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Shorting the Grid: The Hidden Fragility of Our Electric Grid
When rolling blackouts come to the electric grid, they will be old news to the grid insiders.
Only the electricity customers will be surprised.
Grid insiders know how fragile the grid is becoming. Unfortunately, they have no incentive to solve the problems because near-misses increase their profits.
Meredith Angwin describes how closed meetings, arcane auction rules, and five-minute planning horizons will topple the reliability of our electric grid. Shorting the Grid shines light on our vulnerable grid. It also suggests actions that can support the grid that supports all of us.
Only the electricity customers will be surprised.
Grid insiders know how fragile the grid is becoming. Unfortunately, they have no incentive to solve the problems because near-misses increase their profits.
Meredith Angwin describes how closed meetings, arcane auction rules, and five-minute planning horizons will topple the reliability of our electric grid. Shorting the Grid shines light on our vulnerable grid. It also suggests actions that can support the grid that supports all of us.
442 pages, Kindle Edition
Published October 19, 2020
182 people are currently reading
1,114 people want to read
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Displaying 1 - 30 of 44 reviews
February 3, 2023
This book is for people deeply interested in energy policy, electricity, utilities, renewables, especially in New England.
It is ground-breaking in its explanation of regional transmission organizations, (RTOs), how generating plants bid into the grid, how reliability (of generation) hasn't been valued, etc.
Because it is as dense as a textbook (despite being written in an approachable, sprightly manner) I can recommend Shorting the Grid only to readers interested in the topics of renewables, electricity generation, and grid operations.
Yet, it is one of 4-5 books that every professional involved in utility operations or energy policy absolutely should be required to read. Any expert testifying on the subject should first be able to prove that he or she has read and understood Shorting the Grid.
It is ground-breaking in its explanation of regional transmission organizations, (RTOs), how generating plants bid into the grid, how reliability (of generation) hasn't been valued, etc.
Because it is as dense as a textbook (despite being written in an approachable, sprightly manner) I can recommend Shorting the Grid only to readers interested in the topics of renewables, electricity generation, and grid operations.
Yet, it is one of 4-5 books that every professional involved in utility operations or energy policy absolutely should be required to read. Any expert testifying on the subject should first be able to prove that he or she has read and understood Shorting the Grid.
October 31, 2020
Shorting the Grid, by Meredith Angwin, could have made great bed-time reading — put you right to sleep! Could have been. But it isn’t. I honestly don’t know how anyone managed to write a book like this, but she did it, and did it remarkably well. The complexity of the multiple layers of policies and their relationships in much of our grid governance is truly unbelievable. Markets that aren’t really markets, “deregulation” with ever-growing mountains of regulations, renewable energy credits (RECs) and zero emission credits (ZECs), forward capacity auctions, jump-ball filings… Oh my!
But the complexity is the point. It isn’t a bug, it’s a feature! Angwin begins by stating the obvious: People expect reliable, inexpensive, plentiful, and clean electrical power using a diversity of fuels, and a resilient and well-balanced grid. But in the Regional Transmission Organization (RTO) areas, none of that matters. This left me frankly gob-smacked. Nobody has responsibility for maintaining a reliable grid. There are no adults in the room. There is no consumer choice, no transparency, no accountability. “The buck never stops anywhere," as she aptly points out. And this is our wake-up call.
The problems are too many to enumerate in a review, but I will mention a few of them:
* Grid-scale storage is forever a thing of the future — like fusion power, always “about twenty years away.” And extremely resource intensive.
* Renewables are “cheap” because they make their real money on “out-of-market revenues.” This allows them to bid to sell power at very low, even negative, prices, which drives down the grid prices for everyone else. Further, renewables are intermittent, unpredictable, and unreliable, due to the fact that the sun is not always shining nor the wind blowing. They must always be backed up with load-following generation, and the best load-followers are fossil plants. And the higher the penetration of renewables, the greater the instability of the grid.
* The FERC requires RTOs to be fuel-neutral. This leads to shortages, as happens when dual-fuel gas/oil plants cannot be required to stock oil on site, and eventually to rolling blackouts.
* Simply selling kWh to the grid is not the least bit lucrative. The most reliable power generators that we have, nuclear plants, cannot be profitable by doing what they do best. This leads to closure of highly reliable and non-pollutung power plants. And once a nuclear plant is closed, it does not reopen. Further, the reliable power is almost always replaced by whatever is the next most reliable source — namely, fossil fuels.
* Markets are supposed to be about customer choice. In an RTO area, there is no choice — the “customer” is really just a “ratepayer."
* RTOs attempt to solve almost any problem with another kind of auction. Perhaps the most startling thing about the auctions is the way in which the “clearing price” is determined. This is the price that all generators receive. And the price is not set at the lowest bid, it is set at the highest! But wait, renewables can bid the grid prices way down. Confused? You are not alone! Remember, confusion is a feature.
And at the end of the day, electricity prices tend to be higher in the “deregulated” RTO areas. It simply has not worked out the way telephone and airline deregulation did. None of these problems are about the power generators, technology, fuel choices, or carbon footprints. The problem is in the governance. The question, as always, is: who profits? Follow the money. And the result is an expensive, fragile, and high-carbon grid.
I could go on, but as Meredith wanted to write a readable book, so I want to write a readable review. I do want to mention her coverage of the difference between choices made by Germany and France (as well as Sweden and Ontario). Germany tried to decarbonize by building massive renewables — and closing their non-emitting nuclear plants. The result has been an expensive and high-carbon grid. France, in contrast, successfully decarbonized in ten years by going nuclear. Same with Sweden and Ontario. (See electricitymap.org for an outstanding tool for visualizing the carbon footprint of various nations and regions.) The choices made by governments are what make the difference, not individual behaviors. Organizations that push consumers toward what I call energy austerity encourage us to make personal sacrifices in order to do our part. This is just another case of passing the buck. If you are of the belief that taking personal responsibility for using less energy will lead to lower emissions, then the author with the lesson of Germany, will disabuse you of this notion. The RTOs push us toward the German model. Our role models should, rather, be France, Sweden, and Ontario.
Meredith says that this book was ten years in the making. I can believe it. She insisted that she could not and would not produce a book that was unreadable or would put the reader to sleep. Fear not! She writes in a conversational way, as if you are talking over dinner, or sharing coffee and brownies. (Never forget the brownies!)
The grammar is pristine, with no strange idiosyncrasies of capitalization or punctuation. As a self-appointed proof-reader, I notice these things. Throughout the entire 400 pages, I think I counted all of three very minor typos that did not obscure the meaning in any way. Every word is obviously chosen with care. There is no arcane language, and every industry term, buzzword, and practice is carefully explained. It includes extensive endnotes — 292, to be exact. I recommend following many of these references, especially to her blog posts.
Finally, she concludes with a chapter on actions that we can take. She does not tell us all about these shocking problems without leaving us with great suggestions for what we can do about them. This was entirely expected — her previous book, “Campaigning for Clean Air,” which I also reviewed, is the best book on advocacy and activism I have ever read, and having been a political activist in my time, I have read a few.
Do yourself a favor — buy and read this book. And then share it.
But the complexity is the point. It isn’t a bug, it’s a feature! Angwin begins by stating the obvious: People expect reliable, inexpensive, plentiful, and clean electrical power using a diversity of fuels, and a resilient and well-balanced grid. But in the Regional Transmission Organization (RTO) areas, none of that matters. This left me frankly gob-smacked. Nobody has responsibility for maintaining a reliable grid. There are no adults in the room. There is no consumer choice, no transparency, no accountability. “The buck never stops anywhere," as she aptly points out. And this is our wake-up call.
The problems are too many to enumerate in a review, but I will mention a few of them:
* Grid-scale storage is forever a thing of the future — like fusion power, always “about twenty years away.” And extremely resource intensive.
* Renewables are “cheap” because they make their real money on “out-of-market revenues.” This allows them to bid to sell power at very low, even negative, prices, which drives down the grid prices for everyone else. Further, renewables are intermittent, unpredictable, and unreliable, due to the fact that the sun is not always shining nor the wind blowing. They must always be backed up with load-following generation, and the best load-followers are fossil plants. And the higher the penetration of renewables, the greater the instability of the grid.
* The FERC requires RTOs to be fuel-neutral. This leads to shortages, as happens when dual-fuel gas/oil plants cannot be required to stock oil on site, and eventually to rolling blackouts.
* Simply selling kWh to the grid is not the least bit lucrative. The most reliable power generators that we have, nuclear plants, cannot be profitable by doing what they do best. This leads to closure of highly reliable and non-pollutung power plants. And once a nuclear plant is closed, it does not reopen. Further, the reliable power is almost always replaced by whatever is the next most reliable source — namely, fossil fuels.
* Markets are supposed to be about customer choice. In an RTO area, there is no choice — the “customer” is really just a “ratepayer."
* RTOs attempt to solve almost any problem with another kind of auction. Perhaps the most startling thing about the auctions is the way in which the “clearing price” is determined. This is the price that all generators receive. And the price is not set at the lowest bid, it is set at the highest! But wait, renewables can bid the grid prices way down. Confused? You are not alone! Remember, confusion is a feature.
