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Yes the variable costs are low _compared to the fixed costs_. That's the point I made. If you bought a nuclear power plant for $10 billion and your calculation
by cycomanic 3y ago
Yes the variable costs are low _compared to the fixed costs_. That's the point I made.
If you bought a nuclear power plant for $10 billion and your calculation to get an ROI requires that you make $100 per MWh running at 80% load factor, you will not be willing to run your plant only at 50% of the time, because it does not make economic sense. Variable costs are irrelevant in this case.
- mpweiher 3y agoNo. The variable costs are not low because the fixed costs are too expensive, which was what you wrote before and what you imply here. The variable costs are low because fuel is incredibly cheap for the amount of power you get out of it. So you get the ratio correct, but miss on the cause for that ratio.