etudiant said:
I'm simply highlighting that such pricing indicates a regulatory malfunction which discourages long term investments such as nuclear power.
There is no malfunction by anybody's definition. I think your understanding of energy markets and the meaning of negative bids is less than perfect.
The foremost goal of any free market is to be fair to all participants. For example, the stock market must not allow some participants to buy at lower prices than others. Deviation from that is not only wrong, it is criminal in many cases. If you want to promote nuclear (or Tesla Motors Inc., or anything else) for any reason, you may not do it via unfair biases in the energy market (or the stock market).
Negative prices: Suppose you gave your broker an order to sell IBM at a price of "-$10 or higher." That would not cause the market price of IBM to crash to -$10. Instead, you would get paid today's market clearing price for IBM (perhaps +$99). In fact, you will always succeed in selling your IBM stock unless all the other sellers had bids more negative than -$10. Indeed, your reason for the negative bid could be that your boss said, "Sell those stocks today regardless of price or you're fired." [Yes, I know that stock markets allow "sell at market" offers with no floor price, but energy future markets don't have that. Negative price bids, approximate "sell at market" offers.]
It is the same in energy markets. Negative bids appears in the bidY box every day, but only 2-3 times in the past 15 years that I remember has the market clearing price in my state ever gone negative for an hour or two. The negative bidders get paid the same market clearing price as everyone else for all those other hours. Economically, those negative bids have negligible impact on real life for any market participants. All those bidders are trying to say, is "Take my power at any price and pay me the going market rate." You can not call that a regulatory malfunction.
Therefore, in a free market, all participants including nuclear, renewable, and whatever compete on price and operating flexibility. The problem many nuclear plants had is that they were designed for 45 year lifetimes as base load units. That was the standard assumption in the 1970s, but it seems rather arrogant in retrospect. The owners were betting that their technology was not only cheaper in 1975, but that it would remain the cheapest form of generation for the next 45 years. That sounds pretty stupid today. Would you pay $2000 for a smart phone built to last 45 years, or would you rather have a phone that you can discard every year or two so you can buy a new one with the latest technology?
The wisdom of any energy investment that needs decades to pay off the investment is dubious. Heck, any technology investment of any kind that needs decades to pay off the investment is dubious.
Times change. Base load units may need to become intermediate or peakers in the future. The standard lifetime of a capital investment can change from 45 years to 5 years. Keep up with the times or die. Do not expect the energy markets to bail you out.
BTW, I've worked as a nuclear engineer myself and I've always been pro nuke. But I also worked in energy futures markets and I understand how they must work.