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The various producers are rewarded only for momentary conditions. The public service they provide or do not provide in case of intermittent sources is not rewarded or punished for.

False.

Required reading for anyone who wants to opine on pricing systems and market structure for electricity production.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 3rd, 2012 at 11:03:43 AM EST
[ Parent ]
Your reply is quite generic.

Anyway what mechanism exists to make power companies build gas plants for the worst case?

by oliver on Fri Aug 3rd, 2012 at 12:00:47 PM EST
[ Parent ]
Your reply is quite generic.

That blue text in the comments? That's links. They typically provide details, references, related material, or, as in this case, relevant background knowledge for the discussion you are engaged in.

If you can't make a good-faith effort to read a minimum of relevant background material, why should I believe that creating an original text for your benefit will yield results commensurate with the effort it would require?

Anyway what mechanism exists to make power companies build gas plants for the worst case?

Under the current market structure, they get paid a much higher price per MWh than baseload plants, because they can exploit low capital and idling costs to only produce at peak price.

It would also be possible to pay explicitly for "capacity available at N minutes' notice." Some grids do that, and it is not obvious that they are overpaying for or undersupplied with capacity relative to the European grid.

But in fact insufficient gas-fired capacity is not a problem in the contemporary European grid. The problem, rather, is that there is too much gas capacity, such that some gas turbines are being run as baseload. Nor is gas being underbuilt: Roughly half of all new capacity constructed is gas-fired (gas delivers substantially less than half of all MWh from new plants, but that is in the nature of peaker plants).

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 3rd, 2012 at 07:51:48 PM EST
[ Parent ]

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