No More Ducking the Duck: Negative Electricity Pricing Comes to America

April 10, 2017


In commercial-scale electricity generation, the duck curveis a graph of power production over the course of a day that shows the timing imbalance between peak demand and renewable energy production.


Utility Dive:

  • Solar capacity on the California Independent System Operator (CAISO) system spiked last year, leading to negative prices at times when output is highest but demand is not.
  • According to the U.S. Energy Information Administration, total solar capacity in California (including both distributed and utility-scale systems) grew from less than 1 GW in 2007 to nearly 14 GW by the end of last year.
  • The rapid growth has led to low power prices in March, when energy demand is relatively low and solar production is high. On one day last month, real-time CAISO prices dipped below $0/MWh for roughly six hours, EIA said.


There is more evidence that the rapid growth of renewable energy is causing upheavals in organized power markets.

Power prices in CAISO plummeted last month, at times going negative, compared with average prices from $14/MWh to $45/MWh during the same time periods in recent years.

EIA explains the negative prices materialize when generators with high shut-down or restart costs are forced to compete with other generators to avoid operating below equipment minimum ratings or shutting down completely.

“Large price spikes immediately before and after mid-day periods when both utility-scale and distributed solar generation reaches its peak level suggest a need for dispatchable generation sources to help cover ramping periods, when the need for power from the grid to meet load is rapidly changing,” EIA concluded.


On March 11th, the California power grid broke 50% solar power for the first time – when considering ALL sources of solar power in the state:

Additional generation from customer-sited solar generators installed in California (such as those on residential and commercial rooftops) further adds to the total solar share of mid-day electricity generation. As of December 2016, utilities in CAISO reported 5.4 gigawatts (GW) of net-metered distributed solar capacity. EIA estimates that this capacity would have generated approximately 4 million kilowatthours (kWh) during the peak solar hours on March 11. This level of electricity reduced the metered demand on the grid by about the same amount, suggesting that the total solar share of gross demand probably exceeded 50% during the mid-day hours.

Per the EIA, there are multiple reasons why March is the season most probable for negative wholesale rates, including one unique to this year – heavy amounts of hydroelectric power due to flooding this winter. The other major reason is that spring and fall are low demand seasons due to the temperate climate not needing as much heating or cooling. Solar will produce more electricity in the summer – but the high demand of summer means the solar is a lower overall percentage.


California is expected to add a similar amount of solar power in 2017 – and is showing no signs of slowing down after this year. Curtailment will become a bigger issue and an opportunity for energy storage.

Battery investors will build to have access to $0/MWh solar power during the daytime – so they can later sell it from 3-6 PM as the duck curve grows driving the cost of energy to more than triple the full day average.

Note: not just California. Deep Red Texas is rapidly sliding into the Renewable age.


In Texas, wind farms are generating so much energy that some utilities are giving power away.

Briana Lamb, an elementary school teacher, waits until her watch strikes 9 p.m. to run her washing machine and dishwasher. It costs her nothing until 6 a.m. Kayleen Willard, a cosmetologist, unplugs appliances when she goes to work in the morning. By 9 p.m., she has them plugged back in.

And Sherri Burks, business manager of a local law firm, keeps a yellow sticker on her townhouse’s thermostat, a note to guests that says: “After 9 p.m. I don’t care what you do. You can party after 9.”

The women are just three of the thousands of TXU Energy customers who are at the vanguard of a bold attempt by the utility to change how people consume energy. TXU’s free overnight plan, which is coupled with slightly higher daytime rates, is one of dozens that have been offered by more than 50 retail electricity companies in Texas over the last three years with a simple goal: for customers to turn down the dials when wholesale prices are highest and turn them back up when prices are lowest.

It is possible because Texas has more wind power than any other state, accounting for roughly 10 percent of the state’s generation. Alone among the 48 contiguous states, Texas runs its own electricity grid that barely connects to the rest of the country, so the abundance of nightly wind power generated here must be consumed here.

Wind blows most strongly at night and the power it produces is inexpensive because of its abundance and federal tax breaks. A shift of power use away from the peak daytime periods means lower wholesale prices, and the possibility of avoiding the costly option of building more power plants.

