03-01-2019, 02:53 PM
I understand the area of disagreement, but still think it is a reasonable assumption to make that the cost curve continues its downward trend, which will continue to impact the operations of traditional utilities that rely increasingly on gas generation. I don't see the trend in lowered cost to generate onshore wind and certain PV applications changing any time soon, and I think the risk/benefit is already there for a substantial number of investors seeking to build out the infrastructure, with full awareness of the intermittent nature of generation or the cost of developing new transmission networks.
Absent some unknown major technological breakthrough akin to the original fracking boom, I don't see what substantially changes the cost curve for natural gas. Natural gas also carries the risk of fluctuation in input price. As demand increases for natural gas, cost should follow. Solar especially doesn't run up against that limitation. Enough solar energy hits the Earth in an hour to satisfy a year's worth of global energy demand. From a technological standpoint, we can't collect anywhere close to that output, much less use it.
I don't think traditional utes are extinct in five years, but I think the ones that generate the best returns for their shareholders will take the comparative costs of generation into account, together with the risk to the traditional generation/distribution business model, in their plans moving forward.
Frankly, I don't particularly care what technology is capable of generating power as cheaply as possible. I would be thrilled if fusion finally made it out of the lab tomorrow and put every other power generating method out of business because the cost of generation is insanely cheap. Reducing the cost of production is a boon to the economy as a whole, and likely to benefit all of us immensely as investors.
Absent some unknown major technological breakthrough akin to the original fracking boom, I don't see what substantially changes the cost curve for natural gas. Natural gas also carries the risk of fluctuation in input price. As demand increases for natural gas, cost should follow. Solar especially doesn't run up against that limitation. Enough solar energy hits the Earth in an hour to satisfy a year's worth of global energy demand. From a technological standpoint, we can't collect anywhere close to that output, much less use it.
I don't think traditional utes are extinct in five years, but I think the ones that generate the best returns for their shareholders will take the comparative costs of generation into account, together with the risk to the traditional generation/distribution business model, in their plans moving forward.
Frankly, I don't particularly care what technology is capable of generating power as cheaply as possible. I would be thrilled if fusion finally made it out of the lab tomorrow and put every other power generating method out of business because the cost of generation is insanely cheap. Reducing the cost of production is a boon to the economy as a whole, and likely to benefit all of us immensely as investors.