Deregulated energy markets accelerate solar adoption
seanobannon.substack.com
seanobannon.substack.com
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TW of new renewable generation capacity in China over the next decade (02026-02036, I suppose), attributing that to an unpublished report from a consultancy that seems to protect its projections from criticism with an NDA.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/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.
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.
It is China that is imperialist and that has ruined the post cold war free trade world order. The US must respond or China will be the world hegemon. Would you prefer that?
Nixon helped bring China into the global community and the economic ties help bring (hundreds of?) millions out of extreme poverty and built up a major trade partner. Now with China's success the very free trade policy between our countries needs to be adjusted and slowly dialed back towards fairness.
The problem being there are plenty of actors whose motivation isn't "balancing what's best for my country and the world" in a fair way but just "whatever is best for me right now", and the shortsighted selfishness (which in different actors both supports and opposed similar policies for different reasons) really gets in the way of arriving at an optimal outcome for everyone.
The USA is the current imperial power, go ask us born in South America how it felt to listen to stories on dictatorships brought on by the imperialism of the USA; or societies having to bend for the spread of Reagan's economics cancer dismantling any semblance of social democracy to give into "The Third Way" which had to embrace the economic policies the USA wanted others to abide to.
At this exact moment, with the current American situation with a sick society electing a sick individual into power: yeah, I think I'd like to give a chance to China if Xi is out of power and someone like Deng Xiaoping or Hu Jintao is in control.
> intellectual property that the CCP has undermined for forty years to arrive in a position where they can undercut us on price through human rights abuses.
You should check out the stuff the USA outright stole to become the hegemony it is: jet propulsion, radar, atomic bomb developments, the Brits had to see it all get blatantly taken by the USA after needing help in WW2.
Edit: or even more relevant to contemporary times we live now, ask Canadians how they feel about the USA forcing their hand on Arrow Aviation, subsequently stealing their brains to build NASA Jet Propulsion Labs. Now they don't have a well developed Arrow to build jets when the USA turns over talking about annexation.
It is completely reasonable that we wouldn't put up with leaders objectively hostile to our interests popping up in our backyard, not after the last one who did got within a hair's breadth of planting nuclear missiles a hundred miles off our coast.
I actually wouldn't care nearly as much about China were Deng in power. I'd worry a bit given that we don't want to be economically eclipsed, sure, but my present concerns are directly tied to the current leadership and posture of china.
Are you suggesting we were wrong to transfer technology out of Germany post-WWII? To me it seems like a hell of a lot better as some form of repayment than the onerous reparations regime we tried post-WWI. Vae victis; if all millions of American dead cost Germany were some scientists and patents, they should count themselves lucky.
Saying America "stole" JPL from Avro is also a crazy interpretation. The Arrow was an incredibly expensive project: canada had about 20 million people at the time and was in terrible economic shape. Diefenbaker's decision remains controversial, and most people agree that destroying the project so thoroughly was just stupid, but you can't support the idea that we "stole" something from Canada or somehow compelled her to kill the project.
So... Imperialism is your God given right? No questions about what millions of people would have preferred to live under, in their sovereignty, in their freedom? Got it. Every action has a reaction.
> It is completely reasonable that we wouldn't put up with leaders objectively hostile to our interests popping up in our backyard, not after the last one who did got within a hair's breadth of planting nuclear missiles a hundred miles off our coast.
It's not reasonable you'd prop up dictatorships who went to kill thousands, destroy the democratic process for generations of millions of people which in turn created an environment where aftershocks of these dictatorships left whole nations with a fragile democracy, and populations with very little tradition in civics. Because you were scared of another ideology.
It might be reasonable for you, from your point of view as a citizen of an imperial power; for the ones subjugated by this it only created resentment.
> Are you suggesting we were wrong to transfer technology out of Germany post-WWII? To me it seems like a hell of a lot better as some form of repayment than the onerous reparations regime we tried post-WWI. Vae victis; if all millions of American dead cost Germany were some scientists and patents, they should count themselves lucky.
No, I'm saying you were wrong in fucking over the Brits, the Tizard Mission went to the USA to forge an alliance where advanced technology developed by the UK could be worked together between UK-USA, instead of being a partner the USA simply stole the technology for itself while the UK was being beaten down by Nazis, an opportunistic parasite move. Not only that but the USA also cut off British scientists and engineers from the Manhattan Project, after all the contributions done to bring your atomic weapons into play, the one thing that catapulted the USA's hegemony into power.
> Saying America "stole" JPL from Avro is also a crazy interpretation. The Arrow was an incredibly expensive project: canada had about 20 million people at the time and was in terrible economic shape. Diefenbaker's decision remains controversial, and most people agree that destroying the project so thoroughly was just stupid, but you can't support the idea that we "stole" something from Canada or somehow compelled her to kill the project.
