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Happened in Texas too
Could excess power from CA be exported to Mexico or Central America?
Transmission is an issue for that long of a distance.
I've heard that desalination of seawater is not a practical solution to drought because it's too energy-intensive. Does this change when energy temporarily costs less than $0/unit?
Sort of. There are California cities that already have desalination plants. It's okay for retail users on the coast (who are okay paying a bit more).

Agriculture is different. They rely on much cheaper prices and besides, you'd have to transport it uphill.

That reminds me of the old engineering joke.

What's the best way to transport a million kg of water? Build a cloud.

If you're thinking statewide, you could just evaporate seawater, and it's eventually going to rain out somewhere in the mountains.

It's also very capital-intensive. Ideally you would want a useful energy-intensive process with low capital costs so coming online during these peaks but staying idle for the other 80% of the day has minimal impacts.

I wonder if hydrogen generation would be more along the lines of what you're thinking. Hydrogen is an energy store not an energy source -- it takes more energy to produce hydrogen than you get out. But that just means it's a type of battery. It seems conceptually simple to produce... if a plant can be made simple enough (low enough capital costs that the idle time matters less), I wonder if hydrogen generation/burning has been studied as grid-level storage to do this kind of time-of-day energy arbitrage.

(With the amount of interest in grid-level storage and by the law of markets-are-efficient, presumably someone has run the numbers...)

It's not true in the first place. Arab states, and Israel, make heavy use of it; desalinated water is easily affordable for US residents.

What makes US desalination impractical is not the cost of desalinating, but either or both of:

- the cost of building a plant in the first place

- the availability of cheaper fresh water

Southern California, for example, dumps most of it's rain water into the ocean. I'd bet that capturing some of that would be much cheaper in the long run.

it's not hard to come up with some creative solutions... How about a giant bag or huge tanks out in the ocean for holding the water, instead of building dams. Or injection wells to replenish the water tables during the rainy season, pumping it out during the rest of the year.

It just seems weird that millions of gallons of fresh water gets dumped into the ocean, and nothing is done to capture even some of that water.

For a heavy price yes, but it also depends on the EHV transmission lines going from SCE/San Diego southward.
Infrastructure issues aside -- given the current political climate, that's highly unlikely.

"First they come and take our jobs. Now they want us to give them free power!"

Seems like some local industry would be able to use this? Or maybe turn on some air conditioning or hot water heaters.
Making ice is good way to bank cheap power at a company-scale because they can use it to offset AC later.
If Tesla can really put up grid storage modules as fast as they claim, shouldn't this just be a big opportunity to print money? Get paid to charge the batteries on surplus surges, get paid to supply power at night discharging them...
seems like a good opportunity, but how much would it cost for these storage units?
If 65 days of the year you charge and 300 days you don't, it likely isn't cost effective.

Peak time is also during the daytime which means baseload power sources like Gas/Hydro/Nuclear/etc. are likely fulfilling demand at night just fine.

Most likely you are charging during winter and discharging during heat waves in the summer which may not be a viable business model despite the large delta in energy prices.

At least that is my understanding, I'm not an expert. xD

Yes. The "obvious" question when reading an article like this is "Why pay someone to take the power, why not just turn off a gas or coal fired plant?" There are some obvious restrictions around that (like the plant would need to be in the general area of the grid where power was coming from of course) but the issue according to the PUC is that "cycle time" which is the amount of time it takes to turn off a power plant and then turn it on again, is longer than the "event time" where you get an over power event transient.

Grid storage nicely addresses both of these issues because it can absorb the extra energy (charging) and when the grid storage units are charged you can safely turn off a power plant because even if the power suddenly dips for what ever reason the grid storage can cover that loss while the power plant is restarting.

If you reach the point where you have enough grid storage to completely cover the variance between day time and night time power demand, then things get even more efficient as you switch to that storage a 'primary' and then cycle on plants as needed to top them off.

