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Their unit cost is zero?
Capex is huge, and there will always be opex for people, repairs and maintenance. The blades and motors etc all have to be replaced regularly.
Solar output is also much less during winter
My new boiler can run a hydrogen mix and all the UK metal pipes are being replaced with plastic inserts so at some point green hydrogen could offset natural gas and that itself could be replaced eventually with syngas from biofuels.
Apologies, I meant to say Next Unit Cost, didn't spot the missing word. As in the cost to produce one more unit of electricity. This measure ignores capex and is just opex plus associated usage costs like amortised wear and tear, depreciation, etc.
It's near 0, but not 0, because the input (wind, sun) is free, whereas gas (for CCGT) is not. As such renewables can sell in to the grid, profitably, at lower prices than fossil fuels can.
The big problem, as you show with the example of cloudy winter days, is disconnecting generation from usage, via storage.
Green gas from anorobic respiration, including hydrogen (or just blue hydrogen, made via electrolysis of sea water) is a useful step for retrofitting, but not something - in my opinion - that should be considered for new builds.
Ah, yes. But we can't actually ignore capex, because most of the fossil fuel infrastructure is sunk cost.
Renewables are net new capex, which needs a return. The reduction in cost of renewables is the best thing. A barrel of oil isn't going to get any cheaper to pump out but wind and solar will. The war is already won, we just haven't seen the benefits yet.
I think green hydrogen would help smooth the peaks of renewables but it's not very efficient, probably a better use is making ammonium nitrate for fertiliser or as a replacement for heavy oil for shipping
Context of the situation is important. You can't use them interchangeably.
Capex does not matter when we are talking about choosing to generate using existing infrastructure, because capex amortisation is the same regardless of whether you're generating or not. Choosing whether to generate at 1am on a random Tuesday has nothing to do with your previous capex, but everything to do with your next unit cost. If price is higher than cost, you'll generate, it not you (probably) won't.
Capex payback is important when businesses are evaluating building new generation. The spot price at 1am on a random Tuesday has nothing to do with whether you're choosing to build new infrastructure. What does matter is average unit prices, over time, not one data point.
But you said you wanted more renewables... That's capex.
I'm not the person you originally replied to when you falsely claimed that renewables are only economically viable because of last generator pricing.
I have explained why that isn't the case, how both generation and new capacity decisions are made, the different aspects those decisions consider, and how because their next unit cost is lower due to generation input being free they are able to operate profitability at lower spot prices than are achievable for fossil fuels.
One last time - capex payback is a consideration when building new capacity, yes, but that is based on average prices over decades. It is not a consideration when choosing whether to power up or down on at a specific time on a specific day.
Attempting to simplify this to just capex is wrong.
Economically viable means you can raise the capital to build it...higher returns attract more capital
https://www.designingbuildings.co.uk/wiki/Economic_viability
Spain has cut the last generator link so now renewables are not charged at the gas rate.
Let's see how it works out. It's already helped reduce inflation there.
Because capex is capex. Buildings, solar, windmills. Doesn't matter. All that matters is capex roi and opex unit per watt
Now go read this and tell me that capex doesn't matter
https://www.bbc.com/news/uk-england-norfolk-66263340
I'm done here, you're clearly not reading what I've said if you genuinely believe I've said capex never matters.
I said - Renewables are only economically viable because the cost of power is paid on the last generator, which is natural gas.
You said - This is not true, renewables are economically viable at much lower prices than fossil fuels because their next unit cost is effectively zero
And yet I show you sources where increased capex costs are making renewables economically unviable because the capex costs have increased so much due to inflation and the wholesale price they were offered at auction is now not enough to justify the CAPEX to build it.
You're going in circles because you won't admit that the horse comes before the cart. You can't get to zero extra unit cost if you don't build the fucking thing.
I explicitly covered this in my 3rd comment - quoted below.
@hellothere
Definitely for baseload generators. Perhaps slightly different for peaking generators etc. Average for the sort of units you propose to sell, I guess.
This is a fair point - peaking is more complex, especially if we're considering batteries where their generation cost is going to include probabilistic opportunity costs - ie how confident are they that the price won't fall further and/or if this is the peak of the spot and best time to sell.
But yes, over the decades you'd be looking to run to utility for, you're looking at blended averages to calculate the return.
And yet you're still wrong.... The prices are part of the contract.
The increased capex and opex is making it economically unviable
https://www.rigzone.com/news/wire/14gw_wind_project_in_uk_cancelled_as_costs_soared-20-jul-2023-173391-article/
My good fellow, if you believe that cap and floor contracts somehow disproves my point, then you really do need to go back and re-read what I've been saying all along, not just what you think I've been saying.
For the final, final time:
Again:
I will only reply if your next comment actually brings something new to the conversation.
You're talking about existing infrastructure, I'm talking about net new capex, so we're talking at cross purposes and it's dull
Cya
@bernieecclestoned @hellothere
Renewables are viable because they produce electricity cheaper than combustion, and because combustion will be restricted and banned in various conditions as time goes on.
We used to think peak oil would be more of a problem, but previous oil is the compelling problem.
@hellothere](https://sh.itjust.works/u/hellothere)
For the UK, onshore is not viable due to planning and solar is less so during winter when energy demand is highest.
It's a small island surrounded by sea, offshore wind is the only game in town, other than nuclear, and currently offshore is not viable unless the govt ups the contracted MW hour rates...
@bernieecclestoned
Planning needs changing.
(I like wind turbines on hills. Pretty.)
Thing about solar is you keep putting up more panels, and by and by you halve as much power in the winter as you used to in the summer.
Solve the society for the prevention of rural electricity, soon.
I don't think panels are the answer, solar leaves that create fresh water as well as pv and thermal giving >70% efficiency sounds great
https://www.imperial.ac.uk/news/246833/bio-inspired-solar-leaf-design-with-increased/
The storage requirements are going to be huge, we'd need something like this for every town, goes inside the hill, no nimbyism.
https://www.theengineer.co.uk/content/in-depth/uk-firm-promises-high-density-pumped-hydro-revolution/