> why price of electricity continues to rise despite decreasing production costs.
That's economics 201. The price of a commodity is the cost of the marginal producer. So it doesn't matter how cheap some producers are, the price of a commodity is set by the most expensive producer that is meeting demand. So price of electricity won't drop until cheap producers can meet 100% of demand.
Until that happens, cheap producers enjoy outsized profits, encouraging more cheap producers to join the market.
Makes sense, and then you can split consumption (or production - arbitraging with a battery) into time-of-use buckets (a kWh of electricity already has different costs if you're buying during peak hours vs off-peak vs super-off-peak), or spot prices vs reserve prices. In commodities terms, I feel like it would be similar to futures and spot-price.
Those who can buy their energy in bulk and store it efficiently, or only consume when the price is lower than X, will pay a lower rate than those who cannot store energy, or who pay to have someone else store it (again, arbitrage)
That's economics 201. The price of a commodity is the cost of the marginal producer. So it doesn't matter how cheap some producers are, the price of a commodity is set by the most expensive producer that is meeting demand. So price of electricity won't drop until cheap producers can meet 100% of demand.
Until that happens, cheap producers enjoy outsized profits, encouraging more cheap producers to join the market.