9 ms·

Deregulated energy markets accelerate solar adoption

71 points by seanobannon 2y ago

hannob 2y ago
As a counterpoint, I recommend this article: https://ketanjoshi.co/2024/08/12/texas-builds-clean-power-but-it-isnt-a-climate-champion/ https://ketanjoshi.co/2024/08/12/texas-builds-clean-power-bu... It looks into the numbers for the Texas renewable buildout, and there's a very important caveat: the amount of renewables you build is not the relevant metric. Emission reduction is. And Texas does not succeed there.
- jandrese 2y ago
  > Emission reduction is. And Texas does not succeed there. Are you saying they would have released less CO2 had they installed natural gas power plants instead?
  - ZeroGravitas 2y ago
    Maybe they are saying that if they'd followed California's policies they'd have a higher percentage of their power from renewables and they wouldn't be so wasteful with the energy they do generate. Because that's the point of this article isn't it? To follow Texas policies, not California's, by pointing to absolute numbers of renewables. If they looked at absolute numbers on coal and gas they'd look worse.
    - epistasis 2y ago
      California is not plummeting in total emissions either, which is the point of the plots in there. The only thing that could move this along faster is to shut down fully running and functional fossil fuel facilities, which means that the huge capital assets are stranded and a big loss to the people who paid for them. There, Texas's approach of private investors bearing the cost of that poor investment will fare much better than California's approach of letting the utility bill customers for their poor decisions. (I say this as a Californian absolutely INFURIATED at our toothless public utility commission allowing six whole rate increases in the past year, making electricity for a heat pumpfar more expensive than burning gas for heating, and making charging an EV about the same cost as fueling gas car, instead of much cheaper.)
      - Spivak 2y ago
        > and making EVs about the same cost as a gas car At first I was like, isn't that great EVs are the more expensive car but then I realized you meant that the electricity costs as much as the equivalent gas. Oof. Yikes. That's really bad.
        epistasis 2y ago
        Thanks for pointing out that ambiguity, I hopefully edited for better clarity! The other problem in California is that most heating is done via natural gas, and though heating needs are fairly low if houses had any sort of insulation, there's basically zero insulation in all homes. Which means that every winter, people experience massive natural gas bills that should be close to zero, making it very problematic to switch some of the utility cost burdens from the electricity side to natural gas side. Meanwhile, PG&E profits are at the very top of the utility stock list for its profit margins...
        baggy_trough 2y ago
        > there's basically zero insulation in all homes. This is completely false.
        epistasis 2y ago
        Well all I can talk about is the 1970s-era boxes that dominate in the Bay Area, which is the major population center that PG&E serves. If your experience with these homes is different somehow, let me know. But go to SF, go to the peninsula, and you'll find that most homes barely stop air coming in and out of the house, much less have proper insulation. A blower test for SF homes would shock most people in the modern world.
        baggy_trough 2y ago
        Yes, my experience is that you are simply wrong.
        2y ago
  - hannob 2y ago
    They would have released less CO2 if they had regulated CO2 emissions.
- epistasis 2y ago
  > Emission reduction is. And Texas does not succeed there. If we're talking about the impact of a particular tech, choosing the proper baseline is important, otherwise it's easy to reach fallacious results in counterfactual reasoning. Emission reduction versus what? Per-capita emissions reductions? Per-kWh emissions reductions? Compared to whose usage? Plotting total emission and saying "we've failed!" actually hides a lot of what's going on, it's only one aspect, and increased population can hide that overall emissions are trending in the right way.
- buckle8017 2y ago
  Articles that try to compare Texas with California almost always miss that California is not it's own grid. Power in California is from the Western Interconnect, which is regulated by WECC. Power on the Western Interconnect is only 8.7% solar and 10.4% wind.[0] Texas in the same year was 7% solar and 24% wind.[1] [0] https://wecc-spdp-weccgeo.hub.arcgis.com/pages/power-generation https://wecc-spdp-weccgeo.hub.arcgis.com/pages/power-generat... [1] Annoyingly the data is in an excel spreadsheet in a zip file https://www.ercot.com/files/docs/2021/03/10/FuelMixReport_PreviousYears.zip https://www.ercot.com/files/docs/2021/03/10/FuelMixReport_Pr...
- M3L0NM4N 2y ago
  Emission reduction measured how?
deleted 2y ago
[deleted]
makotech221 2y ago
Gimme a break. Compare China's centralized economy's solar/wind/nuclear production to the entirety of the west's decentralized, privatized economy. not even close.
- leetharris 2y ago
  Good, all we need to do is become China and we're set!
  - outer_web 2y ago
    I don't think that's what he was saying.
  - r00fus 2y ago
    No, but the US needs to actually compete with China. Instead the reaction from leadership has been to utter fail to compete and lambast China as an enemy instead of a competitor. None of this serves anyone but the ruling class and deep state. War with China is going to be one that the US loses.
    - kragen 2y ago
      War with China would leave every city in both the US and China a radioactive wasteland. The US would lose, but so would China.
- epistasis 2y ago
  Well it really depends on who is control of the centralized decision making. In most states in the US it's fossil fuel interests that control utilities, and much of the government. Which means a very slow transition for nearly every state, when compared to Texas' decision to allow the cheapest energy to win. In China, the government has the goal of deploying as much energy as possible as cheaply and fast as possible, and promoting their own industries too. Which means tons and tons and tons of renewables.
