[kahnjw]

This does not answer my question.

The identifying characteristic of capital cost is: does not change over small time intervals, it is fixed up front and amortized over the lifetime of the asset.

This article and OP are talking about price spikes which are a symptom of short term (days, hours, minutes) market dynamics.

The reason that prices spike has nothing to do with capital cost and everything to do with short term demand/supply fluctuations.

[gwright]

Fair enough. You were focused on the short term spikes and I jumped to the larger issue of a reliable grid that had backup power.

The connection in my mind is that if you shift your mix of generation plants towards renewables then you have less ability to respond to outages of any kind. Could be cloudy days, windless days, failed transmission lines, and so on.

The advantage of a coal/gas/hydro/nuclear plants is that you can control the amount of power they are producing. That isn't true with wind/solar. You certainly can't turn them up and I think (but I'm not sure) it is difficult to shed power that they generate (i.e. turn them down).

Those price spikes are last ditch attempts to purchase power to meet demand before moving to brown/blackouts. Just another side-effect of not having an appropriate mix of generation capacity.

[hn_throwaway_99]

The argument is that in order to be able to deal with the higher short-term variability inherent with renewables you have higher up front capital costs.