The Ruinous Cost of Free Energy | 13 3 What is a system? The ‘grid’ is formed and sustained by the synchronous operation of the gener- ators within an AC (alternating current) power system.18 The ability of generators to synchronise to form a grid, and to remain synchronised at a common fre- quency affects the behaviour and properties of the system as a whole. [...] The Ruinous Cost of Free Energy | 15 THIS PAGE INTENTIONALLY LEFT BLANK 16 | The Ruinous Cost of Free Energy 4 Why the lowest cost system is the one we have 4 WHY THE LOWEST COST SYSTEM IS THE ONE WE HAVE The system with the lowest total cost is the one we have for a number of reasons. [...] The second perspective is the Levelised Cost of Electricity (LCOE), which acknowledges the up-front investment required to generate electricity from the wind or the sun, and ‘levelises’ that cost across the output from the turbines or the panels over their life. [...] The precise answer depends on factors such as: • the relationship between the patterns of generation relative to the shape of the load; • the capital and operating costs of storage relative to wind and solar gen- eration (taking into account the charge-discharge cycle round trip energy losses); • the cost and performance characteristics of alternative generation technol- ogies; and • the configura. [...] Marcel Boiteux was a member of the French Academy since 1992, past President of the Econometric Society, and is Honoris Causa at the University of Yale.” 40 | The Ruinous Cost of Free Energy References and notes Techno-economic computer models for the optimisation of the planning and operation of power systems, the theory of electricity market design pioneered by Schweppe and others at MIT, and me.
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