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.

  • HelloThere
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    1 year ago

    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.

      • HelloThere
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        1 year ago

        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.

          • HelloThere
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            1 year ago
            • Why are you linking to a definition of economic viability for buildings? The main cost of traditional fossil fuel based electricity generation is the fuel source, over lifetime, not initial construction
            • Higher returns due to high average costs certainty attract investment - I said as much in my first comment
            • I agree with disconnecting prices from last generator, and that it will reduce inflation, because it would reduce the average price, all else being equal
            • A lower average price would extend payback periods which may discourage investment when compared to the current pricing model, again all else being equal. This is a difficult comparison because it would presume an ability to choose between the two payment methods, which you can’t.
            • We are still talking about average prices, over time, which again is different to spot prices, and both above points are further proof that your original statement of renewables being economically inviable is incorrect.
            • Bernie Ecclestoned
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              1 year ago

              Because capex is capex. Buildings, solar, windmills. Doesn’t matter. All that matters is capex roi and opex unit per watt

              We are still talking about average prices, over time, which again is different to spot prices, and both above points are further proof that your original statement of renewables being economically inviable is incorrect.

              Now go read this and tell me that capex doesn’t matter

              https://www.bbc.com/news/uk-england-norfolk-66263340

              • HelloThere
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                1 year ago

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

                • Bernie Ecclestoned
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                  1 year ago

                  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.

                  • HelloThere
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                    1 year ago

                    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.

                  • MidgePhoto@photog.social
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                    1 year ago

                    @bernieecclestoned @hellothere
                    I’m quite sure I said nothing of the sort.

                    This seems to be about semi-fixed costs, which should favour some* renewables, and externalities - which definitely favour renewables, unless the collapse of civilisation and several gigadeaths is ignored as a cost.

                    IIRC the reason for Siemens pulling out of an offshore project was that the price was artificially fixed low, with a penalty.

                  • MidgePhoto@photog.social
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                    1 year ago

                    @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.