this post was submitted on 25 Aug 2023
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An annual energy bill for a typical household will fall to £1,923 in October under regulator Ofgem's new price cap.

I honestly think it's appalling that they're continuing to let these energy providers make obscene profits from us.

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[–] [email protected] 1 points 1 year ago (11 children)

I'm done here, you're clearly not reading what I've said if you genuinely believe I've said capex never matters.

[–] [email protected] 1 points 1 year ago (10 children)

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.

[–] [email protected] 1 points 1 year ago (5 children)

I explicitly covered this in my 3rd comment - quoted below.

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.

[–] [email protected] 1 points 1 year ago (1 children)

@hellothere
Definitely for baseload generators. Perhaps slightly different for peaking generators etc. Average for the sort of units you propose to sell, I guess.

[–] [email protected] 1 points 1 year ago

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.

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