Beating A Dead Horse, Except I Don't Think It's Dead -- July 23, 2022

Update

Later, 12:48 p.m. CT: this update -- to understand the point I'm trying to make, one must read all the milliondollarway posts on ERCOT, ISO-NE, ISO-NY:

• five years from now, Texas will not have a grid problem, and electricity will be stunningly inexpensive;
• five years from now, nothing will have changed in New England, New York
• five years from now, the energy issue in California will be worse

Original Post

It's been eye-opening to follow ISO-NE, ISO-NY, and ERCOT.

The business model should be obvious to all by now. 

I assume folks are familiar with many (most?) mall stores remarking that they make their money for the entire year during one or two days (weeks?) prior to Christmas. Candy retailers make their money during the week preceding Halloween. Hallmark? In the old days, they made their money prior to Valentine's Day. Perhaps not so much any more.

Likewise, renewable energy companies write their contracts in such a way that they know they will make their annual numbers on one or two weeks of "extreme" temperatures. They can lose money fifty weeks of the year, but when rates go over $1,000 / MWh for a couple of weeks each year they make enough money to have a great year. And, of course, the incentives -- subsidies, grants, tax breaks, good will -- and mandates make renewable energy a no-brainer for developers. 

But now, those money-making days for a couple of weeks each year are now being extended to full seasons: two months of winter and two months of summer. 

The renewable energy companies knew this day would eventually come and they "encouraged" it by shutting down fossil fuel solutions while building out their own projects. And politicians became willing partners. 

Link here. 

New England's worst nightmare: if the Freeport LNG export terminal comes back on line before winter. Whether Freeport comes back on line in a timely manner will be seen as a political issue, whether it is or not, but then, again, everything these days, it seems, is political.