But so much of the demand is flexible. For example, I get zero benefit from heating my water tank at a particular time. Building grid storage so I can run my heat pump when it's dark and the air is still is inefficient and silly.
I'm not sure what you are trying to say here. At the individual user level energy usage may appear random and chaotic but at the community level that is not the case. To use your example, at any given instant in time someone in your city is heating water (whether intentionally by consuming water from a hot water storage facility, or passively as that facility activates automatically to keep the water at a given temperature). All of those usages level out to an aggregate demand on energy to heat water over unit time.

If you think about it as a capacitor that "filters" high frequency noise on the electrical grid it might be clearer.

I'm saying that with dynamic pricing grid loads no longer have to be noise. Everyone can charge, heat, clean when energy is cheap/available.
They level out to some extent, but they also enable far larger spikes to form when external events cause normally relatively "random" things to synchronise into narrower intervals across a large number of households.

E.g. the UK has what is called "TV pickup": Shortly after East Enders ends (daily evening TV soap opera), you'll get the sudden surge of 1.5m+ electric kettles turned on at once.

We see that type of situation where "random" events coalesce into very narrow time bands in all kinds of areas. I'd imagine we'll see this type of thing also happen for automated processes. E.g. air-con units ramping up based on thermostats in very lose proximity in the same areas etc.

I feel this is one of the areas where we need a smarter grid and smart home tech and home based batteries to work in conjunction to time-shift load and smooth out the demand more.

E.g. a hot water storage system can afford to turn off for 5 minutes (or whatever) and let the water cool slightly to take advantage of a discount 5 minutes down the line, or an air con unit can reduce speed for the same reason. Or a deep freezer that takes advantage of whatever the safe variation in freezer temperature would be.

Or, hey, I'd like a button on my washing machine and dishwashers that say "I want it to be done by time X. Find the lowest guaranteed rate (e.g. nightly rates) that will let you complete by X. If between now and then you get an offer for a lower rate, start then instead". Most of the time we just set "random" time delays to run them during the night, but most of the time I don't care if it actually runs then as long as it's done by the morning or by the time I'm done working etc.

You already have that happening to an extent at industrial scale. E.g. with industrial processes that require lots of energy that can be slowed or sped up according to prices, but there's a lot of discretionary demand in home as well that could be leveraged to smooth out the demand curve a lot more, and with a battery tied in it could smooth it even more.

You can build on this solution by using the money you save on selling at a loss to other states by using the funds to build storage. As solar capacity increases, more storage is built and in turn more coal plants are taken offline.

The only reason that this is not being implemented is corruption and campaign financing. If never fails to disappoint me the distance politicians will go to support big business as opposed to taking care of actual humans and their future.

Printing money is not a great business if the printers cost $10M and they print out $1,000 a day and lose the ability to print after 1,000 printings.

The economics are still not there yet for widespread battery energy storage. Here are some real numbers:

Wholesale prices fluctuate, but are often in the range of 0 - 10 cents per kWh. Lithium ion batteries cost something like $250/kWh. The inverting electronics cost like $100/kW. Round trip charging efficiencies are like 80%. Battery lifetimes are like 1,000 charge cycles. So assuming a system with 10 kWh at 5 kW, your costs will be $3,000. Or, on a per cycle basis, $3. If you charge 10 kWh for free and then sell 8 kWh for $0.10 each, you're making $0.80 on the transaction. Not enough to even cover your $3 in levelized costs.

(Obviously the economics improve with better assumptions. But there's still maintenance, interest rates, hookup costs, and destruction costs to take into account.)

Fortunately for Tesla, it also sells a few more products that make use of batteries.
I don't think the charging cycles is quite as open and closed as you represent. Its probably 1000 cycles to maintain 80% capacity (or some such threshhold), but you can keep running batteries in a storage-only application them far longer than one would find acceptable for keeping in a car.

But overall, yes, there are lot of technical considerations to actually doing it. And the article and discussions just touch the tip of the actual complexity involved - but it seems like there are power arbitrage opportunities of various corners of the grid in both long and short lasting sources.

I'm not an expert, but my understanding is that reduced capacity of old batteries is a symptom, not the problem. If reduced capacity was the only issue, then yes, it would make total sense to run old batteries into the ground.

