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Javier E

(3) Chartbook 285: Cal-Tex - How Bidenomics is shaping America's multi-speed energy tra... - 0 views

adamtooze.substack.com/...ook-285-cal-tex-how-bidenomics

transition power generation politics policy

shared by Javier E on 27 May 24 - No Cached
  • If the Texas solar boom, the biggest in the USA, has little to do with Bidenomics, are we exaggerating the impact of Bidenomics? Rather than the shiny new tax incentives is it more general factors such as the plunging cost of PVs driving the renewable surge in the USA. Or, if policy is indeed the key, are state-level measures in Texas making the difference? Or, is this unfair to the IRA? Are its main effects still to come? Will it pile-on a boom that is already underway?
  • What did I learn?
  • First, when we compare the US renewable energy trajectory with the global picture, there is little reason to believe that Bidenomics has, so far, produced an exceptional US trajectory.
  • ...29 more annotations...
  • Everywhere, new investment in green energy generation is being propelled by general concern for the climate, shifting corporate and household demand, the plunging prices for solar and batteries triggered by Chinese policy, and a combination of national and regional interventions
  • How different would we expect this data to look without the IRA?
  • The most useful overview of these modeling efforts that I have been able to find is by Bistline et al “Power sector impacts of the Inflation Reduction Act of 2022” in Environmental Research Letters November 2023. If anyone has a better source, please let me know.
  • The top panel shows the historical trajectory of US generating capacity from 1980 to 2021. The second half of the graphic shows how 11 different models predict that the US electricity system might be expected to develop up to 2035, with and without IRA.
  • all the models expect the trends of the 2010s to continue through to the 2030s which means that solar, wind and battery storage dominate America’s energy future. Even without the IRA, the low carbon share of electricity generation will likely rise to 50-55% by 2035. Bidenomics bumps that to 70-80 percent.
  • The question is: “How does the renewable surge of 2022-2024, compare to the model-based expectations, with and without the IRA?”
  • The answer is either, “so so”, or, more charitably, it is “too early to tell”. In broad terms the current rate of expansion is slightly above the rate the models predict without the provision of additional Bidenomics incentives. But what is also clear is that the current rate of expansion, is far short of the long-run pace that should be expected from the IRA
  • At this point, defenders of the IRA interject that the IRA has only just come into effect. Cash from the IRA is only beginning to flow. And in an environment of higher costs for renewable energy equipment and higher interest rates, cash matters.
  • As Yakov Feygin put it: “Maybe the pithiest way to put it is that there are pre-IRA trends and outside IRA trends, but IRA has served to rapidly compress the timeframes for installation in a lot of technologies. So five years has turned into two, for example.”
  • So, to judge the impact of the IRA to date, the real question is not what has been built in 2022 and 2023, but what is in the pipeline.
  • Advised by JP Morgan, sophisticated global players like Ørsted are optimizing their use of both the production and investment tax credits offered by the IRA to launch large new renewable schemes. Of course, correlation is not the same as causation
  • Where the IRA is perhaps doing its most important work may be in incentivizing the middle bracket of projects where green momentum is less certain.
  • According to Utility Drive: “The 10 largest U.S. developers plan to build 110,364 MW of new wind and solar projects over the next five years, according to S&P Global Market Intelligence, but the majority of these projects remain in early stages of development. Just 15% of planned wind and solar projects are under construction, and 13% are considered to be in advanced stages of development, … ”
  • The states that I have highlighted in red stand out either for their unusually low existing level of renewable power capacity or their lack of current momentum.
  • Along with Texas, the pipelines for the PJM, MISO and Southeast regions (which includes Florida) look particularly healthy.
  • The relatively modest California numbers should not be a surprise. As Yakov Feygin and others pointed out, what is needed in California is not more raw generating capacity, but more battery storage. And that is what we are seeing in the data.
  • The numbers would be even larger if it were not for the truly surreal logjam in California’s system for authorizing interconnections. According to Hamilton/Brookings data the volume of hybrid solar and batter capacity in the queue for approval is 6.5 times the capacity currently operating in the state. In other words there is an entire energy transition waiting to happen when the overloaded managerial processes of the system catch up
  • Texas’s less bureaucratic system seems to be one of its key advantages in the extremely rapid roll-out of solar.
  • though it may be true that globally speaking the United States as a whole is a laggard in renewable energy development,
  • If California (with an economy roughly comparable to that of Germany at current exchange rates) and Texas (with an economy roughly the size of Italy’s) were countries, they would be #3 and #5 in the world in solar capacity per capita.
  • the obvious question is, which are the laggards in the US energy system.
  • So there is a lot to get excited about, at, what we are learning to call, the “meso”-level of the economy (more on this in a future post).
  • What the state-level data reveal is that there are a significant number of large states in the USA where solar and wind energy have barely made any impact. Pennsylvania, for instance
  • The relative levels of sunshine between US states is irrelevant. As the global solar atlas shows, the entire United States has far better solar potential than North West Europe. If you can grow corn and tobbaco, you can do utility-scale solar. The fact that Arizona is not a solar giant is mind boggling.
  • Texas is both big and truly remarkable. California already is a world leader in renewable energy. Meanwhile, the majority of the US electricity system presents a very different picture. There is a huge distance to be traveled and the pace of solar build-out is unremarkable.
  • This is where national level incentives like the IRA must prove themselves
  • And these local battles in America matter. Given the extremely high per capita energy consumption in the USA, greening state-level energy systems is significant at the global level. It does not compare to the super-sized levels of emissions in China, but it matters.
  • Indonesia’s total installed electricity generating capacity is rated at 81 GW. As far as immediate impact on the global carbon balance is concerned, cleaning up the power systems of Pennsylvania and Illinois would make an even bigger impact.
  • A key test of Biden-era climate and industrial policy will be whether it can untie the local political economy of fossil fuels, which, across many regions of the United States still stands in the way of a green energy transition that now has all the force of economics and technological advantage on its side.
Javier E

