WHY IS ELECTRICITY COMPETITION NOT WORKING? The principal reason is the failure of Order 888 to accommodate the economic and technological constraints of wholesale power markets.
These systems are costly for two reasons. First, electric energy storage costs are very high in spite of decades of research. Second, charging electrical storage requires additional photovoltaic cells beyond those that just meet load requirements under ideal conditions. This is because the output of photovoltaics is quoted on the basis of what they can provide under ideal circumstances, averaged over a long period of time.
But PV power is intermittent and unpredictable, so to bridge the gap to reliable power-on-demand, it is necessary to add many more solar cells to charge some form of energy storage. When one takes into account the need for electric power at night and during periods of cloudiness, the total costs mount dramatically-typically five to10 times or more than the costs quoted for a single unit  (see sidebar).
The analogy to wind is similar. Specifics vary according to location. Moreover, on an annual basis, the situation for photovoltaics is roughly twice as bad in New England, with its long periods of cloudiness, as it is in Nevada, with its generally clear skies . For wind, the situation is better in the upper Midwest than most other U.S. locations. (One wonders if politicians from these poorer wind or sun areas understand that their rush to renewables could result in much higher electricity costs for their constituents compared with people in superior sun/wind regions).
The Hybrid Approach Still Depends on the Unpredictable
The second path of interest is one in which a power plant stands by in spinning reserve to provide electric power when sunlight or wind is diminished [3, 4, 5, 7, 8]. In this situation, that power plant is actually the principal source of power-on-demand, so wind or solar cells act simply to save some fuel, when the wind blows or the sun shines. This mode of operation is then a "fuel-saver," because of the secondary nature of the renewable energy.
The problem is that across the United States, it is cloudy roughly half the time on average, and while the sun shines maybe eight to12 hours a day (winter-summer), it shines strongest from roughly 10 a.m. to 4 p.m. On that basis over an average 24-hour period, the sun might provide useful energy 20-25 percent of the time , so photovoltaics might "fuel-save" only about 20-25 percent of the fuel from a primary, power-on-demand power plant that otherwise is assumed to operate at 100 percent capacity in this analysis.
Proper accounting requires that system economics include not only the cost of the photovoltaics but also the capital and operating costs of the conventionally fueled power plant and the fuel for 75-80 percent of its operation. In this hybrid mode, the required cost of the associated photovoltaics system must be equal or lower cost than the avoided power plant costs (saved fuel and variable O&M), which will be quite low.
The same general situation holds for wind. On the positive side, the fractional contribution may be more like 30 percent in good wind locations . On the negative side, wind power can vary