But the issue is that the reduced capacity is a symptom that the battery is decaying internally, through a variety of mechanisms (cathode/anode micro-cracking, dendrite growth, physical leakage, who knows). Old batteries are dangerous fire risks, exactly what you don't want in a warehouse full of flammable batteries. Even a 1 in 100,000 risk of fire is unacceptably high if it causes a warehouse to explode. For this reason, it's risky to run old batteries into the ground. This is why there isn't a market to turn old electric car batteries into utility-scale storage.

Then again, this doesn't seem to be an issue for consumer electronics like laptops and phones and electric toothbrushes, so I wonder what's different, if anything.

And yet our rates keep going up, which encourages less electricity usage and higher adoption of personal solar installations. Seems like this is going to be a pretty rough cycle for the power companies to navigate if they aren't allowed to change their business models...
They should pump water uphill during these surges. California hydropower is constrained by rainfall, so the dams and generators already exist. Pumps cost less than batteries and this process has about an 80% roundtrip efficiency
>this process has about an 80% roundtrip efficiency

How is that possible? Even if you assume frictionless pipes and lossless power transmission, that's assuming 90% efficiency for both the pump and the generator.

Well, solar farms in CA are mostly in deserts, where hydro reservoirs are not that feasible.
Power can be transmitted to areas inside of CA that already have hydro reservoirs or ones at higher elevations can be built.
Since it's already wired up to the same grid, does the storage have to be near the generating plant?
I think the point of paying AZ to take excess power is to lower the load on CA grids.

So long distance transmission cannot solve the immediate problem.

(comment deleted)
> So long distance transmission cannot solve the immediate problem.

Then how is it getting to AZ?

In most cases the answer is "no, but it helps". Close physical proximity reduces transmission loss (both inward and outward). And hydro storage requires a very specific sort of topography. If you have fortunately built solar energy plants near these sites, great! Otherwise you will probably have to build new transmission infrastructure (likely HVDC), which costs money.
Well we need all the reasons we can get for adding dam capacity.
If they priced residential power in line with real market rates (in this case negative), I suspect this would not be a problem for long. But we need smart meters first.

I would love to be able to have my heat pump run during steep discounts, but in Colorado we currently have a flat 12 hour off-peak (at night -- the opposite of this) with a mild 20% discount.

It's possible to get a smart meter in Illinois, and I've thought about rigging up appliances to run when rates are negative. However the price feed is lagging by 15 minutes or so. So while you can have a pretty good idea rates would be negative, you can't actually be sure.

It's not a huge deal if you are doing something productive with the energy, but if your goal is to make money it's probably not very effective.

That being said, it might be productive to rig up your gaming pc to mine bitcoins or fold proteins when the price is close to zero.

I'm not aware of any utilities that pass on spot pricing on power to their customers on a minute-by-minute level. Even with smart meters, most just tier the pricing into 2-3 levels per day that stay constant for 6 months or so (here in CA, it resets every summer/winter)
Most customers don't want this. You have to realize that slightly negative costs in some slots (and your power cost would not actually be negative, as it would be more than balanced by the transmission and service costs) would come with eye-poppingly high rates on other days, like 50x the normal rate.

Imagine the horrible news stories and "NBC on Your Side" pieces that will come about when someone pops their A/C on at the wrong time and gets a $1000 power bill.

Even with smart meters (which we all have already in CA) I don't think residential customers will ever see more than three tiers of time-of-use cost per day, although those hours may shift around. However, utilities already contract with major users like universities and large businesses to shape demand, in return for deep discounts. And, smart home devices like EV chargers and battery storage units will be connected to the grid to provide near-instant capability to suck up excess power, or curtail usage.

They do. Many of the reservoirs of the California Water Project also do power storage. They usually pump up at night and generate in the daytime. Sometimes they can't store more energy because they're full of water, as happened at Oroville Dam this year. Sometimes they don't have enough water. A year ago, some hydro plants in California were down due to lack of water.

There's one big pure pumped storage plant in California - Helms, near Fresno.[1] The geography has to be right for pumped storage. You need a high reservoir and a low reservoir near to each other, and since the water levels will change drastically each day, they can't be used for boating or recreation much. Helms has about 1500 meters of elevation difference between the reservoirs. Sites like that are hard to find.

