Why doesn't the capitalist economy invest in cheap renewable energy?

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• poVoq@slrpnk.net ⁨3⁩ ⁨days⁩ ago

  Ok, lots to unpack in this video, but the primary issue is that it is highly US centric and doesn’t apply very well to other large electricity markets like the EU.

  Here in the EU there is already a very high percentage of renewable electricity generation, often exceeding 70% of the total.

  But we have hit a wall not because of too much competition or low profitability, but the exact opposite.

  In the EU the power generation is primarily owned by a few large companies, basically an oligopol. These own both large renewable and fossile fuel plants.

  The video is correct in how it describes how electricity spot markets function, but has a blind spot in how it can be gamed if a few large companies conspire in keeping the electricity a mix.

  By ensuring the demand is rarely fully covered with cheap renewables, but rather keeping a few expensive to run gas-fired plants in the mix, they can collect the price for the gas powered electricity even for the cheap renewables and thus make record profits as long as they keep the market captured like that.

  As a result electricity prices for private and industrial consumers are high, despite a large percentage of cheap renewables, and this is a huge barrier for the much larger non-electricity energy consumption sector to electrify.

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  • ujeenator@lemm.ee ⁨3⁩ ⁨days⁩ ago

    but has a blind spot in how it can be gamed if a few large companies conspire in keeping the electricity a mix. Interesting, thank you for insights, is there anybody on youtube or podcasts who provide any analysis on this topic for EU?

    As a result electricity prices for private and industrial consumers are high Does that mean, that it may be cheaper for them in advance, to build their own solar plant + large energy storage? e.g. with 3-5 years ROI

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    • poVoq@slrpnk.net ⁨3⁩ ⁨days⁩ ago

      Yanis Varoufakis has done a few interviews and videos on the topic which you can find on YouTube.

      Some large industries are doing that, yes. But due to very low gas prices until 2022, much of the industry has slept on the issue and now with general economic headwinds are not necessarily prioritizing such investments due to other bigger problems.

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  • ericjmorey@lemmy.world ⁨3⁩ ⁨days⁩ ago

    I’m EU subsidized solar more that the US did.

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• MrMakabar@slrpnk.net ⁨3⁩ ⁨days⁩ ago

  The problem is that renewables can be done by a lot smaller companies then fossil fuels. Solar can be done by a family on the roof rather easily. Wind turbines cost 3million per piece, so very possible investment for a farmer, small company and the like.

  Fossil fuel power plants are a lot more expensive hence competition is smaller. We are easily talking 100million and more per plant. Large pipelines, refineries and oil or gas field developments easily cost over a billion. That keeps out competition. Not to mention oil having the largest cartel in the world backing it.

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• buzz86us@lemmy.world ⁨2⁩ ⁨days⁩ ago

  This is proof that capitalism sucks. You’re getting readily available electricity, and yet oil is more profitable.

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• PhilipTheBucket@ponder.cat ⁨3⁩ ⁨days⁩ ago

  Compounding the problem is that the incentives for the company don’t always align with the incentives for the person making the decisions.

  If you’re an oil company, anything you do to invest in renewable energy will make you look like a traitor to your peers, and on a personal level, you’ll be at risk of trading the existing huge well-polished mature empire underneath you for a scrappy little tiny empire that might or might not succeed. That distorts decision-making away from sensible decisions even in areas like the tech sector where the scrappy little empire might have orders of magnitude more profit in it. In energy, where as pointed out, the profit might actually be lower, there’s not an energy company on the planet that will do much more than tell their marketing team to talk a lot about it so they look like they’re doing something that people like.

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• Boomkop3@reddthat.com ⁨2⁩ ⁨days⁩ ago

  They are currently. Google and Microsoft are working on getting private nuclear power plants up and running so they can sell more AI slop

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• Eyekaytee@aussie.zone ⁨3⁩ ⁨days⁩ ago

  I get it but even with all these drawbacks we’re doing pretty good, I’d like to see China and India have their lines start going back the other way

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  Also he didn’t mention much about batteries, which are fantastic for arbing cheap solar during the day and expensive power at night

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  • cows_are_underrated@feddit.org ⁨2⁩ ⁨days⁩ ago

    What to consider for China is, that it exports a shit ton of products into other countries. What this means is, that emissions that should be advocated to the EU or US are being emitted in China, which is part of the reason why it has such high emissions.

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    • Eyekaytee@aussie.zone ⁨2⁩ ⁨days⁩ ago

      That’s really cool that you’re producing so much stuff, but I don’t give a shit, I don’t care if you’re the #1 maker of carbonated dildos, and the US and EU have no market for building those things, it means nothing to me being #1 in renewables and yet having co2 emissions go up, it means that even though you’re producing a lot of renewables you’re still sucking compared to the USA and EU when it comes down to the cold hard facts, you’re not reducing your co2 output

      SINGAPORE, Feb 13 (Reuters) - China started construction on 94.5 gigawatts of coal-fired power in 2024, the highest volume of new builds since 2015, hampering the country’s transition away from fossil fuels, researchers said in a report published on Thursday.

      reuters.com/…/chinas-2024-coal-power-construction…

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  • Wanderer@lemm.ee ⁨2⁩ ⁨days⁩ ago

    China makes more renewables than the rest of the world.

    Look at completed and under construction. Wind, solar, nuclear, hydro, pumped hydro.

    50% car sales are EVs.

    10% of GDP is clean tec.

    A large part of emission growth is rapid increases of the petrochemical industry. That’s not going to last long.

    The energy demand increase is almost entirely being met by renewables and increasing. Its going to drop very fast.

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    • Eyekaytee@aussie.zone ⁨2⁩ ⁨days⁩ ago

      Its going to drop very fast.

      Yes that’s what I’d like to see

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• endeavor@sopuli.xyz ⁨3⁩ ⁨days⁩ ago

  checks countries that invest in green energy Huh they’re all capitalist. Strange, its as if this video is commie propaganda for idiots.

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  • ujeenator@lemm.ee ⁨3⁩ ⁨days⁩ ago

    Did you actually listen to the video? They explicitly mention that capitalist countries do subsidize renewable energy, but it’s unreliable due to political fluctuations. Subsidies can be abruptly discontinued with a change in administration (e.g. like new US administration cuts funding). The main point of the video is the investment behavior of energy companies regarding renewable energy, and why, from a Return on Investment perspective, renewables are still not competitive.

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    • endeavor@sopuli.xyz ⁨2⁩ ⁨days⁩ ago

      No i didn’t, thanks for the summary. Seems like capitalism is going against the tankie propaganda and investing in things that are not profitable since capitalists are not evil.

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