Question

note that hydroelectric, wind, and solar power has a marginal cost of essentially zero. Because the price of electricity is determined by demand and the highest marginal cost source used to meet that demand, renewables are currently quite profitable once the up-front costs are accounted for. Imagine now a world in which the electricity grid consists only of renewable energy sources (likely paired with energy storage systems). The likely marginal cost of an additional megawatt-hour of electricity would be zero. How would you recommend operating such a system instead of marginal cost pricing? Think carefully about how utilities could support the building and maintenance of power plants in this environment.

Answer 1

I think this system can be really a good system where there are upfront payments and once they are recovered, there are no marginal costs. The system is absolutely fine and if the costs are once paid by the govt. They can make a plan to revcover the upfront costs in small installments from the users but there are maintenance costs as well which can be charged to the users. In the present environment we have various technologies or sources of energy generation like thermal power plants, coal, nuclear energy generations which have many maintenance costs and govt. charge us for that and for the manpower involved in their maintenance and management.

There can be a system where only renewable sources of energy are used to generate power. And the amount of maintenance would be too low than the other non renewable sources like thermal energy. The utilities can support for the building and maintenance of power plants and if we use these sources, there won't be any pollution. So all countries should work on these technologies. The cost can't be zero as the requirement of maintenance always there but we can save alot with it and it is feasible as well.