In the United States intermittent power such as wind and solar must be curtailed (thrown away) when current demand does not meet existing baseload power generation. In other words, the burning of coal at coal plants, the leading source for energy generation in the U.S., is not something that can be easily ramped up or down: it is an expensive and time-intensive process to turn down a coal plant and, therefore, coal is burned to meet a baseload rate constantly. If wind and solar are available, but the baseload of coal power exceeds demand, the renewable energy sources suffer, not the fossil fuels.
However, in Europe, it is the other way around. Europe’s biggest power markets give preference to renewable energy which is forcing some utilities to use their fossil-fuel plants less. “With Europe’s wind and solar farms set to triple by 2020, utilities investing in new coal and gas-fired power stations no longer face stable returns. As more renewables come on line, a gas that may cost $1 billion to build will be stopped more often from running at full capacity.”
“Even by 2014, gross profit from burning coal in Germany may skid by as much as 41 percent, according to Barclays Plc.”
European renewables are largely being driven by a policy mechanism called Feed In Tariffs (FITs). FITs are subsidized power rates given to renewable energy developments. “Britain plans to install more than 8,000 offshore wind turbines by 2020 to get 15 percent of electricity from renewable sources. Germany installed 7.4 gigawatts of solar photovoltaic capacity last year, the most of any nation, driving total capacity to 17,200 megawatts. Spain aims to get 20.8 percent of its total energy from marine energy, geothermal and offshore wind projects, as well as hydropower, by 2020.”