What's Happening To Wholesale Electricity Prices? (construction-physics.com) 120
US wholesale electricity prices have nearly doubled since 2020, rising faster than consumer rates across most regional grid operators. Analysis of location marginal pricing data from 17 trading hubs shows average wholesale costs increased from baseline 2020 levels to peaks 2-4 times higher by 2022, before partially recovering. Consumer electricity prices rose 35% during the same period.
Transmission congestion spreads are widening in most Independent System Operators and Regional Transmission Organizations, particularly in PJM, SPP, and NYISO, where bottlenecks increasingly prevent access to cheaper generation. California's CAISO stands alone among major grid operators as wholesale prices remain flat or decline in 2025 despite natural gas volatility. The cheapest wholesale electricity continues to trade in SPP's Oklahoma-Kansas region at $16-17 per megawatt-hour.
Transmission congestion spreads are widening in most Independent System Operators and Regional Transmission Organizations, particularly in PJM, SPP, and NYISO, where bottlenecks increasingly prevent access to cheaper generation. California's CAISO stands alone among major grid operators as wholesale prices remain flat or decline in 2025 despite natural gas volatility. The cheapest wholesale electricity continues to trade in SPP's Oklahoma-Kansas region at $16-17 per megawatt-hour.
Two letters: (Score:5, Insightful)
Re:Two letters: (Score:5, Insightful)
Obvious post is obvious.
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When you see conservatives blaming renewables and the like for it the obvious needs to be pointed out.
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Re: Two letters: (Score:2)
Re: Two letters: (Score:1)
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Four more words (Score:2)
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The real question is, what can we do about these billionaires that are robbing us?
Half the country finds them entertaining and keeps voting for them, to get more entertainment.
Re: Four more words (Score:2)
Just say what you mean.
Democrats are the party of the wealthy now, btw.
https://politicalsciencenow.co... [politicalsciencenow.com]
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He wasn't the one pissing himself to flee Bagram though, was he?
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Re:Two letters: (Score:4, Interesting)
For every complex problem there is an answer that is clear, simple, and wrong.
The problem is that distribution networks are highly regulated monopolies, many of them operating in the red because of fire-related lawsuits or government-mandated rate limits that don't respect the costs. They have no real incentive, and in some cases no funding, to expand to meet the ever-increasing demand.
There's a long backlog of electricity producers waiting to be connected to the distribution network, but that network is expanding very slowly.
Meanwhile, supply meet demand. Consumer demand is increasing, AI demand is increasing, all uses of electric power are seeing increasing demand. The supply is choked by the distribution network. Increasing demand, limited supply -> increased price.
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Good point, but I don't think that's even hit its stride yet. We're talking about 2020-present, and it's not a hockey stick.
I suspect unintended consequences more than AI. That and regulatory capture of some kind. That's the usual suspects.
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But also failure to deploy renewables faster enough. This week we have had two periods of free electricity due to the abundance of renewables. The things keeping retail prices high are mostly gas and a bit of nuclear. Our system works on the basis that everyone gets paid the price of the most expensive source, which is always gas or nuclear (we don't have any coal).
Another example of NIMBYism making things worse for everyone. Every objection to renewables is forcing prices to remain high.
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Foreign investors (Score:5, Interesting)
My electric company is owned by a foreign consortium based in Vietnam and Australia. Maybe allowing that wasn’t such a hot idea for consumers.
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Still subject to state regulation (Score:2)
The company may have foreign owners, but the company operating in your state is still under the jurisdiction of the state regulator.
If your state is "deregulated," then the power company provides transmission, but not generation, to its customers. In that case they bill you the supply cost based on what the market is offering.
If your state is not "deregulated," then the power company is providing both transmission and generation to its customers. In that case the state regulator will define the allowed mark
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The easy fix is fo
"Just buy bonds" (Score:1)
Who here thinks buying bonds is a better use of money than taking ownership of your own power generation by using solar+battery?
depends on your use case (Score:2)
Substitute snowmageddon or heat dome as regionally appropriate.
Market forces (Score:5, Insightful)
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Number go up!
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You are half right, supply and demand are market forces.
Wrong Model (Score:5, Interesting)
The US electric grid is based on large generating plants connected by long distance transmission lines. This was the only feasible way to set up the grid when all you had were large generators.
However, with the rise of solar (home and commercial) and battery storage, it is possible to organize the grid as a network of small distributed generators. This reduces the need for long distance transmission and makes the grid more resilient since there are many more sources of energy and the failure of one is insignificant.
