The 2nd Extinction of Fossils

As demand for electricity has declined traditional coal and gas companies in the EuroZone have seen prices drop so low that they had to pay for it to be used. Due to several factors demand for energy has declined in Europe. The Fukushima meltdown that led Germany to close several power plants and the shale gas boom in the United States have both altered the European coal industry. As America becomes independent of foreign energy once thriving industries abroad have lost credit rating and profitability. Wind and Nuclear are designed to run at full capacity and are hard to shut down once running unlike coal and gas that have recently been running at 10% production levels. As trends like this occur in other areas the usage of fossil fuels may become extinct.

Currently renewable energy makes up 1/2 of Germany’s power grid and 1/3 in Italy and Spain. As renewable industries thrive and fossil fuel industries begin to exit the market due to lower profits market share will increase for renewable energies.The financial crisis which has reduced demand even more may cripple this once vibrant and powerful industry.

Works Cited

http://www.economist.com/news/briefing/21587782-europes-electricity-providers-face-existential-threat-how-lose-half-trillion-euros

4 thoughts on “The 2nd Extinction of Fossils

  1. The article at least seemed to imply this 10% production had been occurring for quite some time now. In this type of market Economies of Scale might not be cost saving? Firms might exit the market if production of 10% doesn’t cover marginal costs.

  2. It is important to note that even though Germany shut down its nuclear plants, it still purchases significant quantities of nuclear energy from France. I don’t think this means the end of the industry yet however, given the massive US dependence on fossil fuels coupled with the vast new markets emerging in India and China.

  3. How are these plants that are operating at 10 percent of capacity staying in the market? Are they state-owned enterprises or are they actually still profitable at these levels?

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