- epidemiology 2y ago
  China burns more coal than the rest of the world combined.
xbmcuser 2y ago
Well Texas seems to be planing to put in regulation on the electricity market. Seems like the current administration is out to completely gut any kind of cost savings for american businesses. https://www.canarymedia.com/articles/energy-markets/texas-bill-gas-over-renewables https://www.canarymedia.com/articles/energy-markets/texas-bi...
- warkdarrior 2y ago
  > current administration is out to completely gut any kind of cost savings for american businesses I am sure businesses that follow the administration's wishes will get government contracts, tax rebates, tariff exceptions, and other favorable treatment. I am not worried, the vast majority of businesses will learn within a few months that it is financially profitable to bend the knee.
  - ourmandave 2y ago
    Just don't forget to remove any DEI statements from your website.
    - __MatrixMan__ 2y ago
      > Just don't forget to remove any DEI statements from [redacted] website. edit: removed pronoun
  - emilamlom 2y ago
    Just wondering, why does that not worry you? Requiring people to play the favoritism game seems like a terrible way to govern. Unless I just misunderstood, in which case I apologize.
- outside1234 2y ago
  He was put in office by fossil fuel folks. We shouldn't be surprised that he tries to somehow make these dying fuels competitive.
- jccooper 2y ago
mmanfrin 2y ago
CTRL+F 'Enron' 0 results. Don't really trust something advocating for deregulated energy markets to not mention the elephant in the room.
- username332211 2y ago
  Deregulation is such a funny word. The California deregulation you are referring to, involved the powers that be pushing utility companies to sell their power plants. The current energy deregulation in the EU involves forcing utilities to trade electricity in a spot market, that treats the on-demand production of conventional power plants and the random and unpredictable production of solar and wind, as if it's completely equivalent. Of course, that's a fairly effective way to promote solar, as it's far more intrusive than conventional renewable mandates. As far as I can see, "deregulation" means, "we regulate far more aggressively than before, but there's now a market in there where Wall Street types can make money".
  - Tepix 2y ago
    In the EU there are fundings for strategic reserves in various countries that coal/gas/nuclear/geothermal/biogas plants receive.
  - cbsmith 2y ago
    > The current energy deregulation in the EU involves forcing utilities to trade electricity in a spot market, that treats the on-demand production of conventional power plants and the random and unpredictable production of solar and wind, as if it's completely equivalent. The California case also forced utilities to trade electricity in a spot market. These markets always seem oriented towards purchasing power rather than capacity, which strikes me as odd. Power companies need committed capacity, because they need to have reserves of power. Sure, buying electricity that no one else is using makes sense, but because demand is comparatively inelastic, it's just crazy to have that be how companies ensure they have sufficient capacity.
- outer_web 2y ago
  Yeah he even has a section about deregulation problems in Texas and California... then talks only about wildfires in 2020. Deregulating an industry to achieve a specific goal is certainly one approach.
buckle8017 2y ago
The Texas grid was deregulated in an era where solar and wind were not price competitive. The price competitive producers were all stable fossil fuels, natural gas and coal. They failed to take into account unreliable low cost producers forcing reliable but marginally more expensive producers out of the market. If solar/wind producers had to guarantee power 24x7 at fixed rates the cost would vastly exceed natural gas costs. They just need to change the contract requirements to match reality.
- naasking 2y ago
  > If solar/wind producers had to guarantee power 24x7 at fixed rates the cost would vastly exceed natural gas costs. Possibly, but neither usage nor generation is 24x7 at fixed cost, so what would be the point of that requirement?
  - bee_rider 2y ago
    Artificially hamper renewable uptake.
- HillRat 2y ago
  During "snowmageddon" and similar winter outages fossil fuel shoulder load also broke down, since the dynamic pricing market doesn't pay to keep spinning capacity, and the plants couldn't start up, which is why the cost curves went berserk: the price pressure escalated to try and incentivize production, but the production wasn't to be had. (The JIT nature of Texas LNG logistics also played its part; some gas turbines would have been able to start up, but couldn't get LNG to do so.) Absent turning the Texas energy market into a more rational design (I was part of the energy market during dereg, these failures were predicted by our energy economists at the time), the state should mandate weatherization for wind generation at a minimum, and look into grid-scale battery requirements as prices fall and technologies mature. Solar and wind are fantastic opportunistic power generators that work well together and should be a significant part of any grid's energy mix going forward, but the state needs to act like every other power market and pay for spinning fossil fuel capacity for shoulder and peak demand. Picking energy mix winners and losers is just political meddling in what was supposed to be a free market environment.
nomercy400 2y ago
Deregulating a basic human need and leaving it to the 'market' to solve this. This sounds a lot like other privatization efforts of the past decades. In my country healthcare, child support, energy, national railway, postal services, public housing, banking and more have all been privatized. I worry about this. Not for now, but for 20 years in the future, where all energy is managed by companies and the government can no longer control the market due to being 'too big too fail' and because it gave all control away.
