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Comment by itsoktocry | Hacker News Reader

>power companies are on track to be thoroughly screwed.

I have a hard time making sense of this. I log into HN and see comment after comment about how solar is taking over, then I read articles like this[0], that state that countries heavily invested in renewables, like wind a solar, are going backwards. They are now trying to label natural gas as "green investment" in Germany, otherwise they won't have energy capacity. They have to build more fossil fuel plants.

Do you really think "power companies" are "screwed"?

[0]https://www.cleanenergywire.org/news/eu-indecision-over-gas-...

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Concerns about Germany’s energy system transition and the question of whether power companies are “screwed” are kind of orthogonal.

There are different kinds of power companies.

Utilities with a regulated asset base that get to socialize all of their costs across rate payers aren’t screwed.

Asset-light energy suppliers/retailers in competitive deregulated markets aren’t screwed.

Asset-heavy power generators in competitive deregulated markets might be screwed .. if they have a large portfolio of legacy assets.

Solar PV creates two problems for them.

Firstly, distributed solar reduces the load available to them to serve.

Secondly, centralized and distributed solar depress wholesale energy prices in the middle of the day (and causes increasing frequency of negative-price events).

Together these reduce the volume of sales, reduce profitability, and can increase running costs, because many legacy generators weren’t originally designed to be flexible with the ability to ramp up and down every day.

While solar PV isn’t good for some power companies, it’s generally good for consumers.

And this is why the utility companies are trying to shut it down or make it uneconomical. NEM 3.0 in CA, for example, has a rent-seeking provision where the power company gets to bill the rate-payer for assets the rate-payer owns, even if no power crosses the meter. I predict a rash of off-gridding.

The power-companies-are-screwed story is a bit oversold. The cheapest solar power comes from large solar farms, exactly the sort of thing power companies themselves build and operate. Smaller distributed solar units are a big financial winner in the following circumstances:

- If retail electricity prices are moderate/high and excess solar power generation gets a net metering credit. I don't think that this will remain common as solar penetration increases, but some early adopters in different regions will be able to take advantage.

- If the electrical companies invested too much in transmission and distribution infrastructure and are now making up for it with high prices per kilowatt hour. This describes the Australian rooftop solar boom and at least parts of California. Note that this can be a financial winner even without retail-priced net metering; you're just thrifting on how much overpriced electricity you buy from the power company.

- If the location is far from the existing grid and you're expected to pay to build the intervening connection yourself. Solar plus batteries, even with today's relatively high battery prices, can beat the cost of building that connection.

Mostly I expect power companies to survive the rise of solar power just fine. Most solar generation will come from large facilities owned by large companies, not household rooftop units. The over-representation of small rooftop solar units in Germany has contributed to the high cost of their energy transition. I see the German policy decisions favoring small solar units as a carrot used to ensure broad population support for solar power. Maybe it was politically necessary. But the generating costs would be lower had they favored fewer, larger installations.

The post you are responding to definitely wasn't very nuanced.

Considering there are so many people whose solar is grid connected you would think that they would often ask themselves how difficult it is to maintain repair and operate the grid they rely on every time it snows or rains or at night.

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