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When I was an analyst at the U.S. Treasury, my team’s work centered around promising private investors that we would make it easier for them to invest in renewable energy projects across the Global South. I kept hearing that our job was ultimately to make these projects “bankable.” As the logic went, “there is a sizeable universe of good projects that fall just below many private investors’ desired rate of return,” and therefore lowering the risks of investing in these “good projects” would put them within reach of private investors’ return expectations. To make decarbonization possible, we had to make decarbonization profitable.
This claim cuts straight through Brett Christophers’ latest book, The Price is Wrong: Why Capitalism Won’t Save the Planet, which argues that the cost of developing and generating renewable energy is not what will determine the speed or scale of its uptake. It might finally be cheaper to build solar panels and wind farms than a coal or gas plant, that’s for sure. But given the structure of our energy markets today, it does not follow that assets that are cheap to build are necessarily profitable enough to provide adequate returns to investors.
My old colleagues might have already been aware of this fact, but as Christophers highlights, it’s certainly not intuitive, even to many analysts. Nor are its implications: Decarbonization won’t happen if it’s not profitable enough ― and it’s not profitable enough.
Christophers is a professor at Sweden’s Uppsala University in its “department of human geography,” whose research focuses on how capitalism and the modern financial system shape our lives; in this book, that also includes our energy systems. To make his case, he highlights the vicious feedback loop affecting renewables endemic to today’s energy markets. Government support to build renewable energy drives down its marginal cost, but because there’s now more renewable energy available at any given moment, the falling costs cut into developers’ expected returns, requiring more government support to keep investors and developers interested in the sector.
Combine this dynamic with technical features endemic to renewable energy generation, including its intermittency, and the result is a wholesale electricity market with perennially unstable prices. This volatility throttles the expected returns on any investment in renewable energy. No matter how cheap it is to build renewable energy, private investors and developers won’t decarbonize our globe at the speed or scale we deserve ― not under these financial conditions, at least.
Christophers leans on two theoretical guideposts here. First, Andreas Malm, whose assessment of how the profit motive, not relative costs, drove Britain’s first energy transition from water-wheels to coal and steam is an unmistakable conceptual parallel to today’s transition. Second, Karl Polanyi, whose theory of “fictitious commodities” — referring to land, labor, and money, each of which the state and society must painstakingly regulate into fungible market-friendly products ― Christophers aptly applies to electricity and the artificial markets created around it.
But rather than hew to theory to justify why the energy system needs to be socialized to achieve decarbonization ― which is definitely true, by the way; the profit motive is supremely unhelpful here ― Christophers embraces a holistic understanding of the economy as a set of financial relationships, supply chains, planned markets, and legal institutions connecting various public and private entities with different motives.
That means interviewing investors, who tell him things like: “Low returns and volatility don’t go. No bank in the world will take power price risk at low returns.” Christophers also produces a detailed and data-rich breakdown of the interlocking global energy crises in 2021 and 2022, jumping between Texas, China, India, Australia, and across Europe, to make a larger point about energy markets. These crises were “not taken to be evidence of the failings of markets, or even a reason to question their role as the pre-eminent mechanism of coordination to the state’s electricity sector,” he writes; “the market was regarded as the very means to manage the crisis.” But the markets aren’t working. Something has to give.
He ends the book with a call for socialized power, inspired by the Green New Deal and New York’s Build Public Renewables Act, championed by the state’s democratic socialists on the explicit grounds that, because delivering on the state’s emissions targets is not profitable enough for the private sector to do alone, the public sector must get the job done. With the force of the whole book’s arguments and evidence behind it, this policy prescription hardly appears radical.
Public developers can accept lower profitability thresholds, and public finance institutions can provide debt on more forgiving terms; under the public aegis, rates of return and costs of capital become policy choices. Christophers admits in his introduction that he is more focused on unearthing the fragile relationships among actors across the renewable energy industry than on describing the ways a New York-inspired socialized power sector could function. Given how much there is to unearth, it’s a reasonable choice, but it leaves readers without a working heuristic for the different ways states can intervene in the business of energy.
