Reply To: Wealth of Nations, and Economics of Abundance

[Brian H]

The only way for the existing providers to “rake in” the additional 20+¢/kwh profit (that’s a pretty high number, btw; base is 6½¢/kwh where I live) is if they can erect impenetrable ‘barriers to entry’ to other producers/FF operators. That would be quite a trick. The industrial power buyers, e.g., would install their own generators and take the full benefit, and that would hack away a huge chunk of the utilities’ markets. And the consumer pressure groups would take to the streets with torches and machetes of they were being asked to pay 30-100X the cost of production. You have to be a serious corporate conspiracy theorist to imagine that the market wouldn’t rule in this instance.

IMO, just the NEWS that FF was workable would start a dramatic move in pricing of fossil fuels and every related power usage and production service and product. People are NOT willing to pay vast markups now for something that will be cheaper later. In fact, there might be a serious transitional deflationary risk.