That’s the percentage of a power plant’s maximum potential actually achieved over time. And Bloomberg reports that wide spread adoption of renewables is lowering the hitherto incomparable capacity factor for fossil fuels. This begins the virtuous cycle.
That’s because once a solar or wind project is built, the marginal cost of the electricity it produces is pretty much zero—free electricity—while coal and gas plants require more fuel for every new watt produced. If you’re a power company with a choice, you choose the free stuff every time.
It’s a self-reinforcing cycle. As more renewables are installed, coal and natural gas plants are used less. As coal and gas are used less, the cost of using them to generate electricity goes up. As the cost of coal and gas power rises, more renewables will be installed.
Again, no use getting all Pollyannish about any of this. But the business news only reports the business view and it doesn’t really care if renewables are more profitable than fossil. Business only cares about that middle part – the profit.
So, BFD.
Image: author photo, near Valreas, France.