And this is the driving force behind the ‘default plan’, and why buisness as usual in a market system stalls out with a substantial FF share of generation.
Thanks for the enlightening analysis. If I may make a suggestion, I would have appreciated a bit more explanation of the takeaway message at a higher level -- more on the "big picture". My take is that the higher the installed solar capacity gets the less it's value will be in terms of return on investment.
There is a lot of confusion out there on the cost and value of solar and wind power, and I'm glad to see someone addressing it. However, the technical analysis is just part of the problem. The other part of the problem is media misinformation and public ignorance, which go hand in hand, of course.
I urge you and your readers to follow Mark Jacobson on LinkedIn and wherever else he is active. He is an influential Stanford Professor and head of their atmosphere/energy program. He regularly posts articles and papers claiming that the transition to solar and wind power is progressing according to plan, and the only problem with it is irrational opposition from shills for the oil and gas industry.
Great post - it definitely seems like solar is close to "doing all it can". This post reinforces the insanity of German nuclear policy - Germany is a cold, dark place, and cannot run through the winter on solar power.
As usual, a good analysis in terms of what happens/happened. But again, I sense that the anaysis does not go far enough.
In terms of RES support schemes, we need to be clear what we are dealing with. Germany operates (via the EEG) an asymmetric CfD (although not for off-shore wind – which has gone symmetric – funny that!). Spain, in contrast operates a fully symmetric CfD. The asymmetric system socialises low prices (below strike price) and allows the RES owners to make “loads of money” – when day-ahead/intra-day prices are above the strike price. The Spanish don’t have that problem. Begging the question – why don’t the Germans do something. Over to you Scholtz. Not addressed in the analysis is the way out of the €17bn problem (for Germany – feel free to pro-rata for others).
The solution is: split the (day-ahead/intra-day) market from the point of view of price setting. All RES bids are priced at their respective auction strike price and the dispatchable stuff then makes up the difference (through marginal pricing). This would stabilise prices, and thus traders would make less money. This is why it won’t happen. Generators that I have spoken to – with mixed portolios – have no problems with a split market, as they said to me, we just need a bit of time to unwind positions. The market platforms have all the data needed – a cursory glance at the structure of their data base shows that a single change (price) is all that is needed. Key point: move to pricing elec at the real cost of production – and not using neo-liberal ruales.
I had to smile towards the end of the article as the “pass-the-parcel” problem (everybody has surplus – at the same time) was described. When talking to DG ENER and raising this point – it is usually met with blank looks – probably indicative of cognitive dissonance sub-routines being up-loaded. We were talking about this problem back in 2020 – it was certain to happen. Reaction from EU institutions (including ACER & ENTSO-E) has been………nothing. Begging the question – are they brain-dead at the helm?
Great data that points to the risks associated with increased solar power market penetration. I am bearish on solar as storage is too expensive for deployment at scale and demand response is a non starter for your average consumer. The consumers will eventually revolt as their electricity prices will keep rising while they are being told they have the cheapest electricity.
And this is the driving force behind the ‘default plan’, and why buisness as usual in a market system stalls out with a substantial FF share of generation.
Julien, at which capture rate does switching from horizontal to vertical installation makes sense?
Thanks for the enlightening analysis. If I may make a suggestion, I would have appreciated a bit more explanation of the takeaway message at a higher level -- more on the "big picture". My take is that the higher the installed solar capacity gets the less it's value will be in terms of return on investment.
There is a lot of confusion out there on the cost and value of solar and wind power, and I'm glad to see someone addressing it. However, the technical analysis is just part of the problem. The other part of the problem is media misinformation and public ignorance, which go hand in hand, of course.
I urge you and your readers to follow Mark Jacobson on LinkedIn and wherever else he is active. He is an influential Stanford Professor and head of their atmosphere/energy program. He regularly posts articles and papers claiming that the transition to solar and wind power is progressing according to plan, and the only problem with it is irrational opposition from shills for the oil and gas industry.
https://web.stanford.edu/group/efmh/jacobson/
Great post - it definitely seems like solar is close to "doing all it can". This post reinforces the insanity of German nuclear policy - Germany is a cold, dark place, and cannot run through the winter on solar power.
As usual, a good analysis in terms of what happens/happened. But again, I sense that the anaysis does not go far enough.
In terms of RES support schemes, we need to be clear what we are dealing with. Germany operates (via the EEG) an asymmetric CfD (although not for off-shore wind – which has gone symmetric – funny that!). Spain, in contrast operates a fully symmetric CfD. The asymmetric system socialises low prices (below strike price) and allows the RES owners to make “loads of money” – when day-ahead/intra-day prices are above the strike price. The Spanish don’t have that problem. Begging the question – why don’t the Germans do something. Over to you Scholtz. Not addressed in the analysis is the way out of the €17bn problem (for Germany – feel free to pro-rata for others).
The solution is: split the (day-ahead/intra-day) market from the point of view of price setting. All RES bids are priced at their respective auction strike price and the dispatchable stuff then makes up the difference (through marginal pricing). This would stabilise prices, and thus traders would make less money. This is why it won’t happen. Generators that I have spoken to – with mixed portolios – have no problems with a split market, as they said to me, we just need a bit of time to unwind positions. The market platforms have all the data needed – a cursory glance at the structure of their data base shows that a single change (price) is all that is needed. Key point: move to pricing elec at the real cost of production – and not using neo-liberal ruales.
I had to smile towards the end of the article as the “pass-the-parcel” problem (everybody has surplus – at the same time) was described. When talking to DG ENER and raising this point – it is usually met with blank looks – probably indicative of cognitive dissonance sub-routines being up-loaded. We were talking about this problem back in 2020 – it was certain to happen. Reaction from EU institutions (including ACER & ENTSO-E) has been………nothing. Begging the question – are they brain-dead at the helm?
Great data that points to the risks associated with increased solar power market penetration. I am bearish on solar as storage is too expensive for deployment at scale and demand response is a non starter for your average consumer. The consumers will eventually revolt as their electricity prices will keep rising while they are being told they have the cheapest electricity.