Variable load and its impact

If the load on a power system is not constant but has steep variations, the cost of power generation will increase. 

More generators will have to be connected to handle the high peak loads of the system.  These generators will be idle when the load drops or they may have to operate at low loads.  This will reduce the efficiency of the prime mover and increase the fuel costs.

Increase in capital cost

More generators will have to be added to deliver the peak load.  This will result in higher capital cost.