Quote:
Originally Posted by DoubleK
It's more than that. The shape of merit curve has changed dramatically. Before the conversion to gas fired steam, these coal units were running at 100% output or not at all.
What I don't know is if the operation of the units has changed allowing them to offer up blocks of power at different prices.
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Exactly. They were previously low cost baseload that ran full out.
Gas makes them more flexible (which improves their ability to bid strategicially) and also makes them higher cost, which increase the prices they are able to bid at. Massively reducing the baseload shifts the entire merit order. It also makes prices more volatile.
This was the expected outcome of carbon taxes/coal regulations.