Thread by @simonahac

@DoctorKarl there are a couple of external reasons why a solar (or wind) farm might switch off when it otherwise could be generating:
• "constrained off" by the network operator, basically meaning that the wires near the project are at maximum capacity and can't take more, or

@DoctorKarl • or it could be responding to market events — some projects are exposed to the spot market, and some others have a clause where the offtaker requires them to stop generating when prices go negative.

@DoctorKarl "negative prices" exist by design to provide a signal to market participants that there's an imbalance between supply & demand.

when a project switches off it is simply responding to the market signal.

this @OpenNEM chart from SA last week shows almost daily -ve pricing events.

@DoctorKarl @OpenNem (while it's a bit painful for the wind and solar farms to switch off during negative price events, it's more painful for market exposed gas and coal generators that are less flexible — they are burning fuel and paying for the privilege.)

@DoctorKarl @OpenNem spring traditionally has softer prices — there's plenty of wind, solar and hydro and few people are using airconditioning or heating.

so while a project might have weak earnings during spring, they could easily make it up during summer.

@DoctorKarl @OpenNem owners will be crunching numbers to see if it's worth adding storage to wind & solar farms — in some cases it might be worth it, others not.

don't forget that there are other factors:
• pumped hydro and batteries elsewhere
• old generators leaving market
• changes in demand

@DoctorKarl @OpenNem that last point — fast forward a decade from now, i reckon we'll see significant loads in the market responding to low price events:
• hydrogen production
• metals processing
• desalination
• hydro pumping
• battery charging
• water pre-heating & pre-chilling.

@DoctorKarl @OpenNem yes, there are some (largely outside the energy sector!) who are totally wigged out by negative prices — but most people i know are pretty chilled about them.

negative prices are, by design, a signal to the market. watch it respond!

/end