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just wondering if there may be some justification in legacy carbon based generators feeling used because they are expected to be available to provide base load at any time wind etc. doesn't,

What ticks off the baseload coal burners is not that they don't get to provide baseload. Because they do. It is that other people get to provide baseload as well.

A newly built coal-burner has similar economics to a wind farm - high up-front costs, low(ish) variable costs (if you exclude the subsidy-by-dead-Chinese-coal-miner). Which means that insistence on marginal pricing locks out new coal almost as effectively as it locks out new wind.

... but fully amortised coal has an equity cushion to survive higher volatility. Which means it gets to benefit from the higher average prices (due to the lock-out of capital intensive low average cost producers). If you repair the market structure to allow wind farms in, you undercut that particular source of rent for old, fully amortised coal-burners.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jun 28th, 2011 at 05:11:39 PM EST
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