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Why should the power bill be fixed?

image credit: Power costs are fixed

Why should the power bill be fixed?

The prevailing trend, worldwide, is to make the power matrix of the countries renewable.

Essentially hydraulic, wind, solar sources in which the most important cost item is the amortization of capital expenditure (CAPEX).

Fuel-powered plants such as coal, oil and gas will only be used to compensate for the intermittency of renewable sources and will represent a small portion of the energy matrix.

Thus, the bulk of the electricity sector value chain cost is fixed in $/kW of installed capacity.

To reflect this reality for energy consuming customers, is to bring transparency and simplicity.

Bottom line: consumers should receive a fixed monthly bill associated with the capacity they require from the public network.

Rafael Herzberg's picture

Thank Rafael for the Post!

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Dr. Amal Khashab's picture
Dr. Amal Khashab on Jul 9, 2020 1:28 pm GMT

Hi  Rafael

Yo forget one main thing , that operation costs differ from hydro than wind than solar although all are fuel free. Therefor, component of KW used for specific time( KWh) has to be included in the bill. That is going on now.

You sugesstion sounds logic for mingrids mainly of PV and wind where operation and maintenance  costs are fractional of investment cost.

Rafael Herzberg's picture
Rafael Herzberg on Jul 9, 2020 5:51 pm GMT

Hi Amal,

Of course each power source has its own operational costs BUT and by far the most important factor is the amortization cost. 

Roughly speaking 90% is amortization and 10% is operational costs. As we all know producing power is a capital intensive undertaking. And coincidentally solar, wind and hydro cost (CAPEX) around USD 1 000/istalled kW.

Having said this let me compare two situations that require the same amount of kWh energy to heat water for a home.

1st) a 9.5 kW "Bosh" tankless elecric water heater 
2nd) a 1.5 kW conventional water heater (I have a 100 liter tank at home)

For the end user - with the current rate structure - it doesn't make any difference when it comes to the boiler spec. The bill will be the same because it is only about kWh.

But for the supply side it makes a huge difference meeting a 1.5 kW load or a 9.5 kW one. 


Dr. Amal Khashab's picture
Dr. Amal Khashab on Jul 23, 2020 9:31 pm GMT

Hi, Rafael

Sorry, but what Bosh tankless electric water heater is ?

Rafael Herzberg's picture
Rafael Herzberg on Jul 24, 2020 4:39 pm GMT

Hi Amal, a tankless heater by definition is an "instant" heater. Therefore it requires "a lot of kW to instantly heat the water". A tank heater is -in the other hand" an equipment that heats up the water (using less kW capacity but for more hours to reach the same temperature) and store it.

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