The Political Economy of Electricity Recent Titles in Energy Resources, Technology, and Policy Series Editor: Benjamin K Sovacool A Smarter, Greener Grid: Forging Environmental Progress through Smart Policies and Technology Kevin B Jones and David Zoppo Green Savings: How Policies and Markets Drive Energy Efficiency Marilyn A Brown and Yu Wang The Political Economy of Electricity Progressive Capitalism and the Struggle to Build a Sustainable Power Sector Mark Cooper Energy Resources, Technology, and Policy Benjamin K Sovacool, Series Editor Copyright © 2017 by Mark Cooper All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, except for the inclusion of brief quotations in a review, without prior permission in writing from the publisher Library of Congress Cataloging-in-Publication Data Names: Cooper, Mark, 1947– author Title: The political economy of electricity : progressive capitalism and the   struggle to build a sustainable power sector / Mark Cooper Description: Santa Barbara : Praeger, [2017] | Series: Energy resources, technology,   and policy | Includes bibliographical references and index Identifiers: LCCN 2016056797 (print) | LCCN 2017011736 (ebook) |   ISBN 9781440853425 (alk paper) | ISBN 9781440853432 (ebook) Subjects: LCSH: Electric power systems—Economic aspects | Renewable energy   sources—Economic aspects Classification: LCC HD9685.A2 C66 2017 (print) | LCC HD9685.A2 (ebook) |   DDC 333.793/2—dc23 LC record available at https://lccn.loc.gov/2016056797 ISBN: 978-1-4408-5342-5 EISBN: 978-1-4408-5343-2 21 20 19 18 17  1 2 3 4 5 This book is also available as an eBook Praeger An Imprint of ABC-CLIO, LLC ABC-CLIO, LLC 130 Cremona Drive, P.O Box 1911 Santa Barbara, California 93116-1911 www.abc-clio.com This book is printed on acid-free paper Manufactured in the United States of America Contents Series Foreword vii PART I: HISTORICAL CONTEXT Chapter 1  Introduction 3 Chapter 2 The Political Economy of the Paris Agreement, Technological Progress, and the Decarbonization-Development Dilemma13 PART II: ANALYTIC FRAMEWORK Chapter 3 The Technological Revolutions of Industrial Capitalism45 Chapter 4  The Innovation System of Progressive Capitalism 65 PART III: THE COMPLEXITY OF RESOURCE SELECTION IN A LOW-CARBON ELECTRICITY SECTOR Chapter 5  The Cost of Electricity in a Low-Carbon Future 89 Chapter 6  Energy Potential and Institutional Resource Needs 119 PART IV: CHALLENGES Chapter 7  Conceptualizing Market Imperfections 151 Chapter 8  The Nuclear War Against the Future 181 v viContents PART V: POLICY RESPONSES AND DECISION MAKING TOOLS Chapter 9 The Urgent Need for Policy Action: “Command but Not Control”205 Chapter 10  Decision Making and the Terrain of Knowledge 235 Chapter 11  Application of Multicriteria Portfolio Analysis 257 Epilogue: The Importance of Local Support for Global Climate Policy If the United States Flip-Flops on the Paris Agreement 279 Appendix I: Democratic Equality and the Encyclical on Climate Change as Progressive Capitalism 289 Appendix II: Conceptual Specification of Market Imperfections 317 Appendix III: Empirical Evidence on Policy Directly Evaluating Price in the Climate Change Analysis 347 Notes 359 Bibliography 405 Index 453 SERIES FOREWORD As societies around the world grapple with rising sea levels, melting glaciers, and a changing climate, competition over scarce energy reserves, growing collective energy insecurity, and massive fluctuations in the price and affordability of energy services, what could be more important than a series devoted to the analysis of the interactions among nations, societies, and energy sectors? This series explores how human beings use energy, and how their conversion of energy fuels into energy services can impact social structures and environmental systems It aims to educate readers about complex topics such as the modern use of fossil fuels and nuclear power, climate change adaptation and mitigation, as well as emerging trends in state-of-the-art energy technology including renewable sources of electricity and shale gas It hopes to inform public debate and policy as humanity grapples with how best to transition to newer, cleaner forms of energy supply and use over the next century Apart from investigating innovations in the energy sector, and illustrating the fragile balance between energy development and environmental protection, the series also meets a demand for clear, unbiased information on energy and the environment Books emerging from the series are accessible to the educated layperson, but the depth of scholarship makes them appropriate for a range of readers, including professionals who work in the energy sector, legislators, policymakers, and students and faculty in such fields as engineering, public affairs, global studies, ecology, geography, environmental studies, business and management, and energy policy Books in the series take an investigative approach to global and at times local energy issues, showing how problems arise when energy policies and technological development supersede environmental priorities but also demonstrating cases where activism and sensitive policies have vii viii Series Foreword worked with energy developers to find solutions The titles in the series offer global perspectives on contemporary energy sources, the associated technologies, and international policy responses, showing what has been done to develop safe, secure, affordable, and efficient forms of energy that can continue to power the world without destroying the environment or human communities Benjamin K Sovacool Series Editor PART I HISTORICAL CONTEXT Bibliography445 Soete, Luc, Bart Verspagen, and Bas ter Weel “Systems of Innovation.” In Handbook of