- naasking 2y ago
  There is nothing wrong with markets solving basic human needs as long as the incentives are properly aligned.
  - CooCooCaCha 2y ago
    Company and customer incentives are fundamentally not aligned. Companies want to maximize profit and minimize cost, while customers want as much as possible for the lowest price.
    - naasking 2y ago
      And companies have to compete for customers on cost, which yields an equilibrium that works out well for customers on most goods and services. This is well established at this point.
      - CooCooCaCha 2y ago
        It is not well established at this point. I get the impression you're reading a textbook on economics, and not how it works in the real world. Take covid inflation for example. Covid caused supply chain issues which then caused a temporary bout of inflation, however, companies took this as an opportunity to increase their profit margins more than they need to. They specifically bragged about this in quarterly earnings calls. If companies truly compete on cost then how does stuff like that happen? Shouldn't it have been corrected by now? But that's not what we see, we see companies continue to increase prices with little consequence.
kragen 2y ago
The most significant US regulations in the area aren't even mentioned in this article: the prohibitively high tariffs on Chinese solar modules and electric vehicles, which at least double the cost of solar panels and EVs in the US compared to much of the rest of the world. Current US elites grew up in the energy crisis that started with the Arab oil embargo of 01973 cutting off US energy imports, and they seem determined to perpetuate that crisis, if necessary by cutting off US imports of energy production infrastructure themselves now that the foreigners won't do it for them anymore. The article vastly understates the rapidity of the change. It projects 3 TW of new renewable generation capacity in China over the next decade (02026-02036, I suppose), attributing that to an unpublished report from a consultancy that seems to protect its projections from criticism with an NDA. Given that the PRC installed 373 GW in renewable generation capacity last year (https://english.www.gov.cn/archive/statistics/202501/28/content_WS6798de96c6d0868f4e8ef410.html https://english.www.gov.cn/archive/statistics/202501/28/cont...) this seems like an implausibly low figure; linear extrapolation of installing that same amount every year would give us 3.7 TW installed over that period. But in fact it has been growing exponentially, so 20 TW of added capacity over the next decade seems like a more likely ballpark. That's nameplate capacity, so it's closer to 4 TW of actual energy generation.
- _bin_ 2y ago
  Because we cannot afford, geopolitically, to have a hostile rival nation with whom we may in the next decade be at war control our energy. There is no if, and, or but about that. Of course, most of said solar and battery tech was originally developed by Americans; chinese bought old patents, bought companies out of bankruptcy, and threw obscene amounts of state capital at developing it further. and now we're stuck with crap like CATL owning a huge amount of the advanced battery market. The implication that this is "just what the market decided" and that we must concede to the artificial scenario beijing has constructed, likely with the express intent of gaining leverage over more nations, is ridiculous. Instead, we should mass-invalidate every single chinese-owned patent. She built her economy on stealing ours anyhow. Do it ourselves, or rely on allied/subordinate nations for manufacturing.
  - m_fayer 2y ago
ratherbefuddled 2y ago
It wouldn't be surprising that de-regulation is good for innovation in the US, because "regulation" in the US almost always means corporate capture of a market through political bribery. Regulation in territories where it is harder for corporations to buy politicians seems to be far more successful at driving improvements.
- epistasis 2y ago
  This is very true, and I think an underappreciated point specifically for utilities, so I hope you don't mind if I expand quite a bit on your excellent point. What "deregulation" means in Texas is that there's a competitive market for electricity generation, and that those who invest in the cheapest methods of production can make profits, and those who made poor investments can lose money. This "deregulation" is merely what we think of as "normal" in market economies, where normal competition allows for greater economic efficiency. We are in an era where clean energy is the cheapest energy, and the biggest impediment to the transition is merely being allowed to put the energy on the grid. Go around the country, and the queue to get interconnected to the grid is one of the biggest stumbling blocks. Another huge stumbling block is the procedure for acquiring new electricity generation assets, typically done through IRPs for five years out, based on out-dated data. This is the "standard" regulatory regime in the US, though its highly fractured and there are many many variations. In this highly "regulated" environment, the corporations have already completely captured the market, and have often bribed the Public Utility Commissions to achieve their own goals. Deregulation in Texas means less corporate capture, more of a chance for smaller startups to deploy, and a faster energy transition now that the cheapest technology is clean technology.
  - chowells 2y ago
    I can't believe people are using Texas as a positive example of deregulation after they demonstrated quite enthusiastically how broken their system is. A competent electrical system can handle sustained freezing temperatures without massive blackouts. Texas can't. (No, I can't believe they'll do any better next time. There were no market consequences for incompetence.)
throw9494999 2y ago
In EU renewable are not competitive without strong regulations and subsidies. Distributors are forced to buy renewable at 5x the cost, and keep gas power plants at hot standby in case wind stops, or cloud comes. At the same time, long term investments into fossil fuels and atomic energy are forbidden! Saying "deregulated" energy markets drive solar, is another level of evil. It is logic that drove dependency on Russian natural gas!
