3 ms·
Aside from a few industrial uses, nobody buys "Coal"; people buy power. There is no differentiation. If it's cheaper to put in a new solar array with batteries
by ogre_codes 7y ago
Aside from a few industrial uses, nobody buys "Coal"; people buy power. There is no differentiation. If it's cheaper to put in a new solar array with batteries than it is to continue burning coal, then power companies will shutter the coal plants.
This isn't really analogous to tobacco because there is no direct substitute for smoking. So long as people are addicted to tobacco there is a predictable and steady decline curve which allows these guys to milk it over time.
- hodder 7y agoThere is also a fairly predictable decline curve for coal and shutter dates. I’m not talking about building new plants. That makes no sense I agree (as do the utilities). Existing coal plants absolutely make money as they simply need to cover variable costs.
- ogre_codes 7y agoThe big difference is for tobacco, the curve is decades long and may continue to decline for decades more. For coal power, it's unlikely to last until the end of the decade. Smokers gonna smoke, but outside a few specific places, nobody is going to be generating power with coal in 20 years. Unlike smoking, the consumers of coal power are pragmatic and driven by profit.
- hodder 7y agoThe earnings yield is much higher to compensate.
- perl4ever 7y agoMaybe I don't understand what you're saying but it sounds like you're implying a homeostatic mechanism prevents capital from being withdrawn from coal. If no company or sector could decline due to declining profits, then nothing in the economy would work at all.