The Hunger Games of America's electricity - Axios
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The Hunger Games of America's electricity

Illustration: Rebecca Zisser / Axios

A series of policy actions in Washington and nationwide market trends are scrambling alliances across different energy sources all fighting for a piece of America's stagnant electricity market.

Why it matters: The bottom lines of companies across the energy industry depend upon growing their share of the power mix, yet they often also align with each other in different policy and market fights. Your electricity bill and the nation's carbon emissions are also at stake. Let's take a look at the forces at play and the unlikely alliances forming in what can best be described as the Hunger Games of America's electricity.

Market moves

The Energy Department took the unusual step late last month of asking the Federal Energy Regulatory Commission to issue a rule that would favor nuclear and coal plants, with the stated aim of ensuring the electric grid is resilient.

FERC, an independent government agency that regulates the electricity markets and other energy infrastructure, makes the final decision about whether to issue DOE's proposed rule.

Coal and nuclear have been on the losing end of market and policy moves over the last several years. This is President Trump's attempt to reverse those trends even though costs keep dropping for natural gas, solar and wind.

"Almost everybody has been winning at coal's expense over the last five or six years," said Ethan Zindler, U.S. director of Bloomberg New Energy Finance. "U.S. demand for electricity hasn't been growing, so the pie isn't getting bigger. If you want more of the pie, you have to take it from someone else."

Coal was the dominant player in the electricity space for decades up until several years ago. Hit with the one-two punch of cheap, cleaner burning natural gas and Obama-era environmental regulations, coal's share of the market is shrinking, from nearly 50% in 2008 to 30% in 2016.

The nuclear power sector is struggling to grow its share of the market. It's hovered just below 20% for the last decade or more. Cheap natural gas is also hurting nuclear power, along with other obstacles like high upfront costs and environmental opposition. Its carbon-free profile is less of an asset under the Trump administration, which is rolling back federal climate policies.

The Energy Department's proposed rule would allow coal and nuclear plants operating in competitive markets, which make up more than half of the United States, to recover costs if they have 90 days worth of fuel on site. That's an advantage coal and nuclear have. But gas and renewables are more flexible, making them a natural pairing on the electricity grid.

"Gas can compensate very quickly to the oscillating sources of wind and solar, which is the exact direction our systems in the world are evolving," said Paolo Frankl, who leads the International Energy Agency's renewable division. "Both coal and nuclear are more rigid technologies, so they will have more difficulty adapting in a new system."

The Energy Department's move prompted an unusually broad coalition of trade associations representing wind, solar, natural gas and more to sign onto a filing urging FERC to take more time reviewing the proposed rule. Right now, the Energy Department is only allowing 60 days.

Much has been made of that broad and diverse coalition, but it's important to note that their only common goal in that filing was asking for more time.

Renewables and the oil and gas industry are not natural allies in Washington, but they are in this one case because of their shared interest in not letting coal and nuclear grab their market share.

Analyst Josh Freed of the centrist think tank Third Way sums it up: "The enemy of my enemy is my friend."

State fights

Alliances are shifting outside of Washington. Over the past year, renewable-energy groups and advocates of nuclear power have come together to help enact policies in New York and Illinois to keep open financially struggling nuclear reactors, while also further encouraging renewable energy.

The American Petroleum Institute is lobbying against proposals like that, as well as any potential efforts expanding state renewable mandates.

Traditionally focused on keeping its dominance in the transportation sector, API is now becoming the most powerful grid player too, driven by the growth of natural gas as the leading electricity source. API's members, like Exxon Mobil Corp., and Royal Dutch Shell, are increasingly producing natural gas along with oil.

Solar's trade test

The solar industry is neck deep in an intra-sector battle over the increasing odds that the Trump administration will issue tariffs on cheap solar equipment imports.

This fight, while on its face isolated to just solar, could tilt the electricity mix against solar if tariffs are issued.

"If you're a utility you would pivot to other options," said Tom Werner, CEO of solar manufacturer SunPower. "Our competitors are natural gas and wind predominantly, and they're coming down the cost curve and we'd be going up the cost curve."

Power primer: A related card deck: How America makes its electricity

Featured

Singapore has gone "beyond" UN to pressure North Korea

Trump with Singaporean PM Lee. Photo: Evan Vucci / AP

Prime Minister Lee Hsien Loong of Singapore said Monday "pressure" as well as "dialogue" between the U.S. and China are critical in handling the North Korean nuclear threat. President Trump commended Singapore for partnering with the U.S. to combat the threat, and Lee said his country has gone "beyond" the UN Security Council's resolutions to do so.

Trump also said Singapore Airlines signed a $13.8 billion deal with Boeing which will create 70,000 jobs in the U.S.

