The Gregor Letter is on a lighter schedule here at the end of summer. But there are a couple of readings worth mentioning before I return in September.
But this advantage too is starting to erode. Overall, I see the report as a companion to the Oil Fall series: a different set of authors have come up with a different set of framings, many of them clever, but the target is the same. Old energy infrastructure and the fossil fuel systems they support increasingly run at a loss.
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In both cases—and this is crucial to understand—the cost to shutdown existing assets is not only lower than the cost to keep them running, but, the utilities in each case will be able to replace the asset closures with new infrastructure while still delivering savings to customers.
The bullshit detector rang loudly earlier this month, when Mark Mills of the Manhattan Institute published a ridiculous Op-Ed in the WSJ, claiming a steep and onerous call on natural resources to build out clean energy.
No one credible anywhere claims that rapid deployment of wind, solar, and battery storage does not represent a new call on resources. The industry term, levelized cost of energy LCOE , does more than an adequate job of making these comparisons.
Because the Op-Ed is behind a paywall, I found an internet copy for you to read, below. Utilities have come through a rough decade, but what if they are ready to lead again in the energy sector?
Liam Denning and Nathaniel Bullard of Bloomberg, here in , have considered the signal coming through from the woeful underperformance of oil and gas equities, and discerned that growth prospects now look better in the power sector. Recall that wind and solar began their ascent in Europe—not this decade, but in the previous—and this initially slammed the European utility sector bogged down as it was with nuclear, gas, and coal assets.
But a decade of change both in the EU and the US now sees most utilities adopting, owning, and operating new power assets led by wind, solar, and storage. This strikes me as a classic first you get hurt, then you get mad story. Just hit the picture below. The Gregor Letter Subscribe.
energy and power signals- SOLVED problems/examples.
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