing mechanism.
The 2019 power crisis, when the texas grid kinda almost went dark?
Our shortage was greater than the entire State of California's generation. It was greater than the spare capacity in any of the three neighboring interconnections.
Like I'm not opposed to us joining our neighboring interconnections, but the problem would still exist to some extent because of the ability to move power long distances - and this assumes you build more HVDC and AC interconnections. (There is currently HVDC interconnection).
Also, the problem would still remain, 4-6 hours a day, the cost of spot power at interconnection points would be lower than the marginal cost to operate a thermal plant.
We have an extraordinary reliance on wind and solar, and broadly insufficient thermal generation to deal with generation falloff.
To be clear - I think wind and solar are great, and we should build more, but you also need a sizable amount of thermal generation (preferably nuclear) to provide for base load.
I also don't think thermal can be replaced readily with gas turbine, battery, pumped storage, or other forms of rapid spin up equipment.
Bitcoin (as what is effectively a big resistor) is useful as a artificial price support, to keep the market price at or above the marginal cost to generate power via a thermal plant. Essentially artificial static - but easy to shed - demand.
To explain further, bulk power buyers buy their power often directly from a nearby source and site their facilities near those points, but they purchase power at fixed rates. When market price at those interconnection points rises above the price they paid, they're can be forced to shut down and resell that power back into the market pool.
The losses from shutting dorm bitcoin are limited to production losses during the shutdown, and there is no loss of already made inventory, or other secondary losses like process startup and shutdown for a refinery, semiconductor fab, or other kinds of manufacturing which product a physical good.
I probably wouldn't have picked a market power system like Texas, but it's here, it's what we have, and these kinds of weird market incentives are needed to make it operate correctly (absent a rate of return pricing mechanism.
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