The future of electricity

Here’s a really good graph of what the “day in life of” will look like for electricity pricing.

During the day, solar and wind will do their thing, pushing electricity prices negative for about a 1/3rd of the day. The rest of the time, batteries, gas, and other type’s (you can see the “baseload” nuclear contribution) will produce the power.

Now, a) it means the price of electricity is lower, by the contribution of midday negative prices, but in general, prices will still be set “at the margin” by the marginal cost of hydrocarbons and b) power generators will still require a return to exist at all, and hence there is a lower limit to what we will pay in the future for electricity, which will be defined by opportunity costs and risk.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

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