And at the end of the day, electricity prices tend to be higher in the “deregulated” RTO areas. It simply has not worked out the way telephone and airline deregulation did. None of these problems are about the power generators, technology, fuel choices, or carbon footprints. The problem is in the governance. The question, as always, is: who profits? Follow the money. And the result is an expensive, fragile, and high-carbon grid.
I could go on, but as Meredith wanted to write a readable book, so I want to write a readable review. I do want to mention her coverage of the difference between choices made by Germany and France (as well as Sweden and Ontario). Germany tried to decarbonize by building massive renewables — and closing their non-emitting nuclear plants. The result has been an expensive and high-carbon grid. France, in contrast, successfully decarbonized in ten years by going nuclear. Same with Sweden and Ontario. (See electricitymap.org for an outstanding tool for visualizing the carbon footprint of various nations and regions.) The choices made by governments are what make the difference, not individual behaviors. Organizations that push consumers toward what I call energy austerity encourage us to make personal sacrifices in order to do our part. This is just another case of passing the buck. If you are of the belief that taking personal responsibility for using less energy will lead to lower emissions, then the author with the lesson of Germany, will disabuse you of this notion. The RTOs push us toward the German model. Our role models should, rather, be France, Sweden, and Ontario.
Meredith says that this book was ten years in the making. I can believe it. She insisted that she could not and would not produce a book that was unreadable or would put the reader to sleep. Fear not! She writes in a conversational way, as if you are talking over dinner, or sharing coffee and brownies. (Never forget the brownies!)
The grammar is pristine, with no strange idiosyncrasies of capitalization or punctuation. As a self-appointed proof-reader, I notice these things. Throughout the entire 400 pages, I think I counted all of three very minor typos that did not obscure the meaning in any way. Every word is obviously chosen with care. There is no arcane language, and every industry term, buzzword, and practice is carefully explained. It includes extensive endnotes — 292, to be exact. I recommend following many of these references, especially to her blog posts.
Finally, she concludes with a chapter on actions that we can take. She does not tell us all about these shocking problems without leaving us with great suggestions for what we can do about them. This was entirely expected — her previous book, “Campaigning for Clean Air,” which I also reviewed, is the best book on advocacy and activism I have ever read, and having been a political activist in my time, I have read a few.
Do yourself a favor — buy and read this book. And then share it.
November 15, 2022
This was a fascinating and informative page-turner that I could not put down! Packed with great information and ideas, I deployed three and a half stacks of page tabs on this one...
This book is (obviously) about electrical grids. There is a bit of detail about how the grid works in the sense of a huge, interconnected electrical machine, but most of the book focuses on how the grid works as an instrument of policy.
There's a great hook in the first chapter: Angwin has just finished reading Michael Lewis' The Big Short and as a career grid insider, sees alarming parallels between the 2008 financial meltdown and the current trajectory of grid policy, power plant reliability, and power plant economic feasibility.
Angwin had an interesting career as a chemist in the electrical industry, working on and leading projects that lowered pollution and increased reliability (like pollution control for NOx in gas-fired combustion turbines, or corrosion control in geothermal and nuclear systems). One thing I absolutely love about her writing and her non-EE background is she explains grid systems and grid governance WITHOUT all of the baggage an electrical engineer would be biased to include. She deploys useful metaphors when technical understanding is required, and strategically omits technical details when they're not relevant to her arguments. Angwin's writing conveys authoritative experience and her humour and wit.
The structure of the book works very well! Chapters are nice, short, and digestible (45 chapters in 366 pages) and the writing tone is light, lucid, and engaging. There is great "bookmarking" where Angwin helps summarize what she's just told you and points you towards what's next, and the book's internal referencing is very good (great endnotes and internal references, e.g. Chapter Y will point you back to Chapter X to ensure the right background info is easy to access).
The book is broken into five parts:
Part 1 "Angelic Miracles and Easy Problems" contains key background information about how grids work (in the mechanical/electrical sense), high-level overview of governance types (vertically integrated or Regional Transmission Organization/RTO), as well as a few mini case-studies of Angwin's home grid in Vermont.
Part 2 "Policy, Markets, and Fuel Security" is the meat of the book, digging into how RTOs are governed, gamed, and operated. My non-technical summary is that RTOs are a total shit-show and are not good for consumers: "deregulation" helped enable the Enron/California blackouts in the early 2000s and the more recent Texas grid reliability issues, as well as skyrocketing costs to ratepayers.
Part 3 "Renewables on the Grid" covers the challenges of integrating renewables onto the grid: some general challenges around intermittency, but more specific challenges in RTO areas where "deregulation" (code-word for "dramatically increased regulation and complexity") forces reliable baseload power to financially compete with highly externally-subsidized (e.g. by state governments) renewables.
Part 4 "The RTO and the Customer" talks about impacts on ratepayers (never "customers" because that would reflect an illusion of choice! Always "ratepayers" who pay the rates they're commanded).
Part 5 "Is There a Way Forward" capture Angwin's thoughts on the importance of reliable electricity and how RTOs and market forces are creating an upcoming reliability crisis.
Key takeaways for me:
- An understanding of what an RTO is. This concept was fairly opaque to me (we don't have this in Saskatchewan: SaskPower is a vertically integrated utility. Alberta and Ontario have RTOs in Canada)
- Probably the best-laid-out argument on the challenges of integrating renewables in an RTO grid (and any grid in general). The narrative is great: it's not outright renewables-bashing (Angwin recognizes some of the benefits of renewables), but rather a buildup of information about how and why the grid operates and delivers reliable energy (in a physical and policy sense) and only THEN getting into the challenges of integrating intermittent renewables and how that impacts the economics of keeping reliable plants online.
Two MINOR criticisms:
- The energy community discusses this book with such reverence and authority that it makes it intimidating to read/start. In reality the text and tone is super accessible. Shorting the Grid will probably be one of my go-to early recommendations to people looking to learn more about electricity generation. (this is more a criticism for the wider community: need to pump this book as super accessible!)
- I wish Angwin re-defined acronyms more than once. "RTO" is defined once in the early chapters, then the acronym is used exclusively thereafter. Not being familiar with RTOs (and having a bad memory partially due to a new baby) I had to keep flipping to the appendix to see what this meant, over and over...
I am SO glad I read this book, and more glad I bought a copy to leave tabs in and mark up! An indispensable reference to anyone interested in reliable power generation in their jurisdiction, whether you're in an RTO area or not.
I almost didn't read this book by accident! I first heard Angwin on the Decouple podcast and made a mental note, "grid book, smart woman". When I searched the library for "grid" and saw Gretchen Bakke's book (my review) I misremembered the author and read that one instead. It was great, but much lighter on the regulatory environment for power plants, and was not written by an industry insider. I kept hearing Angwin's work referenced over and over so I knew I had to grab a copy!
This book is (obviously) about electrical grids. There is a bit of detail about how the grid works in the sense of a huge, interconnected electrical machine, but most of the book focuses on how the grid works as an instrument of policy.
There's a great hook in the first chapter: Angwin has just finished reading Michael Lewis' The Big Short and as a career grid insider, sees alarming parallels between the 2008 financial meltdown and the current trajectory of grid policy, power plant reliability, and power plant economic feasibility.
Angwin had an interesting career as a chemist in the electrical industry, working on and leading projects that lowered pollution and increased reliability (like pollution control for NOx in gas-fired combustion turbines, or corrosion control in geothermal and nuclear systems). One thing I absolutely love about her writing and her non-EE background is she explains grid systems and grid governance WITHOUT all of the baggage an electrical engineer would be biased to include. She deploys useful metaphors when technical understanding is required, and strategically omits technical details when they're not relevant to her arguments. Angwin's writing conveys authoritative experience and her humour and wit.
The structure of the book works very well! Chapters are nice, short, and digestible (45 chapters in 366 pages) and the writing tone is light, lucid, and engaging. There is great "bookmarking" where Angwin helps summarize what she's just told you and points you towards what's next, and the book's internal referencing is very good (great endnotes and internal references, e.g. Chapter Y will point you back to Chapter X to ensure the right background info is easy to access).
The book is broken into five parts:
Part 1 "Angelic Miracles and Easy Problems" contains key background information about how grids work (in the mechanical/electrical sense), high-level overview of governance types (vertically integrated or Regional Transmission Organization/RTO), as well as a few mini case-studies of Angwin's home grid in Vermont.
Part 2 "Policy, Markets, and Fuel Security" is the meat of the book, digging into how RTOs are governed, gamed, and operated. My non-technical summary is that RTOs are a total shit-show and are not good for consumers: "deregulation" helped enable the Enron/California blackouts in the early 2000s and the more recent Texas grid reliability issues, as well as skyrocketing costs to ratepayers.
Part 3 "Renewables on the Grid" covers the challenges of integrating renewables onto the grid: some general challenges around intermittency, but more specific challenges in RTO areas where "deregulation" (code-word for "dramatically increased regulation and complexity") forces reliable baseload power to financially compete with highly externally-subsidized (e.g. by state governments) renewables.
Part 4 "The RTO and the Customer" talks about impacts on ratepayers (never "customers" because that would reflect an illusion of choice! Always "ratepayers" who pay the rates they're commanded).
