alt Hacker NewsNot all markets, and not even all European markets, assume a single trading zone (i.e. a copper plate network). Re-dispatch costs are high because policy choices have created a physical reality that drives high constraints.
That could have been prevented by simply not permitting connections in certain parts of the network. Yes, theoretically it could also have been prevented by forcing generators to directly bear re-dispatch costs which would have led developers to build a different set of generating assets. This would have been a different set of market mechanisms.
However, if generation decisions had been made centrally, they would have been made by the same system operators, regulators, and governments that mandated the construction of the current system and they would have therefore built the same system more or less. Do you really think that if e.g. Germany or the GB network had been centrally planned by their respective government mandated regulators and system operators, they wouldn't have put all those windfarms exactly where the market-led model we actually have has put them?
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> Do you really think that if e.g. Germany or the GB network had been centrally planned by their respective government mandated regulators and system operators, they wouldn't have put all those windfarms exactly where the market-led model we actually have has put them?
This is a huge "it depends", because we are then comparing a partly-political system with a fully-political system. The privatized model builds at the optimal locations for getting paid under the prevailing rules; the state one is much more prone to getting distracted by lobby groups. See the German over-dependence on coal and the UK conservative ban on onshore wind farms.
I will be interested to see how the deployment of affordable battery storage changes the economics. I've also seen a striking presentation about how much renewables the UK plans to deploy (roughly double!) by 2030. More on the strategy: https://www.gov.uk/government/publications/clean-power-2030-...
"Clean Power means that by 2030, Great Britain will generate enough clean power to meet our total annual electricity demand, backed up by unabated gas supply to be used only when essential."
(note details of wording)
> -dispatch costs are high because policy choices have created a physical reality that drives high constraints.
You don't seem to understand what's driving the so-called re-dispatch costs in Germany so let me explain: when there's power consumption in the South, it is paid at the market price, when the "supplier" is located in the North (typically wind) and there's not enough network capacity to transfer the power to the consumer, the transport authority sends an order to the supplier not to produce the electricity, and instead pays a thermal power plant in the South (at a higher price than market price, by definition) to provide it instead.
That's not a problem of physical realities driving constraints, that's the problem of a market that uses a very simplified model that simply can't deal with the complexity of the underlying phenomenon (we don't even have enough computing power to accurately model the electricity transport at national scale given how challenging the equations are, and even the lineralized version that are being used in practice are already very compute-intensive, it's entirely futile to expect to build a market that can efficiently reflect them).