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The problem here seems to be that Noranett wants to keep the same revenues despite selling less electricity. I don’t think that a point in favour of Bitcoin, i
by mikehall314 2y ago
The problem here seems to be that Noranett wants to keep the same revenues despite selling less electricity.
I don’t think that a point in favour of Bitcoin, it’s a point against the idea of “revenue must grow at all costs”
- twojacobtwo 2y agoThat was one of my first thoughts as well. The article sells this increase as a necessity, but with no note of whether that was to maintain profits or operating costs, further research may be required. My feeling is that it's the former though.
- crote 2y agoNoranett is a grid operator, and like most European grid operators is legally required to operate as a nonprofit. The only reason the revenue has to remain the same is because it costs the same to operate the grid. There are now just fewer people paying for it. More of a "economy of scale makes things cheap" than a "capitalism is bad".
- mikehall314 2y agoThanks! I appreciate the explanation and your fuller comments above too.
- bcrl 2y agoMost electricity local distribution undertakings run on a cost plus model. If their costs increase, they are permitted to have higher profits as regulators set rates such that profits are a percentage of costs. There is no incentive for grid operators to become more efficient or to avoid needless waste. This works out great for grid operators, but means the general public can only ever expect higher prices for the same service.