Part 5 "Is There a Way Forward" capture Angwin's thoughts on the importance of reliable electricity and how RTOs and market forces are creating an upcoming reliability crisis.
Key takeaways for me:
- An understanding of what an RTO is. This concept was fairly opaque to me (we don't have this in Saskatchewan: SaskPower is a vertically integrated utility. Alberta and Ontario have RTOs in Canada)
- Probably the best-laid-out argument on the challenges of integrating renewables in an RTO grid (and any grid in general). The narrative is great: it's not outright renewables-bashing (Angwin recognizes some of the benefits of renewables), but rather a buildup of information about how and why the grid operates and delivers reliable energy (in a physical and policy sense) and only THEN getting into the challenges of integrating intermittent renewables and how that impacts the economics of keeping reliable plants online.
Two MINOR criticisms:
- The energy community discusses this book with such reverence and authority that it makes it intimidating to read/start. In reality the text and tone is super accessible. Shorting the Grid will probably be one of my go-to early recommendations to people looking to learn more about electricity generation. (this is more a criticism for the wider community: need to pump this book as super accessible!)
- I wish Angwin re-defined acronyms more than once. "RTO" is defined once in the early chapters, then the acronym is used exclusively thereafter. Not being familiar with RTOs (and having a bad memory partially due to a new baby) I had to keep flipping to the appendix to see what this meant, over and over...
I am SO glad I read this book, and more glad I bought a copy to leave tabs in and mark up! An indispensable reference to anyone interested in reliable power generation in their jurisdiction, whether you're in an RTO area or not.
I almost didn't read this book by accident! I first heard Angwin on the Decouple podcast and made a mental note, "grid book, smart woman". When I searched the library for "grid" and saw Gretchen Bakke's book (my review) I misremembered the author and read that one instead. It was great, but much lighter on the regulatory environment for power plants, and was not written by an industry insider. I kept hearing Angwin's work referenced over and over so I knew I had to grab a copy!
November 24, 2020
Amazing read! I've been working for a utility for years and I had a smattering of knowledge about the grid but this definitely sheds light on the politics, policy, and complexities involved... especially in RTOs.
Please please please read this book before engaging in discussion boards online about generation prices of different energy sources!
Please please please read this book before engaging in discussion boards online about generation prices of different energy sources!
January 31, 2021
Teasing out a tangled web of multilayered rules
In trying to talk about the grid problems, I have found that most people have deep opinions on power plants. They hate coal or nuclear, or they hate wind turbines, or whatever. They are often completely unaware of how the ratepayer-serfs are getting robbed by the insiders in an RTO area. Grid governance just isn’t on most people’s radar. -MJ Angwin, author
In a general sense, the above quote from the book sums up the reason for writing Shorting the Grid. People rarely participate in what they don't understand -- and if a system is obtuse by design .... well let's just say that grid ratepayers may be like frogs in a slowly heated pot of swamp water.
Rising utility bills, continuing government subsidies (btw- how's your tax bill, ratepayers? Did you know you're paying twice for some of that electricity?), a tangled web of rules, and the best place to make your concerns heard are non-public meetings or public comment dockets with the regulators.
Mrs. Angwin untangles the regulatory obfuscations the same way you'd untangle a child's long hair after a week running wild in a National Park. Speaking with a calm voice she shares simple stories as the many knots are gently untangled. Afterwards we still need to wash & brush our own hair (so to speak), but at least it won't be painfully tangled anymore.
But that's our choice whether to follow up on what we learn. I reccomend this book especially to any ratepayers living in an "unregulated" grid market.
In trying to talk about the grid problems, I have found that most people have deep opinions on power plants. They hate coal or nuclear, or they hate wind turbines, or whatever. They are often completely unaware of how the ratepayer-serfs are getting robbed by the insiders in an RTO area. Grid governance just isn’t on most people’s radar. -MJ Angwin, author
In a general sense, the above quote from the book sums up the reason for writing Shorting the Grid. People rarely participate in what they don't understand -- and if a system is obtuse by design .... well let's just say that grid ratepayers may be like frogs in a slowly heated pot of swamp water.
Rising utility bills, continuing government subsidies (btw- how's your tax bill, ratepayers? Did you know you're paying twice for some of that electricity?), a tangled web of rules, and the best place to make your concerns heard are non-public meetings or public comment dockets with the regulators.
Mrs. Angwin untangles the regulatory obfuscations the same way you'd untangle a child's long hair after a week running wild in a National Park. Speaking with a calm voice she shares simple stories as the many knots are gently untangled. Afterwards we still need to wash & brush our own hair (so to speak), but at least it won't be painfully tangled anymore.
But that's our choice whether to follow up on what we learn. I reccomend this book especially to any ratepayers living in an "unregulated" grid market.
November 11, 2024
This book had some really helpful insights into energy and capacity markets. I think Angwin's criticism of RTOs and her opinion that competitive markets actually hurt grid reliability and don't necessarily decrease energy costs for consumers is interesting and seems valid. Same with her opinion on renewables, net metering, and the reality (or impossibility) of making an entirely green grid, without nuclear.
Unfortunately, I can't fucking stand her. She is so annoying, and such a damn contrarian. I suspect having to hangout with her would be a nightmare. Like, she somehow managed to complain about the weather in California, but she lives in freaking Vermont....so minus a star for that. Honestly, that's generous, I want to minus two stars, but I won't bc she did educate me.
Unfortunately, I can't fucking stand her. She is so annoying, and such a damn contrarian. I suspect having to hangout with her would be a nightmare. Like, she somehow managed to complain about the weather in California, but she lives in freaking Vermont....so minus a star for that. Honestly, that's generous, I want to minus two stars, but I won't bc she did educate me.
July 11, 2024
Really wanted to like it more. Author makes valid points and obviously did her research, but the writing style is dull and repetitive. Also, author interprets data in a manner I found unconvincing. She also claims nuclear is way to go, citing that no one in U.S ever dies from nuclear. She ignores, however, the issue of nuclear waste and how a meltdown would make an area uninhabitable for thousands of years. She pokes holes in coal, gas, hydro, and renewables, but yet ignores the obvious negatives of nuclear? Lost credibility with me there. Okay book if doing research on the grid and need another example, but if not doing that I suggest go somewhere else for an overview of the grid.
This entire review has been hidden because of spoilers.
March 27, 2024
Awkwardly written with too many acronyms, this gets four stars for laying out the complexity of the grid, showing how regional consortia have rendered it ungovernable, and (SPOILER ALERT!) dispelling the myth that renewables can come anywhere near obviating fossil fuels in electric power generation.
November 28, 2024
Though stubbornly contemporary, Shorting the Grid is perhaps the most accessible explanation of energy markets I’ve seen.
“The grid is becoming more single-fuel, more vulnerable, and more expensive. Insiders make the rules… the public cannot participate in a meaningful way.”
“The grid is becoming more single-fuel, more vulnerable, and more expensive. Insiders make the rules… the public cannot participate in a meaningful way.”
November 22, 2024
Meredith Angwin’s Shorting the Grid primarily covers what the author calls “the policy grid.” As opposed to “the power grid,” which is a physical entity delivering electricity from generation facilities through transmission and distribution infrastructure, the policy grid refers to the collection of organizations that regulate the production and distribution of electricity. These include the Federal Energy Regulatory Commission (FERC), Regional Transmission Organizations (RTOs), state utility regulators, and state and federal legislatures.
These regulations, layered one on top of the other, often work at cross purposes to defeat the goals they’re supposed to promote. Angwin gives a prime example early in the book.
Before digging in to this example, I’ll note that a Regional Transmission Organization (RTO) is an authority responsible for coordinating, among other things, power generation and transmission within a region that spans multiple states. RTOs demand regular reports from electric utilities about their transmission capacity. They balance production and demand through online markets in which utilities and power generation facilities buy and sell electricity, which may be generated in one state and consumed in another.
The RTO in the Northeastern US, ISO-NE, had set up a plan called the Winter Reliability Program. The RTO knew that most of the electricity in the region came from gas-fired power plants. During winter cold snaps, which can be extreme in this part of the country, electricity demands spike as electric heaters work harder to warm homes. Demand for natural gas also spikes, as homes with gas heat require additional fuel to stay warm.
Regulations on natural gas distribution stipulate that gas must be routed to residential customers first and commercial customers second. This puts the Northeast’s power plants in a bind during a cold snap. At a time when demand is at its peak and they most needed gas, they may have a hard time getting it.
ISO-NE foresaw this problem, and their Winter Reliability Program required generation facilities to keep a stock of oil on hand during the winter months. That allows generation facilities to burn oil when gas is unavailable. The generation companies complied, and in the bitterly cold winter of 2017-2018, oil reserves kept the power flowing and saved thousands of homes from freezing.
After that winter, FERC said the Winter Reliability Program violated federal rules by prescribing what type of fuel the generation plants had to burn. ISO-NE had to scrap a well-intended, well-designed and effective program that had prevented a potential disaster. Still committed to reliability for its customers, it had to come up with a new plan to try to provide winter reliability without running afoul of federal regulations.
The new program turned out to be arcane, difficult to understand, and not very effective. The new program was arcane because it had to adhere to complex and conflicting federal regulations. While ISO-NE wanted to serve its customers (whom Angwin always calls “ratepayers”), it was legally bound to serve FERC’s requirements at the expense of its customers.