America forced the dismantling of Avro, even if the Arrow project was expensive it was the USA forcing Canada to give up on Avro, in its downfall came the USA to steal brains to work on JPL, and take you to the moon.
Your country is great at stealing others' tech through economical pressure: stealing brains by promising money, stealing technology when it's convenient, and I'm tired of reading Americans complaining about China's IP theft because it's absurdly hypocritical. You gotta learn your own country's history.
As an imperial power I believe your time is coming to past, your ideology is not holding anymore as a force to propel humanity forward, it did make the world better for a while but for the past 40 years it's been only a slow downfall... If you travel around the USA you can feel it, how dated everything looks, how badly society actually doesn't work, the decay of it is quite palpable.
Small nitpick: It would be more accurate to count these victims in figures of hundreds of thousands, or perhaps even millions. The Indonesian mass killings of 1965-1966 alone, conducted under the imprimatur of the CIA, resulted in the deaths of 500,000-1,000,000 people, and perhaps even more. See: https://en.wikipedia.org/wiki/Indonesian_mass_killings_of_19...
I think you missed a word. I assume you meant South America?
Nicaragua is one of 23 independent North American countries.
* https://en.wikipedia.org/wiki/United_States_occupation_of_Ni...
* https://en.wikipedia.org/wiki/CIA_activities_in_Nicaragua
The USofA has meddled in most American countries.
Yup, I'm aware -- not just Nicaragua, but also Guatemala, Honduras, El Salvador, Chile, Bolivia, etc. I was merely curious about where u/kragen lives.
Alternatively, one could interpret "subordinate" to be one of the COFA[1] nations, for example (not saying I read it that way, but if this were a debate class and I was assigned to make the argument that these states are subordinates of the US, I probably could).
[1]: https://en.wikipedia.org/wiki/Compact_of_Free_Association
I strongly disagree with both your master-race theory of technical innovation and your imperialist rhetoric. Americans, and in particular people from the US, did contribute greatly to solar and battery technological innovation. But a great deal of it was carried out outside the US, or inside the US by non-Americans, and in particular by Chinese grad students at US universities. Technological and scientific progress is inherently an international effort on behalf of all of humanity.
In terms of bringing utility-scale battery storage and PV energy production to mass production, US elites have basically opted not to participate. Unfortunately I expect that situation to continue.
Withdrawing international intellectual-property monopolies en masse is an interesting suggestion; I think it would probably promote progress, in particular because it would free other countries around the world to do the same with US patents and copyrights, which have been among the most significant obstacles to progress and even simple preservation of knowledge.
beijing has a consistent policy of subsidizing and dumping to gain dominance of key industries. metals, energy, etc. they are surely aware of the security implications of this. it seems to be their response to the mutually assured destruction of nuclear weapons: since those are no longer usable, create a new asymmetric situation where china can install herself as international dictator without or in addition to military force.
We can't afford not to respond. If we are unwilling to go to war, we'd have to concede to being china's bitch, which is a worse option than war.
Importing solar panels with no means to repair, replace, and resupply would absolutely make things worse; it'd increase dependence on a technology over which we lack control.
This isn't "imperialist" rhetoric, I'm quite plainly speaking in terms of maintaining our own autonomy and independence, not in terms of coercing others.
I don't think you can credit technology from foreign grad students at American universities or companies to those foreign countries. Doubly so since said chinese grad students have a long track record of facilitating the IP theft we're discussing.
Withdrawing would not free other countries to do so; the core difference here is china is a bad actor who exploits and steals IP. not to mention we could get away with this because we have a military of a certain size; smaller countries probably could not.
Regardless of whether we produce domestically, there's no particular reason why we can't work with other cheap nations within our sphere of influence (probably latam) to handle production.
Should there be some process for rewarding those who discover those most optimal solutions to problems? Maybe.
Patents as they are currently implemented seem to be even less beneficial to the progress of science and useful arts (trades skills) than copyright. Unlike the consumer protection of brand reputation (trade mark); both create artificial scarcity and impede the development, distribution, and diversity of manufacturers of works which would benefit society and citizens.
Current US foreign policy is a bit all over the place, but it's difficult to determine if the US is actually willing to go to war or not to defend its allies or even its own interests. There were the attacks on the Houthis, ok, but in order to facilitate that the US requires military bases outside the US territories proper. At the same time, the US is threatening to stop supporting allied nations, which means it's also threatening to close its bases outside the US and its territories (why would those nations host the bases if not in exchange for some degree of protection?). This will put the US in a position where it is unable to prosecute a war effectively.
