It's misleading, and those who use it generally know it's misleading. It's used to persuade the layperson that electricity generated by wind turbines is cheaper to the consumer or industry than electricity generated by thermal sources or hydro turbines, when in fact that is only true if you disregard the requirement for said electricity to be available on demand - a fairly important omission.
So by this argument all baseload generation prices are a lie too?
The coal or nuclear plant that commits to generating a set amount consistently but never even attempting to meet the actual demand is some kind of hoax?
In reality we're moving from baseload and peaker gas plants to follow demand to renewables and firming (the same gas plants just running at different times). It's a holistic system with parts working together.
The main difference is that renewables are cheaper and cleaner which gets them built faster and displaces more and more coal and gas from the market. With batteries eating the market from the other direction (starting with daily peaks and expanding out from there).
You can see this in carbon intensity of electricity production and the ever increasing share of renewables around the world.
Of course that plan falters a bit if you ban cheap onshore wind across an entire nation for a decade.
Most electricity use is not required to be available on demand, there is a high, constant level of demand and the occassions where there is enough wind to exceed demand are rare enough to generate headlines. World Cup final kettles are the exception, not the rule.
There are also interconnections between the UK and Belgium, Denmark, France, Ireland, Netherlands and Norway. Excess supply can be exported, assuming there's demand.
I often wonder how many people would accept automatic black outs when buying green energy. A process that "happens" here. You can buy for example purely wind powered electricity. But somehow that does not stop being delivered when there is no wind.
Instead there would be electric relay connected to mains in your home and when there is less supply than demand you would get blackout. That would be similar comparison to this.
Assuming you also get closer to wind generation prices not just overall wholesale prices, it would be really popular.
People would install a battery at home the way most of the world installs solar and they’d see massive reductions in electricity bills more than paying for the battery. The UK is absolutely terrible location for solar, and it’s still installed because UK’s electricity prices are so high.
That said, wind going to absolutely zero nationwide is extremely unlikely but the more people who signed up for such a system eventually just a little power wouldn’t be enough for all of them. So there’s be an economic feedback loop.
There is no reason for anyone with a wind park to sell cheap if there are customers willing to pay a high price.
That said with a battery and dynamic prices, there are many days where you can charge a battery when the prices are low and use them battery when the prices are high.
Constant pricing means they make more when wholesale prices tank and less when whole prices rise. I’ll sell you X% of my output for Y$/kWh is a perfectly valid strategy and batteries can absorb output spikes just as they absorb blackouts.
Hedges like this are a useful risk mitigation strategy as going bankrupt is a much larger downside than making slightly more money.
This fine. But from the fact that prices are sometimes high, we can conclude that overlll there is a shortage of windpower. Which will factor into the prices. The owner of the windpark can take the prices for each hour, and compute weighted average with production. And set that as the constant price.
Curtailment means there’s a different between what wind farms can produce and what the grid is willing to buy.
Wholesale prices are really just one aspect of grid manufacturing and paying them doesn’t mean you’re getting the equivalent of a percentage of wind farm productivity.
Large users like the supermarkets have agreements with electricity providers that they will reduce their use at certain times in return for a discount.
Tesco doesn't care if the freezers in store run at 04:00-04:15, or 04:30-04:45, and will pick whichever is cheaper.
Which completely ignores the differences between investment costs and running costs across different technologies.
Open cycles gas turbines are extremely cheap to build and expensive to run. For a green future these can be run on biofuels, hydrogen or hydrogen derivatives.
Therefore they perfectly complement renewables.
Nuclear power on the other hand is an awful companion due to having extremely large fixed costs and acceptable marginal running costs.
