zlacker

> The big problem is that energy prices are set based on the most expensive unit that needs to be turned on

That is not a problem, it is the incentive to have supplies available so they can be turned on.

>>landem+(OP)
I get why it works this way because the alternative would be to force the fossil generators to sell at the renewable price and thereby making it uneconomical for them to operate which leads to brown-outs. I just think the societal costs the up very high because EVERYONE is paying a premium on power, and the total sum of that premium is only going to increase as we move more and more stuff over to electricity.

I therefore wonder if the market couldn't be structured in a better way which would still ensure that the fossil backup generators are adequately compensated but smoothes the extra cost over the remaining cheap GWh. Something like a meditating party which is aware of the production costs and buys up the daily power and sells it on at an averaged price. There are probably good reasons why this wouldn't work, but I am too stupid to figure them out.

>>ulrikr+85
That's what financial hedging and the like do - users and producers can sell power at guaranteed prices in exchange for missing out on price volatility. Ultimately, it's probably fairest that the wholsesale power market works the way it does to ensure guaranteed power - It costs money to provide a 100% service guarantee.

It's worth noting there are some demand response initiatives and the like that are approaching this from the other side - they will pay a user to not use power at particular times of high load. If you don't want to pay a premium on power, I suspect there will be providers happy to oblige, so long as you are willing to forgo the 100% service guarantee.

>>Panzer+K7
With the past winter it seems that people who do not want to pay a premium on power would prefer if the government then stepped in and paid it for them. With the Energy Price Guarantee program, customers don't need to bear the cost of 100% service guarantee.

At this point there isn't really any part of the energy grid that governments do not subsidize. They subsidize companies that provide grid stability. They subsidize renewables that provide capacity. They subsidize the customer who buy energy. They subsidize the grid infrastructure that transports the energy. They subsidize the interconnection between countries that enables trade between countries. They subsidize the cleaning up and associated costs from pollution.

>>belorn+cx
And every step further removed the customer gets the less incentive there is to actually reduce consumption, particularly at the most expensive times of day. Subsidising that period when it’s only going to get monumentally more expensive to supply relative to the rest of the day seems kind of wrong.