This sends a signal that the present US government may not be willing to go to war. Of course, as with all things Trump this could all be bluster and provocation to see some desired action or response, we'll know more in a few months or so.
I'm making more of a positive statement than a normative one. I'm aware the political winds are rather against me in this and wouldn't expect to be able to sell this particular set of ideas to either party, but I still believe them to be our best option.
This dumping stuff is nonsense. If you investigate more deeply than reading PR, you'll come to the same conclusion. See https://news.ycombinator.com/item?id=43463872 for more details on that.
If "being china's bitch", as you put it, were the alternative to war, it would not be "a worse option than war", because the PRC has ICBMs and 600 nuclear warheads. War with China would mean every major US city and every Chinese city becoming a radioactive wasteland. There are people who would prefer that to some kind of unfavorable economic situation, but I do not think those people merit a place in public discourse.
What I'm advocating, however, is not that the US accept an unfavorable economic situation and give up autonomy and independence; it's that the US cease to force an unfavorable economic situation on itself by sabotaging its own energy supply, which is fundamental to both transportation and to all forms of heavy industry. The foreseeable energy future is solar, and US policy is built on wilful blindness to that fact, a blindness which will cripple its industry's capacity to compete with China over at least the next three decades.
And you're assuming being stuck under the thumb of an illiberal regime hostile to our beliefs and way of life, a regime with a long history of violating basic liberties, of mass murder, and of ethnic (han) supremacy, would stop at trade concessions. I don't believe we could reach a point where we could make tolerable policy changes to appease the PRC.
I don't think it's an issue of us being blind. There are plenty of contributing factors. For one, we are terrible at industrial policy and it's ridden with recapture. E.g. Ford shutting down a battery plant because the UAW demanded (and gov't generally supported) the fact that they'd have to re-hire and re-train tons of UAW employees at the new factory. This is objectively not the way to handle what we believe to be a critical energy supply issue. The fact that it's become incredibly difficult to produce solar panels or batteries competitively, both due to higher wages and more stringent regulations than one would find in china. This is exacerbated by decades of conspiracy to wink-and-nod at illegal immigration suppressing investment in automation, meaning catch-up would be painful and take time. Etc.
There's also the fact that, as it stands now, we cannot replace our grid with renewables. It's also much easier to make a large chunk of it nuclear, but the environmental/clean energy groups have mostly been captured by nuke-hating tree-huggers for half a century now. Objectively you do not want to make all your generation wind/solar because your storage requirements are much higher, because the LCOE numbers people use in their calculations (Lazard's are popular) are notoriously bad, and because storage tech either isn't there yet or is cost-prohibitive.
I am very frustrated by people who 1. try to reduce this to "one simple thing" that they happen to support, and likely supported long before and apart from current issues, 2. people who see it as an opportunity for recapture, and 3. the head-in-the-sand denialists who just don't know or care that America's position and people are threatened by the way things are headed.
Renewables don't work. Nuclear is much easier. It's the environmentalists at fault. LCOE is notoriously bad. Storage doesn't work.
Also, you're angry at people who are head in the sand denialists who don't realise or care that America is under threat.
The person you're discussing this with is totally correct. America is throwing away it's future with this approach to energy. And you are a perfect avatar of the people enthusiasticly commiting this self-destruction.
Importing now does not increase security.
Edit: one thing the Trump-Vance administration has done is tear through the tissue-paper screen of "rules based international order" rhetoric, exposing to plain view that we live in a world of great powers and international anarchy. As we have always done, but somehow allowed ourselves to believe naive falsehoods.
Importing oil and gas now does not increase security, but importing PV modules does, because it gives you the capacity to produce energy from them for 20 years (module warranty period) or more likely 100 years (how long they'll actually work, though below the 80% of original capacity the warranty guarantees). Moreover, distributed generation with PV panels is enormously more resilient to being blown up by Chinese nukes or Russian, Ukrainian, or Chinese drone swarms than a few big coal power stations and oil refineries. (To say nothing of global warming.)
We aren't importing much oil and gas. Importing PVs is nice. Increasing domestic PV production is better. And in any case, we're installing record amounts of PV already [1]--the limiting factor is installation, not production.
[1] https://www.energy.gov/eere/solar/quarterly-solar-industry-u...
Uhh they don’t last forever. So yeah. They can be controlled like oil if you are unable to make or source replacements.
They last for decades, and the resources (unlike with oil) to produce, repair, and rebuild them are readily available in the US (if through no other resources than recycling failed panels).
The biggest risk is that the US stops training engineers, scientists, and technicians who would be capable of doing that work.
