The problem isn’t the break-even IO price per se.
The real problem is that MGT will struggle to get funding unless the rewards are enough to offset the risks for financiers.
The IRRs for the $110USD IO case are not great. 14%, 17% and 20% depending on which optimisation case you use. Even 20% IRR might not be enough.
So, I wouldn’t think of $54 as your long term break even cost. It’s got to be more like $110 (or higher) long term to attract the finance to build the thing.
What is actually happening here?, page-74
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