Tony Seba, Adam Dorr and RethinkX have released a new report called The Great Stranding: How Inaccurate Mainstream LCOE Estimates are Creating a Trillion-Dollar Bubble in Conventional Energy Assets.
To summarize, the conventional energy sector is hooped and it is imperative that we not let it take us down with them.
Here is the conclusion of their Executive Summary in their report:
Our analysis has a number of important implications for energy and finance, as well as for society and the environment at large:
- Conventional energy assets are severely mispriced, and their overvaluation is creating a growing asset valuation bubble in the conventional energy sector.
- Coal, gas, nuclear, and hydro power are no longer competitive with the combination of SWB, even using inaccurate mainstream LCOE calculations.
- Solar and wind power reached cost parity and became cheaper than coal, gas, nuclear, and hydro power several years sooner than mainstream analysts reported.
- The widening gap between rapidly increasing conventional energy LCOE and rapidly decreasing SWB costs means that the SWB disruption will proceed faster than expected.
- Coal and gas power plants with integrated carbon capture and storage (CCS) are doubly mispriced (overvalued).
- Governments must protect people, not incumbent companies or industries, from the financial risk of the conventional energy asset bubble.
- Carbon neutrality can be achieved more quickly and cheaply than generally expected.
The EIA, IEA, and other analysts are playing a critical role in mispricing conventional energy assets that is analogous to the role that the credit rating agencies played in mispricing subprime mortgage assets, which led to the housing bubble and financial crisis in 2007. We call on investors, policymakers, civic leaders, public utility commissions, and other decision-makers to demand reality-based conventional LCOE estimates in order to protect their stakeholders and society.
Download The Great Stranding or watch the RethinkX summarization below.
You may also want watch this video on their previous energy report: Rethinking Energy 2020-2030 – 100% Solar, Wind and Batteries in Just the Beginning
Or, if the so-called conventional energy industry already makes you irate then perhaps you prefer a more obstreperous take on what this all means:
