[7thaccount]

So as awesome as the wind production tax credits are in creating many GW of wind power (in the US at least), it did result in many wind farms being able to submit offers that are artificially low. That lowers price signals for everyone else too and causes market distortion.

[ZeroGravitas]

That market distortion is the whole idea. Similar to a carbon tax, it's intended to correct for the market distortion of externalities from pollution and carbon.

If we just left the market alone it would make inefficient decisions. It's not perfect but it's moving things in the right direction.

[7thaccount]

I think your point misses part of the market's intent. If you want the market to act correctly, you have to model the carbon or greenhouse constraint in the opmization.

That way you'll send the proper price signals and incentivize new generation or other assets (badly needed in much of the US). What we're currently doing fixes one problem and causes another. This is why ERCOT is having to do things like add in a $9000/MWh ORDC (among other reasons). The prices are just too low.