21% of all energy is now being consumed by data centers with not enough investment in new forms of energy generation.
This is a policy decision by the government. More realistically it is a decision to not proactively do anything and instead rely on market prices to encourage new entrants to the market.
It's not a free market in Europe since there is vast amount of planning regulations involved etc. If you want to see free markets in action, look at the electricity prices in Texas, where ironically renewables are also the dominant source.
https://www.gridstatus.io/live
Texas is an interesting example because they allowed true unregulated rates for residential consumers. Consumers liked getting lower rates until that winter storm a few years ago had bills for some in the $thousands. Then they didn't like the free market so much.
weird, because wouldnt part of the price for electricity include the network?
Are you telling me that the electricity purchasing is like me purchasing from amazon, but but never charges shipping, or factor it into the products, and then suddenly cant ship because all trucks are used and no money to buy new?
Demand has gone up largely because of data centers. Supply has not increased enough so expensive options are the marginal supplier. Grids costs are also build into tariffs.
A very fair question and the answer is complicated. Production costs and transmission costs are separate. Also demand changes the market rate. And even if renewables are cheaper to produce in a market usually the highest price regardless of source sets the price. This is to incentivise the cheapest production methods to be invested in.
It’s a massive topic and I encourage everyone to go and dive into it. It’s endlessly fascinating and also one of the really positive stories in the world right now which can help balance your emotions in a sometimes depressing world. At least for me it does.
> This is to incentivise the cheapest production methods to be invested in.
It's also just a rule of economics. The price is set at the cost of the most expensive production necessary to meet demand.
So if solar could fulfill 100% of energy demand, price would be the cost of solar, and any other more expensive generation would either lose money, shut down or idle.
But if we shut down or idle those today we wouldn't have enough electricity, so the price rises until the more expensive plants can stay open and demand is met.
Because at the moment wind has been the winner in the Irish climate, especially when you look backwards long enough to account for the time scales over which energy buildouts occur. Renewables have grown to 40% of the overall supply, resulting in the most expensive plants (currently coal plants, and before that peat) closing. Solar is entering the market rapidly though, it grew from like 1% to 4% in the last 3 years. So I wouldn’t be surprised to see some gas plants closing in the next few years, given the more expensive options are now already gone
That rule is a rule of free markets. Electricity is not a free market, so it only partially applies. Texas is closer to a free market, and unsurprisingly it is adopting solar faster than most.
It is. But solar produces most around midday and then tapers off toward dawn/dusk, so it might supply 100% of demand at midday but only 10% around sunset.
If you build more solar it'll meet 100% of demand for a larger portion of the day, which is what we're doing.
It is not that complicated. When the energy crisis in EU happened a few years ago, it demonstrated clearly that people and industry is willing to pay a years worth of energy bills for a single month to keep lights and machine operating. What this mean is that you could in concept give people free power for 11 months, and then increase electricity prices by 12x for the remaining month, and people would still pay it.
This also demonstrated through most countries in Europe that citizens will vote to have government that fix the energy market. Citizens do not want a free energy market that can raise prices to any degree, and its their tax money that fund grid stability.
This all mean that the cheapest form of producing energy do not result automatically in reduced energy costs for consumers and companies. The product that people pay for is not energy in a pure form, it is energy produced at a given time and given location. Make the energy free but the time and location expensive, and the total cost will still be expensive.
Transmission can help Ireland, but it can also hurt it by linking it to a larger market that can create a even higher demand spikes than exist in the current local grid. If the linked grid has locations which has higher energy costs than Ireland, then Ireland will subsidize those people by linking the markets together. Rules like highest price regardless of source sets the price, and higher amount of transmissions, also tend to result in more companies getting paid to maintain operations and thus more parties getting paid that is not linked to the marginal cost of producing energy.
It's really not. Energy grids are not designed for distributed generation. In my US state, that means billions of infrastructure investment.
The people using carbon to create forcing functions to transition to renewables conveniently forget to mention that. Which sucks, as solar in particular is almost a miracle product, but at this point my delivery charges to get electricity exceed the electricity supply by 10%. 20 years ago, delivery was 30% of supply.
My state, New York, decided it would be smart to turn off the nuclear plant that supplies 20% of NYC electricity, and replace it over a decade with a rube goldberg arrangement of gas, offshore wind, solar, and Canadian imports. The solar is hampered by distribution capacity, gas was slowed down by corruption and is being limited by environmental activists, we elected a president that believes that windmills give you cancer, and of course we are picking fights with Canada now.