the Economics of Innovation (Volume 2) Edited by Bronwyn H Hall and Nathan Rosenberg, 1159–1180 Amsterdam, The Netherlands: North-Holland, 2010 Solar Power Rocks “2016 United States Solar Power Rankings.” SolarPowerRocks.com, https://solarpowerrocks.com/2016-state-solar-power-rankings/ Sood, Ashish, Gareth M Jones, Gerard J Tellis, and Ji Zhu “Predicting the Path of Technological Innovation: SAW vs Moore, Bass, Gompertz and Kryder.” Marketing Science 31 (2012): 964–979 Sorrell, Steve, Alexandra Mallett, and Sheridan Nye Barriers to Industrial Energy Efficiency, A Literature Review Working Paper, United Nations Industrial Development Organization, 2011 Southern Alliance for Clean Energy “Plant Vogtle’s Price Tag Climbs to $21 Billion as Commission Experts Predict Further Delays and Cost Increases for Southern Company’s Proposed Reactors.” Cleanenergy.org December 11, 2015 Sovacool, Benjamin K “Exposing the Paradoxes of Climate and Energy Governance.” International Studies Review 16 (2014): 294–297 Sovacool, Benjamin K., Alex Gilbert, and Daniel Nugent “An International Comparative Assessment of Construction Cost Overruns for Electricity Infrastructure.” Energy Research and Social Science (2014): 152–160 Sovacool, Benjamin K., Alex Gilbert, and Daniel Nugent “Risk, Innovation, Electricity Infrastructure and Construction Cost Overruns: Testing Six Hypotheses.” Energy 74 (2014): 906–917 Sovacool, Benjamin K., Daniel Nugent, and Alex Gilbert “Construction Cost Overruns and Electricity Infrastructure: An Unavoidable Risk?” Electricity Journal 27 (2014): 112–120 Sovacool, Benjamin K., and Michael H Dworkin Global Energy Justice: Problems, Principles, and Practices Cambridge, U.K.: Cambridge University Press, 2014 Spence, Alexa, Christina Demski, Catherine Butler, Karen Parkhill, and Nicholas Frank Pidgeon “Public Perceptions of Demand-Side Management and a Smarter Energy Future.” Nature Climate Change (2015): 550–554 Sperling, Dan, David Bunch, Andrew Burke, Ethan Abeles, Belinda Chen, Kenneth Kurani, and Thomas Turrentine Analysis of Auto Industry and Consumer Responses to Regulation and Technological Change and Customization of Consumer Response Models in Support of AB 1493 Rulemaking Institute of Transportation Studies, UC Davis, June 1, 2004 Springer, Urs “Quantifying Risks and Risk Correlations of Investment in Climate Mitigation.” IWOE, October 2003 Sreedharan, Priya “Recent Estimates of Energy Efficiency Potential in the USA.” Energy Efficiency (2013): 433–445 Staffell, Iain, and Richard Green Is There Still Merit in the Merit Order Stack? The Impact of Dynamic Constraints on Optimal Plant Mix British Institute of Energy Economics, http://www.biee.org/wpcms/wp-content/uploads/Staffell-Merit-in-the-Merit-Order -Stack.pdf Standard & Poor’s Assessing the Credit Risk of Competing Technologies for New U.S Nuclear Power Plants August 13, 2008 Standard & Poor’s Construction Costs to Soar for New U.S Nuclear Power Plants October 15, 2008 Standard & Poor’s For New U.S Nuclear Power Plants, Liquidity Requirement Could be Substantial October 21, 2008 Standard & Poor’s Utilities Make Some Progress on New Nuclear Power, But Hurdles Still Linger March 9, 2009 446Bibliography Stanley, Roya Natural Gas: Acquisition and Response NREL, 2003 Stein, Eric W “A Comprehensive Multi-Criteria Model to Rank Electric Energy Production Technologies,” Renewable and Sustainable Energy Reviews 22 (2012): 640–654 Steinhurst, William, David White, Amy Roschelle, Alice Napoleon, Rick Hornby, and Bruce Biewald Energy Portfolio Management: Tools & Resources for State Public Utility Commissions Synapes Energy Economics and NARUC, 2006 Steinke, Florian, Philipp Wolfrum, and Clemens Hoffmann “Grid vs Storage in a 100% Renewable Europe.” Renewable Energy 50 (2013): 826–832 Stephens, T S Non-Cost Barriers to Consumer Adoption of New Light-Duty Vehicle Technologies Argonne National Laboratory Report Washington, DC: U.S Department of Energy, 2013 Stephenson, W David “Internet of Things Could Offset Government Inaction on Climate.” Greenbiz.com, November 17, 2014 Stern, Paul C “New Environmental Theories: Towards a Coherent Theory of Environmentally Significant Behavior.” Journal of Social Issues 56 (2000): 407–424 Stiglitz, Joseph E Freefall: America, Free Markets, and the Sinking of the World Economy New York: Norton, 2010 Stiglitz, Joseph E Globalization and Its Discontents New York: Norton, 2002 Stiglitz, Joseph E Information and the Change in the Paradigm in Economics Nobel Prize Lecture, December 8, 2001 Stiglitz, Joseph E “Phony Capitalism.” Harper’s Magazine, September 2014 Stiglitz, Joseph E The Price of Inequality: How Today’s Divided Society Endangers Our Future New York: Norton, 2013 Stiglitz, Joseph E The Roaring Nineties: A New History of the World’s Most Prosperous Decade New York: Norton, 2004 Stirling, Andrew “Analysis, Participation and Power: Justification and Closure in Participatory Multi-Criteria Analysis.” Land Use Policy 23 (2006): 95–107 Stirling, Andrew “Diversity and Ignorance in Electricity Supply Investment: Addressing the Solution Rather than the Problem.” Energy Policy 22 (1994): 195–216 Stirling, Andrew “A General Framework for Analyzing Diversity in Science, Technology and Society.” Interface, Journal of the Royal Society (2007): 707–719 Stirling, Andrew “Multicriteria Diversity Analysis: A Novel Heuristic Framework for Appraising Energy Portfolios.” Energy Policy 38 (2010): 1622–1634 Stirling, Andrew On Science and Precaution in the Management of Technological Risk European Science and Technology Observatory, 2001 Stirling, Andrew On the Economics and Analysis of Diversity SPRU Paper No 28, University of Sussex, 2000 Stirling, Andrew “Risk, Precaution and Science: Towards a More Constructive Policy Debate.” EMBO Reports (2007): 309–315 Stone, Alan Public Service Liberalism: Telecommunications and Transitions in Public Policy Princeton, NJ: Princeton University Press, 1991 Sueyoshi, Toshiyuki, and Mika Goto “Photovoltaic Power Stations in Germany and the United States: A Comparative Study by Data Envelopment Analysis.” Energy Economics 42 (2014): 271–288 Sullivan, Patrick, Jeffrey Logan, Lori Bird, and Walter Short Comparative Analysis of Three Proposed Federal Renewable Electricity Standards NREL/TP-6A2-45877 National Renewable Energy Laboratory, 2009 Sunderkotter, Malte, and Christopher Weber “Valuing Fuel Diversification in Power Generation Capacity Planning.” Energy Economics 34 (2012): 1664–1674 Sundqvist, Thomas “What Causes the Disparity of Electricity Externality Estimates?” Energy Policy 32 (2004): 1753–1766 Bibliography447 Szolgayova, Jana, Sabine Fuss, and Michael Obersteiner “Assessing the Effects of CO2 Price Caps on Electricity Investment—A Real Options Analysis.” Energy Policy 36 (2008): 3974–3981 Szolgayova, Jana, Sabine Fuss, Nikolay Khabarov, and Michael Obersteiner “Robust Energy Portfolios under Climate Policy and Socioeconomic Uncertainty.” Environmental Model & Assessment 17 (2012): 39–49 Takahashi, Kenji, and David Nichols The Sustainability and Cost of Increasing Efficiency Impacts: Evidence from Experience to Date ACEEE Summer Study on Energy Efficiency in Buildings, 2008 Taleb, Nassim Nicholas The Black Swan: The Impact of the Highly Improbable New York: Random House, 2007 Taleb, Nassim Nicholas “The Fourth Quadrant: A Map of the Limits of Statistics.” Edge, December 18, 2016 Tascikaraoglu, A., and M Uzunoglu “A Review of Combined Approaches for Prediction of Short-Term Wind Speed and Power.” Renewable and Sustainable Energy Reviews, 34 (2014): 243–254 Taylor, Lester D Telecommunications Demand in Theory and Practice Dordrecht, The Netherlands: Kluwer Academic Publishers, 1994 Temperton, Ian “Dining Out on Electricity Market Reform with Kylie, the Tooth Fairy and a Spherical Horse in a Vacuum.” Climate Change Capital, 2012 Tennessee Valley Authority TVA’s Environmental and Energy Future 2011 Thollander, Patrik, Jenny Palm, and Patrik Rohdin “Categorizing Barriers to Energy Efficiency – An Interdisciplinary Perspective.” In Energy Efficiency Edited by Jenny Palm InTech, 2010 Tierney, Susan, Eric Svenson, and Brian Parsons Ensuring Electric Grid Reliability under the Clean Power Plan: Addressing Key Themes From The FERC Technical Conferences April 2015 Toke, David, Sylvia Breukers, and Maarten Wolsnik “Wind Power Deployment Outcomes: How Can We Account for the Differences?” Renewable and Sustainable Energy Review 12 (2008) Triguero, Angela, Lourdes Moreno-Mondéjar, and María A Davia “The Influence of Energy Prices on Adoption of Clean Technologies and Recycling: Evidence from European SMEs.” Energy Economics 46 (2014): 246–257 Tweedie, Dale, and James Hazelton “Social Accounting for Inequality: Applying Piketty’s Capital in the Twenty-First Century.” Social and Environmental Accountability Journal 35 (2015): 113–122 Twomey, Paul, and Karsten Neuhoff “Wind Power and Market Power in Competitive Markets.” Energy Policy 38 (2010): 3198–3210 UNFCCC Paris Agreement United Nations Framework Convention on Climate Change, 2015 UBS Investment Research Entergy Corp.: Challenging Outlook for New Team at Kickoff UBS, February 4, 2013 UBS Investment Research Entergy Corp.: Re-Assessing Cash Flows from the Nukes UBS, January 2, 2013 UBS Investment Research Global Utilities, Autos & Chemicals: Will Solar, Batteries and Electric Cars Re-Shape the Electricity System? UBS, August 20, 2014 UBS Investment Research In Search of Washington’s Latest Realities (DC Field Trip Take­ aways) UBS, February 20, 2013 Ueckerdt, Falko, Robert Brecha, and Gunnar Luderer “Analyzing Major Challenges of Wind and Solar Variability in Power Systems.” Renewable Energy (2015): 1–10 448Bibliography Uihlein, Andreas, and Peter Eder Toward Additional Policies to Improve the Environmental Performance of Buildings EUR 23775 EN, European Commission, Joint Research Centre, Institute for Prospective Technological Studies, 2009 Under2 Coalition http://under2mou.org/coalition/ Upton, Gregory B., Jr., and Brian F Snyder “Renewable Energy Potential and Adoption of Renewable Portfolio Standards.” Utilities Policy 36 (2015): 67–70 U.S Census Bureau National Totals: Vintage 2015 Washington, DC: U.S Government Printing Office, 2016 U.S Congressional Office of Technology Assessment Studies of the Environmental Costs of Electricity, OTA-BP-ETI-134 Washington, DC: U.S Government Printing Office, 1994 U.S Department of Commerce, Bureau of Economic Analysis Gross Domestic Product (GDP) by State Washington, DC: U.S Government Printing Office, 2015 U.S Department of Energy 2009 Wind Technologies Market Report Washington, DC: U.S Government Printing Office, 2010 U.S Department of Energy 2012 Wind Technologies Market Report Washington, DC: U.S Government Printing Office, 2013 U.S Department of Energy SunShot Utility Scale Solar Washington, DC: U.S Government Printing Office, 2013 U.S Department of Energy SunShot Vision Study Washington, DC: U.S Government Printing Office, 2012 U.S Department of Energy Wind Vision: A New Era for Wind Power in the United States Washington, DC: U.S Government Printing Office, 2015 U.S Energy Information Administration 20% Wind Energy by 2030 Washington, DC: U.S Government Printing Office, 2008 U.S Energy Information Administration “Database, Petroleum, Natural Gas, Coal.” eia gov, 2015 U.S Energy Information Administration Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010 