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To me the article is just economics 101. 1) Supply is constrained (by the war and sanctions), demand is fixed to rising, so price goes up. 2) Price goes up, s

To me the article is just economics 101. 1) Supply is constrained (by the war and sanctions), demand is fixed to rising, so price goes up. 2) Price goes up, so there is more demand for alternatives, including dirty ones (coal) but also green ones (solar, wind, etc). 3) Increased investment in green energy sources will make them more competitive faster than expected and thus spur the transition.

JumpCrisscross 4y ago
> investment in green energy sources will make them more competitive faster than expected and thus spur the transition The article is worth the read. Apparently "S&P Global, a data firm, thinks emissions from energy combustion will peak in 2027, at a level the world would still be producing in 2028 had the war not happened." This isn't theorized market activity, it's actual changes in generation capacity plans made over the last twelve months.
kneebonian 4y ago
Interestingly enough pretty much the same factors pushed the shale revolution in oil extraction.
- JumpCrisscross 4y ago
  > the same factors pushed the shale revolution in oil extraction The salient difference being the state intervention this time around. Fracking was largely private R&D.
  - stonogo 4y ago
    The Department of Energy literally invented modern fracking; see the Eastern Gas Shales Project, which lasted for a decade and a half. Early commercial fracking worked off of shale mapping performed at Sandia National Lab; reference here https://energy.sandia.gov/wp-content/gallery/uploads/FINAL-HydraulicFracturing-Final-wSAND1.pdf https://energy.sandia.gov/wp-content/gallery/uploads/FINAL-H... (which research continues). Finally, the government provided $10 billion in tax cuts for unconventional gas drilling over the past thirty years, so even that private R&D was subsidized.
    - WeylandYutani 4y ago
      The free market is considerably more government driven than people want to believe.
    - kortilla 4y ago
      Indeed, but $10 billion is nothing over 30 years. More than that goes into renewable research every year. If you want a meaningful comparison it should be something like dollars per kWh.
jillesvangurp 4y ago
Exactly. I would add to this that pro-longed price uncertainty for fossil fuels causes people to invest in alternatives to minimize their risk and exposure and to divest from any solutions involving coal or gas. Even if it's profitable right now, it might very well not be in just the blink of an eye. Coal and gas related assets are increasingly toxic from an investment point of view as well. Also, renewables were already very competitive before the war started. The added price uncertainty since then is just widening the gap. Anyone who has the option is considering putting solar on their roof, replacing their gas boiler with a heat pump, and buying an EV. Once people start receiving 1000 euro monthly bills for heating, people are going to get creative trying to fix that. Such a thing has happened this winter and people are acting accordingly.
throwaway4aday 4y ago
1) Supply is constrained (by the war and sanctions), demand is fixed to rising, so price goes up. 2) Price goes up 2 a) Demand remains the same or increases (we're talking about energy so demand will always be increasing) 2 b) there is more demand for alternatives, including dirty ones (coal) but also green ones (solar, wind, etc). 3) Businesses see an opportunity for higher returns 3 a) Increased investment in fossil fuel energy sources to take advantage of the higher prices. Wells with dirtier oil that were idle are brought back online because they are profitable, higher cost extraction gears up like tar sands. 3 b) Increased investment in green energy sources to take advantage of higher energy prices.

JumpCrisscross 4y ago

> investment in green energy sources will make them more competitive faster than expected and thus spur the transition The article is worth the read. Apparently "S&P Global, a data firm, thinks emissions from energy combustion will peak in 2027, at a level the world would still be producing in 2028 had the war not happened." This isn't theorized market activity, it's actual changes in generation capacity plans made over the last twelve months.

kneebonian 4y ago

Interestingly enough pretty much the same factors pushed the shale revolution in oil extraction.

JumpCrisscross 4y ago
> the same factors pushed the shale revolution in oil extraction The salient difference being the state intervention this time around. Fracking was largely private R&D.
- stonogo 4y ago
  The Department of Energy literally invented modern fracking; see the Eastern Gas Shales Project, which lasted for a decade and a half. Early commercial fracking worked off of shale mapping performed at Sandia National Lab; reference here https://energy.sandia.gov/wp-content/gallery/uploads/FINAL-HydraulicFracturing-Final-wSAND1.pdf https://energy.sandia.gov/wp-content/gallery/uploads/FINAL-H... (which research continues). Finally, the government provided $10 billion in tax cuts for unconventional gas drilling over the past thirty years, so even that private R&D was subsidized.
  - WeylandYutani 4y ago
    The free market is considerably more government driven than people want to believe.
  - kortilla 4y ago
    Indeed, but $10 billion is nothing over 30 years. More than that goes into renewable research every year. If you want a meaningful comparison it should be something like dollars per kWh.

jillesvangurp 4y ago

Exactly. I would add to this that pro-longed price uncertainty for fossil fuels causes people to invest in alternatives to minimize their risk and exposure and to divest from any solutions involving coal or gas. Even if it's profitable right now, it might very well not be in just the blink of an eye. Coal and gas related assets are increasingly toxic from an investment point of view as well. Also, renewables were already very competitive before the war started. The added price uncertainty since then is just widening the gap. Anyone who has the option is considering putting solar on their roof, replacing their gas boiler with a heat pump, and buying an EV. Once people start receiving 1000 euro monthly bills for heating, people are going to get creative trying to fix that. Such a thing has happened this winter and people are acting accordingly.

throwaway4aday 4y ago

1) Supply is constrained (by the war and sanctions), demand is fixed to rising, so price goes up. 2) Price goes up 2 a) Demand remains the same or increases (we're talking about energy so demand will always be increasing) 2 b) there is more demand for alternatives, including dirty ones (coal) but also green ones (solar, wind, etc). 3) Businesses see an opportunity for higher returns 3 a) Increased investment in fossil fuel energy sources to take advantage of the higher prices. Wells with dirtier oil that were idle are brought back online because they are profitable, higher cost extraction gears up like tar sands. 3 b) Increased investment in green energy sources to take advantage of higher energy prices.