If you don't have competent government, that's not the fault of renewables.
This is not snark. With forward-looking rational planning the transition could have started decades ago, and we could have had a low carbon energy economy by 2010 at the latest.
But fossils make so much money they can buy the policy they want, and here we are arguing about national tactics instead of planetary strategy.
In a vast over simplfication, the most expensive producer that gets to supply sets the overall price. So even if you supply 99% from wind and hydro, the 1% of power that comes from gas sets the price for 100% of the electricity in the market.
When gas gets more expensive, electricity from gas gets more expensive. The more you have to rely on gas (because you don‘t have batteries, not enough solar, etc), the more you pay high prices.
There are different ways to address these issues. Demand side load management, batteries, etc.
Solar is priced based on gas prices as a financial incentive to encourage producers to build solar. That’s because profiting from the difference between the cost of production for solar and the cost of production from gas is supposed to be the incentive to build solar.
The gas prices went up massively in 2022 with the war in Ukraine, and even though that subsided before the war in Iran a little, the existing supply companies are not going to give back an increase in the price they’ve gained because their prices dropped.
You would have to normalize against other costs and do a deep dive to really understand. My first question would be whether electricity (commercial and residential) has become relatively more expensive than gas, beer, and other commodities. If it's the same rate then it's more of an overall inflation thing. If electricity really is far and away higher than the rest over time then one would have to look at laws, the grid, demand, and of course supply too.
> You would have to normalize against other costs and do a deep dive to really understand.
The tricky part here is that energy is an input to basically everything. It's a major (through fertiliser) input to food, and then all of transport and stocking of said food which tends to be how energy changes influence downstream inflation. So I think you'd probably need a deeper analysis to tease out these issues.
21% of all energy is now being consumed by data centers with not enough investment in new forms of energy generation.
This is a policy decision by the government. More realistically it is a decision to not proactively do anything and instead rely on market prices to encourage new entrants to the market.
https://www.cso.ie/en/releasesandpublications/ep/p-dcmec/dat...
Would any free market proponent like to chime in here? Why hasn’t this occurred?
It's not a free market in Europe since there is vast amount of planning regulations involved etc. If you want to see free markets in action, look at the electricity prices in Texas, where ironically renewables are also the dominant source. https://www.gridstatus.io/live
Texas is an interesting example because they allowed true unregulated rates for residential consumers. Consumers liked getting lower rates until that winter storm a few years ago had bills for some in the $thousands. Then they didn't like the free market so much.
It's actually fine in theory but it's nearly impossible to build anything in Ireland due to the way the planning laws work.
In an ideal situation we would be seeing a ramp up in production of all types to take advantage of the costs.
weird, because wouldnt part of the price for electricity include the network?
Are you telling me that the electricity purchasing is like me purchasing from amazon, but but never charges shipping, or factor it into the products, and then suddenly cant ship because all trucks are used and no money to buy new?
Demand has gone up largely because of data centers. Supply has not increased enough so expensive options are the marginal supplier. Grids costs are also build into tariffs.
What is your point?
A very fair question and the answer is complicated. Production costs and transmission costs are separate. Also demand changes the market rate. And even if renewables are cheaper to produce in a market usually the highest price regardless of source sets the price. This is to incentivise the cheapest production methods to be invested in.
It’s a massive topic and I encourage everyone to go and dive into it. It’s endlessly fascinating and also one of the really positive stories in the world right now which can help balance your emotions in a sometimes depressing world. At least for me it does.
> This is to incentivise the cheapest production methods to be invested in.
It's also just a rule of economics. The price is set at the cost of the most expensive production necessary to meet demand.
So if solar could fulfill 100% of energy demand, price would be the cost of solar, and any other more expensive generation would either lose money, shut down or idle.
But if we shut down or idle those today we wouldn't have enough electricity, so the price rises until the more expensive plants can stay open and demand is met.
... So then why isn't the solar to replace the more expensive plants getting built?
[delayed]
Because at the moment wind has been the winner in the Irish climate, especially when you look backwards long enough to account for the time scales over which energy buildouts occur. Renewables have grown to 40% of the overall supply, resulting in the most expensive plants (currently coal plants, and before that peat) closing. Solar is entering the market rapidly though, it grew from like 1% to 4% in the last 3 years. So I wouldn’t be surprised to see some gas plants closing in the next few years, given the more expensive options are now already gone
Snarky response deleted.
