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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: 2) by c0lo on Sunday March 21 2021, @10:53PM (2 children)

    by c0lo (156) Subscriber Badge on Sunday March 21 2021, @10:53PM (#1127252) Journal

    I get YT ads from a company that want to sucker suckers in their program: get paid to install PV on your roof. I suspect a scheme of "we are the PV owners, will sell you power made on your roof".

    Otherwise, I'm charged 27c/kWh consumed and paid 6.5c/kWh fed into the grid - no longer subsidized.

    --
    https://www.youtube.com/watch?v=aoFiw2jMy-0
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  • (Score: 0) by Anonymous Coward on Monday March 22 2021, @01:01AM (1 child)

    by Anonymous Coward on Monday March 22 2021, @01:01AM (#1127297)

    > I'm charged 27c/kWh consumed and paid 6.5c/kWh fed into the grid

    Do you have more installed solar than your "base load"? By base load, I mean minimum load during the day when solar is making power--all the clocks, computers, etc that are always on.

    Given the poor sell/buy ratio, it would seem like a disincentive to have much more solar than your base load?

    • (Score: 2) by c0lo on Monday March 22 2021, @01:21AM

      by c0lo (156) Subscriber Badge on Monday March 22 2021, @01:21AM (#1127307) Journal

      Given the poor sell/buy ratio, it would seem like a disincentive to have much more solar than your base load?

      True. 'xcept the storage prices come down fast lately and then one can move in storing all that's needed and feed-in nothing. Totally achievable with the rooftop area available.
      We're early on in the process; once it picks up speed it will accelerate the downfall into the death spiral for power utilities - the more money you try to squeeze, the less participants to squeeze will choose to stay with you.

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0