Analysts' inaccurate cost estimates are creating a trillion-

Analysts' inaccurate cost estimates are creating a trillion-dollar bubble in conventional energy assets


Published
March 15, 2021
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The following is a contributed article by Tony Seba and Adam Dorr, founder and research fellow, respectively, at RethinkX.
For the past 10 years, there has been a conventional energy bubble gathering steam. The reason is all too familiar. Just as the credit rating agencies ignored actual market data in the buildup to the subprime mortgage crisis, mainstream energy analysts have ignored market data in the valuation of new conventional power plants.
The U.S. Energy Information Administration (EIA), the International Energy Agency (IEA), Wall Street banks and other analysts all assume that a newly-built coal, natural gas, nuclear or hydro power plant will be able to generate the same amount of electricity year after year from now until 2040 and beyond, with the same consistent sales revenue. In essence, these analysts are pretending that conventional power plants will never face competition from solar, wind and battery technologies (SWB), despite all evidence to the contrary. This assumption is patently false.

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