No offense taken. I just wanted to make it clear I wasn't some rando who read an article or two on this.
I could have been more clear. There are many kinds of PPAs, but my understanding talking to the banks that do the financing is that they are an integral part of helping the developer get the steel in the ground. I agree there is almost always an off-taker that provides the fixed payment in exchange for the market payment. I agree the uncertainty can be hedged to a degree, but was just relaying what was said by the key folks representing the argument against nodal in parliament (think that's the right venue). The additional revenue uncertainty complicates things and slows things down.
I agree purely nodal markets don't make sense without some reliability mechanism, but that's not what many of the key academics were preaching/advocating not too long ago and why Texas did what it did. The Texas grid may have done better had they stuck to the older vertically integrated model which may have led to some older units staying around. It's hard to rewind in order to fully tell. I'd have to go pull a lot of figures to see if they retired coal that would have stuck around absent the markets. There surely wouldn't have been the bankruptcy fiascos from having $9000/MWh prices for a week, but that's another topic. I also think the courts are still looking into claims of market manipulation coming from the natural gas industry during Uri.
There is certainly a lot to talk about on PCM. Would love to chat later! Have a good holiday.
I could have been more clear. There are many kinds of PPAs, but my understanding talking to the banks that do the financing is that they are an integral part of helping the developer get the steel in the ground. I agree there is almost always an off-taker that provides the fixed payment in exchange for the market payment. I agree the uncertainty can be hedged to a degree, but was just relaying what was said by the key folks representing the argument against nodal in parliament (think that's the right venue). The additional revenue uncertainty complicates things and slows things down.
I agree purely nodal markets don't make sense without some reliability mechanism, but that's not what many of the key academics were preaching/advocating not too long ago and why Texas did what it did. The Texas grid may have done better had they stuck to the older vertically integrated model which may have led to some older units staying around. It's hard to rewind in order to fully tell. I'd have to go pull a lot of figures to see if they retired coal that would have stuck around absent the markets. There surely wouldn't have been the bankruptcy fiascos from having $9000/MWh prices for a week, but that's another topic. I also think the courts are still looking into claims of market manipulation coming from the natural gas industry during Uri.
There is certainly a lot to talk about on PCM. Would love to chat later! Have a good holiday.