California is a good example where a network of home batteries has prevented four major outages this year and was called into use about 15 times to supplement large generators.
A problem is that power companies don't make profits from small scale generation and storage. It actually costs them. Power companies would rather invest in large generating plants and long distance transmission where they get a guaranteed return on investment and well as controlling the market so they can charge high prices.
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If it's the same as here, then there is simply no market incentive for localized storage even though there is a massive need. For market to drive distributed storage, you need extremely local pricing.
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PS. except for homeowners of course.
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For "homeowners" substitute "property owners". Where I live, lots of commercial buildings have solar panels on their roofs or over their parking lots.
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If it's the same as here, then there is simply no market incentive for localized storage even though there is a massive need. For market to drive distributed storage, you need extremely local pricing.
In California, they have messed with the cost structure enough that solar without storage is usually not worth doing beyond your peak usage, because your excess power production won't net you nearly as much as you pay to buy that power back later in the afternoon.
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That's why most solar installations in California now have batteries so they can store solar PV energy and avoid buying or selling from the grid.
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All the new installations, sure. All the old ones, highly unlikely. If you are on NEM 1.0 or 2.0, you are grandfathered into that for a certain period of time, I think 25 years. If you add a battery to your system, it counts as changing your system that you will be put on the new NEM 3.0 rules. That's very likely not going to be worth it for a property owner and will likely even discourage some from getting a battery knowing they'll lose out on the better sell back rates of 1.0 or 2.0.
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In California, they have messed with the cost structure enough that solar without storage is usually not worth doing beyond your peak usage, because your excess power production won't net you nearly as much as you pay to buy that power back later in the afternoon.
Why should home solar owner get a guaranteed return greater than the wholesale market cost?
All that does is raise the price of electricity for everyone who can't install solar.
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In California, they have messed with the cost structure enough that solar without storage is usually not worth doing beyond your peak usage, because your excess power production won't net you nearly as much as you pay to buy that power back later in the afternoon.
And it's gotten worse; I recently got notified by my local power company that they're 'restructuring' their charges; under the new system, the charge for your connection to the grid and the 'generation charge', both fixed fees, will now be assessed separately, so that you're paying both of those charges each month even if you're continuously selling power back to them from overproduction, where previously your overproduction could apply against those costs.
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half the nation can't use home solar anyway
This is nonsense. Of course it can. You simply need to add more panels. Nobody wants to install used panels for money, because the way they profit is by marking up parts prices, and you get a bigger markup at the same percentage on a new panel. But there are absolute piles of used panels out there, I am actually seeing large numbers of them just given away, so this is absolutely a viable business. And that's never been more true than it is now with microinverters, because you can add panels in any numbers y
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Large houses in hot climates don't have enough roof space to accommodate the number of panels you would need to displace grid power. Using obsolete panels that generated less power when they were new is only going to make the problem worse.
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Large houses in hot climates don't have enough roof space to accommodate the number of panels you would need to displace grid power.
Simply putting panels between the sun and the house substantially reduces the need for cooling, even if you didn't connect them to anything, because the back of the panel is white and the other side is dark.
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LOLZ add more panels? You think here in Chicago we can put panels over the streets and neighbors lawns too? The sun is too fucking low for too much of the year and there isn't the land. A couple more modern huge nuke plants is what we need in Illinois. Problem solved.
what a coincidence! (Score:2)
huh... AI bulls*t becomes ubiquitous and electricity prices skyrocket. no correlation though, right? what a coinkydink.
Misleading headline (Score:1)
No, prices aren't rising. Owners are **choosing** to raise prices because they can.
If the gov't (yeah, i know) mandated a sliding cost scale, with highest prices for the biggest users, things would change rather quickly
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If the gov't (yeah, i know) mandated a sliding cost scale, with highest prices for the biggest users, things would change rather quickly
I've said this before. That won't work. Business, unlike homeowners, have the ability to create shell companies. The effort required to avoid rules like that is negligible for businesses. All that does is massively increase the billing hassle for the power companies.
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I don't follow your reasoning at all. If a data center is using massive amounts of power why does it matter who owns it? Power companies just need to charge at the meter a scaling rate based on use. Some one has to pay that bill or the servers go off.
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I don't follow your reasoning at all. If a data center is using massive amounts of power why does it matter who owns it? Power companies just need to charge at the meter a scaling rate based on use. Some one has to pay that bill or the servers go off.
Ten tiny companies, ten meters.
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Ten tiny companies, ten meters.
So instead of paying higher prices for power they'll spend tons of money maintaining an incredibly inefficient system?
