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> renewable electricity has a short-run marginal cost of zero This seems to be the crux of the argument. It certainly doesn't make sense to me. Obviously oil w
by arbuge 7y ago
> renewable electricity has a short-run marginal cost of zero
This seems to be the crux of the argument. It certainly doesn't make sense to me. Obviously oil would find it hard to compete with electricity if it was free, but amortizing the cost of renewable power plants means that is unlikely any time soon.
- epistasis 7y agoThere are times of the year where renewable energy is free right now, and production is curtailed. There are also some places where prices go slightly negative because the producers' tax credit schemes give them revenue in excess of the negative price.
- Iv 7y agoMarginal cost = cost of producing one more unit of something (energy in that case) once your capital has been spent. It just says that if you have a solar panel, you don't need to spend additional money to make it produce electricity. Unlike, say, a diesel generator. It is purely capital spending, zero marginal cost. Another way of counting would be to say that _not_ producing costs you money as you are losing capital over the panels' lifetime.