That demand comes late in the day when solar is producing only limited power and wind sometimes produces nothing. There must always be a natural gas power plant ready to provide electricity during peak demand. Wind and solar aren’t just more expensive, they are unreliable. But why should you care if some coal, natural gas, or nuclear company is financially stressed? Well, because it’s costing you money. Crazy, right?Ĭoal, nuclear and some natural gas providers that don’t have long term contracts can only be competitive for time slots in either auction for electricity demand that wind and solar can’t supply. But get this… After the natural gas utility wins bids at, say, 3 cents a kilowatt hour, the wind and solar providers also get 3 cents an hour, even though their bids were much lower.
The next highest bidder, usually a natural gas utility, sets the price that’s accepted as the supply meets demand. Therefore, wind and solar win any bids for power they can deliver for any given time slots at the first auction. Because wind and solar companies take advantage of tax credits not available to natural gas, coal, and nuclear, they can always offer the lowest bids, typically less than one cent a kilowatt hour. Here’s where it gets disturbing, expensive, and dangerous. I know… this is a ridiculously complicated system, but hang with me.
A second day-of auction is held in order to fill in any gaps that remain. The bids are for short segments, as little as five minutes.
The first auction is held to see how much utilities will bid to deliver electricity the following day. What remains goes into the auctions for RTOs and ISOs Some of it is pre-sold in long-term contracts. They do it for two-thirds of the US population.ĭonn Dears, explains how the system works in “The Looming Energy Crisis.” For starters, not all electricity demand is auctioned off. These organizations conduct daily auctions to buy electricity. You might think I’m exaggerating, but hear me out.ĭo you think it makes sense for wind and solar companies to offer their electricity at one price, but then automatically get paid a higher price… which raises your bill? And wouldn’t you be concerned to know that when we rely too much on unreliable electricity sources…blackouts are much more likely?Īll of this started back in 1999 when the federal government allowed utilities to create Regional Transmission Organizations and Independent System Operators or RTO and ISOs. And our electric grid is becoming far less reliable. Worse yet, this auction-rigging means most people pay higher electricity bills. That’s because the auctions are completely rigged in favor of wind and solar.
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Blackouts now, and in the future, are a completely avoidable problem that Congress should fix immediately.ĭid you know a lot of electricity American’s use comes to them through a series of auctions? Weird, right? Well, brace yourself, because it’s about to get a lot weirder. The system gives wind and solar companies an unfair advantage, which has led to too much unreliable electricity generation from wind and solar. Why? It’s happening because of a complex, market distorting (and ridiculous) system of having electricity producers bid to provide you power. Mark Mathis explains just why subsidised wind and solar is driving power prices through the roof.īlackouts in Texas and other parts of the country in February 2021. In the USA, wind and solar operators have rigged the market to such an extent that, if this were a casino in Vegas, they’d be frog marched out the front door. And that it might avoid freezing or boiling in the dark, or having to shut down its business operations, altogether.Īt the head of the supply chain, though, there will be a bunch of avaricious young punks hoping to cash in on your desperate need for power. These days, when the sun sets and/or calm weather sets in, there will be a household or business at the end of the line hoping that its numbers come up. With an increasing role for wholly weather-dependent power sources, the supply of electricity has become more like Roulette. Nowadays, there’s no need to ‘engineer’ sudden collapses in output: mother nature does that all by herself and since we’ve become critically reliant upon wind and solar, well, market rorting is all the easier. Following which they would wait until the grid was on the brink of collapse, and offer to supply the grid at prices a thousand times the prevailing market rate. Back then, Enron’s traders would wait for a spike in power demand and then ‘engineered’ either a gas supply interruption or shutdown of a gas-fired power plant, on the premise of “unscheduled maintenance”.