it is difficult to compare subsidized production (via govt transfers) versus at the margin 'cheapness'. its not apples and apples.
Actually, in most European countries, there are no government transfers - the cost of the fixed price (being the difference between market prices and the fixed price guaranteed to renewable energy producers) is spread over ratepayers' bills and not supported by government funds in any way. So the fact that wind injected in the system has an effect on what the same ratepayers have to pay is directly relevant.
A more specific argument against this is that at some point, there will be so much wind in the system that prices will be too low for any technology to be profitable - and all producers (other that tariff-supported wind producers) would go bankrupt. At that point, something will need to be changed: either a minimum price for electricity for all producers, or some other form of production planification...
What you're really inferring is that nuclear and coal plants get less $ for their nighttime production of electricity than before wind. But in reality, for each kWh not produced from coal, 10-12 cents are paid to wind operators - this is guaranteed in most places.
Actually, nighttime prices are not really touched by wind - they are already low. Wind has the biggest impact at times of high demand, when the price is set by more expensive marginal producers like peakers. It is at peak times that nukes and coal make the most money, as they sell at high marginal prices electricity which costs the no more than at night. At peak times, you replace 15c/kWh peaking gas kWh by low-marginal cost wind. You don't replace the base load producers (they are cheaper), you reduce the marginal plants. When wind penetration gets high enough, it will reduce demand from baseload plants, but not the price at that time (unless some of the more expensive baseload plants are completely taken out of the supply side at that point).
So consumers are forced to buy 8c/kWh at night, but they also have to pay only 10c/kWh at peak times, instead of 15c/kWh, at the more expensive peaker plant is no longer needed and prices are set by the next most expensive plant (or the next, or the next, depending on how much wind you insert).
The difficulty is that market prices are set by marginal cost, and not by levelised average cost, and the different technologies have such different rankings when you use different cost concepts. Maybe to take wind out of the equation, you should just think about nues versus gas, because the problem is the same: the more nukes you have in the system, the lower prices are for everybody, and they end up being too low for ANY technology to be profitable (thus investment in nukes would not, and will not, happen under market mechanisms).
7. As long as no new capacity needs to be built, the higher costs of wind don't become apparent, and as you point out - for a few years this might be the case (though if you look at areas with large wind (Denmark) there was large scaling of NG plants as well) while other things were mothballed (coal)
Well, yes. Wind does not eliminate the need to invest in replacement capacity. But investment in that capacity will be needed only when existing capacity needs to be taken out (which is a big carve out); and it needs to be priced as capacity and not as MWh generation source.
If energy prices triple, then the 'duration' of wind would make it much more attractive than for a life cycle energy option like nat gas that needs a large % of costs year to year instead of up front. However this culture will crumble well before energy triples. Personally I think we've seen the all time highs in energy prices due to money/credit overshoot. But I digress...
Investment in wind does not require high prices, it requires prices systematically higher than a given (moderately high) threshold for a very long time. A short period of low prices is enough to make a wind project go bankrupt and thus for investors not to make the initial investment decision, even if the average price is competitive. Remember my image about the guy standing on the beach, with his feet stuck to the ground, and the kid with a buoy. Whe nthe tide comes, the guy dies, and not the kid, even if on average the kid is lower than the man. "Cheap" and "competitive" are not the same thing in a marginalist market setting.
Finally, IF externalities are included (mainly carbon, but other fossil related negatives) then wind may truly be cheaper (but again, unaffordable to the current system of claims/wealth)
Externalities don't exist. Otherwise, we wouldn't even be having this conversation.
Just think about this: ALL generation sources (coal, nukes, wind) rae cheaper than gas-fired power plants. And yet the market, over the past 15 years, has built NOTHING BUT gas-fired plants in North America and Europe. Please think about this. Wind power
Some questions:
Can wind turbines have remotely/automatically controlled variable pitch to respond to changes in demand and/or wind speed and thus assist in regional supply regulation and reduce drastic shut downs.
Yes, they mostly do these days.
To what extent will "smart grids" be able to assist in demand regulation - e.g. by charging electric cars at night but also targeted at times when maximum wind is available
The potential is massive; it remains to be seen how it can be implemented. This is largely a regulatory question more than a technical one.
To what extent can power storage plants like Turlough Hill assist in supply regulation - and what is their effect on average costs - is their an optimum penetration of storage plants
Storage plants help. They are limited by topography, unfortunately.
Are there any examples of paying for capacity rather than output as a means of ensuring there is sufficient investment in new peaker capacity. Would doing so not be analogous to guaranteeing feed in tariffs for wind?
yes, some US markets have explicit capacity markets. Others do it through the spot markets through "balancing costs" ie penalties for producers who under or over deliver and special payments for producers that make "spinning reserves" (ie immediately available spare capacity) available
If the major losers from increasing wind penetration are the owners/operators of existing plant, are there any examples of mechanisms for compensating them for loss of production - e.g. through some payment for capacity scheme? Clearer the operator of a plant that is only required 5% of the time would need either very high marginal prices or some sort of "state guarantee" in return for providing security of supply.
Peakers can generate a profit producing electricity only a few % of the year; as to incumbents, they are the ones pushing for market pricing these days, but yes, at some point, some regulatory changes will be needed, either in the form of minimum prices or some other mechanisms.
What is the effect of "internationalising/widening the grid" on wind variability - i.e. the larger the geographic area, the greater the likelihood of at least some wind in parts of the grid.
Yes, the wider the grid area, the more stable it can be and the more intermittency can be absorbed.
What is the impact of rising transmission costs if power for parts of a widening grid is sourced from increasing remote sources - e.g. wind/wave from Ireland, Solar from the Sahara. Ireland is investing a lot of money in inter-connectors to the UK (and, I think, France) as a means of widening its grid. Conversely, what are the transmission cost savings from (sometimes) being able to favour areas of supply deficit with local wind production (rather than remote nuclear or some other v. centralised resource). I'm thinking of low population density areas or other areas remote from major power plants but whose needs could largely/often be met by local wind/wave/solar. Surely there are computer models available for optimising not just the supply mix, but the cost mix, which could assist in estimating the impact of introducing more wind on the overall system and returns for all stakeholders.
Conversely, what are the transmission cost savings from (sometimes) being able to favour areas of supply deficit with local wind production (rather than remote nuclear or some other v. centralised resource). I'm thinking of low population density areas or other areas remote from major power plants but whose needs could largely/often be met by local wind/wave/solar. Surely there are computer models available for optimising not just the supply mix, but the cost mix, which could assist in estimating the impact of introducing more wind on the overall system and returns for all stakeholders.
Well, transmission costs can be balanced by the lower prices of electricity from having a wider market.
Wind power