The US annual oil demand costs around $500 billion (over 7 billion barrels used per year, but it's not all for energy). Since that does include other uses besides energy and energy demands are only increasing, it's still a useful baseline figure for estimating (because it's conservative, we'll likely need more in the future).
To acquire 20 years worth of our current demand would cost over $10 trillion (+ storage costs + future processing costs). Do you really think we can acquire 20 years worth of oil as easily as we can acquire solar panels? Panels which cost a fraction of that and don't require you to literally burn them to get energy, and instead can produce energy for decades with a little bit of maintenance (clean them, keep trees from growing over them).
You will notice that utility PV and CCGT are relatively similar in cost. Of course, replacing most of our energy infrastructure would have massive capex that one would add to the solar option. Note that the solar numbers do not include the cost of storage. And the storage requirements as you replace each GW of generation get higher, not lower.
Some evidence that it's not correct is that Saudi Arabia signed a PPA for wind last year at US$15.65 per MWh https://renewablesnow.com/news/saudi-arabia-signs-1-100-mw-o..., which is barely over half of Lazard's minimum LCOE for wind of US$27. So I don't think they're being too generous regarding renewables, though their solar numbers do look more reasonable.
Here's a quick LCoE exercise. Unlike Lazard, I show my work, so that, if it's wrong, anyone can see that and correct it. Suppose you're a utility that can freely import Chinese solar panels at the current €0.110/Wp (https://www.solarserver.de/photovoltaik-preis-pv-modul-preis...) in a region where single-axis trackers give you a 25% capacity factor, you are borrowing money at 5% to build a 100-megawatt-peak plant, the panel cost is 30% of the total plant cost, and the plant life is 20 years. (These are fairly typical numbers.)
The panels will degrade over the 20-year period, so you'll only get about 90% of your rated peak power on average over that time, and the capacity factor of 25% brings that down to 23 megawatts on average. (This is front-loaded, so the panels produce more toward the beginning of the plant's life when it matters more, but let's ignore that.) This works out to about 200'000 MWh per year.
To amortize a €36.78 million loan over 20 years at 5% you need to pay €2.9 million per year.
Dividing €2.9 million by 200'000 MWh gives you €15 per MWh (1.5¢/kWh, 55¢ per gallon of gasoline, US$4.30/GJ).
This is pretty far below where current European and US solar PPAs are coming in, and about half of what Lazard gives as the low end. So, either I'm missing something fundamental, or one or more of my assumptions above is inapplicable to most of Europe and the US. Here are my best guesses about what it is:
- A lot of European plants are being built in very polar and cloudy countries like the Netherlands and Germany, so the capacity factor is much worse than 25%. Like 10%.
- The US has massive import tariffs which more than double the price of solar panels.
- Maybe balance-of-plant costs have fallen far behind the precipitous drop in solar module prices, so maybe currently the cost of modules is only 15% of the plant cost instead of the usual 30% or so.
- Maybe lenders consider solar energy projects risky and so demand higher interest rates than the 5% or so that is usual for utility bond flotation.
What do others think?
It's really only that last couple of years top end that lets the comparison to gas prices stand. Without it, the document clearly shows that building new solar is as cheap as buying the gas to burn in an existing gas plant.
I think Lazard cost estimated have always been US specific, though I didn't see that spelled out explicitly at a glance.
So embargoing or blockading PV exports to the US would be a threat that the US might start to produce less energy 20 or 30 years in the future. This is very different from the situation with oil, where the Strategic Petroleum Reserve contains 19 days of petroleum consumption. https://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(U....
20 years versus 19 days is a significant difference, I feel. 20 years would be long enough for a functioning country to develop a solar-module industry from scratch, though the US probably couldn't. Think about the state of the Chinese PV industry 20 years ago, for example.
It means you can't replace panels destroyed and can't grow your energy production. If one side can and the other can't, that's a major problem.
> 20 years would be long enough for a functioning country to develop a solar-module industry from scratch
The best time to plant a tree was 20 years ago. The second best is today. We're twenty years ago.
1. The embargo would have to last decades.
2. The US would have to sit on its hands for those decades and deliberately choose not to develop its own manufacturing capability.
An oil embarge is absolutely more impactful than a PV embargo. That doesn't mean the latter isn't a problem.
> embargo would have to last decades.
My point is it wouldn't. An embargo would immediately limit America's ability to grow its energy base and replace e.g. panels destroyed closer to China (or hell, on the homeland through presumably sabotage). If you're at war and your energy is capped while your enemy's isn't, that's a strategic problem. Waiting for that predictable problem to manifest versus cauterising it today is madness.
I do not want to resort to Reddit-level insults but you are so misguided to imply you are trolling.
1) The Australian government is spending millions of dollars to ensure we can turn off excessive solar production to protect grid stability.