Excess solar power isn't a big problem in areas that use air conditioning. Peak A/C load and peak solar output tend to coincide. The big excess power headache is wind, where output varies 4:1 over a day over wide areas. Excess wind generation late at night is common.

The best way to understand the power business is to read PJM 101, the introductory training material for the US's largest power grid. Unfortunately, PJM recently put that behind a login.

[1] https://en.wikipedia.org/wiki/Helms_Pumped_Storage_Plant

Peak power usage is around 7-8PM, this discrepancy is the source of the duck curve. More storage could allow tons more solar to be installed.

https://cleantechnica.com/2014/07/21/utilities-cry-fowl-over...

(deepsun - the "no sun" critical event happens every night)

7-8pm according to that link is the net peak, after solar production has canceled out the original afternoon peak. The problem is that even though solar supply does roughly coincide with the peak of demand, solar production has increased enough that, since about 2013, it's gone past the point of offsetting peak afternoon A/C usage, to now producing an actual net trough in the afternoon hours (you can see the afternoon extremum flips from a local maximum to a local minimum from 2012 to 2014, and just keeps going further down every year since, as peak afternoon solar grows faster than peak afternoon A/C).

The new net peak around 7-8pm is because demand has a long tail into the early evening, while solar drops off sharply around 5-7pm. But yeah the end result is that it does cause a problem for grid management if you add more incremental solar, since the original afternoon peak it helped smooth out has long since been smoothed and then some.

Wind is really variable, and often way out of sync with load. I just looked at PJM's dashboard, and peak wind in the last 24 hours was 4 gigawatts at 4 AM. Wind bottomed out at 0.65 GW at 8 PM. That's total output from wind farms from Illinois to New England. Averaging over a large area isn't that helpful.

Piping energy in from the wind corridor that runs up from the Texas panhandle to Canada has promise. The wind is steadier there. It's quite possible to run megavolt DC power lines now; China has 16,000Km of them. California has had a half-megavolt DC link from Oregon to Southern California since the 1970s.

Calculations show that it's less expensive to maintain more solar panels than maintaining storage. (And, instead of solar panels -- wind turbines, as they are mostly better than solar panels).

Storage is better to be left for critical events (no sun + no wind + peak consumption). And even then it's better to keep several gas power plants to cover those events.

I'd love to see those studies, that's unfamiliar to me! With the quickly dropping costs of storage, I wonder where/if there's and inflection point.
Its hard to imagine a more efficient solar energy storage medium than oil and gas. I'd be curious how close it is myself.
I'm not sure how efficient hydrocarbons are as storage media; the point is that eras of geological processes have already done the work of storing energy in that form.
I was more interested in the claim of having more solar negating the need for storage.

Oil and gas are horrifyingly inefficient storage mechanisms. Round trip will be less than 50%, best case. That said, power to gas may be worthwhile if there's a ton of excess electrical power certain times of the year and the capital costs of power to gas is low enough.

I'm thinking more in terms of availability, cost, volume and portability. I might be wrong but wouldn't a oil tanker full of diesel fuel contain a great deal more potential energy than the same volume of the best battery cell we can produce for this purpose?
Storage doesn't much care about volume and portability; batteries are good enough. Availability is important for pumped storage, but after that everything scores pretty similarly. So you're left with cost dominating the equation, along with the lesser factor of round-trip efficiency. And it costs a lot of money to store excess energy as hydrocarbons.
Easy.

If you have a ton of panels you have a ton of excess electricity during peak production hours and whatever you skim off the top is basically free. You're better off inefficiently converting what you skim off the top into something you can convert back into energy efficiently or cheaply/easily (pumping water up a hill, running grow lamps on algae that turn into bio-fuel or some other Rube Goldberg operation) than using an expensive, efficient storage mechanism.

Basically, putting excess capacity to use is basically free so you don't care about the round trip efficiency (in dollars, joules in/out, or whatever metric you're using) of your storage medium, just the return portion of the trip.

Heavy metals are a pretty damn good storage medium. The bang for your buck you get when nuclei fall apart is unbeatable.
why pump at night? wouldn't it be better to pump while the solar panels are active?

do they cover the water to stop it from evaporating?

