Let’s look at some real information as an example. Here’s an hourly energy report from Alberta:
Things to note on there: The ‘pool price’ is what the energy operators pay to import energy, or get paid to export energy. These costs are passed on to consumers.
If you look at the graph for pool price, you’ll see it start to spike as the sun goes down and demand picks up. During the day when the sun is out, we tend to export power, but the price when we export is usually $65-$85. But when the sun goes down the price spikes. It happened to be fairly warm on those days, so the nighttime price wasn’t too bad. But during the high demand period from 4-8 PM, prices spiked as high as $600/MW, almost ten times the ‘sunny day’ price.
In Alberta, you can ‘bank’ electricity when you generate it, and then when you consume it from the grid you can count your consumption against your ‘banked’ power. So, it is common for people to bank power when the power provider has to sell it for $65, and then demand the power back when the power company has to import it for $600. Someone else has to pay for that, and it’s other consumers in the form of delivery charges or whatever the cost is buried in.
There are two major reasons this is unsustainable: First, we are incentivizing people to build more solar, which will drive down the daytime price even more. In some areas, when the wind is blowing and the sun is shining the pool price can go negative, meaning the power provider has to pay others to take their excess power, then they have to pay to get the power back later when demand is higher and solar is offline. The pool price signal is telling us that we are getting maxxed out on solar power, and should be investing elsewhere. But the incentives drive more solar adoption.
The other reason it is unsustainable is because it can’t scale. If everyone tried to take advantage of the program, the system would collapse. But long before then, it will drive up costs for everyone else and create a backlash to the program.
Also notice how ineffective renewables can be. We have built out enough solar and wind to provide roughly 40% of our overall power if it ran at full capacity. At the moment of the chart, that translated into a whopping 1.9% of our total power, and we still needed 93% of our power to come from other sources. I have never seen our percentage of fossil fuels go lower than 75%. Usually it’s in the mid-80’s.
This is not nearly as bad as it can get. This chart was from a period of relatively warm weather and low demand. Let’s look at what happened in December. Here’s a monthly chart, so you can see I’m not just cherry picking the worst days:
The red line is the pool price, which went absolutely insane in December because wind and solar remained nearly offline for much of the time. This is the result of having too much intermittent power and not enough baseload. Also notice that the pool price does not line up with solar generation - another clue that we have too much solar power. When we need power most in winter, solar isn’t very available.
Also, when the pool price is high we are almost always importing, and when it’s really high so are all our grid partners in SK, MN, BC. We aren’t unique in relying too much on intermittent power, and wind and sun conditions are too correlated between us and our partners for grid buying/selling to be a good solution.
Finally, this is grid scale solar - giant plants. Rooftop solar here is MUCH worse.
As you can see, if we ever tie rooftop solar output to the pool price, solar is in big trouble in terms of affordability. It requires massive subsidies to survive here.