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Shorting the Grid: The Hidden Fragility of Our Electric Grid
When rolling blackouts come to the electric grid, they will be old news to the grid insiders. Only the electricity customers will be surprised. Grid insiders know how fragile the grid is becoming. Unfortunately, they have no incentive to solve the problems because near-misses increase their profits. Meredith Angwin describes how closed meetings, arcane auction rules, and five-minute planning horizons will topple the reliability of our electric grid. Shorting the Grid shines light on our vulnerable grid. It also suggests actions that can support the grid that supports all of us.
442 pages, Kindle Edition
Published October 19, 2020
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February 3, 2023
This book is for people deeply interested in energy policy, electricity, utilities, renewables, especially in New England.
It is ground-breaking in its explanation of regional transmission organizations, (RTOs), how generating plants bid into the grid, how reliability (of generation) hasn't been valued, etc.
Because it is as dense as a textbook (despite being written in an approachable, sprightly manner) I can recommend Shorting the Grid only to readers interested in the topics of renewables, electricity generation, and grid operations.
Yet, it is one of 4-5 books that every professional involved in utility operations or energy policy absolutely should be required to read. Any expert testifying on the subject should first be able to prove that he or she has read and understood Shorting the Grid.
It is ground-breaking in its explanation of regional transmission organizations, (RTOs), how generating plants bid into the grid, how reliability (of generation) hasn't been valued, etc.
Because it is as dense as a textbook (despite being written in an approachable, sprightly manner) I can recommend Shorting the Grid only to readers interested in the topics of renewables, electricity generation, and grid operations.
Yet, it is one of 4-5 books that every professional involved in utility operations or energy policy absolutely should be required to read. Any expert testifying on the subject should first be able to prove that he or she has read and understood Shorting the Grid.
October 31, 2020
Shorting the Grid, by Meredith Angwin, could have made great bed-time reading — put you right to sleep! Could have been. But it isn’t. I honestly don’t know how anyone managed to write a book like this, but she did it, and did it remarkably well. The complexity of the multiple layers of policies and their relationships in much of our grid governance is truly unbelievable. Markets that aren’t really markets, “deregulation” with ever-growing mountains of regulations, renewable energy credits (RECs) and zero emission credits (ZECs), forward capacity auctions, jump-ball filings… Oh my!
But the complexity is the point. It isn’t a bug, it’s a feature! Angwin begins by stating the obvious: People expect reliable, inexpensive, plentiful, and clean electrical power using a diversity of fuels, and a resilient and well-balanced grid. But in the Regional Transmission Organization (RTO) areas, none of that matters. This left me frankly gob-smacked. Nobody has responsibility for maintaining a reliable grid. There are no adults in the room. There is no consumer choice, no transparency, no accountability. “The buck never stops anywhere," as she aptly points out. And this is our wake-up call.
The problems are too many to enumerate in a review, but I will mention a few of them:
* Grid-scale storage is forever a thing of the future — like fusion power, always “about twenty years away.” And extremely resource intensive.
* Renewables are “cheap” because they make their real money on “out-of-market revenues.” This allows them to bid to sell power at very low, even negative, prices, which drives down the grid prices for everyone else. Further, renewables are intermittent, unpredictable, and unreliable, due to the fact that the sun is not always shining nor the wind blowing. They must always be backed up with load-following generation, and the best load-followers are fossil plants. And the higher the penetration of renewables, the greater the instability of the grid.
* The FERC requires RTOs to be fuel-neutral. This leads to shortages, as happens when dual-fuel gas/oil plants cannot be required to stock oil on site, and eventually to rolling blackouts.
* Simply selling kWh to the grid is not the least bit lucrative. The most reliable power generators that we have, nuclear plants, cannot be profitable by doing what they do best. This leads to closure of highly reliable and non-pollutung power plants. And once a nuclear plant is closed, it does not reopen. Further, the reliable power is almost always replaced by whatever is the next most reliable source — namely, fossil fuels.
* Markets are supposed to be about customer choice. In an RTO area, there is no choice — the “customer” is really just a “ratepayer."
* RTOs attempt to solve almost any problem with another kind of auction. Perhaps the most startling thing about the auctions is the way in which the “clearing price” is determined. This is the price that all generators receive. And the price is not set at the lowest bid, it is set at the highest! But wait, renewables can bid the grid prices way down. Confused? You are not alone! Remember, confusion is a feature.
And at the end of the day, electricity prices tend to be higher in the “deregulated” RTO areas. It simply has not worked out the way telephone and airline deregulation did. None of these problems are about the power generators, technology, fuel choices, or carbon footprints. The problem is in the governance. The question, as always, is: who profits? Follow the money. And the result is an expensive, fragile, and high-carbon grid.
I could go on, but as Meredith wanted to write a readable book, so I want to write a readable review. I do want to mention her coverage of the difference between choices made by Germany and France (as well as Sweden and Ontario). Germany tried to decarbonize by building massive renewables — and closing their non-emitting nuclear plants. The result has been an expensive and high-carbon grid. France, in contrast, successfully decarbonized in ten years by going nuclear. Same with Sweden and Ontario. (See electricitymap.org for an outstanding tool for visualizing the carbon footprint of various nations and regions.) The choices made by governments are what make the difference, not individual behaviors. Organizations that push consumers toward what I call energy austerity encourage us to make personal sacrifices in order to do our part. This is just another case of passing the buck. If you are of the belief that taking personal responsibility for using less energy will lead to lower emissions, then the author with the lesson of Germany, will disabuse you of this notion. The RTOs push us toward the German model. Our role models should, rather, be France, Sweden, and Ontario.
Meredith says that this book was ten years in the making. I can believe it. She insisted that she could not and would not produce a book that was unreadable or would put the reader to sleep. Fear not! She writes in a conversational way, as if you are talking over dinner, or sharing coffee and brownies. (Never forget the brownies!)
The grammar is pristine, with no strange idiosyncrasies of capitalization or punctuation. As a self-appointed proof-reader, I notice these things. Throughout the entire 400 pages, I think I counted all of three very minor typos that did not obscure the meaning in any way. Every word is obviously chosen with care. There is no arcane language, and every industry term, buzzword, and practice is carefully explained. It includes extensive endnotes — 292, to be exact. I recommend following many of these references, especially to her blog posts.
Finally, she concludes with a chapter on actions that we can take. She does not tell us all about these shocking problems without leaving us with great suggestions for what we can do about them. This was entirely expected — her previous book, “Campaigning for Clean Air,” which I also reviewed, is the best book on advocacy and activism I have ever read, and having been a political activist in my time, I have read a few.
Do yourself a favor — buy and read this book. And then share it.
But the complexity is the point. It isn’t a bug, it’s a feature! Angwin begins by stating the obvious: People expect reliable, inexpensive, plentiful, and clean electrical power using a diversity of fuels, and a resilient and well-balanced grid. But in the Regional Transmission Organization (RTO) areas, none of that matters. This left me frankly gob-smacked. Nobody has responsibility for maintaining a reliable grid. There are no adults in the room. There is no consumer choice, no transparency, no accountability. “The buck never stops anywhere," as she aptly points out. And this is our wake-up call.
The problems are too many to enumerate in a review, but I will mention a few of them:
* Grid-scale storage is forever a thing of the future — like fusion power, always “about twenty years away.” And extremely resource intensive.
* Renewables are “cheap” because they make their real money on “out-of-market revenues.” This allows them to bid to sell power at very low, even negative, prices, which drives down the grid prices for everyone else. Further, renewables are intermittent, unpredictable, and unreliable, due to the fact that the sun is not always shining nor the wind blowing. They must always be backed up with load-following generation, and the best load-followers are fossil plants. And the higher the penetration of renewables, the greater the instability of the grid.
* The FERC requires RTOs to be fuel-neutral. This leads to shortages, as happens when dual-fuel gas/oil plants cannot be required to stock oil on site, and eventually to rolling blackouts.
* Simply selling kWh to the grid is not the least bit lucrative. The most reliable power generators that we have, nuclear plants, cannot be profitable by doing what they do best. This leads to closure of highly reliable and non-pollutung power plants. And once a nuclear plant is closed, it does not reopen. Further, the reliable power is almost always replaced by whatever is the next most reliable source — namely, fossil fuels.
* Markets are supposed to be about customer choice. In an RTO area, there is no choice — the “customer” is really just a “ratepayer."
* RTOs attempt to solve almost any problem with another kind of auction. Perhaps the most startling thing about the auctions is the way in which the “clearing price” is determined. This is the price that all generators receive. And the price is not set at the lowest bid, it is set at the highest! But wait, renewables can bid the grid prices way down. Confused? You are not alone! Remember, confusion is a feature.
And at the end of the day, electricity prices tend to be higher in the “deregulated” RTO areas. It simply has not worked out the way telephone and airline deregulation did. None of these problems are about the power generators, technology, fuel choices, or carbon footprints. The problem is in the governance. The question, as always, is: who profits? Follow the money. And the result is an expensive, fragile, and high-carbon grid.
I could go on, but as Meredith wanted to write a readable book, so I want to write a readable review. I do want to mention her coverage of the difference between choices made by Germany and France (as well as Sweden and Ontario). Germany tried to decarbonize by building massive renewables — and closing their non-emitting nuclear plants. The result has been an expensive and high-carbon grid. France, in contrast, successfully decarbonized in ten years by going nuclear. Same with Sweden and Ontario. (See electricitymap.org for an outstanding tool for visualizing the carbon footprint of various nations and regions.) The choices made by governments are what make the difference, not individual behaviors. Organizations that push consumers toward what I call energy austerity encourage us to make personal sacrifices in order to do our part. This is just another case of passing the buck. If you are of the belief that taking personal responsibility for using less energy will lead to lower emissions, then the author with the lesson of Germany, will disabuse you of this notion. The RTOs push us toward the German model. Our role models should, rather, be France, Sweden, and Ontario.
Meredith says that this book was ten years in the making. I can believe it. She insisted that she could not and would not produce a book that was unreadable or would put the reader to sleep. Fear not! She writes in a conversational way, as if you are talking over dinner, or sharing coffee and brownies. (Never forget the brownies!)
The grammar is pristine, with no strange idiosyncrasies of capitalization or punctuation. As a self-appointed proof-reader, I notice these things. Throughout the entire 400 pages, I think I counted all of three very minor typos that did not obscure the meaning in any way. Every word is obviously chosen with care. There is no arcane language, and every industry term, buzzword, and practice is carefully explained. It includes extensive endnotes — 292, to be exact. I recommend following many of these references, especially to her blog posts.
