Comment by avianlyric
3 years ago
Because the wind providers have already sold that electricity in an energy auction. So the grid has to pay them for electricity, even if they can’t use it.
One of the big points in the article is that there’s a single energy market in the UK that doesn't consider location. So it’s possible for wind providers to sell energy from locations where it can’t be used. An obvious fix is to introduce multiple energy markets for different locations, so the price of electricity drops in areas where there’s excessive production, and not enough transfer capability.
This isn't a real economic loss. Claiming it is, is tantamount to saying that if you don't need to go to hospital while on vacation, you have wasted money on travel insurance.
How is this even close to insurance? When you buy insurance you buy protection from risk, that risk exists regardless of if a bad thing actually happens or not, and you’re still protected even if nothing happens. There’s no economic loss there because you’re getting the product you paid for (insurance coverage, and a substantial reduction of risk), you claiming on that insurance is irrelevant.
A better comparison would be going on holiday, pre-paying for £100,000 of medical treatment at a hospital, and then never going to hospital. Then there’s clearly an economic loss, you’ve paid £100,000 of your real cash, and got no nothing in return. You haven’t even got protection from risk, because the hospital isn’t gonna help you if your luggage goes missing, but travel insurance obviously will.
I don't think you understand how this stuff works in reality at the moment.
Perhaps the system could be changed to be more like how you imagine it should work, or would prefer that it would work.
But not understanding how it does work and jumping off from there on the discussion means that folks end up talking past each other, rather than actually communicating.
You didn't directly address anything I said in my post or explain why you think I am poorly informed..
I used to work for National Grid in the Miliband era; I worked, among other things, on theorizing a replacement to the 'circle diagram' for the (then thought to be) coming renewables regime.
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