Angwin is upfront about having an agenda in this book. Put simply, her agenda is to make the regulation of power generation, transmission and distribution more simple, open and clear, and to have regulation explicitly serve the needs of customers by making electricity as cheap, reliable and clean as possible.
It’s hard to argue with those principles. So, why is the policy grid such a mess right now?
Many of the problems trace back to the history of the grid, which Gretchen Bakke describes so clearly in her 2016 book, The Grid. Electric utilities used to be monopolies, because it didn’t make sense to build multiple sets of transmission and distribution lines in every state. The cost of running even one power line into every home is enormous. Imagine having five power companies in each state, with five sets of lines atop every utility pole, five pole-top transformers in on every block, and five lines running into every home. That’s just not feasible. One power grid is plenty.
As local monopolies, the power companies were heavily regulated to prevent them from doing what monopolies do, which is gouge people. In exchange for limiting how much the companies could charge for electricity, the regulating agencies promised them a guaranteed return on investment. If a power company spent a billion dollars on a new generation facility, the regulator guaranteed they would recoup all of that investment over time, plus a percentage profit on top.
Angwin notes that this incentive led power companies to build more generation facilities than they needed. That, in turn, led to a very reliable grid, as there was always some excess capacity to meet demand, even during the heaviest spikes. The utilities were vertically integrated monopolies, meaning they controlled both the production and distribution of electricity. Generation was the money maker. Transmission and distribution were the means of delvering the product to the customer.
Deregulation of the electric utilities began in 1982 with a Supreme Court ruling requiring utilities to transmit power regardless of who created it. This broke the vertical monopoly of the grid. The utilities were no longer entirely in control of the system.
Over time, as more private generation facilities came online, the responsibilities of the electric utilities moved away from money-making generation and toward money-losing maintenance of transmission and distribution networks.
The federal government loosened market regulations on the power industry, hoping to move the grid closer to a free market model, and to replicate the successes of airline and telecom deregulation. After those latter two industries were deregulated, airfares and phone service prices went down, and quality, availability and consumer choice improved.
The power industry, as Gretch Bakke notes, is fundamentally different than every other industry in that its product (electricity) is consumed the instant it is produced, and in that production must always match demand, exactly, down to the second.
RTOs came into existence to try help state and local utilities deal with these two unique challenges. How could a utility in one state balance generation and demand when the power being produced and consumed crossed state lines? RTOs are non-profit organizations that help interconnected utilties plan for and manage this balance on a minute-to-minute basis. They provide a marketplace by running an ongoing auction of electrical capacity in which prices change every five minutes. They also set rules on how much capacity utilities must maintain to deliver adequate power to their customers.
So, when ISO-NE created its Winter Reliability Program to try to ensure adequate power under the most adverse conditions, it seemed to be operating under its legal purview.
In an attempt to create a truly open market, however, the federal government had prevented RTOs from demanding that any power be generated by any specific fuel. In a truly open market, the only things that matter are commodity and price, not how or where the commodity was produced.
This sort of regulation works in other markets. We don’t tell Ford how to make their cars, or Papermate how to make their pens. They choose how to make products based on customer needs, and the market either approves or rejects what they’ve built.
Once again, however, electricity is different. It must be available in life-threatening situations such as extreme cold and extreme heat. Because it’s consumed the instant it’s created, it depends on a real-time supply chain. When there’s no sun, solar panels simply won’t produce. No wind, no power from the turbines. No natural gas, the gas plants go offline. Power goes out that very second, and thousands of people freeze.
This was the scenario ISO-NE foresaw and attempted to prevent by requiring generation facilities to maintain oil reserves for a worst-case scenario that did in fact come to pass. FERC then said this plan violated federal regulations by dictating what type of fuel had to be used to generate the required power.
Both entities were trying to protect the consumer: ISO-NE by guaranteeing availability and FERC by promoting low market prices. In practice, however, the regulations work against each other and in the end, everyone loses.
Angwin points out that these multi-layered, conflicting regulations pervade the entire industry and that they’re so complex, even seasoned professionals have a hard time understanding them. Many of the rules are made behind closed doors to benefit narrow interest groups, and many of them make no sense at all from a consumer perspective.
For example, Angwin describes what happens when a utility buys power in an RTO auction to meet the needs of the next five minutes. The RTO lists three sellers whose rates can be described as cheap, more expensive, and most expensive. The utility needs to buy power from all three sources to meet coming needs. So how much do they pay?
In a normal market, they would pay the cheap price to the cheap supplier, the more expensive price to the more expensive supplier, and the highest price to the last supplier. In the RTO market, they have to pay the most expensive price to all of the suppliers. The rule basically says that if they pay a high price to one supplier in an auction, they have to pay the same high price to all suppliers, even when those other suppliers explicitly said they would sell for less.
What sense does that make?
For the consumer, none. But in a world where cheap renewables threaten to drive traditional generation plants into bankruptcy, there is a place for this seemingly irrational rule.
The grid, as Gretchen Bakke points out, has to serve many conflicting interests. It has to be on all the time, or our lives come to a halt. It has to be profitable for the companies that supply and maintain it. It has to clean to keep from poisoning the world it serves.
Angwin argues that the various regulatory bodies that try to address these conflicting needs have themselves become a major threat to the grid’s long-term viability. They don’t play well together. They often work at cross-purposes, with one agency’s regulations nullifying the effects of another’s. Many of their regulations have unintended consequences that cause more harm than good. (Angwin notes as an example some California regulations of the early 2000s that incentized companies to take generation facilities offline, deliberately causing rolling blackouts and increasing profits for the generators that remained online).
Angwin argues that the secrecy of the rule-making processes at RTOs and other regulatory bodies is a big part of what enables this regulatory mess. She advocates for open and transparent regulatory decision-making, so the public can see whose interest is being served by various rules, and how.
This is an informative book, but unfortunately, it’s poorly structured and would have benefitted from a professional editor. Angwin’s prose is undisciplined, meandering, repetitive and unclear. In most chapters, it’s hard to understand what the author wants to you to take away. If she manages to get a point across, it’s in spite of her words, not because of them.
Still, the book is useful and may be better skimmed than read.
After reading Bakke and Angwin back to back, and after doing some work in the power industry, I wonder about the future of the grid as a whole. Cheap renewables put so much economic pressure on traditional generation facilities that they may not be able to survive without subsidies. And they will need to survive for some time, because solar and wind can’t produce when the sky is dark and the wind is calm.
Electric storage technology does not yet exist at the proper scale to provide power for the masses when wind and solar are idle. We still need the traditional power plants to fill that gap.
Meanwhile, the transmission and distribution components of the grid remain incredibly complex, fragile, and vulnerable to storms and other disasters. Maintaining the existing infrastructure is incredibly expensive and not at all profitable for the utility companies responsible for its care.
As Angwin notes, a major threat to today’s grid is that there’s no answer to the question of who is ultimately responsible for keeping the power flowing, the power on which all our lives depend. The generation care only about producing megawatts. The utility companies barely turn enough profit to keep up the lines that wheel power from state to state and from substation to home.
Unlike the regulated monopolies of the twentieth century whose existence depended on keeping all parts of the system working in harmony to serve the customer, in today’s partially deregulated, partially hyper-regulated grid, “The buck stops nowhere.”
These regulations, layered one on top of the other, often work at cross purposes to defeat the goals they’re supposed to promote. Angwin gives a prime example early in the book.
Before digging in to this example, I’ll note that a Regional Transmission Organization (RTO) is an authority responsible for coordinating, among other things, power generation and transmission within a region that spans multiple states. RTOs demand regular reports from electric utilities about their transmission capacity. They balance production and demand through online markets in which utilities and power generation facilities buy and sell electricity, which may be generated in one state and consumed in another.
The RTO in the Northeastern US, ISO-NE, had set up a plan called the Winter Reliability Program. The RTO knew that most of the electricity in the region came from gas-fired power plants. During winter cold snaps, which can be extreme in this part of the country, electricity demands spike as electric heaters work harder to warm homes. Demand for natural gas also spikes, as homes with gas heat require additional fuel to stay warm.
Regulations on natural gas distribution stipulate that gas must be routed to residential customers first and commercial customers second. This puts the Northeast’s power plants in a bind during a cold snap. At a time when demand is at its peak and they most needed gas, they may have a hard time getting it.
ISO-NE foresaw this problem, and their Winter Reliability Program required generation facilities to keep a stock of oil on hand during the winter months. That allows generation facilities to burn oil when gas is unavailable. The generation companies complied, and in the bitterly cold winter of 2017-2018, oil reserves kept the power flowing and saved thousands of homes from freezing.
After that winter, FERC said the Winter Reliability Program violated federal rules by prescribing what type of fuel the generation plants had to burn. ISO-NE had to scrap a well-intended, well-designed and effective program that had prevented a potential disaster. Still committed to reliability for its customers, it had to come up with a new plan to try to provide winter reliability without running afoul of federal regulations.
