If the goal is to electrify everything in the United States and generate electricity solely through wind, solar, and batteries, we will have to mine more copper (and other metals) than has been mined in all of human history up till now. We can do it, but it will probably be even less popular, especially among groups like the Sierra Club, than nuclear and drilling for oil and gas. So to them, living like Noble Savages is the better alternative.
Had to resort to ChatGPT because this comes up so often...
This framing skips a crucial comparison: the mining we already do to sustain the fossil-fuel system. Oil, gas, and coal aren’t “mined once and done.” They require permanent, large-scale extraction of fuel every year, forever. That includes not just drilling and fracking, but the steel, cement, proppants, and yes—massive quantities of metals—needed to keep that system running.
The clean-energy buildout is front-loaded: you mine materials once, build long-lived assets (20–40+ years), and then mostly recycle. Multiple lifecycle analyses show that, over time, the total material throughput for a renewables-heavy system is lower than for fossil fuels precisely because you stop extracting combustible material.
None of this means mining impacts vanish. They don’t. But the idea that we’re choosing between “unprecedented mining” and “status quo” is backwards. The status quo guarantees perpetual extraction with no endpoint. Electrification shifts from infinite fuel mining to finite infrastructure mining—followed by recycling.
If someone is worried about environmental harm from mining, the logical conclusion isn’t to stick with a system that depends on endless extraction. It’s to build the system that requires less of it over the long haul.
Good point though the fossil fuel industry uses mostly iron ore which is relatively abundant and concentrated, requiring less land and processing. Copper, essential for electrification, is far less concentrated so requires more extraction and processing. Then the rare earth minerals (lithium, cobalt, palladium, etc.) which require astounding amounts of raw ore/footprint to extract tiny amounts of usable products. Granted, some rare earths may be separated out from the same copper process. We have three copper mines in our vicinity in NM and they are fooking enormous! This isn't too be a naysayer, oil will run out some day so electrification is in the cards whether we like it or not.
Oil and gas extraction is considered mining, though usually not as obvious/invasive on the surface. But look at Canadian (or Venezuelan) oil sands production and you will see "mining"
Oil sands for sure. Do they remediate like coal strip mining? Germans and Aussies(at least what I know of) scrape of topsoil and save it, then replace it after extraction.
Copper is not the only conductive material on earth. And more efficient use of copper with insulating materials can reduce the amount of copper per mile (HVDC lines are said to use about half as much copper as HVAC lines with the same capacity, for example.)
Per Gemini a NYC rat can conduct around 24 AMPs before igniting.
> To determine exactly how much electricity a New York City rat could conduct before catching fire, we have to model the rat as a biological resistor and calculate the energy required to raise its body temperature to the auto-ignition point of its fur.
>The short answer is: A current of approximately 24 Amps flowing from mouth to tail for 1 second would deliver enough energy to flash-ignite a healthy NYC rat.
If you want to get to the bottom of this ... hole you need to do the cost of mining copper per amp conducted v the cost of catching a rat per amp conducted.
So many tradeoffs that they don't want to confront, or they want to slide. Getting them to say we should live like Noble Savages would at least keep them honest.
Glad you made the noble savages allusion, I was planning to make a manifesto style comment blaming Rousseau for a modern intersectional neo-pastoralist movement. Saved me the bother
I am typically the happiest of hippie-punchers around here but I can lean into OG John Muir environmentalism when the cost-benefits don't pencil and I'm pretty darn happy about the Klamath project.
This seems like a win-win: "The hydropower they provided was so marginal that Oregon and California utilities recognized it was more cost-effective to remove them, ultimately contributing $200 million to the effort.”
There are a number of these very old dams in the NW that don't really provide significant energy that can be blown up and restore habitats. Environmentalists though also want to do the same to the Columbia, which actually provides significant energy, plus makes the river navigable up into Idaho and provides irrigation in Eastern WA & OR. That probably is not going to happen.
It's never going to happen. The Grand Coulee Dam is one of the biggest structures built by mankind. Environmentalists can keep pounding sand here. But yes, a bunch of these now 100 year old dams can be blown up. That's all good.
There was a DOE report from the Obama years that made the point that there are a lot of storage dams in the US that could be retrofitted to produce hydroelectricity.
Is that true? Much of British Columbia and Alaska is undeveloped, and I would guess (on no evidence) that the mountaintop-removal mines in WV are now ripe for use as reservoirs.
Most electricity demand will be in the lower 48; transmission losses from Alaska would probably be huge.
There are still dam sites available in the lower 48 in the Colorado River system, but you'd have to dam up national parks like the Grand Canyon and Canyonlands, and we're already having trouble keeping the current reservoirs full enough to generate electricity.
There are two different questions here: "will new dams end up producing enough valuable electricity to cover their construction/transmission costs?" and "are there still sites at which a functional dam could be built?" Reduced construction/transmission costs and increased electricity demand can make the answer to the first question more favorable, but not really change the second one.
IMHO the low-hanging fruit is convincing BC to dam some of their closer rivers to power Vancouver, and export the surplus to us. It's only later that turning to Alaska makes sense (for the Pacific Interconnection; given that you didn't address WV, I'm going to assume that the state is as mysterious to you as me).
The Pacific DC Intertie is about 800mi long (as the bird flies), roughly the same distance as Seattle-Juneau. Now, is Seattle as big a load sink as LA? Certainly not now. But the future is harder to predict.
The Alaskan grid is also the dirtiest interconnection, because oil is cheap there (reduced transport costs) and solar generation isn't really viable. So a net-zero future will necessarily involve (at first) carbon offsets for the Alaskan generation and then (as oil prices drop below maintenance costs to keep the drilling going) building some form of new generation/transmission to maintain baseload supply up there.
I'm really only familiar with river systems in the west, particularly the Colorado River basin. There are several dam sites available, but no one wants to build more, and, as a practical matter, there isn't enough water to fill them; we can't keep existing reservoirs full as it is.
For Alaska, I'm just skeptical of the transmission distances involved, but hydropower for Alaska's needs seems like a good idea to me.
One of the Sierra Club's first political fights was to prevent the construction of the Hetch Hetchy Reservoir, so I'm guessing not. That said, in my native Scotland I'm always amazed how there seem to be small-scale hydro schemes going up all over the Highlands with nary a whisper, while transmission lines attract huge opposition.
If the US deliberately cuts its electricity supply, that will (further) shift economic and political power to China, where environmental (and other) standards are lower. Feels like these orgs sometimes operate like there is only one country in the world.
More on point, developing countries installing Gigawatts upon Gigawatts are certainly not in a low-growth / low-inestment equilibruim struggling to relearn growth... Contra USA, EU.
State directed overcapacity and “involution” are not necessarily relevant. There is also a huge stranded capital problem in China. This comes all at a cost. There is a tremendous underinvestment in healthcare and social services in China, structure deflation (downward pressure on wages), and rising unemployment. China is now 8 months in with decreasing industrial output.
Well the industrial investment - the involution in cars is one subject
The adding of power capacity
I am not in any case making any argument for PRC mode of investment being a model, it was more to the point that the idea of comparing mature economy per-capita energy data - in a case of low-growth low-investment to a developing country on a clear spring to add 100s of gigawatts of generation capacity yearly is a nonsensical thing to do.
PRC is no longer particularly poor as such. Developing and building like mad, however yes.
But but but Matt- I have an issue poll right here that says 90%+ of Americans believe climate change is a serious issue. They’ll happily pay higher electricity prices so we can electrify everything!
This became relevant in MA this past winter. Prices went up due to a colder winter and a new green initiative. People got mad and the first thing Healey cut was subsidies for making homes more energy efficient. Healey once bragged that she "shot down 2 pipelines" but is now talking about energy affordability a lot more.
On the note of democratic politicians dropping their climate talking points, look at the harder left politicians. Most aren’t talking much about climate anymore either. That’s moderation!
Wouldn't subsidies for making homes more energy efficient help lower personal energy costs? Wouldn't they be pro-affordability at least to the individual? (I don't know whether they're cost effective at population level)
They are, which is why we have the program. The problem is that instead of funding it from the taxpayer's general fund it's funded from the delivery charges on every energy bill. So it was an easy way to "lower" the energy bills by giving out fewer subsidies.
There's also questions about the efficiency of the program and whether it overpays, but that's usually a secondary concern.
For good measure they're specifically listed on the utility bill, so all the Republicans can post a copy of the electric bill and bitch about how much is going to "those people."
The problem with subsidies especially ones taken direct from energy bills as a de facto regressive tax is always in the details.
Sometimes these are de facto means tested (either directly or by tying eligibility to other benefits) and thus exclude a large part of the population who just sees higher bills
They only benefit people in a position where they can actually make use of the subsidy, renters, people who already have the improvements or people who can't afford the rest of the cost get higher bills for no benefit.
Sometimes they create perverse incentives, see all of the subsidised insulation having to be stripped out of British homes this year at taxpayer cost as people just took the free insulation without checking if the company was any good and now their homes have severe damp or are unfit for human habitation due to fire risks.
Sometimes people don't understand that even if it has worked perfectly for them that the pay after subsidy is still cheaper than it would be if they didn't get the improvements as people are bad with understanding these things.
These things mean its something that can make people very mad when they see some infographic from the opposition political party showing how much of their bill is going towards something they can't use.
I imagine that paying an extra $5 on your electric bill for vague environmental reasons is quite popular; paying $50 more and using less electricity isn't.
I would happily pay slightly higher electricity prices so we can get on a sustainable path, address climate change for my kids' future, and also compete with China. I'm not interested in paying higher electricity prices so we can pump out huge numbers of new data centers in a short time.
"the green wing of the energy wonk community is suddenly buzzing in a frenzied way about responsive demand, as if this is some kind of magic alternative to major new capital investment, in a way that doesn’t make any sense to me."
I agree with the overall thrust of this post, but imo this part is half-baked. I really wish Matt would talk to some of the more serious people in this space, rather than sticking with these sorts of takes that denigrate serious people like Jigar Shah, who's been strongly advocating for getting more out of the grid assets we already have using tools like demand response. This is in fact an almost magic alternative to at least some new infrastructure. It lets us get more out of the system we already paid for and thus reduces the overall system's cost. We'll also need to build much more too, but please don't denigrate people advocating for demand response and things like virtual power plants. These are most definitely a part of the energy abundance agenda.
The idea of demand response is that the grid is vastly underutilized on average. There's a lot of hidden capacity in the assets we already paid for. To unlock that extra capacity "magically", we just need to shift non-essential demand to different times of day. Generation and transmission assets average 50% utilization overall, distribution assets (the substations and wires closer to your house) average around 30%.
With the right incentives, for example getting people with EVs to charge them overnight or when the sun is shining, instead of when they come home from work, we can avoid increasing peak demand, and this use the assets we already paid for to deliver a lot more energy over the course of the day. Delivering more kwh across the same set of grid assets will reduce the cost for each kwh moved.
People Like Jigar Shah, who's been advocating for these types of solutions, may be a bit frenzied about utilities and regulators dragging their feet on this, but that's because they want to enable more energy use, not less, and they know demand response is one fast way to do that, all while lowering the cost of each kwh that gets delivered.
MY's point, and it's a relevant one, is that this doesn't fundamentally alter the calculus about needing capital investment in infrastructure and capacity for any sort of highly-electrified future. He's correct that it's not an "alternative to major new capital investment", and that's the broad point. MY goes out of his way to say half a dozen times that, yes, we efficiency is a good thing and worth doing.
But the fundamental disagreement is with the organizations and individuals who oppose energy abundance. This disagreement this is mostly orthogonal to the point you make about Shah.
Fair enough, although the way he denigrated and dismissed people like Shah just didn't sit well with me. Shah isn't pushing efficiency, He's big on demand response to get as much as we possibly can out of the grid assets we already have.
Overall, I'd put Shah firmly in the abundance camp, so it seemed strange that Matt would belittle one of Shah's most strongly held beliefs about one of the best tools to achieve more energy abundance while keeping costs down. It was just sloppy imo, and also wrong on the facts. He even said he didn't understand how it could work. Maybe he could have just listened to one of Shah's hundreds of podcasts on the subject.
I don't think MY "denigrated" anyone in this article. He certainly criticized sharply the Stokes/Lovins camp, but unless I'm wrong, that doesn't include Shah.
Saying "Efficiency is important and good but largely irrelevant to the focus of this post" is hardly denigrating. MY literally describes it as "valuable" and cites a familial connection to the work!
I think we're talking past each other. My specific beef with Matt on this post is over his dismissing of demand response. DR is important tool that actually is an important part of the abundance agenda because it enables more capacity while simultaneously reducing costs. I think he gets that badly wrong and frankly just doesn't understand the grid well enough to know he's wrong. His use of words like "frenzied" and "magic" are in fact denigrating, imo.
I very slightly disagree with his dismissing energy efficiency so offhandedly, not for environmental reasons, but because it can unlock free extra capacity that's much needed. We're on a path to not have enough electricity so anything we can do to use less without sacrifice is good.
I agree with him overall about Stokes/Lovin and their anti-abundance stance because I think they are more about using less than enabling us to get more out of what we have and what we build.
Are you just tone policing two sentences? Or you do you actually disagree with MY that efficiency improvements/DR are inadequate to move the needle on long-term energy abundance?
MY is arguing for HUGE increases in energy deployment. My interpretation is "order of magnitude"-size growth. In that context, improvements in capacity through efficiency, even on the scale of "literally doubling capacity" are relatively small potatoes.
Let me try this again - my specific beef is that Matt is wrong on the facts to to dismiss DR so offhandedly. DR has the potential to be a major unlock for new capacity. Moving from 30% utilization of our distribution grid to something closer to 60% over a decade or so would be huge. Same thing on the generation side.
The most ambitious electricity growth forecasts call for demand just about doubling over the next 25 years. So something that could nearly double capacity is not small potatoes. It would just about solve the problem for a couple of decades. (I'm way oversimplifying here - we need lots of build out too, but you get the idea).
IMO, the three most important tools we have to meet expected demand growth cost effectively are 1) Permitting and regulation reform so we can build more, 2) Smart grid technologies like DR that enable higher utilization of we have and what we build, and 3) New technologies like nuclear, geothermal, cheaper batteries, better solar and wind.
I would say that what Jigar Shaw has focused on and what MattY was referencing are only adjacent to each other.
On other hand I would criticize Matt's post more for insufficient attention to Grid.
I'd also say that a lot of distribution capacity and transmission capacity unlocking practically speaking needs upgrading to unlock so not coming for free - at same time grid management upgrading and higher efficiency out of same rights of way is simply good sense in long-term economics for a grid system that's even in equipment terms terribly under-invested - something that needs doing (and needs Gov intervention to smooth, accelerate and unlock).
As as our conversation months back - attention to known-unknowns of interactions.
(the Iberians coming back so quickly on a black start was amazing - although I think the the overall information highlights what I said months ago, the risk factors of complex interactions of new technology that hasn't been fully mastered)
I agree with you about "the risk factors of complex interactions of new technology that hasn't been fully mastered." IIRC, that's where we ended up finding common ground on the cause of the Iberian outage as it related to IBRs.
I also agree that most of the unlocks Shah and others advocate for are not purely free. They're much lower cost than new build alternatives. Shah isn't opposed at all to new builds and says new infrastructure will absolutely be needed.
The one area I might disagree with you a bit is that I don't believe we've underinvested in grid as much as just invested badly and mostly in the wrong things. Shah and others have pointed out that distribution spending has been through the roof over the past 5-10 years, but we didn't get much to show for all the capex because it wasn't done in an intelligent and proactive way that leverages the latest technology or newer ideas. Instead, 70 year old assets keep getting replaced with expensive new assets using the same 70 year old technology.
It's interesting that when I ask Gemini whether we're doing bad investment, after offering a vanilla discussion of how to invest well, it offers ten sources, none of which is the Niskanen article. Too new, I guess. Score one for humans.
honestly this is an area that's moving (for infrastructure) comparatively rapidly.
I've had to update my views significantly from say 5 years ago as the advancing on electech across the board has been incredible.
(and thus I am fully onboard w Noah Smith ranting about the foolishiness of ignoring this sub-industrial revolution - or "misgendering" (haha) of it as Green when it should really be about strategic superiority and include military (one can overdo the drone lessons in Ukraine but really when Ukraine can take out modern Russian naval assets - as oil tankers off Turkish coast - with various forms of drones... (or hit strategic bomber assets) one really needs to stop thinking elec-toys)
Yes, and thanks for the link. This is exactly the type of mis-investment I was thinking. The money gets spent, but ratepayers don't get the bang for the buck or future proofing they should if newer tech was used.
And the overall economic efficiencies - this is of course a classic issue of a long-term investment case that clearly has very good NPV but the up-front capital investment being heavy, it can be sub-optimally slowed.
It's good to look into more DR. The question, as always, is whether and how much spending on DR is cost effective. The point that a lot of DR folks miss is that the costs of aggregating DR are non- trivial, and to displace infrastructure or capacity upgrade needs DR has to show up reliably and consistently for a long long long time. A good starting point is getting electricity prices right and let consumers react to expensive peak prices.
The point a lot of DR folks also miss (in the US) is all the 100% EV targets set for the mid-2030s are just gone. Consensus is now down to 30% of new vehicle sales will be EVs by 2035. That puts the EV carparc turnover now out past 2050 and I think a lot of the industry is coming back to Toyota's original approach that EVs will only ever be a % of the total new vehicle sales. All the DR modeling has this assume a can opener approach with requiring localized battery storage and they get there through the original EV forecasts which were never going to happen and which are now not happening.
I'm genuinely asking this - Can you point me to the DR modeling that assumes a can opener? EVs are really just a small part of demand response. They're used because they help clearly communicate the ideas.
DR is also data centers flexing for a few hours a year during periods of maximum grid stress. For DCs where it isn't cost effective to do this (the minority by far), they can install local batteries or gas generators and "appear" to the grid as if they're flexing. This still saves ratepayers tons of money by avoiding costly seldom used grid upgrades. It also allows the DC to get a grid connection years earlier than they otherwise could.
Sure. Here's one of Shah's interviews. The early EV growth rate was always taken as a given when estimating the future EV grid storage potential with these EVs + the bidirectional charging capability being the "assume a can opener". The growth rates just aren't there.
Jigar: We’re on the verge of load growing again through “electrify everything.” Leaning into distributed energy resource adoption and VPPs is the best way – likely the only way – for the grid to handle that electrification at a reasonable cost and on the timeline we need.
Look at electric vehicles (EVs) alone. In the past few years, we’ve been adding less than 5 GW of EV charger capacity annually. In 2025, we’re forecasted to add 20 GW; that grows to 90 GW of charger capacity added each year by 2030. The accompanying addition of storage capacity in EV batteries – hundreds of GWh every year – makes for highly flexible demand that we can shift to follow supply, whether from wind or solar variability or excess nuclear production, to make the grid more efficient and support decarbonization.
I just scanned the interview, but he's talking about a lot of different things there. Just as I was is using EVs as one example of a DER that could play a big role, he does the same. But EVs are just one of many things he talks about there and even with OBBBA, most of what he's said there still holds up fine today. I agree that growth of EVs will be a lot lower than he says there. OTOH, residential and commercial BESS projections have increased much more than enough to offset the slower EV growths. The outlook for DERs and VPPs has never been better.
As far as the assume a can opener aspect of this, he only mentions bidirectional charging in passing. Back then, as today, there's a lot of disagreement over how big of a role that'll have and how long it'll take. Again, I think you're missing the forest for the trees in this interview. As I read it, in the two years since he did this interview, the numbers have shifted around a bit at the micro level thanks to policy changes, but at a macro level, everything he's saying has held up great and we're further on the path to doing this than we were back then.
We started this talking about simple demand response and getting EVs to charge off peak instead of right when folks get home from work and adding to peak loads. That's still in play and with 5 million EVs on the road today and growing, that's still going to matter in terms of helping to manage grid peaks. We're talking about being able to shave peaks by as much as 5 GW at today's installed numbers and those are still growing relatively fast (though not nearly as fast as projected).
I think the bigger issue, right now, with EVs as a home power source is that equipment needed to send power out of the car to the home is quite expensive, requires an electrician to install, and is not compatible with many of the cheaper EV models.
Once the tech trickles down to even the cheapest EVs and the cost of the equipment drops to around $2,000, including installation labor, I think we'll see more people do this.
Being able to cover the cost of your car's insurance just by shifting your home's electricity load from peak hours to off-peak hours actually has a big impact on the total cost of ownership, relative to a gas car. But, it has to be cheap to set up and work with affordably priced cars (not just high-end luxury models), or the value falls apart.
Capital keeps depreciating at the same rate whether it is being used or not, so capital-intensive stuff probably isn't a great candidate for turning on/off based on current energy pricing.
That depends on how much the capital owner gets paid/saves for turning off during peaks versus what the rate of depreciation is.
There's been a bunch of work in the last couple of years on data center flexing (demand response) and the thing that surprised me the most out of all of it is how low average DC asset utilization can be (as low as 60% overall).
So sometimes these assets run all out all the time with five nines, but more often they're just not fully utilized and flexing a little bit to save a bunch of op ex actually works for them.
I totally agree with these caveats and your point that getting prices right is by far the first baby step that many jurisdictions haven't even gotten to yet. All of this stuff is new and tough to get exactly right on the first try.
Most utilities have had it beaten into them that "everything must be 100% reliable" and that "you can't take any risk whatsoever" on new and unproven stuff if there's even a tiny chance of something going wrong. That mindset really slows down deployment of new stuff, except with those few utilities that have gotten good at managing this risk intelligently.
The good news is that data on exactly how much to value/depend on DR is getting very good and widely available for the various classes of resources. It's still a work in progress, but it's moving along fast.
The AI buildout will accelerate all this because some jurisdictions are allowing data centers to procure third party DR resources (eg contract w/DR aggregators) in leu of agreeing to operate flexibly themselves. For many, this will be the only way to get a grid connection in a reasonable time.
Demand response is definitely a thing - in fact, at industrial scale it's been a thing for years, with large consumers like steel foundries negotiating contracts to provide "negawatts" back to the grid at times of high demand. At consumer scale it's newer, but starting to happen - I (in the UK) get emails from my electricity supplier offering discounted electricity at times of predicted low demand, and apparently in Japan you can get push notifications in an app: https://www.bitsaboutmoney.com/archive/markets-in-power/
The obstacle to rolling it out at consumer scale is that the infrastructure which supplies the electricity was not designed to support that level of interactivity. You have a meter in your house that tracks how much electricity you're using (and nowadays reports back it back to your supplier over a cellular network), but (at least here in the UK, where I've worked a bit on these systems) there's no way for your supplier to send a message back to it saying "we're a bit stretched right now", and no appliances listening to it anyway, so you need a side-channel. You can pick up the phone to a steel plant operator and say "Hey Dave, mind turning down the arc furnace for half an hour?", and he'll say "sure thing, as per clause 43.7 of our supply contract" but that doesn't scale to millions of people. Hence the emails and the push notifications.
[I don't know whether they literally pick up the phone or make some kind of API call, I only worked on the consumer side]
For the case of EV charging, I've always felt like "smart" devices that communicate digitally with utilities over the internet is overkill. In practice, electricity demand peaks almost always occur during the early evening, which means "dumb" solution where you just schedule the car to start charging late at night works just as well. Requires nothing but a simple clock.
That's true and that's mostly how it's getting rolled out right now. For sure it's the best place to start.
OTOH, grid operators pay a ton of money to always be ready for grid emergencies. Every grid has something called "spinning reserves" where power plants that aren't really needed are kept running (spinning) just so they can instantly take over if another power plant fails.
This is expensive and although it's not trivially simple, demand response has proven to be a very cost effective replacement for at least some of the spinning reserves on a grid. This is an example where the juice can actually be worth the squeeze with the added complexity.
I'm actually an Octopus customer! But you're right, they do support higher levels of consumer demand response with their Intelligent Octopus tariff (https://octopus.energy/smart/intelligent-octopus-go/). But that depends on compatible appliances (EV chargers, maybe heat pumps?) which most people won't have, communicating with Octopus via a side-channel (the Internet) and being fed back into the grid-balancing mechanism via Octopus aggregating all the demand response their customers can provide and offering that as a bid on the half-hourly auctions that determine the spot price of electricity.
I belatedly realise that I was unclear - when I said "the obstacle to rolling it out..." I meant "the difficult technical problem that must be solved or worked around" rather than "the reason it will never happen". It *is* happening, it's just a slower and more difficult process than we'd like due to lock-in effects of technical choices made years ago.
I'm certainly not above getting people to try and use electricity efficiently. But the bottom line is the grid needs to be able to provide power when people WANT to use it.
Most people will be at work when the sun is shining, and then they will plug their cars in when they get home.
The key is that it has to be simple and easy plus there needs to be a payoff.
In Texas, people with EVs tend to sign up for overnight EV charging plans. These offer almost half price electricity for overnight for EV charging. It's all automatic. They sign up and then just program their cars so instead of charging immediately when it's plugged in, the car starts charging either at a pre-set time, or when it needs to start such that it'll finish at a preset time. Every EV sold today has this charging program capability already built in. Once you set it up, it's automatic.
Where I am in NH we don't have time of use or EV rates, but to be a good electricity citizen, I programmed my EV to operate this way as well. I did this once years ago and now I never think about it. My car is programmed to always be charged and ready to go by 7am. This way, I can plug it in when I get home and not worry about contributing to overloading the grid during peak periods.
I can see the value of such plans becoming even greater once bidirectional charging is thrown into the mix. With that, you can use the half-priced electricity not only to power your driving, but also to power your home's air conditioner whenever the car is parked at home. In a Texas summer, the effect of this can be quite substantial.
As a Hudson Valley resident, energy has become the #1 issue discrediting NYS governance. In the last ten years, we shut down our local nuclear reactor (Indian Point) and replaced it with two massive natural gas plants. At the same time, environmentalists have stalled several pipelines and transmission projects.
My marginal cost of electricity (supply plus delivery charge) has reached >$0.22 per kWh. We've ended up with a massive policy failure where both carbon emissions and consumer prices have jumped.
Still, it hasn't triggered a lick of introspection from our local leaders. Their response has been to argue for a state take-over of local utilities to implement a laundry list of Progressive goals (prioritize minority owned sub contractors, generate union jobs, income based electricity charge caps) that will not solve the fundamental supply and transmission issue. Like caricatures of Rand villains, the totally foreseeable failures of their policies justifies an increase in their control of the market.
"My marginal cost of electricity (supply plus delivery charge) has reached >$0.22 per kWh. We've ended up with a massive policy failure where both carbon emissions and consumer prices have jumped."
It is rather striking that by far the largest component of the electric bill is the transmission and supply charges, not the energy price. No one who lives here seems to be worked up about this.
Where I live in Australia it is a pretty common complaint about gas. Lots of people only have gas for a stove for cooking yet you'll be paying $1/day in supply charges for it.
That said, people complain but it isn't clear what they can actually do about it. There is limited appetite for renationalising businesses -- and the state government just used a lot of political capital to bring trains back into public control. They were privatised in 2020. So that worked because it was a relatively fresh issue.
Shrestha has to be on a short list of worst state legislators in the country. Her being renominated broke my ability to believe Democrats are capable of trying to fix problems.
Related, Open NY spending a ton of money and effort to get her renominated *after* she voted against the housing bill proved that they don’t actually care about housing.
Open NY is just way too captured by progressive everything bagel ideology unfortunately. It's basically impossible to find a left-leaning group of people in NYC who care about politics but don't want to spend all day fawning over Zohran's eyes or whatever.
Regarding why electricity is so expensive in California, I did a whole report on it that's been fairly widely quoted. And California's high electricity rates are a problem for decarbonization.
I understand you're weary of the enviros but we aren't a monolith and I think this is the most informative bit of work on this topic that you'll see.
The issue with average electricity bills is that they California has a pretty high spread in utility bills. From inland customers with very high AC use to coastal customers with low energy use and high prevalence of rooftop solar.
The solution to expensive electricity isn't just increasing supply, but also working through the myriad infrastructure costs and regulatory decisions that determining the final price of electricity that customers see. I discuss that in the paper as well.
And as to Matt's comment that most of CA isn't hot in the summer, take a drive from the Imperial Valley to Palm Springs to San Bernardino, Riverside, Pasadena, SF Valley and all up the hundreds of miles of the San Joaquin Valley in summer---its baking hot. The relatively cool coastal strip is the exception.
I feel compelled to point out that this is why ~everyone lives in the relatively cool coastal strip and Republicans can get 36% of California's vote while winning 66% of its land area in counties.
Most of California is desert that is either useless for human habitation or, at best, relies on unsustainable water usage to create the illusion that it's useful for habitation. Much of the rest is mountains. The population density of those areas is low as it is and should really be even lower.
CA also produces a lot of cattle and milk. They eat a ton of alfalfa. Shipping is expensive.
Which is why CA needs both more large and small scale water storage. If you haven't watched Andrew Millisons work on Youtube on India I suggest you check it out. Very similar climate to CA. Short intense rain season followed by long hot summers.
Love Andrew Millison! I'm not sure how a groundwater based system like he describes meshes with the reservoir based system that California has. It seems like not much rain actually does run to the sea.
I can say that in my area of Central CA I would see the rivers flowing each year for a couple of months putting huge amounts of water out to sea.
And I know that lots of water in Northern CA goes as well due to misguided concerns about the delta smelt.
It probably doesn't fix all the problems. CA is probably doing too much agriculture given the amount of rainfall it receives. But I bet it goes most of the way.
If you solve energy you also solve water. Desalination is limited by the cost of energy versus the cost of fresh water. Granted without running the numbers I suspect we don't actually have the technology to make electricity that cheap or desalination that efficient yet but in a hypothetical abundance future where we keep driving both in the right direction its a solvable problem. As much as I love nuclear I am also an esoteric solar nut which California is uniquely good for in America, esoteric solar (solar power towers and orbital solar with microwave transmission) is one of those areas where you can theoretically have absurdly low cost floors on 24/7 available solar energy, both solar power towers and orbital solar are already financially viable and mostly just need scaling.
Thank you for the report! And my gratitude to Matt for an outstanding column in an area where I often criticize him. Matt only had a couple thousand words to cover an enormous amount of material, and I think he did an incredible job. He's right about the most important issues:
1. Abundant cheap electricity will be an enormous boon.
2. Enviros, notably the awful Sierra Club (see my other comment for an insider view) but also the media/donor complex exemplified by The Atlantic and yes it matters that a California progressive billionaire funds it, are still in the clutches of degrowth.
MagellanNH’s caveat about efficiency of using the distribution grid is correct, but his umbrage at Matt on Jigar’s behalf is a bit much. Let’s stay focused on the core points: we can have a much more prosperous and *relatively* cleaner energy system by adding enormous amounts of solar PV and batteries in the short term, transmission in the medium term, and geothermal and nuclear in the long term. Solar and batteries by themselves can be transformative if we just keep deploying them.
Can't find your other comment. I responded to MagellanNH's comment on demand response (DR). Pasting it here for convenience:
It's good to look into more DR. The question, as always, is whether and how much spending on DR is cost effective. The point that a lot of DR folks miss is that the costs of aggregating DR are non- trivial, and to displace infrastructure or capacity upgrade needs DR has to show up reliably and consistently for a long long long time. A good starting point is getting electricity prices right and let consumers react to expensive peak prices.
Thanks for the paper. As a Californian I scratch my head at how to lower electricity prices, since investments in the grid to lower prices are funded by higher electricity rates.
With that said I can't see how the paper addresses making electricity less expensive. It seems your goal instead is to lower the cost per kw/h on a customer's bill. Isn't charging an annual fee to lower rates a subsidy to households that use more power? I understand your position that poorer communities live inland where it's hotter, but long-term you're encouraging more suburban growth in inland areas if you transfer costs to all homeowners.
And finally, I found that very few people were clear on what the causes of high prices are. My hope is that clarifying that would help others come up with solutions.
Thanks Eric. A couple of things that may help you:
* The paper recommends shifting costs of social policy to the tax base. That will help a lot. It's hard to do, so the income graduated fixed charge is a second best. A distant one at that. But we should still strive.
* We also talk about other solutions that are in the nitty gritty of regulation that move things on the margin (such as setting accurate utility returns and regulatory structures)
* Reducing the per unit value of electricity use is important as it makes it more economic relative to gas. Higher electricity use could mean more efficient grid utilization. This is a small but positive effect.
* Reducing per unit electricity costs will also correct some of the rooftop solar related price effects which are a bigger near term issue.
No. The only way to displace a line is for all dependant load to go completely off grid. And there are numerous challenges with siting, maintaining reserves for reliability, controlling the operation etc.
I work in Public Power rate setting and the accuracy of this article reassures me about your accuracy in areas where I’m not knowledgeable, thanks!
Your diagnosis is all correct and I agree “something needs to be done” but often the hardest step is figuring out correct “somethings.” Pushing back on misplaced advocacy and permitting reform are two steps in the right direction but might be too small on their own.
Just in our planning horizon, we essentially need to double our capacity, which is challenging because of turbine shortages. Now, I have a lot of faith in the markets and am much more optimistic than most of my colleagues. But if Government wants to ensure a speedy energy transition for CO2 and/or maintain strategic advantage in AI, or just long-run abundance, one thing I could really see helping is some sort of “Operation Warp Speed” on clean baseload generation. Something like, the Federal Government guarantees purchase of (and permitting approval for!) 500 GW of new nuclear turbines.
We aren't going to build 500 GW of new nuclear power in the next 20 years, outside of Internet fantasies. China, which is building at a relatively frenetic pace, has built 34 GW in the past ten years. There is no government policy that gets you to those levels, other than getting major head trauma and experiencing a hallucination while you're in a coma.
Doesn't have to be nukes if geothermal or cold fusion happen; but likely it will be one of those three. Recall 15 years ago, nobody would have every expected solar to become a significant contributor, but with Wright's law, the cost of the tech decreases significantly with scale. Same thing will happen to some clean baseload tech, unless we give up on a clean energy transition and build that much fossil fuels again.
Batteries and PV are going to get continuously cheaper, eating larger and larger shares of what we consider "baseload". If we're smart (or if we're China) we're going to make massive investments into renewables and pumped hydro first; the latter requires turbines, but the turbines aren't compatible with nuclear or geothermal. We pick off all the low-hanging fruit by 2040 and then build out whatever long term zero-carbon baseload is required using whatever tech is mature at that point. That might be new and inexpensive modular nuclear reactors, or a mature version of the fracking-based geothermal stuff. It doesn't really make sense to build that baseload today.
IMO you're on to something with your operation warp speed idea for clean firm. The trouble is that the main inhibitor isn't really construction finance or even offtake agreements. Today I bet the industry could line up financing and offtake for hundreds of nuclear plants if everything else could be lined up. Both Biden and Trump have made major changes to the NRC and I think between them they've given the industry most of what it wants/needs on that front. There could be some permitting/social license issues to work out, but I'd bet a lot of the country would welcome a couple of reactors as long as they're not worried about getting taken to the cleaners on the cost.
That gets us to the problem. The cost overruns and schedule delays of the Summer and Vogtle nuclear projects bankrupted or nearly bankrupted almost everyone that had anything to do with them and the final price tag gave ratepayers and regulators sticker shock. This was all because "first of a kind" project risk showed up with a vengeance on these builds and that created a strong "touched a hot stove" inhibition to nuclear in not just legislatures and PUCs, but also potential nuclear contractors and suppliers.
So the job for your operation warp speed is less about financing (though that can help), organizing offtake/PPAs, or even NRC or permitting reform. The job is to invent a government incentive structure that can neutralize/spread out first-of-a-kind project risk so PUCs, utilities, contractors, and suppliers won't be so afraid of this stuff.
There have been a few proposals floated and I think this will likely gain some steam next year. The idea would be to create some sort of federal consortium that's organized around building 10-20 reactors around the country and spreading out or capping the project risk such that there's a lid on how bad the costs can be for ratepayers and how much of a bath suppliers and contractors have to take if some things go badly wrong along that way while they're figuring all this stuff out. The idea is that we know Vogtle 4 cost a lot less than Vogtle 3 and they had a lot less construction problems with it. It's almost certain that the 20th build of that design will be much cheaper still, so if there was some way to pool the risk of all 20 of the next builds, it might be manageable enough for enough PUCs and legislatures to bite.
Public Power has a bit more of a financing challenge than IOUs, as it's a big ask to have our ratepayers front the cash for new capacity, but we could likely get around that if we had cost guarantees (tax free debt helps!). Perhaps 20 new reactors would be enough to get everything kickstarted and the advantage of the plan you outlined is you don't really need a proactive Federal Government so it's probably workable. But, especially given much of the risk is regulatory and the Fed keeps coming out with a bunch of expensive plans anyways, I kind of like the government taking on that initial risk and then, likely, not having it actually cost a thing for taxpayers.
I'm no expert on this, but my understanding is that despite a lot of industry attempts to frame things this way, it isn't quite true. The Decouple youtube channel hosted a talk with James Krellenstein about this. He did a deep dive into the problems at Vogtle and his view was that this was mostly just first-of-a-kind risk and bad project management. His logic on this seems reasonable and if he's right, the industry should be able to figure itself out once it gets enough experience building the same design.
This is part 1 of a two part discussion that really gets into the weeds, but I linked the exact spot where Krellenstein makes his case that the issues really weren't mostly regulatory.
Is there really any way to make this happen without major subsidies, or at least guarantees, from the Federal government? And will the GOP actually back those?
I really don't know. I think the big problem is that for large reactors, the worst-case project risk and budget amounts for each individual build are just too big to be handled by most of the parties involved, especially given what happened with Vogtle. It's likely with enough builds pooled somehow that the overall risk to taxpayers wouldn't be that big, but I don't know if legislators or voters have the stomach to take on the risk. It's almost certain there would be some politically exploitable failures and public shaming for specific bad acts if they could get this sort of thing approved.
Most republicans have heard about the Solyndra debacle and spent years trying to gain political advantage blaming Obama for it. Most don't know that the same Obama program (through the Loan Programs Office) also enabled Vogtle to get built. Because the Loan Programs Office had a portfolio of loans that was smartly managed, overall they actually made taxpayers money despite some politically exploitable and very public failures (like Solyndra). Their mandate was to write loans on risky projects, so if none had failed, it would have been a sign they were too conservative and their role could have been played by normal banks. I think a similar program/govt office could work to offer some sort of project risk insurance. Instead of or in addition to loans, it'd be an insurance program to pool project risk. It'll be tough to get the incentives right (so we don't get $20k gold plated toilets), but it's probably doable. Whether congress would do it, and especially this congress, is anyone's guess.
I feel like if this was going to happen, it would happen during the non-lame-duck phase of a Trump presidency, when the Rs are able to spend money without concern for deficits and Trump can clean up any GOP objections by threatening people. I suppose the Dems could have filibustered but I bet they wouldn’t have. Unfortunately the Trump Presidency is not built for projects like this, and it’s useful “do politically risky things” half-life is almost over (squandered on ICE and DOGE and Medicaid cuts.)
I don’t know what the future holds, but most likely the GOP is going to slide back into its base obstructionist stance. Also very hard to see anyone trusting any Federal compacts passed by Dem Presidents unless the Dems do something to insulate against another future Trump and DOGE and Supreme Court letting the administration rip up laws.
Overall good article with a good point. Two technical comments: 1) rate of return and profits are not capped; in some states utilities can manage their expenses such that they can earn more. Better to say “tightly regulated.” 2) Leah Stokes may even have her argument wrong - utilities with lower rates of return have an incentive to increase their capital spending to increase profits. Better to give them a reasonable rate of return to there is less of an incentive.
You expect an activist to have actually read any of the IO literature on electricity regulation before providing their solution to what they see as the “problem” in said industry?
There was one student from NC state that gave the same presentation on a dynamic structural paper on windmill development. No one understood what was going on and we were sure he didn’t either. Guy was a fucking legend for getting into conference after conference.
I think you're being a little too hard on Matt. Utility regulation is hard and I have seen many people -- not just activists -- trip up when trying to discuss it.
Utility return on equity is required legally to be equal to their cost of capital. You can't keep lowering it indefinitely. The idea is to get this judgement right, but it's pretty hard and even small deviations create pieces incentives.
The part of your post where you say "utilities with lower rates of return have an incentive to increase their capital spending to increase profits" isn't completely accurate because if utility ROE is lower than their cost of capital then they wouldn't spend enough.
Yeah. Authorized = what the regulators set. Point is that there is a floor. And economic literature shows that sometimes smaller increments over the ideal ROE can have negative consequences. Be careful how you set it!
The part of your post where you say "utilities with lower rates of return have an incentive to increase their capital spending to increase profits" isn't completely accurate because if utility ROE is lower than their cost of capital then they wouldn't spend enough.
That's true of utility's net earnings. Higher or lower O&M can change what utilities actually earn versus what they were projected to.
But the value of return on equity that regulators set (e.g., 9% or 10% etc) dictates their approach to capital spending, and that's what has to be set at the utility's true cost of capital.
What makes this problem so thorny is that utilities are always incentivized to increase their capital spending as much as possible, rather than trying to operate efficiently, leading to a lot of dubious projects that the public pays for with higher power bills.
Public utility commissions are supposed to be the safeguard against this, but in practice, the utility commissions tend to be bought and paid for by the utilities they are supposed to regulate, so they end up not doing their job.
In most states staff of the commission can protest utility rates if the utility is “over earning .” This can force a rate case to reset the rates. Theoretically, this allows ratepayers to capture any efficiencies in the form of lower rates.
"Leah Stokes may even have her argument wrong - utilities with lower rates of return have an incentive to increase their capital spending to increase profits."
Yeah, I mean making it up on volume sales is a well known, basic, phenomenon.
Interesting results and excellent, clear presentation!
One thing I was wondering: were “liberal” and “ conservative” defined for respondents or did they use their own interpretations? Maybe I missed it as I had to skim but these days I often have no idea what people mean when they use such terms, as they seem to have been unmoored from their original meanings in much public discourse.
Fascinating to look through and great work all around! Props to everyone working on the data visualizations, especially picking the colors. Clear and thematic throughout.
Interesting word cloud on what Democrats are fighting for. Relevant to today's post, the words climate change, environment, etc don't appear at all, even in the tiniest size. I mean, others that made the cut were "honestly" and "feel free" along with what is sure to be the Democrats' rallying cry in 2028, that they're fighting for (as the word cloud offered) "idea."
The same environmental people advocating real time pricing for electricity probably chastised ERCOT for selling electricity at adjustable rates to people who signed up during that winter storm a few years back.
There's a huge difference between a system that rationally allows more of the price signal to flow to end users and a system that turns average retail electricity users into high stakes gamblers without even understanding the risks they've taken on.
Before Uri, I suspect you would have to work very hard to find any environmental people advocating for a real-time pricing system that exposes retail ratepayers to the risk of $20,000 charges for a couple of weeks of electricity usage.
More than anything, Griddy was a failure of regulators to protect ignorant consumers from themselves. That's why it's gone now, and it's why even in free wheeling Texas, regulations have been changed to make sure it can't come back.
Retail consumers considered only the upside risk and not the downside risk of Texas legislatures not mandating sufficient weatherization of gas generators and the lack of grid interconnections across state lines. (Panhandle and West Texas were fine because they have grid connections but most of ERCOT is separated from other states to avoid federal environmental regulations applying due to the interstate commerce clause.)
There is a reason retail consumers generally pay a fixed rate for electricity, even if it causes inefficiencies.
Yeah. He wasn’t fancy enough for my colleagues. Ridiculous. Backstory there is he went early and got an industry job, and that job reneged so he went again.
That sounds fucking awful. My friend only got the Austin job because they only made offers to hotshots (from the Royal zip code 😉). He was just giving a talk and they poached him over the summer.
Christ onna croissant. A whole piece on how the horrible, terrible, no good, very bad lefty eco groups want to prevent new electricity generation and force Americans into austerity, with not a single word about how Trump has been revoking permission for renewable energy generation for no better reason than "lol fu libs."
Look, I get that hardcore MAGA are unwinnable. But there are significant numbers of people who either voted for Trump very reluctantly, regret their vote for him, and/or didn't vote for anyone, and who are gettable. Putting my Brian Beutler hat on: pointing out the bad things the leftists do without even mentioning that TRUMP DID THE SAME BAD THING is political malpractice! Can we please, please get away from "liberals beat themselves up over everything anyone affiliated with them ever did wrong, but when the GOP does horrible/incompetent/evil shit, that's just the GOP being the GOP"? Pretty please?
"Amory Lovins and the Rocky Mountain Institute, for instance, spread the idea that the cheapest and greenest kilowatt-hour is the one you never use."
Look, I'm not saying Lovins should be the standard-bearer of today's Democratic Party, but he is technically correct, which is the best kind of correct, isn't he? The kilowatt-hour you never use is one you never pay for, ergo, it is the cheapest. And it is the greenest, because every single for of electricity generation has some negative impact on the environment, whether it be CO2 emissions, land use, birds killed by wind turbines, etc.
"If everyone can switch to different kinds of light bulbs so they don’t need as much electricity, that’s the win."
Well, isn't it? Isn't it straightforwardly good to achieve the same results (in this case, light) with a fraction of the energy? Would you rather have us go back to incandescent light bulbs? What is the complaint here?
"people can't just not eat food"
Obviously not, but it sure as heck would be nice if Americans could stop wasting [insert quick Google search] between 200 and 400 pounds of food per person per year! That's approximately a pound of food wasted per person per day. That's insane! Think how much greenhouse gas emissions that is. Can we figure out and implement a way to reduce that? Food waste gets far, far less attention than electricity generation or transportation in the climate change discourse.
Please be gentle with Matt. He's confronting a Slow Boring readership completely bamboozled by the degrowthers and he's desperately trying to help them see the light of day.
This is a fair point. I do get concerned sometimes about the degree to which a lot of these articles preach to the choir. I would much rather see articles like today's run in a pub with a more orthodox liberal audience, while the articles that run here challenge the audience a little more. On the other hand, it's not like Matt gets invited to write often in pubs with more orthodox liberal audiences, and my understanding is that this substack has silent subscribers who are both more progressive than the commentariat and are quite influential in the party.
A political movement forfeits any right to be taken seriously when its policies demand clean energy it fails to produce and transmit. This is no small thing. The clever use of energy is what makes subsistence easy.
So happy to see a growing movement to ban gas-powered leaf blowers. It’s crazy that we ever allowed a new source of industrial noise into our neighbourhoods which is virtually constant in the fall. People could do worse than go back to raking and get some exercise.
Also they are genuinely horrifically polluting. Wandering by those two-strokes is self-evidently in the category "this is not remotely healthy to be breathing."
I literally moved out of an apartment complex because of the nonstop gas-powered leafblowing that went on for hours every single day, starting at 7am. It made my apartment entirely unlivable. I not only want to ban gas-powered leafblowers, but I want a Disco Demolition Night-style bonfire for all of those terrible things.
I think there is a bigger point in this article, which is that we are all worse off when people obscure their objectives and/or their motives. I am not sure that is fixable, since it is so highly incentivized as a human behavior, but obfuscation makes policy discussions straight up worse, whether you are talking about energy or abortion or taxes or health care or <insert your thing here>. It’s incredibly tedious.
I read this post and I am now totally convinced that the degrowthers are bad. Of course, I also was convinced of that the first time Matt made this argument and if anything I feel just as strongly now that he has laid down the same argument for the fiftieth time. Job well done.
I mean, he did the Lucy and the football trick on me again with that enticing headline "A bolder vision for American energy" only to find -- yet again -- that he was devoting his time and space to trashing the braindead enviro groups. Got it. Yup, they're braindead.
Maybe some day he can *really* live up to his headlines and go deep into how we actually achieve energy abundance other than "transition to a renewable future by using as much natural gas as we can" in that marvelous underpants gnomes way.
Oh, and dumping on people who call for more efficient and time-sensitive use of electricity via variable pricing is a cheap attack. Many of the people calling for this (like David Roberts of Volts) really want to see vast new supplies of electricity too (mostly by increasing renewables, of course). Matt trashing them for this is like the anti-abundance people saying that upzoning is worthless because they're 100% focused on corporations and billionaires.
Matt Yglesias could invest the time to become an expert in energy policy, the same way he invested the time to become an expert in housing policy. Failing that, he could stop writing about it. Failing both things, he could just say "copy whatever China is doing."
"Well, it’s a reminder that influential elements of the environmental movement are driven by their roots as a conservation movement."
This is the key point to the entire post. The phrase of the moment is "the housing theory of everything". I would say if there is one thing the commentors, Matt and myself are in agreement on is this theory has a decent amount of explanatory power to explaining our current moment.
But I think a different phrase needs to be more popularized as I actually think it's way more applicable to politics across the developed world (outside of countries with common law systems); The "old people theory of everything". Basically, the fact that median age of your typical person in countries across the world is rising and continuing to rise is actually the real story here (and covers the "the housing theory of everything" once you understand who is the real most powerful force in stopping housing developments. And not just in the US).
Matt has noted previously how much dysfunction at a variety of left wing non-profits stems from the fact that a) the staffers disproportionately are very left young people who have views way to the left of the median Democrat and b) the "Everything bagel" problem that Matt alluded to in this post with Sierra Club's changing stance on immigration.
I still think we underrate how much of what these organizations due really is driven by its donors. This has come up with the Israel/Gaza debate; basic demographic realities of left leaning donor class being what it is, there's been tension between donor base and more pro Palestinian staff. But I think we underrate how much of these organizations are still driven by who donates. The donors to these orgs are older left wealthier left wingers. And to kind of defend these people, this is a cohort of people who remembers when "Silent Spring" came out, remembers lakes literally catching on fire and remembers literal circles of smog around major cities. I at least understand why you're frame of reference of the world became "development of any kind = destruction of nature that is literally killing us". Again, the issue is it's outdated.
And again, the median age is rising meaning older voters have increasing power explains a ton about NIMBY*, the politics of pensions, the politics of Medicare, the politics of immigration** and just general "everything was better in the good ole days"*** thinking.
* I recommended it before, but I think the commentators would really like the "Big Dig" podcast. In my previous recommendation, I noted how it gave me more sympathy for older NIMBYs as it's clear that a big historical motivation was seeing the "headless chicken" aspect of highway building.
*** Completed unrelated, but I think Sean Duffy is now the leader in the most absurd invocation of the "good ole days" thinking. I would say the guy who wrote "$140K is poverty" briefly took the lead. But Sean Duffy touting that by lower fuel standards we might bring back the old wood panel station wagons is now the winner. Honest to god, do you know one person who actually is pining for the ugly wood panel station wagon? In all of those dumb "look what they took from us" posts that show advertisements from the 50s or prices from the 70s, is any of them wondering what happened to the wood panel station wagon? I honestly think it's in play that Duffy will advocate for bringing back smoking on airplanes based pure "jam into my veins" nostalgia.
If I remember right, in the recent Sierra Club dustup, the actual people working at the Sierra Club were relatively good on YIMBY/energy issues, but it was their older Boomer donors that were pushing back more.
The "140K is poverty" guy has expanded on his first essay with two bangers. He adds some nuance, backtracks a little bit and explains his thesis better in both of them.
The one from today is excellent and something I suspect 90% of Matt's readers would agree with.
“…a simple, aggressive strategy to rebuild the American middle class by shifting taxes off workers and onto idle capital, forcing companies to invest through a 4-year capex shot clock, eliminating benefit cliffs, and restoring broad-based prosperity centered on the 65th percentile family.”
I agree it's better. Think this part makes a lot of sense for example "We tax wages (pursuit) heavily, while subsidizing debt and capital gains (property)." I suspect the writer of his substack would agree too (I mean the fact the carried interest loophole still exists is absolutely insane to me). There are some specifics that I have an issue with. For example "Expensing: Temporary (4-year) 100% Immediate Expensing for all physical capex. Mechanism: Creates a binary choice: Invest (0% effective tax) or Hoard (35% statutory tax)". Not sure this is the greatest idea even if I do think it's good to find a mechanism to induce corporations to make investment decisions based on long term time horizons. My suspicion is this would lead the private sector equivalent of "bridges to nowhere"; CapEx investment just for the sake of immediate tax relief whether the ROI is actually high enough to justify cost. But I feel like the specific proposals are at least on the right track of possibly being better for the middle and upper middle class (the fact that basically no one anymore pays inheritance tax because of an extremely successful propaganda to call inheritance taxes "death taxes" and using the (extremely rare) idea of a family losing their small farm as some typical stand in for all inheritance, is nuts to me. So on board restoring the "estate tax" and cutting down loopholes).
But it's still very much undermined by stuff like "For much of the last 40 years, the United States has drifted into a nightmare." This is some Taylor Lorenz/MAGA brain nonsense (the horseshoe theory is real people). Also, look at that chart "Z scores Measures of Satisfaction" and it so clear how much basic underlying economic conditions is the story here. So Positive personal sentiment went up to right up until 2006-2008 range, plunged, steadily increased until 2020, and then plunged again post-pandemic and during the worst inflationary period since the 70s? Knock me over with a feather.
If the goal is to electrify everything in the United States and generate electricity solely through wind, solar, and batteries, we will have to mine more copper (and other metals) than has been mined in all of human history up till now. We can do it, but it will probably be even less popular, especially among groups like the Sierra Club, than nuclear and drilling for oil and gas. So to them, living like Noble Savages is the better alternative.
Had to resort to ChatGPT because this comes up so often...
This framing skips a crucial comparison: the mining we already do to sustain the fossil-fuel system. Oil, gas, and coal aren’t “mined once and done.” They require permanent, large-scale extraction of fuel every year, forever. That includes not just drilling and fracking, but the steel, cement, proppants, and yes—massive quantities of metals—needed to keep that system running.
The clean-energy buildout is front-loaded: you mine materials once, build long-lived assets (20–40+ years), and then mostly recycle. Multiple lifecycle analyses show that, over time, the total material throughput for a renewables-heavy system is lower than for fossil fuels precisely because you stop extracting combustible material.
None of this means mining impacts vanish. They don’t. But the idea that we’re choosing between “unprecedented mining” and “status quo” is backwards. The status quo guarantees perpetual extraction with no endpoint. Electrification shifts from infinite fuel mining to finite infrastructure mining—followed by recycling.
If someone is worried about environmental harm from mining, the logical conclusion isn’t to stick with a system that depends on endless extraction. It’s to build the system that requires less of it over the long haul.
Damn GPT cooked on that one
Good point though the fossil fuel industry uses mostly iron ore which is relatively abundant and concentrated, requiring less land and processing. Copper, essential for electrification, is far less concentrated so requires more extraction and processing. Then the rare earth minerals (lithium, cobalt, palladium, etc.) which require astounding amounts of raw ore/footprint to extract tiny amounts of usable products. Granted, some rare earths may be separated out from the same copper process. We have three copper mines in our vicinity in NM and they are fooking enormous! This isn't too be a naysayer, oil will run out some day so electrification is in the cards whether we like it or not.
Lithium is not a rare earth FWIW.
Fun fact ... the US is ranked #3 globally in lithium reserves. we're mining just 1% of global demand but we do have the stuff here.
You are correct, guilty of lumping things together!
Old oil wells are filled with that stuff from NM to MS. A whole brine belt.
Oil and gas extraction is considered mining, though usually not as obvious/invasive on the surface. But look at Canadian (or Venezuelan) oil sands production and you will see "mining"
Oil sands for sure. Do they remediate like coal strip mining? Germans and Aussies(at least what I know of) scrape of topsoil and save it, then replace it after extraction.
Copper is not the only conductive material on earth. And more efficient use of copper with insulating materials can reduce the amount of copper per mile (HVDC lines are said to use about half as much copper as HVAC lines with the same capacity, for example.)
Per Gemini a NYC rat can conduct around 24 AMPs before igniting.
> To determine exactly how much electricity a New York City rat could conduct before catching fire, we have to model the rat as a biological resistor and calculate the energy required to raise its body temperature to the auto-ignition point of its fur.
>The short answer is: A current of approximately 24 Amps flowing from mouth to tail for 1 second would deliver enough energy to flash-ignite a healthy NYC rat.
So you're saying the city has a renewable supply for slow-blow fuse elements, eh? I smell opportunity (and melting rat)!
(Also if Gemini did any calculations while thinking, I'm dying to know how it accounted for rat health in the model...)
Oh it showed the math but I really didn’t vet it.
If you want to get to the bottom of this ... hole you need to do the cost of mining copper per amp conducted v the cost of catching a rat per amp conducted.
Fun fact of the day!
WOKE CHATGPT! THIS IS DEI! 🤣
Hannah Ritchie has written an entire book about this.
