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The problem with wholesale prices driving towards zero is how do you recover costs associated with security of supply. It's great that solar makes wholesale pri
by waylonk 12y ago
The problem with wholesale prices driving towards zero is how do you recover costs associated with security of supply. It's great that solar makes wholesale prices zero throughout the day. But if generators can't recover the cost of their investments, then they'll eventually decommission those plants.
There are different types of power plants such as Peaker Plants (http://en.wikipedia.org/wiki/Peaking_power_plant http://en.wikipedia.org/wiki/Peaking_power_plant) that can start quickly (within minutes) to provide security of supply against renewables. However, they are quite a bit more expensive to operate, which means wholesale prices will need to increase in order to make money with them.
Source - I work for one of New Zealand's largest electricity generators.
- sergiosgc 12y agoIn Portugal, there's an "availability factor" line on the the electricity bill, which is dependent not on consumption, but on the defined consumption limit. I imagine this gets distributed to fast start/stop power plants.
- crdoconnor 12y ago>The problem with wholesale prices driving towards zero is how do you recover costs associated with security of supply. It's great that solar makes wholesale prices zero throughout the day. But if generators can't recover the cost of their investments, then they'll eventually decommission those plants. Well, if that's a coal burning plant then that's good news.