Comment by tialaramex
2 days ago
All of Germany's neighbours, from which it buys electricity, are decarbonising so yes obviously it inevitably gets "fixed at some point".
Germany's wholesale prices are similar to many other European countries, the worst is easily Ireland because of their geography, small, northern, coastal, they often need to import power, and that import has to come from Britain, which is between them and the continent, so their prices will almost always be higher than Britain's already not-great prices - we're obviously not going to sell the Irish £89 per MWh electricity and then charge our own users £119 per MWh for the same product.
What I am saying is that those spot prices may not represent all of the reneweables' marginal costs. Question is, will the end consumer prices ever go down, and by how much?
> Question is, will the end consumer prices ever go down, and by how much?
No, electricity is not likely to become a deflationary product. It hasn't been in my lifetime and I don't see that changing. Products which do that are weird and they don't tend to do it for very long.
There was a period (last century, more than fifty years ago) when Oil was deflationary in the US, as the very easily extracted Saudi Oil came online and US import bans ended - you'd pay the same dollar price to fill a car with gasoline in one year as the next and of course wages continued to grow so that oil is getting cheaper in real terms. But that's a long time ago, a time when gasoline was 30 cents per gallon.
Solar PV is just straight up cheaper than any fossil power. Solar Farms the UK agreed to subsidise in 2022 came online early last year and even in those more normal times (before Trump started a war in the Middle East) the "subsidy" amounts they were paying us totalled a few million quid a year because the fossil power was so expensive. Once Trump got into it, we were being paid like £3-4M per month in "subsidy" because of course the fossil fuel costs more now but sunlight is still free.
But that does not translate into lower prices for consumers, at most it means their prices might not rise as quickly.
The prices of so many things have gone down with times due to increased efficiencies. Why not electricity? If solar PV is cheaper than fossils, I would, naive as I am, expect prices to go down.
(I acknowledge fossils have been going up for various reasons, and have become more scarce, and energy demands are rising)
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