Electricity demand is lower at night, so they can use the excess electricity at that time to pump the water, and release it during the day to provide extra power during peak periods.
so from the fossil fuel produced electricity. now it makes sense.

So they'll eventually flip it over to day.

> California hydropower is constrained by rainfall, so the dams and generators already exist.

But there's nothing to pump, at least a good part of the year. The dammed river beds are practically dry during the summer/fall months.

Plus there are environmental issues where you are pumping water out of places where endangered species are living or spawning. Removing water has an environmental impact, which California already feels due to water already being diverted in large amounts for agriculture or drinking water.
I'm sure there's some business opportunities that can be taken to alleviate this surplus. There's a generation of people that have been groomed to use their electrical appliances during the night time wether to do laundries or wash dishes because they would be charged less from energy providers. In recent years, people are doing their charging at home in the middle of the night.

But perhaps this can flip around. Imagine laundromats that charge cheaper for drying or washing during the day vs during the night. Cheaper electric car charging during the day. Business opportunities that benefit everyone simply by changing some habits.

> I'm sure there's some business opportunities that can be taken to alleviate this surplus.

You need to be able to message the energy consumers (most likely smart versions of large appliances) within minutes notice.

I think you would have to have appliances ready when you leave home in the morning and set the power price at which you are willing to run it. Right now, I don't think most large appliances support such a system. Perhaps home assistants (Amazon Alexa, Google Home, Apple HomePod, etc) would be the right place to integrate these settings, but you would still need the assistant to be able to interact with your dishwasher / clotheswasher / Tesla Powerwall.

At the moment, we are adding solar to the grid faster than we are adding smart appliances that are capable of deciding when to use power, based on the current market price of power.

This strikes me as a viable usefor IoT-style appliances. Or maybe IoT outlets.

Also, I bet a swimming pool could be cooled down when power is cheap, and the chilled water pumped through a heat exchanger as air conditioning.

California should use the power to mine bitcoin!! :)
this is the best answer. we should contact Jerry Brown.
This seems to be a temporary problem until green electricity has the capacity and is cheap enough to be used year-round.

Natural gas is so much cheaper on a $/BTU basis, but perhaps with enough solar capacity (or other green sources) that wont be the case much longer. It would be great if I could keep cool and warm using electricity alone.

Maybe the could make our PG&E bills not be (very quickly) .30/kwh and instead follow the .12/kwh average of the USA during these peak times.
Alternative title: Solar power output exceeds most optimistic predictions.

It seems like a non-story for a burst-y power source to occasionally produce more power than we need.

Exact. If California had a consistent excess of solar they wouldn't need so much from the Hoover dam.
Cool, we'll use your idea to rephrase the title above.
The headline on the LA Times is spot on. Could that be used instead?

California invested heavily in solar power. Now there's so much that other states are sometimes paid to take it

I was under the impression that some users felt this title was misleading; if so, changing it back will just provoke more objections.
If the consumer electricity rates were adjusted dynamically, I bet that would soak up the extra power. For example, one could charge one's electric car when the power cost is very low.
Reading these articles is like listening to five year olds arguing. "These guys says it's enough!" "These other guys say it's not!" "But what if it's cloudy?" You can picture the journalist holding a toy microphone and nodding intently at each source, the argument going entirely over their head.

The entire argument revolves around the distribution of power usage and of power generation throughout the day and throughout the year. So why not explain that for your readers? Show us charts with that information? Tell us how much energy is produced by solar on the cloudiest days? Show us a chart of power usage over solar power production over the last year, and tell us the minimum and maximum percent?

At least explain the difference between minimum, maximum and average production, and when each of those matters!

But no, none of that. We get a graph showing the increasing share of solar generation, and another with absolute figures of the curtailed solar capacity. And a bunch of pictures and animations, of course.

This is what innumeracy looks like.

This article was produced by a newspaper for a region where butt implants are a thing and the hottest gossip is what stars are fucking each other.

This article was not read by the majority of its intended audience, and even if it was, was not understood by a majority of those that read it. Asking for it to contain more information is silly given those facts.

