Business Week: UK energy prices must reflect the cost of backup energy supply for renewable sources..

From Business Week:  “E.ON AG, the second-largest power producer in Britain, said U.K. energy prices must reflect the cost of backup supply as the country boosts output from renewable sources.”

Utilities need to keep running gas-fired plants because sources of alternative generation such as wind can fluctuate, E.ON’s Director of Regulation and Energy Policy Sara Vaughan said in a telephone interview. The battery technology that’s used to store power from wind remains in its infancy, she said.

Vaughn stated that “It’s not necessarily a case of building new capacity, it is also a case of having sufficient incentives to keep existing plants on the system,” she said.

Over the next decade, Britain is preparing to replace as much as 30 percent of its aging power-station capacity with a new fleet of nuclear reactors, gas-fueled plants and generators driven by renewable sources such as wind.

On days when wind is weak, wind farms can only be relied upon to generate about 10 percent of their total capacity, Vaughan said, adding that there are “very few days” when other generators need to provide the full 90 percent backup. Developing interconnections with Europe would only increase wind farms’ peak reliability to 12 percent, she said.

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