Here’s my attempt: Energy must be financed, generated, distributed, and consumed. Government intervention in favor of decarbonization looks distinct at each step.
Governments can provide consumption support by shielding ratepayers from the higher electricity bills that come from potential utility investments into renewable energy procurement and decarbonization-related grid management, backstopping utility investments through a demand guarantee. Consumption support is equitable, but it’s also indirect and incomplete — it might provide a utility with more financial breathing room to procure or develop renewables, but if renewables are not available to procure on the grid or are not easy to develop, this demand guarantee likely just pads the utility’s bottom line.
Governments can provide distribution support by encouraging utilities to purchase renewable energy. Distribution support most often takes the form of regulatory nudges: In the United States, mandates like Renewable Portfolio Standards force utilities to increase their clean energy procurement, guaranteeing purchase demand for clean electricity and Renewable Energy Certificates, which companies might buy to clean up their own energy portfolios.
These demand-guarantee interventions have helped speed up renewable energy development nationwide, but with limits. In particular, utility power purchase agreements don’t provide developers with adequate price stability because utilities fix the quantity of energy they purchase rather than the price; corporate PPAs, meanwhile, cannot be relied on at scale because there aren’t enough large creditworthy corporations like Google and Amazon willing to commit to buying energy from new projects at a fixed price. For these reasons and more, supporting utilities’ efforts to decarbonize will not call forth adequate renewable energy generation sources into existence.
Generation support is what most governments already do. Whether through feed-in tariffs, production tax credits, or contracts for difference, generation support entails propping up generators’ profitability, ensuring that the sale price of their energy is never too low. Christophers explains why this mechanism — that is, a revenue guarantee rather than a demand guarantee — is deeply necessary: Renewable energy sources and the energy markets they’re plugged into are both structurally volatile, so, no matter how much energy they generate, they never generate all that much profit. Withdrawing generation support would be, in no uncertain terms, a death knell for renewables development.
And, finally, financing support targets renewable energy sources as capital-intensive assets requiring huge amounts of upfront debt. Whether through the investment tax credit, viability gap funding, concessional financing, or other forms of cost-share plans, financing support is another form of direct price support for generation companies; by lowering a project’s cost of capital, it helps lower its developer’s threshold for project profitability, meaning that generators pay less debt service and keep more of their revenues. High interest rates have lately forced up the cost of debt for renewable energy projects to unsustainable levels, far above private developers’ prospective rates of return. Financing support is a must-have these days ― and it’s all the more necessary across the Global South, where the costs of capital are far higher.
None of this is to say that socializing generation and finance solves every problem ― as far as the United States is concerned, non-financial barriers abound, such as regulations and interconnection queues ― but within the existing structure of energy markets, public ownership does solve a lot.
What does direct government intervention into energy consumption and distribution look like? Public ownership of local distribution utilities is a start. Unlike private utility companies, they don’t need to promise ten percent returns to shareholders, and can use the financial breathing room that comes from lower profitability thresholds to tamp down rate hikes and, perhaps more importantly, rate volatility. Public utilities will not drive decarbonization, but they could potentially help advance transmission reform and better integrate distributed energy resources into the grid.
Christophers all but argues that the best thing governments can do for all four support categories is to redesign energy markets. Beyond simply incentivizing the deployment of clean firm and battery technologies to complement renewables, policymakers’ biggest task is to build an energy system where volatile wholesale energy prices ― which even publicly owned renewable energy developers will have to face for the foreseeable future ― are not the reason that a project fails to get built. That would be a policy failure, and we don’t have time for those.
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Paradise, California, is snatching up high-risk properties to create a defensive perimeter and prevent the town from burning again.
