This is an archived version of the PW Sources newsletter from Saturday, May 18, 2024. Sign up to receive PW Sources directly to your inbox here.


On May 13, the Federal Energy Regulatory Commission approved Order No. 1920, the most comprehensive overhaul to electric transmission policy in over a decade. The new rule adopts requirements for transmission operators to conduct long-term transmission planning over a 20-year time horizon and includes a provision to discourage states from opting out of paying for transmission upgrades.

In a 2002 paper, HOANG DANG details the deregulation of the electricity industry and advocates for expanding the FERC’s jurisdiction over transmission:

“Increased wholesale competition was supposed to yield significant benefits to consumers in the form of lower retail prices for electricity. The actual results, in many parts of the country, are that the benefits of competition have been negated by the strain on the nation’s system of interconnected high-voltage transmission lines. ‘By 1990, non-utility generation [of electricity] had grown to supply more than half of the marginal generation capacity added to the industry, and more than 10 percent of cumulative generation capacity.’ The transmission grid was not designed for this enormous increase in the flow of electricity and, as a result, problems have occurred in the form of transmission congestion, otherwise known as bottlenecks. Very little has been done to expand the transmission grid in order to meet the demands of increased competition. In recognition of the growth of the electricity generation and the new stresses on the transmission grid, the FERC issued Order No. 2000, which provided for the formation of regional transmission organizations (RTOs) responsible for providing full and open access to all market participants in its region. RTOs are limited in their ability to make the necessary expansion to the transmission grid because the federal government has limited authority to eliminate the many barriers to transmission expansion. The current structure provides utilities little incentive to invest in transmission lines. Furthermore, state siting processes pose many barriers to an RTO’s attempt to construct interstate transmission lines.”

“Making the case for more aggressive decarbonization targets in the utility sector basically means calling for bundled utilities to invest more in transmission, storage, and low-carbon generation.” By Nolan Lindquist. Link. And see Jeff St. John on FERC member Mark Christie’s dissenting opinion on the new rules and the growing clean energy backlog. Link.

 “Even with proactive regional planning, regional transmission will remain undermined by utilities’ preference for local and supplemental projects. Order 1920 also does nothing to resolve the fundamental lack of independent planning outside RTOs.” By Devin Hartman. Link. And see David Roberts’s conversation with Lorenzo Kristov on a “bottom-up” grid. Link.

+  “Proximity to interconnection points is driving site selection for data center demand, but these edge deployments tend to be smaller. Secondary markets continue to compose almost 20% of capacity under construction.” A JLL report on the expansion of data center preleasing and construction. Link.


Hydrogen economy

STEFAN SCHOPPENGERD is a research associate in the Economics Department of the Berlin School of Economics and Law. His working paper analyzes industrial relations, hydrogen, and working time policies in the German steel industry.

From the paper:

“The switch to hydrogen-based direct reduction is the technological option for decarbonization being pursued by a broad consensus of all stakeholders. Its enormous potential for reducing CO₂ emissions can only be realized using ‘green’ hydrogen. Both the corresponding conversion of the steel mills and the necessary development of the hydrogen economy are moving along the lines of profit-oriented entrepreneurial activity, despite enormous government expenditure of public funds, research and development, and needs assessment and capacity planning (another lesson in the fact that functioning markets are not natural institutions, but ones that require a high degree of political preconditions). Essential for trade union policy here is the effort to persuade state institutions to adopt an industrial policy that makes invests in ‘green’ production capacities attractive for steel companies at the existing locations. How these positions are advocated corresponds to the established paths of social partnership corporatism. The competences within the framework of coal and steel co-determination can be used to press for a long-term transformation strategy at the company level; political frameworks at the state, national, and European levels can be influenced by lobbying, sometimes flanked by appealing action days or demonstrations. In terms of content, the focus is on positions formulated in consensus with companies on behalf of the industry: subsidies, green protectionism, and targeted development of sales markets. In addition, there is advocacy for the qualification of employees in order to prepare them for the new requirements.”

+ + +

+  “The cash transfer mode allows you to bypass all the intermediaries…Its political salience is really significant because it draws a direct connection between the leadership and the beneficiary.” New on PW, Rohan Venkat interviews Yamini Aiyar on India’s “techno-patrimonial” welfare model. Link.

+  “The years with the greatest distribution of income across all countries in the region—2002 to 2003 and 2013 to 2014—correspond to the years with the greatest economic growth and the best labor market performance.” Also on PW, Camilo Andrés Garzón and Maria Camila González interview José Antonio Ocampo, Colombia’s former Minister of Finance. Read in English or Spanish.

+  “The tariff war is ultimately about geopolitics, not the cat and mouse game of supply chains. No one knows if China will respond performatively or powerfully.” New on the Polycrisis, Tim Sahay and Kate Mackenzie on Biden’s decision to raise tariffs on Chinese imports. Link.  

+  “Há uma trajetória ideológica, política e econômica, construída ao longo de décadas, que obriga hoje o governo Lula 3 a adotar um figurino fiscalista.” Leda Paulani on Brazil’s “New Fiscal Framework.” Link

+  Ricardo Fornasari on the antisystemic potential of climate change litigation. Link.

+  “This paper offers some of the first clear empirical support for the long-standing theoretical claim that traceable policy designs generate stronger mass feedback effects than do less traceable policy designs.” By Brain T. Hamel. Link.

+  “We observe that between 2004 and 2013, Chinese solar firms increased their annual production by 76% per year, and by 2016, China’s dominance of global solar manufacturing had become all-encompassing.” By Ignacio Banares-Sanchez, Robin Burgess, David Laszlo, Pol Simpson, John Van Reenen, and Yifan Wang. Link.

+  Andrea Silva on Rural Property and Land Administration Plans and land titling in Colombia. Link.

+  Meryem Gökten, Philipp Heimberger, and Andreas Lichtenberger apply a Beveridge (full-employment-consistent) rate of unemployment to analyze deviations from full employment in EU countries. Link.

+  “In many instances such as pre-civil rights United States and pre-Mandal India, poor and wealthy voters exhibited partisan and redistributive preferences in accordance to their class location because in these periods their status rank was unchallenged. In the Indian case, upper caste voters were more sympathetic to the statist and redistributive focus of the Congress Party between 1947 and the 1980s when those policies did not disturb Brahman hegemony in education and the state. When those policies began to target these ‘status’ goods, however, an anti-redistribution coalition was able to take shape in support of the BJP. The psychic and material dimensions of status suggest that the poor are not misunderstanding their economic interests when they vote for right-wing anti-redistribution parties as suggested in the US case. Instead they are rationally seeking to protect their status which holds both economic and social benefits, even if the material component doesn’t completely compensate what they could gain from state-led redistribution.” By Pavithra Suryanarayan. Link.

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