Opinion | Bidenomics: The Queen Bee Is Jennifer Harris - The New York Times - 0 views

www.nytimes.com/...ennifer-harris-bidenomics.html

history US economics policy economic free trade neoliberalism biden

shared by Javier E on 20 Jun 24 - No Cached
  • I was thrilled when the Biden administration came in with a plan for big federal investments in the American industrial base, tariffs, support for labor unions and actions against monopolies. No one knew what to call it — Post-neoliberalism? Democratic capitalism? Neopopulism? — but for the first time in generations a U.S. administration was saying that people should control the market, not the other way around.
  • But if it was the right path, why didn’t more voters trust President Biden on the economy?
  • To understand who Ms. Harris is, you have to know who she used to be.
  • ...13 more annotations...
  • As a young State Department policy planner in the 2000s, she was a lonely voice in Washington raising the alarm about the rise of China. She pushed for tariffs and against trade agreements before it was cool, and was an author of a book called “War by Other Means” about how blind faith in free markets put the United States at a geopolitical disadvantage. For years, she felt like an oddball in Washington, where both parties were still in thrall to neoliberalism.
  • The Hewlett Foundation hired her as the head of an initiative that has given away $140 million so far to people who are devising a new economic philosophy. Then she served a stint in the White House. Today, she’s an intellectual leader of a growing, bipartisan consensus
  • She fell in love with economics and studied it at Wake Forest. After she joined a student delegation to a NATO summit in Prague in 2002, a faculty adviser on that trip offered her a job in Washington working at the National Intelligence Council. In those early years, she believed what everyone else in Washington believed about the economy — that governments ought not meddle with it.
  • if Mr. Trump correctly identified a problem — “China is eating our lunch” — he did not solve it, beyond putting tariffs on Chinese products. His tax cut for the rich hurt rather than helped matters.
  • It’s the Biden administration that came in with a plan to build an economy that was good for workers, not just shareholders, using some strategies Ms. Harris had been talking about for years.
  • The thinking behind it goes like this: Unquestioning belief in the free market created a globalism that funneled money to the 1 percent, which has used its wealth to amass political power at the expense of everyone else. It produced free trade agreements that sent too many U.S. factories to China and rescue plans after the 2008 financial crisis that bailed out Wall Street instead of Main Street.
  • It was her job to track China’s use of subsidies, industrial espionage and currency manipulation to fuel its rise as a manufacturing powerhouse. Ms. Harris argued that tariffs on China were a necessary defense. Nobody agreed. “I was kind of just banging my head against this wall,” she told me. “The wall was a foreign policy establishment that saw markets as sacrosanct.”
  • Barack Obama campaigned on a pledge to renegotiate NAFTA, but he struck up a new trade deal instead — the Trans-Pacific Partnership. Ms. Harris argued against it. “We didn’t have the foggiest idea” of what it would do to our economy, she told me. Nobody listened.
  • it sent Democrats back to the intellectual drawing board. Larry Kramer, then the president of the Hewlett Foundation, recruited her in 2018 to promote alternatives to ideas that had guided U.S. policy for decades. He hoped she could do for free-market skepticism what Milton Friedman and his allies had done for free-market fundamentalism, which became policy under the Reagan administration and eventually was embraced by both parties as truth.
  • She has since rejoined the Hewlett Foundation, where she funds people who are proposing new solutions to economic problems. One grantee, the conservative think tank American Compass, promotes the idea of a domestic development bank to fund infrastructure — an idea with bipartisan appeal.
  • But the work that Ms. Harris and others in the Biden administration have done is unfinished, and poorly understood. The terms “Bidenomics” and “Build Back Better” don’t seem to resonate
  • Ms. Harris acknowledges that these ideas haven’t yet taken hold in the broader electorate, and that high interest rates overshadow the progress that’s been made. It’s too early for voters to feel it, she told me: “The investments Biden has pushed through aren’t going to be felt in a month, a year, two years.”
  • she celebrates the fact that leaders across the political spectrum are embracing the idea that Americans need to “get back to building things in this country.” This election has no candidates blindly promoting the free market. The last one didn’t either. In the battle of ideas, she has already won.
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