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128 comments on The cost of wind, the price of wind, the value of wind
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128 comments on The cost of wind, the price of wind, the value of wind
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In the graph 'Grundlast' appears to be about 50% of the peak so I'm not sure if the final comment about not needing mostly coal or nuclear is valid. You want renewables to displace deep baseload (say 99% reliable) to well under 50% of peak. 20% would be great if achievable.
I'm suspicious of the 'merit order effect' and will study the pdf later. In the case of solar PV I look at it this way; in a middle class suburb two adjoining houses have an executive couple and struggling self funded retirees. The execs install $20-30k of PV and get a FIT of 45c/kwh. Next door's rates go up from 17c to 20c/kwh yet this is purportedly less than if the billion dollar power company (with low cost of capital) installed its own generators. This merit-order-effect must be pretty good.
Or the market is simply directed - the German framework includes creating the industry and infrastructure to support a business model - while recognizing that without incentives, the market does little on its own.
There is no question that a number of technical hurdles and limitations exist in creating a competing model to what currently exists - one of those hurdles being the opposition of those currently profiting in the regulated market.
The government balances various interests - and currently, profit is assured by the rate setting mechanisms which also attempt to prevent manipulation and gouging. That this authority is extended to creating competition in a market that wishes to see none is simply a political decision - much like the decision to phase out nuclear generation in Germany.
It might not work - but the German solar and wind industries, not to mention the various industries behind them, are at least within an allowable distance of being called profitable.
And your example of a 3c rise for the couple next door implies that the energy company is only supplying ca 9 customers, each buying only 1 kw. Which might be an useful starting point to develop a realistic ratio - for example, the PV system delivers a total of 15 kilowatt hours a day, even though a typical customer would use something on the order of 30 or 50 kilowatt hours a day. The residential customer ends up paying for electricity regardless - forcing a market for energy that is not directly controlled by monopolistic companies is a legitimate goal for an elected government to pursue, regardless of what those companies may think.
The counterargument is that the FIT is set by government regulation, not by the market. In that sense it is little different to the ethanol production credit. The producers are probably getting paid too much. I suggest feed-in tariffs be removed after a few years to see what customers really want to pay. Alternative incentive schemes include green energy quotas with no price support
http://en.wikipedia.org/wiki/Feed-in_Tariff
Electricity suppliers like hydro do very well in spot markets; in Australia recently spot electricity sold for $10 a kwh, that's 1,000 cents a kwh.
There is also an equity effect with FIT in that the poor (pensioners etc) stay poor and the rich (corporations etc) stay rich.
It isn't a counter argument - it is an argument. Electricity rates are already controlled by government regulation, from pollution controls to allowable margins. Simply extending that authority to foster competition, for reasons that may not be 'market oriented,' simply allows for the fact that the 'market' is not the only factor in deciding a society's interests, however imperfectly.
As for the rich getting richer in their position of the owners of capital - that remains true in both cases, the only difference being the scale, not the reality.
Solar panels on the house provide electricity transmission as well as electricity. Every kilowatt on site is a kilowatt that isn't crowding out the kilowatt for your house in the transmission line and heating up the transmission line. Lower transmission line temperature is lower electricity losses and lower chance of overload blackout.
Boof
Being realistic, I don't think wind can (nor should) replace all of the baseload, but it could replace a significant chunk. I personally think that a good chunk of nuclear (20% of installed capacity and 50% of kWh), a large chunk of wind (50% of installed capacity and 40% of kWh) and a large fleet of peak capacity (hydro where available, gas otherwise - 30% of capacity, 10% of kWh) would be a pretty good solution (with, of course, overall capacity being rather larger than it is today).