The Economics of Creating New Energy Supply Chains

For many years now, frequent commenter and senior energy analyst Glenn Doty has been offering readers a level-headed, no-nonsense understanding of the basic economics facing the energy industry. I recommend checking out the remark he made to my recent post: What Will It Take to Mitigate Climate Change?, in which he discusses the invariable result of developing an alternative to an existing (especially large) supply chain, in this case, energy.

The bottom line is that anything, whether planned or accidental, that creates an end-run around existing supply chain reduces the price of the commodity, thus its price, therefore making it even more competitive than it was before.

Does this mean that the basic premise of my current book project (“Bullish on Renewable Energy – Eleven Reasons Why Clean Energy Investors Can’t Lose”) is flawed?  I don’t believe so, but Glenn argues otherwise, and claims that government subsidies for renewables are a requirement, at least for the coming few years, if the enterprise of replacing fossil fuels is to gain serious traction.