The new program turned out to be arcane, difficult to understand, and not very effective. The new program was arcane because it had to adhere to complex and conflicting federal regulations. While ISO-NE wanted to serve its customers (whom Angwin always calls “ratepayers”), it was legally bound to serve FERC’s requirements at the expense of its customers.
Angwin is upfront about having an agenda in this book. Put simply, her agenda is to make the regulation of power generation, transmission and distribution more simple, open and clear, and to have regulation explicitly serve the needs of customers by making electricity as cheap, reliable and clean as possible.
It’s hard to argue with those principles. So, why is the policy grid such a mess right now?
Many of the problems trace back to the history of the grid, which Gretchen Bakke describes so clearly in her 2016 book, The Grid. Electric utilities used to be monopolies, because it didn’t make sense to build multiple sets of transmission and distribution lines in every state. The cost of running even one power line into every home is enormous. Imagine having five power companies in each state, with five sets of lines atop every utility pole, five pole-top transformers in on every block, and five lines running into every home. That’s just not feasible. One power grid is plenty.
As local monopolies, the power companies were heavily regulated to prevent them from doing what monopolies do, which is gouge people. In exchange for limiting how much the companies could charge for electricity, the regulating agencies promised them a guaranteed return on investment. If a power company spent a billion dollars on a new generation facility, the regulator guaranteed they would recoup all of that investment over time, plus a percentage profit on top.
Angwin notes that this incentive led power companies to build more generation facilities than they needed. That, in turn, led to a very reliable grid, as there was always some excess capacity to meet demand, even during the heaviest spikes. The utilities were vertically integrated monopolies, meaning they controlled both the production and distribution of electricity. Generation was the money maker. Transmission and distribution were the means of delvering the product to the customer.
Deregulation of the electric utilities began in 1982 with a Supreme Court ruling requiring utilities to transmit power regardless of who created it. This broke the vertical monopoly of the grid. The utilities were no longer entirely in control of the system.
Over time, as more private generation facilities came online, the responsibilities of the electric utilities moved away from money-making generation and toward money-losing maintenance of transmission and distribution networks.
The federal government loosened market regulations on the power industry, hoping to move the grid closer to a free market model, and to replicate the successes of airline and telecom deregulation. After those latter two industries were deregulated, airfares and phone service prices went down, and quality, availability and consumer choice improved.
The power industry, as Gretch Bakke notes, is fundamentally different than every other industry in that its product (electricity) is consumed the instant it is produced, and in that production must always match demand, exactly, down to the second.
RTOs came into existence to try help state and local utilities deal with these two unique challenges. How could a utility in one state balance generation and demand when the power being produced and consumed crossed state lines? RTOs are non-profit organizations that help interconnected utilties plan for and manage this balance on a minute-to-minute basis. They provide a marketplace by running an ongoing auction of electrical capacity in which prices change every five minutes. They also set rules on how much capacity utilities must maintain to deliver adequate power to their customers.
So, when ISO-NE created its Winter Reliability Program to try to ensure adequate power under the most adverse conditions, it seemed to be operating under its legal purview.
In an attempt to create a truly open market, however, the federal government had prevented RTOs from demanding that any power be generated by any specific fuel. In a truly open market, the only things that matter are commodity and price, not how or where the commodity was produced.
This sort of regulation works in other markets. We don’t tell Ford how to make their cars, or Papermate how to make their pens. They choose how to make products based on customer needs, and the market either approves or rejects what they’ve built.
Once again, however, electricity is different. It must be available in life-threatening situations such as extreme cold and extreme heat. Because it’s consumed the instant it’s created, it depends on a real-time supply chain. When there’s no sun, solar panels simply won’t produce. No wind, no power from the turbines. No natural gas, the gas plants go offline. Power goes out that very second, and thousands of people freeze.
This was the scenario ISO-NE foresaw and attempted to prevent by requiring generation facilities to maintain oil reserves for a worst-case scenario that did in fact come to pass. FERC then said this plan violated federal regulations by dictating what type of fuel had to be used to generate the required power.
Both entities were trying to protect the consumer: ISO-NE by guaranteeing availability and FERC by promoting low market prices. In practice, however, the regulations work against each other and in the end, everyone loses.
Angwin points out that these multi-layered, conflicting regulations pervade the entire industry and that they’re so complex, even seasoned professionals have a hard time understanding them. Many of the rules are made behind closed doors to benefit narrow interest groups, and many of them make no sense at all from a consumer perspective.
For example, Angwin describes what happens when a utility buys power in an RTO auction to meet the needs of the next five minutes. The RTO lists three sellers whose rates can be described as cheap, more expensive, and most expensive. The utility needs to buy power from all three sources to meet coming needs. So how much do they pay?
In a normal market, they would pay the cheap price to the cheap supplier, the more expensive price to the more expensive supplier, and the highest price to the last supplier. In the RTO market, they have to pay the most expensive price to all of the suppliers. The rule basically says that if they pay a high price to one supplier in an auction, they have to pay the same high price to all suppliers, even when those other suppliers explicitly said they would sell for less.
What sense does that make?
For the consumer, none. But in a world where cheap renewables threaten to drive traditional generation plants into bankruptcy, there is a place for this seemingly irrational rule.
The grid, as Gretchen Bakke points out, has to serve many conflicting interests. It has to be on all the time, or our lives come to a halt. It has to be profitable for the companies that supply and maintain it. It has to clean to keep from poisoning the world it serves.
Angwin argues that the various regulatory bodies that try to address these conflicting needs have themselves become a major threat to the grid’s long-term viability. They don’t play well together. They often work at cross-purposes, with one agency’s regulations nullifying the effects of another’s. Many of their regulations have unintended consequences that cause more harm than good. (Angwin notes as an example some California regulations of the early 2000s that incentized companies to take generation facilities offline, deliberately causing rolling blackouts and increasing profits for the generators that remained online).
Angwin argues that the secrecy of the rule-making processes at RTOs and other regulatory bodies is a big part of what enables this regulatory mess. She advocates for open and transparent regulatory decision-making, so the public can see whose interest is being served by various rules, and how.
This is an informative book, but unfortunately, it’s poorly structured and would have benefitted from a professional editor. Angwin’s prose is undisciplined, meandering, repetitive and unclear. In most chapters, it’s hard to understand what the author wants to you to take away. If she manages to get a point across, it’s in spite of her words, not because of them.
Still, the book is useful and may be better skimmed than read.
After reading Bakke and Angwin back to back, and after doing some work in the power industry, I wonder about the future of the grid as a whole. Cheap renewables put so much economic pressure on traditional generation facilities that they may not be able to survive without subsidies. And they will need to survive for some time, because solar and wind can’t produce when the sky is dark and the wind is calm.
Electric storage technology does not yet exist at the proper scale to provide power for the masses when wind and solar are idle. We still need the traditional power plants to fill that gap.
Meanwhile, the transmission and distribution components of the grid remain incredibly complex, fragile, and vulnerable to storms and other disasters. Maintaining the existing infrastructure is incredibly expensive and not at all profitable for the utility companies responsible for its care.
As Angwin notes, a major threat to today’s grid is that there’s no answer to the question of who is ultimately responsible for keeping the power flowing, the power on which all our lives depend. The generation care only about producing megawatts. The utility companies barely turn enough profit to keep up the lines that wheel power from state to state and from substation to home.
Unlike the regulated monopolies of the twentieth century whose existence depended on keeping all parts of the system working in harmony to serve the customer, in today’s partially deregulated, partially hyper-regulated grid, “The buck stops nowhere.”
August 27, 2024
Book Review:
“The American electrical grid has been called ‘the largest machine on earth,’” writes Meredith Angwin, author of Shorting the Grid: The Hidden Fragility of Our Electric Grid. After reading about grid failures in Texas, and rolling blackouts in other states, I picked up Angwin’s book, hoping to learn what has been causing all of these problems. Angwin is a chemist who spent her career working in the utility industry and teaches courses on America’s electrical grid, writes with a snarky tone that can be both endearing and aggravating. But she makes her point clear: “In my opinion, a grid meltdown is coming.”
Warning: for a grid novice like myself, Angwin’s book was a bit of a technical deep-dive, with lots of acronyms and technical terms. The book’s main point is that our grid contains insane complexities that make it woefully inefficient. Grid rules and regulations are so complex within our utility industry that “you could hide an elephant in these regulations.” Angwin defines our two different grids. “The power grid is about generators and voltage and wires. It is about delivering electricity to customers.” Our power grid works pretty well. In contrast, our “policy grid” of rules and regulations is where our grid fails.
Angwin writes that “to some extent, this entire book is about what went wrong with utility deregulation” that took place 25 years ago, and led to the removal of consumer choices, a lack of transparency, and removed accountability. Previously, our utility model was “vertically integrated,” where utilities own the power plants and distribution equipment. Deregulation moved much of the country to Regional Transmission Organizations, or RTOs. Angwin explains (in great detail) how RTOs are a bureaucratic nightmare. Within an RTO “no agency is charged with ensuring reliable power,” and the grid is becoming “more fragile and more expensive,” and risks frequent rolling blackouts. The deregulation that led to RTOs did not result in an energy market that saved any money. It just added complexity. “RTO markets punish reliable plants and support unreliable plants.” Angwin writes that “it’s Orwellian. RTOs are ‘deregulated’ only if ‘deregulated’ actually means ‘lots more regulation.’” She explains many details of the RTO system, but the net/net, per Angwin, is this: RTOs “gave us higher prices and the possibility of a new kind of reliability failure,” enabled market manipulation and failures, and resulted in mismanagement and inefficiencies. Angwin writes that “in an RTO area, the buck never stops anywhere.”
