Comment by hunterpayne
3 days ago
You are confusing capacity costs (capital outlay) with utilization costs (what you actually pay per watt). Its true that renewables have a very low cap cost. They are also several times the utilization cost. That's why electricity in CA is 2-3x what it was just 10 years ago. And energy prices are basically the same as 10 years ago.
PS LCOE is a BS stat used to confuse those that don't understand energy markets, not a real market calculation that anyone pays.
> They are also several times the utilization cost
Prove it.
> electricity in CA is 2-3x what it was just 10 years ago.
That has nothing to do with the cost of generation. The reason costs have gone up are 1/wildfire mitigation and liability, 2/replacement of aging grid infrastructure (plus a geographically diverse state - replacing infrastructure in mountains is costly), 3/rising demand and new fixed infrastructure cost (which is subsumed into everyone's bills), and 4/decommissioning of power plants (San Onofre and Diablo Canyon were both mothballed and haven't been replaced).
Also, California utilities are heavily regulated. Utility rates have to be approved by the government, making the rate-setting process highly politicized. For a very long time the regulators refused to let the utilities raise rates even though it was necessary. Eventually, though, that became unsustainable. The result was that instead of raising rates a percentage point or two per year, all of a sudden there was a real threat of the system going completely bankrupt and so prices shot up dramatically.
If you really want to understand the energy markets in CA, there's no better source than the Los Angeles Times. Or what's left of it, anyway.
> LCOE is a BS stat used to confuse those that don't understand energy markets
Let me get my popcorn while you explain it to us ignoramuses.
LCOE is helpful but only holds up to a certain point. Latest Lazard report has levelized cost of firming included as well. Dispatchability of power is an important part of the picture missed by LCOE for weather-dependent generation. Once grids are meaningfully composed of solar/wind, the cost of firming is significant and mostly comes from gas peaker plants these days.
>That's why electricity in CA is 2-3x what it was just 10 years ago
No, CA electrical cost is about paying for PG&E's insurance liabilities and subsidizing the living situation in places which are de facto uninhabitable on account of wildfires.
Sorry, PG&E's accounting says otherwise.
PG&E is incentivized to spend more money on capex because the state guarantees a return on investment, a perverse incentive which causes them to make stupid money decisions to realize more profit. For example doubling the cost of energization by having a large proportion of it done by external contractors.
24% of PG&E's revenue (that is customer rate payments) goes to wildfire related costs.
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What exactly does their accounting say?