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0 sats \ 3 replies \ @satgoob 14h \ parent \ on: We Can All Be Millionaires! (WSJ, Mark Skousen) econ
Restrict supply? Like cause blackouts? Not really a thing in the USA outside of some grids bc of bad market dynamics.
Look at how PJM has had new entry of billion dollar projects funded by private funds - its structure has done quite a good job of spurring prívate investment to meet grid needs
There’s some risk of cannibalization if you overbuild in a certain area but that’s a product of demand
You could pre build anticipating demand I guess (not sure if that’s what you’re saying) but that’s not going to make a return for a while so that would have to be a ton of government dollars
Yes the Chinese do exactly that- prebuild suppl of electricity which then triggers the building of demand- factories and cities- electricity is the lifeblood of the modern economy and the Chinese model of build the supply and the demand will come has proven hugely successful.
And yes it is a model that private operators will not adopt because of the risk and the longer term investment- it is a model that only a government can have the mandate and incentive to operate.
Private models much more incentivise limited new power generation so they can milk the maximum profits from the limited supply provided by the generators they already own and operate.
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The Chinese took the blueprints for Vogtle, tweaked them and now build them at 1/6th cost Vogtle will cost and 12 times the speed and frequency.
A government pushing power generation and supplying it at a low cost can then leave the market to consume it and produce from it- remember the Hoover Dam!
China has now begun construction on the Yarlung Tsangpo River of a new hydro scheme that makes the three gorges one look small.
Electricity is the lifeblood of the industrial and post industrial economy.
'Free markets' are often inherently inferior to state lead strategies to provide it because of the tendency for profit motivated power generators to operate in a rentseeking cartel manner due to the high costs of entry to the market and lack of incentives to increase supply thus reducing profits.
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