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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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New York City may very well be the epicenter of this particular fight.
It’s official: the Moss Landing battery fire has galvanized a gigantic pipeline of opposition to energy storage systems across the country.
As I’ve chronicled extensively throughout this year, Moss Landing was a technological outlier that used outdated battery technology. But the January incident played into existing fears and anxieties across the U.S. about the dangers of large battery fires generally, latent from years of e-scooters and cellphones ablaze from faulty lithium-ion tech. Concerned residents fighting projects in their backyards have successfully seized upon the fact that there’s no known way to quickly extinguish big fires at energy storage sites, and are winning particularly in wildfire-prone areas.
How successful was Moss Landing at enlivening opponents of energy storage? Since the California disaster six months ago, more than 6 gigawatts of BESS has received opposition from activists explicitly tying their campaigns to the incident, Heatmap Pro® researcher Charlie Clynes told me in an interview earlier this month.
Matt Eisenson of Columbia University’s Sabin Center for Climate Law agreed that there’s been a spike in opposition, telling me that we are currently seeing “more instances of opposition to battery storage than we have in past years.” And while Eisenson said he couldn’t speak to the impacts of the fire specifically on that rise, he acknowledged that the disaster set “a harmful precedent” at the same time “battery storage is becoming much more present.”
“The type of fire that occurred there is unlikely to occur with modern technology, but the Moss Landing example [now] tends to come up across the country,” Eisenson said.
Some of the fresh opposition is in rural agricultural communities such as Grundy County, Illinois, which just banned energy storage systems indefinitely “until the science is settled.” But the most crucial place to watch seems to be New York City, for two reasons: One, it’s where a lot of energy storage is being developed all at once; and two, it has a hyper-saturated media market where criticism can receive more national media attention than it would in other parts of the country.
Someone who’s felt this pressure firsthand is Nick Lombardi, senior vice president of project development for battery storage company NineDot Energy. NineDot and other battery storage developers had spent years laying the groundwork in New York City to build out the energy storage necessary for the city to meet its net-zero climate goals. More recently they’ve faced crowds of protestors against a battery storage facility in Queens, and in Staten Island endured hecklers at public meetings.
“We’ve been developing projects in New York City for a few years now, and for a long time we didn’t run into opposition to our projects or really any sort of meaningful negative coverage in the press. All of that really changed about six months ago,” Lombardi said.
The battery storage developer insists that opposition to the technology is not popular and represents a fringe group. Lombardi told me that the company has more than 50 battery storage sites in development across New York City, and only faced “durable opposition” at “three or four sites.” The company also told me it has yet to receive the kind of email complaint flood that would demonstrate widespread opposition.
This is visible in the politicians who’ve picked up the anti-BESS mantle: GOP mayoral candidate Curtis Sliwa’s become a champion for the cause, but mayor Eric Adams’ “City of Yes” campaign itself would provide for the construction of these facilities. (While Democratic mayoral nominee Zohran Mamdani has not focused on BESS, it’s quite unlikely the climate hawkish democratic socialist would try to derail these projects.)
Lombardi told me he now views Moss Landing as a “catalyst” for opposition in the NYC metro area. “Suddenly there’s national headlines about what’s happening,” he told me. “There were incidents in the past that were in the news, but Moss Landing was headline news for a while, and that combined with the fact people knew it was happening in their city combined to create a new level of awareness.”
He added that six months after the blaze, it feels like developers in the city have a better handle on the situation. “We’ve spent a lot of time in reaction to that to make sure we’re organized and making sure we’re in contact with elected officials, community officials, [and] coordinated with utilities,” Lombardi said.
And more on the biggest conflicts around renewable energy projects in Kentucky, Ohio, and Maryland.
1. St. Croix County, Wisconsin - Solar opponents in this county see themselves as the front line in the fight over Trump’s “Big Beautiful” law and its repeal of Inflation Reduction Act tax credits.
2. Barren County, Kentucky - How much wood could a Wood Duck solar farm chuck if it didn’t get approved in the first place? We may be about to find out.
3. Iberia Parish, Louisiana - Another potential proxy battle over IRA tax credits is going down in Louisiana, where residents are calling to extend a solar moratorium that is about to expire so projects can’t start construction.