> This is what innumeracy looks like.

I don't know whether it's innumeracy so much as lack of time, and also the specific expertise (not just ability to understand numbers, but expertise in this specific area) to be able to understand the information. For a general reporter (not an 'energy correspondent' or something similar) the article you're proposing would take at least a week of study and research, probably more, this 'he said, she said' stuff can be knocked off in a few hours.

Not only that, but the results couldn't fit in a tweet so people could retweet it over and over again like masturbating monkeys, so in the mind of legacy media, why produce it?
It's innumeracy. I don't need to know anything about the subject matter to understand why the concepts, numbers and relationships mentioned above are important. In fact, I am absolutely not a solar expert -- I have no expertise in this specific area -- and I know that I am entirely qualified to understand the basics of load variation over time.
Imagine understanding this was something you were assigned at work. What would you ask first? I am a web programmer with no specialty in any of this, but here's my top list:

  - what's min / max usage and production?
  - density plot of usage throughout the state
  - density plot of usage over typical 24h? typical 356d?
  - what kind of special events w.r.t. usage are there?
  - cost of storage, improvement over past decade?
  - cost of transport, improvements?
This is off the top of my head, non-expert studied math but never professionally. How many of these are answered in the article?
What gets me is their articles key line is 'it depends on who you ask' then they ask you to subscribe because they are "telling fact from fiction".

I hope journalism changes soon. Id love a higher-cost service that actually looks at the broader picture and takes a side (edit: an informed side, clearly explained, rather than an ideological one) rather than focussing on headlines, 'he said she said' and too much undistilled text

That takes a side? You mean like fox news or the New York Times? Doesn't all media these days take a side?
Okay lets go with an informed side, not an ideological one
NYTimes pioneered a lot of data visualization techniques. I think the lead guy on the project built the now-famous d3 library.
Your tone is gratuitously negative.

The article's central point doesn't "revolve around the distribution of power capacity and generation." It's more precise.

Specifically, it's highlighting the current state of CA renewables policy (with a specific knock on effect for emphasis) and the missing money problem. I found the article insightful and accurate.

This is what makes this issue so frustrating to discuss. People care so very much about it, yet often know surprisingly little.
This isn't abnormal, other examples.

Paying the chemistry industry for shutting down energy intensive operations during low electricity periods

Transfers between countries in Europe and fines when your electricity prediction is off ( it costs a lot)

Useless spending power on hot days for not blasting the net because of solar power

Lower costs at night for using electricity

It's not as easy as it looks, solar power really puts an additional stress on our net, definitely in the beginning of the 'electricity usage behavior shift'. Read more about the reason why electricity is unstable in some countries : http://infoboxdaily.com/3-african-countries-with-erratic-pow... - didn't find anything better

Source: done a project for 'Electricity usage prediction' in Belgium with one of my previous employers.

I wondered whether TFA would ever get to the cause of this waste, and eventually it did!

Once state regulators approve new plants or transmission lines, the cost is now built into the amount that the utility can charge electricity users — no matter how much or how little it is used.

Oh, so that's why they kept building natural gas plants that don't get used most of the time! If you've ever been to a PUC meeting, you've seen corruption at its most brazen. "Citizens' groups" entirely funded by utilities and telcos wait their turn to dutifully read the prepared statements, the commissioners dutifully thank them, and then they go to work with the rubber stamp. It doesn't actually matter that power plants get built in a timely fashion or actually operate more than a small percentage of the time, the rate-payers are already on the hook. The only way a utility executive gets a bonus is by saddling the public with CWIP charges, so that's what they scheme to do every working day.

No coal, gas, or nuclear plant should ever be built by forcing the public to do the job of investors. If investors can't be found to support a plant that supposedly will generate for decades, maybe we should listen to the market?

[EDIT:] Great article, though, because it tells the whole story, and that seems rare anymore.