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Ten tiny companies, ten meters.
So instead of paying higher prices for power they'll spend tons of money maintaining an incredibly inefficient system?
Surprisingly little money. As soon as the extra cost exceeds the cost of hiring one person to maintain workarounds, it is cheaper to do the workarounds. Tricks like that might ostensibly work for individuals, but they fail badly every time when you're talking about big corporations.
Re:Misleading headline (Score:5, Informative)
No, prices aren't rising. Owners are **choosing** to raise prices because they can.
If the gov't (yeah, i know) mandated a sliding cost scale, with highest prices for the biggest users, things would change rather quickly
That's not how electricity prices work.
In non-wholesale market areas the cost of electricity is set by the government. The net return to the utility is fixed and pretty low, low to mid single digits percent. Monthly or yearly price variation in those regions are virtually always related to pass-through costs like fuel or storm damage which the utility "passes through" without markup to the customer. New large loads, like a datacenter, basically get explicitly approved by the state via regulatory mechanisms to ensure they don't raise prices for consumers in excess of the benefits they provide the region.
In wholesale markets prices are set by the market itself (which an independent regional nonprofit runs), with generators bidding into the market with cost curves. That works a little differently market-to-market, but basically the utility calculates their breakeven cost for each generator and submits that. The market stack-ranks all the generators bid in, in real time (say every 5 minutes). The controllers for the grid then send orders to the generators whether they should be online, and at what generation level. There's all kind of complexities with that I won't get into. The key observation there however should be "wait, if they're bidding in at cost how do they make money?" And the answer is the unit "on the margin", i.e. the unit that is the most expensive that is required not to have blackouts, sets the market price in any given 5 minute period. That "most expensive" unit nets basically no money. Everybody else makes a profit of whatever the difference is between the most expensive unit's generating cost and their generating cost. There are independent market monitors that make sure no generator/utility are exerting market influence to game the system (which is illegal).
The author of the blog post is picking up on something real, which is that transmission constraints are increasingly impacting wholesale prices. There's quite a bit more going on than that though, and more transmission won't solve all of it.
One issue is that the price in a given hour is increasingly set by a marginal generator that is totally divorced in price from renewables. In a perfect world those higher cost marginal generators would eventually be replaced by the lower cost technology, but in practice the lower cost technology (solar, wind) is incapable of reliably serving electricity. So the more expensive generators stick around because they have to, and the renewables operators just increasingly pocket the difference. Most grid operators use a separate market that clears once a year and compensates reliability to ensure the grid doesn't collapse because stable generators retire. That has its own insufficiencies, but the end result is that the wholesale price of electricity is increasingly meaningless for sending price signals to generators as to whether they should stay operational. It really only works for telling a generator if they should be outputting in any given minute, not if a plant should continue to operate.
Another issue is that because of the way intermittent generation (wind, solar) warp the market the wholesale cost of electricity increasingly means nothing to consumer bills either. Take California, with the ironically stable (if high) wholesale prices but the soaring retail costs. Why is that? It's because incentives are warping the generation market, and those incentives are funded outside of wholesale electricity cost. Home solar rebate programs. Transmission infrastructure cost (solar/wind are typically far from power consumers and require a lot more/bigger power lines). Insurance cost (more transmission infrastructure for solar/wind increases the likelihood of things like wildfire, which increases insurance cost). Cost to build batt
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That's not how electricity prices work.
No, it is. Government just needs to tell power companies to charge on a sliding scale based on usage at the meter. It's incredibly simple.
You even say in your post that government sets the prices but somehow that cant be changed?
lets ask one of the culprits (Score:3)
Worse coming... (Score:2)
......with the Big Bad Bill allowing natural gas to be exported overseas, the largest portion of electricity energy supply will rise with greater demand.
I'd plan on electricity being significantly more expensive upcoming.
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I wonder how much of a thing this will be though. While we do currently move some natural gas around by boat in liquefied form it's incredibly expensive relative to piped sources https://energynewsbeat.co/how-... [energynewsbeat.co]. .
Our state gov did it (Score:2)
Our state government pressured our utility (who mostly uses hydro and some NG) to dump their one small coal plant. Since then, they are paying spot prices far more often. Since they can't raise consumer rates much, they are laying folks off like crazy internally to try to stay afloat, so it takes forever to get work done.
Thank you WA state!