Noble savages, but with an abundant supply of NPR podcasts.
okay that was my one hippy-punching joke for the month
“Leading discussion on theory on some days, making lattes when needed”
So many tradeoffs that they don't want to confront, or they want to slide. Getting them to say we should live like Noble Savages would at least keep them honest.
Glad you made the noble savages allusion, I was planning to make a manifesto style comment blaming Rousseau for a modern intersectional neo-pastoralist movement. Saved me the bother
As far as I know, Rousseau never used the term "noble savage." (That doesn't make him less wrong though).
This source says that we would need a 14% increase in copper production from current levels in order to decarbonize.
https://www.sustainabilitybynumbers.com/p/minerals-for-electricity
I guess it's a good thing we stopped wasting metal on the pennies then.
(Yes, I know penny alloy was mostly Ni.)
Are they at least ok with hydroelectric?
Hell no they aren't--think of the salmon! And all the other ecosystem disruption!
I am typically the happiest of hippie-punchers around here but I can lean into OG John Muir environmentalism when the cost-benefits don't pencil and I'm pretty darn happy about the Klamath project.
This seems like a win-win: "The hydropower they provided was so marginal that Oregon and California utilities recognized it was more cost-effective to remove them, ultimately contributing $200 million to the effort.”
https://www.fisheries.noaa.gov/feature-story/worlds-biggest-dam-removal-project-open-420-miles-salmon-habitat-fall
There are a number of these very old dams in the NW that don't really provide significant energy that can be blown up and restore habitats. Environmentalists though also want to do the same to the Columbia, which actually provides significant energy, plus makes the river navigable up into Idaho and provides irrigation in Eastern WA & OR. That probably is not going to happen.
It's never going to happen. The Grand Coulee Dam is one of the biggest structures built by mankind. Environmentalists can keep pounding sand here. But yes, a bunch of these now 100 year old dams can be blown up. That's all good.
Two words: Salmon Cannons
We've built out pretty much all the hydroelectric we can. There are only so many rivers and so many spots to build dams.
And only so many salmon cannons we can man with biology interns.
There was a DOE report from the Obama years that made the point that there are a lot of storage dams in the US that could be retrofitted to produce hydroelectricity.
Is that true? Much of British Columbia and Alaska is undeveloped, and I would guess (on no evidence) that the mountaintop-removal mines in WV are now ripe for use as reservoirs.
Most electricity demand will be in the lower 48; transmission losses from Alaska would probably be huge.
There are still dam sites available in the lower 48 in the Colorado River system, but you'd have to dam up national parks like the Grand Canyon and Canyonlands, and we're already having trouble keeping the current reservoirs full enough to generate electricity.
There are two different questions here: "will new dams end up producing enough valuable electricity to cover their construction/transmission costs?" and "are there still sites at which a functional dam could be built?" Reduced construction/transmission costs and increased electricity demand can make the answer to the first question more favorable, but not really change the second one.
IMHO the low-hanging fruit is convincing BC to dam some of their closer rivers to power Vancouver, and export the surplus to us. It's only later that turning to Alaska makes sense (for the Pacific Interconnection; given that you didn't address WV, I'm going to assume that the state is as mysterious to you as me).
The Pacific DC Intertie is about 800mi long (as the bird flies), roughly the same distance as Seattle-Juneau. Now, is Seattle as big a load sink as LA? Certainly not now. But the future is harder to predict.
The Alaskan grid is also the dirtiest interconnection, because oil is cheap there (reduced transport costs) and solar generation isn't really viable. So a net-zero future will necessarily involve (at first) carbon offsets for the Alaskan generation and then (as oil prices drop below maintenance costs to keep the drilling going) building some form of new generation/transmission to maintain baseload supply up there.
I'm really only familiar with river systems in the west, particularly the Colorado River basin. There are several dam sites available, but no one wants to build more, and, as a practical matter, there isn't enough water to fill them; we can't keep existing reservoirs full as it is.
For Alaska, I'm just skeptical of the transmission distances involved, but hydropower for Alaska's needs seems like a good idea to me.
Definitely not true
One of the Sierra Club's first political fights was to prevent the construction of the Hetch Hetchy Reservoir, so I'm guessing not. That said, in my native Scotland I'm always amazed how there seem to be small-scale hydro schemes going up all over the Highlands with nary a whisper, while transmission lines attract huge opposition.
They're not even okay with solar and wind.
It's what they want now. But if we switched to 100% solar and wind, they would then switch to hating solar and wind.
I bet they hate geothermal too...
The noble savage lifestyle is legitimate, but trying to take away big ass trucks from working stiffs is ignoble.
If the US deliberately cuts its electricity supply, that will (further) shift economic and political power to China, where environmental (and other) standards are lower. Feels like these orgs sometimes operate like there is only one country in the world.
And yet China only consumes half as much electricity per capita as the US: https://en.wikipedia.org/wiki/List_of_countries_by_electricity_consumption
Poorer countries are indeed poorer.
More on point, developing countries installing Gigawatts upon Gigawatts are certainly not in a low-growth / low-inestment equilibruim struggling to relearn growth... Contra USA, EU.
State directed overcapacity and “involution” are not necessarily relevant. There is also a huge stranded capital problem in China. This comes all at a cost. There is a tremendous underinvestment in healthcare and social services in China, structure deflation (downward pressure on wages), and rising unemployment. China is now 8 months in with decreasing industrial output.
Well the industrial investment - the involution in cars is one subject
The adding of power capacity
I am not in any case making any argument for PRC mode of investment being a model, it was more to the point that the idea of comparing mature economy per-capita energy data - in a case of low-growth low-investment to a developing country on a clear spring to add 100s of gigawatts of generation capacity yearly is a nonsensical thing to do.
PRC is no longer particularly poor as such. Developing and building like mad, however yes.
to complement, it is by no means clear that PRC energy investment is over-capacity (ex-coal).
Different subject than their industrial as like cars, etc.
Interesting look at china’s energy use this past year: https://substack.com/@hannahritchie
They aim to fix that
And yet... quite funny.
Rather look at China installation growth and demand growth.
See also: the "slow down!" side of the AI-regulation debate.
You referring to Trump here?
But but but Matt- I have an issue poll right here that says 90%+ of Americans believe climate change is a serious issue. They’ll happily pay higher electricity prices so we can electrify everything!
This became relevant in MA this past winter. Prices went up due to a colder winter and a new green initiative. People got mad and the first thing Healey cut was subsidies for making homes more energy efficient. Healey once bragged that she "shot down 2 pipelines" but is now talking about energy affordability a lot more.
On the note of democratic politicians dropping their climate talking points, look at the harder left politicians. Most aren’t talking much about climate anymore either. That’s moderation!
Wouldn't subsidies for making homes more energy efficient help lower personal energy costs? Wouldn't they be pro-affordability at least to the individual? (I don't know whether they're cost effective at population level)
They are, which is why we have the program. The problem is that instead of funding it from the taxpayer's general fund it's funded from the delivery charges on every energy bill. So it was an easy way to "lower" the energy bills by giving out fewer subsidies.
There's also questions about the efficiency of the program and whether it overpays, but that's usually a secondary concern.
For good measure they're specifically listed on the utility bill, so all the Republicans can post a copy of the electric bill and bitch about how much is going to "those people."
Thank you for that explanation - that makes sense.
The problem with subsidies especially ones taken direct from energy bills as a de facto regressive tax is always in the details.
Sometimes these are de facto means tested (either directly or by tying eligibility to other benefits) and thus exclude a large part of the population who just sees higher bills
They only benefit people in a position where they can actually make use of the subsidy, renters, people who already have the improvements or people who can't afford the rest of the cost get higher bills for no benefit.
Sometimes they create perverse incentives, see all of the subsidised insulation having to be stripped out of British homes this year at taxpayer cost as people just took the free insulation without checking if the company was any good and now their homes have severe damp or are unfit for human habitation due to fire risks.
Sometimes people don't understand that even if it has worked perfectly for them that the pay after subsidy is still cheaper than it would be if they didn't get the improvements as people are bad with understanding these things.
These things mean its something that can make people very mad when they see some infographic from the opposition political party showing how much of their bill is going towards something they can't use.
"The problem with subsidies especially ones taken direct from energy bills as a de facto regressive tax is always in the details."
I hadn't realized they were taken directly from the energy bills until Wandering Llama explained it.
I imagine that paying an extra $5 on your electric bill for vague environmental reasons is quite popular; paying $50 more and using less electricity isn't.
I would happily pay slightly higher electricity prices so we can get on a sustainable path, address climate change for my kids' future, and also compete with China. I'm not interested in paying higher electricity prices so we can pump out huge numbers of new data centers in a short time.
"the green wing of the energy wonk community is suddenly buzzing in a frenzied way about responsive demand, as if this is some kind of magic alternative to major new capital investment, in a way that doesn’t make any sense to me."
I agree with the overall thrust of this post, but imo this part is half-baked. I really wish Matt would talk to some of the more serious people in this space, rather than sticking with these sorts of takes that denigrate serious people like Jigar Shah, who's been strongly advocating for getting more out of the grid assets we already have using tools like demand response. This is in fact an almost magic alternative to at least some new infrastructure. It lets us get more out of the system we already paid for and thus reduces the overall system's cost. We'll also need to build much more too, but please don't denigrate people advocating for demand response and things like virtual power plants. These are most definitely a part of the energy abundance agenda.
The idea of demand response is that the grid is vastly underutilized on average. There's a lot of hidden capacity in the assets we already paid for. To unlock that extra capacity "magically", we just need to shift non-essential demand to different times of day. Generation and transmission assets average 50% utilization overall, distribution assets (the substations and wires closer to your house) average around 30%.
With the right incentives, for example getting people with EVs to charge them overnight or when the sun is shining, instead of when they come home from work, we can avoid increasing peak demand, and this use the assets we already paid for to deliver a lot more energy over the course of the day. Delivering more kwh across the same set of grid assets will reduce the cost for each kwh moved.
People Like Jigar Shah, who's been advocating for these types of solutions, may be a bit frenzied about utilities and regulators dragging their feet on this, but that's because they want to enable more energy use, not less, and they know demand response is one fast way to do that, all while lowering the cost of each kwh that gets delivered.
MY's point, and it's a relevant one, is that this doesn't fundamentally alter the calculus about needing capital investment in infrastructure and capacity for any sort of highly-electrified future. He's correct that it's not an "alternative to major new capital investment", and that's the broad point. MY goes out of his way to say half a dozen times that, yes, we efficiency is a good thing and worth doing.
But the fundamental disagreement is with the organizations and individuals who oppose energy abundance. This disagreement this is mostly orthogonal to the point you make about Shah.
Fair enough, although the way he denigrated and dismissed people like Shah just didn't sit well with me. Shah isn't pushing efficiency, He's big on demand response to get as much as we possibly can out of the grid assets we already have.
Overall, I'd put Shah firmly in the abundance camp, so it seemed strange that Matt would belittle one of Shah's most strongly held beliefs about one of the best tools to achieve more energy abundance while keeping costs down. It was just sloppy imo, and also wrong on the facts. He even said he didn't understand how it could work. Maybe he could have just listened to one of Shah's hundreds of podcasts on the subject.
I don't think MY "denigrated" anyone in this article. He certainly criticized sharply the Stokes/Lovins camp, but unless I'm wrong, that doesn't include Shah.
Saying "Efficiency is important and good but largely irrelevant to the focus of this post" is hardly denigrating. MY literally describes it as "valuable" and cites a familial connection to the work!
I think we're talking past each other. My specific beef with Matt on this post is over his dismissing of demand response. DR is important tool that actually is an important part of the abundance agenda because it enables more capacity while simultaneously reducing costs. I think he gets that badly wrong and frankly just doesn't understand the grid well enough to know he's wrong. His use of words like "frenzied" and "magic" are in fact denigrating, imo.
I very slightly disagree with his dismissing energy efficiency so offhandedly, not for environmental reasons, but because it can unlock free extra capacity that's much needed. We're on a path to not have enough electricity so anything we can do to use less without sacrifice is good.
I agree with him overall about Stokes/Lovin and their anti-abundance stance because I think they are more about using less than enabling us to get more out of what we have and what we build.
I guess I'm uncertain what you're point here is.
Are you just tone policing two sentences? Or you do you actually disagree with MY that efficiency improvements/DR are inadequate to move the needle on long-term energy abundance?
MY is arguing for HUGE increases in energy deployment. My interpretation is "order of magnitude"-size growth. In that context, improvements in capacity through efficiency, even on the scale of "literally doubling capacity" are relatively small potatoes.
Let me try this again - my specific beef is that Matt is wrong on the facts to to dismiss DR so offhandedly. DR has the potential to be a major unlock for new capacity. Moving from 30% utilization of our distribution grid to something closer to 60% over a decade or so would be huge. Same thing on the generation side.
The most ambitious electricity growth forecasts call for demand just about doubling over the next 25 years. So something that could nearly double capacity is not small potatoes. It would just about solve the problem for a couple of decades. (I'm way oversimplifying here - we need lots of build out too, but you get the idea).
https://www.icf.com/insights/energy/electricity-demand-expected-to-grow
IMO, the three most important tools we have to meet expected demand growth cost effectively are 1) Permitting and regulation reform so we can build more, 2) Smart grid technologies like DR that enable higher utilization of we have and what we build, and 3) New technologies like nuclear, geothermal, cheaper batteries, better solar and wind.
I would say that what Jigar Shaw has focused on and what MattY was referencing are only adjacent to each other.
On other hand I would criticize Matt's post more for insufficient attention to Grid.
I'd also say that a lot of distribution capacity and transmission capacity unlocking practically speaking needs upgrading to unlock so not coming for free - at same time grid management upgrading and higher efficiency out of same rights of way is simply good sense in long-term economics for a grid system that's even in equipment terms terribly under-invested - something that needs doing (and needs Gov intervention to smooth, accelerate and unlock).
As as our conversation months back - attention to known-unknowns of interactions.
(the Iberians coming back so quickly on a black start was amazing - although I think the the overall information highlights what I said months ago, the risk factors of complex interactions of new technology that hasn't been fully mastered)
I agree with you about "the risk factors of complex interactions of new technology that hasn't been fully mastered." IIRC, that's where we ended up finding common ground on the cause of the Iberian outage as it related to IBRs.
I also agree that most of the unlocks Shah and others advocate for are not purely free. They're much lower cost than new build alternatives. Shah isn't opposed at all to new builds and says new infrastructure will absolutely be needed.