Finally, she concludes with a chapter on actions that we can take. She does not tell us all about these shocking problems without leaving us with great suggestions for what we can do about them. This was entirely expected — her previous book, “Campaigning for Clean Air,” which I also reviewed, is the best book on advocacy and activism I have ever read, and having been a political activist in my time, I have read a few.
Do yourself a favor — buy and read this book. And then share it.
November 15, 2022
This was a fascinating and informative page-turner that I could not put down! Packed with great information and ideas, I deployed three and a half stacks of page tabs on this one...
This book is (obviously) about electrical grids. There is a bit of detail about how the grid works in the sense of a huge, interconnected electrical machine, but most of the book focuses on how the grid works as an instrument of policy.
There's a great hook in the first chapter: Angwin has just finished reading Michael Lewis' The Big Short and as a career grid insider, sees alarming parallels between the 2008 financial meltdown and the current trajectory of grid policy, power plant reliability, and power plant economic feasibility.
Angwin had an interesting career as a chemist in the electrical industry, working on and leading projects that lowered pollution and increased reliability (like pollution control for NOx in gas-fired combustion turbines, or corrosion control in geothermal and nuclear systems). One thing I absolutely love about her writing and her non-EE background is she explains grid systems and grid governance WITHOUT all of the baggage an electrical engineer would be biased to include. She deploys useful metaphors when technical understanding is required, and strategically omits technical details when they're not relevant to her arguments. Angwin's writing conveys authoritative experience and her humour and wit.
The structure of the book works very well! Chapters are nice, short, and digestible (45 chapters in 366 pages) and the writing tone is light, lucid, and engaging. There is great "bookmarking" where Angwin helps summarize what she's just told you and points you towards what's next, and the book's internal referencing is very good (great endnotes and internal references, e.g. Chapter Y will point you back to Chapter X to ensure the right background info is easy to access).
The book is broken into five parts:
Part 1 "Angelic Miracles and Easy Problems" contains key background information about how grids work (in the mechanical/electrical sense), high-level overview of governance types (vertically integrated or Regional Transmission Organization/RTO), as well as a few mini case-studies of Angwin's home grid in Vermont.
Part 2 "Policy, Markets, and Fuel Security" is the meat of the book, digging into how RTOs are governed, gamed, and operated. My non-technical summary is that RTOs are a total shit-show and are not good for consumers: "deregulation" helped enable the Enron/California blackouts in the early 2000s and the more recent Texas grid reliability issues, as well as skyrocketing costs to ratepayers.
Part 3 "Renewables on the Grid" covers the challenges of integrating renewables onto the grid: some general challenges around intermittency, but more specific challenges in RTO areas where "deregulation" (code-word for "dramatically increased regulation and complexity") forces reliable baseload power to financially compete with highly externally-subsidized (e.g. by state governments) renewables.
Part 4 "The RTO and the Customer" talks about impacts on ratepayers (never "customers" because that would reflect an illusion of choice! Always "ratepayers" who pay the rates they're commanded).
Part 5 "Is There a Way Forward" capture Angwin's thoughts on the importance of reliable electricity and how RTOs and market forces are creating an upcoming reliability crisis.
Key takeaways for me:
- An understanding of what an RTO is. This concept was fairly opaque to me (we don't have this in Saskatchewan: SaskPower is a vertically integrated utility. Alberta and Ontario have RTOs in Canada)
- Probably the best-laid-out argument on the challenges of integrating renewables in an RTO grid (and any grid in general). The narrative is great: it's not outright renewables-bashing (Angwin recognizes some of the benefits of renewables), but rather a buildup of information about how and why the grid operates and delivers reliable energy (in a physical and policy sense) and only THEN getting into the challenges of integrating intermittent renewables and how that impacts the economics of keeping reliable plants online.
Two MINOR criticisms:
- The energy community discusses this book with such reverence and authority that it makes it intimidating to read/start. In reality the text and tone is super accessible. Shorting the Grid will probably be one of my go-to early recommendations to people looking to learn more about electricity generation. (this is more a criticism for the wider community: need to pump this book as super accessible!)
- I wish Angwin re-defined acronyms more than once. "RTO" is defined once in the early chapters, then the acronym is used exclusively thereafter. Not being familiar with RTOs (and having a bad memory partially due to a new baby) I had to keep flipping to the appendix to see what this meant, over and over...
I am SO glad I read this book, and more glad I bought a copy to leave tabs in and mark up! An indispensable reference to anyone interested in reliable power generation in their jurisdiction, whether you're in an RTO area or not.
I almost didn't read this book by accident! I first heard Angwin on the Decouple podcast and made a mental note, "grid book, smart woman". When I searched the library for "grid" and saw Gretchen Bakke's book (my review) I misremembered the author and read that one instead. It was great, but much lighter on the regulatory environment for power plants, and was not written by an industry insider. I kept hearing Angwin's work referenced over and over so I knew I had to grab a copy!
This book is (obviously) about electrical grids. There is a bit of detail about how the grid works in the sense of a huge, interconnected electrical machine, but most of the book focuses on how the grid works as an instrument of policy.