- Calwestjobs 2y ago
  well i understand what you want to say and yes you are correct. but people seem to fall in trap of not thinking about user/customer. if pv is so cheap that it can pay itself in 6-7 years, by customer lowering his draw from grid drastically most of the time, whole energy transition will not be so painful for other participants of market. wast majority of thinking is going to energy providers, not a lot of thinking is going to changing customers habits ( of which most energy intense can be automated and either spread out or concentrated towards time when energy is cheap - you know sun will be shining tomorrow or day after, renewables are not as unpredictable) customers and provider can cooperate. and so " In EU renewable are not competitive.." for whom? for energy providers ? Or for customer which can easily and cheaply lower his energy draw from grid by 70% most of year by installing solar pv hot water heater + heatpumpin for 7 months of cooling his house from pv? even before installing batteries? (just electric hot water heater)
TheGrimGeometer 2y ago
The article lays out 3 different business models in the energy industry and calls them "regulated", "partially deregulated", and "deregulated". While the distinction between them isn't made very clear (at least to me), it argues that the "deregulated" models are better at responding to market conditions, and thus better at pivoting to solar power, than regulated ones. It doesn't clearly tie the choice of business model to the way the businesses are regulated, so it fails to support the claim that regulation is the cause of the lack of solar adoption. The examples it uses to make its case, the TVA and the state of Texas, are also not great. The TVA is owned by the government. So the question of their pivot to solar power is more of a political question than an economic one. Is there any political will to spend tax dollars pivoting the TVA away from nuclear and hydro sources to solar? Which politicians support/reject the policy and why? Texas is also not a great example given the recent tragedies arguably resulting from their lack of regulation. https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis In-line with other comments, Enron is a classic case-study of the consequences of allowing free markets unfettered control over essential infrastructure.
- kccqzy 2y ago
  I thought the article did a good job answering your questions. > TVA benefits from existing capex in large nuclear and hydro plants, enjoys low rates, and has little incentive to change. So apparently TVA has already invested in large nuclear and hydro and doesn't need more power. It's not about to build more solar so that it can shut down its nuclear or hydro plants. No business will cannibalize itself like this. It will have to a different economic entity. > Regulated utilities can also sign PPAs, but the lengthy and complex regulatory approvals make the process so cumbersome that few investors or developers actually pursue this option. Regulated entities can theoretically do this, but they are cumbersome so they don't. The article also mentions the tragedy of the 2021 crisis, along with the 2020 blackouts in California; the article says it's a matter of extreme weather, not the failure of a specific type of energy market.
  - TheGrimGeometer 2y ago
    > large capex in existing infrastructure with little incentive to change is common to most large companies, so picking the TVA as the "regulated" energy example seems a little like cherry-picking to me. > I'm not read into the details of PPA regulations. There may be a good point there about how some/all of them are too onerous which de-incentivizes change. idk. > ensuring that companies we entrust with providing critical infrastructure are resilient to extreme weather is a matter of regulation. I think that the Texas and California examples were both specific instances of regulatory failures regardless of their ambient culture of regulation.
belorn 2y ago
A free energy market is great and all until citizens start to expect that the government is responsible for a stable and economical reasonable grid, and who will elect politicians to that fact. At that point the cost of the grid is carried by the government, not through market forces, and companies are not slow to adapt their investments into the parts that are highly profitable while leaving the cost centers to the government. The energy crisis that happened in EU demonstrated to me that citizens are not willing to have a free market for the energy grid. When a single month cost as much as a whole year, and companies are unable to fulfill contracts or have to shut down, then their anger is not directed at the commercial companies in charge of solar, wind or other type of energy plants. It is directed towards the government for failing to provide basic function of society, which apparently include a reasonable priced electricity.
lakis 2y ago
IN https://blog.gridstatus.io/caiso-beats-the-heat/ https://blog.gridstatus.io/caiso-beats-the-heat/ , there is a very interesting quote. "The Electric Reliability Council of Texas (ERCOT) has also been lauded for its growth in storage, but when put into perspective of load, the gap remains quite large. Comparing all-time peak load and peak storage discharge (non-coincident), ERCOT's battery fleet would have met less than 5% of demand, while CAISO's battery fleet would have met about 16%, more than triple the value in Texas." Absolute numbers are not the right metric when one of the states doesn't care about efficiency and decides to generate more and more electricity. Then absolute number are huge but percentages of renewal are very low.
cool_dude85 2y ago
No attempt to control for any other factors before producing an article with a causal claim right there in the title? Geographically, do deregulated states happen to be located in areas of the country with significantly more solar potential? Who knows! I read the whole article and don't even know which states are "deregulated" and which are "partly deregulated".