“That is a proverbial win-win for the utility and the customer,” said Omar Siddiqui, director of energy efficiency at the Electric Power Research Institute, a nonprofit industry group.

For utilities, the giveaway is hardly altruistic. Deregulation in Texas has spurred intense competition for customers. By encouraging energy use at night, utilities reduce some of the burdens, and costs, that the oversupply of wind energy places on the power grid.

Similar experiments are underway elsewhere.

17 Responses to “No More Ducking the Duck: Negative Electricity Pricing Comes to America”

  1. schwadevivre Says:

    If these sort of production load imbalances keep on happening then even the poor battery storage currently available becomes attractive to utilities

  2. Gingerbaker Says:

    Does extrapolation not make it clear that RE just doesn’t make sense as a profit industry? Costs will continue to go down. Lifespan of components will continue to go up.

    At some point, it will cost more to buy, install, maintain the meters and billing departments than to simply stop billing people for the energy that comes for free from the sky and is harvested on equipment that has been payed for and amortized.

    Why don’t we wise up, skip the middle man, and build us a public system asap?

    • Glenn Martin Says:

      Usage fees will eventually be replaced with hook-up and grid maintenance fees which will vary according to inflation and as infrastructure ages and needs to be replaced. It should be lower than present fees and be a lot more predictable.

  3. Canman Says:

    That first video has Jeremy Rifkin touting German electricity. Here’s a sobering pie chart and post about Germany’s 2016 energy consumption:

    I don’t think the comparison of distributed energy production and distributed computing is quite right. The micro-computing companies didn’t demand subsidies for their products and mandated phase outs for large mainframe computers. The micro-computing industry did benefit from government research, and here, I think this is something that could be carried over to energy production. The best prospects appear to be with forth generation nuclear that can’t melt down and may use up waste. I think it would be prudent to get some demonstration models up and running, even if it just means finding out that they won’t work.

    One thing that’s glaringly apparent in that pie chart is that civilization uses huge amounts of energy. If 2.1% wind and 1.2% solar are the best that the rocket scientists in Germany can do, maybe Mark Jacobson is wrong and it’s not possible to run the world on wind, water and solar (WWS). Please note that if these numbers for wind and solar seem small, it’s because the chart is for all energy consumption (transportation, heating, industry) and not just electricity.

    • Gingerbaker Says:

      Very convincing argument that Jacobson is wrong. In what peer-reviewed journal will you publish?

      • jfon Says:

        Here’s a peer-reviewed journal’s comparison of energy scenarios.
        ‘three studies stand out in this review as exceptional: Jacobson & Delucchi, Worldwatch, and WWF. Notably, these studies all aim to demonstrate the feasibility of energy efficiency and renewable energy-dominated decarbonization strategies and thus normatively constrain the available portfolio of low-carbon technologies by excluding, a priori, nuclear energy and/or CCS. To accomplish deep decarbonization with this limited portfolio, this group of studies depends on sustaining global energy intensity improvements for decades at a rate twice as fast as the most rapid energy intensity improvement experienced in any single year in recent history and roughly 3.5 times faster than the average global rate sustained from 1970 to 2011 (Figure 3). Furthermore, these studies call for normalized capacity additions of the remaining eligible low-carbon energy technologies of 5–23 GW/year/$T of GDP (Figure 6). In contrast, normalized global generation capacity of all types grew by just 1.5–3 GW/year/$T of GDP from 1965 to 2010. Given the multiplicity of feasibility challenges associated simultaneously achieving such rapid rates of energy intensity improvement and low-carbon capacity deployment, it is likely to be both premature and dangerously risky to ‘bet the planet’ on a narrow portfolio of favored low-carbon energy technologies.’

        • Canman Says:

          I like this bit from the last paragraph of their conclusion:

          Finally, these studies tend to only superficially address the key technical, economic, infrastructural, and societal factors that may constrain a rapid energy system transition or how such constraints can be plausibly overcome. …

          Thanks for finding this study.

          • Gingerbaker Says:

            And yet this very website – Climate Crocks – is chockful of articles with testimony from electrical grid operators themselves who see no very little in the way of problems of a technical nature standing in the way of full carbon-free electrical power generation and distribution.

