This was an interesting read. I still don't quite understand the pricing during emergencies or shortages, though.

There is no tolerable scenario where providers could choose not to generate electricity for a grid if it were necessary and they were the only provider available.

I want to assume that in the freest of markets the state could still compel electrical generators to operate in the events of an emergency.

I really need to read up on what happened in Texas in 2021.

> providers could choose not to generate electricity for a grid if it were necessary

Enron basically forced this exact situation in order to charge inflated prices.

Maybe worse is that this isn’t even the reason they ended up in court.

> I still don't quite understand the pricing during emergencies or shortages, though.

Unpredictable supply shortages (almost always from emergency shutoffs at fossil plants) happen on the grid all the time. To deal with this, grid operators contract with "operating reserves", which are sources of supply that stay ready to make up for a supply shortfall. Often this takes the form of running natural gas turbines (hence the subcategory called "spinning" reserves).

This is very expensive electricity because usually you must pay for the fuel spent while the reserve isn't being used also.

As more battery storage is added to the grid, this service will be increasingly provided by batteries instead of natural gas turbines.

It can also be provided by voluntary (and compensated) demand curtailment programs.

None of this can make up for a grid that is under-invested in resilience (in exchange in the short term for extremely low electricity prices), which is basically what happened in Texas.

IDK how it is in the jurisdiction of the author, but I know a bit about how it is in the small European country I reside in (and which has a market almost identical to how it's described in the post).

There is a "System operator" which has the final responsibility for the stability of the grid. The TLDR is that they really really really want to use the market to solve it, but in a crisis they have supreme powers over all production and all consumption.

There are multiple short-term intra-day markets for extra capacity, and both producers and consumers can participate (consumers can reduce their capacity temporarily). It is extremely rare that these markets are not enough. Any "weird" bidding (e.g possible attempts at market manipulation) is audited, and market manipulation is of course illegal. You can only provide bids based on your estimation on the value of the power, and you need (if audited) to be able to show how this is calculated in a consistent (over time) way.

In the case of a system instability from either market failure or some extreme unexpected event (e.g. multiple production facilities going offline) there are a hierarchy of actions:

- Many/most large industrial consumers have deals where they pay less in grid fees, but they can be disconnected with little warning and no compensation. In the old days the system operator would call them, but these days more and more of this is digitalized. (There are prototypes of markets where these kind of load-shedd services can sold on a per-kW-per-hour basis)

- Any producer can be forced to produce at any time. They will be compensated according to normal spot-price for that hour.

- Any consumer can be cut at any time. Every substation is prioritized according to their criticality (suburbia is less important than hospitals). If nothing else works then substations will be disconnected in accordance with this list. (Also btw, there is always 2 network-paths to every substation over a certain size)

"Our generators & compressors froze over" was PR bullshit. The spot price of natural gas went through the roof at the time.