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Thu Apr 19, 2012, 08:23 AM

UPDATE 1-Spain spot power at 2-year low, wind smashes record


MADRID, April 18 (Reuters) - Spanish spot power prices sank to their lowest levels in two years on Wednesday as cheap supplies of wind power climbed high above previous records.

The Iberian Electricity Market's (Mibel) spot exchange, OMIE, set the day-ahead "pool" price at 22.69 euros ($29.82) per megawatt-hour, down 11.75 euros on the day and the lowest for a full working day since it fixed a price of 21.41 euros for April 8, 2010.

By 1520 GMT, Spanish wind parks - the world's fourth-most productive - were producing 16,513 megawatts, or enough to meet 43.3 percent of demand, according to data from national grid operator REE.


Wind power weighs on the "pool" price because it displaces costlier coal- and gas-burning plants from the generation mix.


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Reply UPDATE 1-Spain spot power at 2-year low, wind smashes record (Original post)
jpak Apr 2012 OP
BlueToTheBone Apr 2012 #1
AlecBGreen Apr 2012 #2
kristopher Apr 2012 #3

Response to jpak (Original post)

Thu Apr 19, 2012, 08:31 AM

1. That is good news for the future.

Now we need to get on board the sustainable train.

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Response to jpak (Original post)

Thu Apr 19, 2012, 10:48 AM

2. good news but only one day

Hopefully it will lower the average spot price per year, not just on a good windy day.

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Response to AlecBGreen (Reply #2)

Thu Apr 19, 2012, 11:18 AM

3. Any wind feeding into that market exercises a downward pressure.

Cape Wind Project Will Reduce Regional Electricity Prices By $7.2 Billion, Study Says

The Cape Wind offshore wind project will reduce wholesale electricity prices for the New England region by $7.2 billion over 25 years, finds a new report published by economic consulting firm Charles River Associates.

The report shows that ISO New England, the electric grid operator, first dispatches electric generating units with the lowest-cost fuel. Because Cape Wind's fuel - wind - is zero cost, the report states that Cape Wind will displace higher-priced and fossil-fueled units, thus resulting in an average savings of $286 million per year in New England.

The increase in price suppression was attributed primarily to an increase in power-plant retirements and a larger price difference between natural gas and fuel oil, the report notes.

Price suppression in wholesale electric markets that occurs as a result of wind power projects has been documented in Europe and in several U.S. power markets. According to Charles River Associates, price suppression from wind power was noted in the 2009 report, which stated, "All of the wind resource potential could provide downward pressure on the marginal prices for energy within the New England electricity market...This price pressure would ultimately benefit New England consumers." ...


The merit-order effect: a detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany
Sensfuß, Frank, Ragwitz, Mario, Genoese, Massimo

The German feed-in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies. Critics state that the costs for consumers are too high. An important aspect to be considered in the discussion is the price effect created by renewable electricity generation. This paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in Germany. The central aspect to be analysed is the impact of renewable electricity generation on spot market prices. The results generated by an agent-based simulation platform indicate that the financial volume of the price reduction is considerable. In the short run, this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits. In the case of the year 2006, the volume of the merit-order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers.
Can be downloaded here: http://ideas.repec.org/p/zbw/fisisi/s72007.html

Irish wind generation costs analysed
25 February 2011

Wind generation in Ireland does not increase wholesale electricity prices and in fact, the trend is that it lowers them.
This is according to a study by Eirgird, the Irish grid operator and the Sustainable Energy Authority of Ireland (SEAI).
Eirgrid used detailed modelling tools to look in detail at the wholesale prices in the Irish electricity system in 2011.
The analysis showed that wind generation lowers wholesale prices by over Euro 70 million.
This almost exactly offsets the costs of the Public Service Obligation (PSO) levy...


"The "merit-order effect"
Electricity produced under a FIT law can help to reduce the average cost of electricity by affecting the wholesale price. Because renewable electricity must be purchased before other sources, the size of the remaining demand to be purchased on the spot market is reduced. Under the "merit order" principle, plants with the lowest costs are used first to meet demand, with more costly plants being brought on line later if needed. The most expensive conventional power plants are therefore no longer needed to meet demand. If the FIT tariff (or price) is lower than the price from the most expensive conventional plants, then the average cost of electricity decreases, and this is called the ‘merit-order effect’. This decrease was estimated to be about € 5 billion in Germany in 2006.

Posted here at: http://www.democraticunderground.com/112711897

Why generators are terrified of solar

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