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Absolutely not! The reason the system is so f*d up is because we are gambling with a system critical resource. Not every system benefits from competitive marke

Absolutely not! The reason the system is so f*d up is because we are gambling with a system critical resource. Not every system benefits from competitive markets especially infrastructure. Having a good working electricity network benefits the greater good and enables business to operate. This does not translate to short term market profits where you need to squeeze every possible dime out of the system. From cutting unneeded maintenance to paying the lowest possible salaries will catch up with you in 10-20 years when the system collapses. The tax payer will be the one paying for the damages and the "criminals" that caused the damage will be retired with their fortune.

roenxi 3y ago
> ...from cutting unneeded maintenance to paying the lowest possible salaries will catch up with you in 10-20 years when the system collapses... I don't think you're taking a clear view of the incentive structure around expensive capital assets. These are massive investments in infrastructure that often need to be paid back over 10-20 year periods before they make a profit. At some point the investment becomes so huge that the owners are incentivised to run even at a loss for a year or so to avoid the pain of writing down the capital they spent so much on. Skimping on maintenance and salaries isn't what the incentives push towards in a free market. In fact, having worked in similar environments, there is a slight tendency to overpay on salaries and over-invest in maintenance since they make relatively little difference to the profitability of the project and the derisking is extremely valuable. If an investor isn't planning on paying for maintenance and playing a long game, infrastructure investment is unlikely to appeal (at least not in a standard free market).
- hulitu 3y ago
  Well, they claimed that sometimes, electricity price is negative. What stops someone charging a battery _only_ when the price is negative ?
  - jnsaff2 3y ago
    Well nothing stops you from doing that of course. It's just that the LCOE will be very high as you use your battery very rarely and the capital cost of the battery spread over the charge cycles will be very high.
  - roenxi 3y ago
    The energy provider is literally paying people who are willing to do that. I would hope nothing is stopping people from doing that. That is more of a technical issue though, when I say they'll run at a loss, I mean purely because when you do the profit-maximisation numbers strange things happen when the capital investment is very high.
  - deleted 3y ago
    [deleted]
spacebanana7 3y ago
Integration is a slightly separate matter from privatisation. Even if each country's energy system was operated by a state owned enterprise, the overall system would be cheaper and more reliable if countries could better send energy across borders. North Sea wind could be exported southwards during periods of weak solar and vice versa. France could import fossil fuel energy during periods of nuclear downtime.
- realusername 3y ago
  > North Sea wind could be exported southwards during periods of weak solar and vice versa. France could import fossil fuel energy during periods of nuclear downtime. Don't worry they also thought about this, the EU wanted price caps on nuclear because EDF was supposed to make way too much money from the gas crisis & general winter consumption. The electricity "market" in the EU means supporting the Energiewende, no matter how bad it's failing.
  - ExoticPearTree 3y ago
    Ah yes, the price cap nonsense that EU thinks will fix problems. Sometimes I wonder if the current politicians in Brussels ever attended basic economy classes. Because they don't seem to understand that they can't control the markets.
brnt 3y ago
The precise definition of 'market' gives a lot of room to form opinions. On the one hand: Europe is a block, and Europe is better for it, given the realities of geopolitics. A common energy infrastructure and policy are integral to making such a block function. Power, electrical or political, needs to be organized for it to work optimally. The European democracies can then define what optimal means: what do we actually want to optimize? That's the other hand: I agree that a commercial marketplace is not the right focus, at least not now. Europe needs energy sovereignty more than a place for capitalists to extract value. We need to guarantee there is value to extract for future generations first, as the Russian invasion in neighboring Ukraine shows. We can bicker on who makes how much profit later. Making Europeans less sensitive to macro events in their energy bill is one aim, giving European industry, a foundation under the EU as a power block, is a second aim. We can only make meaningful progress with a well integrated energy market and integrated policies on these subjects. I read the article in this spirit, not in the spirit that Europe needs more deregulation and more commercial opportunities in this market.
- ExoticPearTree 3y ago
  European countries are already interconnected. And they import/export power to their neighbors. I don't see a big issue that power from one end can't "flow" to the other end. The losses over thousands of kilometers of power lines will probably offset any gains on the "cheapness" of renewables.
  - brnt 3y ago
    Those connectors have bandwidths, and thus require planning or expansion. Countries have differing policies, which have impacts on countries connected (famous example: wind on German offshore has impact on whether France scales nuclear plants down). The market as is does not favor price stability, or low prices, as parent pointed rightly out, both of which require coordination across European borders. Transmission-loss reduction is a good example of how Europe might deepen cooperation: HVDC lines are rapidly becoming feasible and economically interesting. By their nature, the require cooperation of multiple jurisdictions and thus policy frameworks, potentially hundreds if including sometimes powerful local governments.

