Comment by jaapz
2 days ago
In my country (for people with a so called "dynamic pricing" contract) the price of electricity already drops significantly when we have a load of green energy (wind, solar). I guess this is just a side effect of not having a well-balanced grid. But still that's already kind of a CO2-based pricing - although not directly
This is what makes me wonder how much additional benefit an explicit carbon signal actually buys you over normal dynamic pricing
On grids where pricing declines due to more low carbon generation generating, there is no extra value. On grids where pricing declines due to more fossil generation running, that is the signal you want to avoid loads during those time windows.
At the moment, lower prices are not necessarily a guarantee of lower emissions. And so, if you want to orchestrate loads to move them to the lowest emission time windows (perhaps not prioritizing cost), carbon signal is the way to do so.
[flagged]
Mostly yes, but it works the other direction as well: a fossil power station may not want to completely shut down because it expects more demand later in the day, and offer a few hours of low cost electricity to stay in the merit order.
A lot of fossil power stations cant shut down for a few hours, they have to keep themselves on.
Coal mostly. This is why coal is largely being phased out for natural gas which can cycle on and off as needed.