71 points by seanobannon 2y ago

As a counterpoint, I recommend this article: https://ketanjoshi.co/2024/08/12/texas-builds-clean-power-but-it-isnt-a-climate-champion/ https://ketanjoshi.co/2024/08/12/texas-builds-clean-power-bu... It looks into the numbers for the Texas renewable buildout, and there's a very important caveat: the amount of renewables you build is not the relevant metric. Emission reduction is. And Texas does not succeed there.

jandrese 2y ago
> Emission reduction is. And Texas does not succeed there. Are you saying they would have released less CO2 had they installed natural gas power plants instead?
- ZeroGravitas 2y ago
  Maybe they are saying that if they'd followed California's policies they'd have a higher percentage of their power from renewables and they wouldn't be so wasteful with the energy they do generate. Because that's the point of this article isn't it? To follow Texas policies, not California's, by pointing to absolute numbers of renewables. If they looked at absolute numbers on coal and gas they'd look worse.
  - epistasis 2y ago
    California is not plummeting in total emissions either, which is the point of the plots in there. The only thing that could move this along faster is to shut down fully running and functional fossil fuel facilities, which means that the huge capital assets are stranded and a big loss to the people who paid for them. There, Texas's approach of private investors bearing the cost of that poor investment will fare much better than California's approach of letting the utility bill customers for their poor decisions. (I say this as a Californian absolutely INFURIATED at our toothless public utility commission allowing six whole rate increases in the past year, making electricity for a heat pumpfar more expensive than burning gas for heating, and making charging an EV about the same cost as fueling gas car, instead of much cheaper.)
    - Spivak 2y ago
      > and making EVs about the same cost as a gas car At first I was like, isn't that great EVs are the more expensive car but then I realized you meant that the electricity costs as much as the equivalent gas. Oof. Yikes. That's really bad.
      - epistasis 2y ago
        Thanks for pointing out that ambiguity, I hopefully edited for better clarity! The other problem in California is that most heating is done via natural gas, and though heating needs are fairly low if houses had any sort of insulation, there's basically zero insulation in all homes. Which means that every winter, people experience massive natural gas bills that should be close to zero, making it very problematic to switch some of the utility cost burdens from the electricity side to natural gas side. Meanwhile, PG&E profits are at the very top of the utility stock list for its profit margins...
        baggy_trough 2y ago
        > there's basically zero insulation in all homes. This is completely false.
        epistasis 2y ago
        Well all I can talk about is the 1970s-era boxes that dominate in the Bay Area, which is the major population center that PG&E serves. If your experience with these homes is different somehow, let me know. But go to SF, go to the peninsula, and you'll find that most homes barely stop air coming in and out of the house, much less have proper insulation. A blower test for SF homes would shock most people in the modern world.
        baggy_trough 2y ago
        Yes, my experience is that you are simply wrong.
        2y ago
- hannob 2y ago
  They would have released less CO2 if they had regulated CO2 emissions.
epistasis 2y ago
> Emission reduction is. And Texas does not succeed there. If we're talking about the impact of a particular tech, choosing the proper baseline is important, otherwise it's easy to reach fallacious results in counterfactual reasoning. Emission reduction versus what? Per-capita emissions reductions? Per-kWh emissions reductions? Compared to whose usage? Plotting total emission and saying "we've failed!" actually hides a lot of what's going on, it's only one aspect, and increased population can hide that overall emissions are trending in the right way.
buckle8017 2y ago
Articles that try to compare Texas with California almost always miss that California is not it's own grid. Power in California is from the Western Interconnect, which is regulated by WECC. Power on the Western Interconnect is only 8.7% solar and 10.4% wind.[0] Texas in the same year was 7% solar and 24% wind.[1] [0] https://wecc-spdp-weccgeo.hub.arcgis.com/pages/power-generation https://wecc-spdp-weccgeo.hub.arcgis.com/pages/power-generat... [1] Annoyingly the data is in an excel spreadsheet in a zip file https://www.ercot.com/files/docs/2021/03/10/FuelMixReport_PreviousYears.zip https://www.ercot.com/files/docs/2021/03/10/FuelMixReport_Pr...
M3L0NM4N 2y ago
Emission reduction measured how?

deleted 2y ago

[deleted]

makotech221 2y ago

Gimme a break. Compare China's centralized economy's solar/wind/nuclear production to the entirety of the west's decentralized, privatized economy. not even close.

leetharris 2y ago
Good, all we need to do is become China and we're set!
- outer_web 2y ago
  I don't think that's what he was saying.
- r00fus 2y ago
  No, but the US needs to actually compete with China. Instead the reaction from leadership has been to utter fail to compete and lambast China as an enemy instead of a competitor. None of this serves anyone but the ruling class and deep state. War with China is going to be one that the US loses.
  - kragen 2y ago
    War with China would leave every city in both the US and China a radioactive wasteland. The US would lose, but so would China.
epistasis 2y ago
Well it really depends on who is control of the centralized decision making. In most states in the US it's fossil fuel interests that control utilities, and much of the government. Which means a very slow transition for nearly every state, when compared to Texas' decision to allow the cheapest energy to win. In China, the government has the goal of deploying as much energy as possible as cheaply and fast as possible, and promoting their own industries too. Which means tons and tons and tons of renewables.
epidemiology 2y ago
China burns more coal than the rest of the world combined.

