Re:Some Rare, Real Talk from a Utility About Competition wit...
by joak on Tuesday February 06, 2024 @09:02AM
(#39274242)
Exactly, with renewables the marginal cost is zero (once the system is installed producing a kWh is free, no fuel to pay for).
And when marginal cost is zero price goes to zero as well (unless there is scarcity or artificial scarcity thanks to a sort of monopoly or cartel)
This easy to understand: imagine that A and B have invested in capacity production. If A sells at x dollars, B will sells at x-0.1 dollars stealing the market to A. Etc... there is no bottom since the marginal cost is zero.
And when marginal cost is zero price goes to zero as well (unless there is scarcity or artificial scarcity thanks to a sort of monopoly or cartel)
This easy to understand: imagine that A and B have invested in capacity production. If A sells at x dollars, B will sells at x-0.1 dollars stealing the market to A. Etc... there is no bottom since the marginal cost is zero.