This is particularly true of major technological transitions. James Watt developed the coal-powered steam engine in 1776, but coal supplied less than 5 percent of the planet’s energy until 1840, and it didn’t reach 50 percent until 1900. While these transitions are happening, investors start shying away from the current options.
The price of solar and wind power and lithium-ion batteries used to store energy has really dropped over the last decade. Although sun and wind produced just 6 percent of the world’s electric supply in 2017, they made up 45 percent of the growth in supply, and the cost of sun and wind power continues to fall by about 20 percent with each doubling of capacity.
As the transitions take hold and prices lower, demand for fossil fuels will stop growing. Then, the market for fossil fuels will weaken. Witness Peabody, the world’s largest private-sector coal-mining company, which went from being on Fortune’s list of most admired companies in 2008 to bankrupt in 2016.
It also looks as though the natural gas market will also suffer. Between 2010 and 2014 the shale industry operated with negative cash flows of more than $200 billion. European utilities have written down about $150 billion in stranded assets.
Another example - While there are only three million electric cars out of a worldwide total of 800 million they accounted for 22 percent of the growth in global car sales.
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