I don't understand so when a natural gas plant is built they adjust rates upward? Isn't that the opposite of supply and demand?
Yes, but, this is not an open market, this is the CPUC and they have a captive audience they can force to pay whatever they want to force them to pay.
There is very little competition in electrical utilities. The theory is that in order to prevent competing electric lines from being built, government must control prices. However, many utilities still have private investors, who want prices to go up. Since existing prices already pay these investors a fair return, they have to find a more objective reason than "we want more money". Often this takes the form of unnecessary capital spending, the costs of which can be inflated and passed on to captive customers. After all, if the capital spending (e.g. on a power plant) were necessary, it would itself generate a return (e.g. by selling power) that would attract investors. The public is victim of the principal-agent problem when public utilities commissions approve such arrangements. This has led to a situation in which California and other states have more generation capacity than they need.
No. In theory, that new gas plant is "planned" and replacing aging capacity, while meeting expected demand.

Rates are separate.

Many power utilities are granted a monopoly, especially the transmission (high voltage, long distance) and distribution ("last mile" / neighborhood wires) horizontals as they're true natural monopolies.

In exchange for that concession, their profits are capped. The cap is a function of their "rate base" -- i.e. qualifying capex -- and an approved rate. These rates are adjusted periodically, requiring public utility commission (State) or FERC (federal) rate setting sessions.

For example, "Total Revenue Requirement = Rate Base [assets] × Allowed Rate of Return + Expenses" [0]

Without having looked into this, it's easy to over-estimate how easy (hard) life as a public utility is.

[0] http://blog.aee.net/how-do-electric-utilities-make-money

This kind of regulatory response to natural monopolies can (and does) result in 'gold-plating'. It incentivises profit-maximising monopolists to over-invest in qualifying capital: even though their ROI remains the same, their absolute profit grows larger.

However, there's no easy solution here: natural monopolies are a genuinely tricky public policy issue. Alternative solutions that come to mind are more direct price controls or public ownership. I'm not suggesting these are superior alternatives; just throwing them in there to provide more grist for the conversational mill.

In the case of natural gas power plants, aren't they (at least some of the time) built due to the need for 'peaker' plants? That is, if there's a sudden surge in demand (which solar can't react to, for obvious reasons) or an unpredictable drop in solar output (e.g. a cloud moves in between California and the sun), gas plants can quickly fire up to cover the output gap (much quicker than, say, coal or nuclear).

Wholesale electricity prices should naturally spike during these times as well. Demand is temporarily outpacing supply. That's the market in the very short-run, I guess. In the long run, I don't agree that we should 'listen to the market'. The market doesn't price in externalities like increased infrastructure costs (which are usually worn by taxpayers) or greenhouse gas emissions (a global negative externality) unless the government steps in to internalise these costs.

I honestly don't know much about California's electricity market, but it seems like no one has been 'listening to the market' for quite some time now: https://www.forbes.com/sites/realspin/2016/01/15/california-... , http://www.gosolarcalifornia.ca.gov/solarwater/index.php , http://www.gosolarcalifornia.ca.gov/about/nshp.php

That's the story we hear occasionally, but according to TFA "starting and stopping natural gas plants is costlier and more difficult than shutting down [and, presumably, starting up] solar panels" so they just leave those running without regard to daily peaks. I'm not sure how we ever got sold on a technology with those characteristics being a good "peaker", but hey! utilities execs are good at their jobs, when their jobs are correctly understood to be screwing over the customer.

Your anti-market bias is reversed in this case. The market [EDIT: for investments] doesn't want these new plants, because they're wasteful and bad for the environment. Therefore, they're bad investments that will only be made if the public is forced against its will to make them.

Huh, well I definitely learned something today.

As for anti-market biases, I suspect we might disagree on the definition of the phrase 'the market'. Admittedly, I mentally put the word 'free' in-front of the word 'market' when I hear it used without qualification. I feel like it's the only safe assumption to make.

Otherwise, chances are, the regulated, distorted and interfered with market that I have in my head is very likely different to the one you have in yours. And unless we both explain what we mean exactly when we say 'the market', we're just kinda talking past each other.

