Google's Quest for Clean Energy Impeded by Small-but-Dominant Utilities in Some US States (nytimes.com) 53
Meta, Microsoft and Apple, and Google all want carbon-free power. But Google "says its goals for carbon-free power are impeded by state-regulated utilities," reports the New York Times, especially those in America's Southeastern states which aren't facing a competitive market.
Google's battle in the region, where it has a major concentration of data centers, raises a question that applies to the energy transition everywhere: Is what's good for a few companies good for all?
At the heart of their campaign, Google and its tech giant allies want to dismantle a decades-old regulatory system in the Southeast that allows a handful of utilities to generate and sell the region's electricity — and replace it with a market in which many companies can compete to do so. Such markets exist in some form in much of the country, but the Southeastern utilities are staunchly defending the status quo. Senior utility executives contend that their system better insulates consumers from spikes in prices of commodities like natural gas, promotes reliability and supports the long-term investments needed to develop clean-power technologies....
Most electricity in the United States was long generated and distributed by heavily regulated monopoly utilities in each state. But just before the start of this century, lawmakers and regulators, arguing that competition would bring efficiencies, made it possible to set up power markets and end the dominance of the utilities — a revolution that bypassed the Southeast. Google and others contend that the markets have brought cost savings, innovation and the capital needed to increase clean power generation from wind and solar. The most recent move toward a form of power market, in a group of Western states, has saved nearly $3 billion since 2014, according to the market operator.
Self-interest also plays a role: In power markets, large companies can strike deals with independent producers that give them more leeway to bargain on price and secure more clean energy. Google entered a landmark deal last year to provide clean power to its data centers in Virginia, which is in a sprawling market called PJM....
The big utilities in the Southeast are now building more solar projects, but those pushing for a market in the region say it's not enough. In the region, the proposed solar projects' generating capacity is equivalent to just over a fourth of total capacity, which is far below the 80 percent for PJM, according to an analysis by Tyler Norris, a senior executive at Cypress Creek Renewables, a solar company, and a special adviser in the Energy Department during the Obama administration. "Project developers are attracted to open wholesale electricity markets with price transparency, independent oversight and the ability to trade with multiple potential customers," Mr. Norris said.
At the heart of their campaign, Google and its tech giant allies want to dismantle a decades-old regulatory system in the Southeast that allows a handful of utilities to generate and sell the region's electricity — and replace it with a market in which many companies can compete to do so. Such markets exist in some form in much of the country, but the Southeastern utilities are staunchly defending the status quo. Senior utility executives contend that their system better insulates consumers from spikes in prices of commodities like natural gas, promotes reliability and supports the long-term investments needed to develop clean-power technologies....
Most electricity in the United States was long generated and distributed by heavily regulated monopoly utilities in each state. But just before the start of this century, lawmakers and regulators, arguing that competition would bring efficiencies, made it possible to set up power markets and end the dominance of the utilities — a revolution that bypassed the Southeast. Google and others contend that the markets have brought cost savings, innovation and the capital needed to increase clean power generation from wind and solar. The most recent move toward a form of power market, in a group of Western states, has saved nearly $3 billion since 2014, according to the market operator.
Self-interest also plays a role: In power markets, large companies can strike deals with independent producers that give them more leeway to bargain on price and secure more clean energy. Google entered a landmark deal last year to provide clean power to its data centers in Virginia, which is in a sprawling market called PJM....
The big utilities in the Southeast are now building more solar projects, but those pushing for a market in the region say it's not enough. In the region, the proposed solar projects' generating capacity is equivalent to just over a fourth of total capacity, which is far below the 80 percent for PJM, according to an analysis by Tyler Norris, a senior executive at Cypress Creek Renewables, a solar company, and a special adviser in the Energy Department during the Obama administration. "Project developers are attracted to open wholesale electricity markets with price transparency, independent oversight and the ability to trade with multiple potential customers," Mr. Norris said.
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That's one way to look at it.
Another is that people are dependent on the utilities which are guarding their monopoly and stifling the free market.
