{"id":456121,"date":"2021-03-11T10:53:04","date_gmt":"2021-03-11T15:53:04","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=456121"},"modified":"2021-03-11T10:53:04","modified_gmt":"2021-03-11T15:53:04","slug":"new-research-historical-data-shows-inaccurate-levelized-costs-of-electricity-for-conventional-power-plants-have-distorted-the-market-and-potentially-created-a-growing-global-financial-bubble","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/new-research-historical-data-shows-inaccurate-levelized-costs-of-electricity-for-conventional-power-plants-have-distorted-the-market-and-potentially-created-a-growing-global-financial-bubble\/","title":{"rendered":"New Research: Historical Data Shows Inaccurate Levelized Costs of Electricity for Conventional Power Plants Have Distorted the Market and Potentially Created A Growing Global Financial Bubble"},"content":{"rendered":"
\n

LONDON and SAN FRANCISCO, March 11, 2021 (GLOBE NEWSWIRE) — New research released today from RethinkX details decade-long inaccurate estimates of the levelized costs of electricity (LCOE) for coal, natural gas and hydro power plants, produced by virtually all mainstream analyses and used to direct future investment, have distorted the electricity market, potentially creating a growing global financial bubble around conventional power plants with dynamics that are similar to the subprime mortgage housing bubble that led to the Great Recession.<\/p>\n

\n
\n
\n The Great Stranding: How Inaccurate Mainstream LCOE Estimates are Creating a Trillion-Dollar Bubble in Conventional Energy Assets<\/u>
\n <\/em>
\n <\/a>, a new report from RethinkX<\/u><\/a> co-founder Tony Seba and co-author Adam Dorr, includes detailed historical data revealing that,\u00a0at least\u00a0since 2010, the leading analyst organizations, including the International Energy Agency (IEA), the United States Energy Information Administration (EIA), Wall Street analysts and others, that define\u00a0the\u00a0LCOE\u00a0on\u00a0which investors, policymakers, regulators and civic leaders make decisions, have systematically assumed that conventional\u00a0coal, natural gas and hydro power plants would produce far more electricity than they actually have, and therefore achieve levelized costs of electricity that are far lower than they actually are, making those power plants appear to be far better investments than they turn out to be.\u00a0The divergence between real costs and the incorrect LCOE, happening in conventional power markets, is so large and growing that mainstream analyses underestimate the per kilowatt-hour cost of coal, gas and hydro by up to\u00a0400%. [See Video Presentation<\/u><\/a>]<\/p>\n

\u201cFor at least a decade, mainstream energy analysts have ignored real market data, just as the credit rating agencies ignored real housing market data. As a result, over $2.2 trillion has been invested in conventional power plants worldwide based in part on erroneous assumptions about future output and therefore the cost of electricity and that number is growing,\u201d said Seba. \u201cWhat happened to coal as a result of natural gas is now happening to all conventional power as a result of the rapidly increasing adoption of near zero marginal cost solar wind and battery (SWB) \u2013 but because of erroneous assumptions that underlie levelized costs of electricity, governments, investors and ratepayers may not know it. Instead, they could continue to sink trillions into assets that will be increasingly worthless, at the expense of ratepayers and potentially our retirement funds.\u201d<\/p>\n

This new research reveals prospective conventional electricity power plants have become overly inflated in value likely because\u00a0virtually all mainstream analysts calculate LCOE based on the false assumption that any newly-built power plant will be utilized at a high and constant rate year after year, and in the case of coal, natural gas and hydro at much higher rates than\u00a0what historical market data shows. As a result,\u00a0when corrected for the real output,\u00a0the real levelized costs of electricity from these conventional power plants are much higher\u00a0than these agencies have projected.\u00a0 Specifically:<\/p>\n