The 2018 Camp Fire was the deadliest wildfire in California’s history, wiping out 90% of the structures in the mountain town of Paradise and killing at least 85 people in a matter of hours. Investigations afterward found that Paradise’s town planners had ignored warnings of the fire risk to its residents and forgone common-sense preparations that would have saved lives. In the years since, the Camp Fire has consequently become a cautionary tale for similar communities in high-risk wildfire areas — places like Chinese Camp, a small historic landmark in the Sierra Nevada foothills that dramatically burned to the ground last week as part of the nearly 14,000-acre TCU September Lightning Complex.
More recently, Paradise has also become a model for how a town can rebuild wisely after a wildfire. At least some of that is due to the work of Dan Efseaff, the director of the Paradise Recreation and Park District, who has launched a program to identify and acquire some of the highest-risk, hardest-to-access properties in the Camp Fire burn scar. Though he has a limited total operating budget of around $5.5 million and relies heavily on the charity of local property owners (he’s currently in the process of applying for a $15 million grant with a $5 million match for the program) Efseaff has nevertheless managed to build the beginning of a defensible buffer of managed parkland around Paradise that could potentially buy the town time in the case of a future wildfire.
In order to better understand how communities can build back smarter after — or, ideally, before — a catastrophic fire, I spoke with Efseaff about his work in Paradise and how other communities might be able to replicate it. Our conversation has been lightly edited and condensed for clarity.
Do you live in Paradise? Were you there during the Camp Fire?
I actually live in Chico. We’ve lived here since the mid-‘90s, but I have a long connection to Paradise; I’ve worked for the district since 2017. I’m also a sea kayak instructor and during the Camp Fire, I was in South Carolina for a training. I was away from the phone until I got back at the end of the day and saw it blowing up with everything.
I have triplet daughters who were attending Butte College at the time, and they needed to be evacuated. There was a lot of uncertainty that day. But it gave me some perspective, because I couldn’t get back for two days. It gave me a chance to think, “Okay, what’s our response going to be?” Looking two days out, it was like: That would have been payroll, let’s get people together, and then let’s figure out what we’re going to do two weeks and two months from now.
It also got my mind thinking about what we would have done going backwards. If you’d had two weeks to prepare, you would have gotten your go-bag together, you’d have come up with your evacuation route — that type of thing. But when you run the movie backwards on what you would have done differently if you had two years or two decades, it would include prepping the landscape, making some safer community defensible space. That’s what got me started.
Was it your idea to buy up the high-risk properties in the burn scar?
I would say I adapted it. Everyone wants to say it was their idea, but I’ll tell you where it came from: Pre-fire, the thinking was that it would make sense for the town to have a perimeter trail from a recreation standpoint. But I was also trying to pitch it as a good idea from a fuel standpoint, so that if there was a wildfire, you could respond to it. Certainly, the idea took on a whole other dimension after the Camp Fire.
I’m a restoration ecologist, so I’ve done a lot of river floodplain work. There are a lot of analogies there. The trend has been to give nature a little bit more room: You’re not going to stop a flood, but you can minimize damage to human infrastructure. Putting levees too close to the river makes them more prone to failing and puts people at risk — but if you can set the levee back a little bit, it gives the flood waters room to go through. That’s why I thought we need a little bit of a buffer in Paradise and some protection around the community. We need a transition between an area that is going to burn, and that we can let burn, but not in a way that is catastrophic.
How hard has it been to find willing sellers? Do most people in the area want to rebuild — or need to because of their mortgages?
Ironically, the biggest challenge for us is finding adequate funding. A lot of the property we have so far has been donated to us. It’s probably upwards of — oh, let’s see, at least half a dozen properties have been donated, probably close to 200 acres at this point.