  • On North Korea: U.S. and Singapore share "an unwavering commitment" to combating the threat, Trump said.
  • On Lee's father, the former PM: Singapore made "rapid development from a poor island nation to an economic powerhouse under [Lee's] great father."
  • On U.S.-Singapore relations: The relationship is at its "highest point and it will continue," Trump said. Lee underscored that Singapore is the second-biggest Asian investor in the U.S.
Worth noting: The president did not take questions after the joint conference, though reporters asked about the Niger ambush and Trump's tweet about gold star widow Myeshia Johnson.
Featured

Megyn Kelly refutes Bill O'Reilly's harassment denials

Megyn Kelly poses on the set of her new show "Megyn Kelly Today." Photo: Charles Sykes / Invision / AP

Megyn Kelly spoke out against her former Fox News colleague Bill O'Reilly on NBC News' Megyn Kelly Today this morning, stating, "O'Reilly's suggestion that no one ever complained about his behavior is false. I know because I complained."

The background: Kelly's assertion comes on the heels of O'Reilly's repeated denials of sexual misconduct during his time at Fox News. A NYT report was published over the weekend detailing his $32 million settlement agreement with a former Fox News analyst over a harassment claim.

More from Kelly: She also shared an email that she wrote to the co-presidents of Fox News in November 2016 after O'Reilly said in a CBS interview that "wasn't interested" in her discussion of Fox News' toxic professional climate in her memoir: "Perhaps he didn't realize the kind of message his criticism sends to young women across this country about how men continue to view the issue of speaking out about sexual harassment."

How O'Reilly responded to the latest report: Emily Steel and Michael S. Schmidt, the New York Times reporters who broke the story about O'Reilly's massive settlement agreement, shared some of their on-the-record interview tapes with O'Reilly with the NYT's The Daily podcast.

In O'Reilly's own words:

  • "We have physical proof that this is bullshit. Bullshit. Okay? So it's on you if you want to destroy my children further."
  • "This is crap. And you know it. It's politically and financially motivated. And we can prove it with shocking information."
  • "Leaks are not facts. Leaks are designed to hurt people, and surely you both know that."
  • "I've never had one complaint filed against me by a co-worker in any Human Resources department."

O'Reilly also went on the record with his former Fox News colleague Glenn Beck this morning and repeated a similar defense while arguing that there is a larger conspiracy meant to end his career, per Media Matters for America:

  • "The end game is, 'Let's link Bill O'Reilly with Harvey Weinstein.'"
  • "[T]hey don't care because this was a hit job to get me out of the market place. And then you'll have the left go, oh, he's paranoid, oh, yeah, yeah. OK. I could back that up 50 different ways. Media Matters is involved. CNN is involved. And it's beyond any doubt."

O'Reilly posted a statement on his website with a sworn affidavit from his accuser that he claims refutes the reports. He has promised to address the allegations further tonight on No Spin News, his nightly podcast.

Featured

Lack of affordable housing killing jobs in Bay Area

A view of the San Francisco skyline from Alamo Square. Photo: Marcio Jose Sanchez / AP

The Bay Area saw its worst month for local employment since February 2010, losing 4,700 jobs in September, per Mercury News.

The backdrop: Employers in the Bay Area are finding it hard to fill positions due to limited housing and sky-high prices. Workers who can't find or afford housing close to their offices are pushed out of the area, and many of them don't want to bother with long commutes. "Housing is the chain on the dog that is chasing a squirrel," economist Christopher Thornberg told Mercury News. "Once that chain runs out, it yanks the dog back."

Go deeper: The national jobs picture for September

Featured

Norway's electric car boom

Data: U.S. Energy Information Administration; Chart: Lazaro Gamio / Axios

Norway has, far and away, the largest percentage of cars that are electric compared to other nations, according to a new report released Monday by the U.S. Energy Information Administration.

The reason: The Norwegian government offers the largest monetary incentives for plug-in electric cars, per the report: "These incentives reduce the purchase price and the operational costs associated with PEV ownership and include an exemption from an acquisition tax ($11,600 savings) for both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs)."

Why it matters: The trend toward electric cars is picking up speed all over the world, including in the biggest economies like China. Norway, whose wealthy government and economy has been built on oil production, offers an example of what factors drive adoption of electric cars.

Go deeper: The report, titled "Plug-in electric vehicles: future market conditions and adoption rates" is worth a read, or at least a scan.

Featured

Trump meets with Singapore's Prime Minister at the White House

President Donald Trump greets Singapore's Prime Minister Lee Hsien Loong as he arrives at the White House. Photo: Andrew Harnik / AP

President Trump met with Lee Hsien Loong, the Prime Minister of Singapore, at the White House Monday where they spoke of the strength of U.S.-Singapore relations.