There's a great hook in the first chapter: Angwin has just finished reading Michael Lewis' The Big Short and as a career grid insider, sees alarming parallels between the 2008 financial meltdown and the current trajectory of grid policy, power plant reliability, and power plant economic feasibility.
Angwin had an interesting career as a chemist in the electrical industry, working on and leading projects that lowered pollution and increased reliability (like pollution control for NOx in gas-fired combustion turbines, or corrosion control in geothermal and nuclear systems). One thing I absolutely love about her writing and her non-EE background is she explains grid systems and grid governance WITHOUT all of the baggage an electrical engineer would be biased to include. She deploys useful metaphors when technical understanding is required, and strategically omits technical details when they're not relevant to her arguments. Angwin's writing conveys authoritative experience and her humour and wit.
The structure of the book works very well! Chapters are nice, short, and digestible (45 chapters in 366 pages) and the writing tone is light, lucid, and engaging. There is great "bookmarking" where Angwin helps summarize what she's just told you and points you towards what's next, and the book's internal referencing is very good (great endnotes and internal references, e.g. Chapter Y will point you back to Chapter X to ensure the right background info is easy to access).
The book is broken into five parts:
Part 1 "Angelic Miracles and Easy Problems" contains key background information about how grids work (in the mechanical/electrical sense), high-level overview of governance types (vertically integrated or Regional Transmission Organization/RTO), as well as a few mini case-studies of Angwin's home grid in Vermont.
Part 2 "Policy, Markets, and Fuel Security" is the meat of the book, digging into how RTOs are governed, gamed, and operated. My non-technical summary is that RTOs are a total shit-show and are not good for consumers: "deregulation" helped enable the Enron/California blackouts in the early 2000s and the more recent Texas grid reliability issues, as well as skyrocketing costs to ratepayers.
Part 3 "Renewables on the Grid" covers the challenges of integrating renewables onto the grid: some general challenges around intermittency, but more specific challenges in RTO areas where "deregulation" (code-word for "dramatically increased regulation and complexity") forces reliable baseload power to financially compete with highly externally-subsidized (e.g. by state governments) renewables.
Part 4 "The RTO and the Customer" talks about impacts on ratepayers (never "customers" because that would reflect an illusion of choice! Always "ratepayers" who pay the rates they're commanded).
Part 5 "Is There a Way Forward" capture Angwin's thoughts on the importance of reliable electricity and how RTOs and market forces are creating an upcoming reliability crisis.
Key takeaways for me:
- An understanding of what an RTO is. This concept was fairly opaque to me (we don't have this in Saskatchewan: SaskPower is a vertically integrated utility. Alberta and Ontario have RTOs in Canada)
- Probably the best-laid-out argument on the challenges of integrating renewables in an RTO grid (and any grid in general). The narrative is great: it's not outright renewables-bashing (Angwin recognizes some of the benefits of renewables), but rather a buildup of information about how and why the grid operates and delivers reliable energy (in a physical and policy sense) and only THEN getting into the challenges of integrating intermittent renewables and how that impacts the economics of keeping reliable plants online.
Two MINOR criticisms:
- The energy community discusses this book with such reverence and authority that it makes it intimidating to read/start. In reality the text and tone is super accessible. Shorting the Grid will probably be one of my go-to early recommendations to people looking to learn more about electricity generation. (this is more a criticism for the wider community: need to pump this book as super accessible!)
- I wish Angwin re-defined acronyms more than once. "RTO" is defined once in the early chapters, then the acronym is used exclusively thereafter. Not being familiar with RTOs (and having a bad memory partially due to a new baby) I had to keep flipping to the appendix to see what this meant, over and over...
I am SO glad I read this book, and more glad I bought a copy to leave tabs in and mark up! An indispensable reference to anyone interested in reliable power generation in their jurisdiction, whether you're in an RTO area or not.
I almost didn't read this book by accident! I first heard Angwin on the Decouple podcast and made a mental note, "grid book, smart woman". When I searched the library for "grid" and saw Gretchen Bakke's book (my review) I misremembered the author and read that one instead. It was great, but much lighter on the regulatory environment for power plants, and was not written by an industry insider. I kept hearing Angwin's work referenced over and over so I knew I had to grab a copy!
November 24, 2020
Amazing read! I've been working for a utility for years and I had a smattering of knowledge about the grid but this definitely sheds light on the politics, policy, and complexities involved... especially in RTOs.
Please please please read this book before engaging in discussion boards online about generation prices of different energy sources!
Please please please read this book before engaging in discussion boards online about generation prices of different energy sources!
January 31, 2021
Teasing out a tangled web of multilayered rules
In trying to talk about the grid problems, I have found that most people have deep opinions on power plants. They hate coal or nuclear, or they hate wind turbines, or whatever. They are often completely unaware of how the ratepayer-serfs are getting robbed by the insiders in an RTO area. Grid governance just isn’t on most people’s radar. -MJ Angwin, author
In a general sense, the above quote from the book sums up the reason for writing Shorting the Grid. People rarely participate in what they don't understand -- and if a system is obtuse by design .... well let's just say that grid ratepayers may be like frogs in a slowly heated pot of swamp water.
