[bumby]

Just speculation, but I imagine there is much less volatility in terms of fossil fuel policies. Fossil fuels (regretfully) have large and entrenched lobbyists who seem to get continued political support regardless of the office party. Contrast that to policies for/against renewables which have become a signaling mechanism.

[dpierce9]

What? Gas prices in Europe are extremely volatile [0]. Neither lobbyists nor politicians control prices and even if they did it isn’t obvious the lobbyists would prefer smooth prices.

[0] https://tradingeconomics.com/commodity/eu-natural-gas

[bumby]

Volatility in terms of policies, not prices. E.g., the it's fairly certain the subsidies for gas that are in place this year will continue next year. Price volatility has a lot more market dynamics at play.

[dpierce9]

I have lost the thread. The og parent said that political uncertainties were responsible for gas plant economic issues. You are now saying that gas plant lobbyists create more political certainty. I don’t know if that is true but it is beside the point.

[bumby]

I don’t think it is. If we agree that lobbyists affect political outcomes, and we can agree that some industries have entrenched lobbyists, then we can connect the two to say that lobbyists create more political certainty. That’s not to conflate “more certainty about policy” with “good policy.” It’s only beside the point if you think policy doesn’t impact energy prices, which is fairly easy to disprove.

In other words, if you think it's hard to implement a new energy policy in part because of monied interests, those monied interests are providing certainty in policy. To ground it in more real terms, I may not want to bet on new energy tech if the have an economic advantage based on who's in the White House. By contrast, betting on fossil fuels has more certainty because those interests are protected almost regardless of who's in the White House.

[dpierce9]

From the parent: “Political uncertainty about the future energy system is jacking up the rate of return investors are demanding of gas plant projects without contracted revenues.”

Your argument about lobbyists creating certainty doesn’t follow. Not all people in an industry have the same interests (gas generators and gas producers both like gas but price impacting regulation will create divergences). Lobbyists may reduce certainty because, for example, a super convincing lobbyist might instigate changes to an staid regime. The cumulative impact of different, less effective lobbyists over time may wash out or it may cause branches.

[bumby]

Ok, I'll try to be more explicit with the caveat that it's possible I'm reading too much between the OP's lines.

"future energy systems" means, in this case, battery and EV tech. Had it said "legacy energy systems" I agree that it does not follow. However, as stated, they are saying "we just don't know what's going to be on the political horizon. Maybe a ultra-conservative will be in the white house and all of these subsidies that help foster future energy systems will go out the window." Again, it's about the volatility of less-entrenched, prospective industries that are more reliant on policies to make them viable.

Entrenched lobbyists, almost by definition, want to keep the status quo. So I don't think we can agree that they are likely to institute massive changes. Put differently, do you think it's more likely that fossil fuel subsidies or that renewable subsidies will be dramatically reduced if the WH changes parties in the next election?