Every grid operator will do similar things when solar and wind reach 80% of the generation
2) Solar PV has an effective life of about 25 years and still produces about 75% of its nameplate capacity in 25 years.
If you are genuinely concerned about what the energy supply chain will look like in 25 years, you are either a fool or a liar or both.
Solar PV was invented at Bell Labs in 1954. Since then it has reduced in cost by more than 99.9%. And continues to fall in price.
To demonstrate how quickly solar can be deployed; Pakistan added 1/3 of its total generation capacity in 2024. That is over 17GW of solar in a poor and disorganised country.
A large part of the German's military initiatives in WW2 were about obtaining access to oil, and the most successful Allied initiatives were about cutting off that oil.
It's not like being dependent on Saudi Arabia to supply oil. If China cuts us off from new solar panels, the solar panels we already have continue to provide electricity. It would only slow the rate of deployment, which we're already doing to ourselves by imposing a tariff on solar panel imports.
https://www.nytimes.com/2024/03/07/business/china-solar-ener...
This is basically nonsense. Chinese solar panels are cheap because they are produced efficiently, with orders of magnitude less materials and energy than were required in 02012, when the US started imposing "anti-dumping" tariffs on them.
I've read many of the US Department of Commerce filings on the topic attempting to argue that the current prices are unfairly subsidized. The arguments are embarrassingly bad, arguing over things like what the fair price of solar glass should be, or whether the fair price of the labor of Chinese solar panel assembly workers should be determined by comparing to Malaysian electronics assembly labor or Romanian electronics assembly labor. (They settled on Turkish labor.)
Even when resorting to such absurd arguments, the countervailing tariffs the DoC decided it could justify were only in the range of 10-15%:
https://www.federalregister.gov/documents/2023/07/11/2023-14...
Finding the original filings in these cases, spanning 13 years at this point, took a fair bit of digging, but it was very eye-opening. See for example https://www.govinfo.gov/content/pkg/FR-2014-12-23/pdf/2014-3... and Barcode:4426784-02 C-570-011 (not linkable by any URL).
But, basically, you have to ask, if subsidies are the reason Chinese solar module prices today are lower than module prices were in 02012, when they cost €0.64 per peak watt instead of today's €0.110, does that mean that Chinese taxpayers are paying 82% of the cost of installing solar panels around the world? China is just exporting €100 billion a year of its tax revenues in the form of solar panels, with the intent of at some point raising the prices to above where they were in 02012, say €0.75 per peak watt? When should we expect that other shoe to drop?
Because the solar panel industries in other nations are pretty thoroughly destroyed, except for those created by Chinese companies seeking ways around US tariffs.
It just isn't a plausible story, even if it is being promoted by the same newspaper that promoted the story of Saddam Hussein's "weapons of mass destruction" to justify invading Iraq.
The NYT article you linked talked about them using cheap(polluting) coal power and cheap(slave labor) mineral inputs.
As for coal power specifically, being polluting doesn't make it cheap; it's economically uncompetitive with both solar and wind, and in China specifically, the coal has to be imported from abroad, making it not just more expensive but also a national security risk.
https://www.reuters.com/business/energy/china-has-more-than-...
>current large-scale coal mine capacity is 3.88 billion tons per year
However Wiki does say that it's use is uneconomical. https://en.wikipedia.org/wiki/Coal_in_China
Being polluting does make it cheap. The pollution controls, filters etc add nothing to generating capacity and only add cost.
We shoudln't let China overproduce and dump excess solar productions in its own attempts to control the market. We're trying to not repeat the energy dependence on unfriendly foreign powers. We don't want the Chinese Solar Embargo of 2026.
I think that this misreads how the Chinese solar industry works. It's one of the less government-controlled industries in China. It's fiercely competitive, which leads to low prices, rapid change, and periodic bankruptcies. Chinese-made solar panels became popular for the same reason their T-shirts and microwave ovens became popular: acceptable quality offered at unbeatable prices.
I also think that there's low risk of lock-in from buying Chinese solar products now. Solar panels have a typical operating lifetime about equivalent to 5 years at 100% of rated power. In practice this means something more like 20 years in a solar farm in a very sunny climate or 35 years in a cloudy climate. The steady state replacement rate to maintain a nation's solar capacity is therefore about 3%-5% of the initial installation rate. If China prohibited solar panel exports, Western countries could maintain existing solar farm capacity with only tiny outside-of-China solar manufacturing capacity. There would be plenty of time for not-China countries to determine if the embargo were temporary or persistent before investing in more expensive but more dependable domestic factories.
It's not lock-in, it's price competitiveness of locally produced solar. If Chinese solar is half price, domestic industry won't exist. If relations with China further deteriorate, they may restrict access. If there was a war we'd be out a major source of energy production/growth.
