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posted by martyb on Saturday March 20 2021, @07:16PM   Printer-friendly

Over-valued fossil fuel assets creating trillion-dollar bubble about to burst:

A major new report has warned that conventional energy assets including coal, gas, nuclear and hydro power plants have been consistently and "severely" over-valued, creating a massive bubble that could exceed $US1 trillion by 2030.

The report is the latest from Rethinx, an independent think-tank that was co-founded by Stanford University futurist Tony Seba, who is regarded as one of few global analysts to correctly forecast the plunging cost of solar over the last decade.

According to the new report, co-authored by Rethinx research fellow Adam Dorr, analysts and the broader market are still getting energy valuation badly wrong, not just on the falling costs of solar, wind and batteries, or "SWB," but on the true value, or levelised cost of energy, of conventional energy assets.

"Since 2010, conventional LCOE[*] analyses have consistently overestimated future cash flows from coal, gas, nuclear, and hydro power assets by ignoring the impacts of SWB disruption and assuming a high and constant capacity factor," the report says.

Where the analysts are going wrong, according to Seba and co, is in their assumptions that conventional energy plants will be able to successfully sell the same quantity of electricity each year from today through to 2040 and beyond.

[...] This assumption, says the report, has been false for at least 10 years. Rather, the productivity of conventional power plants will continue to decrease as competitive pressure from near-zero marginal cost solar PV, onshore wind, and battery storage continue to grow exponentially worldwide.

"Mainstream LCOE analyses thus artificially understate the cost of electricity of prospective coal, gas, nuclear, and hydro power plants based on false assumptions about their potential to continue selling a fixed and high percentage of their electricity output in the decades ahead," the report says.

[...] "In doing so, they have inflated the value of those cash flows and reported far lower LCOE than is actually justified ... and helped create a bubble in conventional energy assets worldwide that could exceed $1 trillion by 2030."

[*] LCOE: Levelized Cost Of Energy.

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  • (Score: 1, Informative) by Anonymous Coward on Saturday March 20 2021, @11:28PM (4 children)

    by Anonymous Coward on Saturday March 20 2021, @11:28PM (#1126892)

    Replying to myself. I was wrong about VT on two counts -- []

    tl;dr -- VT is well on it's way--wood isn't primary and they have already done their renewable homework.

    Vermont consumes more than three times as much energy as it produces, but total energy consumption is the smallest of all the states, which contributes to Vermont having the lowest carbon dioxide emissions of any state.
            Nearly 3 out of 5 Vermont households heat their homes with petroleum, 1 out of 5 use natural gas, and almost 1 out of 6 burn wood for heat. More than one-third of Vermont schoolchildren attend facilities heated by wood products.
            In 2019, Vermont generated 99.9% of its electricity from renewable resources, a larger share than in any other state. About 55% of Vermont's in-state generation came from conventional hydroelectric power.
            In 2019, Vermont’s five wind farms accounted for about 18% of the state’s utility-scale electricity net generation, a larger share than in almost four-fifths of the states.
            By 2050, Vermont plans to obtain 90% of all its energy from renewable sources and to reduce overall energy use by more than one-third, according to their Renewable Energy Standard.

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  • (Score: 2) by legont on Sunday March 21 2021, @01:03AM (3 children)

    by legont (4179) on Sunday March 21 2021, @01:03AM (#1126914)

    Hydro is not renewable because reservoirs silt.

    "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
    • (Score: 2) by hendrikboom on Sunday March 21 2021, @02:30AM (1 child)

      by hendrikboom (1125) Subscriber Badge on Sunday March 21 2021, @02:30AM (#1126949) Homepage Journal

      It is possible to dredge them. But no one seems to be doing it.

      • (Score: 3, Touché) by legont on Sunday March 21 2021, @10:53AM

        by legont (4179) on Sunday March 21 2021, @10:53AM (#1127051)

        I was told that it is prohibitive energy wise. Unless we use nukes to dig which was planned and tested at some point.

        "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
    • (Score: 2) by FatPhil on Sunday March 21 2021, @11:17AM

      by FatPhil (863) <{pc-soylent} {at} {}> on Sunday March 21 2021, @11:17AM (#1127056) Homepage
      The guys who set the rules disagree with you:
      Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves