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> Like if gas is $5 and RE is $1 the RE folks get $5 instead? yes if there's 1mW of gas in the grid then everyone gets paid the gas price this is called pay-
by blibble 9mo ago
> Like if gas is $5 and RE is $1 the RE folks get $5 instead?
yes
if there's 1mW of gas in the grid then everyone gets paid the gas price
this is called pay-as-clear, and has some positives (strongly encourages RE construction), and some disadvantages (zero long term planning, paying gas generators absurd rates if they can squeeze in at the top of the auction)
UK government is consulting on changes to this system at present
- cbmuser 9mo agoThere is no way of changing this. It’s how commodity markets work.
- otherme123 9mo agoThere are alternatives, like "pay as bid", which heavily incentives the best price guesser instead of the cheapest producers. And is a system more fragile against collusions in concentrated markets (i.e. a handful of big producers that agree on high bids).
- blibble 9mo agoof course there is this is not the global oil market the UK electricity market is a government creation, highly regulated, and only accessible to limited participants 30 minutely, day ahead, pay-by-clear auction markets are not a property of the universe