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Grid stability is the real bad investment. In a free market we should have events where demand exceeds supply and when, and if the state didn't pump large amoun

by belorn 4y ago

Grid stability is the real bad investment. In a free market we should have events where demand exceeds supply and when, and if the state didn't pump large amount of subsidies into grid stability we would see regular power outages. Those that would be hurt most by power outages would then invest into backup generators. Grid stability cost money and power companies do not want to carry that cost. It is a much better investment for them to let society carry those costs and simply produce as much energy when its most cost effective to do so.

kmeisthax 4y ago
Great, except it's more expensive for everyone to run a backup generator than for power companies to overbuild capacity and bundle it into the cost of electricity. Making "society carry the costs" makes everyone poorer so that power utilities can have a thicker profit margin. There's also a related problem: once everyone is already paying the cost to purchase and operate backup power on a regular basis, they're not going to bother paying their power bills. They're just going to disconnect from the grid, because people aren't paying them for "power when its most profitable". They're paying for "power when they need it". Grid stability is the literal job of your power company, arguably moreso than power generation.
- belorn 4y ago
  It would indeed be a more expensive grid for everyone. However customers tend to pick which ever producer has the cheapest sticker price and a large number will not consider the cost associated with potential blackouts when going into contract. Those situations tend to result in a rush to the bottom if there is no other forces involved in the market. In a market where the government guaranties stability people think they are paying for the kw/h, not power when they need it. It only if they are somehow forced to to consider "power then they need it" that they consider such thing when deciding which power company is cheapest. Which returns back to investments. If consumers will reward companies based on the cost of kw/h, and they will assume that governments take care of balancing the grid, then companies that invest in technology that produce the cheapest kw/h and ignore grid stability. The only way out would be for governments to subsidize less economical ventures but which consider grid stability.

by belorn 4y ago

kmeisthax 4y ago

Great, except it's more expensive for everyone to run a backup generator than for power companies to overbuild capacity and bundle it into the cost of electricity. Making "society carry the costs" makes everyone poorer so that power utilities can have a thicker profit margin. There's also a related problem: once everyone is already paying the cost to purchase and operate backup power on a regular basis, they're not going to bother paying their power bills. They're just going to disconnect from the grid, because people aren't paying them for "power when its most profitable". They're paying for "power when they need it". Grid stability is the literal job of your power company, arguably moreso than power generation.

belorn 4y ago
It would indeed be a more expensive grid for everyone. However customers tend to pick which ever producer has the cheapest sticker price and a large number will not consider the cost associated with potential blackouts when going into contract. Those situations tend to result in a rush to the bottom if there is no other forces involved in the market. In a market where the government guaranties stability people think they are paying for the kw/h, not power when they need it. It only if they are somehow forced to to consider "power then they need it" that they consider such thing when deciding which power company is cheapest. Which returns back to investments. If consumers will reward companies based on the cost of kw/h, and they will assume that governments take care of balancing the grid, then companies that invest in technology that produce the cheapest kw/h and ignore grid stability. The only way out would be for governments to subsidize less economical ventures but which consider grid stability.