tag:blogger.com,1999:blog-2830084253401570472.post8098060335691158902..comments2024-03-28T09:22:36.967+13:00Comments on Offsetting Behaviour: Reserve GenerationEric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-2830084253401570472.post-59667342409443272292011-12-13T11:13:46.530+13:002011-12-13T11:13:46.530+13:00That's what I figured. You could build a model...That's what I figured. You could build a model then on public stupidity leading to political pressure for excess reserve capacity, but I'm not sure why it's easier for those price-sensitive demanders to make that case than it is for the other side to say "Screw the smelter".Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-46868151464165423262011-12-13T10:46:21.575+13:002011-12-13T10:46:21.575+13:00@ Eric
I don't think we have actually ever be...@ Eric<br /><br />I don't think we have actually ever been in threat of blackouts from lack of capacity (as opposed to transmission issues) since the market was introduced. Rather, the pain of low rain is felt in high prices by those price-sensitive demanders, who like to encourage talk of blackouts in order to have the government invoke the spirit of Dunkirk to induce fixed-price consumers to cut back and spare the flex-price consumers some of the pain. That is, the degree of public hand-ringing is not necessarily a good measure of the true threat to security of supply.Seamus Hogannoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-9951860841029176382011-12-09T13:51:17.129+13:002011-12-09T13:51:17.129+13:00Was there really risk of system collapse absent sp...Was there really risk of system collapse absent spare capacity? I'd thought that wholesale prices just spiked up and a bunch of price-sensitive demanders cut back usage.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-84548089232482667102011-12-09T11:38:26.092+13:002011-12-09T11:38:26.092+13:00Relevance to the row, I mean full and frank discus...Relevance to the row, I mean full and frank discussion, that we've been having elsewhere in these pages - at root here is the inability of politicians and the public to think rationally about risk and to factor it into cost benefit analysis. <br /><br />From the UK experience, it seems that, as in other markets, the supply side in an electricity market will deliver the level of security (ie excess capacity, which determines the probability of supply shortfall) that the demand side is willing to pay for - but that politicians want us to have and pay for a higher level of security than that. Many a cup of tea fuelled debate in Whitehall's corridors of power over whether security of electricity supply constitutes a public good, and on what grounds.Hathawaynoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-43996474064643767602011-12-09T11:16:04.689+13:002011-12-09T11:16:04.689+13:00@Anonymous:
That was a typo: Now fixed.@Anonymous: <br /><br />That was a typo: Now fixed.Seamus Hogannoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-61311778838452319812011-12-09T10:49:09.457+13:002011-12-09T10:49:09.457+13:00Are you sure you meant to say that the Wolak repor...Are you sure you meant to say that the Wolak report was "not wrong"?Anonymousnoreply@blogger.com