Agreed. From first hand experience, even for regulated electricity markets, games get played to maximize profit per power generated that are directly making stability worse. Fixing these loop holes is hard for the regulator since they are instructed to encourage both increased renewable penetration and stability, despite traders/operators/producers not acting in good faith and just gaming whatever they can.
A healthy regulated will encourage maximizing profit for power and bring in competition which drives the cost down until energy is a commodity and the cost of electricity is actually based on the price of production and a small profit based on the cost of capital. Any situations that cause price spikes result in investment to harvest the difference.
The fact that you can add to the grid by installing solar and battery and connect to the grid in a single afternoon makes it pretty easy these days to have an elastic market that grows until you hit the limit of decentralized production vs. existing transmission architecture... but with the right equipment you can have community sized islands that can be much more immune to instability.
> A healthy regulated will encourage maximizing profit for power and bring in competition which drives the cost down until energy is a commodity and the cost of electricity is actually based on the price of production and a small profit based on the cost of capital.
That is not how the electricity market works, in Australia anyway, and somewhat fundamentally everywhere. The network needs to maintain a frequency and voltage for it to be reliable. These change as load and production change. So consumers don't get a choice of which electrons power their house, only who they pay. They pay a 'retailer' who usually has nothing to do with production for a known cost per kwh + fees ahead of time. The market then operates where agreements between parties including retailers and produces (traders and others as well) has a 'market rate' that essentially arbitrage between longer term fixed rates and market rates.
The fact that the stability is tied to frequency and voltage (and infrastructure) means there is a limit to the rate of production and consumption, not to mention electricity is a necessity in the modern age.
In Australia at least we are finding out the hard way about what happens when you privatize a necessity. People will pay whatever it costs, and since the market needs a high level of regulation just to function, a market IMO is just a bad fit for trying to bring costs down rather than just rent seeking.
> The fact that you can add to the grid by installing solar and battery and connect to the grid in a single afternoon
That has become harder in recent time due to areas being over saturated by solar. Cities in Australia can deny you connecting to the grid if there is too much, as well as we have high network voltage detection on inverters which now kick in on many sunny days due to again, too much solar. Electricity network operators pay a large amount of money to services to predict/model how much of the power in their network is coming from solar and where because they commonly don't know, so it becomes a difficult balance of how much solar you are allowed to connect.
> but with the right equipment you can have community sized islands that can be much more immune to instability.
Agreed, but due to the required _shared_ infrastructure for this to work will need public land to connect these islands or even within an 'island', as well as the now private vested interests in rent seeking, this will be a fringe solution only available to those with larger amounts of land like communes or other rural setups. Again, speaking to Australia.
What it sounds like is Australia needs negative energy prices during peaks, again arguing for market forces, if you pay people to take electricity (charging people who produce electricity more than you pay people to take, keeping the difference) the "having more electricity than we can use" problem goes away and you don't have to prevent people from hooking up new capacity.
Well regulated markets enable this, charge consumers 0 or even pay them to use energy during the solar maximum, same for industry. People will build storage to make money.
You must have variable pricing driven by markets when you have a lot of variable renewables, fixed rates just don't work. Too much electricity is one of those good problems to have if you manage it correctly. Free or very cheap energy could be a huge competitive advantage for Australia.
It does have negative prices as well as interconnects between most states, but it is risky for consumers (average household) to be exposed to these price swings. I don't like retailers, but they do shield the average consumer to wild swings in prices that could 50x their daily cost.
In 2022, a lot of retailers nearly went under due to the max price of $14.4k per MWh ($14.4 per kWh, which is usually ~$0.25 for households) being sustained for a longer period cause a few producers had the market over a barrel. The federal government needed to step in and restrict the maximum price for gas (despite Australia exporting >10x more than in produces, we still have to buy it at international market rates), which flowed down to gas peakers which during times of lower than expected energy production act as short term stablisers. In this case we had multiple coal plant failures due to their age/poor upkeep, and likely some manipulation by producers.
Your average household doesn't want to have their energy consumption behaviours dictated by a market. We have a national battery program that creates a VPPs (Virtual Power Plant) and other mechanisms to enable households to somewhat benefit from these market prices and theoretically provide stability to the grid, but it is all quite complicated, and suffers from being able to be gamed. There isn't a simple solution when a market is involved because you have a group of people acting in bad faith to extract the most value for a shared resource that relies on shared infrastructure.
If the network and producers were publicly managed (like the electricity networks use to be and still are in some states), the incentives are a lot better aligned with a stable grid that is affordable for the most number of consumers. It still would be complicated, but a bunch of problems would be simplified, likely traded off for other issues.
