alt Hacker NewsBut with power the final product it's the same, the production method is different.
So it's more like this: I make a product for 5 and sell it for 6. My production facility is maxed, but there is still much demand. So I (or someone else) sets up another factory, making them for 8 and selling for 9 (there is demand enough). Now, will I keep selling at 6? No, my prices will also increase (to maximise my profit), and the final price will be where the demand curve crosses the supply curve.
I am wind, the new one is gass. We both make the same product, we sell at the same price, but I make a larger profit.
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Dylan16807 • yesterday at 10:44 PM
You get simple supply and demand with uniform prices in commodity markets but I'm doubtful that's most markets in general.
Makes sense. But in a normally functioning market, production at 5 will rapidly ramp up to capture the excess profits to be made by selling at 8. Eventually this will drive everyone's prices to 6 and the ones stuck producing at 7 (natural gas) will be driven out of business.
According to this comment https://news.ycombinator.com/item?id=46982118 there's additional "treasury" (is that the tax authority in the UK?) weirdness that prevents renewables from capturing these profits.