Washington, DC: U.S Government Printing Office, 2011 U.S Energy Information Administration Electricity Annual Washington, DC: U.S Government Printing Office, 2015 U.S Energy Information Administration Impacts of a 25-Percent Renewable Electricity Standard as Proposed in the American Clean Energy and Security Act Discussion Draft Washington, DC: U.S Government Printing Office, 2009 U.S Energy Information Administration Monthly Energy Review, various issues U.S Energy Information Administration “Nonhydro Electricity Storage Increasing as New Policies are Implemented.” Today in Energy, April 3, 2015 U.S Energy Information Administration Nuclear Generating Units, 1955–2009 Washington, DC: U.S Government Printing Office, 2010 U.S Energy Information Administration Nuclear Power Plant Operations, 1957–2009 Washington, DC: U.S Government Printing Office, 2010 U.S Energy Information Administration Updated Capital Costs for Electricity Generation Plants Washington, DC: U.S Government Printing Office, 2013 U.S Environmental Protection Agency 40 CFR Part 60, Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units; Proposed Rule, Federal Register 79 (117), June 18, 2014 U.S Environmental Protection Agency 40 CFR Part 60, Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units; Regulatory Impact Assessment June 18, 2014 Bibliography449 U.S Environmental Protection Agency Regulatory Impact Analysis for the Proposed Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units Washington, DC: U.S Government Printing Office, 2013 U.S Environmental Protection Agency “U.S Greenhouse Gas Inventory Report: 1990– 2014.” Washington, DC: U.S Government Printing Office, 2015 U.S Environmental Protection Agency and Department of Transportation In the Matter of Notice of Upcoming Joint Rulemaking to Establish 2017 and Later Model Year Light Duty Vehicle GHG Emissions and CAFE Standards Docket ID No EPA-HQ-OAR-0799 Docket ID No NHTSA-2010-0131, 2011 U.S GAO Federal Electricity Subsidies: Information on Research Funding, Tax Expenditures, and Other Activities That Support Electricity Production, GAO-08-102 Washington, DC: U.S Government Printing Office, 2007 Valentine, Scott Victor “Gradualist Best Practice in Wind Power Policy.” Energy for Sustainable Development 22 (2014): 74–84 Veena, P., V Indragandhi, R Jeyabharath, and V Subramaniyaswamy “Review of Grid Integration Schemes for Renewable Power Generation System.” Renewable and Sustainable Energy Reviews 34 (2014): 628–641 Venetsanos, Konstantinos, Penelope Angelopoulou, and Theocharis Tsoutsos “Renewable Energy Sources Project Appraisal under Uncertainty: The Case of Wind Energy Exploitation within a Changing Energy Market Environment.” Energy Policy 30 (2002): 293–307 Verbruggen, Aviel, Erik Laes, Sanne Lemmens “Assessment of the Actual Sustainability of Nuclear Fission Power.” Renewable and Sustainable Energy Reviews 32 (2014): 16–28 Verrastro, Frank, and Conor Branch Developing America’s Unconventional Gas Resources: Benefits and Challenges CSIS Energy and National Security Program, December 2010 Vine, Doug, and Timothy Juliani Climate Solutions: The Role of Nuclear Power Center for Climate and Energy Solutions, April 27, 2014 Vine, Edward Behavior Assumptions Underlying Energy Efficiency Programs for Businesses California Institute for Energy and Environment, January 2009 Violette, Daniel, and Maggie Shober Carbon Dioxide Reductions from Demand Response: Impacts in Three Markets Navigant, Inc., November 25, 2014 Viscusi, Kip, John M Vernon, and Joseph E Harrington, Jr Economics of Regulation and Antitrust Cambridge, MA: MIT Press, 2000 Vithayasrichareon, Peerapat, Jenny Riesz, and Iain F MacGill “Using Renewables to Hedge Against Future Electricity Industry Uncertainties—An Australian Case Study.” Energy Policy 76 (2015): 43–56 Vorrath, Sophie “Energy Storage to Reach Cost ‘Holy Grail,’ Mass Adoption in Years.” Renew Economy, March 3, 2015 Walwyn, David Richard, and Alan Colin Brent “Renewable Energy Gathers Steam in South Africa.” Renewable and Sustainable Energy Reviews 41 (2015): 390–401 Walz, R., J Schleich, and M Ragwitz Regulation, Innovation and Wind Power Technologies: An Empirical Analysis for OECD Countries DIME Final Conference, Maastricht, April 2011 Walz, Rainer “The Role of Regulation for Sustainable Infrastructure Innovation: The Case of Wind Energy.” International Journal of Public Policy (2007): 57–88 Warr, Benjamin S., Robert U Ayres, and Eric Williams Increase Supplies, Increase Efficiency: Evidence of Causality Between the Quantity and Quality of Energy Consumption and Economic Growth 2009/22/EPS.ISIC, Faculty & Research Working Paper INSEAD, 2009 450Bibliography Wasi, Nada, and Richard T Carson “The Influence of Rebate Programs on the Demand for Water Heaters: The Case of New South Wales.” Energy Economics 40 (2013): 645–656 Watkiss, Paul, Alistair Hunt, William Blyth, and Jillian Dyszynski “The Use of New Economic Decision Support Tools for Adaptation Assessment: A Review of Methods and Applications, Towards Guidance on Applicability.” Climatic Change 132 (2015): 401–416 Webber, Phil, Andy Gouldson, and Niall Kerr “The Impacts of Household Retrofit and Domestic Energy Efficiency Schemes: A Large Scale, Ex Post Evaluation.” Energy Policy 84 (2015): 35–43 Weekly Round Up “Vogtle Costs May Have Reached $21 Billion.” Nuclear Intelligence Weekly, December 11, 2015 Wei, Max, Shana Patadia, and Daniel Kammen “Putting Renewables and Energy Efficiency to Work: How Many Jobs Can the Clean Energy Industry Generate in the US?” Energy Policy 38 (2010): 919–931 Weigt, Hannes, Denny Ellerman, and Erik Delarue “CO2 Abatement from Renewables in the German Electricity Sector: Does a CO2 Price Help?” Energy Economics 40 (2013): S149–S158 Weiss, Jurgen, Bruce Tsuchida, Michael Hagerty, and Will Gorman EPA’s Clean Power Plan and Reliability: Assessing NERC’s Initial Reliability Review Brattle Group, February 2015 Weiss, Martin, Martin K Patel, Martin Junginger, and Kornelius Blok “Analyzing Price and Efficiency Dynamics of Large Appliances with the Experience Curve Approach.” Energy Policy 38 (2010): 770–783 Weyant, John P “Accelerating the Development and Diffusion of New Energy Technologies: Beyond the Valley of Death.” Energy Economics 33 (2011): 674–682 Whitefoot, Kate, Meredith Fowlie, and Steven Skerlos Product Design Response to Industrial Policy: Evaluating Fuel Economy Standards Using an Engineering Model of Endogenous Product Design Working Paper, Energy Institute at Haas, May 2012 Widen, Joakim “Correlations Between Large-Scale Solar and Wind Power in a Future Scenario for Sweden.” IEEE Transactions on Sustainable Energy (2011): 177–184 Wiemken E., H G Beyer, W Heydenreich, and K Kiefer “Power Characteristics of PV Ensembles: Experiences from the Combined Power Production of 100 Grid Connected PV Systems Distributed over the Area of Germany.” Solar Energy 70 (2001): 513–518 Wilde, Robert “Climate Expert: Marxists, Global Warming Extremists Control Vatican.” Breitbart.com, June 13, 2015 Wilkinson, Nick An Introduction to Behavioral Economics New York: Palgrave, 2008 Wilson, Charlie, Arnulf Grubler, Kelly S Gallagher, and Gregory F Nemet “Marginalization of End Use Technologies in Energy Innovation for Climate Protection.” Nature Climate Change (2012): 780–788 Wilson, Charlie, and Hadi Dowlatabadi “Models of Decision Making and Residential Energy Use.” Annual Review of Environmental Resources 32 (2007): 169–203 Wirl, Franz “Taxes Versus Permits as Incentive for the Intertemporal Supply of a Clean Technology by a Monopoly.” Resource and Energy Economics 36 (2014): 248–269 Wiser, Ryan, Galen Barbose, Jenny Heeter, Trieu Mai, Lori Bird, Mark Bolinger, Alberta Carpenter, Garvin Heath, David Keyser, Jordan Macknick, Andrew Mills, and Dev Millstein A Retrospective Analysis of the Benefits and Impacts of U.S Renewable Portfolio Standards Technical Report, NREL TP-6A20-65005, January 2016 Wiser, Ryan, and Mark Bolinger 2014 Wind Technologies Market Report U.S Department of Energy, August 2015 Bibliography451 Woolf, Tim, Vladlena Sabadosh, and Bruce Biewald Equipment Price Forecasting in Energy Conservation Standards Analysis Comments submitted to the U.S Department of Energy, Synapse Energy Economics, March 24, 2011 World Nuclear Association The Economics of Nuclear Power December 2016 http://www world-nuclear.org/information-library/economic-aspects/economics-of-nuclear-power aspx Worrell, Ernst, John A Laitner, Michael Ruth, and Hodayah Finman “Productivity Benefits of Industrial Energy Efficiency Measures.” Energy 28 (2003): 1081–1098 Wouter Botzen, W J., and Jeroen C J M van den Bergh “Specifications of Social Welfare in Economic Studies of Climate Policy: Overview of Criteria and Related Policy Insights.” Environmental and Resource Economics 58 (2014): 1–33 Wu, Jing, Audun Botterud, Andrew Mills, Zhi Zhou, Bri-Mathias Hodge, and Mike Heaney “Integrating Solar PV (Photovoltaics) in Utility System Operations: Analytical Framework and Arizona Case Study.” Energy 85 (2015): 1–9 Yale Program on Climate Change Communications Politics & Global Warming November 2016 http://climatecommunication.yale.edu/wp-content/uploads/2016/12/Global -Warming-Policy-Politics-November-2016.pdf Yang, Ming, William Blyth, Richard Bradley, Derek Bunn, Charlie Clarke, and Tom Wilson “Evaluating the Power Investment Options with Uncertainty in Climate Policy.” Energy Economics 30 (2008): 1933–1950 Yang, Yun, Shijie Zhang, and Yunhan Xiao “Optimal Design of Distributed Energy Resource Systems Coupled with Energy Distribution Networks.” Energy 85 (2015): 433–448 Yoshizawa, Go, Andy Stirling, and Tatsujiro Suzuki Electricity System Diversity in the UK and Japan - A Multi-criteria Diversity Analysis University of Sussex, SEWPS, Paper No 176, 2009 Zadeh, L A “Fuzzy Logic.” IEEE Computer 21 (1968): 83–93 Zadeh, L A “Fuzzy Sets.” Information and Control (1965): 338–353 Zarnikau, Jau, Steve Isser, and Amy Martin “Energy Efficiency Programs in a Restructured Market: The Texas Framework.” The Electricity Journal 28 (2015): 74–88 Zeineb, Abdmouleh, Rashid A M Alammari, and Adel Gastli “Review of Policies Encouraging Renewable Energy Integration and Best Practices.” Renewable and Sustainable Energy Reviews 45 (2015): 249–262 Zelenika-Zovko, I., and J M Pearce “Diverting Indirect Subsidies from the Nuclear Industry to the Photovoltaic Industry: Energy and Financial Returns.” Energy Policy 39 (2011): 2626–2632 Zhao, Haoran, Qiuwei Wu, Shuju Hu, Honghua Xu, and Claus Nygaard Rasmussen “Review of Energy Storage System for Wind Power Integration Support.” Applied Energy 137 (2015): 545–553 Zheng, Cheng, and Daniel M Kammen “An Innovation-Focused Roadmap for a Sustainable Global Photovoltaic Industry.” Energy Policy 67 (2014): 159–169 Zinaman, Owen, Mackay Miller, Ali Adil, Douglas Arent, Jaquelin Cochran, Ravindra Vora, Sonia Aggarwal, Minnesh Bipath, Carl Linvill, Ari David, Matthew Futch, Richard Kaufman, Efraín Villanueva Arcos, José María Valenzuela, Eric Martinot, Daniel Noll, Morgan Bazilian, and Reji Kumar Pillai “Power Systems of the Future.” The Electricity Journal 28 (2015): 113–126 Zorlu, Pelin, Simon Skillings, Nick Mabey, and Chris Littlecott Risk Managing Power Sector Decarbonization in the UK: Avoiding the Risks of a New “Dash for Gas.” London: E3G, 2012 Index Carbon capture and storage, 16, 22, 90–94, 109–110, 253 Carbon