Rising utility bills, continuing government subsidies (btw- how's your tax bill, ratepayers? Did you know you're paying twice for some of that electricity?), a tangled web of rules, and the best place to make your concerns heard are non-public meetings or public comment dockets with the regulators.
Mrs. Angwin untangles the regulatory obfuscations the same way you'd untangle a child's long hair after a week running wild in a National Park. Speaking with a calm voice she shares simple stories as the many knots are gently untangled. Afterwards we still need to wash & brush our own hair (so to speak), but at least it won't be painfully tangled anymore.
But that's our choice whether to follow up on what we learn. I reccomend this book especially to any ratepayers living in an "unregulated" grid market.
In trying to talk about the grid problems, I have found that most people have deep opinions on power plants. They hate coal or nuclear, or they hate wind turbines, or whatever. They are often completely unaware of how the ratepayer-serfs are getting robbed by the insiders in an RTO area. Grid governance just isn’t on most people’s radar. -MJ Angwin, author
In a general sense, the above quote from the book sums up the reason for writing Shorting the Grid. People rarely participate in what they don't understand -- and if a system is obtuse by design .... well let's just say that grid ratepayers may be like frogs in a slowly heated pot of swamp water.
Rising utility bills, continuing government subsidies (btw- how's your tax bill, ratepayers? Did you know you're paying twice for some of that electricity?), a tangled web of rules, and the best place to make your concerns heard are non-public meetings or public comment dockets with the regulators.
Mrs. Angwin untangles the regulatory obfuscations the same way you'd untangle a child's long hair after a week running wild in a National Park. Speaking with a calm voice she shares simple stories as the many knots are gently untangled. Afterwards we still need to wash & brush our own hair (so to speak), but at least it won't be painfully tangled anymore.
But that's our choice whether to follow up on what we learn. I reccomend this book especially to any ratepayers living in an "unregulated" grid market.
March 27, 2024
Awkwardly written with too many acronyms, this gets four stars for laying out the complexity of the grid, showing how regional consortia have rendered it ungovernable, and (SPOILER ALERT!) dispelling the myth that renewables can come anywhere near obviating fossil fuels in electric power generation.
May 14, 2021
Damn good. Highly technical (but worth it) and Fuck we are in trouble!
June 12, 2023
Interesting book, much I didn't know. I thought it was excellent in most areas, though I took issue with her analysis on various auction models.
There are two central issues discussed. First, the grid must balance a fundamental tradeoff between efficiency and redundancy (in other words, how much insurance should rate-payers be forced to buy?) Second, issues of political economy put our grid inside the optimal frontier of robustness vs. efficiency.
Most of the insurance discussion is around centrally planned alternatives like paying utilities to keep fuel onsite. Intuitively, it seems like a better solution would be to give consumers choice over how much price risk to bear, and then let the market handle the rest endogenously - but that isn't really discussed.
Her final proposal at the end seems very reasonable: baseload of nuclear and load following generation of hydro first and then a mixture of gas/wind/solar/nuclear.
Interesting Claims:
~Gas is popular because of flexibility, but poses significant risk to the grid due to availability concerns. So it's useful as an insurance-esque fuel for small variations in sun/wind/demand, but in a winter crisis you could easily run out.
~The limited transparency of and public interest in RTO's make them relatively more likely to be coopted by special interests
~With respect to the grid, batteries are not a serious technology for anything other than utilities gaming certain metrics around peak demand
~Renewables require 100% backup because of intermittency issues. At the margin, they can make the grid dirtier than fossil fuel comparisons (because the backup will be a less efficient version of fossil fuels that must come on and off quickly).
~Renewables subsidies can make the grid more fragile by pricing out more reliable plants and forcing them to close (to me, if anything, this proves the virtue of capacity auctions, because the positive externality of flexibility is underpriced)
~Net-Metering (solar generation at home being paid retail prices) is a subsidy to solar generation that raises power costs for everyone else
~There is a free-rider problem where states within an RTO can pass laws that other states in the RTO have to pay for (e.g. renewables mandates that increase cost on the whole grid). For this reason (among others) she prefers RTO's within a single state.
~Requests by utilities for users to limit power consumption in summer periods of high demand are mostly self-serving and serve to shift costs to other utilities
~The old utility market structure incentivized overinvestment due to guaranteed rates of return on capital
~Often, the bottleneck for natural gas is pipeline capacity, not upstream production (especially due to the environmental lobby blocking pipelines)
Weak Points:
~She takes issue with the Dutch auction structure of the marketplace (marginal seller sets the price) because they pay too much to the top of the queue with low marginal costs. She seems to prefer that everyone that bids below the marginal seller is paid their bid - but doesn't really acknowledge that people would change their bidding practices? And that, even if the law could force people to bid at their marginal cost, that this would distort the new incentives for new production.
~I think she is too critical of capacity auctions and natural gas. To me, flexibility is valuable, and it makes sense for gas utilities to be compensated for the value of that flexibility- but she doesn't like that capacity payments help gas and hurt nuclear, which is much less flexible.
Thoughts provoked by the book:
~The potential for geographic diversification of renewables by connecting dispersed parts of the grid. The wind isn't blowing in LA but it might be in Las Vegas, etc. Obviously, the reliability benefit would have be somewhat offset by the line-loss cost of sending electricity across more distance.
