Pricing Signals is the key IMHO.The problem with Flat Earth...

Pricing Signals is the key IMHO.
The problem with Flat Earth Economists are that they cannot predict discontinuous events.
Most Economic comment relies on Spreadsheet analysis not market simulation and the equations are diabolical!. (The EU by the way uses E3 ontology for simulation and Agent analysis.)

OK I suppose I can quickly summarise my thoughts as, the current excess of CO2 permits (both here and EU) has removed the incentive to innovate.

Generators were so against CO2 costs be it tax/ETS they successfully lobbied for a compensating excess of permits.

This was stupid and ignored a recognition of the effects of FiT and subsidies on the market. What actually happened was the market competitor "renewables" did not force the price down immediately. The problem is the cost base for renewables (use Solar) is HIGH initial cost but LOW recurrent cost. The cost base for traditional generators is somewhat different. I might add most $ comparisions of renewables vs Coal etc do not indicate costs initial and recurrent separately per kW.

( This is also the nonsense with Nuclear comparision as the per kW does not include 50,000 years storage and monitoring or notional insurance cost for leaks "Fukishima anyone?" I should say Fukishushimi! as high radioactivity has been found in Tuna of California ) http://samuel-warde.com/2013/08/radioactive-bluefin-tuna-caught-off-california-coast/

The message here is "be careful what you ask for you might get it".

The generators now face a collapsing market.
TOUGH for the Generators GREAT FOR Bluegen

Some German stuff here:
http://www.iwr.de/news.php?id=24334
"16.08.2013, 16:21 Uhr Print message . Recommend article



Mini Block_heating stations are booming in North Rhine-Westphalia


Eschborn - the support program for mini combined heat and power (CHP) installations, launched more than a year ago has led to a boom in mini Block_heating power plants in North Rhine-Westphalia (NRW) ready. 4,270 Plants are been funded since the launch on April 1, 2012. Of the lion part of Rhine-Ruhr is 1,006 units or 23 per cent, as recently announced by the Federal Office of Economics and export control (BAFA).

Of the total of the promotion, which amounted to 9 million on the reporting date, just over two million on the most populous Federal State slipped. On the overall performance of 18,94 megawatts (MW), North Rhine-Westphalia constitutes 4.2 MW, or 22 per cent. Second place followed behind Bavaria (2.8 MW, 665 plants, 1.38 million euros) and Lower Saxony (3.19 MW, 521 plants, 1.2 million euros).

Several performance classes come to the usage
In relation to the performance classes, a nearly homogeneous image of the funded assets arises nationwide. 12.5 Percent of this mini CHP plants have a power under three kilowatts (kW), 47.5% are in the range of 3.1 to 10 kW and 40.1 per cent in the segment of 10.1 to 20 kW. The plants used primarily in residential buildings, nursing homes, hotels, schools and small commercial units.

Promotion brings momentum to the economy
The funding amount is dependent on the electrical performance of the installed mini CHP plant and starts at 1,500 euro for a Micro-CHP system with a kW. Maximum funding can 3,500 euros for a mini-CHP with 20 kW.

EUR 40,62 million total direct investment in the CHP area are the approved funding and over 72,94 million euros on investments resulting from overall economic. This means that per euro on Government funding over 4.5 euros in the field of CHP and even over 8.1 euro overall economic were initiated.
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*******MORE Good News!
http://www.germanenergyblog.de/?p=14001&cpage=1#comment-136090&utm_source=twitterfeed&utm_medium=twitter
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DIW Study: Higher Energy Production Flexibility Reduces Surpluses

Published on August 23, 2013 in Biomass, Coal, Conventional, Electricity, Gas, Renewable, Solar, Storage and Wind. 0 Comments


A recent study by Wolf-Peter Schill from the German Institute for Economic Research (DIW) analyses the connection between more flexible electricity generation and surpluses on the electricity market. Surpluses can lead to negative prices on the electricity market as long as the electricity cannot be stored. The study looks into how a more flexible fleet of conventional plants could substantially reduce surpluses on the market. Additionally, the study calls for research and developments into storage facilities to absorb overproduction and to cover peak load periods.

One of the main challenges of the German energy transition is the highly volatile availability of energy from renewable sources.Wind and photovoltaic energy depend highly on the weather and are difficult to adjust to the market demand. As a consequence electricity generation might be higher than demand.

For technical and economic reasons, conventional plants like nuclear and coal plants currently generate electricity at a must-run of about 20 GW, the study says. Existing biomass energy plants are also difficult to adjust quickly. Biomass plants could be technically improved while the fleet of conventional plants could be made more flexible by substituting coal by more flexible gas plants.

The study compares hypothetical situations in 2022, 2032 and 2050. The amount of renewable energy varies among the scenarios (the basic scenario contemplates a realization of the Federal government’s goals on the share of the renewables, the others regard possibly higher renewable production).

In principle, the share of renewables in the energy production rises, leading to a future reduction of the base-load (the amount of electricity that must still be generated conventionally). The reduction is not uniform, and particularly high during off-peak periods. The electricity supply from renewables is then sometimes higher than the demand.

In a flexible system (i.e. without a base-load from conventional and more flexible biomass plants), surpluses occur 471 hours of 8,760 hours a year. The surplus generated during these hours would however only be 4.4 TWh, which corresponds to less than 2% of the overall yearly production. In contrast, in an inflexible system, the surplus energy would rise to 18% of the energy production.

Another question addressed by the study is the storage of energy from renewables. In principle, a flexible system requires fewer new storage facilities than an inflexible system (41 GW as opposed to 74 GW additional capacity for 2032). These numbers are however based on the assumption that all electricity from the market is fed into the system.

Should the feed-in from renewables be reduced by only one per cent of the yearly production, an inflexible system would require only half as much new storage capacity (38 GW), while a flexible system would not need more storage at all. But there might be political objections to reducing the feed-in for renewable energies.

A more flexible conventional system is therefore vital to avoid energy surpluses and should be taken up as top priority. Besides technical improvements and a substitution of inflexible coal by more flexible gas plants, exporting surpluses or their use for heat generation could increase system flexibility.

Research and investments into new storage systems are likewise considered important, but it should be noted that a slight reduction of feed-in during peak times can considerably reduce the amount of storage needed. The importance of storage is, however, not limited to the balance of surpluses but also to cover peak loads and supply frequency control.
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Flexible Generation (Bluegen) has a huge cost impact!
This means that Wind/Solar/generation needs Bluegen far more than the $ value installation cost and the system is codependent. (it doesn't matter about cost so much if you can respond under 2 min to fluctuations in supply )