The mainstream financial analysis ignores the last decade of average capacity data trends and has helped to drive over-valuation and malinvestment in traditional energy sources and infrastructure worldwide. The 18-minute clip below explains the ramifications.
A large and rapidly-expanding global financial bubble now exists around conventional coal, gas, nuclear, and hydropower energy assets. This bubble has in part been created by mainstream energy analyses that have, for the last decade, significantly underestimated the levelized cost of electricity (LCOE) from conventional power plants because they assume these plants will be able to successfully sell the same quantity of electricity each year from now through 2040 and beyond. This assumption has been false for at least ten years. The rates at which conventional power plants are utilized will continue to decrease as competitive pressure from near-zero marginal cost solar photovoltaic and onshore wind power, and battery energy storage continues to grow exponentially worldwide. Since 2010, the LCOE figures published in mainstream analyses and used by policymakers, regulators, civic leaders, utilities, asset owners, and investors have significantly underestimated the actual cost of electricity generated by prospective coal, gas, nuclear, and hydro power plants. This in turn means that conventional energy asset valuations are heavily overstated…
This video is a synopsis of our new research report “The Great Stranding: How Inaccurate Mainstream LCOE Estimates are Creating a Trillion-Dollar Bubble in Conventional Energy Assets” that was published on March 11th, 2021 and is available for download free of charge from our RethinkX website (https://www.rethinkx.com). Here is a direct video link.
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