S
Sylvia Else
Davo said:It's desirable as a producer to run at full capacity but it's the spot
market that determines who actually runs.
It is, but only a deranged gas-fired plant manager bids prices below his
marginal cost of operation, and only a similarly deranged coal-fired
plant manager bids prices above the marginal cost of gas-fired plant
when it's unlikely that all the gas-fired capacity will be required anyway.
So the practical outcome is that as demand reduces, generators are taken
off-line in reverse order of marginal cost.
Sylvia.