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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.
(Score: 1) by khallow on Sunday March 21 2021, @06:25AM (8 children)
As I noted before, with these kinds of subsidies and regulations, there is no free market in power generation.
(Score: 1) by khallow on Sunday March 21 2021, @08:17AM (1 child)
Government interference could, for example, make geothermal attractive (through a combination of subsidy and penalizing the alternatives). If that were to happen, would we then applaud the inevitable shift in the market to geothermal or ask whether we could be doing better things with the effort and resources going into that?
(Score: 0) by Anonymous Coward on Sunday March 21 2021, @09:46AM
Those zany kids and their whacko plans! Bah!
(Score: 2) by Azuma Hazuki on Monday March 22 2021, @01:17AM (5 children)
So it's only the Free Market when it's something you like, and when it's not something you like. Duh Eebil Gubbamint And Its Regulations From Thuh Pits'o'Hell are responsible? Oh, you stupid, lying motherfucker...
I will agree with you on one thing, though: fossil fuels never should have gotten subsidized. Had that never happened, maybe we'd have gotten a decade or two ahead on the renewables curve than where we are.
I am "that girl" your mother warned you about...
(Score: 1) by khallow on Monday March 22 2021, @05:48AM (4 children)
Words have meaning. A true free market is an impossible ideal, but in practice, we call anything close a free market. Here, there are number problems that make the market not free. A key pair are heavy regulation and large market distortions (particularly, subsidies) of the market.
(Score: 2, Insightful) by Azuma Hazuki on Monday March 22 2021, @06:32AM (3 children)
Yes. Words DO have meaning, which is what I and several others have been pounding into your greasy self-serving smirking ignorant face for years to no avail. You don't argue in good faith and never did.
The Free Market (why are you not capitalizing the name of your God, blasphemer?!) is a fucking *stupid* solution to most problems of human endeavor. The less elastic the demand for something is, which is to say, the more important and basic it is for survival and social intercourse, the stupider an idea "let's apply Free Market ideology to this!" becomes.
You, in your demon-worshiping Free Market religion, have forgotten that markets emerge from and were created for human prosperity, NOT the other way around. If you want to bitch about regulation being applied poorly, do so, but STOP USING THAT TO IMPLY REGULATION ITSELF IS BAD. You disingenuous little fuck. Do you think we can't all see what you're doing with this?
I am "that girl" your mother warned you about...
(Score: 0) by Anonymous Coward on Monday March 22 2021, @03:48PM (1 child)
It is now apparent that in addition to the mental disorder of homosexuality, you have Tourette's. Just kidding. You do seem to have a real case of depression, though.
(Score: 2) by Azuma Hazuki on Tuesday March 23 2021, @11:57AM
So~o, did you have anything germane to the points I was making to say, or did you just want to tone troll?
I am "that girl" your mother warned you about...
(Score: 1, Touché) by khallow on Tuesday March 23 2021, @01:49PM
I suggest looking up the meaning of free market and asking yourself, how does that apply to a heavily subsidized and regulated situation? And then apologize for being an idiot here. As to the rest of your post, there's a quote that seems so very appropriate "People make up how things work." [reason.com]. Nobody worships free markets here. Nobody claims all regulation is bad. Pull your head out of your ass.
And remember, truth remains an absolute defense against your bullshit.