xbmcuser 2y ago

Well Texas seems to be planing to put in regulation on the electricity market. Seems like the current administration is out to completely gut any kind of cost savings for american businesses. https://www.canarymedia.com/articles/energy-markets/texas-bill-gas-over-renewables https://www.canarymedia.com/articles/energy-markets/texas-bi...

warkdarrior 2y ago
> current administration is out to completely gut any kind of cost savings for american businesses I am sure businesses that follow the administration's wishes will get government contracts, tax rebates, tariff exceptions, and other favorable treatment. I am not worried, the vast majority of businesses will learn within a few months that it is financially profitable to bend the knee.
- ourmandave 2y ago
  Just don't forget to remove any DEI statements from your website.
  - __MatrixMan__ 2y ago
    > Just don't forget to remove any DEI statements from [redacted] website. edit: removed pronoun
- emilamlom 2y ago
  Just wondering, why does that not worry you? Requiring people to play the favoritism game seems like a terrible way to govern. Unless I just misunderstood, in which case I apologize.
outside1234 2y ago
He was put in office by fossil fuel folks. We shouldn't be surprised that he tries to somehow make these dying fuels competitive.
jccooper 2y ago

mmanfrin 2y ago

CTRL+F 'Enron' 0 results. Don't really trust something advocating for deregulated energy markets to not mention the elephant in the room.

username332211 2y ago
Deregulation is such a funny word. The California deregulation you are referring to, involved the powers that be pushing utility companies to sell their power plants. The current energy deregulation in the EU involves forcing utilities to trade electricity in a spot market, that treats the on-demand production of conventional power plants and the random and unpredictable production of solar and wind, as if it's completely equivalent. Of course, that's a fairly effective way to promote solar, as it's far more intrusive than conventional renewable mandates. As far as I can see, "deregulation" means, "we regulate far more aggressively than before, but there's now a market in there where Wall Street types can make money".
- Tepix 2y ago
  In the EU there are fundings for strategic reserves in various countries that coal/gas/nuclear/geothermal/biogas plants receive.
- cbsmith 2y ago
  > The current energy deregulation in the EU involves forcing utilities to trade electricity in a spot market, that treats the on-demand production of conventional power plants and the random and unpredictable production of solar and wind, as if it's completely equivalent. The California case also forced utilities to trade electricity in a spot market. These markets always seem oriented towards purchasing power rather than capacity, which strikes me as odd. Power companies need committed capacity, because they need to have reserves of power. Sure, buying electricity that no one else is using makes sense, but because demand is comparatively inelastic, it's just crazy to have that be how companies ensure they have sufficient capacity.
outer_web 2y ago
Yeah he even has a section about deregulation problems in Texas and California... then talks only about wildfires in 2020. Deregulating an industry to achieve a specific goal is certainly one approach.

buckle8017 2y ago

The Texas grid was deregulated in an era where solar and wind were not price competitive. The price competitive producers were all stable fossil fuels, natural gas and coal. They failed to take into account unreliable low cost producers forcing reliable but marginally more expensive producers out of the market. If solar/wind producers had to guarantee power 24x7 at fixed rates the cost would vastly exceed natural gas costs. They just need to change the contract requirements to match reality.

naasking 2y ago
> If solar/wind producers had to guarantee power 24x7 at fixed rates the cost would vastly exceed natural gas costs. Possibly, but neither usage nor generation is 24x7 at fixed cost, so what would be the point of that requirement?
- bee_rider 2y ago
  Artificially hamper renewable uptake.
HillRat 2y ago
During "snowmageddon" and similar winter outages fossil fuel shoulder load also broke down, since the dynamic pricing market doesn't pay to keep spinning capacity, and the plants couldn't start up, which is why the cost curves went berserk: the price pressure escalated to try and incentivize production, but the production wasn't to be had. (The JIT nature of Texas LNG logistics also played its part; some gas turbines would have been able to start up, but couldn't get LNG to do so.) Absent turning the Texas energy market into a more rational design (I was part of the energy market during dereg, these failures were predicted by our energy economists at the time), the state should mandate weatherization for wind generation at a minimum, and look into grid-scale battery requirements as prices fall and technologies mature. Solar and wind are fantastic opportunistic power generators that work well together and should be a significant part of any grid's energy mix going forward, but the state needs to act like every other power market and pay for spinning fossil fuel capacity for shoulder and peak demand. Picking energy mix winners and losers is just political meddling in what was supposed to be a free market environment.