4. Baltimore County, Maryland – The fight over a transmission line in Maryland could have lasting impacts for renewable energy across the country.
5. Worcester County, Maryland – Elsewhere in Maryland, the MarWin offshore wind project appears to have landed in the crosshairs of Trump’s Environmental Protection Agency.
6. Clark County, Ohio - Consider me wishing Invenergy good luck getting a new solar farm permitted in Ohio.
7. Searcy County, Arkansas - An anti-wind state legislator has gone and posted a slide deck that RWE provided to county officials, ginning up fresh uproar against potential wind development.
Talking local development moratoria with Heatmap’s own Charlie Clynes.
This week’s conversation is special: I chatted with Charlie Clynes, Heatmap Pro®’s very own in-house researcher. Charlie just released a herculean project tracking all of the nation’s county-level moratoria and restrictive ordinances attacking renewable energy. The conclusion? Essentially a fifth of the country is now either closed off to solar and wind entirely or much harder to build. I decided to chat with him about the work so you could hear about why it’s an important report you should most definitely read.
The following chat was lightly edited for clarity. Let’s dive in.
Tell me about the project you embarked on here.
Heatmap’s research team set out last June to call every county in the United States that had zoning authority, and we asked them if they’ve passed ordinances to restrict renewable energy, or if they have renewable energy projects in their communities that have been opposed. There’s specific criteria we’ve used to determine if an ordinance is restrictive, but by and large, it’s pretty easy to tell once a county sends you an ordinance if it is going to restrict development or not.
The vast majority of counties responded, and this has been a process that’s allowed us to gather an extraordinary amount of data about whether counties have been restricting wind, solar and other renewables. The topline conclusion is that restrictions are much worse than previously accounted for. I mean, 605 counties now have some type of restriction on renewable energy — setbacks that make it really hard to build wind or solar, moratoriums that outright ban wind and solar. Then there’s 182 municipality laws where counties don’t have zoning jurisdiction.
We’re seeing this pretty much everywhere throughout the country. No place is safe except for states who put in laws preventing jurisdictions from passing restrictions — and even then, renewable energy companies are facing uphill battles in getting to a point in the process where the state will step in and overrule a county restriction. It’s bad.
Getting into the nitty-gritty, what has changed in the past few years? We’ve known these numbers were increasing, but what do you think accounts for the status we’re in now?
One is we’re seeing a high number of renewables coming into communities. But I think attitudes started changing too, especially in places that have been fairly saturated with renewable energy like Virginia, where solar’s been a presence for more than a decade now. There have been enough projects where people have bad experiences that color their opinion of the industry as a whole.
There’s also a few narratives that have taken shape. One is this idea solar is eating up prime farmland, or that it’ll erode the rural character of that area. Another big one is the environment, especially with wind on bird deaths, even though the number of birds killed by wind sounds big until you compare it to other sources.
There are so many developers and so many projects in so many places of the world that there are examples where either something goes wrong with a project or a developer doesn’t follow best practices. I think those have a lot more staying power in the public perception of renewable energy than the many successful projects that go without a hiccup and don’t bother people.
Are people saying no outright to renewable energy? Or is this saying yes with some form of reasonable restrictions?
It depends on where you look and how much solar there is in a community.
One thing I’ve seen in Virginia, for example, is counties setting caps on the total acreage solar can occupy, and those will be only 20 acres above the solar already built, so it’s effectively blocking solar. In places that are more sparsely populated, you tend to see restrictive setbacks that have the effect of outright banning wind — mile-long setbacks are often insurmountable for developers. Or there’ll be regulations to constrict the scale of a project quite a bit but don’t ban the technologies outright.
What in your research gives you hope?
States that have administrations determined to build out renewables have started to override these local restrictions: Michigan, Illinois, Washington, California, a few others. This is almost certainly going to have an impact.
I think the other thing is there are places in red states that have had very good experiences with renewable energy by and large. Texas, despite having the most wind generation in the nation, has not seen nearly as much opposition to wind, solar, and battery storage. It’s owing to the fact people in Texas generally are inclined to support energy projects in general and have seen wind and solar bring money into these small communities that otherwise wouldn’t get a lot of attention.