Regionally Specific (Score:2)
What happens to residential electricity pricing is very specific to region. In California, the cost of PG&E's electricity has skyrocketed due to wildfires. You just need to spark a couple wildfires during a mega-drought and high winds then suddenly WHAMO! -- $30 billion dollar settlement, bankruptcy proceedings, (https://en.wikipedia.org/wiki/Pacific_Gas_and_Electric_Company#Wildfires), and a mandate to put 10,000 miles of above-ground power lines underground.
All of that is extremely expensive. They nee
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Came for the ignorance (Score:2)
Just ignore his batshit crazy solution at the end. It's almost as if he had someone incredibly intelligent write the first 20 minutes and then someone else who never watched it do the last part.
Greed combined with bad laws (Score:1)
Utility company gets X% of the money charged to share holders.
Rates can go up to cover the cost of building new generation plants.
So - build the most expensive generation plant you can get away with.
Rates get moved up.
Utility company gets same X% just of a bigger pie.
Profit!
So Glad.... (Score:1)
....I built my house off-grid years ago.
I could run my house on 100% incandescent bulbs if I wanted (though honestly I prefer the LEDs).
If you can put any kind of solar on your home, I urge you to do so.
Ferret
Time to pay the piper (Score:2)
Think all of that wind and solar was free? And while we're on the subject, the Salt River Project in Arizona boasts that they are a non-profit company which means that any "profit" doesn't really get returned to the customer but rather to upper management.
AI data centers (Score:2)
Re:Too many EVs (Score:5, Insightful)
Really? you think its the 1 out of 20 cars that's causing the grid to buckle?
It's clearly because we changed the law to sell our natural gas to other countries at the same time as an explosion in electrical computing needs (mostly caused by AI Junk)
but keep pushing those ridiculous talking points
AI training based on availability of the sunlight? (Score:2)
If you have to feed the troll, can't you at least think of a substantive Subject?
But is there any Funny in the discussion of the story?
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In order to stop forcing consumes to fund foreign wars, countries must disallow import of all products from Russia.
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+1, insightful
Re: Too many EVs (Score:2)
Europe not buying LNG from Russia distorts the market. US producers can get a better price selling to Europe, so prices go up in the US too. If you donâ(TM)t like this, youâ(TM)re better off crushing Putin so Europe starts buying Russian LNG again. You canâ(TM)t just sit back and ignore it if you donâ(TM)t like it.
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END NATO, No more LNG of the EU, Stop funding foreign conflicts.
I mean... or... green-light Ukraine joining NATO, and we'll all stomp the unjustifiable Russian invasion in a couple months.
While we're at it... let's recognize Palestine and let them in too. In fact, every country should be included. Any act of military aggression on any nation by any other nation and the entire world should curb-stomp that into oblivion. Want lines on the map to move? Do it via diplomacy, where like-minded countries merge and countries that have different opinions within split.
Now
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EVs would be residential, not wholesale, pricing.
Big AI Data Centers would be wholesale pricing.
Re:Too many EVs (Score:5, Interesting)
They sell you power at $0.28/kw but but it back from you between $0.06- $0.08 which means you have to produce 4x what you need to have a 0 bill, unless you can store all you need at night, when base-load is cheap for them to produce anyway. If they wanted cheap electricity, they would encourage solar deployments everywhere, charge people for grid-connections at a size (200A @240V for example), and just charge people for the delta they consume. They would still make money, and the deployment of solar wouldn't have been halted. Batteries to some degree (1x your solar production maybe) should be mandatory but no, they screwed it all up, making the worst possible solution. Solar is no longer worth it, and the grid is only more expensive. We are idiots, governed by fools.
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I don't see this as a troll but an honest opinion. Why is this being downmodded as troll? Do you suspect it was posted by Jimmy Kimmel?
Mod abuse right here. Mod parent up to 2 at least.
Re:Too many EVs (Score:5, Informative)
Because it is just factually wrong and Slashdot doesn't have a "wrong" or "incorrect" mod option.
NEM was modified to drive investment and demand in battery energy storage. CA massively over produces solar energy. So much so that utilities are forced to PAY out of state utilities to take our excess production. The solution is more storage, not more generating capacity.
The market was not driving investment in batteries and demand is too low to drive economies of scale and reduce cost. The State decided to change the market to benefit everyone (the whole world) by driving battery demand in California. As demand rises and costs reduce, the rest of the world benefits as well. Simple facts, the debate was public, records exist, it's not a conspiracy or hand out.
The poster is just angry and spreading misinformation, thus a "troll" in the Slashdot mod scheme.
Re:Too many EVs (Score:5, Informative)
Saloomy wasn't wrong. From the consumer standpoint, that's exactly what happened. New sign ups get screwed, to the point where it nearly doubles the pay off for your solar system. By the time it's paid off, you've lost anywhere from 15-30% (call it 20%) efficiency.