nomercy400 2y ago

Deregulating a basic human need and leaving it to the 'market' to solve this. This sounds a lot like other privatization efforts of the past decades. In my country healthcare, child support, energy, national railway, postal services, public housing, banking and more have all been privatized. I worry about this. Not for now, but for 20 years in the future, where all energy is managed by companies and the government can no longer control the market due to being 'too big too fail' and because it gave all control away.

naasking 2y ago
There is nothing wrong with markets solving basic human needs as long as the incentives are properly aligned.
- CooCooCaCha 2y ago
  Company and customer incentives are fundamentally not aligned. Companies want to maximize profit and minimize cost, while customers want as much as possible for the lowest price.
  - naasking 2y ago
    And companies have to compete for customers on cost, which yields an equilibrium that works out well for customers on most goods and services. This is well established at this point.
    - CooCooCaCha 2y ago
      It is not well established at this point. I get the impression you're reading a textbook on economics, and not how it works in the real world. Take covid inflation for example. Covid caused supply chain issues which then caused a temporary bout of inflation, however, companies took this as an opportunity to increase their profit margins more than they need to. They specifically bragged about this in quarterly earnings calls. If companies truly compete on cost then how does stuff like that happen? Shouldn't it have been corrected by now? But that's not what we see, we see companies continue to increase prices with little consequence.

kragen 2y ago

The most significant US regulations in the area aren't even mentioned in this article: the prohibitively high tariffs on Chinese solar modules and electric vehicles, which at least double the cost of solar panels and EVs in the US compared to much of the rest of the world. Current US elites grew up in the energy crisis that started with the Arab oil embargo of 01973 cutting off US energy imports, and they seem determined to perpetuate that crisis, if necessary by cutting off US imports of energy production infrastructure themselves now that the foreigners won't do it for them anymore. The article vastly understates the rapidity of the change. It projects 3 TW of new renewable generation capacity in China over the next decade (02026-02036, I suppose), attributing that to an unpublished report from a consultancy that seems to protect its projections from criticism with an NDA. Given that the PRC installed 373 GW in renewable generation capacity last year (https://english.www.gov.cn/archive/statistics/202501/28/content_WS6798de96c6d0868f4e8ef410.html https://english.www.gov.cn/archive/statistics/202501/28/cont...) this seems like an implausibly low figure; linear extrapolation of installing that same amount every year would give us 3.7 TW installed over that period. But in fact it has been growing exponentially, so 20 TW of added capacity over the next decade seems like a more likely ballpark. That's nameplate capacity, so it's closer to 4 TW of actual energy generation.

_bin_ 2y ago
Because we cannot afford, geopolitically, to have a hostile rival nation with whom we may in the next decade be at war control our energy. There is no if, and, or but about that. Of course, most of said solar and battery tech was originally developed by Americans; chinese bought old patents, bought companies out of bankruptcy, and threw obscene amounts of state capital at developing it further. and now we're stuck with crap like CATL owning a huge amount of the advanced battery market. The implication that this is "just what the market decided" and that we must concede to the artificial scenario beijing has constructed, likely with the express intent of gaining leverage over more nations, is ridiculous. Instead, we should mass-invalidate every single chinese-owned patent. She built her economy on stealing ours anyhow. Do it ourselves, or rely on allied/subordinate nations for manufacturing.
- m_fayer 2y ago

ratherbefuddled 2y ago

It wouldn't be surprising that de-regulation is good for innovation in the US, because "regulation" in the US almost always means corporate capture of a market through political bribery. Regulation in territories where it is harder for corporations to buy politicians seems to be far more successful at driving improvements.

epistasis 2y ago
This is very true, and I think an underappreciated point specifically for utilities, so I hope you don't mind if I expand quite a bit on your excellent point. What "deregulation" means in Texas is that there's a competitive market for electricity generation, and that those who invest in the cheapest methods of production can make profits, and those who made poor investments can lose money. This "deregulation" is merely what we think of as "normal" in market economies, where normal competition allows for greater economic efficiency. We are in an era where clean energy is the cheapest energy, and the biggest impediment to the transition is merely being allowed to put the energy on the grid. Go around the country, and the queue to get interconnected to the grid is one of the biggest stumbling blocks. Another huge stumbling block is the procedure for acquiring new electricity generation assets, typically done through IRPs for five years out, based on out-dated data. This is the "standard" regulatory regime in the US, though its highly fractured and there are many many variations. In this highly "regulated" environment, the corporations have already completely captured the market, and have often bribed the Public Utility Commissions to achieve their own goals. Deregulation in Texas means less corporate capture, more of a chance for smaller startups to deploy, and a faster energy transition now that the cheapest technology is clean technology.
- chowells 2y ago
  I can't believe people are using Texas as a positive example of deregulation after they demonstrated quite enthusiastically how broken their system is. A competent electrical system can handle sustained freezing temperatures without massive blackouts. Texas can't. (No, I can't believe they'll do any better next time. There were no market consequences for incompetence.)

throw9494999 2y ago

In EU renewable are not competitive without strong regulations and subsidies. Distributors are forced to buy renewable at 5x the cost, and keep gas power plants at hot standby in case wind stops, or cloud comes. At the same time, long term investments into fossil fuels and atomic energy are forbidden! Saying "deregulated" energy markets drive solar, is another level of evil. It is logic that drove dependency on Russian natural gas!

