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Many thanks.  My point about near monopolies increasing prices is probably more relevant to the cost of putting more capacity out there (which in a fixed regulatory price environment impacts directly on profit margins and the incentive to add capacity.  Thus if there are only a couple of suppliers providing large turbines to the off shore market - they can charge more, reducing operator margins and thus the rate of investment/capacity increase.

Thanks for the link to your excellent diary on the level of fixed conventional capacity that can be displaced by variable wind capacity.  It should be noted that this displacement rate can go up if:

  1. Energy storage technologies are used - Ireland has a large man make lake on top of a mountain (Turlough Hill) which is filled up at times of energy surplus and emptied at times of peak demand.  As we move to hybrid cars with rechargeable batteries these could also be preferentially charged overnight whenever demand is low.  Ditto for buildings designed to be giant storage heaters.

  2. As the market/grid size is increased - e.g. by Ireland building additional inter-connector capacity with Britain. The larger the distribution network/market, the greater the fluctuations which can be absorbed, and the greater the statistical probability that some places will be windy to make up for those places which are not.

I don't know what the economics of transmitting power over very long distances are - it probably doesn't make sense for surplus power on a windy day in Ireland to be transmitted to Poland even if it could displace conventional capacity there, but I would be interested in what the optimum size of such a network/grid would be.

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Dec 8th, 2007 at 05:30:54 PM EST
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