What's next: The leaders will participate in a bilateral working luncheon with Cabinet Secretaries and key White House officials later this afternoon, before making a joint statement in the Rose Garden.

Featured

EPA pulls scientists' climate change talks

Seals rest on rocks in Narragansett Bay off the coast of North Kingstown, R.I. Rhode Island. Photo: Steven Senne / AP

The Environmental Protection Agency has canceled three of its scientists' speaking engagements at the State of the Narragansett Bay and Watershed conference today in Providence, R.I., per the New York Times' Lisa Friedman. The conference coincides with the release of a 400-page report on the health of Narragansett Bay, which features "significant" discussion of how climate change has affected the bay. The agency helps fund the Narragansett Bay Estuary Program and the agency's scientists were involved in the report.

Why it matters: "The move highlights widespread concern that the EPA will silence government scientists from speaking publicly or conducting work on climate change," writes Friedman. Trump-appointed EPA administrator Scott Pruitt has maintained humans are not the main driver of global warming, and has removed most mentions of climate change from the EPA website.

What they're saying:

  • "It's definitely a blatant example of the scientific censorship we all suspected was going to start being enforced at EPA," John King, who works on the program, told the. "They don't believe in climate change, so I think what they're trying to do is stifle discussions of the impacts of climate change."
  • "EPA scientists are attending, they simply are not presenting, it is not an EPA conference," EPA spokesman John Konkus told the Washington Post in an email.
Featured

Amazon gets hundreds of city proposals to host HQ2

Amazon chief executive Jeff Bezos at a meeting with Donald Trump in 2016. Photo: Evan Vucci / AP

Amazon has been flooded with pitches from cities and regions that want to host its second headquarters, the company said Monday. The company received 238 proposals from "54 states, provinces, districts and territories across North America."

Why it matters: There's lots of competition for what Amazon is calling HQ2. While the new headquarters could bring 50,000 jobs that pay an average salary of $100,000 to the winning city, there are also potential downsides to hosting, including the possible cost of billions of dollars via tax breaks.

Go deeper: The New York Times recently covered the tactics cities are employing to court the project.

Featured

Tillerson says Taliban could join Afghan gov. if they renounce violence

Secretary of State Rex Tillerson speaks with Gen. John Nicholson, left, commander of Resolute Support, and Amb. Hugo Llorens. Photo: Alex Brandon / AP

Secretary of State Rex Tillerson said Monday on a previously unnannounced visit to Afghanistan that he thinks moderate elements of the Taliban could participate in the Afghan government under certain conditions, per the AP. He said the Taliban should prepare to negotiate with the government since they'll "never win a military victory."

"There's a place for them in the government if they are ready to come, renouncing terrorism, renouncing violence and being committed to a stable prosperous Afghanistan... we are looking to engage with those voices and have them engage in a reconciliation process leading to a peace process and their full involvement and participation in the government," he said.
Why it matters: The strategy Trump laid out for Afghanistan focused primarily on military efforts, but this is a window into what Tillerson believes a diplomatic solution could look like.
Featured

Foxconn backs Bitcoin startup Abra

Rebecca Zisser / Axios

Abra, a Silicon Valley bitcoin startup primary focused on foreign exchange, has raised $16 million in new funding led by China's Foxconn.

Why it matters: This deal could help lead to a revolution in how people pay for consumer electronics and other household goods. Foxconn's investment does not have a strategic partnership attached, but Abra CEO Bill Barhydt believes that the inclusion of IoT chips in such things as flat-screen TVs – Foxconn now owns Sharp – could eventually be leveraged to enable pay-as-you go leasing programs transacted via Bitcoin.

Other investors in the Series B round: Silver8 Capital, Ignia, Arbor Ventures, American Express, Jungle Ventures, Lerer Hippeau Ventures and RRE Ventures.

Bottom line: Does Barhydt's vision seem far-fetched? Sure. Well, until you realize that a version of this has been underway for several years with M-Pesa and solar home-lighting systems in Kenya.

Featured

E-commerce warehouse jobs breathe life into the rust belt

Bethlehem, Pennsylvania is well acquainted with the struggles brought on by deindustrialization. The city was once home to America's second-largest steel producer, but its citizens struggled for decades with declining steel employment, before Bethlehem Steel went bankrupt altogether in the early 1990s.

But as the New York Times reports, the city as become a poster child in recent years for the new, e-commerce economy. Its proximity to New York and Philadelphia and its large pool of less expensive labor have made it an appealing place for online retailers to locate their warehouses and fulfillment centers.

Why it matters: Some economists argue that when you account for fulfillment center jobs, the retail industry is actually adding jobs, and that these positions pay better than those in brick-and-mortar stores.