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superioso t1_iys2rj8 wrote

Reply to comment by Looney_Tunes_99 in Solar energy in Europe will be 10 times cheaper than gas by 2030 by EnergyTransitionNews

On longer time scales if prices get higher then more companies enter the market to supply products.

It's only short term that prices rise massively, like due to unexpected issues from covid, staff shortages etc.

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International-Map-44 t1_iyspw71 wrote

If the cause of the high prices is due to scarcity of a material, having more companies in there will not decrease the price - quite the opposite actually.

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GenderBender3000 t1_iytuyga wrote

Not sure why you’re being downvoted. People are trying to argue supply and demand with supply and demand. If the prices are high for the end product, more companies get into the market to try and make some money. This means more demand for the raw materials which, when there is limited availability of the raw material, increases their price, which increases the cost to manufacture, which increases the end product cost. It will be competition for the raw materials, not competition for your business.

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grundar t1_iyuagjb wrote

> Not sure why you’re being downvoted.

If you're asking in good faith, it's because so far neither of you have backed up the assumption that increased demand for raw materials won't lead to increased supply of them.

Silicon (for solar) isn't rare.
Lithium (for batteries) isn't rare.

> If the prices are high for the end product, more companies get into the market to try and make some money.

Yes, and why does this not apply when the end product is "silicon" and the market is "mining"?

Maybe there are significant restrictions there, but that's not something you can expect people to take on faith.

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IamChuckleseu t1_iyuwl37 wrote

Because while you use great logic with "if there is bigger demand for batteries there will be more companies making batteries", you completely fail to apply this exact same logic to mining lithium to increase supply and increased demand to it.

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orrk256 t1_iyw0x7e wrote

And once it is a competition for the material the profit goes down and the excess companies leave the market, and it gets dominated by the most efficient, leaving the most efficient companies to once again try and offer the lowest cost product that now has a much higher bar for entry into said market because of the inherent advantage created by being able to make it cheaper...

At least finish your theoretical model

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superioso t1_iyw7mnx wrote

Supply and demand works both ways. Demand means higher prices, but higher prices means it will be more profitable to go out and supply the materials - like more companies mining for lithium, or drilling for oil.

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