This may seem a bit provocative given current energy prices, and expectations/worries of shortages this winter or next year, but some long term trends are worth considering, as they will shape not just the energy markets but a lot of other economic activity.
People like to dry their clothes as they run laundry so the dryer example would need to be very predictable but having air conditioner that make ice could be a good way to shift demand yet retain performance
I would place this as one of the most important pieces I’ve read in a long, long time! How eye-opening. What a different future vision than I had been thinking of. Thank you!
fair point. my argument was to highlight that every new product sold or service provided requires energy to be produced. this point remains even if the marginal emergy consomption for every gdp increase is less than 1%.
Thanks for a slightly different perspective - but also a relevant one. You are right that storage of electricity offers the ability to think about electricity systems in a very different way - interestingly, it is a trend that pays against the trend I describe toward zero prices - the more you have flexible demand, and storage, the more you can arbitrage the price differences between zero and high peaks, and the more that takes you back to "normal" prices.
And one conclusion that should be obvious - there is no long term future for merchant renewable energy projects so that fantasy of governments (that think they avoid "subsidies") should be killed once and for all.
If prices are at zero most of the time, renewables which have to pay interest on their loans all the time, will go out of business. You need the fixed rate price guarantees to make sure you have a cash flow which will at all times cover your financing costs.
People like to dry their clothes as they run laundry so the dryer example would need to be very predictable but having air conditioner that make ice could be a good way to shift demand yet retain performance
I would place this as one of the most important pieces I’ve read in a long, long time! How eye-opening. What a different future vision than I had been thinking of. Thank you!
Great write up, Jerome! You might enjoy reading a similar piece I wrote a while ago. https://open.substack.com/pub/fallacyalarm/p/charged-up?r=157w3s&utm_medium=ios&utm_campaign=post
Energy is important, but it doesn't hold that "1% more of it is 1% more GDP and vice versa". It hasn't been true for decades.
fair point. my argument was to highlight that every new product sold or service provided requires energy to be produced. this point remains even if the marginal emergy consomption for every gdp increase is less than 1%.
Thanks for a slightly different perspective - but also a relevant one. You are right that storage of electricity offers the ability to think about electricity systems in a very different way - interestingly, it is a trend that pays against the trend I describe toward zero prices - the more you have flexible demand, and storage, the more you can arbitrage the price differences between zero and high peaks, and the more that takes you back to "normal" prices.
We'll have to see which trend prevails...
And one conclusion that should be obvious - there is no long term future for merchant renewable energy projects so that fantasy of governments (that think they avoid "subsidies") should be killed once and for all.
Can you explain this one a bit further?
If prices are at zero most of the time, renewables which have to pay interest on their loans all the time, will go out of business. You need the fixed rate price guarantees to make sure you have a cash flow which will at all times cover your financing costs.
Thank you! And now I understand the idea of a merchant model better as well. Hat/tip. :)