I love the idea of solar, but I think it's better at the community level then the individual.
@Amazing, your post is obviously of the perspective of the state and the greater good. Your post isn't wrong either.
You both just had different perspectives on the same topic.
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So much so that utilities are forced to PAY out of state utilities to take our excess production.
I don't get this. It's solar. If you don't want the power then turn it off. The utility may not have that level of control over home inverters (though some do) but they certainly can control the output of any grid-scale solar install. Why would they be paying "out of state utilities" (presumably where the sun don't shine) to take the power? Utilities like money and that doesn't seem like a money-making idea. Yeah, they don't want their large capital investment sitting idle but it's better than running
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Every residential homeowner would have storage (Score:3)
The
Re: Too many EVs (Score:1)
Easy anwser - You are subsidizing data centers (Score:2)
Everyone else is subsidizing large data centers.
The net effect of say 1000 jobs for a data center will most likely be offset by a higher energy price paid by everyone in the surrounding region.
Probably the same thing as how bring in a professional sports team, using government eminent domain to force people to sell land to the government, then building a government owned sports stadium, loss of property tax revenue results in a net tax increase on everyone and a free ride for the sports team owner.
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The problem was that utilities had to buy from homeowners at retail prices, but from bulk suppliers at wholesale prices, and buying from the homeowner was mandated. That resulted in the binary choice of utilities going belly-up or else charging ratepayers who did not or could not install solar ever higher prices to pay for the solar they were buying from homeowners, power the utilities did not actually need any more.
Naturally, those who already had solar did not like their gravy train becoming less lucrati
Re: Too many EVs (Score:1)
Re: Too many EVs (Score:2)
They sell you power at $0.28/kw but but it back from you between $0.06- $0.08 which means you have to produce 4x what you need to have a 0 bill
I think you left out something important - the utility is REQUIRED to buy every kilowatt of electricity you want to sell them, if they need it or not, if they want it or not. It used to be the regulators forced utilities to pay an excessively high price for your excess electricity, but I guess that has changed.
If you want utilities to pay higher rates, you have to give them the ability to control when and how much they buy.
The purpose of the electric grid isn't to help solar panel owners have net zero $ ele
Re:What happened? Green mandates happened. (Score:5, Insightful)
Did you not notice the point that only in CA has the price actually remained stable lately? Maybe the green mandates to supplement the power DID help?
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That argument would carry more weight if you actually posted California's low, low electrical rates.
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How would that change the fact that California's energy rates are not being effected by this current problem?
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How would that change the fact that California's energy rates are not being effected by this current problem?
Simple. California was an early adopter of these policies and already paying renewable premium.
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Or maybe CA prices are stable because they were already sky-high.
The average cost per kWh in the US is 13.7 cents. In California, it's 26.0 cents.
https://www.electricchoice.com... [electricchoice.com]
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Someone posted what they pay for electricity in California and what their buy back rate is and their rates are insane.
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What mandate? There were tax breaks for renewables, not mandates.
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It's a supply & demand issue
That's the only thing you got right.
AI is creating a massive surge in energy usage https://www.goldmansachs.com/i... [goldmansachs.com] . THAT's what's causing these higher prices, rapidly increasing demand https://www.pbs.org/newshour/s... [pbs.org]. https://www.cbsnews.com/news/a... [cbsnews.com]
We know green energy works and we know the "baseload problem" is a conservative myth https://www.nrdc.org/bio/kevin... [nrdc.org] .
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Okay, I work in the industry.. If solar and windmills worked, we would be putting them up everywhere. They don't work.
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What the hell are you talking about? We've been putting them up all over the country for years now https://www.climatecentral.org... [climatecentral.org] .
Okay, I work in the industry
Yeah, you work in the industry the same way the janitors at Disney work in the movie business. There's no way you do anything important in that industry with the blatantly ignorant things you e been saying.
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Leaning into unreliable power sources when demand is increasing is just going to make any supply issues worse.
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We know green energy works and we know the "baseload problem" is a conservative myth https://www.nrdc.org/bio/kevin... [nrdc.org]
Mr Steinberger is a policy advocate, which he specifically listed as half of his course load when he graduated from Stanford in 2014 with a masters in mechanical engineering. Power engineers are electrical and those are the guys you want to be talking to about this.
What he is trying to do with this article is draw attention away from renewables inherent unreliability without some sort of energy storage attached, at which point it _becomes_ part of the baseload. That's all well and good as long as the sun