~The potential for what I think of as "negative batteries" - productive uses for variable excess power. For example, why can't we just increase the baseload and do desalination when demand goes down at night?
Interesting Cites:
~There is no free market for energy: Can there ever be? By Travis Kavulla
~Roadmap to Nowhere: The Myth of Powering the Nation with Renewable Energy by Conley/Maloney
~The Non-Solutions Porject - Mathijs Beckers
~Asymmetric Risk and Fuel Neutrality in Capacity Markets - Mays et al
~A question of power: electricity and the wealth of nations - Robert Bryce
~The Grid: The Fraying Wires Between Americans and Our Energy Future - Gretchen Bakke
There are two central issues discussed. First, the grid must balance a fundamental tradeoff between efficiency and redundancy (in other words, how much insurance should rate-payers be forced to buy?) Second, issues of political economy put our grid inside the optimal frontier of robustness vs. efficiency.
Most of the insurance discussion is around centrally planned alternatives like paying utilities to keep fuel onsite. Intuitively, it seems like a better solution would be to give consumers choice over how much price risk to bear, and then let the market handle the rest endogenously - but that isn't really discussed.
Her final proposal at the end seems very reasonable: baseload of nuclear and load following generation of hydro first and then a mixture of gas/wind/solar/nuclear.
Interesting Claims:
~Gas is popular because of flexibility, but poses significant risk to the grid due to availability concerns. So it's useful as an insurance-esque fuel for small variations in sun/wind/demand, but in a winter crisis you could easily run out.
~The limited transparency of and public interest in RTO's make them relatively more likely to be coopted by special interests
~With respect to the grid, batteries are not a serious technology for anything other than utilities gaming certain metrics around peak demand
~Renewables require 100% backup because of intermittency issues. At the margin, they can make the grid dirtier than fossil fuel comparisons (because the backup will be a less efficient version of fossil fuels that must come on and off quickly).
~Renewables subsidies can make the grid more fragile by pricing out more reliable plants and forcing them to close (to me, if anything, this proves the virtue of capacity auctions, because the positive externality of flexibility is underpriced)
~Net-Metering (solar generation at home being paid retail prices) is a subsidy to solar generation that raises power costs for everyone else
~There is a free-rider problem where states within an RTO can pass laws that other states in the RTO have to pay for (e.g. renewables mandates that increase cost on the whole grid). For this reason (among others) she prefers RTO's within a single state.
~Requests by utilities for users to limit power consumption in summer periods of high demand are mostly self-serving and serve to shift costs to other utilities
~The old utility market structure incentivized overinvestment due to guaranteed rates of return on capital
~Often, the bottleneck for natural gas is pipeline capacity, not upstream production (especially due to the environmental lobby blocking pipelines)
Weak Points:
~She takes issue with the Dutch auction structure of the marketplace (marginal seller sets the price) because they pay too much to the top of the queue with low marginal costs. She seems to prefer that everyone that bids below the marginal seller is paid their bid - but doesn't really acknowledge that people would change their bidding practices? And that, even if the law could force people to bid at their marginal cost, that this would distort the new incentives for new production.
~I think she is too critical of capacity auctions and natural gas. To me, flexibility is valuable, and it makes sense for gas utilities to be compensated for the value of that flexibility- but she doesn't like that capacity payments help gas and hurt nuclear, which is much less flexible.
Thoughts provoked by the book:
~The potential for geographic diversification of renewables by connecting dispersed parts of the grid. The wind isn't blowing in LA but it might be in Las Vegas, etc. Obviously, the reliability benefit would have be somewhat offset by the line-loss cost of sending electricity across more distance.
~The potential for what I think of as "negative batteries" - productive uses for variable excess power. For example, why can't we just increase the baseload and do desalination when demand goes down at night?
Interesting Cites:
~There is no free market for energy: Can there ever be? By Travis Kavulla
~Roadmap to Nowhere: The Myth of Powering the Nation with Renewable Energy by Conley/Maloney
~The Non-Solutions Porject - Mathijs Beckers
~Asymmetric Risk and Fuel Neutrality in Capacity Markets - Mays et al
~A question of power: electricity and the wealth of nations - Robert Bryce
~The Grid: The Fraying Wires Between Americans and Our Energy Future - Gretchen Bakke
This entire review has been hidden because of spoilers.
February 19, 2024
Many illuminating details about the alphabet soup by which we buy and sell electricity in the US, mostly relying on the author’s deep experience with electricity regulation in New England. The power of NEPOOL was completely unknown to me. She also outlined well the winners and losers from capacity markets.
That said, I was frankly unimpressed with many of the analyses in the book. The oft-repeated claim that RTO areas causes higher electricity prices simply doesn’t hold water. If anything, the results the author presents show that the difference in prices between RTO and non-RTO areas has fallen since RTOs were introduced. That’s exactly what we’d hope the RTO to do, not necessarily reverse large pre-existing price differentials entirely.
There are a few other examples like this, where she returns repeatedly to a fact or conclusion that flies in the face of the actual data. It really undermines many of the useful parts of her book, where it seems to me that she mostly appeals to vibes and the vast complexity of RTO market-based schemes to make her claims. And it leaves me deeply unsure that returning to vertically integrated utilities would lead to cleaner, more affordable power as she claims. It is very unclear that these systems are more transparent or lead to better outcomes. There is also precious little actual data about what transpires in the regulated parts of the US (other than the presence of more nuclear power).
