richfool wrote:What I can't determine is will the increasing amount of energy produced by renewables (solar and wind), along with whatever energy is produced by the oil companies, drive down the price of energy and thus the profitability of renewable energy stocks and IT's?
I think it already is doing this, and I have been saying this for a few years. However there are multiple things rolled up into the price signal so it is quite confusing to sort them out and at any given moment other factors also drive pricing.
I think that renewables has taken a wedge out of overall energy demand that is now equal to, or slightly greater than, the annual increase in global energy demand (~1% yoy from memory). That is why Oil & Gas are now building out at a slower rate than they were in the past. They can see that the investment signal is now for replacement only (~7% reservoir decline yoy from memory) or is in fact less as that renewables wedge gets bigger. In the short term most of that impact is going to coal, but it is coming for O&G as well.
Over time that will lead to erratically higher prices (during O&G supply disruptions) and erratically lower prices (during O&G demand disruptions, as now in covid19), but on aggregate lower prices. I think that effect is going on already.
Problem for your thesis (and mine as an RDSB holder) is that the merit order effect means that most expensive sources get squeezed first. So nuclear and oil are first on the block, if they can be replaced. For nuclear it is a cinch that it is no longer needed. For oil it is coming quick that it is no longer needed. The next 20-30 years are good for renewables + gas as they are the winners on a levelised cost basis"In a dramatic reversal, one of the world's biggest makers of coal-fired power plants is to exit the market and focus on greener alternatives. US industrial giant General Electric said it would shut or sell sites as it prioritised its renewable energy and power generation businesses.....GE has said in the past it would focus less on fossil fuels, reflecting the growing acceptance of cleaner energy sources in US power grids. But just five years ago, it struck its biggest ever deal - paying almost £10bn for a business that produced coal-fuelled turbines." https://www.bbc.co.uk/news/business-54242055