4 ms·
That the market price of renewable power can and sometimes does go to zero is simply a consequence of that the marginal cost of producing additional energy is z
by jnxx 8y ago
That the market price of renewable power can and sometimes does go to zero is simply a consequence of that the marginal cost of producing additional energy is zero. The market price does not include the upfront cost but depends only on that marginal cost.
About the same is valid for nuclear power. Only the upfront cost is higher, and there is a much larger cost for decommissioning a plant.
That's the reason why renewable power needs to be subsidized, at least to some degree, and why nuclear power was always subsidized.
- geezerjay 8y agoI've assumed that the reason was that green energy production, which is tied to climate factors (windy/rainy/sunny days), can't be ramped up or down to match demand. As surplus energy can't be stored or sold then its value tends to zero.