Useful, though, for a great primer about the entities that make up electricity generation and transmission.
That said, I was frankly unimpressed with many of the analyses in the book. The oft-repeated claim that RTO areas causes higher electricity prices simply doesn’t hold water. If anything, the results the author presents show that the difference in prices between RTO and non-RTO areas has fallen since RTOs were introduced. That’s exactly what we’d hope the RTO to do, not necessarily reverse large pre-existing price differentials entirely.
There are a few other examples like this, where she returns repeatedly to a fact or conclusion that flies in the face of the actual data. It really undermines many of the useful parts of her book, where it seems to me that she mostly appeals to vibes and the vast complexity of RTO market-based schemes to make her claims. And it leaves me deeply unsure that returning to vertically integrated utilities would lead to cleaner, more affordable power as she claims. It is very unclear that these systems are more transparent or lead to better outcomes. There is also precious little actual data about what transpires in the regulated parts of the US (other than the presence of more nuclear power).
Useful, though, for a great primer about the entities that make up electricity generation and transmission.
January 25, 2022
This was an excellent read. Highly recommend checking it out. The book looks at the issues impacting the electricity grid in the United States and finds that a lot of the issues are around policy and governance problems and less technological. Also, the author does a great job breaking these super complex issues down for the reader. You can get lost in certain sections that get deep into the weeds around certain examples but it's probably ok to skim those if need be. Honestly, the most interesting portion to me was the problems surrounding wind and solar and the grid. The author makes a convincing case that these types of renewables won't be enough to fully replace other types of dirty energy sources and, currently, these sources are driving an increase in the use of coal and gas on the grid now. The author shows that the best path forward is a combination of nuclear energy and renewables. Fascinating stuff.
January 19, 2024
Interesting and detailed about the power grid in New England, although beginning by comparing itself to The Big Short: Inside the Doomsday Machine was a little exaggerated I think. The author downplays the risk of climate change and seems to argue that it's fine to just keep pumping CO2 into the atmosphere because the real danger is your energy bill rising by $8/month. She completely straw-mans the green new deal and sidesteps the one scientific thing in the whole book, which I didn't appreciate either. Overall most of it was sound and well-informed, I just think the author took some shortcuts to make her argument appear better. Finally, this audiobook is by far the worst edited audiobook I have ever listened to, I tried not to let it influence me but I'm sure it did.
April 27, 2023
A lot of people have strong opinions one way or the other about Climate Change. And there are just as many opinions about what types of energy generation we should champion. Unfortunately, what unites almost ALL of these people is that very few have any clue about how the grid works. I know because I was one of them. If you’re going to make statements of any kind about how we should manage energy - the very industry that affects all other industries - then you at least ought to have a foundation for how that energy is managed. You get an excellent primer with Meredith’s book. You also get an eye opening peek into just how fragile our grid truly is.
February 7, 2024
The book goes into gory detail about energy markets and associated auctions and regulations and dysfunctions, and these can be complex and opaque, but that doesn't stop Angwin. Even if you, like I, don't follow all the RTO auction stuff in the first part of the book, the second part, which deals with grid reliability and renewables, and references the first part in a reader-friendly way, is illuminating. It's kind of a crazy book. At times it seems like a rant, but a very well informed and rational one.
March 9, 2021
A boring, poisoned argument. Angwin is another dishonest intellectual, pushing for Total Government Control. Hence Angwin will graciously dance around the issue to make it the fault of the regime Cronies. Back in the days of the Hoover Dam the argument might have meant Angwin is just dim, yet in the days of solar panels, people living off the grid and low power devices the dimness proves to be a ruse.
October 24, 2022
Probably the clearest description of one of the most complicated topics going around. A few sections I had to reread just to get my head around just because it's a soup of acronyms at points. No fault of the author, just an immensely complicated topic that few know about.
If anything, I'd say it could have been longer to make sure all the topics got covered with enough detail. And I think an editor should have eliminated the writing from the first person.
If anything, I'd say it could have been longer to make sure all the topics got covered with enough detail. And I think an editor should have eliminated the writing from the first person.
October 28, 2022
Excellent primer and insight on electric grid
The idea that we can have "100% renewables + batteries" is perhaps the biggest piece of mis-information from climate activists. yes, decarbonization and sustainability are important goals. But they have to be based on reality. Ms Angin does a great job providing a basic education on the electric grid, a subject few really understand. Easy to read and super helpful.
The idea that we can have "100% renewables + batteries" is perhaps the biggest piece of mis-information from climate activists. yes, decarbonization and sustainability are important goals. But they have to be based on reality. Ms Angin does a great job providing a basic education on the electric grid, a subject few really understand. Easy to read and super helpful.
January 19, 2023
It’s one of those books that either completely makes sense or makes no sense at all.
It is very well written and maybe it’s just my ADD brain but I found this highly interesting and had to bounce around to multiple resources for clarification.
SPOILER ALERT — the energy industry is complex and confusing. Don’t assume this book will turn you into an expert on the first go. About to take my 3rd dive in soon to this book
It is very well written and maybe it’s just my ADD brain but I found this highly interesting and had to bounce around to multiple resources for clarification.
