Complex Systems with Patrick McKenzie (patio11)Patrick McKenzieAll episodes
Why SoftBank paid me 17 yen to skip the air conditioning
Patrick McKenzie (patio11) reads his 2022 Bits about Money essay “Markets in power,” prompted by a SoftBank push notification asking him to cut his air conditioner use between 5 and 8 PM, and updated for the era of AI data centers. He walks through why electricity has to be consumed almost the moment it is generated, how base load, intermediate, and peaker plants divide up a day’s demand, and how virtual power plants turn software and contracts into the economic equivalent of a peaker plant. The new commentary covers CoreWeave’s start as a GPU host for Ethereum miners, why ERCOT paid a Bitcoin miner tens of millions of dollars during the 2023 Texas heat wave, and why AI data centers, whose chip depreciation is five to ten times their electricity bill, behave more like base load than Bitcoin miners do
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Full transcript available here: https://www.complexsystemspodcast.com/why-softbank-paid-me-17-yen-to-skip-the-air-conditioning/
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Links:
(Source essay) Markets in power: https://www.bitsaboutmoney.com/archive/markets-in-power/
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Timestamps:
(00:00) Intro
(02:58) Electricity is ubiquitous, and other polite fictions
(06:35) Electricity supplied and demanded are necessarily equal
(07:57) Demand for electricity fluctuates over the day and over the year
(09:53) The power generation mix
(13:34) Demand response and virtual power plants
(19:50) A quick aside about meter reading
(21:05) Why this sudden interest in power?
(26:22) Wrap
