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chippiewilllast Monday at 11:18 AM1 replyview on HN

I agree, although I think one of the disadvantages in the UK is that the suppliers aren't paying the cost for their own volatility. A renewable supplier can add 1GW supply to the grid, but 1GW of natural gas generation capacity is still required.

Fixed costs and capital costs end up being shouldered by the consumer which ironically ends up pushing overall costs up.


Replies

lokegyesterday at 4:44 PM

This can be alleviated by the gas plant operator selling call options, effectively paying them for being reliable. The relevant keyword is "capacity markets".