externality, 206, 212–214 Carbon lock-in, 186, 221 Carbon tax, 167; policy evaluations, 215, 216t, 217t; uncertainty of value, 211, 213f, 268 Catholic Church, 63–64, 250–251 Central station power, 6, 11, 16, 85, 92–93, 181–182; environmental concerns, 107–108, 111–112; size and financial risk, 106–107 See also Fossil fuels; Nuclear power Citi Research, 124 Clean Air Act, 220 Clean Cars Coalition, 285 Clean Power Plan (CPP), 136, 142–144, 280–282 Climate change, 3, 6, 16–18, 25–26, 32, 75, 89; impact on policy urgency, 206–210; literature, 164–171, 206; market imperfections and policy challenge, 164–179; role of subsidies, 221–222 Coal power, 103, 195–197, 274, 283 Command but not control regulation, 6, 173–176; key characteristics, 223–225; overestimation of cost, 100t Common pool resource management model, 26–29, 279, 286 Concentrating Solar Power (CSP): California analysis, 137–138; current cost, 92; lifecycle carbon, 110; Alternative energy See Renewable resources Anderson, Elizabeth, 53–55, Appendix I Australian Power Generation Technology Report, 17, 18–19, 22–23, 94–95, 142, 146 Avent, Ryan, 214 Awerbuch, Shimon, 257, 264, 273 Baseload power, 9, 11, 108; and demand reduction/management, 124; inertia, 131, 133; nuclear license renewal, 197–209 Battery power and storage, 16, 94–95, 129, 145 Behavioral economics, 68–70; performance standards, 223; role in efficiency gap, 156, 160, 173–176; role in welfare economics, 208–209 Berger, Martin, 257 Binz, Ron, 273 Biomass, environmental impact of, 20–21, 108, 111–112 Black Swan Theory, 242–243 Blumstein, Carl, 154 Burtraw, Dallas, 219–220, 229–231 California: analysis of renewable integration, 136–141, 285; Energy Commission, 209, 210; Energy Institute, 160–162; LEV, 100t; trend setting, 125 Cap-and-trade, 215, 220 453 454Index marginal contribution, 93; share, 21t; system factors, 112–113 Consumers, 178–179 Corporate Average Fuel Economy (CAFE) standards, 152 Creative destruction/construction, 47, 52, 54, 74–75, 186 Credit Suisse, 124–126, 183 de la Rue du Can, Stephane, 219 Decarbonization: impact of greater efficiency, 104t; scenarios, 103; timing of reductions, 109–110 Decision-making frameworks, 235–249; Black Swan Theory, 242–243; critique of statistical basis, 240–242; mapping regions of knowledge, 238t; need for new, 235–236; other approaches, 248– 250; policy approach, 264f, 267f; project management, 245–248; strategic advice, 259t; technology risk assessment, 243–245; terrain of knowledge, 236–237 Deep Decarbonization in Australia, 18–19, 103 Deep Decarbonization Pathways Project, 17, 21–23, 109 Demand response: California Lawrence Berkeley National Laboratory, 136– 138; California utilities, 139–141; Clean Power Plan, 143–145; demand shaping, 136–137; general studies, 141–143; impact on infrastructure resources 126, 127t, 128–131, 133– 135; transformation dividend, 16, 104–105, 133–135 Democratic egalitarianism, 54–55, 56t, Appendix I Deutsche Bank, 130 Development-decarbonization dilemma, 29; decarbonization, 34; development, 30–32; energy and development, 17t; limits of degrowth, 34, 36t, 39t; steady-state, 33–34, 38; target thresholds, 36t, 38–40 Diablo Canyon, 197, 209–200 Digital communications, 75 Discount rate, 211–213, 223, 254–255 Duck Chart, 133, 134f Ecological rationality, 69, 72 The Economics of Load Defection, 185 The Economics of Regulation, 60 Economist, 214 Edison Electric Institute (EEI), 188–191 Efficiency, 85, 97–98; benefits, 111–115, 114t; current cost, 91f, 104–105; past performance, 225–228; potential, 125–126, 127t, 173 Efficiency gap, 98, 101; definition and debate, 152–155 See also Market barriers/imperfections Electricity sector, 3, 40–41; digital economy, 74–75; and economic development, 17–18 Emissions, China, 33, 36–38 Emissions, global targets, 38–40 Emissions, India, 33 Emissions, Japan, 33, 36–37 Emissions, Russia, 33, 36–38 Emissions, United States, 33, 36–37 Emissions standards See Performance standards Energy Economics, 165 Energy Efficiency Economics and Policy (RFF), 158–159, 165 Energy gap See Efficiency gap Energy justice, 75 Energy paradox See Efficiency gap energy [r]evolution: A Sustainable World Energy Outlook See Greenpeace International Energy sector, 3; distributed justice, 56; role in economic progress, 75 See also Electricity sector Energy-water nexus, 111–112 Environmental impacts (non-carbon), 111–113, 117t; accidents, 113t; life cycle, 110t; sustainability, 115 Environmental Protection Agency (EPA), 142–143, 152, 194 Environmental/economic merit order, 89, 93, 103, 105, 276 European Commission, 145 Exelon, 191–196 Experience curves, 225–227 Externalities, 111–115, 176–177; environmental and other externalities, 214–215; in ICT sectors, 76–80; impact on policy, 205–210; subsidies, 221 Index455 Facing the Challenges of a Distribution System in Transition (EEI), 189–190 Feedback hypothesis (FBH), 73 Financial risk, 106–108 First Energy, 195–197 Flexibility solutions, 140 Fossil fuels, 3, 18–19; deep decarbonization pathway, 22; First Energy, 195–197; incumbency and inertia, 177–178; subsidies, 220–223 Fritz, Martin, 35–38 The Future of Solar, 119–120 Generic Environmental Impact Statement for License Renewal (NRC), 197–209 Global warming, 168 See also Climate change Globalization, 74, 79 Golove, William H., 158 Greenhouse gas, 3, 23; emission levels, 32f, 33–35; policies, 217t Greenpeace International, 17, 21t, 22, 110 Grid defection, 130, 185 Hepburn, Cameron, 229–232 Hinkley nuclear reactor, 91, 94 Hydropower, 21; environmental impact, 110–113; multi-criteria evaluation, 267, 272, 274; sustainability, 115–116 Illinois, 191–195, 197 Illinois Department of Commerce and Economic Opportunity, 193, 197 Imperial College, 