Angwin calls herself an environmentalist, and states that she believes that man-made carbon dioxide is a problem, but that her “book is about the grid, not about the climate debate.” Still, she dedicates multiple chapters in the book to the use of renewable energy. Going with the primary theme of the book, Angwin describes the insane complexities of how renewables are included within our grid. Angwin believes that much of the discussion on renewables is hype, and that there is much “green rhetoric.” She believes that renewables can work for meeting some “intermittent power” needs, but not for “baseload” power needs. She states that renewables make the grid less efficient: “the grid has to work around them.” A problem with integrating intermittent renewables on the grid is that they require a backup energy supply. Angwin writes extensively about ways in which renewables are inefficient, and attacks studies that claim that America can make the switch to renewables. In multiple chapters, Angwin attacks policies that pay homeowners for adding solar to their homes, and then sell this solar energy back into the grid at retail prices (I.E., the price that the homeowner pays for their electricity). She states that the homeowners should be paid at far lower wholesale rates, thus making it much less attractive to install solar panels on one’s home.
Angwin explains how Renewable Energy Certificates (RECs) are gamed and misused, and lead to greenwashing. She questions whether or not RECs are really a “shell game” and states that “RECs are symptomatic of energy policies so complicated that few people understand them, including many of the politicians that voted for them.” Angwin writes that “renewable portfolio standards are a very expensive way to abate carbon,” since mandates increase the cost of power, and that cap-and-trade systems would be more efficient and much less expensive.
Angwin writes extensively about the storage requirement for green energy, because energy is needed even when the sun isn’t shining and the wind isn’t blowing. Storing electricity in batteries is extremely difficult and comes with many barriers, including loss of energy during the round trip to/from storage. Battery production is resource-intensive. Today, grid-level storage is not available. The number of batteries needed for grid-level storage is staggering, and likely will never happen. Simply put, Angwin believes that batteries can help the grid, but cannot be the grid.
Angwin stresses that, at this point, personal responsibility towards lowering one’s own energy usage will have minimal (if any) impact on climate change. She writes that “little changes make a big difference is bunkum when applied to climate change and power.” Angwin declares that the low-carbon fuels she strongly prefers are nuclear and hydro, and writes about Sweden and Ontario low-carbon grids, both relying on nuclear and hydro. Nuclear power is Angwin’s clear energy favorite.
Angwin sums up her beliefs like this: consumers should have access to all the energy we want when we want it. The power grid should be “as clean as possible,” with the cost of electricity being “as low as reasonably possible.” Low-carbon fuel sources should “be encouraged, as much as reasonably possible.” Nuclear plants should serve as the grid’s energy baseload. Hydro is the best “load-following” energy, because it can be started quickly and is “non-polluting.” No hydro in the area? Then follow up nuclear with solar, wind and natural gas as backups. What can we, as consumers, do? Pay attention and get involved!
From an environmental perspective, Angwin’s book has some glaring omissions, and her opinions will likely piss off most environmentalists. First, her analysis fails any mention of the costs climate change will wreak on America, not to mention the planet. Second, she chooses not to address nuclear waste. Third, she ignores the environmental impact of hydro power. But her relentless harping on the very real inefficiencies within our grid make it blatantly clear that we are wasting scads of energy, and money, and that the risk of our grid “shorting” is way too high. Angwin sold me on the fact that we need a total grid revamp.
“The American electrical grid has been called ‘the largest machine on earth,’” writes Meredith Angwin, author of Shorting the Grid: The Hidden Fragility of Our Electric Grid. After reading about grid failures in Texas, and rolling blackouts in other states, I picked up Angwin’s book, hoping to learn what has been causing all of these problems. Angwin is a chemist who spent her career working in the utility industry and teaches courses on America’s electrical grid, writes with a snarky tone that can be both endearing and aggravating. But she makes her point clear: “In my opinion, a grid meltdown is coming.”
Warning: for a grid novice like myself, Angwin’s book was a bit of a technical deep-dive, with lots of acronyms and technical terms. The book’s main point is that our grid contains insane complexities that make it woefully inefficient. Grid rules and regulations are so complex within our utility industry that “you could hide an elephant in these regulations.” Angwin defines our two different grids. “The power grid is about generators and voltage and wires. It is about delivering electricity to customers.” Our power grid works pretty well. In contrast, our “policy grid” of rules and regulations is where our grid fails.
Angwin writes that “to some extent, this entire book is about what went wrong with utility deregulation” that took place 25 years ago, and led to the removal of consumer choices, a lack of transparency, and removed accountability. Previously, our utility model was “vertically integrated,” where utilities own the power plants and distribution equipment. Deregulation moved much of the country to Regional Transmission Organizations, or RTOs. Angwin explains (in great detail) how RTOs are a bureaucratic nightmare. Within an RTO “no agency is charged with ensuring reliable power,” and the grid is becoming “more fragile and more expensive,” and risks frequent rolling blackouts. The deregulation that led to RTOs did not result in an energy market that saved any money. It just added complexity. “RTO markets punish reliable plants and support unreliable plants.” Angwin writes that “it’s Orwellian. RTOs are ‘deregulated’ only if ‘deregulated’ actually means ‘lots more regulation.’” She explains many details of the RTO system, but the net/net, per Angwin, is this: RTOs “gave us higher prices and the possibility of a new kind of reliability failure,” enabled market manipulation and failures, and resulted in mismanagement and inefficiencies. Angwin writes that “in an RTO area, the buck never stops anywhere.”
Angwin calls herself an environmentalist, and states that she believes that man-made carbon dioxide is a problem, but that her “book is about the grid, not about the climate debate.” Still, she dedicates multiple chapters in the book to the use of renewable energy. Going with the primary theme of the book, Angwin describes the insane complexities of how renewables are included within our grid. Angwin believes that much of the discussion on renewables is hype, and that there is much “green rhetoric.” She believes that renewables can work for meeting some “intermittent power” needs, but not for “baseload” power needs. She states that renewables make the grid less efficient: “the grid has to work around them.” A problem with integrating intermittent renewables on the grid is that they require a backup energy supply. Angwin writes extensively about ways in which renewables are inefficient, and attacks studies that claim that America can make the switch to renewables. In multiple chapters, Angwin attacks policies that pay homeowners for adding solar to their homes, and then sell this solar energy back into the grid at retail prices (I.E., the price that the homeowner pays for their electricity). She states that the homeowners should be paid at far lower wholesale rates, thus making it much less attractive to install solar panels on one’s home.
Angwin explains how Renewable Energy Certificates (RECs) are gamed and misused, and lead to greenwashing. She questions whether or not RECs are really a “shell game” and states that “RECs are symptomatic of energy policies so complicated that few people understand them, including many of the politicians that voted for them.” Angwin writes that “renewable portfolio standards are a very expensive way to abate carbon,” since mandates increase the cost of power, and that cap-and-trade systems would be more efficient and much less expensive.
Angwin writes extensively about the storage requirement for green energy, because energy is needed even when the sun isn’t shining and the wind isn’t blowing. Storing electricity in batteries is extremely difficult and comes with many barriers, including loss of energy during the round trip to/from storage. Battery production is resource-intensive. Today, grid-level storage is not available. The number of batteries needed for grid-level storage is staggering, and likely will never happen. Simply put, Angwin believes that batteries can help the grid, but cannot be the grid.
Angwin stresses that, at this point, personal responsibility towards lowering one’s own energy usage will have minimal (if any) impact on climate change. She writes that “little changes make a big difference is bunkum when applied to climate change and power.” Angwin declares that the low-carbon fuels she strongly prefers are nuclear and hydro, and writes about Sweden and Ontario low-carbon grids, both relying on nuclear and hydro. Nuclear power is Angwin’s clear energy favorite.
Angwin sums up her beliefs like this: consumers should have access to all the energy we want when we want it. The power grid should be “as clean as possible,” with the cost of electricity being “as low as reasonably possible.” Low-carbon fuel sources should “be encouraged, as much as reasonably possible.” Nuclear plants should serve as the grid’s energy baseload. Hydro is the best “load-following” energy, because it can be started quickly and is “non-polluting.” No hydro in the area? Then follow up nuclear with solar, wind and natural gas as backups. What can we, as consumers, do? Pay attention and get involved!
From an environmental perspective, Angwin’s book has some glaring omissions, and her opinions will likely piss off most environmentalists. First, her analysis fails any mention of the costs climate change will wreak on America, not to mention the planet. Second, she chooses not to address nuclear waste. Third, she ignores the environmental impact of hydro power. But her relentless harping on the very real inefficiencies within our grid make it blatantly clear that we are wasting scads of energy, and money, and that the risk of our grid “shorting” is way too high. Angwin sold me on the fact that we need a total grid revamp.
May 14, 2021
Damn good. Highly technical (but worth it) and Fuck we are in trouble!
