I understand how the combined cycle gas turbine doesn’t quite have the economies of scale that big steam turbines do (though these too ran into scale limits in the late 60s, as Richard Hirsh documents), but why isn’t a CCGT plant still a sunk cost? Even if the economies of scale are diminished, if the fixed costs of a CCGT are still sunk, wouldn’t that still point towards (a slightly smaller) natural monopoly in the BPW account?
I understand how the combined cycle gas turbine doesn’t quite have the economies of scale that big steam turbines do (though these too ran into scale limits in the late 60s, as Richard Hirsh documents), but why isn’t a CCGT plant still a sunk cost? Even if the economies of scale are diminished, if the fixed costs of a CCGT are still sunk, wouldn’t that still point towards (a slightly smaller) natural monopoly in the BPW account?