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I totally agree with your wider point but I would guess there's federal subsidies involved in the current pricing in Texas. I think those are a good thing, and

I totally agree with your wider point but I would guess there's federal subsidies involved in the current pricing in Texas. I think those are a good thing, and there should be more of them and more effort removing the explicit and implicit subsidies on gas that they seek to counterbalance. (I'm also now wondering how much the solar panels paid in tariffs and if the two government interventions cancel out) But probably worth acknowledging they exist. Here's a right wing take on it: https://www.texaspolicyresearch.com/federal-energy-subsidies-distort-the-market-and-impact-texas-a-closer-look-at-the-true-costs/ https://www.texaspolicyresearch.com/federal-energy-subsidies... I think Lazard has info on costs before and after incentives.

epistasis 2y ago
Lazard's, also points out that solar is the cheapest energy source (on average, this varies by geography). Fossil fuel subsidies are much larger than renewable energy subsidies, as a total dollar amount, but then right now we get much more of our energy from fossil fuels. > For fossil fuels, the nature of subsidies differs. Tax provisions like the expensing of intangible drilling costs defer expenses rather than involve direct payments. Critics argue that these measures should not be classified as subsidies since they do not provide government cash infusions. However, any form of subsidy, whether through direct spending or tax incentives, skews the energy market and undermines the principle of free enterprise. The most shocking thing is the battery, to me. Because the battery subsidy is at most 1-2 years of price drops. So if today, batteries are cost effective, but only because of subsidy, in a short time they will be cost-effective without any subsidy. However, if we want cheap energy we should keep the subsidies in place. Batteries and solar get cheaper the more we build of them, so the faster we make the investment, the faster they get cheaper, and the sooner we have a cheaper energy source, which all in all saves us massive amounts of money. The "Inflation Reduction Act" was a funny name for Biden's on-shoring of massive amounts of factories for renewable energy, but I think in the end it will stop future inflation, long after he has died. Energy price spikes are frequently the cause of inflation, but once we have the coming energy abundance, and most of the cost of electricity is in storage rather than generation, we don't have to worry as much about global geopolitics cutting off our supply. The worst will be a week-long shortage due to a continent-wide weather event that we have not yet seen the likes of, but likely will in the future due to climate change. Or, a volcano eruption that also at the same time destroys crop production, in which case lower electricity levels won't be much of a concern...
- ZeroGravitas 2y ago
  The name was specifically chosen because of that effect. I believe it was based on the work of Saul Griffith who has a PDF here explaining it: "Electrification is anti-inflationary." > Unpacking the U.S. Inflation Reduction Act: What was in it? What could it mean for Australia? > Clean electrification is the transformation of our energy economy away from one based on low-cost fossil-fuelled machines that require expensive future commitments to fossil-fuels, to higher-cost electric machines that are powered by clean electricity. This turns the energy economy from one of fuels to one of finance, and the beauty of finance is that it locks in the cost of something for the period of that finance. It is literally anti-inflationary as can be seen in Figure 2. https://cdn.prod.website-files.com/612b0b172765f9c62c1c20c9/639d4e51598a9c13b8a45a80_Electrification%20is%20anti-inflationary%20-%20Saul%20Griffith.pdf https://cdn.prod.website-files.com/612b0b172765f9c62c1c20c9/...

epistasis 2y ago

Lazard's, also points out that solar is the cheapest energy source (on average, this varies by geography). Fossil fuel subsidies are much larger than renewable energy subsidies, as a total dollar amount, but then right now we get much more of our energy from fossil fuels. > For fossil fuels, the nature of subsidies differs. Tax provisions like the expensing of intangible drilling costs defer expenses rather than involve direct payments. Critics argue that these measures should not be classified as subsidies since they do not provide government cash infusions. However, any form of subsidy, whether through direct spending or tax incentives, skews the energy market and undermines the principle of free enterprise. The most shocking thing is the battery, to me. Because the battery subsidy is at most 1-2 years of price drops. So if today, batteries are cost effective, but only because of subsidy, in a short time they will be cost-effective without any subsidy. However, if we want cheap energy we should keep the subsidies in place. Batteries and solar get cheaper the more we build of them, so the faster we make the investment, the faster they get cheaper, and the sooner we have a cheaper energy source, which all in all saves us massive amounts of money. The "Inflation Reduction Act" was a funny name for Biden's on-shoring of massive amounts of factories for renewable energy, but I think in the end it will stop future inflation, long after he has died. Energy price spikes are frequently the cause of inflation, but once we have the coming energy abundance, and most of the cost of electricity is in storage rather than generation, we don't have to worry as much about global geopolitics cutting off our supply. The worst will be a week-long shortage due to a continent-wide weather event that we have not yet seen the likes of, but likely will in the future due to climate change. Or, a volcano eruption that also at the same time destroys crop production, in which case lower electricity levels won't be much of a concern...

ZeroGravitas 2y ago
The name was specifically chosen because of that effect. I believe it was based on the work of Saul Griffith who has a PDF here explaining it: "Electrification is anti-inflationary." > Unpacking the U.S. Inflation Reduction Act: What was in it? What could it mean for Australia? > Clean electrification is the transformation of our energy economy away from one based on low-cost fossil-fuelled machines that require expensive future commitments to fossil-fuels, to higher-cost electric machines that are powered by clean electricity. This turns the energy economy from one of fuels to one of finance, and the beauty of finance is that it locks in the cost of something for the period of that finance. It is literally anti-inflationary as can be seen in Figure 2. https://cdn.prod.website-files.com/612b0b172765f9c62c1c20c9/639d4e51598a9c13b8a45a80_Electrification%20is%20anti-inflationary%20-%20Saul%20Griffith.pdf https://cdn.prod.website-files.com/612b0b172765f9c62c1c20c9/...