It's rare for there to be little wind in the North Sea. It's only a couple days a month when it's below 1/3 capacity. And it's negatively correlated with solar: a day that's both cloudy and low-wind is very rare.

But it does happen, so you need backups. The good news is that natural gas backup generators are fairly cheap per peak megawatt. Most of the cost is drilling wells, liquifying gas, shipping it, unloading it, etc. All those other costs are much lower because the generators only run a small fraction of the time.

If you go to https://winderful.uk and set the date range to a year, you can get a sense of how many long dips there are.

Correct, this is the problem that the Tories failed to identify when they started to reduce fossil fuel usage. It was a political decision taken to shore up support with people who ended up moving to the Lib Dems anyway (and everything unravelled anyway with Brexit for Cameron, who was probably the biggest proponent of this...Lib Dems incidentally also played a key role in blocking nuclear).

Comparing the prices of these two things does not tell you what the eventual cost is going to be.

To explain the context: the UK had to cap electricity prices because costs have risen so much, government is paying huge subsidies to providers, minister made bombastic claims in the last election that he could fix everything, nothing has worked out, he has now set up a range of quangos to employ his friends (reducing quangos was one of the promises in the election) who are now briefing the press aggressively with other lobbyists that costs are going to drop...despite the government having no political ability to do anything that will reduce costs (the latest briefing is that new gas plants are too expensive, an obviously misleading comparison on many levels).

UK electricity prices are extraordinarily high, the political context is that you have to say this will reduce them. This is obviously not going to lead prices to fall but the context has to be the same.

The other question is why we are doing this if this isn't going to actually cause prices to fall? As with many similar problems in the UK: too many people making too much money. Government is now subsidizing retail electricity prices to pay for private sector investment in high-cost technology that guarantees a high ROI. Most of the people quoted in the government's presser are lobbyists, as I said above a cottage industry of quangos has now sprung up surrounding Miliband. There is no way back.

In terms of macro, it is definitely quite interesting because the last few years of this have essentially made it impossible for the UK to operate as a modern industrial economy. How do you maintain employment with essentially no industrial function? Energy prices are so high commercially that some services businesses are actually struggling too. It is incredible employment and wages are so high in the UK (although the level of economic support the government is providing, particularly in services, is huge).

You need to have the right levels of energy available at all times. But that doesn't mean baseload any more. Hasn't for ages. It means having a variety of different sources that tend to be available at different times, backstopped with something like gas turbines.

The gas and other base load infrastructure are largely built, it just needs maintenance which is a lower cost than building something new. The CfD is a competitive process, so the price (should) fully incorporate the cost to build the infrastructure, maintain it, operate it and make a profit.

My understanding is that base load tends to refer to a source that produces constantly to cover base usage levels round the clock. That’s what nuclear is good for, and then you have other technologies that service the peaks it can’t quickly scale to.

That’s not really a relevant model any more with renewables, what you need is in-fill for times the main power source isn’t producing well. As a complementary power source you want something agile and switchable. Usually this is gas generators which are easy to spin up/down more or less instantly. Obviously gas is not ideal as it’s still a fossil source, so some countries are looking at batteries etc to service those loads.

That is correct. Which is managed by the day ahead market. If you can produce electricity when the grid is strained you will be paid a lot.

The problem with for example new built nuclear power is that it is essentially only fixed costs. Therefore it does not complement renewables at all.

Why should someone buy expensive grid based nuclear power when renewables deliver?

We've seen people starting to muse on the "unraveling of the grid monopoly" now when renewables allow consumers to vote with their wallets rather than accepting whatever is provided.

https://oilprice.com/Energy/Energy-General/The-Quiet-Unravel...