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The Southeast was the scene of several nuclear projects that were financial debacles, including the Virgil Summer Nuke [wikipedia.org] in SC and the Vogtle Nuke [wikipedia.org] in Georgia.
The current plan is to pass the massive cost overruns onto consumers, but they were built with government-guaranteed loans, so if the utilities are undercut, the cost will be dumped onto the taxpayers.
To prevent that, the state legislatures need to ban market competition.
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Yeah. It's like, let's get rid of all these small local telcos and ISPs and consolidate them under a unified Comcast or AT&T. That way we can pass the savings onto the customer. And we can perfect our customer service model by tweaking it over the entire country. It will be the best and most widely loved companies in the US.
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Apparently the southeast is more status-quo conservatives rather than free-market conservatives..
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Re: Do not trust Google (Score:2)
An analogous situation (Score:4, Interesting)
Self-interest also plays a role: In power markets, large companies can strike deals with independent producers that give them more leeway to bargain on price and secure more clean energy. Google entered a landmark deal last year to provide clean power to its data centers in Virginia, which is in a sprawling market called PJM....
This reminds me of our current health insurance situation:
Large corporations can strike deals with hospitals and other providers, for lower service prices. Individuals without health insurance must pay full price, but insurance companies get a discount.
Or state tax incentives:
Large corporations can strike deals with states for tax relief (in return for putting their facility in that state), while smaller companies don't have the clout to do this.
We should definitely change the current system, which insulates consumers from spikes in energy costs, and pass the savings on to the large corporations.
Oh, and growing up I can't remember a time when the natural gas system or the electric grid failed absent some weather calamity such as an earthquake or hurricane or something.
Nowadays, it seems like rolling blackouts and gas failures [usnewsshorts.com] are the norm, just like (we're told) it happens in 3rd world countries.
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They simply want to steamroller over the small utilities
"small utilities" ? We're literally talking about massive government granted monopolies here. I'm up for an anti-Google rant as much as the next guy, but at least try and look intelligent while ranting.
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They simply want to steamroller over the small utilities
"small utilities" ? We're literally talking about massive government granted monopolies here. I'm up for an anti-Google rant as much as the next guy, but at least try and look intelligent while ranting.
Compared to Alphabet (Google) they are small. And utilities are heavily regulated with their prices, their investments and even executive compensation are decided by the states (government). They are more of a public private partnership. And not for nothing, but last time we did this, Enron happened.
Re: Do not trust Google (Score:2)
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Neither did the legislation in California that lead to Enron and rolling disasters.
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Compared to Alphabet (Google) they are small. And utilities are heavily regulated with their prices, their investments and even executive compensation are decided by the states (government). They are more of a public private partnership. And not for nothing, but last time we did this, Enron happened.
Compared to Alphabet most companies and even some countries are small.
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Compared to Alphabet (Google) they are small.
No they aren't. Simply having money makes you neither big, nor competent in any given market. Many companies have died finding out that you can just swing your big dollarsign covered dick into other industries. There's a reason companies like bp / Shell opt to buy existing other companies in a space (e.g. Lightsource and Daystar respectively), they know that just throwing billions around achieves nothing.
Google is small fry in the utility world, they lack industry knowledge, IP, and expertise, and claiming
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My thoughts as well. Something is fishy about their claims. If they want to implement renewables I highly doubt anything is really stopping them. Coat your datacenter with solar/wind and use that power with minimal/no grid tie. Ooooh, they (presumably) want to deeply integrate with the grid and offload their power instability onto it and expect the grid operators deal with the externalities (either them pulling power at times of high demand or making the grid buy their renewables despite low demand) at
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Datacenters are perhaps uniquely suited to doing it right. They already need to have a large battery bank and probably dual conversion + generators just to be a 1st class datacenter. Given that, they already have most of what is needed for a large solar deployment that doesn't slap the grid around.
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They simply want to steamroller over the small utilities and make people even more dependent on Google.
Not sure I follow your logic. Is Google planning on selling electricity?