Currently the US is expected to manufacture solar modules at least equal to solar installs last year.
Being able to maintain production if there was an embargo, we're seeing something like a 20% year over year growth of total installed solar.
Current US industrial policy is vastly inadequate for bootstrapping a domestic solar industry to international competitiveness, and the US trade barriers against cheap Chinese EVs are ensmallening the future domestic electricity market. This is a problem, because that's where domestic manufacturers have to sell their product before hypothetically achieving low enough production costs to gain a foothold in export markets.
To be quantitative, the US only installed about 34GWp of PV last year https://www.pv-magazine.com/2025/01/28/us-added-34-gw-of-pv-... and increased its manufacturing capacity from 14.1GWp yearly to 42.1GWp yearly https://seia.org/research-resources/us-solar-market-insight/. However, that's GWdc, and those 34GWac were actually 50GWdc. So US manufacturing capacity lags behind demand, as you'd expect given its inefficiency and consequent international uncompetitiveness.
Also, I want to point out that your idea that what companies in China should or shouldn't be allowed to produce or invest in is within the jurisdiction of the US government is a breathtaking level of central-economic-planning advocacy that even Stalin and Mao would never have admitted to. It's precisely the rejection of such central planning by Deng that permitted Mainland China to develop economically.
Arguments about current exponential growth not being fast enough don't land with me.
Promoting domestic PV panel production would be reasonable, but that's not what current US industrial policy is aimed at. Instead it's trying to resuscitate fossil fuels, like Tinkerbell, through sheer force of belief.
https://www.canarymedia.com/articles/energy-markets/texas-bi...
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.
edit: removed pronoun
Regulation in territories where it is harder for corporations to buy politicians seems to be far more successful at driving improvements.
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.
Texas is an energy-only market right now (payments only for kWh delivered), but adding a capacity market could help (payments for ensuring the ability to deliver electricity), and capacity markets are common in other energy markets around the US. And another thing that would have helped even more clearly is cleaning house at the ISO that didn't follow any of the guidelines from the massive outage from nuclear and gas that happened more than a decade ago. But the ISO failing to do what it's supposed to do is the regulators not doing their job. Regulators regulating what they have the power to do is clearly important in any system.
Don't really trust something advocating for deregulated energy markets to not mention the elephant in the room.
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".
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.
Deregulating an industry to achieve a specific goal is certainly one approach.
https://en.m.wikipedia.org/wiki/Enron
https://en.m.wikipedia.org/wiki/2000%E2%80%932001_California...
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.
Also quantitatively cutting costs qualitatively looks like enshittification of goods and services in practice, and unlike in undergrad economics textbooks consumers rarely have recourse in the form of switching brands since basically all "markets" for necessities are oligopolies (thanks often to government contracts for public works in an increasingly privatized world, if not simply the natural global minimum of any market).
On a basic level the point of putting a commodity on the market is to sell it to the highest bidder. Why is this the preferred way to distribute necessities? It certainly "aligns" with one particular incentive - that of the seller - not that of most people. Doesn't everyone need access to healthcare, housing, energy, etc.? Are poor people to compete with people who can outspend them several times over for food and housing? As the cost of living continues to increase does it make sense to hand over an increasing portion of our wages for the same - or worse - standard of living?
If you want freedom of choice in what you consume and have the means to do so then go ahead and turn to a market to buy a penthouse or gourmet food or whatever. But why is it such an offense to the current hegemonic ideology to ensure that there is basic universal access to essential resources?
Neither public services nor private enterprise is a silver bullet to everything.
They pivot or they slowly die.
Companies want to maximize profit and minimize cost, while customers want as much as possible for the lowest price.
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.
You're writing this from the comfort of your home where you're enjoying the fruits of the most significant quality of life improvements over 200 years. Hedonistic adaptation has blinded you to all of the evidence that's staring in the face, like the screen you're reading on right now.
> 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.
Temporary aberrations from extreme disruptions do not refute the general rule.
IMHO, you can't have markets without regulations, and the markets that work best are those in high-trust societies, and that high-trust usually comes form a solid regulatory structure (i.e. laws).
This is why saying "deregulation is bad" is just as incoherent as saying "regulations are bad." We need to move beyond that sort of fallacious dichotomy.
Public goods and common goods need artificial markets created by regulatory frameworks.
> Deregulated markets, which might be better described as “differently regulated” markets, separate these concerns. Independent power producers (generators) build and sell electricity wholesale to Retail Electric Providers (REPs), who sell to households, while utilities manage the transmission and infrastructure.
