alt Hacker NewsI've read this before and I don't understand how this doesn't become/is untenable.
Doesn't this mean that solar/wind are insanely lucrative?
Also, this would mean that in order to really bring the price down, gas needs to be taken out as a source. But gas is typically the source that balances the grid because its output can be changed quickly. So price wise, you might get a drop but you would lose your ability to react quickly to fluctuations in demand
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Yes, and I think that’s actually intentional, they’re rewarding renewables way over the odds without needing to give politically controversial benefits. The rewards are just an inherent result of the existing system. This is why renewables are growing rapidly in the uk.
Of course we’ll need a way to resolve fluctuations both rapid and slower. Rapid fluctuations are handled by pumped hydro and increasingly by batteries.
The slow fluctuations (day/night all the way to summer/winter and good/bad weather patterns) are much trickier, I think it’s still unclear how well handle them, but it will certainly be partly handled by having an excess of renewables, though we’ll likely need some other solutions too, nuclear is probably one of them.
> Doesn't this mean that solar/wind are insanely lucrative?
This is how markets are supposed to work. It provides an economic incentive for production to increase, which is what we want.
Consider what happens if you develop a farming method to produce potatoes for a fraction of the usual cost, but you can only meet 10% of total demand at your local market. What price are you going to sell your potatoes for when you show up to the market? You (like any free market seller) want to maximise your return, so you'll be able to sell for a fraction under the previous market rate, undercutting everyone else. Your farming method would be extremely lucrative.
Not only is it insanely lucrative, but the government enters into "contract for difference" contracts that guarantees a price per MWh that are generally above market rates, taking out most of the financial risk.
> Doesn't this mean that solar/wind are insanely lucrative?
I used to work in wind energy in the Netherlands, it is only profitable there due to government subsidies. It was/is an enormously complicated system to understand on the whole. I was on the environmental impact side (visualizations) during the permitting process. It's high-risk & enormously expensive during the permitting process (i.e. getting permission to build the wind farm), and beyond that I understand it's a bidding process and again, super complicated on the energy trading side once you're operating. My experience was that the wind farm operators seemed to be doing well financially, but insanely lucrative? I'm not sure about that vs. non-renewables. Everyone I worked with (including myself) believed in green energy as a part of a larger mission to make the world a slightly better place. EU directives on renewables is what pushed the mission forward; the dutch on the whole (surprisingly), do not love wind turbines in their back yard.