That rule is a rule of free markets. Electricity is not a free market, so it only partially applies. Texas is closer to a free market, and unsurprisingly it is adopting solar faster than most.
>Snarky response deleted.
We appreciate your restraint.
It is. But solar produces most around midday and then tapers off toward dawn/dusk, so it might supply 100% of demand at midday but only 10% around sunset.
If you build more solar it'll meet 100% of demand for a larger portion of the day, which is what we're doing.
It is not that complicated. When the energy crisis in EU happened a few years ago, it demonstrated clearly that people and industry is willing to pay a years worth of energy bills for a single month to keep lights and machine operating. What this mean is that you could in concept give people free power for 11 months, and then increase electricity prices by 12x for the remaining month, and people would still pay it.
This also demonstrated through most countries in Europe that citizens will vote to have government that fix the energy market. Citizens do not want a free energy market that can raise prices to any degree, and its their tax money that fund grid stability.
This all mean that the cheapest form of producing energy do not result automatically in reduced energy costs for consumers and companies. The product that people pay for is not energy in a pure form, it is energy produced at a given time and given location. Make the energy free but the time and location expensive, and the total cost will still be expensive.
Transmission can help Ireland, but it can also hurt it by linking it to a larger market that can create a even higher demand spikes than exist in the current local grid. If the linked grid has locations which has higher energy costs than Ireland, then Ireland will subsidize those people by linking the markets together. Rules like highest price regardless of source sets the price, and higher amount of transmissions, also tend to result in more companies getting paid to maintain operations and thus more parties getting paid that is not linked to the marginal cost of producing energy.
It's really not. Energy grids are not designed for distributed generation. In my US state, that means billions of infrastructure investment.
The people using carbon to create forcing functions to transition to renewables conveniently forget to mention that. Which sucks, as solar in particular is almost a miracle product, but at this point my delivery charges to get electricity exceed the electricity supply by 10%. 20 years ago, delivery was 30% of supply.
My state, New York, decided it would be smart to turn off the nuclear plant that supplies 20% of NYC electricity, and replace it over a decade with a rube goldberg arrangement of gas, offshore wind, solar, and Canadian imports. The solar is hampered by distribution capacity, gas was slowed down by corruption and is being limited by environmental activists, we elected a president that believes that windmills give you cancer, and of course we are picking fights with Canada now.
Renewables run on competent government.
If you don't have competent government, that's not the fault of renewables.
This is not snark. With forward-looking rational planning the transition could have started decades ago, and we could have had a low carbon energy economy by 2010 at the latest.
But fossils make so much money they can buy the policy they want, and here we are arguing about national tactics instead of planetary strategy.
Mostly because marginal pricing/merit order.
In a vast over simplfication, the most expensive producer that gets to supply sets the overall price. So even if you supply 99% from wind and hydro, the 1% of power that comes from gas sets the price for 100% of the electricity in the market.
When gas gets more expensive, electricity from gas gets more expensive. The more you have to rely on gas (because you don‘t have batteries, not enough solar, etc), the more you pay high prices.
There are different ways to address these issues. Demand side load management, batteries, etc.
Solar is priced based on gas prices as a financial incentive to encourage producers to build solar. That’s because profiting from the difference between the cost of production for solar and the cost of production from gas is supposed to be the incentive to build solar.
The gas prices went up massively in 2022 with the war in Ukraine, and even though that subsided before the war in Iran a little, the existing supply companies are not going to give back an increase in the price they’ve gained because their prices dropped.
because you start internalizing costs
You would have to normalize against other costs and do a deep dive to really understand. My first question would be whether electricity (commercial and residential) has become relatively more expensive than gas, beer, and other commodities. If it's the same rate then it's more of an overall inflation thing. If electricity really is far and away higher than the rest over time then one would have to look at laws, the grid, demand, and of course supply too.
> You would have to normalize against other costs and do a deep dive to really understand.
The tricky part here is that energy is an input to basically everything. It's a major (through fertiliser) input to food, and then all of transport and stocking of said food which tends to be how energy changes influence downstream inflation. So I think you'd probably need a deeper analysis to tease out these issues.
The price of energy drives inflation. It shouldn't be going up if the claims the new source is cheaper is true (surprise, it's not.)