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Comment by mono442 | Hacker News Reader

Did those savings actually trickle to end costumer bills? I often read how renewables are making electricity cheaper but I only pay more and more despite the share of them increasing here in electricity generation.

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Well we can see how much we would even expect this to matter.

For example take the 2024 Financial Report of Hydro One (distributor for Ontario) [0].

Apparently they earned 8,484M in revenue, and spent 4,143M in Power, and Net Income was 1,156M. Putting these together you can sort of conclude that the price of the electricity is around 1/2 their expenses.

If I then go to Ontario Power Generation financial reports 2024 [1], Revenue was apparently 7,187M, with Fuel Costing 1,049M, and net income around 1,006M. This sort of tells you that the price of fuel is only around 1/6th of their expenses.

I spent some time thinking about this and I'm not sure what to conclude other than probably a lot of what you pay is just paying for staff and maintenance and so even if fuel was free where I live it would be like a 1/12th change. Assuming the big savings in Wind are supposed to be from not having to pay for Fuel.

[0] https://www.hydroone.com/investorrelations/Reports/Hydro%20O...

[1] https://www.opg.com/reporting/financial-reports/

One reason cost might be going up is because the grid needs upgrades.

A house might have a typical peak power demand of 1kWH. Now? It might peak at 10. I'm making up these numbers by the way.

Everywhere that I know of, you pay for the grid through your bill.

The more variability there is in the grid, the more the grid need to invest in balancing, reserve energy and transmission. Each of those are expensive to build out and maintain. They are usually paid through taxes and grid fees, and here in Sweden you will generally pay more for those than for the energy that you consume.

Any saving on the production side will only effect part of the bill, and the total bill can go up even as the average wholesale price goes down.

I was more thinking of increasing throughput on existing power lines. That's a lot of work/money that'll need to be spent if we want to switch cars and heating to electric.

I'm in Austria and I pay separate bills for the grid and the electricity.

in the UK the price everyone pays is set according to the marginal price

essentially this means if there's one milliwatt of gas on the grid: everyone pays the gas price

as a result consumers see very benefit from renewables

(but the renewable generators are making out like bandits)

This is the right move. The marginal price is the price that balances supply and demand by definition, and this must be the case on the grid at all times, even to the last milliwatt, or you immediately get a Spain situation with cascading blackouts where huge parts of the grid go dark.

That happened once, and the causes are still unclear/ being investigated. We don't have blackouts unless extreme weather or bad grid sectors (e.g. semi abandoned rural). Also, we have marginal pricing, and we had this pricing for years before the Blackout.

And you can have other pricing schemes, for example pay-as-bid, that also balance supply and demand.

Yes that's sound weird but this is to make sure gas peaker plants which by definition run only a fraction of time can be profitable and be built.

yeah I understand the theory behind the system

however the market participants have "adapted" to it

https://www.theguardian.com/business/2025/jan/08/two-power-s...

it works pretty well on a short-term basis but due to the way the system works there's no ability to price-in a long term signal

the government is currently consulting on a changes to introduce this mechanism (as is the EU)

At a glance, it sounds as if those power stations need to pay for themselves in a few hours per week, and as soon as you get more transmission capacity from Scotland they're dead.

Give those constraints, of course they must be expensive if they are to exist at all.

Do I misunderstand anything?

second paragraph of the article starts with:

> The sector contributed 0.25% to GDP and enabled savings on consumers' electricity bills of more than 4.6 billion euros in 2024, with an average reduction in the wholesale price of close to 20 euros per MWh.

In Spain they probably do because the government is heavily involved in the electricity production. It's not really a free market, and it didn't have to be. In fact I'd prefer it to be more in the government's hands then it is. But Spain is a country that's much more socialist than the US and as such I'm very happy to live here.

For example when energy prices rose during the pandemic and the Ukraine war the government put limits on price increases and also lowered VAT.

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