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Yes and? Nuclear power would also be very cheap if you could build power plants for free. You can't just ignore fixed costs. > And guess what That investment

Yes and? Nuclear power would also be very cheap if you could build power plants for free. You can't just ignore fixed costs. > And guess what That investment decisions don't work like that? That people/companies expect to make a profit? > Electricity is priced, at least last time I checked the European ones, at generating cost Electricity is priced at what the market is willing to bear.

hef19898 3y ago
The European electricity market, the Germany is connected to, prices electricity (or priced last time I checked, there might have been changes), like this (over symplified, so please read up the details yourself): - generators provide capacity and nominate that capacity for future and as reserve capacity, the former is being priced using futures traded at an exchange, the latter is paid for by grid opertors to maintain grid stabilizyt - consumers, the ones large enough to trade on the exchange, nominate consumption the same way, if they are able to take up load or shed load on short notice, they are paid for that the same way peaker plants mentioned above are paid for - the balance between demand and supply for each period, day ahead for example, defines the exchange price (which results, sometimes, in negative prices and allows for speculation) - producers get to produce as long as their variable production cost is below the exchange price in that period (CAPEX used to be excluded from that), that usually means that wind, solar and hydro get to deliver first, followed by coal, oil and nuclear with gas usually being to expensive for anything else other than peaker plants So, this market is pricing electricity based on variable cost. Operators are including these market prices in their calculations, and that means that the majority of the build capacity is wind, solar and coal (and yes, brand new gas plants have never gone online because shutting them down before hand was cheaper). TL/DR: Exchanges, aka the market, ignores fix costs while opertors don't. Honestly, if you fail to understand that crucial market mechanism (for Europe with its integrated grid, the US is different) try to get aroind that first, it explains an aweful lot of how electricty production capacity is built. By the way, this market prevented outages very reliably.
- Wytwwww 3y ago
  > The European electricity market, the Germany is connected to, prices electricity (or priced last time I checked, there might have been changes), like this (over symplified, so please read up the details yourself): I keep trying to say that this/market price isn't really relevant. Nobody would invest in solar if it only produced as much as it does in December whole year long. If you overprovision enough that solar alone could satisfy any of meaningful proportion of total demand during winter that mean that prices during sunny summer/spring days would be approximately 0 which again makes investment unattractive. > TL/DR: Exchanges, aka the market, ignores fix costs while opertors don't. Perhaps. I don't see how the first half of this sentence is particularly relevant to this conversation and the second half is something I keep repeating over and over again. > Honestly, if you fail to understand that crucial market mechanism Well yes if you add gas, coal, wind etc. to the equation it changes this but that wasn't part of the initial argument. If you have more or less constant demand during the whole year (or especially if demand in winter is higher) solar capacity needs to be balanced out by gas/coal/etc. which is far from ideal. That doesn't seem to be likely to change in the foreseeable future (and to reiterate I'm talking specifically about the northern half of Europe.

hef19898 3y ago

The European electricity market, the Germany is connected to, prices electricity (or priced last time I checked, there might have been changes), like this (over symplified, so please read up the details yourself): - generators provide capacity and nominate that capacity for future and as reserve capacity, the former is being priced using futures traded at an exchange, the latter is paid for by grid opertors to maintain grid stabilizyt - consumers, the ones large enough to trade on the exchange, nominate consumption the same way, if they are able to take up load or shed load on short notice, they are paid for that the same way peaker plants mentioned above are paid for - the balance between demand and supply for each period, day ahead for example, defines the exchange price (which results, sometimes, in negative prices and allows for speculation) - producers get to produce as long as their variable production cost is below the exchange price in that period (CAPEX used to be excluded from that), that usually means that wind, solar and hydro get to deliver first, followed by coal, oil and nuclear with gas usually being to expensive for anything else other than peaker plants So, this market is pricing electricity based on variable cost. Operators are including these market prices in their calculations, and that means that the majority of the build capacity is wind, solar and coal (and yes, brand new gas plants have never gone online because shutting them down before hand was cheaper). TL/DR: Exchanges, aka the market, ignores fix costs while opertors don't. Honestly, if you fail to understand that crucial market mechanism (for Europe with its integrated grid, the US is different) try to get aroind that first, it explains an aweful lot of how electricty production capacity is built. By the way, this market prevented outages very reliably.

Wytwwww 3y ago
> The European electricity market, the Germany is connected to, prices electricity (or priced last time I checked, there might have been changes), like this (over symplified, so please read up the details yourself): I keep trying to say that this/market price isn't really relevant. Nobody would invest in solar if it only produced as much as it does in December whole year long. If you overprovision enough that solar alone could satisfy any of meaningful proportion of total demand during winter that mean that prices during sunny summer/spring days would be approximately 0 which again makes investment unattractive. > TL/DR: Exchanges, aka the market, ignores fix costs while opertors don't. Perhaps. I don't see how the first half of this sentence is particularly relevant to this conversation and the second half is something I keep repeating over and over again. > Honestly, if you fail to understand that crucial market mechanism Well yes if you add gas, coal, wind etc. to the equation it changes this but that wasn't part of the initial argument. If you have more or less constant demand during the whole year (or especially if demand in winter is higher) solar capacity needs to be balanced out by gas/coal/etc. which is far from ideal. That doesn't seem to be likely to change in the foreseeable future (and to reiterate I'm talking specifically about the northern half of Europe.