roenxi 3y ago

> ...from cutting unneeded maintenance to paying the lowest possible salaries will catch up with you in 10-20 years when the system collapses... I don't think you're taking a clear view of the incentive structure around expensive capital assets. These are massive investments in infrastructure that often need to be paid back over 10-20 year periods before they make a profit. At some point the investment becomes so huge that the owners are incentivised to run even at a loss for a year or so to avoid the pain of writing down the capital they spent so much on. Skimping on maintenance and salaries isn't what the incentives push towards in a free market. In fact, having worked in similar environments, there is a slight tendency to overpay on salaries and over-invest in maintenance since they make relatively little difference to the profitability of the project and the derisking is extremely valuable. If an investor isn't planning on paying for maintenance and playing a long game, infrastructure investment is unlikely to appeal (at least not in a standard free market).

hulitu 3y ago
Well, they claimed that sometimes, electricity price is negative. What stops someone charging a battery _only_ when the price is negative ?
- jnsaff2 3y ago
  Well nothing stops you from doing that of course. It's just that the LCOE will be very high as you use your battery very rarely and the capital cost of the battery spread over the charge cycles will be very high.
- roenxi 3y ago
  The energy provider is literally paying people who are willing to do that. I would hope nothing is stopping people from doing that. That is more of a technical issue though, when I say they'll run at a loss, I mean purely because when you do the profit-maximisation numbers strange things happen when the capital investment is very high.
- deleted 3y ago
  [deleted]

spacebanana7 3y ago

Integration is a slightly separate matter from privatisation. Even if each country's energy system was operated by a state owned enterprise, the overall system would be cheaper and more reliable if countries could better send energy across borders. North Sea wind could be exported southwards during periods of weak solar and vice versa. France could import fossil fuel energy during periods of nuclear downtime.

realusername 3y ago
> North Sea wind could be exported southwards during periods of weak solar and vice versa. France could import fossil fuel energy during periods of nuclear downtime. Don't worry they also thought about this, the EU wanted price caps on nuclear because EDF was supposed to make way too much money from the gas crisis & general winter consumption. The electricity "market" in the EU means supporting the Energiewende, no matter how bad it's failing.
- ExoticPearTree 3y ago
  Ah yes, the price cap nonsense that EU thinks will fix problems. Sometimes I wonder if the current politicians in Brussels ever attended basic economy classes. Because they don't seem to understand that they can't control the markets.

brnt 3y ago

The precise definition of 'market' gives a lot of room to form opinions. On the one hand: Europe is a block, and Europe is better for it, given the realities of geopolitics. A common energy infrastructure and policy are integral to making such a block function. Power, electrical or political, needs to be organized for it to work optimally. The European democracies can then define what optimal means: what do we actually want to optimize? That's the other hand: I agree that a commercial marketplace is not the right focus, at least not now. Europe needs energy sovereignty more than a place for capitalists to extract value. We need to guarantee there is value to extract for future generations first, as the Russian invasion in neighboring Ukraine shows. We can bicker on who makes how much profit later. Making Europeans less sensitive to macro events in their energy bill is one aim, giving European industry, a foundation under the EU as a power block, is a second aim. We can only make meaningful progress with a well integrated energy market and integrated policies on these subjects. I read the article in this spirit, not in the spirit that Europe needs more deregulation and more commercial opportunities in this market.

ExoticPearTree 3y ago
European countries are already interconnected. And they import/export power to their neighbors. I don't see a big issue that power from one end can't "flow" to the other end. The losses over thousands of kilometers of power lines will probably offset any gains on the "cheapness" of renewables.
- brnt 3y ago
  Those connectors have bandwidths, and thus require planning or expansion. Countries have differing policies, which have impacts on countries connected (famous example: wind on German offshore has impact on whether France scales nuclear plants down). The market as is does not favor price stability, or low prices, as parent pointed rightly out, both of which require coordination across European borders. Transmission-loss reduction is a good example of how Europe might deepen cooperation: HVDC lines are rapidly becoming feasible and economically interesting. By their nature, the require cooperation of multiple jurisdictions and thus policy frameworks, potentially hundreds if including sometimes powerful local governments.