Mr Southway, your phrase “this energy policy of using unreliable and parasitic energy” was puzzling. Renewables, as you know are stochastic (& thus not dispatchable). Unreliable? Their MTBF is no worse (or better) than those from conventional generation. Parasitic? How?. A cost wall & creative accounting? Care to expand? As for “the real cost of energy continues to rise” nope – empirically this is not the case and a cursory examination of ENTSO-E data will show. Renewables have lowered real costs of wholesale elec. As my post notes – marginal pricing cannot deliver real wholesale prices when renewables make up a large part of the generation mix. As for putting the continent out of business – correct only in that sticking with marginal pricing in a renewable world will do so. & for the avoidance of doubt, I’m not offering a “point of view” – everything I have said is factually correct and verifiable.
Great analysis Julien, bravo! I particularly liked your comparison of solar generation vs solar value - could this be extended to other solar-heavy markets, for example Hungary?
What this all means is that by following this energy policy of using unreliable and parasitic energy solutions the whole of Europe is heading toward a cost wall that is being managed with dangerous creative accounting while the real cost of energy continues to rise that will eventually put the whole continent out of business.
Once again from Mr Jomaux, a fine analysis. Observation ref Spain: in April & May, Spain in any 24 hr period has been seeing prices below €30/MWh for 70% of the time and below €20/MWh for 50% of the time (note in Spain day-ahead constitutes 75% of the market by volume). This is well below auction strike prices for wind (circa €50/MWh) and belowish those for PV €30 - €35.Symmetric CfDs are wonderful instruments for bringing on renewables albeit with the gov’ as the funder of last resort. How does that work in Spain? With persistently low prices. In an unreformed elec market CfDs are an open ended financial commitment for all govs.
What we (I work in a collective) have noticed is that what occurs in Spain, gradually moves to North West Europe (NWE). Thus NWE now looks like Spain circa 2020, where small changes in load or generation output, causes massive price swings. The situation in Spain now, absent adequate storage (no not batt’s – wholly inadequate – you need electrolysers) is prices that do not & cannot reflect real cost of production, be it fuel inputs or LCOEs (for renewables). The marginal market has to end. It is functionally incapable of delivering prices that reflect production costs and the evidence is there in Spain and in NWE.
The curious thing is that this is not discussed. Batt storage will be the solution – apparently. Again, it will help, a bit but the reality is it will not/cannot stabilise prices – because it lacks capacity – compared to e.g. electrolysers/hydrogen. Now, the talk in the EU institutions is all about x-border connections – yeah – that’ll sort it. How? Given if state X has massive surpluses due to RES, state y next door is very likely to have the same (wind output correlates over distance of up to 600km). None of this is discussed, only simple non-solutions (x-border) – good for traders, good for price volatility, rubbish for real pricing and network stability. Again, a glance @ Benelux and DE shows price contagion – they move in lock-step – more x-border – more lock-step.
Very good explanation of current conditions. I appreciate your careful analysis and explanations.
Mr Southway, your phrase “this energy policy of using unreliable and parasitic energy” was puzzling. Renewables, as you know are stochastic (& thus not dispatchable). Unreliable? Their MTBF is no worse (or better) than those from conventional generation. Parasitic? How?. A cost wall & creative accounting? Care to expand? As for “the real cost of energy continues to rise” nope – empirically this is not the case and a cursory examination of ENTSO-E data will show. Renewables have lowered real costs of wholesale elec. As my post notes – marginal pricing cannot deliver real wholesale prices when renewables make up a large part of the generation mix. As for putting the continent out of business – correct only in that sticking with marginal pricing in a renewable world will do so. & for the avoidance of doubt, I’m not offering a “point of view” – everything I have said is factually correct and verifiable.
Great analysis Julien, bravo! I particularly liked your comparison of solar generation vs solar value - could this be extended to other solar-heavy markets, for example Hungary?
What this all means is that by following this energy policy of using unreliable and parasitic energy solutions the whole of Europe is heading toward a cost wall that is being managed with dangerous creative accounting while the real cost of energy continues to rise that will eventually put the whole continent out of business.
https://nigelsouthway.substack.com/p/wind-and-solar-and-evs-are-not-the
Once again from Mr Jomaux, a fine analysis. Observation ref Spain: in April & May, Spain in any 24 hr period has been seeing prices below €30/MWh for 70% of the time and below €20/MWh for 50% of the time (note in Spain day-ahead constitutes 75% of the market by volume). This is well below auction strike prices for wind (circa €50/MWh) and belowish those for PV €30 - €35.Symmetric CfDs are wonderful instruments for bringing on renewables albeit with the gov’ as the funder of last resort. How does that work in Spain? With persistently low prices. In an unreformed elec market CfDs are an open ended financial commitment for all govs.
What we (I work in a collective) have noticed is that what occurs in Spain, gradually moves to North West Europe (NWE). Thus NWE now looks like Spain circa 2020, where small changes in load or generation output, causes massive price swings. The situation in Spain now, absent adequate storage (no not batt’s – wholly inadequate – you need electrolysers) is prices that do not & cannot reflect real cost of production, be it fuel inputs or LCOEs (for renewables). The marginal market has to end. It is functionally incapable of delivering prices that reflect production costs and the evidence is there in Spain and in NWE.
The curious thing is that this is not discussed. Batt storage will be the solution – apparently. Again, it will help, a bit but the reality is it will not/cannot stabilise prices – because it lacks capacity – compared to e.g. electrolysers/hydrogen. Now, the talk in the EU institutions is all about x-border connections – yeah – that’ll sort it. How? Given if state X has massive surpluses due to RES, state y next door is very likely to have the same (wind output correlates over distance of up to 600km). None of this is discussed, only simple non-solutions (x-border) – good for traders, good for price volatility, rubbish for real pricing and network stability. Again, a glance @ Benelux and DE shows price contagion – they move in lock-step – more x-border – more lock-step.