Calwestjobs 2y ago
well i understand what you want to say and yes you are correct. but people seem to fall in trap of not thinking about user/customer. if pv is so cheap that it can pay itself in 6-7 years, by customer lowering his draw from grid drastically most of the time, whole energy transition will not be so painful for other participants of market. wast majority of thinking is going to energy providers, not a lot of thinking is going to changing customers habits ( of which most energy intense can be automated and either spread out or concentrated towards time when energy is cheap - you know sun will be shining tomorrow or day after, renewables are not as unpredictable) customers and provider can cooperate. and so " In EU renewable are not competitive.." for whom? for energy providers ? Or for customer which can easily and cheaply lower his energy draw from grid by 70% most of year by installing solar pv hot water heater + heatpumpin for 7 months of cooling his house from pv? even before installing batteries? (just electric hot water heater)

TheGrimGeometer 2y ago

The article lays out 3 different business models in the energy industry and calls them "regulated", "partially deregulated", and "deregulated". While the distinction between them isn't made very clear (at least to me), it argues that the "deregulated" models are better at responding to market conditions, and thus better at pivoting to solar power, than regulated ones. It doesn't clearly tie the choice of business model to the way the businesses are regulated, so it fails to support the claim that regulation is the cause of the lack of solar adoption. The examples it uses to make its case, the TVA and the state of Texas, are also not great. The TVA is owned by the government. So the question of their pivot to solar power is more of a political question than an economic one. Is there any political will to spend tax dollars pivoting the TVA away from nuclear and hydro sources to solar? Which politicians support/reject the policy and why? Texas is also not a great example given the recent tragedies arguably resulting from their lack of regulation. https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis In-line with other comments, Enron is a classic case-study of the consequences of allowing free markets unfettered control over essential infrastructure.

kccqzy 2y ago
I thought the article did a good job answering your questions. > TVA benefits from existing capex in large nuclear and hydro plants, enjoys low rates, and has little incentive to change. So apparently TVA has already invested in large nuclear and hydro and doesn't need more power. It's not about to build more solar so that it can shut down its nuclear or hydro plants. No business will cannibalize itself like this. It will have to a different economic entity. > Regulated utilities can also sign PPAs, but the lengthy and complex regulatory approvals make the process so cumbersome that few investors or developers actually pursue this option. Regulated entities can theoretically do this, but they are cumbersome so they don't. The article also mentions the tragedy of the 2021 crisis, along with the 2020 blackouts in California; the article says it's a matter of extreme weather, not the failure of a specific type of energy market.
- TheGrimGeometer 2y ago
  > large capex in existing infrastructure with little incentive to change is common to most large companies, so picking the TVA as the "regulated" energy example seems a little like cherry-picking to me. > I'm not read into the details of PPA regulations. There may be a good point there about how some/all of them are too onerous which de-incentivizes change. idk. > ensuring that companies we entrust with providing critical infrastructure are resilient to extreme weather is a matter of regulation. I think that the Texas and California examples were both specific instances of regulatory failures regardless of their ambient culture of regulation.

belorn 2y ago

A free energy market is great and all until citizens start to expect that the government is responsible for a stable and economical reasonable grid, and who will elect politicians to that fact. At that point the cost of the grid is carried by the government, not through market forces, and companies are not slow to adapt their investments into the parts that are highly profitable while leaving the cost centers to the government. The energy crisis that happened in EU demonstrated to me that citizens are not willing to have a free market for the energy grid. When a single month cost as much as a whole year, and companies are unable to fulfill contracts or have to shut down, then their anger is not directed at the commercial companies in charge of solar, wind or other type of energy plants. It is directed towards the government for failing to provide basic function of society, which apparently include a reasonable priced electricity.

lakis 2y ago

IN https://blog.gridstatus.io/caiso-beats-the-heat/ https://blog.gridstatus.io/caiso-beats-the-heat/ , there is a very interesting quote. "The Electric Reliability Council of Texas (ERCOT) has also been lauded for its growth in storage, but when put into perspective of load, the gap remains quite large. Comparing all-time peak load and peak storage discharge (non-coincident), ERCOT's battery fleet would have met less than 5% of demand, while CAISO's battery fleet would have met about 16%, more than triple the value in Texas." Absolute numbers are not the right metric when one of the states doesn't care about efficiency and decides to generate more and more electricity. Then absolute number are huge but percentages of renewal are very low.

cool_dude85 2y ago

No attempt to control for any other factors before producing an article with a causal claim right there in the title? Geographically, do deregulated states happen to be located in areas of the country with significantly more solar potential? Who knows! I read the whole article and don't even know which states are "deregulated" and which are "partly deregulated".