Why is energy “cheaper” at night? Doesn’t nuclear, coal, hydro, etc all cost the same to produce no matter what time of day? Demand shouldn’t factor into cost.
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The thing about grid-scale power is that production has to *perfectly* match demand *at all times*.
This is a challenging, and very expensive problem to solve. It means that power companies often need to build entire power plants just to run them during peak demand. Those plants might just be entirely offline at other times. And they will have an entire army of scientists and engineers trying to predict demand as good as they can but it’s still really hard.
In order to incentivize people to not all use power during peak hours that power is priced at a higher rate.
If people reduce their peak demand that means that power companies can build fewer plants.
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