165–167, 214 Incumbent technologies, 4, 52, 85; attack on alternatives, 188–189; inertia, 177–178; subsidies, 220–222; war on the future, 182–187 Industrial revolutions, 3–4; digital technology and decarbonization, 75–77, 79; economic development, 29–31; historical patterns, 47–53 Information, communications, and advanced control technologies, 4; ICT role in grid management, 16, 34; positive sum game in development, 54, 76 Innovation gap, 164, 215, 221 Innovation systems, 65, 72; Critique of laissez faire, 41, 68–69, 70t; digital technology and decarbonization, 74– 76, 77t; national systems, 72; policy interventions, 73f; solar, 81f; solar and wind as case studies, 80–85; wind, 83t Innovation-diffusion, 66–66; diffusion curve, 66f; policy across diffusion curve, 262–263 Institutional resources: integration, 126–127, 131–133, 139–142; needs, 131–132; reliability, 133–135 International Energy Agency, 95 Internet of Things, 145 Iron Triangle of Barriers, 165 Jacobson, Mark Z., 18, 20–21, 22–23, 89–90, 101–104, 110–112, 116, 206 Kahn, Alfred, 60–61 Keynesian economics, 47, 240 Koch, Max, 35–38 Laissez faire capitalism, 55, 68–72, 233– 234 See also Neoclassical economics Lawrence Berkeley National Laboratory (LBNL), 98–99, 136–141, 155–159, 210, 216–218 Lazard, 17, 90–94, 124 Least regrets opportunities, 140 Leonhardt, David, 215 Levelized cost: current, 91f; definition, 89–90; least cost, 25; saved energy, 99t Lovins, Amory B., 187, 197 Madrian, Brigitte C., 208 Market barriers/imperfections, 41, 156t, Appendix II, Appendix III; California Energy Institute, 160–162; climate change, 166–167, 170–179; efficiency gap, 152–155; justification for regulation of infrastructure, 60, 63–64; Lawrence Berkeley National Laboratory causes of the gap, 155–156; low demand elasticity, 61; McKinsey, 162–163t; Resources for the Future causes of the gap, 158; schools of thought, 45–46, 68–71; UN Industrial Organization causes of the gap, 159, 206–210, 219, 224, 262 456Index Market failure, 46, 156, 158–165; benefits of policy, 210; discount rate, 211; inferiority of price, 211–215; urgency for policy 205–207; welfare economics of policy, 208–209, 224 Market fundamentalism, 45–46, 68–69, Appendix II; empirical evidence on climate change, 176–179; empirical evidence on efficiency gap, 173–176; major imperfections, 170, 177–178; Nobel laureates, 70t; Nordhaus, 165, 168, 169; rejection of price, 165, 168–170, Weyant, 165, 168, 169–170 Market power, 61–62,193 Marx, Karl, 4, 53 Massachusetts Institute of Technology (MIT), 119–120 McKinsey & Company, 98–99, 124, 126, 153, 162–164 Mean-variance portfolio theory, 257 Mercatus Center, 152–155 Merit order framework, 89, 93, 101, 104, 184–185, 193–194, 267–268 See also Environmental/economic merit order Micro grids, 145 Micro level behavior, 79–80 MISO, 141, 191–192 Mitigation, 23, 25, 136–139, 210; project management and risk mitigation, 245–248 Multicriteria portfolio analysis: comparisons to other approaches, 269–275; formula, 265; market imperfections and ambiguity, 261–262; portfolio method, 264–266; principles for navigating ambiguity, 257–259; rank order of resources, 267–268; sequence of decisions, 261t, 269f Multipliers, 177; jobs, 117f Mythological risk classification, 249–251 NASA, 249, 259t National Association of Consumer Utility Advocates, 213 National Highway Traffic Safety Administration (NHTSA), 152 National Regulatory Research Institute (NRRI), 264 National Renewable Energy Laboratory (NREL), 121 Natural gas, 16, 90–93, 103; environmental impact, 110–113; multi-criteria evaluation, 267, 272, 274; role in market clearing, 193–195; sustainability, 115–116 Natural monopoly, 60–61 Natural Resources Defense Council (NRDC), 190 Neoclassical economics, 5; critique, 46t, 68–72, 158; welfare economics, 208– 210 See also Laissez faire capitalism Network effects, 62 New Deal, 53 New York Times, 215 Nichols, David, 99 Noll, Roger, 170 Nordhaus, William, 165, 168, 169 North American Electric Reliability Corporation (NERC), 143, 144 North Anna nuclear reactor, 91–92, 94–95 North, Douglass, 29 Nuclear Energy Agency, 95 Nuclear power, 11, 22–23, 85; aging reactor cost, 184f; climate disadvantages, 111–113; Diablo Canyon license renewal, 209–202; disagreement on cost, 96–97, 103; false reliability crisis—Illinois, 191– 195; financial risk,108t; multi-criteria portfolio analysis for New England, 271–273; subsidies, 220–222; Vogtle, 91–92 Nuclear Regulatory Commission (NRC), 197–208 Nuclear renaissance, 95, 122 Nuclear retirement, 191–195 Nuclear war against the future, 181, 186–188, 195–208 Oak Ridge National Laboratory (Oak Ridge), 165, 166–167t Offshore wind, 21, 94, 108, 113 Ohio, 195–196 Onshore wind, 21, 94, 108, 113 Ostrom, Elinor, 26–29 Over-generation, 140 Pacific Gas & Electric Company (PG&E), 197–200 Index457 Papal Encyclical on Climate Change (Laudato Si’), 55, 62–64, Appendix I Paris Agreement on Climate Change, 5–7, 13–14; economics, 23–25; governance, 14, 26–29; performance standard, 223; political economy of compliance, 282t; potentially compliant states, 280–280; sustainable development, 25; U.S withdrawal, 279 Peaking power, 16, 75, 93, 133 Pearce, David W., Pérez, Carlota, 47, 52–54, 74–79 Performance standards, 6, 215–220; appliances, 226–229, 228t; benefits, 226; command but not control, 223– 225; cost reduction, 100–101; market imperfections addressed by, 224t; progressive policy, 230, 273 Periodization, 47–50, 54 Piketty, Thomas, 5, 233 PJM, 145, 192–196 Policy evaluations, 216t, 217t, 218t; market imperfections addressed, 219 Political economy: challenge of institution building, 34–35, 45; defined, 3–5 Portfolio analysis, 264–266, 269–277 Positive-sum game, 54 Power Purchase Agreement (PPA), 