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the benefit of adding additional low marginal cost volatile energy harvesting are their free-standing benefit, plus the portfolio benefit of reducing the variability of the combined power supply.

I'm not really arguing with you, 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, and yet much of their main "market" is being undermined and undercut by wind. Their capacity utilisation (and revenue) goes down, while their costs go down much less (just by their variable costs).

It comes down to whether or not legacy producers should also get paid for providing capacity, not just output, to compensate them for their fixed costs.

Of course many legacy plants paid back their investors a long time ago and should be happy for any business they can get provided it covers their fixed and variable costs. However if at some point in the future they become uneconomic and start closing wholesale, the entire entire generation portfolio may become unable to meet peak demand at valley production times even with a wider range of renewable options in place.

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jun 28th, 2011 at 04:22:43 PM EST
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