No worries dude. It's cool to discuss, even if we don't agree. Markets may not be "free", but they can still function as we'd expect markets to function if there are multiple sellers and buyers. The market for utility bonds is like that, but the market for electricity often is not.
Unfortunately the free market is a purely theoretical concept and a model not unlike Newtonian physics - useful, but incorrect.
The turbines engines used for natural gas based electrical power production can be throttled up and down over a wide range. IIRC from maximum power down to about 15%. But, no you do not want to just shut them off. There are natural gas based diesel generators that can be turned on and off, but being Diesel engines they really only run efficiently over a small power output range and you control how much power is generated by how many you turn on. You need rows and rows of the Diesels to match the power from a gas turbine and each diesel needs to be individually matched into the power grid. So, there are reasons to go with gas turbine electrical power generation to meet peak power demands. OTOH, CA is tearing down recently built plants because of over capacity which is just crazy and obviously a boondoggle for the electric companies. But, building the plants was driven by the craziness that immediately preceded it; CA's NIMBY driven under capacity and being forced to meet peak power demands by buying outrageously priced power from out of state. Just bad planning, more bad planning, and certainly more bad planning to come.

  Informative post but unsure of the meaning of the latter part... not in favor here of the teardowns, vs reserve capacity, say if some new technology comes along which needs
a greater amount of electricity, or, less hopefully likely, some caldera-type event which isolates the California grid from out-of-state stable backup power as well as a significant amount of the power it uses...
That depends on the type of solar power. Yes, there's photovoltaic power - though you'll note that the article was talking about mirrors - mirrors heating up something. That something often has quite a bit of heat capacity.

There are quite a few ways to store that thermal energy from solar ( https://en.wikipedia.org/wiki/Solar_thermal_energy#Heat_stor... ) The Ivanpah Solar Power mentioned in the article lacks any storage, but its possible to store steam - the PS10 plant ( https://en.wikipedia.org/wiki/PS10_solar_power_plant ) stores its steam at 50 bar and 285 C for an hour.

Its also possible to do molten salt ( https://en.wikipedia.org/wiki/Thermal_energy_storage#Molten_... ) which can store its heat for up to a week. Solar Two used this in the Mojave back in the late 90s.

The peaker plants aren't necessary when you can just grab some steam or other thermal energy from a tank and use that.

Hydroelectric power ( http://www.energy.ca.gov/hydroelectric/ ) also does a good job of being an instant on (recognizing the issue that California has had for the past few years with hydroelectric power...).

From https://www.forbes.com/sites/jonbruner/2011/10/20/the-high-s...

> Each generator housing contains a 280-ton turbine that looks like a ship’s propeller and a 430-ton generator rotor that spin in perfect synchronization with the grid’s alternating current. As large as these generators are, they’re among the nimblest big sources of power available: Duffus can bring a turbine online in under two minutes and, once it’s running, can summon as much electricity from it as he needs in as little as ten seconds. Each 60-megawatt generator can produce enough electricity to supply roughly 60,000 households, but all of that capacity isn’t needed most of the time.

Solar panels can also decentralize energy generation, letting communities be more resilient and prevent global blackouts.
The sad part is that many people will read the title and use the article to say "solar power is ruining everything and is a waste of taxpayer dollars!" But, when you actually read the article you realize that the utilities are the issue because they keep building natural gas plants and transmission lines rather than just investing in storage, demand response, or other technologies that add more flexibility to the grid.
Is this just a function of how many households in CA get 100% of their power from solar currently? I got an email recently from PGE where I can opt into and decide the % of my power that comes from solar.

Does the state generate enough power to move over every household to solar?

Ill tell you what. Every single bulb is LED, tv plasma-> led, all appliances and fans upgraded to energy efficient, all HDDs->SSD, all lights on sensors, no heating used, no AC used, and my bills are bigger here in CA than ever. So if there is a glut of power I can also say that datacenters pay less than people in homes and its not cheap to charge electric cars, in fact, they are charging more per kwh and changed a lot of free charging stations to pay-for/metered. As a little guy in a brutal tax bracket its too bad all this energy progress hasnt helped out with the bills.
Utility companies usually have load shedding agreements with industrial consumers that can tolerate power supply temporarily going down.

Is the inverse - consuming above than average and building up heat, chemical stock or whatever they usually do that lets them ride out supply slumps - too difficult?

It seems extremely wasteful to pay another state just to have them power down their solar farms.