Quote:
Originally Posted by SeeGeeWhy
Depressed gas prices will keep both hydrogen and fission off the table. Ironically, the best thing that Western Canada might be able to do would be to join the global nat gas trade (via LNG) or make nat gas consumption heavily penalized/illegal (which is something Guillbeaut is up to, Smith alluded to it in her victory speech). Either uplifts gas pricing, which makes alternatives more economically viable to invest in.
The rub, is no one really talks about the fraction of GDP that goes towards additional energy extraction and provision, or similarly, the amount of tax receipts generated by the same. The net effect being that the more GDP or tax receipts generated by “self dealing” we are fooling ourselves thinking that we have decoupled growth from excess power consumption.
Street, gas plants that run 30% of the time are routinely built. These are peakers. BES is similar in that you can pay a relatively low-moderate initial outlay and recover that quickly by pouncing on high price scenarios.
The June 7 event referred to earlier in this thread brought $1000/MWh pricing to the pool. You don’t need to sell very many kWh at that clearance to profit wildly. This is transparent in a deregulated grid. In a regulated grid, the erosion of value is obscured but still present. When net surplus energy drops, so do truly value add GDP transactions, and as a result net surplus tax receipts also drop. Curtailments, negative pricing, extremely high pricing, brownouts, blackouts, industry leaving - all signs that things are going the wrong direction.
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This was an insightful post. Thank you.
I wasn't very clear in my earlier post. When I said a gas turbine I was referring to a plant with CCS attached. The expense of adding CCS would require a lot more payback and therefore would need more than 30% utilization I'd imagine. I'm throwing a number it there and have no real idea where that would be, but it seems to me a capital intensive project would need a substantial payback.
The interesting thing I'm getting from your post is that it's likely that the cure for high prices will be the high prices. As in, as long as there's $1000/MWh events, there'll be an appetite for dispatchable generation or storage.
My concern I raise above, is that as Alberta is the only province you can basically plug and play renewables it's going to see hyper growth leading to a very difficult grid to balance. And it seems AESO's projections seem to be blind to it.
But maybe the almost free power at high renewable output will be good for industry and the high price events will sort themselves out with more gas/batteries?