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OkayPhysicisttoday at 1:00 AM1 replyview on HN

No. The operative word there is "required". The grid sorts the various providers cheapest to most expensive, then uses all the power from each until they don't need the power anymore, at which point they pay everyone who they did take power from the rate of the highest winning bidder.

If you were offering power at $1000/kWh, you would simply lose the auction.

Imagine the scenario where Alice, Bob, Charlie, and Daniel are each selling power at $1/kWh, $2, $3, and $4 respectively. We need 30 kW of power.

Alice bids 10 kW at $1/kWh. We draw power from her, but we still need 20 kW

Bob bids 15 kW at $2/kWh. We draw power from him, but we still need 5 kW.

Charlie bids 30 kW at $3/kWh. We draw 5 kW from him. We don't need any more power, so Charlie has set the price at $3/kWh

Over the next hour, Alice gets $30, Bob gets $45, and Charlie gets $15. Daniel gets nothing, because he was out bid.


Replies

LorenPechteltoday at 3:10 AM

What happens when they bid power and can't deliver?

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