June 12, 2023
Interesting book, much I didn't know. I thought it was excellent in most areas, though I took issue with her analysis on various auction models.
There are two central issues discussed. First, the grid must balance a fundamental tradeoff between efficiency and redundancy (in other words, how much insurance should rate-payers be forced to buy?) Second, issues of political economy put our grid inside the optimal frontier of robustness vs. efficiency.
Most of the insurance discussion is around centrally planned alternatives like paying utilities to keep fuel onsite. Intuitively, it seems like a better solution would be to give consumers choice over how much price risk to bear, and then let the market handle the rest endogenously - but that isn't really discussed.
Her final proposal at the end seems very reasonable: baseload of nuclear and load following generation of hydro first and then a mixture of gas/wind/solar/nuclear.
Interesting Claims:
~Gas is popular because of flexibility, but poses significant risk to the grid due to availability concerns. So it's useful as an insurance-esque fuel for small variations in sun/wind/demand, but in a winter crisis you could easily run out.
~The limited transparency of and public interest in RTO's make them relatively more likely to be coopted by special interests
~With respect to the grid, batteries are not a serious technology for anything other than utilities gaming certain metrics around peak demand
~Renewables require 100% backup because of intermittency issues. At the margin, they can make the grid dirtier than fossil fuel comparisons (because the backup will be a less efficient version of fossil fuels that must come on and off quickly).
~Renewables subsidies can make the grid more fragile by pricing out more reliable plants and forcing them to close (to me, if anything, this proves the virtue of capacity auctions, because the positive externality of flexibility is underpriced)
~Net-Metering (solar generation at home being paid retail prices) is a subsidy to solar generation that raises power costs for everyone else
~There is a free-rider problem where states within an RTO can pass laws that other states in the RTO have to pay for (e.g. renewables mandates that increase cost on the whole grid). For this reason (among others) she prefers RTO's within a single state.
~Requests by utilities for users to limit power consumption in summer periods of high demand are mostly self-serving and serve to shift costs to other utilities
~The old utility market structure incentivized overinvestment due to guaranteed rates of return on capital
~Often, the bottleneck for natural gas is pipeline capacity, not upstream production (especially due to the environmental lobby blocking pipelines)
Weak Points:
~She takes issue with the Dutch auction structure of the marketplace (marginal seller sets the price) because they pay too much to the top of the queue with low marginal costs. She seems to prefer that everyone that bids below the marginal seller is paid their bid - but doesn't really acknowledge that people would change their bidding practices? And that, even if the law could force people to bid at their marginal cost, that this would distort the new incentives for new production.
~I think she is too critical of capacity auctions and natural gas. To me, flexibility is valuable, and it makes sense for gas utilities to be compensated for the value of that flexibility- but she doesn't like that capacity payments help gas and hurt nuclear, which is much less flexible.
Thoughts provoked by the book:
~The potential for geographic diversification of renewables by connecting dispersed parts of the grid. The wind isn't blowing in LA but it might be in Las Vegas, etc. Obviously, the reliability benefit would have be somewhat offset by the line-loss cost of sending electricity across more distance.
~The potential for what I think of as "negative batteries" - productive uses for variable excess power. For example, why can't we just increase the baseload and do desalination when demand goes down at night?
Interesting Cites:
~There is no free market for energy: Can there ever be? By Travis Kavulla
~Roadmap to Nowhere: The Myth of Powering the Nation with Renewable Energy by Conley/Maloney
~The Non-Solutions Porject - Mathijs Beckers
~Asymmetric Risk and Fuel Neutrality in Capacity Markets - Mays et al
~A question of power: electricity and the wealth of nations - Robert Bryce
~The Grid: The Fraying Wires Between Americans and Our Energy Future - Gretchen Bakke
There are two central issues discussed. First, the grid must balance a fundamental tradeoff between efficiency and redundancy (in other words, how much insurance should rate-payers be forced to buy?) Second, issues of political economy put our grid inside the optimal frontier of robustness vs. efficiency.
Most of the insurance discussion is around centrally planned alternatives like paying utilities to keep fuel onsite. Intuitively, it seems like a better solution would be to give consumers choice over how much price risk to bear, and then let the market handle the rest endogenously - but that isn't really discussed.
Her final proposal at the end seems very reasonable: baseload of nuclear and load following generation of hydro first and then a mixture of gas/wind/solar/nuclear.
Interesting Claims:
~Gas is popular because of flexibility, but poses significant risk to the grid due to availability concerns. So it's useful as an insurance-esque fuel for small variations in sun/wind/demand, but in a winter crisis you could easily run out.
~The limited transparency of and public interest in RTO's make them relatively more likely to be coopted by special interests
~With respect to the grid, batteries are not a serious technology for anything other than utilities gaming certain metrics around peak demand
~Renewables require 100% backup because of intermittency issues. At the margin, they can make the grid dirtier than fossil fuel comparisons (because the backup will be a less efficient version of fossil fuels that must come on and off quickly).
~Renewables subsidies can make the grid more fragile by pricing out more reliable plants and forcing them to close (to me, if anything, this proves the virtue of capacity auctions, because the positive externality of flexibility is underpriced)
~Net-Metering (solar generation at home being paid retail prices) is a subsidy to solar generation that raises power costs for everyone else
~There is a free-rider problem where states within an RTO can pass laws that other states in the RTO have to pay for (e.g. renewables mandates that increase cost on the whole grid). For this reason (among others) she prefers RTO's within a single state.
~Requests by utilities for users to limit power consumption in summer periods of high demand are mostly self-serving and serve to shift costs to other utilities
~The old utility market structure incentivized overinvestment due to guaranteed rates of return on capital
~Often, the bottleneck for natural gas is pipeline capacity, not upstream production (especially due to the environmental lobby blocking pipelines)
Weak Points:
~She takes issue with the Dutch auction structure of the marketplace (marginal seller sets the price) because they pay too much to the top of the queue with low marginal costs. She seems to prefer that everyone that bids below the marginal seller is paid their bid - but doesn't really acknowledge that people would change their bidding practices? And that, even if the law could force people to bid at their marginal cost, that this would distort the new incentives for new production.
~I think she is too critical of capacity auctions and natural gas. To me, flexibility is valuable, and it makes sense for gas utilities to be compensated for the value of that flexibility- but she doesn't like that capacity payments help gas and hurt nuclear, which is much less flexible.
Thoughts provoked by the book:
~The potential for geographic diversification of renewables by connecting dispersed parts of the grid. The wind isn't blowing in LA but it might be in Las Vegas, etc. Obviously, the reliability benefit would have be somewhat offset by the line-loss cost of sending electricity across more distance.
~The potential for what I think of as "negative batteries" - productive uses for variable excess power. For example, why can't we just increase the baseload and do desalination when demand goes down at night?
Interesting Cites:
~There is no free market for energy: Can there ever be? By Travis Kavulla
~Roadmap to Nowhere: The Myth of Powering the Nation with Renewable Energy by Conley/Maloney
~The Non-Solutions Porject - Mathijs Beckers
~Asymmetric Risk and Fuel Neutrality in Capacity Markets - Mays et al
~A question of power: electricity and the wealth of nations - Robert Bryce
~The Grid: The Fraying Wires Between Americans and Our Energy Future - Gretchen Bakke
This entire review has been hidden because of spoilers.
February 19, 2024
Many illuminating details about the alphabet soup by which we buy and sell electricity in the US, mostly relying on the author’s deep experience with electricity regulation in New England. The power of NEPOOL was completely unknown to me. She also outlined well the winners and losers from capacity markets.
That said, I was frankly unimpressed with many of the analyses in the book. The oft-repeated claim that RTO areas causes higher electricity prices simply doesn’t hold water. If anything, the results the author presents show that the difference in prices between RTO and non-RTO areas has fallen since RTOs were introduced. That’s exactly what we’d hope the RTO to do, not necessarily reverse large pre-existing price differentials entirely.
There are a few other examples like this, where she returns repeatedly to a fact or conclusion that flies in the face of the actual data. It really undermines many of the useful parts of her book, where it seems to me that she mostly appeals to vibes and the vast complexity of RTO market-based schemes to make her claims. And it leaves me deeply unsure that returning to vertically integrated utilities would lead to cleaner, more affordable power as she claims. It is very unclear that these systems are more transparent or lead to better outcomes. There is also precious little actual data about what transpires in the regulated parts of the US (other than the presence of more nuclear power).
Useful, though, for a great primer about the entities that make up electricity generation and transmission.
That said, I was frankly unimpressed with many of the analyses in the book. The oft-repeated claim that RTO areas causes higher electricity prices simply doesn’t hold water. If anything, the results the author presents show that the difference in prices between RTO and non-RTO areas has fallen since RTOs were introduced. That’s exactly what we’d hope the RTO to do, not necessarily reverse large pre-existing price differentials entirely.
There are a few other examples like this, where she returns repeatedly to a fact or conclusion that flies in the face of the actual data. It really undermines many of the useful parts of her book, where it seems to me that she mostly appeals to vibes and the vast complexity of RTO market-based schemes to make her claims. And it leaves me deeply unsure that returning to vertically integrated utilities would lead to cleaner, more affordable power as she claims. It is very unclear that these systems are more transparent or lead to better outcomes. There is also precious little actual data about what transpires in the regulated parts of the US (other than the presence of more nuclear power).