On the face of it this makes sense to me. Deregulation doesn't mean there are no regulations at all. It means we split up a monolithic entity into different parts that can each be subject to competitive forces and be regulated differently.
It just takes way longer to reach market equilibrium than free-market advocates claim. And by way longer, I mean years or even decades rather than months or weeks, which means a lot of suffering or externalities during the transitional period.
Healthcare was once deregulated in the U.S. And it was fine. And it would be again if we deregulated healthcare, but it would take more than a decade and nobody has the stomach for that. (And nobody has yet made a compelling case to demonstrate that a deregulated healthcare system would be a sufficient improvement over what we have now to justify the suffering that the changeover would cause.)
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
In-line with other comments, Enron is a classic case-study of the consequences of allowing free markets unfettered control over essential infrastructure.
> 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.
> 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.
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.
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.
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.
Are you saying they would have released less CO2 had they installed natural gas power plants instead?
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.
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.)
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.
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...
This is completely false.
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.
Maybe there's some stuff between the drywall and stucco? I never checked because the lead paint on the walls (any of the walls I've lived among; the Bay Area has a lot of old, shit housing) made me wary of drilling holes.
Here, it’s like whatever. I never run the heater, and there are maybe 7 days a year where I want the AC.
If you've got an attic, it's not too expensive to from zero insulation to basic insulation, and the ROI is pretty quick. Of course, some areas of California had neighborhoods built in the Eichler-style with no attic space; those are hard to add insulation to. A nice large tree over the home can help with summer heat, but large trees over the home have risks and costs too.
Asking google AI:
"California emmisions rate" gave:
"California has seen a decline in greenhouse gas emissions, with a 20% reduction since 2000, while its economy has grown significantly. The state aims to reduce emissions to 85% below 1990 levels by 2045 and achieve carbon neutrality by 2045"
Then asking "Texas emissions rate" gave:
"Texas is a major emitter of carbon dioxide in the United States, producing 13.4% of the nation's total in 2022, with transportation being a significant source of emissions"
followed by:
"Emissions Leader: In 2022, Texas produced 663 million metric tons of carbon dioxide, more than double that of California, the second-largest producer"
https://ww2.arb.ca.gov/ghg-inventory-graphs
The graphs seem to contradict those in the article, as the article has a huge annual variability not shown in the government data, and also the article does not show the decline in the "Electric Power" sector that's shown so clearly in the CA government data.
I also would not agree with the article's assessment that Texas is a "disaster" based on the same sort of plot. Serving the needs of ever more people, with an ever growing GDP, but keeping emissions constant is a win environmentally.
Are you saying it includes the USE of fossil fuels produced in the State outside of the State OR the emissions related to the production of fossil fuels in the State?
The former does not in my opinion sound accurate while the latter I fail to see changes anything because surely emissions from other industries (steel/construction/etc) are included for the State that they are made in.
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.
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-generat...
[1] Annoyingly the data is in an excel spreadsheet in a zip file https://www.ercot.com/files/docs/2021/03/10/FuelMixReport_Pr...
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.
Possibly, but neither usage nor generation is 24x7 at fixed cost, so what would be the point of that requirement?
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.
and in process lower your household energy need
BY INCREASING comfort.
BREEAM / Passive house.... In passive house in norway (alaska of europe) you can be 3 days without electricity(or gas or any other heating medium) and in coldest of cold days you do not need to put sweater on, because it is still comfortable, heat is not escaping as fast.
so there is deregulation of market and there is not educated customer + educated regulation which bankrupts your company if you build trash like they mostly build in USA. so it is not only energy, there are other regulation not in sync with reality/human nature.
and by lowering your household energy needs(by increasing comfort), higher ratio of renewables can be used cheaply or even onsite/roof.
and your energy requirement can be manipulated more in time i.e. you can heat house few degrees more few days in advance. after you see on tv that next few days will be cloudy/stormy/ hurricane/frost... or just make app do that for you
or you can heat your hot water at noon where electricity prices are almost 0$
so less effort providing energy for household is, more effort can be put into providing energy for business
build better houses, use saving in energy to buy more things. hard capitalism. but no that is bad. :)
socialism inside of a energy market is good for people raised in capitalism. makes no sense to me.
lowering households energy need 100% in instant is like providing 25% more energy generation for everything else.
I think Texas' market right now is completely disproving that point. The amount of batteries being deployed everywhere are showing that storing solar/wind for a fraction of the day is going to be a lot cheaper than having tons of gas.
None of this serves anyone but the ruling class and deep state. War with China is going to be one that the US loses.
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.
If we stopped buying shit we don't need, they could easily turn off a good portion of their coal powered electricity plants if they wanted.
