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Comment by vimy | Hacker News Reader

Would be a good start to change how electricity prices are calculated in Europe. The whole system is broken. The price is set by the highest costing source. In this case gas plants. Nuclear plants that are paid off are producing near free energy but it’s sold at the same price like gas. Wind and solar are also sold at the same price like gas. Even if only 10 % comes from gas plants (just an example) it all costs the same. It’s insane.

And cap the EU CO2 emission trading system. Speculators are pushing up those prices making everything worse.

These prices are at least 50 % policy failure.

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> EU CO2 emission trading system

Its there to make emissions expensive and reduce companies consumption. Its a very good system that looks like its working as intended.

whether or not it actually works or makes sense, the idea behind it is genius

Have any idea what the original intention behind this pricing system was ? There must have been a reason for it…

This is a good read that explains a lot of how the market works https://www.politico.eu/article/why-europes-electricity-is-s....

Basically to enable recouping investments in primarily wind/solar since they have no real ongoing input costs. The article explains it well, but doesn't paint a good picture until those future storage technologies are here.

It's designed for fossil fuels not renewables.

Renewables bid low, because that accurately reflects their costs, which the bidding system is design to reveal, like an auction.

The only problem is that gas is scarce and really expensive. And people seem allergic to any solution which isn't to subsidize the cost of gas, driving up demand.

And the renewables get the highest price, which will always be higher than their production costs...

It's designed to repay investment into non fossil fuel power supply that don't have those variable input costs.

It is designed to extract credible bids from energy suppliers and minimize costs.

The wider range of prices is the new thing, but the cheaper sources getting paid at the marginal price was always the intention. It stops people inflating their bid, which renewables could do if they wanted to queue jump, they'd just be risking that they are the most expensive renewable and they don't get picked, and get paid zero.

It incentives the lowest cost producers (as long as it's regulated properly, see the Australian experience with gas cartels abusing the system).

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