@bradplumer @noahqk @BeyondCoal Oh, so many things that you have to overlook to assume it was "just economics" that drove the transition. So let's start with a little reminder that only 1/3 of generation is IPP/Merchant so traditional economics only applies to that particular group of power generators. 1/
@bradplumer @noahqk @BeyondCoal And gas prices are impactful on the ops margin but the forecast of gas prices is what impacts the build margin. And utilities regularly overestimated gas prices and are just now starting to catch up to mainstream projections. 2/
@bradplumer @noahqk @BeyondCoal One of the things enviro advocates like beyond coal used to do is hire expert consultants (like me and my colleagues at Synapse) to push back on utility gas price projections. The advocates were the ones ensuring that economics were making their way into decision making. 3/
@bradplumer @noahqk @BeyondCoal But most importantly, coal plants in rate base would have just kept chugging along had it not been for environmental policies that forced the power plants to make "retrofit or retire" decisions. 4/
@bradplumer @noahqk @BeyondCoal These types of "market failures" in this sector have been my obsession for the past 7 years and how I stumbled on things like affiliate transaction issues and self-committing coal. These types of barriers to exit are often ignored in traditional energy-economic modeling 5/
@bradplumer @noahqk @BeyondCoal Another interesting thing to note is that unit by unit analysis of retirement decisions reveals that many of the coal retirements were marginally economic/uneconomic. It was probably advocacy that pushed them over the edge. 6/
@bradplumer @noahqk @BeyondCoal Oh, and we haven't even got to the point where advocates at the state/federal level are the ones pushing for scientific-based standards that protect human health. 7/
@bradplumer @noahqk @BeyondCoal So, yes, if there was no rate regulation, no sunk cost fallacies, perfect foresight, no barriers to entry/exit, no information asymmetry, etc.... then maybe economics would have produced similar results as the advocates. But NONE of those conditions exist in the electric sector
