From the Article:
The impact of the weather on the generation of renewable energy is not only expected to lead to more unpredictable prices but will also see greater importance placed on thermal capacity to act as a back up, causing significant dilemmas for investors, the report has found.
These plants become more important to maintain system security, but will find themselves operating less and less, and hence becoming less profitable. However, in countries where hydro accounts for a significant percentage of renewable energy such as those in Scandinavia, there is much less of a requirement for thermal to provide back up support.
The report says: “We have little doubt that investors will face major challenges developing appropriate investment and divestment strategies to deal with this kind of future ahead. Thermal assets may be highly valuable if the market evolves in one direction, but they also face the strong possibility that the intermittency from wind and solar can create power stations that for most of the time do not make a profitable contribution.”
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