Re:Europe’s energy crisis is about to go global as gas price...
by epistasis on Monday September 27, 2021 @01:55PM
(#28673870)
You are correct, gentle supply and demand will operate too slowly to correct the market.
A huge problem with the current market is that it's not very free, entrance is too difficult for new players, and the entrenched players have excessive political power through regulatory capture. There are far too many players with massive amounts of assets that would be stranded and devalued, if they were allowed to be exposed to competition.
But even if there were a more free market, the speed of capital on these sorts of scales is very slow. So even though it may be more economically efficient to abandon a bunch of bad coal plants and do massive deployments of new technology, the amount of capital necessary makes it difficult to make the transition at the economically most cost effective pace.
Look at all the coal plants that burn coal, despite losing money at it.
A huge problem with the current market is that it's not very free, entrance is too difficult for new players, and the entrenched players have excessive political power through regulatory capture. There are far too many players with massive amounts of assets that would be stranded and devalued, if they were allowed to be exposed to competition.
But even if there were a more free market, the speed of capital on these sorts of scales is very slow. So even though it may be more economically efficient to abandon a bunch of bad coal plants and do massive deployments of new technology, the amount of capital necessary makes it difficult to make the transition at the economically most cost effective pace.
Look at all the coal plants that burn coal, despite losing money at it.
https://www.spglobal.com/marketintelligence/en/news-insights...