Welcome to the Mclowd Community Newsletter.
“The 1320 megawatt Vales Point coal fired power station has been sold by the NSW Government for just $1 million to former ERM Power chief Trevor St Baker and coal mining executive Brian Flannery.
Coal power station sold for $1 million, Business Spectator 20 Nov 2015
There was a time not so long ago when a coal-fired power station would change hands for hundreds of millions of dollars (a bit like the valuations currently attributed to accounting software companies like Xero, MYOB and Class).
However as the above quote illustrates, today you can buy a coal-fired power station for less than the cost of an average Sydney home.
There is a very simple reason as to why the value of that asset has fallen so far and so fast:
The price charged by incumbent generators for electricity bears no relationship to the actual marginal cost of that energy, which – as more and more people are coming to understand – is zero.
Administration Platform Update
The development Team is finishing the year strongly, and will be taking a well-earned break over the Christmas / New Year period.
While continuing to respond to user feedback on a daily basis, the following additional functions are also now live:
- Contributions cap report
- The ability to define the tax-efficiency of disposals
Support for in-specie contributions will be live pre-Christmas, and we have a number of third party integrations in the pipeline, including audit and roboadvice. Further updates on these and other 2016 initiatives in the New Year.
Six years ago a series of research papers were prepared on behalf of SAI Global, a company specialising in risk and compliance. (Copies can be downloaded here).
The basic thrust of the research was that the reality of carbon risk would eventually show up in capital markets, both with respect to:
- Capital deployment
- Entity valuations (which were forecast to decline significantly)
At the time I was writing that research there was considerable evidence to support the hypothesis that carbon-intensive industries would witness value destruction on a massive scale.
However at the time:
- Carbon risk was an unfamiliar concept
- Regardless most people would have been sceptical about the predictions being made
- Consequently the papers sank without a trace
Today, as we begin the journey towards a Zero Marginal Cost Society, it is no longer necessary to predict the future.
You can just get the crowd (and in due course an army of machine-learning computers) to invent it.
Mclowd Pty Ltd