183 Price effects, 177 Price fundamentalism See Market fundamentalism Progressive capitalism, 3, 8, 41, Appendix I; critique of neoclassical, 45–46; historical process, 47–50, 51f; inclusiveness, 52; moral framework, 54–58; Papal Encyclical, 64; progressive analysis 58; state and progressive policy, 52–54; StructureConduct-Performance, 59t, 60–62 See also Progressive policy Progressive policy: climate (Hepburn), 230t; SCP paradigm, 230t; Stiglitz on taxes, 230t; welfare economics, 208–210 Project management and risk mitigation, 245–248 Public license, 62 Rauch, Jason, 272 Regional transmission organizations (RTOs), 191–192 Regions of knowledge, 238; risk, 252; uncertainty, 253; unknowns, 255; vagueness, 252 See also Decisionmaking frameworks Regulation: market failure, 171–172t; overestimation of cost, 100; rationale, 54, 60–61 See also Performance standards Regulatory Assistance Project (RAP), 133, 173 Reliability: California analysis, 136–143; clean power plan, 144t; false reliability crisis, 191–193, 196; measures to promote, 135t Renewable Integration Study Executive Summary Report See PJM Renewable Portfolio Standard (RPS), 124, 281 Renewable resources: California potential, 136–147; energy savings, 97, 102t, 125–126; financial analysts view, 123–125; geographic distribution, 121–122; global potential, 119–121; mid-term potential, 122, 123t Resource economics: economic merit order, 89; efficiency as a resource, 103, 94, 102–103, 105, 276 Resource selection: multiple characteristics, 106–107; jobs, 116– 117; portfolio analysis, 271–272 Resources for the Future (RFF), 158–159, 165 Robinson, James A., 52–53 Rocky Mountain Institute (RMI), 124, 130, 185–186 Ross, David, 58–59, 230t Rowe, John, 195 Sanford Bernstein, 125 Scherer, Frederic M., 58–59, 229, 230t Schumpeterian economics, 47, 66, 75 Small modular reactors (SMR), 95, 108 Smart grid, 145, 263 Smith, Adam, 4, 54 Solar power: cost trends, 15f, 95; current cost, 91f; environmental impact, 458Index 110–113; integration, 139–142; jobs, 116f; merit order, 102f; multi-criteria evaluation, 267, 272, 274; other characteristics, 108–112; role of state policy, 80–81; share of resources, 21t; sustainability, 115–116 Sperling, Dan, 226 Stiglitz, Joseph E., 230t, 232 Stirling, Andrew C., 257, 264 Storage: cost trends, 92–95; demand response, 126–129; new role, 16, 135t; other characteristics, 108; role in integration, 136–137 Structure-Conduct-Performance (SCP) paradigm, 45, 58–60 Subsidies, 85; history, 220; shift to alternatives, 222 Sustainability analysis, 115 System integration, 131–132, 135 Takahashi, Kenji, 99 Taleb, Nassim Nicholas, 264 Tax policy, 232 See also Carbon tax Technological progress: decarbonization road maps, 17–20; deep decarbonization, 27; Greenpeace, 27; historic, 29, 31f; 100 percent renewable, 18, 20, 21t; revolutions, 14, 48t, 51t, 53; solution to climate change, 15, 16 Technology Learning in the Energy Sector, 225–226 Technology risk assessment, 243–245 Terrain of knowledge, 235, 236, 237–242 Tesla, 129 Toward Additional Policies to Improve the Environmental Performance of Buildings See European Commission Transaction costs, 177 Transmission costs, 142 UBS Investment Research, 128–129 Uncertainty-ambiguity matrix, 247–248 Under Coalition, 280–281 United Nations Framework Convention on Climate Change, 5, 13–15, 26, 276 United Nations Industrial Development Organization (UNIDO), 153–154, 159–160 U.S Department of Energy, 98, 120–121, 142, 145, 201, 226 U.S Energy Information Administration, 95, 136 Variable generation (VG), 136 Vehicles, 145, 152, 197–209, 226 See also Clean Cars Coalition Virtuous cycle framework, 65, 74, 76, 79–80 Vogtle nuclear reactor, 91–92, 94 War against the future: baseload bias in licenses, 197–201; economic motivation, 181–187; Exelon, 191–196; First Energy, 195–208; utilities, 188–191 Watkiss, Paul, 269, 271 Welfare economics, 70, 208, 234 Weyant, Jon, 165, 168, 169–170 Wilkinson, Nick, 162t Wind power: cost trends, 15f, 96f; current cost, 91f; environmental impact, 110–113; jobs, 116f; integration, 139–142; merit order, 102f; multi-criteria evaluation, 267; other characteristics, 108–112; role of state policy, 80–81; share of resources, 21t; shifting cost curve, 194f; sustainability, 115–116 Wind Vision Report, 120, 135, 142–143 See also U.S Department of Energy Woerman, Matt, 219–220, 229 Yang, Spencer, 273 About the Author MARK COOPER is Senior Fellow for Economic Analysis at the Institute for Energy and the Environment at Vermont Law School A former Yale University and Fulbright Fellow and a recipient of the Esther Peterson Award for Consumer Service, he is also an Adjunct Fellow at Silicon Flatirons at the University of Colorado School of Law He has published six books and hundreds of articles and papers on energy, high technology, telecommunications, and media Cooper has provided expert testimony more than 400 times for public interest clients, including attorneys general, people’s counsels, and citizen interveners before state and federal agencies, courts, and legislators in dozens of jurisdictions in the United States and Canada 459 ... increase their load factor and/ or make their output more attractive to grid operators In fact, some argue that when all of their potential values to the operation of the grid are taken into account,... and Standard Deviation in Percent of Resources Resource Deep Jacobson et al Greenpeace Decarbonization Average Standard Average Standard Average Share Share Deviation Share Deviation PV (Total)... author Title: The political economy of electricity : progressive capitalism and the   struggle to build a sustainable power sector / Mark Cooper Description: Santa Barbara : Praeger, [2017] |