The one area I might disagree with you a bit is that I don't believe we've underinvested in grid as much as just invested badly and mostly in the wrong things. Shah and others have pointed out that distribution spending has been through the roof over the past 5-10 years, but we didn't get much to show for all the capex because it wasn't done in an intelligent and proactive way that leverages the latest technology or newer ideas. Instead, 70 year old assets keep getting replaced with expensive new assets using the same 70 year old technology.
Well... for me invested in wrong thing is pretty much = to underinvested.
But I do agree capex is flowing not ideally - and too much CapEx trapped in modes that are backwards looking reconstructing 1970s concept looks
Thus I linked earlier to the Niskanen Center article "Why are utilities building tomorrow’s grid with yesterday’s technology?" (https://www.niskanencenter.org/why-are-utilities-building-tomorrows-grid-with-yesterdays-technology/) - now of course short and focused on a specific argument but I think one easily extrapolates beyond
Thanks for the link.
It's interesting that when I ask Gemini whether we're doing bad investment, after offering a vanilla discussion of how to invest well, it offers ten sources, none of which is the Niskanen article. Too new, I guess. Score one for humans.
honestly this is an area that's moving (for infrastructure) comparatively rapidly.
I've had to update my views significantly from say 5 years ago as the advancing on electech across the board has been incredible.
(and thus I am fully onboard w Noah Smith ranting about the foolishiness of ignoring this sub-industrial revolution - or "misgendering" (haha) of it as Green when it should really be about strategic superiority and include military (one can overdo the drone lessons in Ukraine but really when Ukraine can take out modern Russian naval assets - as oil tankers off Turkish coast - with various forms of drones... (or hit strategic bomber assets) one really needs to stop thinking elec-toys)
Yes, and thanks for the link. This is exactly the type of mis-investment I was thinking. The money gets spent, but ratepayers don't get the bang for the buck or future proofing they should if newer tech was used.
And the overall economic efficiencies - this is of course a classic issue of a long-term investment case that clearly has very good NPV but the up-front capital investment being heavy, it can be sub-optimally slowed.
It would be good to learn more about the malinvestment. Any good links?
It's good to look into more DR. The question, as always, is whether and how much spending on DR is cost effective. The point that a lot of DR folks miss is that the costs of aggregating DR are non- trivial, and to displace infrastructure or capacity upgrade needs DR has to show up reliably and consistently for a long long long time. A good starting point is getting electricity prices right and let consumers react to expensive peak prices.
The point a lot of DR folks also miss (in the US) is all the 100% EV targets set for the mid-2030s are just gone. Consensus is now down to 30% of new vehicle sales will be EVs by 2035. That puts the EV carparc turnover now out past 2050 and I think a lot of the industry is coming back to Toyota's original approach that EVs will only ever be a % of the total new vehicle sales. All the DR modeling has this assume a can opener approach with requiring localized battery storage and they get there through the original EV forecasts which were never going to happen and which are now not happening.
I'm genuinely asking this - Can you point me to the DR modeling that assumes a can opener? EVs are really just a small part of demand response. They're used because they help clearly communicate the ideas.
DR is also data centers flexing for a few hours a year during periods of maximum grid stress. For DCs where it isn't cost effective to do this (the minority by far), they can install local batteries or gas generators and "appear" to the grid as if they're flexing. This still saves ratepayers tons of money by avoiding costly seldom used grid upgrades. It also allows the DC to get a grid connection years earlier than they otherwise could.
Sure. Here's one of Shah's interviews. The early EV growth rate was always taken as a given when estimating the future EV grid storage potential with these EVs + the bidirectional charging capability being the "assume a can opener". The growth rates just aren't there.
Jigar: We’re on the verge of load growing again through “electrify everything.” Leaning into distributed energy resource adoption and VPPs is the best way – likely the only way – for the grid to handle that electrification at a reasonable cost and on the timeline we need.
Look at electric vehicles (EVs) alone. In the past few years, we’ve been adding less than 5 GW of EV charger capacity annually. In 2025, we’re forecasted to add 20 GW; that grows to 90 GW of charger capacity added each year by 2030. The accompanying addition of storage capacity in EV batteries – hundreds of GWh every year – makes for highly flexible demand that we can shift to follow supply, whether from wind or solar variability or excess nuclear production, to make the grid more efficient and support decarbonization.
https://www.brattle.com/insights-events/publications/brattle-qa-energy-leaders-innovators-us-department-of-energys-jigar-shah-on-the-future-of-virtual-power-plants/
I just scanned the interview, but he's talking about a lot of different things there. Just as I was is using EVs as one example of a DER that could play a big role, he does the same. But EVs are just one of many things he talks about there and even with OBBBA, most of what he's said there still holds up fine today. I agree that growth of EVs will be a lot lower than he says there. OTOH, residential and commercial BESS projections have increased much more than enough to offset the slower EV growths. The outlook for DERs and VPPs has never been better.
As far as the assume a can opener aspect of this, he only mentions bidirectional charging in passing. Back then, as today, there's a lot of disagreement over how big of a role that'll have and how long it'll take. Again, I think you're missing the forest for the trees in this interview. As I read it, in the two years since he did this interview, the numbers have shifted around a bit at the micro level thanks to policy changes, but at a macro level, everything he's saying has held up great and we're further on the path to doing this than we were back then.
We started this talking about simple demand response and getting EVs to charge off peak instead of right when folks get home from work and adding to peak loads. That's still in play and with 5 million EVs on the road today and growing, that's still going to matter in terms of helping to manage grid peaks. We're talking about being able to shave peaks by as much as 5 GW at today's installed numbers and those are still growing relatively fast (though not nearly as fast as projected).
I think the bigger issue, right now, with EVs as a home power source is that equipment needed to send power out of the car to the home is quite expensive, requires an electrician to install, and is not compatible with many of the cheaper EV models.
Once the tech trickles down to even the cheapest EVs and the cost of the equipment drops to around $2,000, including installation labor, I think we'll see more people do this.
Being able to cover the cost of your car's insurance just by shifting your home's electricity load from peak hours to off-peak hours actually has a big impact on the total cost of ownership, relative to a gas car. But, it has to be cheap to set up and work with affordably priced cars (not just high-end luxury models), or the value falls apart.
Capital keeps depreciating at the same rate whether it is being used or not, so capital-intensive stuff probably isn't a great candidate for turning on/off based on current energy pricing.
That depends on how much the capital owner gets paid/saves for turning off during peaks versus what the rate of depreciation is.
There's been a bunch of work in the last couple of years on data center flexing (demand response) and the thing that surprised me the most out of all of it is how low average DC asset utilization can be (as low as 60% overall).
So sometimes these assets run all out all the time with five nines, but more often they're just not fully utilized and flexing a little bit to save a bunch of op ex actually works for them.
I totally agree with these caveats and your point that getting prices right is by far the first baby step that many jurisdictions haven't even gotten to yet. All of this stuff is new and tough to get exactly right on the first try.
Most utilities have had it beaten into them that "everything must be 100% reliable" and that "you can't take any risk whatsoever" on new and unproven stuff if there's even a tiny chance of something going wrong. That mindset really slows down deployment of new stuff, except with those few utilities that have gotten good at managing this risk intelligently.
The good news is that data on exactly how much to value/depend on DR is getting very good and widely available for the various classes of resources. It's still a work in progress, but it's moving along fast.
The AI buildout will accelerate all this because some jurisdictions are allowing data centers to procure third party DR resources (eg contract w/DR aggregators) in leu of agreeing to operate flexibly themselves. For many, this will be the only way to get a grid connection in a reasonable time.
Demand response is definitely a thing - in fact, at industrial scale it's been a thing for years, with large consumers like steel foundries negotiating contracts to provide "negawatts" back to the grid at times of high demand. At consumer scale it's newer, but starting to happen - I (in the UK) get emails from my electricity supplier offering discounted electricity at times of predicted low demand, and apparently in Japan you can get push notifications in an app: https://www.bitsaboutmoney.com/archive/markets-in-power/
The obstacle to rolling it out at consumer scale is that the infrastructure which supplies the electricity was not designed to support that level of interactivity. You have a meter in your house that tracks how much electricity you're using (and nowadays reports back it back to your supplier over a cellular network), but (at least here in the UK, where I've worked a bit on these systems) there's no way for your supplier to send a message back to it saying "we're a bit stretched right now", and no appliances listening to it anyway, so you need a side-channel. You can pick up the phone to a steel plant operator and say "Hey Dave, mind turning down the arc furnace for half an hour?", and he'll say "sure thing, as per clause 43.7 of our supply contract" but that doesn't scale to millions of people. Hence the emails and the push notifications.
[I don't know whether they literally pick up the phone or make some kind of API call, I only worked on the consumer side]
I thought automated consumer level demand response is exactly what Octopus has been doing for while in the UK. Do I have that wrong?
There have been devices to turn off air conditioners at high demand times for decades, no?
For the case of EV charging, I've always felt like "smart" devices that communicate digitally with utilities over the internet is overkill. In practice, electricity demand peaks almost always occur during the early evening, which means "dumb" solution where you just schedule the car to start charging late at night works just as well. Requires nothing but a simple clock.
That's true and that's mostly how it's getting rolled out right now. For sure it's the best place to start.
OTOH, grid operators pay a ton of money to always be ready for grid emergencies. Every grid has something called "spinning reserves" where power plants that aren't really needed are kept running (spinning) just so they can instantly take over if another power plant fails.
This is expensive and although it's not trivially simple, demand response has proven to be a very cost effective replacement for at least some of the spinning reserves on a grid. This is an example where the juice can actually be worth the squeeze with the added complexity.
I'm actually an Octopus customer! But you're right, they do support higher levels of consumer demand response with their Intelligent Octopus tariff (https://octopus.energy/smart/intelligent-octopus-go/). But that depends on compatible appliances (EV chargers, maybe heat pumps?) which most people won't have, communicating with Octopus via a side-channel (the Internet) and being fed back into the grid-balancing mechanism via Octopus aggregating all the demand response their customers can provide and offering that as a bid on the half-hourly auctions that determine the spot price of electricity.
I belatedly realise that I was unclear - when I said "the obstacle to rolling it out..." I meant "the difficult technical problem that must be solved or worked around" rather than "the reason it will never happen". It *is* happening, it's just a slower and more difficult process than we'd like due to lock-in effects of technical choices made years ago.
Superb comment.
I'm certainly not above getting people to try and use electricity efficiently. But the bottom line is the grid needs to be able to provide power when people WANT to use it.
Most people will be at work when the sun is shining, and then they will plug their cars in when they get home.
The key is that it has to be simple and easy plus there needs to be a payoff.
In Texas, people with EVs tend to sign up for overnight EV charging plans. These offer almost half price electricity for overnight for EV charging. It's all automatic. They sign up and then just program their cars so instead of charging immediately when it's plugged in, the car starts charging either at a pre-set time, or when it needs to start such that it'll finish at a preset time. Every EV sold today has this charging program capability already built in. Once you set it up, it's automatic.
Where I am in NH we don't have time of use or EV rates, but to be a good electricity citizen, I programmed my EV to operate this way as well. I did this once years ago and now I never think about it. My car is programmed to always be charged and ready to go by 7am. This way, I can plug it in when I get home and not worry about contributing to overloading the grid during peak periods.
Yeah, that's the way to do it.
I can see the value of such plans becoming even greater once bidirectional charging is thrown into the mix. With that, you can use the half-priced electricity not only to power your driving, but also to power your home's air conditioner whenever the car is parked at home. In a Texas summer, the effect of this can be quite substantial.
As a Hudson Valley resident, energy has become the #1 issue discrediting NYS governance. In the last ten years, we shut down our local nuclear reactor (Indian Point) and replaced it with two massive natural gas plants. At the same time, environmentalists have stalled several pipelines and transmission projects.
My marginal cost of electricity (supply plus delivery charge) has reached >$0.22 per kWh. We've ended up with a massive policy failure where both carbon emissions and consumer prices have jumped.
Still, it hasn't triggered a lick of introspection from our local leaders. Their response has been to argue for a state take-over of local utilities to implement a laundry list of Progressive goals (prioritize minority owned sub contractors, generate union jobs, income based electricity charge caps) that will not solve the fundamental supply and transmission issue. Like caricatures of Rand villains, the totally foreseeable failures of their policies justifies an increase in their control of the market.
"My marginal cost of electricity (supply plus delivery charge) has reached >$0.22 per kWh. We've ended up with a massive policy failure where both carbon emissions and consumer prices have jumped."
It is rather striking that by far the largest component of the electric bill is the transmission and supply charges, not the energy price. No one who lives here seems to be worked up about this.
Where I live in Australia it is a pretty common complaint about gas. Lots of people only have gas for a stove for cooking yet you'll be paying $1/day in supply charges for it.
That said, people complain but it isn't clear what they can actually do about it. There is limited appetite for renationalising businesses -- and the state government just used a lot of political capital to bring trains back into public control. They were privatised in 2020. So that worked because it was a relatively fresh issue.
https://www.premier.sa.gov.au/media-releases/news-archive/done-deal-rail-services-to-return-to-south-australians
Shrestha has to be on a short list of worst state legislators in the country. Her being renominated broke my ability to believe Democrats are capable of trying to fix problems.
Related, Open NY spending a ton of money and effort to get her renominated *after* she voted against the housing bill proved that they don’t actually care about housing.
Open NY is just way too captured by progressive everything bagel ideology unfortunately. It's basically impossible to find a left-leaning group of people in NYC who care about politics but don't want to spend all day fawning over Zohran's eyes or whatever.
So much this
Who wouldn't want to get lost in those eyes?
Regarding why electricity is so expensive in California, I did a whole report on it that's been fairly widely quoted. And California's high electricity rates are a problem for decarbonization.
https://share.google/1DWTLvfdqiynKEo7p
I understand you're weary of the enviros but we aren't a monolith and I think this is the most informative bit of work on this topic that you'll see.
The issue with average electricity bills is that they California has a pretty high spread in utility bills. From inland customers with very high AC use to coastal customers with low energy use and high prevalence of rooftop solar.
The solution to expensive electricity isn't just increasing supply, but also working through the myriad infrastructure costs and regulatory decisions that determining the final price of electricity that customers see. I discuss that in the paper as well.
