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Comment by mabbo | Hacker News Reader

The threat isn't that people don't need any power from the electric company, it's that people need very little of it. Demand dropping to 5% of your usual business model might as well be demand dropping to 0%.

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Some of that drop can be beneficial to the power company. They are always on the edge of capacity, because building more capacity is very (billions) expensive, and at first you don't need all of it, so the marginal cost of expansion is huge. Deploying solar across the area could postpone the need for generator expansion, and save money for current customers.

Depends on the type of capacity. I gather that peaking power is typically provided by gas combustion turbines (https://en.wikipedia.org/wiki/Gas_turbine#Industrial_gas_tur...), which have much lower capital costs and much higher operating costs (including maintenance). But if you need more baseline, then, yeah, you're going to be spending a lot of money, although I'd expect modern gas powered baseline plants to be relatively cheap (don't ask about nuclear, and fuel handling is much easier than coal, plus coal is nasty dirty stuff that needs exhaust cleaning, and disposal of ash).

I think Joe might have been referring to transmission and switching costs. Adding generation capacity to the grid usually means that you need more substations, and control infrastructure.

Especially when you're dealing with physical infrastructure (like power lines) that has relatively fixed upkeep costs regardless of demand.

Here in NYC ConEd charges a very large fixed fee for that physical infrastructure. Last month I used 96kWh but paid $43.35 (basically $0.45/kwh).

Around $20 of that is fixed fees, to pay for the basic infrastructure, billing, meter reading etc...

But in that case you can downsize a lot, because you only need to produce 10% of the normal electricity, and then charge, say, twice the amount your normally charge for the usage, perhaps reducing it to 8% or so.

That is still a higher rate of return than you would normally get, which makes it a better investment.

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