Posted by: @batpred

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My simple understanding is every 30 or 15 mins, generators bid for production with whatever price they require. The cheapest that are required to meet the expected demand get to produce. But they all get paid at the price of the highest price that had to be accepted. That last one is often gas.

Yes, that's pretty much the way the wholesale electricity market works @batpred 

Britain is currently using half-hourly settlement, with the market closing 10-mins before the generation is needed.

However, as far as possible, Energy Suppliers also have Power Purchase Agreements (PPAs) with generators. That's a long-term contract to take electricity from them at a pre-arranged fixed price.

Thus, for example, OVO Energy signed a PPA with Vattenfall for wind-generation from a wind-farm in the North Sea.

PPAs can be signed in advance of a generation site being built. The Generation Company can reveal those PPAs to potential investors, thus providing assurances that their money will be safe and yield a good return.

It's those PPAs which 'dampen' price fluctuations and allow the larger Energy Suppliers to hold prices steady. Smaller Suppliers who haven't been able to negotiate enough electricity from PPAs are more likely to fail when there's a global surge in fuel pricing. Such failures are governed by Ofgem regulations, which means their customers are moved to another company, operating as a Supplier of Last Resort (SoLR). One of the levies which Ofgem add to our electricity bills goes towards maintaining a fund to pay for the SoLR process.

Posted by: @batpred

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...

You seem to see your role as defining what is right and what is not?

...

Not in the slightest.

I have two roles; one as moderator, one as contributor. Neither does any defining. As a mod, I don't define the rules; I just apply them. As a contributor, I don't define anything else; I just discuss.

As for right/wrong, I'm assuming here you're talking about correct/incorrect rather than appropriate/inappropriate. Here, it's easy to lay out my stall since I specifically picked up on just the technical details, not the discussion about why datacentres are being commissioned.

@technogeek said...

Posted by: @technogeek

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An additional reason for so many data centres is because for "the cloud" which these data centres support, to be 100% robust, they must have a large amount of duplication contained within them. You can have regions of data centres, each region containing multiple data centres in different geographical areas.

Whilst I disagree the cloud can ever be 100% robust, his point is accurate. The technical term for the duplication is "redundancy", and that requires duplication of all kinds of resources - distributed across multiple geographic sites - to earn the tag of "robust".

As a result of your misquoting him as saying that the cloud "duplicates work", he then corrected you with an illustration of a commercial website.

Posted by: @technogeek

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I did not say the cloud duplicates work, I said the cloud has a level of duplication, there is a subtle difference. If you have a commerical website the chances are it will be trading 24/7. To make the website robust your data has to be duplicated on a number of geographcally separate sites.

Once again, as I have explained, this is entirely correct. However, you again misquoted saying...

Posted by: @batpred

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And to look at one example from yours, when you way "To make the website robust your data has to be duplicated on a number of geographically separate sites." , you are also staying that a website cannot be made robust unless it is on different sites.

Which is not a fact. There are different types of requirements, some you could call robustness.

...which is incorrect. It is a fact. Any computing system dealing with any data that isn't static (which is what @technogeek specified) must be geographically distributed if it is to be robust.

As you can see, I'm not defining anything; merely pointing out long understood practice in the IT industry. As for whether I may be justified in doing so, I'll draw your attention to something else you said....

Posted by: @batpred

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I can see your point but being an area I am fairly familiar with, it seemed worth adding to the discussion

I have no intention of getting into some "mine's bigger than yours" competition but suffice to say I have several decades of professional experience in just this area, so can demonstrate I'm qualified to comment.

As a result, no I don't see my role as defining anything. I'm just picking you up on a technical aspect you posted which was demonstrably wrong.

Posted by: @transparent

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Thus, for example, OVO Energy signed a PPA with Vattenfall for wind-generation from a wind-farm in the North Sea.

PPAs can be signed in advance of a generation site being built. The Generation Company can reveal those PPAs to potential investors, thus providing assurances that their money will be safe and yield a good return.

That makes sense and this is what data centres are also trying to do. 