Useful, though, for a great primer about the entities that make up electricity generation and transmission.
October 18, 2024
I confess I stopped reading about a third of the way through, for no fault of the author's, but because it's a very clear, concise, well-researched and -supported investigation into the apparently tenuous nature of our electric grid and why we should be concerned and active in raising our voices and demanding that government and responsible agencies get it fixed and right ...
And I realized that I'm not enjoying spending my precious reading time on educating myself about our precarious electricity resources and getting informed on what I can do about it. Don't misunderstand, gentle Prospective Reader, Angwin does a really fine job of laying-out what could be an extremely technical and eye-glazing argument for improving our national electric power supply. I've just realized that I need to conserve my time and attention to "literature", that all-encompassing term for fiction and history.
But if you are seriously curious about the state of our electric grid and feel the need to get informed and even entertain suggestions of how you can get involved in correcting its deficiencies, I sincerely recommend this book.
And I realized that I'm not enjoying spending my precious reading time on educating myself about our precarious electricity resources and getting informed on what I can do about it. Don't misunderstand, gentle Prospective Reader, Angwin does a really fine job of laying-out what could be an extremely technical and eye-glazing argument for improving our national electric power supply. I've just realized that I need to conserve my time and attention to "literature", that all-encompassing term for fiction and history.
But if you are seriously curious about the state of our electric grid and feel the need to get informed and even entertain suggestions of how you can get involved in correcting its deficiencies, I sincerely recommend this book.
January 25, 2022
This was an excellent read. Highly recommend checking it out. The book looks at the issues impacting the electricity grid in the United States and finds that a lot of the issues are around policy and governance problems and less technological. Also, the author does a great job breaking these super complex issues down for the reader. You can get lost in certain sections that get deep into the weeds around certain examples but it's probably ok to skim those if need be. Honestly, the most interesting portion to me was the problems surrounding wind and solar and the grid. The author makes a convincing case that these types of renewables won't be enough to fully replace other types of dirty energy sources and, currently, these sources are driving an increase in the use of coal and gas on the grid now. The author shows that the best path forward is a combination of nuclear energy and renewables. Fascinating stuff.
January 19, 2024
Interesting and detailed about the power grid in New England, although beginning by comparing itself to The Big Short: Inside the Doomsday Machine was a little exaggerated I think. The author downplays the risk of climate change and seems to argue that it's fine to just keep pumping CO2 into the atmosphere because the real danger is your energy bill rising by $8/month. She completely straw-mans the green new deal and sidesteps the one scientific thing in the whole book, which I didn't appreciate either. Overall most of it was sound and well-informed, I just think the author took some shortcuts to make her argument appear better. Finally, this audiobook is by far the worst edited audiobook I have ever listened to, I tried not to let it influence me but I'm sure it did.
April 27, 2023
A lot of people have strong opinions one way or the other about Climate Change. And there are just as many opinions about what types of energy generation we should champion. Unfortunately, what unites almost ALL of these people is that very few have any clue about how the grid works. I know because I was one of them. If you’re going to make statements of any kind about how we should manage energy - the very industry that affects all other industries - then you at least ought to have a foundation for how that energy is managed. You get an excellent primer with Meredith’s book. You also get an eye opening peek into just how fragile our grid truly is.
September 6, 2024
Good book, glad I read it. but you can get pretty much everything from this book from this short Austin Vernon blog post- https://abundance.institute/articles/...
Lots of good focus on practical instances of policy failures, but I wish the author had focused more on the exact outcomes of each failure. For example, she just talks a lot about CASPR and how it manipulates the market and is very controversial, but it was very murky why exactly it did not work well.
Other parts of the book I found were very redundant. It covers the gas cycle backup for renewables practically every chapter…
Lots of good focus on practical instances of policy failures, but I wish the author had focused more on the exact outcomes of each failure. For example, she just talks a lot about CASPR and how it manipulates the market and is very controversial, but it was very murky why exactly it did not work well.
Other parts of the book I found were very redundant. It covers the gas cycle backup for renewables practically every chapter…
November 29, 2024
Very interesting book, confirms a lot of my biases so might be an unbiased review but what she says makes sense.
Could be more concise and written without so much repetition hence why I am removing a star.
Would love to read a counter argument to this with a bit more analysis into the negatives of nuclear, e.g. high capital costs and time overruns (Vogtle units 3&4). Most of the nuclear talked about in this book was constructed a long time ago.
This is a very complex topic but I agree with most of the authors arguments, some I did not (I think demand response could play a larger role etc). Overall enjoyed it
Could be more concise and written without so much repetition hence why I am removing a star.
Would love to read a counter argument to this with a bit more analysis into the negatives of nuclear, e.g. high capital costs and time overruns (Vogtle units 3&4). Most of the nuclear talked about in this book was constructed a long time ago.
This is a very complex topic but I agree with most of the authors arguments, some I did not (I think demand response could play a larger role etc). Overall enjoyed it
February 7, 2024
The book goes into gory detail about energy markets and associated auctions and regulations and dysfunctions, and these can be complex and opaque, but that doesn't stop Angwin. Even if you, like I, don't follow all the RTO auction stuff in the first part of the book, the second part, which deals with grid reliability and renewables, and references the first part in a reader-friendly way, is illuminating. It's kind of a crazy book. At times it seems like a rant, but a very well informed and rational one.
March 9, 2021
A boring, poisoned argument. Angwin is another dishonest intellectual, pushing for Total Government Control. Hence Angwin will graciously dance around the issue to make it the fault of the regime Cronies. Back in the days of the Hoover Dam the argument might have meant Angwin is just dim, yet in the days of solar panels, people living off the grid and low power devices the dimness proves to be a ruse.
October 24, 2022
Probably the clearest description of one of the most complicated topics going around. A few sections I had to reread just to get my head around just because it's a soup of acronyms at points. No fault of the author, just an immensely complicated topic that few know about.
If anything, I'd say it could have been longer to make sure all the topics got covered with enough detail. And I think an editor should have eliminated the writing from the first person.
If anything, I'd say it could have been longer to make sure all the topics got covered with enough detail. And I think an editor should have eliminated the writing from the first person.
October 28, 2022
Excellent primer and insight on electric grid
The idea that we can have "100% renewables + batteries" is perhaps the biggest piece of mis-information from climate activists. yes, decarbonization and sustainability are important goals. But they have to be based on reality. Ms Angin does a great job providing a basic education on the electric grid, a subject few really understand. Easy to read and super helpful.
The idea that we can have "100% renewables + batteries" is perhaps the biggest piece of mis-information from climate activists. yes, decarbonization and sustainability are important goals. But they have to be based on reality. Ms Angin does a great job providing a basic education on the electric grid, a subject few really understand. Easy to read and super helpful.
January 19, 2023
It’s one of those books that either completely makes sense or makes no sense at all.
It is very well written and maybe it’s just my ADD brain but I found this highly interesting and had to bounce around to multiple resources for clarification.
SPOILER ALERT — the energy industry is complex and confusing. Don’t assume this book will turn you into an expert on the first go. About to take my 3rd dive in soon to this book
It is very well written and maybe it’s just my ADD brain but I found this highly interesting and had to bounce around to multiple resources for clarification.
SPOILER ALERT — the energy industry is complex and confusing. Don’t assume this book will turn you into an expert on the first go. About to take my 3rd dive in soon to this book
January 29, 2023
A plea for sanity in electrical generation
The author shows how much mismanagement goes into determining the machines that are chosen to build our electrical grids. Often without considering reliability at all. She calls for each of us to take an active role in fighting to change that.
It’s a bit disappointing in that trying to understand so of the manipulation is so far from being an easy task.
The author shows how much mismanagement goes into determining the machines that are chosen to build our electrical grids. Often without considering reliability at all. She calls for each of us to take an active role in fighting to change that.
It’s a bit disappointing in that trying to understand so of the manipulation is so far from being an easy task.
January 1, 2025
I was really disappointed with this book. It was not written well - the very first graph included errors in the commentary (i.e. referring to "xxK GW" instead of "xxk MW", the author seemed to bounce around between different topics within chapters and between chapters, and the author seemed to ignore other topics altogether (e.g. battery and solar price curves).
The author clearly has a lot of knowledge but is in need of an editor.
The author clearly has a lot of knowledge but is in need of an editor.
January 12, 2022
A gargantuan effort by Meredith to explain the highly complex web of regulations and policies present in the utilities industry. Highly recommend for anyone interested in learning more about how our electric grids work, the tough realities behind renewables, and the inherent problems with the current systems in place.
November 18, 2021
This book was for my work book club and it was...fine. If you are already familiar with these topics, it might not be the best book for you. It also got a little repetitive at parts. But the tone was conversational and easy to understand.
December 27, 2021
A unique view of a neglected topic
It opens with a frightening example, New England having rolling blackouts in midwinter, and progresses to explain how such problems are becoming ordinary. Honestly, parts were a slog, but it's too important to avoid.
It opens with a frightening example, New England having rolling blackouts in midwinter, and progresses to explain how such problems are becoming ordinary. Honestly, parts were a slog, but it's too important to avoid.
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