I think it more likely they want exactly what they're saying. They consume a lot of electricity so they want to buy from a highly competitive market so they can get lower prices. I don't see any reason to not take them at face value here.
If that's the case, Google would want lots of small providers in the market. Even if they don't buy electricity from them, just the threat they pose will keep bigger suppliers a bit nervous. That's the
"Self-interest also plays a role:" (Score:2)
It doesn't "play a role". Whether you think Google is in the right here, or not - self-interest is the only factor.
Spin (Score:4, Insightful)
Re:Spin (Score:5, Interesting)
Typically they are regulated significantly as public utilities.
I'm in the NE, where legislators commonly follow CA's lead. Utility pricing was reasonable prior to market competition, then just like CA, prices dramatically increased. Sure there was a lot more junk mail from all the others but the standard rate offered by the utility was cheaper. Of course they were regulated and limited. Then years ago bad storms revealed the cost cutting limitations had resulted in neglect. The state invested significantly in improving the situation. Now of course there's improvement, and 50% higher cost for 2023.
Sure, there are good and bad aspects of any system, but pricing and quality was better in the more regulated environment than it has been in the more "competition" environment sadly.
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The big problem in CA was in removing the regulations for awhile. Competition does help lower prices, but you still need regulations to keep the market healthy for both the competition and the customers. Regulations are back, and the PUC is getting tougher (though still a tendency for lenience).
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CA does not actually have competition.
PGE and SCE (the two large "private" companies) are basically fronts for CPUC for taking the blame. The state sets the rules, they set the prices, and basically allow all kinds of inefficiencies to continue. It is so bad that solar breaks even in 5 years. Yes, only five years.
Basically both the "private" companies and "public" utility commissions use each other as scapegoats, while people are literally dying due to wild fires started by these companies. Entire towns and
Re:Spin (Score:4)
"utility executives contend that their system better insulates consumers from spikes in prices of commodities like natural gas, promotes reliability and supports the long-term investments" .....is all a fancy way of spinning the fact that they're overcharging.
Nope, I don't believe that's true.
Here are the rates by state:
https://www.eia.gov/electricit... [eia.gov]
Here is a map of which states are deregulated:
https://infocastinc.com/market... [infocastinc.com]
The deregulated states have the highest rates by far.
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"utility executives contend that their system better insulates consumers from spikes in prices of commodities like natural gas, promotes reliability and supports the long-term investments" .....is all a fancy way of spinning the fact that they're overcharging.
In a for-profit capitalist system, define "overcharging".
I'd say let's go after the billionaires in the electric monopoly, but we're so corrupt we can't even define corruption or monopoly anymore.
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A good PSC prevents the overcharging. Remove the regulations and open the market and you get a confusopoly, higher prices, and less reliability, not vigorous competition. See Enron. See also Texas (but you may need a flashlight for that).
I do not know about the Southeast, but (Score:3)
I do not know about the Southeast, but in my state, the idiots voted to de-regulate electricity and allow competition. The result, rates went up like 10% to 20%, depending where you live within a year and stayed there.
So SE US, be careful!
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Yeah because this is America it's all black and white. It's either all regulation or no regulation. It's not conceivable that a system can be set up where new players come into the market and yet fall under a regulatory framework. Nosiree.
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In the really real America utilities get "fully deregulated" and are still subject to some regulation.
But also in the same place, the old regulation was inadequate, and the new regulation is moreso.
Just ask California.
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If that was actually inflation, corporate profits would be down. Corporate profits are up. It's just a greedy money grab using "inflation" as an excuse.
My California power cost 2.5x my SE power (Score:2)
Maybe I'm now living under some brutal utility monoply. I dunno, I never looked into it.
But I paid about 2.5 more for power (per kw/hr) in California than I do now.
If that's the effect of a utility monopoly then bring on more of that!
It's more complicated than what most people think (Score:3)
*the UK has every problem we have in North America and then a layer of cronyism and corruption. I've gotten in trouble twice for blocking blatant corruption.
