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That doesn't really make sense. Electric utilities require capital investment proportional to peak usage, but only earn returns on average usage. This will on
by fancyketchup 11y ago
That doesn't really make sense.
Electric utilities require capital investment proportional to peak usage, but only earn returns on average usage. This will only increase the ROIC of an electric utility by reducing the peak:average ratio.
Additionally, electric utilities are in a constant cycle of capacity upgrades to keep up with increasing demand. Customers adding distributed storage allows utilities to delay capital investment (which makes the company look better in the near-term).
- hyperpape 11y agoI think they're saying that the investment in peak capacity may be already made, whereas the returns on use are ongoing, so creating incentives to save electricity may not be valuable to the companies. Don't know if that's their actual cost-structure, but it's plausible in the abstract.
- danmaz74 11y ago> but only earn returns on average usage Not if the price they sell at is different at different hours.