Electricity capital and accumulation strategies in the U.S. electricity system

Abstract

The U.S. electricity sector has undergone a series of technological and political economic transformations between 1995 and 2020. Some, but not all, states have moved toward the provision of electricity through wholesale electricity markets, while others have remained traditionally regulated. In addition, electricity is increasingly generated from natural gas and renewable energy, and while total electricity consumption is stagnant in the United States, electric utility revenues have continued to grow. In combination with a growing emphasis on increasing shareholder value, the result of these changes has been the entry of a range of new electricity industry, finance, and regulatory actors, as well as a shift in the ways in which existing actors are seeking to realize surplus value. In light of these changes, in this paper, I outline the contemporary contours and contradictions of the U.S. electricity industry and detail five accumulation strategies being used in the industry. Building on scholarship in energy geography and geographies of finance, and based on the analysis of industry documents and financial analyst reports, I detail how the U.S. electricity has been reshaped by the introduction of new types of technologies, financial risk and investment opportunities, and changing modes of regulation. The resulting accumulation strategies are contested, partial, and incomplete, and are therefore a messy set of overlapping and at times contradictory strategies being deployed in an industry in flux.

New political ecologies of renewable energy

“…Other work has taken a more granular view on financial practices and accumulation strategies in renewable project development, including widespread financial exclusion and favoritism, extraction and rentierism. These financial geographies are contributing to rising transnational corporate monopolies in the sector (Baker, 2015(Baker, , 2021Kennedy, 2018;Knuth, 2018Knuth, , 2021Harrison, 2020;Klagge and Nweke-Eze, 2020;Christophers, 2022a).…”

The Role of Moral Devaluation in Phasing Out Fossil Fuels: Limits for a Socioecological Fix

“…Therefore, prices tend to decline when technologies develop, something advantageous in terms of progressive devaluation but not necessarily for capitalist growth (Malm 2016:340). However, this obstacle can also be defied by price guarantees, long‐term contracts, economies of scale, rent capture from investors, and accumulation in the production of minerals needed for electrification and batteries, among other possible mechanisms (see, for example, Baker 2021; Harrison 2020).…”

“…Moreover, although phase-out plans in Europe are commonly presented as environmental policies, most of them rely on an increase in investments in fixed capital for the use of natural gas (Galg oczi 2019). Increasing reliance on natural gas is related to, among other causes, its role in facilitating system reliability as well as European-Russian natural gas trade and geopolitical relations (Gustafson 2020). The central role of natural gas in phase-out plans creates a new carbon lock-in, therefore promoting the final devaluation of coal while postponing the devaluation of natural gas.…”

Alternative energy capital of the world? Fix, risk, and solar energy in Los Angeles’ urban periphery

“…sPower's rapid expansion through mergers and acquisitions, including its stated commitment to "actively buying select utility-scale renewable assets in virtually any stage of development in the United States" (sPower, 2016), reflects broader consolidation trends that have characterized the US electricity sector in recent decades (Harrison, 2020). However, in contrast to fossil fuel generation, variable renewable energy generation such as solar is subject to different marginal revenue dynamics.…”