We are applying for some federal grants right now, and we’ll see how that goes. What’s evolved quite a bit on this in recent years, though, is that — because we’ve done some modeling — instead of thinking of the buffer as areas that are managed uniformly around the community, we’re much more strategic. These fire events are wind-driven, and there are only a couple of directions where the wind blows sufficiently long enough and powerful enough for the other conditions to fall into play. That’s not to say other events couldn’t happen, but we’re going after the most likely events that would cause catastrophic fires, and that would be from the Diablo winds, or north winds, that come through our area. That was what happened in the Camp Fire scenario, and another one our models caught what sure looked a lot like the [2024] Park Fire.
One thing that I want to make clear is that some people think, “Oh, this is a fire break. It’s devoid of vegetation.” No, what we’re talking about is a well-managed habitat. These are shaded fuel breaks. You maintain the big trees, you get rid of the ladder fuels, and you get rid of the dead wood that’s on the ground. We have good examples with our partners, like the Butte Fire Safe Council, on how this works, and it looks like it helped protect the community of Cohasset during the Park Fire. They did some work on some strips there, and the fire essentially dropped to the ground before it came to Paradise Lake. You didn’t have an aerial tanker dropping retardant, you didn’t have a $2-million-per-day fire crew out there doing work. It was modest work done early and in the right place that actually changed the behavior of the fire.
Tell me a little more about the modeling you’ve been doing.
We looked at fire pathways with a group called XyloPlan out of the Bay Area. The concept is that you simulate a series of ignitions with certain wind conditions, terrain, and vegetation. The model looked very much like a Camp Fire scenario; it followed the same pathway, going towards the community in a little gulch that channeled high winds. You need to interrupt that pathway — and that doesn’t necessarily mean creating an area devoid of vegetation, but if you have these areas where the fire behavior changes and drops down to the ground, then it slows the travel. I found this hard to believe, but in the modeling results, in a scenario like the Camp Fire, it could buy you up to eight hours. With modern California firefighting, you could empty out the community in a systematic way in that time. You could have a vigorous fire response. You could have aircraft potentially ready. It’s a game-changing situation, rather than the 30 minutes Paradise had when the Camp Fire started.
How does this work when you’re dealing with private property owners, though? How do you convince them to move or donate their land?
We’re a Park and Recreation District so we don’t have regulatory authority. We are just trying to run with a good idea with the properties that we have so far — those from willing donors mostly, but there have been a couple of sales. If we’re unable to get federal funding or state support, though, I ultimately think this idea will still have to be here — whether it’s five, 10, 15, or 50 years from now. We have to manage this area in a comprehensive way.
Private property rights are very important, and we don’t want to impinge on that. And yet, what a person does on their property has a huge impact on the 30,000 people who may be downwind of them. It’s an unusual situation: In a hurricane, if you have a hurricane-rated roof and your neighbor doesn’t, and theirs blows off, you feel sorry for your neighbor but it’s probably not going to harm your property much. In a wildfire, what your neighbor has done with the wood, or how they treat vegetation, has a significant impact on your home and whether your family is going to survive. It’s a fundamentally different kind of event than some of the other disasters we look at.
Do you have any advice for community leaders who might want to consider creating buffer zones or something similar to what you’re doing in Paradise?
Start today. You have to think about these things with some urgency, but they’re not something people think about until it happens. Paradise, for many decades, did not have a single escaped wildfire make it into the community. Then, overnight, the community is essentially wiped out. But in so many places, these events are foreseeable; we’re just not wired to think about them or prepare for them.
Buffers around communities make a lot of sense, even from a road network standpoint. Even from a trash pickup standpoint. You don’t think about this, but if your community is really strung out, making it a little more thoughtfully laid out also makes it more economically viable to provide services to people. Some things we look for now are long roads that don’t have any connections — that were one-way in and no way out. I don’t think [the traffic jams and deaths in] Paradise would have happened with what we know now, but I kind of think [authorities] did know better beforehand. It just wasn’t economically viable at the time; they didn’t think it was a big deal, but they built the roads anyway. We can be doing a lot of things smarter.
A war of attrition is now turning in opponents’ favor.
