On your point 6, I think this is the key feature of the future power market. The prices will be bimodal, near zero when there is excess negligible marginal cost power available and a high price point when there is deficit.
The main cost/revenue risk is then how much of the time/energy produced is in each of these modes. And this answer depends on things outside each generators control (system balance issues).
Someone has to eat this risk.
Dispatchable offtake users, like H2 will be important, but H2 can't really sustain more than ~$10-20/MWh power cost, so power produced in the regime where there is enough to cover all normal users, and part of H2 capacity should be a low positive value. A poorly designed CfD could cost the public entity a LOT of $ effectively subsidizing H2 production under those conditions, even if there is a don't pay if proces are negative backstop.
Agreed. Indeed, it looks to me that we will be in a bimodal market, extremely low prices and very high prices with few hours in between. I believe that negative price hours would be resolved, but not really the extremely low price hours as to enable "smart use", we need low prices (as you mentioned with H2).
I also fear that before doing H2, we might just use more energy for less useful applications, like warming more our swimming pools (check out another post I did on that). This would be related to the rebound effect, something that is not considered enough in my opinion.
Have you ever looked into the simultanious effects of the energy power market price being above the 2012-2013 CfD for offshore wind while below that for Hinkley Point C, should the nuclear power plant ever be started up?
I assume EDF and the French government will gladly fill the UK-France interconnectors with the prower produced by the plant.
On your point 6, I think this is the key feature of the future power market. The prices will be bimodal, near zero when there is excess negligible marginal cost power available and a high price point when there is deficit.
The main cost/revenue risk is then how much of the time/energy produced is in each of these modes. And this answer depends on things outside each generators control (system balance issues).
Someone has to eat this risk.
Dispatchable offtake users, like H2 will be important, but H2 can't really sustain more than ~$10-20/MWh power cost, so power produced in the regime where there is enough to cover all normal users, and part of H2 capacity should be a low positive value. A poorly designed CfD could cost the public entity a LOT of $ effectively subsidizing H2 production under those conditions, even if there is a don't pay if proces are negative backstop.
Agreed. Indeed, it looks to me that we will be in a bimodal market, extremely low prices and very high prices with few hours in between. I believe that negative price hours would be resolved, but not really the extremely low price hours as to enable "smart use", we need low prices (as you mentioned with H2).
I also fear that before doing H2, we might just use more energy for less useful applications, like warming more our swimming pools (check out another post I did on that). This would be related to the rebound effect, something that is not considered enough in my opinion.
Very interesting article.
Have you ever looked into the simultanious effects of the energy power market price being above the 2012-2013 CfD for offshore wind while below that for Hinkley Point C, should the nuclear power plant ever be started up?
I assume EDF and the French government will gladly fill the UK-France interconnectors with the prower produced by the plant.
Thanks for your comment. I have not looked to that particular situation of the UK but thanks for the tip, I'll think about it.