            In other words, this is doable technically now, without need for nuclear power. And a good thing too, as other articles here show how the nuclear industry has basically imploded and is now just vestigial.

            There is simply zero economic issue involved here. Seven years of current fossil fuel expenditures will buy us a brand-spanking new 100% RE power system whose costs amortized over the expected lifespan of the system would make it the best ROI in human history.

            The only thing holding us back is political will, and the (hopefully criminal) efforts of the fossil fuel industry to subvert the truth about AGW and renewable energy.

      • jfon Says:

        ‘the nuclear industry has basically imploded and is now just vestigial.’
        Nukes make by far the highest proportion of non-fossil energy in the US, the UK, and France. They will in Japan, too, as soon as they can bring themselves to switch on a couple more power plants, and they still do, just, in Germany, despite early closure of half the fleet. There’s about another dozen countries with nuclear making a quarter or more of their power. Solar’s best effort is about 8%, in Italy, which actually imports more nuclear power than that, from France, Switzerland, and Slovenia.

    • schwadevivre Says:

      Nuclear power is one of the most heavily subsidised forms of generation. From the initial land purchases through the additional infrastructure, security, and civil defense planning into the disposal of wastes. Any nuclear project eats far more public money than renewables. For example Hinkley Point power station will receive more than £30 bn in subsidy per the Financial Times

      As to “Generation IV” reactors they have not even been planned and (on an optimistic assessment) will not come online until at least 2030. Many of the proposed designs have not been built or tested and the fairytales about reduced radioactive waste are just that – fairytales.

  4. J4Zonian Says:

    Germany, 4th biggest economy in the world, has done some remarkable work in only about 6 years. Not as fast as we all need to, and with priorities warped by the economic system but still…

    The priority has been to get rid of nuclear rather than fossil fuels, and when the Energiewende started, solar, wind and battery prices were all something on the order of 10 times what they are now. The EV industry barely existed. Now all those are priced to take over as fast as they can be built. That big petroleum wedge? Almost all electrifiable for EVs, especially trains (including high speed rail) and public transit. The big coal and gas wedges? Partly heating, also electrifiable, as is most of the rest. The duck will be flattened a lot as efficiency, passive and active solar water and space heating, biking, walking and other clothesline paradox energies are built in to the system.

    It will take longer or cost more to replace housing and commercial building stock than energy infrastructure and vehicles, even longer to change the landscape. It was obvious 40+ years ago that efficiency, wind and solar were the energy sources of the future. We should have started then with sufficient subsidies, planning and building but didn’t because of conservatives’ resistance and the power and money of fossil and fissile fuel corporations. They knew then but decided to institute a program of organized lying and manipulation to keep their businesses going as long as possible even though it meant that billions would suffer and die in chaos and violence, and millions of species would likely be wiped out.

    From your link: “The share of gas in the power sector grew partly because gas prices plummeted” and “exports are rescuing coal power, which is increasingly not needed to cover domestic demand” When we wise up and relegate economics (and the unconscious impulses it covers for) to 2nd or 3rd priority in making decisions, we’ll have some hope of survival, instead of being tossed around on whatever waves are coming through, and being in thrall to our worst impulses. Most of the problems people blame on renewables are really problems with the political and economic systems.

    The internet was a military creation and the computer industry is still subsidized.

    • Canman Says:

      Color me unimpressed. Renewable energy is mostly hydro, which is close to its limit, and biomass, which means burning stuff. Geothermal and tides are miniscule. The expandable parts are wind and solar and they have to grow by nearly two orders of magnitude. Germany’s energiewende is based on wishful thinking and is rightly being mocked:

  5. rayduray Says:

    There’s an interesting wrinkle to the good news about CA’s solar power abundance. It’s contributing to a curtailment of wind turbines in the Pacific Northwest by the BPA which which is enjoying an abundance of hydropower in their system. Here’s the story on the BPA’s first wind curtailment in four years:

    There’s a delicious irony in that the West Coast seems to be suffering from over-abundant energy production this spring. Someone is bound to write a book about it: “Zen and the Art of Power Grid Balancing”.

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