A solar developer’s defeat in Massachusetts last week reveals just how much stronger project opponents are on the battlefield after the de facto repeal of the Inflation Reduction Act.
Last week, solar developer PureSky pulled five projects under development around the western Massachusetts town of Shutesbury. PureSky’s facilities had been in the works for years and would together represent what the developer has claimed would be one of the state’s largest solar projects thus far. In a statement, the company laid blame on “broader policy and regulatory headwinds,” including the state’s existing renewables incentives not keeping pace with rising costs and “federal policy updates,” which PureSky said were “making it harder to finance projects like those proposed near Shutesbury.”
But tucked in its press release was an admission from the company’s vice president of development Derek Moretz: this was also about the town, which had enacted a bylaw significantly restricting solar development that the company was until recently fighting vigorously in court.
“There are very few areas in the Commonwealth that are feasible to reach its clean energy goals,” Moretz stated. “We respect the Town’s conservation go als, but it is clear that systemic reforms are needed for Massachusetts to source its own energy.”
This stems from a story that probably sounds familiar: after proposing the projects, PureSky began reckoning with a burgeoning opposition campaign centered around nature conservation. Led by a fresh opposition group, Smart Solar Shutesbury, activists successfully pushed the town to drastically curtail development in 2023, pointing to the amount of forest acreage that would potentially be cleared in order to construct the projects. The town had previously not permitted facilities larger than 15 acres, but the fresh change went further, essentially banning battery storage and solar projects in most areas.
When this first happened, the state Attorney General’s office actually had PureSky’s back, challenging the legality of the bylaw that would block construction. And PureSky filed a lawsuit that was, until recently, ongoing with no signs of stopping. But last week, shortly after the Treasury Department unveiled its rules for implementing Trump’s new tax and spending law, which basically repealed the Inflation Reduction Act, PureSky settled with the town and dropped the lawsuit – and the projects went away along with the court fight.
What does this tell us? Well, things out in the country must be getting quite bleak for solar developers in areas with strident and locked-in opposition that could be costly to fight. Where before project developers might have been able to stomach the struggle, money talks – and the dollars are starting to tell executives to lay down their arms.
The picture gets worse on the macro level: On Monday, the Solar Energy Industries Association released a report declaring that federal policy changes brought about by phasing out federal tax incentives would put the U.S. at risk of losing upwards of 55 gigawatts of solar project development by 2030, representing a loss of more than 20 percent of the project pipeline.
But the trade group said most of that total – 44 gigawatts – was linked specifically to the Trump administration’s decision to halt federal permitting for renewable energy facilities, a decision that may impact generation out west but has little-to-know bearing on most large solar projects because those are almost always on private land.
Heatmap Pro can tell us how much is at stake here. To give you a sense of perspective, across the U.S., over 81 gigawatts worth of renewable energy projects are being contested right now, with non-Western states – the Northeast, South and Midwest – making up almost 60% of that potential capacity.
If historical trends hold, you’d expect a staggering 49% of those projects to be canceled. That would be on top of the totals SEIA suggests could be at risk from new Trump permitting policies.
I suspect the rate of cancellations in the face of project opposition will increase. And if this policy landscape is helping activists kill projects in blue states in desperate need of power, like Massachusetts, then the future may be more difficult to swallow than we can imagine at the moment.
And more on the week’s most important conflicts around renewables.
1. Wells County, Indiana – One of the nation’s most at-risk solar projects may now be prompting a full on moratorium.
2. Clark County, Ohio – Another Ohio county has significantly restricted renewable energy development, this time with big political implications.
3. Daviess County, Kentucky – NextEra’s having some problems getting past this county’s setbacks.
4. Columbia County, Georgia – Sometimes the wealthy will just say no to a solar farm.
5. Ottawa County, Michigan – A proposed battery storage facility in the Mitten State looks like it is about to test the state’s new permitting primacy law.