Sean Casten

Sean Casten is president & CEO of Recycled Energy Development, LLC, a company devoted to profitably reducing greenhouse emissions.

The Price Is Not Enough

Prices vs. contracts: Why good CO2 policy needs complex financial markets

Economic theory is predicated on the thesis that if supply and demand are allowed to freely set the price for a given item, rational capital allocation (and a host of other social benefits) will follow.  Much of public policy is predicated on the truth of that thsis. But there’s a problem with the thesis: price alone isn’t sufficient. A market that provides nothing more than a spot price for a given commodity is only a market in name. To have a real market of the kind that brings about all the good things that economic theory describes, we need a …

She's Got a Great Personality

Cap-and-dividend: the worst possible way to regulate GHG emissions

Cap-and-dividend stinks. There are probably worse ways to regulate GHG emissions, but none that have gotten any kind of traction inside the beltway. Its advocates — in particular, Peter Barnes and Sen. Maria Cantwell (D-Wash.) — are, so far as I can tell, truly motivated to find good policy solutions. I don’t know either of them personally, but I’m pretty sure I share their motivations, which makes me somewhat uncomfortable setting the time aside to criticize their ideas. But the ideas are really flawed. I have generally found that advocates of cap-and-dividend are like advocates of perfect markets: the model …

Shameless Commerce Department

ComEd offers Illinois $500M in exchange for guaranteed profits

The gaul of this is hard to put to words. Commonwealth Edison, one of Illinois’ regulated utilities is seeking to take advantage of the state’s budget crisis by offering the state $500 million in exchange for a guarantee of the utility’s future profits. If there’s a better case to be made that a regulated utility isn’t a business in any normal sense of the word, I haven’t found it. As a regulated monopoly, ComEd doesn’t get exposed to much in the way of competition, and as long as they can get regulators to declare that their capital investments are prudent, …

Coal: Like a bad date, it's Dirty AND Expensive.

Duke seeks approval for expensive coal

More breaking news from the Coal Isn’t Cheap department. Duke Energy reports that the new 620 MW coal plant they are building in Indiana is now expected to cost $2.9 billion, or 23 percent more than they last estimated in November. It’s worth always taking the time to do some math whenever these type of numbers get released. No one has invested in new coal assets of any significance in the U.S. in nearly 2 decades, for the simple reason that a coal plant is a lousy investment. Meanwhile, every new coal plant that has been proposed or commenced construction …

America's declining reserve margin

Without major capital investments, this generation of Americans will short change the next

From 1980 to 2007, total U.S. electricity consumption increased by a factor of 1.8, but total generation capacity increased by only 1.7 times. In other words, demand out-grew supply. For a while, that was fine — we had more toys than we needed, and real power prices declined for two decades as we made better use of the toys we had. By the year 2000, though, that gig was up, and we suddenly found ourselves having to run our most expensive plants harder, having fully tapped-out our low-cost supply. Electricity prices, not surprisingly, rose — and continue to do so, …

Dumb grids

The smart grid conversation is stupid. Policies to encourage smart grids are at best minor distractions, and at worst contrary to the public interest. Smart grids are also the key to cleaning up and modernizing the electric system. These sentences are not in conflict with one another. The smart grid is the cart, not the horse. There is no doubt that better access to real time data could facilitate a much more rational use of our electric infrastructure, shifting usage patterns (both in time and in space) to reduce the costs of grid construction and operation. But we don’t need …

three easy steps

Policy fixes to unleash clean energy, part 8

U.S. energy and environmental policy sucks. We burn too much fuel, we emit too much pollution and we do so under a set of rules that cause us to spend far too much on energy, even as we use it in volumes that poison our planet, our geopolitics and our economy. We deserve better. That said, while it’s fairly easy to identify what ideal energy and environmental policy would look like if we had a clean sheet of paper, it’s harder – and ultimately, more important – to figure how to achieve those objectives within existing political constraints.  That’s not …

Policy fixes to unleash clean energy, part 7

Having noted in part 2 that all barriers to clean energy deployment can be lumped into utility policy, environmental policy, and out-of-date policy — and having outlined the necessary fixes for the first two in parts 5 and 6 — we now address out-of-date policies. This is perhaps the hardest to address, because it is such a catch-all. It is also, somewhat uniquely, a case where we don’t even know where all the bodies are. In my experience, it is hard to build any clean energy project without running into some antiquated law that impedes progress. Which by extension means …

Environmental Policy Reforms

Policy fixes to unleash clean energy, part 6

Having outlined ideal utility policy in part 5, we move now to ideal environmental policy. As a reminder, this is not the policy that could be accomplished tomorrow given political realities, but rather the long-term goal we ought to shoot for. If the only thing that mattered was good environmental policy guided by responsible principles, this is what we’d do. It is the long-term goal, but not necessarily the politically-possible next step. Ideal environmental policy reforms Immediately convert all emissions regulations to an output basis, per unit of electricity (MWh) and/or thermal (MMBtu) energy produced. Under present regulation, the less …