If they wanted. China has a policy of overproduction, especially in raw materials like steel. While the US subsidizes consumption, China subsidizes production. It is not clear they would elect to scale back (and take the economic hit) even if Western consumers decided to voluntarily cut back (which also seems unlikely).
China's share of of electricity production from coal is at 60% as of 2023[1] compared to 16% for the US[2]. That's down from 80% in 2005. It currently generates 35% of its electricity from renewable sources as of 2023 compared to 41% in the US. The US has been replacing coal with gas - gas was 19% in 2005 and 42% in 2023.
China first exceeded the US's annual carbon emissions in 2006 with both outputting about 6 billion tons. Since then the US has declined to a bit under 5 billion tons in 2023 while China has doubled to a bit under 12 billion tons[3] making it by far the largest emitter in notional terms per year.
While the Western world's carbon emissions have been in decline for years (with the US still the highest ex-China), China and India's emissions continue to climb at significant rates. It's true that China is building enormous amounts of renewable energy, but that can be further generalized to China is building enormous amounts of energy production across all sources, dirty and clean.
[1] https://ourworldindata.org/grapher/share-elec-by-source?coun... [2] https://ourworldindata.org/grapher/share-elec-by-source?coun... [3] https://ourworldindata.org/grapher/annual-co2-emissions-per-...
Yeah, but they're kind of leapfrogging from coal to clean energy. In 10 years, they are expected to be at 60% renewables.
The reason I'm skeptical of that framing is it implies coal production is being replaced by clean energy, rather than total energy production being increased.
Coal production continues to climb[1] and construction of new coal plants hit a 10 year high in 2024[2]. China accounted for 95% of the world’s new coal power construction activity in 2023[3].
Lots of countries announce decarbonization goals, but I will remain skeptical until the data show progress.
[1] https://ourworldindata.org/grapher/coal-production-by-countr...
[2] https://www.carbonbrief.org/chinas-construction-of-new-coal-...
[3] https://www.carbonbrief.org/china-responsible-for-95-of-new-...
I wasn't intending to imply that. It's entirely possible China might get to 90% renewable energy production without shutting down a single coal plant.
> Lots of countries announce decarbonization goals, but I will remain skeptical until the data show progress.
Sure, but that doesn't conflict with having more and more of your energy production being renewable.
Either way, the idea that coal is economically infeasible is contradicted by the fact that China is building huge amounts of it[1]. For China energy production is an "and" question, not an "or" question.
[1] https://www.carbonbrief.org/chinas-construction-of-new-coal-...
That's exactly what coal is bad at. Anything less than a day is bad news for coal. Which means that all this coal capacity is building is going to be for rarer seasonal events, and going to be mostly sitting unused.
The argument was always that the labor and regulations cost too much but the labor abuse and pollution are costing us more.
The same party that wants to move manufacturing back to the US also wants to deregulate as much as possible, roll back labor rights and repeal environmental laws. The cost of moving manufacturing out of China and to the US is that the few Americans who can get work in a mostly AI driven and automated industry will eventually get treated and paid like Chinese labor.
Sure, they want to roll back all those protections but we don't have to. And more to the point, why doesn't the US party that champions labor rights and environmental regulations want to move manufacturing back to the US? It's very easy to say you support factory worker rights when you don't have any factory workers.
But we're going to. You know that's the deal.
>And more to the point, why doesn't the US party that champions labor rights and environmental regulations want to move manufacturing back to the US?
Both parties are strongly pro-business and pro-manufacturing[0], and the Democrats did campaign on reshoring just because it's a no-brainer, but they seem more focused on preserving labor rights and a living wage than do Republicans.
[0]https://www.americanmanufacturing.org/blog/what-does-the-off...
https://www.npr.org/sections/money/2012/10/17/163074704/manu...
https://fivethirtyeight.com/features/manufacturing-jobs-are-...
Democrats just recently changed their stance based on Trump's win, which is great if it helps the avg. worker.
We need to figure out how to structure our economy to benefit everyone:
>And manufacturing in particular embodies something that seems to be disappearing in today’s economy: jobs with decent pay and benefits available to workers without a college degree. The average factory worker earns more than $25 an hour before overtime; the typical retail worker makes less than $18 an hour.
It's fun to look back at these articles talking about how retail is taking off....now all the big boxes are dying, we replaced storefronts with a few warehouses.
Sure, the amount of labor going into making something has shrunk but so has the amount of labor required to sell something. Honestly, it's not just going to be just an AI driven and automated manufacturing industry. Healthcare, education and everything else seems to be falling into the same dark spiral.
While (centralized, government) industrial policy has played a key role in making its renewable energy sector so utterly dominant, the sector thus created is more decentralized and privatized than in even the US.
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!
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)