And as to Matt's comment that most of CA isn't hot in the summer, take a drive from the Imperial Valley to Palm Springs to San Bernardino, Riverside, Pasadena, SF Valley and all up the hundreds of miles of the San Joaquin Valley in summer---its baking hot. The relatively cool coastal strip is the exception.
I feel compelled to point out that this is why ~everyone lives in the relatively cool coastal strip and Republicans can get 36% of California's vote while winning 66% of its land area in counties.
Most of California is desert that is either useless for human habitation or, at best, relies on unsustainable water usage to create the illusion that it's useful for habitation. Much of the rest is mountains. The population density of those areas is low as it is and should really be even lower.
IDK, California has enough water for millions more people to live in the desert if they stopped growing friggin alfalfa
CA also produces a lot of cattle and milk. They eat a ton of alfalfa. Shipping is expensive.
Which is why CA needs both more large and small scale water storage. If you haven't watched Andrew Millisons work on Youtube on India I suggest you check it out. Very similar climate to CA. Short intense rain season followed by long hot summers.
https://www.youtube.com/playlist?list=PLNdMkGYdEqOCgePyiAyBT0sh7zlr7xhz3
Basically lots of berms, swales and ponds keep the water on the land and allow it to recharge aquifers instead of running into the sea
Love Andrew Millison! I'm not sure how a groundwater based system like he describes meshes with the reservoir based system that California has. It seems like not much rain actually does run to the sea.
I can say that in my area of Central CA I would see the rivers flowing each year for a couple of months putting huge amounts of water out to sea.
And I know that lots of water in Northern CA goes as well due to misguided concerns about the delta smelt.
It probably doesn't fix all the problems. CA is probably doing too much agriculture given the amount of rainfall it receives. But I bet it goes most of the way.
But think of the poor cows.
If you solve energy you also solve water. Desalination is limited by the cost of energy versus the cost of fresh water. Granted without running the numbers I suspect we don't actually have the technology to make electricity that cheap or desalination that efficient yet but in a hypothetical abundance future where we keep driving both in the right direction its a solvable problem. As much as I love nuclear I am also an esoteric solar nut which California is uniquely good for in America, esoteric solar (solar power towers and orbital solar with microwave transmission) is one of those areas where you can theoretically have absurdly low cost floors on 24/7 available solar energy, both solar power towers and orbital solar are already financially viable and mostly just need scaling.
Yeah, I have my doubts whether we can ever get desal cheap enough for agriculture, but the cheaper it gets the better.
On a population-weighted basis, California is not hot. Sorry for all the folks stuck inland.
The first year I lived in Chico it was 113 degrees on the 4th of July.
Thank you for the report! And my gratitude to Matt for an outstanding column in an area where I often criticize him. Matt only had a couple thousand words to cover an enormous amount of material, and I think he did an incredible job. He's right about the most important issues:
1. Abundant cheap electricity will be an enormous boon.
2. Enviros, notably the awful Sierra Club (see my other comment for an insider view) but also the media/donor complex exemplified by The Atlantic and yes it matters that a California progressive billionaire funds it, are still in the clutches of degrowth.
MagellanNH’s caveat about efficiency of using the distribution grid is correct, but his umbrage at Matt on Jigar’s behalf is a bit much. Let’s stay focused on the core points: we can have a much more prosperous and *relatively* cleaner energy system by adding enormous amounts of solar PV and batteries in the short term, transmission in the medium term, and geothermal and nuclear in the long term. Solar and batteries by themselves can be transformative if we just keep deploying them.
Can't find your other comment. I responded to MagellanNH's comment on demand response (DR). Pasting it here for convenience:
It's good to look into more DR. The question, as always, is whether and how much spending on DR is cost effective. The point that a lot of DR folks miss is that the costs of aggregating DR are non- trivial, and to displace infrastructure or capacity upgrade needs DR has to show up reliably and consistently for a long long long time. A good starting point is getting electricity prices right and let consumers react to expensive peak prices.
Thanks for the paper. As a Californian I scratch my head at how to lower electricity prices, since investments in the grid to lower prices are funded by higher electricity rates.
With that said I can't see how the paper addresses making electricity less expensive. It seems your goal instead is to lower the cost per kw/h on a customer's bill. Isn't charging an annual fee to lower rates a subsidy to households that use more power? I understand your position that poorer communities live inland where it's hotter, but long-term you're encouraging more suburban growth in inland areas if you transfer costs to all homeowners.
And finally, I found that very few people were clear on what the causes of high prices are. My hope is that clarifying that would help others come up with solutions.
Thanks Eric. A couple of things that may help you:
* The paper recommends shifting costs of social policy to the tax base. That will help a lot. It's hard to do, so the income graduated fixed charge is a second best. A distant one at that. But we should still strive.
* We also talk about other solutions that are in the nitty gritty of regulation that move things on the margin (such as setting accurate utility returns and regulatory structures)
* Reducing the per unit value of electricity use is important as it makes it more economic relative to gas. Higher electricity use could mean more efficient grid utilization. This is a small but positive effect.
* Reducing per unit electricity costs will also correct some of the rooftop solar related price effects which are a bigger near term issue.
Thanks for reading the paper!
Wouldn't it be cheaper and faster to stick solar and a battery on every CA home instead of watching PG&E spend billions on burying lines?
No. The only way to displace a line is for all dependant load to go completely off grid. And there are numerous challenges with siting, maintaining reserves for reliability, controlling the operation etc.
I work in Public Power rate setting and the accuracy of this article reassures me about your accuracy in areas where I’m not knowledgeable, thanks!
Your diagnosis is all correct and I agree “something needs to be done” but often the hardest step is figuring out correct “somethings.” Pushing back on misplaced advocacy and permitting reform are two steps in the right direction but might be too small on their own.
Just in our planning horizon, we essentially need to double our capacity, which is challenging because of turbine shortages. Now, I have a lot of faith in the markets and am much more optimistic than most of my colleagues. But if Government wants to ensure a speedy energy transition for CO2 and/or maintain strategic advantage in AI, or just long-run abundance, one thing I could really see helping is some sort of “Operation Warp Speed” on clean baseload generation. Something like, the Federal Government guarantees purchase of (and permitting approval for!) 500 GW of new nuclear turbines.
I've heard about using battery backup to provide reactive power instead of turbines - how is that going?
We aren't going to build 500 GW of new nuclear power in the next 20 years, outside of Internet fantasies. China, which is building at a relatively frenetic pace, has built 34 GW in the past ten years. There is no government policy that gets you to those levels, other than getting major head trauma and experiencing a hallucination while you're in a coma.
Doesn't have to be nukes if geothermal or cold fusion happen; but likely it will be one of those three. Recall 15 years ago, nobody would have every expected solar to become a significant contributor, but with Wright's law, the cost of the tech decreases significantly with scale. Same thing will happen to some clean baseload tech, unless we give up on a clean energy transition and build that much fossil fuels again.
Batteries and PV are going to get continuously cheaper, eating larger and larger shares of what we consider "baseload". If we're smart (or if we're China) we're going to make massive investments into renewables and pumped hydro first; the latter requires turbines, but the turbines aren't compatible with nuclear or geothermal. We pick off all the low-hanging fruit by 2040 and then build out whatever long term zero-carbon baseload is required using whatever tech is mature at that point. That might be new and inexpensive modular nuclear reactors, or a mature version of the fracking-based geothermal stuff. It doesn't really make sense to build that baseload today.
IMO you're on to something with your operation warp speed idea for clean firm. The trouble is that the main inhibitor isn't really construction finance or even offtake agreements. Today I bet the industry could line up financing and offtake for hundreds of nuclear plants if everything else could be lined up. Both Biden and Trump have made major changes to the NRC and I think between them they've given the industry most of what it wants/needs on that front. There could be some permitting/social license issues to work out, but I'd bet a lot of the country would welcome a couple of reactors as long as they're not worried about getting taken to the cleaners on the cost.
That gets us to the problem. The cost overruns and schedule delays of the Summer and Vogtle nuclear projects bankrupted or nearly bankrupted almost everyone that had anything to do with them and the final price tag gave ratepayers and regulators sticker shock. This was all because "first of a kind" project risk showed up with a vengeance on these builds and that created a strong "touched a hot stove" inhibition to nuclear in not just legislatures and PUCs, but also potential nuclear contractors and suppliers.
So the job for your operation warp speed is less about financing (though that can help), organizing offtake/PPAs, or even NRC or permitting reform. The job is to invent a government incentive structure that can neutralize/spread out first-of-a-kind project risk so PUCs, utilities, contractors, and suppliers won't be so afraid of this stuff.
There have been a few proposals floated and I think this will likely gain some steam next year. The idea would be to create some sort of federal consortium that's organized around building 10-20 reactors around the country and spreading out or capping the project risk such that there's a lid on how bad the costs can be for ratepayers and how much of a bath suppliers and contractors have to take if some things go badly wrong along that way while they're figuring all this stuff out. The idea is that we know Vogtle 4 cost a lot less than Vogtle 3 and they had a lot less construction problems with it. It's almost certain that the 20th build of that design will be much cheaper still, so if there was some way to pool the risk of all 20 of the next builds, it might be manageable enough for enough PUCs and legislatures to bite.
Public Power has a bit more of a financing challenge than IOUs, as it's a big ask to have our ratepayers front the cash for new capacity, but we could likely get around that if we had cost guarantees (tax free debt helps!). Perhaps 20 new reactors would be enough to get everything kickstarted and the advantage of the plan you outlined is you don't really need a proactive Federal Government so it's probably workable. But, especially given much of the risk is regulatory and the Fed keeps coming out with a bunch of expensive plans anyways, I kind of like the government taking on that initial risk and then, likely, not having it actually cost a thing for taxpayers.
"especially given much of the risk is regulatory"
I'm no expert on this, but my understanding is that despite a lot of industry attempts to frame things this way, it isn't quite true. The Decouple youtube channel hosted a talk with James Krellenstein about this. He did a deep dive into the problems at Vogtle and his view was that this was mostly just first-of-a-kind risk and bad project management. His logic on this seems reasonable and if he's right, the industry should be able to figure itself out once it gets enough experience building the same design.
This is part 1 of a two part discussion that really gets into the weeds, but I linked the exact spot where Krellenstein makes his case that the issues really weren't mostly regulatory.
https://youtu.be/bGySq7QBRiY?t=1102
Is there really any way to make this happen without major subsidies, or at least guarantees, from the Federal government? And will the GOP actually back those?
I really don't know. I think the big problem is that for large reactors, the worst-case project risk and budget amounts for each individual build are just too big to be handled by most of the parties involved, especially given what happened with Vogtle. It's likely with enough builds pooled somehow that the overall risk to taxpayers wouldn't be that big, but I don't know if legislators or voters have the stomach to take on the risk. It's almost certain there would be some politically exploitable failures and public shaming for specific bad acts if they could get this sort of thing approved.
Most republicans have heard about the Solyndra debacle and spent years trying to gain political advantage blaming Obama for it. Most don't know that the same Obama program (through the Loan Programs Office) also enabled Vogtle to get built. Because the Loan Programs Office had a portfolio of loans that was smartly managed, overall they actually made taxpayers money despite some politically exploitable and very public failures (like Solyndra). Their mandate was to write loans on risky projects, so if none had failed, it would have been a sign they were too conservative and their role could have been played by normal banks. I think a similar program/govt office could work to offer some sort of project risk insurance. Instead of or in addition to loans, it'd be an insurance program to pool project risk. It'll be tough to get the incentives right (so we don't get $20k gold plated toilets), but it's probably doable. Whether congress would do it, and especially this congress, is anyone's guess.
I feel like if this was going to happen, it would happen during the non-lame-duck phase of a Trump presidency, when the Rs are able to spend money without concern for deficits and Trump can clean up any GOP objections by threatening people. I suppose the Dems could have filibustered but I bet they wouldn’t have. Unfortunately the Trump Presidency is not built for projects like this, and it’s useful “do politically risky things” half-life is almost over (squandered on ICE and DOGE and Medicaid cuts.)
I don’t know what the future holds, but most likely the GOP is going to slide back into its base obstructionist stance. Also very hard to see anyone trusting any Federal compacts passed by Dem Presidents unless the Dems do something to insulate against another future Trump and DOGE and Supreme Court letting the administration rip up laws.
Overall good article with a good point. Two technical comments: 1) rate of return and profits are not capped; in some states utilities can manage their expenses such that they can earn more. Better to say “tightly regulated.” 2) Leah Stokes may even have her argument wrong - utilities with lower rates of return have an incentive to increase their capital spending to increase profits. Better to give them a reasonable rate of return to there is less of an incentive.
You expect an activist to have actually read any of the IO literature on electricity regulation before providing their solution to what they see as the “problem” in said industry?
I barely expect IO faculty to have read the paper, and I have no expectation of anyone understanding it
There was one student from NC state that gave the same presentation on a dynamic structural paper on windmill development. No one understood what was going on and we were sure he didn’t either. Guy was a fucking legend for getting into conference after conference.
I think you're being a little too hard on Matt. Utility regulation is hard and I have seen many people -- not just activists -- trip up when trying to discuss it.
MattY is not the subject of my sentence. He at least reads white papers.
Utility return on equity is required legally to be equal to their cost of capital. You can't keep lowering it indefinitely. The idea is to get this judgement right, but it's pretty hard and even small deviations create pieces incentives.
The part of your post where you say "utilities with lower rates of return have an incentive to increase their capital spending to increase profits" isn't completely accurate because if utility ROE is lower than their cost of capital then they wouldn't spend enough.
The utility’s AUTHORIZED rate of return is required to be equal to its cost of capital. How that turns out in practice can be different.
Yeah. Authorized = what the regulators set. Point is that there is a floor. And economic literature shows that sometimes smaller increments over the ideal ROE can have negative consequences. Be careful how you set it!
The part of your post where you say "utilities with lower rates of return have an incentive to increase their capital spending to increase profits" isn't completely accurate because if utility ROE is lower than their cost of capital then they wouldn't spend enough.
It may turn out not to be a floor if the utility's O&M is higher than forecasted. I wouldn't call it a floor.
That's true of utility's net earnings. Higher or lower O&M can change what utilities actually earn versus what they were projected to.
But the value of return on equity that regulators set (e.g., 9% or 10% etc) dictates their approach to capital spending, and that's what has to be set at the utility's true cost of capital.
Thanks for the back and forth. Check this blog out if interested: https://share.google/vd3c9IrYfeK1fVGXN
Agreed. Thanks for this back and forth and thanks for looking the link to the Berkeley article.
