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Jerome a Paris:
renewable power generators, which have large subsidies, low operational costs and free fuel, can offer cheaper prices than owners of plants running on conventional fossil fuels.

Not to forget the large subsidies fossil fuels benefit from?

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Oct 22nd, 2012 at 08:34:52 AM EST
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The subsidies are completely irrelevant to the fact that they have low marginal cost - only the low operating costs and absence of fuel costs are relevant here.

Certain support regimes (like tax credits) which are totally disconnected from the power markets can give an additional incentive for renewable energy producers to bid negative prices on the markets to have certainty of dispatch in massive generation surplus periods (as the separate revenue flow ensures positive cash flow despite negative prices) - which just goes to show that all the complex "market" support regimes easily create perverse incentives just as much as - if not more than - the simpler (but 'socialist') FiTs.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Mon Oct 22nd, 2012 at 09:30:10 AM EST
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