“Solar reduces both the price and the quantity of power sold by gas generators,” said Ghosh. “So it has a double whammy effect on fossil fuel plants.”
In my view, the duck curve shows why the future predicted in the first chart is not likely to materialize. If gas generators become too unprofitable, the electric system will collapse.
“The risk is that gas plants – once they become uneconomic – will not be there as a backstop,” said Ghosh.
That risk is not likely to be tolerated for very long if at all. Most people remember what happened to former Governor Gray Davis when inadequate generating capacity caused rolling blackouts in California in 2001. Something will need to give.
“Keeping backup capacity on the grid becomes increasingly difficult as solar energy lowers power prices and worsens the economics of other technologies,” writes Wood MacKenzie. “Should solar market saturation rapidly increase, today’s market . . . compensation mechanisms will need to evolve to maintain reliability.”
Do you understand this argument well enough to agree/disagree with it?