I am curious if this means that, in the case of Ovo agreement with Vattenfall, this means that Vattenfall has to make sure they are accepted in all 30 mins slots that they are presumably bidding for?

And that they only need to bid for periods that a) Ovo has sufficient demand and b) the ones that are economically viable to them to sell just based on the wholesale price?

Posted by: @transparent

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Posted by: @batpred

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My simple understanding is every 30 or 15 mins, generators bid for production with whatever price they require. The cheapest that are required to meet the expected demand get to produce. But they all get paid at the price of the highest price that had to be accepted. That last one is often gas.

Yes, that's pretty much the way the wholesale electricity market works @batpred 

Britain is currently using half-hourly settlement, with the market closing 10-mins before the generation is needed.

However, as far as possible, Energy Suppliers also have Power Purchase Agreements (PPAs) with generators. That's a long-term contract to take electricity from them at a pre-arranged fixed price.

Thus, for example, OVO Energy signed a PPA with Vattenfall for wind-generation from a wind-farm in the North Sea.

PPAs can be signed in advance of a generation site being built. The Generation Company can reveal those PPAs to potential investors, thus providing assurances that their money will be safe and yield a good return.

It's those PPAs which 'dampen' price fluctuations and allow the larger Energy Suppliers to hold prices steady. Smaller Suppliers who haven't been able to negotiate enough electricity from PPAs are more likely to fail when there's a global surge in fuel pricing. Such failures are governed by Ofgem regulations, which means their customers are moved to another company, operating as a Supplier of Last Resort (SoLR). One of the levies which Ofgem add to our electricity bills goes towards maintaining a fund to pay for the SoLR process.

Thanks both, that all makes perfect sense and seems prima facie like a fairly sensible market mechanism albeit doubtless not perfect (is anything?).  Im struggling to come up with a better one.  

@majordennisbloodnok 

My stance as a contributor is to add to the debate. I do not have multiple hats, so no danger of one hat being used to pursue the other role. 

If based on my long term experience, I feel that I can add to it, I do. I stand by what I wrote, it is based on decades of arbitrating on problems across plan, build, operate between business, user and IT stakeholders. 

But I can also see cases where drilling a point to the nth degree is not appropriate. 

I did that (drilling a point), but then recognised it and moved on. 

Posted by: @batpred

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I did that (drilling a point), but then recognised it and moved on. 

It seems not.

You didn't drill into a point; you misquoted as I have said several times and explicitly demonstrated. Nor, it seems, have you moved on as the continued attempt to argue demonstrates.

This site is used quite often by people wanting information. If anything is posted that is incorrect, that gets in the way of this and, if I notice it, I will correct it. You posted something inaccurate and misleading and so I called it out, and I will continue to do so for as long as you attempt to reframe your mistake as anything but a mistake.

Posted by: @batpred

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I am curious if this means that, in the case of Ovo agreement with Vattenfall, this means that Vattenfall has to make sure they are accepted in all 30 mins slots that they are presumably bidding for?

And that they only need to bid for periods that a) Ovo has sufficient demand and b) the ones that are economically viable to them to sell just based on the wholesale price?

We can't know these facts. PPAs are confidential documents between consenting companies!

OVO wouldn't be able to know what its demand might be a couple of years after signing a PPA. Nor would Vattenfall know if it had sufficient wind to satisfy that demand!

Negotiating such contracts is a skilled exercise... somewhat akin to an investment banker dealing on the Stock Exchange.

OVO might reasonably also buy energy storage capacity, and it might have the rights to re-sell over-generation to rival Suppliers, presumably at a better price than they could obtain from the wholesale market. Such measures would enable it to offset risks it is left to carry as a result of the PPA.

@transparent 

😀 Clearly there are risks involved in any business transaction. 

I can see how this could work but remain curious about the relevant mechanisms in our electricity market! 

Electricity retailers offer fixed price deals.  By agreeing the purchase price in advance they can manage the risks.  Electricity generators probably buy fuel in advance as well (obviously not renewables).  All this trading creates a market for data centres.

@jamespa 

And it seems some of the nasty public cloud data centres are also in the futures market to buy diesel. Going by the rumours around the public consultation I have been to 😀