SPOILER ALERT — the energy industry is complex and confusing. Don’t assume this book will turn you into an expert on the first go. About to take my 3rd dive in soon to this book
January 29, 2023
A plea for sanity in electrical generation
The author shows how much mismanagement goes into determining the machines that are chosen to build our electrical grids. Often without considering reliability at all. She calls for each of us to take an active role in fighting to change that.
It’s a bit disappointing in that trying to understand so of the manipulation is so far from being an easy task.
The author shows how much mismanagement goes into determining the machines that are chosen to build our electrical grids. Often without considering reliability at all. She calls for each of us to take an active role in fighting to change that.
It’s a bit disappointing in that trying to understand so of the manipulation is so far from being an easy task.
January 12, 2022
A gargantuan effort by Meredith to explain the highly complex web of regulations and policies present in the utilities industry. Highly recommend for anyone interested in learning more about how our electric grids work, the tough realities behind renewables, and the inherent problems with the current systems in place.
November 18, 2021
This book was for my work book club and it was...fine. If you are already familiar with these topics, it might not be the best book for you. It also got a little repetitive at parts. But the tone was conversational and easy to understand.
December 27, 2021
A unique view of a neglected topic
It opens with a frightening example, New England having rolling blackouts in midwinter, and progresses to explain how such problems are becoming ordinary. Honestly, parts were a slog, but it's too important to avoid.
It opens with a frightening example, New England having rolling blackouts in midwinter, and progresses to explain how such problems are becoming ordinary. Honestly, parts were a slog, but it's too important to avoid.
May 27, 2021
If you have concerns about keeping the lights on across the U.S., read this book. Angwin has done something so unique by providing an explanation as well as solutions in layman's terms.
January 12, 2023
Just an old Boomer's perspective on energy. Relatively disappointing and outdated already by 2020.
January 28, 2023
A cautionary tale for those who assume undbundling ESKOM is a good idea.
March 11, 2023
In the genre of horror, where this opus on the American utility industry resides, this is as good as Stephen King’s It.
August 29, 2023
Five stars for the content of the book. However, I cannot completely recommend the audiobook version, which could have used some better editing.
September 25, 2023
Had a lot of good info but I thought it was too histrionic
October 27, 2023
A brilliant analysis of how RTOs work (or don't). I'm still a bit confused on how it all works but I think that is a part of the author's point!
January 16, 2024
Stopped at 68% of the audiobook. The narrator and production was, in the end, too much for me to overcome. Not to mention the writing or lack of editing of the text; entirely too long and repetitive.
December 20, 2023
Ms Angwin makes essential policy points about a topic that is both largely invisible and incredibly important, so it’s an absolute shame that this book is so poorly edited. The amount of word‐for‐word repetition is staggering, and one has to wonder if certain paragraphs (and even chapters) are present only to meet a publisher’s minimum page‐count. I sympathize somewhat, as a properly edited version of Ms Angwin’s treatise would likely result in 60–80 pages—a length that has very little support in the retail book market. The fact remains, however, that the reader is wasting about 75% of his or her time with this version of the book—an inefficiency unacceptable regardless of the quality of ideas presented. It would be wonderful if this could be condensed to an appropriate length and released for ebook and audiobook, where there is at least some market for short content.
In the meantime, here are the bullets I took away:
• Nuclear is absolutely essential to any serious decarbonization plan and probably will remain so for decades to come. No other zero‐carbon source comes close to its output.
• The quick‐on, quick‐off gas‐fired plants used to complement intermittent solar and wind sources are among the most polluting, so adding solar to a grid without adding significant battery capacity can actually increase that grid’s carbon output.
• Allowing consumers to sell energy back to the utility at retail rather than wholesale rates is bad for almost everyone, both because it skews the market and because it disincentivizes investment in on‐site batteries.
• The regional transmissions organizations (RTOs) of “deregulated” grids in the U.S. are anything but true markets. Almost every supplier remains profitable by chasing incentives rather than per‐kilowatt sales. Some RTOs are more successful than others, but in general they correlate with higher prices and more outages than girds that remained regulated.
(Additional warning: the audiobook version is basically unedited, with all the unintended silences at page‐turns left in. It also comes with no PDF, so the many figures and tables are inaccessible to the listener.)
In the meantime, here are the bullets I took away:
• Nuclear is absolutely essential to any serious decarbonization plan and probably will remain so for decades to come. No other zero‐carbon source comes close to its output.
• The quick‐on, quick‐off gas‐fired plants used to complement intermittent solar and wind sources are among the most polluting, so adding solar to a grid without adding significant battery capacity can actually increase that grid’s carbon output.
• Allowing consumers to sell energy back to the utility at retail rather than wholesale rates is bad for almost everyone, both because it skews the market and because it disincentivizes investment in on‐site batteries.
• The regional transmissions organizations (RTOs) of “deregulated” grids in the U.S. are anything but true markets. Almost every supplier remains profitable by chasing incentives rather than per‐kilowatt sales. Some RTOs are more successful than others, but in general they correlate with higher prices and more outages than girds that remained regulated.
(Additional warning: the audiobook version is basically unedited, with all the unintended silences at page‐turns left in. It also comes with no PDF, so the many figures and tables are inaccessible to the listener.)
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