What makes this problem so thorny is that utilities are always incentivized to increase their capital spending as much as possible, rather than trying to operate efficiently, leading to a lot of dubious projects that the public pays for with higher power bills.
Public utility commissions are supposed to be the safeguard against this, but in practice, the utility commissions tend to be bought and paid for by the utilities they are supposed to regulate, so they end up not doing their job.
Ohio is a good example of where public utility commission corruption led to higher costs.
In most states staff of the commission can protest utility rates if the utility is “over earning .” This can force a rate case to reset the rates. Theoretically, this allows ratepayers to capture any efficiencies in the form of lower rates.
Yes but could be on a going forward basis only.
With lag.
Also very unclear wrt future test years and multi year rate cases
"Leah Stokes may even have her argument wrong - utilities with lower rates of return have an incentive to increase their capital spending to increase profits."
Yeah, I mean making it up on volume sales is a well known, basic, phenomenon.
Results live! https://youthpoll.yale.edu/fall-2025-results
Interesting results and excellent, clear presentation!
One thing I was wondering: were “liberal” and “ conservative” defined for respondents or did they use their own interpretations? Maybe I missed it as I had to skim but these days I often have no idea what people mean when they use such terms, as they seem to have been unmoored from their original meanings in much public discourse.
"Liberal" and "conservative" were based on self-identification using the standard ANES 7-point ideology scale question.
Fascinating to look through and great work all around! Props to everyone working on the data visualizations, especially picking the colors. Clear and thematic throughout.
All credit to Aharon and Sofia!
Interesting word cloud on what Democrats are fighting for. Relevant to today's post, the words climate change, environment, etc don't appear at all, even in the tiniest size. I mean, others that made the cut were "honestly" and "feel free" along with what is sure to be the Democrats' rallying cry in 2028, that they're fighting for (as the word cloud offered) "idea."
The same environmental people advocating real time pricing for electricity probably chastised ERCOT for selling electricity at adjustable rates to people who signed up during that winter storm a few years back.
There's a huge difference between a system that rationally allows more of the price signal to flow to end users and a system that turns average retail electricity users into high stakes gamblers without even understanding the risks they've taken on.
Before Uri, I suspect you would have to work very hard to find any environmental people advocating for a real-time pricing system that exposes retail ratepayers to the risk of $20,000 charges for a couple of weeks of electricity usage.
More than anything, Griddy was a failure of regulators to protect ignorant consumers from themselves. That's why it's gone now, and it's why even in free wheeling Texas, regulations have been changed to make sure it can't come back.
Retail consumers considered only the upside risk and not the downside risk of Texas legislatures not mandating sufficient weatherization of gas generators and the lack of grid interconnections across state lines. (Panhandle and West Texas were fine because they have grid connections but most of ERCOT is separated from other states to avoid federal environmental regulations applying due to the interstate commerce clause.)
There is a reason retail consumers generally pay a fixed rate for electricity, even if it causes inefficiencies.
Or if variable, then variable within set bounds.
It's on thing to have rates jump a bit during max demand to encourage efficiency. It's another to have unbound rate increases.
It is stupid that people have the option to sign up for unbounded rate increases.
Pretty good JMP on that floating around from 4-5 years ago. Someone at A&M has the data.
Did the guy go private sector? My buddy who works with ERCOT data is at UT Austin.
Yeah. He wasn’t fancy enough for my colleagues. Ridiculous. Backstory there is he went early and got an industry job, and that job reneged so he went again.
That sounds fucking awful. My friend only got the Austin job because they only made offers to hotshots (from the Royal zip code 😉). He was just giving a talk and they poached him over the summer.
Christ onna croissant. A whole piece on how the horrible, terrible, no good, very bad lefty eco groups want to prevent new electricity generation and force Americans into austerity, with not a single word about how Trump has been revoking permission for renewable energy generation for no better reason than "lol fu libs."
Look, I get that hardcore MAGA are unwinnable. But there are significant numbers of people who either voted for Trump very reluctantly, regret their vote for him, and/or didn't vote for anyone, and who are gettable. Putting my Brian Beutler hat on: pointing out the bad things the leftists do without even mentioning that TRUMP DID THE SAME BAD THING is political malpractice! Can we please, please get away from "liberals beat themselves up over everything anyone affiliated with them ever did wrong, but when the GOP does horrible/incompetent/evil shit, that's just the GOP being the GOP"? Pretty please?
"Amory Lovins and the Rocky Mountain Institute, for instance, spread the idea that the cheapest and greenest kilowatt-hour is the one you never use."
Look, I'm not saying Lovins should be the standard-bearer of today's Democratic Party, but he is technically correct, which is the best kind of correct, isn't he? The kilowatt-hour you never use is one you never pay for, ergo, it is the cheapest. And it is the greenest, because every single for of electricity generation has some negative impact on the environment, whether it be CO2 emissions, land use, birds killed by wind turbines, etc.
"If everyone can switch to different kinds of light bulbs so they don’t need as much electricity, that’s the win."
Well, isn't it? Isn't it straightforwardly good to achieve the same results (in this case, light) with a fraction of the energy? Would you rather have us go back to incandescent light bulbs? What is the complaint here?
"people can't just not eat food"
Obviously not, but it sure as heck would be nice if Americans could stop wasting [insert quick Google search] between 200 and 400 pounds of food per person per year! That's approximately a pound of food wasted per person per day. That's insane! Think how much greenhouse gas emissions that is. Can we figure out and implement a way to reduce that? Food waste gets far, far less attention than electricity generation or transportation in the climate change discourse.
Please be gentle with Matt. He's confronting a Slow Boring readership completely bamboozled by the degrowthers and he's desperately trying to help them see the light of day.
Yup, this bothers me too.
This is a fair point. I do get concerned sometimes about the degree to which a lot of these articles preach to the choir. I would much rather see articles like today's run in a pub with a more orthodox liberal audience, while the articles that run here challenge the audience a little more. On the other hand, it's not like Matt gets invited to write often in pubs with more orthodox liberal audiences, and my understanding is that this substack has silent subscribers who are both more progressive than the commentariat and are quite influential in the party.
A political movement forfeits any right to be taken seriously when its policies demand clean energy it fails to produce and transmit. This is no small thing. The clever use of energy is what makes subsistence easy.
So happy to see a growing movement to ban gas-powered leaf blowers. It’s crazy that we ever allowed a new source of industrial noise into our neighbourhoods which is virtually constant in the fall. People could do worse than go back to raking and get some exercise.
Yes, noise rather than source of energy is the cromulent path to take here.
Cromulent is a wonderful word.
It embiggens your wordiness!
Indubitably!
Yeah, and those bulldozers and excavators should be next! Think of all the employment we'd have for construction workers and how healthy they'd be!
Speaking of noise pollution, whoever switched the backup warnings from high pitched to low pitched deserves a medal.
Also they are genuinely horrifically polluting. Wandering by those two-strokes is self-evidently in the category "this is not remotely healthy to be breathing."
I literally moved out of an apartment complex because of the nonstop gas-powered leafblowing that went on for hours every single day, starting at 7am. It made my apartment entirely unlivable. I not only want to ban gas-powered leafblowers, but I want a Disco Demolition Night-style bonfire for all of those terrible things.
Agree on the gas-powered leaf blowers. But am I the only person who finds the whining noise of electrical blowers almost as maddening?
Electric seem much quieter than gas, at least.
Higher frequencies are more obnoxious than lower frequencies. Lower volume is good but on net I'm not sure there's a difference between the two.
Or just use electric leaf blowers.
I think there is a bigger point in this article, which is that we are all worse off when people obscure their objectives and/or their motives. I am not sure that is fixable, since it is so highly incentivized as a human behavior, but obfuscation makes policy discussions straight up worse, whether you are talking about energy or abortion or taxes or health care or <insert your thing here>. It’s incredibly tedious.
I read this post and I am now totally convinced that the degrowthers are bad. Of course, I also was convinced of that the first time Matt made this argument and if anything I feel just as strongly now that he has laid down the same argument for the fiftieth time. Job well done.
I mean, he did the Lucy and the football trick on me again with that enticing headline "A bolder vision for American energy" only to find -- yet again -- that he was devoting his time and space to trashing the braindead enviro groups. Got it. Yup, they're braindead.
Maybe some day he can *really* live up to his headlines and go deep into how we actually achieve energy abundance other than "transition to a renewable future by using as much natural gas as we can" in that marvelous underpants gnomes way.
Oh, and dumping on people who call for more efficient and time-sensitive use of electricity via variable pricing is a cheap attack. Many of the people calling for this (like David Roberts of Volts) really want to see vast new supplies of electricity too (mostly by increasing renewables, of course). Matt trashing them for this is like the anti-abundance people saying that upzoning is worthless because they're 100% focused on corporations and billionaires.
Matt Yglesias could invest the time to become an expert in energy policy, the same way he invested the time to become an expert in housing policy. Failing that, he could stop writing about it. Failing both things, he could just say "copy whatever China is doing."
Not one of his strongest areas, considering how much he writes about it.
"Well, it’s a reminder that influential elements of the environmental movement are driven by their roots as a conservation movement."
This is the key point to the entire post. The phrase of the moment is "the housing theory of everything". I would say if there is one thing the commentors, Matt and myself are in agreement on is this theory has a decent amount of explanatory power to explaining our current moment.
But I think a different phrase needs to be more popularized as I actually think it's way more applicable to politics across the developed world (outside of countries with common law systems); The "old people theory of everything". Basically, the fact that median age of your typical person in countries across the world is rising and continuing to rise is actually the real story here (and covers the "the housing theory of everything" once you understand who is the real most powerful force in stopping housing developments. And not just in the US).
Matt has noted previously how much dysfunction at a variety of left wing non-profits stems from the fact that a) the staffers disproportionately are very left young people who have views way to the left of the median Democrat and b) the "Everything bagel" problem that Matt alluded to in this post with Sierra Club's changing stance on immigration.
I still think we underrate how much of what these organizations due really is driven by its donors. This has come up with the Israel/Gaza debate; basic demographic realities of left leaning donor class being what it is, there's been tension between donor base and more pro Palestinian staff. But I think we underrate how much of these organizations are still driven by who donates. The donors to these orgs are older left wealthier left wingers. And to kind of defend these people, this is a cohort of people who remembers when "Silent Spring" came out, remembers lakes literally catching on fire and remembers literal circles of smog around major cities. I at least understand why you're frame of reference of the world became "development of any kind = destruction of nature that is literally killing us". Again, the issue is it's outdated.
And again, the median age is rising meaning older voters have increasing power explains a ton about NIMBY*, the politics of pensions, the politics of Medicare, the politics of immigration** and just general "everything was better in the good ole days"*** thinking.
* I recommended it before, but I think the commentators would really like the "Big Dig" podcast. In my previous recommendation, I noted how it gave me more sympathy for older NIMBYs as it's clear that a big historical motivation was seeing the "headless chicken" aspect of highway building.
** honestly, it doesn't take a PhD to realize "who's going to be more afraid of new groups of people coming to country". But in case you needed back up. https://today.yougov.com/politics/articles/43424-young-americans-more-supportive-immigration-poll
*** Completed unrelated, but I think Sean Duffy is now the leader in the most absurd invocation of the "good ole days" thinking. I would say the guy who wrote "$140K is poverty" briefly took the lead. But Sean Duffy touting that by lower fuel standards we might bring back the old wood panel station wagons is now the winner. Honest to god, do you know one person who actually is pining for the ugly wood panel station wagon? In all of those dumb "look what they took from us" posts that show advertisements from the 50s or prices from the 70s, is any of them wondering what happened to the wood panel station wagon? I honestly think it's in play that Duffy will advocate for bringing back smoking on airplanes based pure "jam into my veins" nostalgia.
If I remember right, in the recent Sierra Club dustup, the actual people working at the Sierra Club were relatively good on YIMBY/energy issues, but it was their older Boomer donors that were pushing back more.
The "140K is poverty" guy has expanded on his first essay with two bangers. He adds some nuance, backtracks a little bit and explains his thesis better in both of them.
The one from today is excellent and something I suspect 90% of Matt's readers would agree with.
https://substack.com/home/post/p-178506882 (no subscription needed)
“…a simple, aggressive strategy to rebuild the American middle class by shifting taxes off workers and onto idle capital, forcing companies to invest through a 4-year capex shot clock, eliminating benefit cliffs, and restoring broad-based prosperity centered on the 65th percentile family.”
He’s so very, very wrong.
Yeah, Idle capital isn't really much of a thing. People don't just have huge piles of cash sitting in a scrooge McDuck vault.
It's pretty much always invested in one form or another. Even stuff like stable value mutual funds are a form of investment.
The idea of forcing firms to spend money is ignorant.
I agree it's better. Think this part makes a lot of sense for example "We tax wages (pursuit) heavily, while subsidizing debt and capital gains (property)." I suspect the writer of his substack would agree too (I mean the fact the carried interest loophole still exists is absolutely insane to me). There are some specifics that I have an issue with. For example "Expensing: Temporary (4-year) 100% Immediate Expensing for all physical capex. Mechanism: Creates a binary choice: Invest (0% effective tax) or Hoard (35% statutory tax)". Not sure this is the greatest idea even if I do think it's good to find a mechanism to induce corporations to make investment decisions based on long term time horizons. My suspicion is this would lead the private sector equivalent of "bridges to nowhere"; CapEx investment just for the sake of immediate tax relief whether the ROI is actually high enough to justify cost. But I feel like the specific proposals are at least on the right track of possibly being better for the middle and upper middle class (the fact that basically no one anymore pays inheritance tax because of an extremely successful propaganda to call inheritance taxes "death taxes" and using the (extremely rare) idea of a family losing their small farm as some typical stand in for all inheritance, is nuts to me. So on board restoring the "estate tax" and cutting down loopholes).
But it's still very much undermined by stuff like "For much of the last 40 years, the United States has drifted into a nightmare." This is some Taylor Lorenz/MAGA brain nonsense (the horseshoe theory is real people). Also, look at that chart "Z scores Measures of Satisfaction" and it so clear how much basic underlying economic conditions is the story here. So Positive personal sentiment went up to right up until 2006-2008 range, plunged, steadily increased until 2020, and then plunged again post-pandemic and during the worst inflationary period since the 70s? Knock me over with a feather.