Articles by
Jérôme Guillet and John Evans
Renewables International: The value of wind power – balancing costs
By
Jérôme Guillet and John Evans
This is what feed-in tariffs do, fundamentally, by setting a fixed price for wind production which is high enough to reassure producers on their initial investment, and low enough to provide a hedge against cost increases elsewhere in the system. Indeed, when gas prices were higher such as in 2008, feed-in tariffs in several countries ended up being below the prevailing wholesale price.
Renewables International: The cost of wind
By
Jérôme Guillet and John Evans
That is the point of feed-in tariffs, which provide stable, predictable revenue to wind producers, and ensure that their maximum production is injected into the system at all times,
which influences market prices by making supply of more expensive production unnecessary. . . These tariffs make sense for consumers. The higher fixed price (feed-in tariff) is added to the electricity buyers' bill, but as that bill is lower, thanks to wind input, than it would have otherwise been, the actual net cost of the tariffs is much lower than it appears. . . i.e. an apparent fixed cost imposed on consumers ends up reducing their bills.
