My understanding is somewhat limited, as that is a second-hand anecdote.
They probably don't turn the smelters off completely, instead simply scaling production down to a minimum. This seems like the most reasonable action in any case, as they would want to continue smelting as soon as the spot-price dropped.
For me the most interesting part of this was the fact that energy brokers existed (not that surprising) and that the free market allowed for instruments like this to be developed.
There are quite a few levels of distribution as well, and each of those implement different market instruments to optimise for reduced risk and costs.
A hard problem that is starting to emerge is actually based on both how distributors amortise risk, and the emergence of smart meters.
Smart meters should be able to help regulate the entire market, because they give us better control over the load profile. The thing is, a typical consumer buys their energy from a retailer, who themselves will have agreements with wholesalers, who in turn work with energy providers and the NEM. Who should have control over the smart meter, its data and operation? Who should benefit from the cost savings and reduced risks?
At the moment the cost savings seem to be shared fairly equally, but ownership of data and control varies based on legislation (state to state in Australia). There is definitely a lot of room for innovation in this space; I'm looking forward to seeing how things progress as more and more of these devices are deployed.
They probably don't turn the smelters off completely, instead simply scaling production down to a minimum. This seems like the most reasonable action in any case, as they would want to continue smelting as soon as the spot-price dropped.
For me the most interesting part of this was the fact that energy brokers existed (not that surprising) and that the free market allowed for instruments like this to be developed.
There are quite a few levels of distribution as well, and each of those implement different market instruments to optimise for reduced risk and costs.
A hard problem that is starting to emerge is actually based on both how distributors amortise risk, and the emergence of smart meters.
Smart meters should be able to help regulate the entire market, because they give us better control over the load profile. The thing is, a typical consumer buys their energy from a retailer, who themselves will have agreements with wholesalers, who in turn work with energy providers and the NEM. Who should have control over the smart meter, its data and operation? Who should benefit from the cost savings and reduced risks?
At the moment the cost savings seem to be shared fairly equally, but ownership of data and control varies based on legislation (state to state in Australia). There is definitely a lot of room for innovation in this space; I'm looking forward to seeing how things progress as more and more of these devices are deployed.