Are low profits to blame for the energy transition lagging?

On a recent episode of the show, host Ed Crooks was joined by Melissa Lott and Joseph Majkut to discuss two books that were generating a lot of interest in energy circles. One of those, The Price Is Wrong, argues that inadequate profitability is the key reason why the transition to low-carbon energy is not moving fast enough to address the threat of global warming.

There are plenty of interesting and provocative points raised in the book, so it made sense to hear them direct from the source. Ed and Melissa are joined by author and academic Brett Christophers to dissect the main points: the challenges and obstacles faced by renewable energy projects in terms of profitability and investment, and the true impact of these on progressing the energy transition.

Christophers says that low returns in renewables are a result of competition, volatility in wholesale power markets, and the design of energy markets – ‘returns are lower in renewables because there’s too much money chasing too few projects.’ Ed and Melissa weigh in with their thoughts on this. Plus, they discuss the importance of market design, the role of power purchase agreements, and the need for stability in renewable energy projects. There’s a definite need for more stability-providing sources to make renewable energy projects bankable on a larger scale. Are PPAs the answer?

Listen back to the review of The Price Is Wrong with Ed, Melissa and Joseph here.

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