Power sink (Score:4, Interesting)
Enter the green energy people and their totally unreliable wind and solar. They want to use their cheap electricity when the wind blows and sun shines and then also pay 30 cents per kwh when their green energy isn't producing. Some even want to sell their electricity back to the grid when they don't need it for 30 cents per kwh. Except when the sun is shining or the wind is blowing and it isn't too hot out we end up with a surplus of electricity and which drives the price negative.
And this is a problem to be solved, not an impenetrable obstacle.
All we need is a way to use the extra power in an intelligent way. Some manufacturing process that can be used as a sink for all the excess power, that can be spun up or down fairly quickly without affecting the underlying process.
Something like converting bauxite to aluminum, which is very energy intensive, but which might be done in the background in an automated way and on a small scale. Someone loads up the electrochemical cells with ore, and then once a month (when remotely alerted by the process) comes by to collect the aluminum and add more ore to the cells.
People have suggested ammonia production as one solution: if this could be done on a small scale it would fit nicely. Take the extra power, make fertilizer, and a truck comes by once a month to take away the product.
Other people have suggested carbon sequestration: there have been some recent technological advances that makes capturing CO2 from the atmosphere very efficient (compared to air distillation, the current method). A truck comes by once a month to load up on liquid CO2 and takes it to a facility to be pumped underground. Using an electric semi for transportation, and the electric grid for pumping and post processing.
Another way to solve the problem is with grid-scale batteries. Not to supply the grid when the sources go offline, but to smooth out the peaks and troughs of demand and reduce the dependence on peaker plants and the unreliability of solar and wind. Something like 15 minutes of supply would solve a lot of these issues.
(And there's limited lithium on the Earth, but there's a huge amount of lithium in sea water, an opportunity for zeolite extraction for someone wanting to pursue this. Also, Tesla recently discovered/patented a method of extracting lithium from playa mud, and it's a pretty clean method, and there's a lot of playa mud available. The lithium supply problem is an area of active research.)
Pointing out problems that cannot be addressed is a valid criticism, but the existence of problems is not by itself a reason not to do something.
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I actually spent 12 years trying to change consumer habits so that consume demand would match supply as opposed to the current system where supply has to match demand. Technically and economically we had some huge s
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GP: We should store some power and also do some other stuff
You: We can't store all the power
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In Calif at least, the utilities have to pay for putting CO_2 into the air. This cost is directly passed to consumers. The state then uses the money for ridiculous projects like high speed rail, refunds a small percentage back to rate payers, and a large percentage back to the poor. In other words, the state uses electric utilities for hidden taxation, driving up the apparent pre-tax price of energy.
Crocodile Tears (Score:1)
Now do the Jones Act.
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Now do the Jones Act.
What do public waterways have to do with this? And the Jones Act is a completely different animal. The energy prices in the SE (otherwise just known as 'the south') are quite low and stable. That system of regulation is working. The Jones Act means we use only a tiny fraction of waterway shipping that we could due to protectionism. If we got rid of the Jones Act, shipping prices would almost certainly fall and we would use the rivers for shipping far more than we do. If we deregulate this energy marke
Enron rev2 (Score:2)
Google can't get tips from Kenneth Lay, but Jeffrey Skilling is still available to implement this sort of thing.
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Is Ken Lay still dead ? Was he ever dead ? He sure did head to the checkout line at a convenient time.
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Is Ken Lay still dead ? Was he ever dead ? He sure did head to the checkout line at a convenient time.
Just like Generalissimo Francisco Franco, Ken Lay is still dead.
Smartest guys in the room (Score:2)
OTOH (Score:3)
I live in Georgia and pay a fairly low(ish) rate without rolling blackouts. Two new reactors are slated to come on-line to help with carbon emissions. One of them is now fueling and expected online in Q1 2023.
One option to be more green is to put solar panels on the roof of the data center. Or make a longer term deal with the regulated utility to get them to expand their solar efforts faster.
Google concentration of data centers... (Score:2)
Don't let Google fool you (Score:2)
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I'm not sure that's correct. Google executives want to get street cred with their woke buddies around the corporate wokosphere.
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