Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, June 6, 2024

AI Summary. The authors measure "new work" by identifying newly added US job titles that are textually distinct from existing ones, and find that a local area's initial share of college-educated residents and its population density are the two strongest predictors of employment growth in new work. A high 1980 manufacturing share predicts less new work.

Gueyon Kim, Cassandra Merritt, and Giovanni Peri National Bureau of Economic Research
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The density of four-year colleges in 1980 is the most important single predictor of a region’s employment growth in high-skilled cognitive analytical “new job” categories between 1980 and 2010. @giov_peri @Gueyon_Kim

What local factors best predict where new work emerges?

Core argument: The initial local share of college-educated residents and log population density are the two most significant predictors of employment growth in "new work" across US commuting zones and decades, in an analysis spanning 1980 to 2010.

Our “new work” measure exploits the evolution of lists of job titles [from] US government agencies. Text analysis transforms job titles into multidimensional vectors: for each job title, we calculate the vector-distance from all titles existing in the previous period and consider the most similar title (minimum distance). If this value is above a threshold parameter, we classify the added job title as “new.” We document the importance of the initial local share of college-educated and log population density as the two most significant predictors of [employment growth in] “new work” across [Commuting Zones] CZs and decades. We analyze how exposure to global shocks and the presence of local factors correlate with the emergence of “new work” across commuting zones between 1980 and 2010. To investigate the effect of the local supply of human capital on the creation of “new work,” we use the historical presence and density of 4-year college institutions in the CZ. The importance of the initial local share of college-educated and log population density [are] the two most significant predictors of “new work” across CZs and decades. High manufacturing share in 1980 also strongly (but with a negative sign) predicts “new work.”

Takeaways by Macro Roundup® AI

  1. The initial local share of college-educated residents and log population density are the two most significant predictors of employment growth in "new work" across US commuting zones and decades, in an analysis spanning 1980 to 2010.
  2. A high manufacturing share in 1980 also strongly predicts "new work" across commuting zones, but with a negative sign, while the historical presence and density of 4-year colleges proxies the local supply of human capital.
  3. The "new work" measure converts US government agency job-title lists into multidimensional vectors, classifying an added title as "new" when its minimum vector-distance from all prior-period titles exceeds a threshold parameter.

Related Articles:

AI Summary. Russia's population has been declining for years, with Western estimates of at least 150,000 Russian battlefield deaths in Ukraine, nearly a million people leaving the country after the war began, and births at their lowest level in more than two decades. Russia has pledged to spend up to $157bn over six years on measures supporting families and children.

Betsy McKay and Georgi Kantchev Wall Street Journal
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The Russo-Ukraine War has amplified Russian population decline with at least 150,000 Russian battlefield deaths and almost 1mm young people fleeing the country since the start of the war. In response, Putin has declared 2024 “the year of the family.”

Is Russia's shrinking population a threat to its future?

Core argument: At least 150,000 Russians have died on the battlefield in Ukraine, according to Western estimates, and nearly a million fled the country after the war began, compounding a population decline that predates the war.

Russia’s population has been in decline for years, and the war in Ukraine has made matters worse. At least 150,000 Russians are dead on the battlefield, according to Western estimates. Nearly a million fled the country after the war began. Births are at their lowest level in more than two decades, with bigger-than-average drops in babies born in some regions closest to the fight. The Russian president has called raising the birthrate a national priority. Putin has pledged to spend up to $157 billion on measures to support families and children over the next six years. Russian society itself, he said, has to change, with large families becoming more common. “Motherhood is an exquisite purpose for women,” he said in an address on International Women’s Day in March. Family, he added, is “the most important thing for any woman, no matter what career path she chooses or what professional heights she attains.”

Takeaways by Macro Roundup® AI

  1. At least 150,000 Russians have died on the battlefield in Ukraine, according to Western estimates, and nearly a million fled the country after the war began, compounding a population decline that predates the war.
  2. Russian births have fallen to their lowest level in more than two decades, with bigger-than-average drops in some regions closest to the fighting.
  3. Vladimir Putin has called raising the birthrate a national priority and pledged to spend up to $157 billion over six years on measures supporting families and children, while urging that large families become more common.

Related Articles:

  • Russian Power in Decline — World Health Organization estimates put remaining life expectancy for 15-year-old Russian males in 2019 at 53.7 years, the same as in Haiti and worse than in 23 of the 46 countries the United Nations classifies as least developed. Projecting from those survival patterns, more than one in four 20-year-old Russian males would die before age 60, twice the European risk.
  • Russians Have Emigrated in Huge Numbers Since the War in Ukraine — An analysis network estimates that between 817,000 and 922,000 people have left Russia since the start of the war in Ukraine, roughly 1% of the country's workforce, worsening an acute labour shortage. A Moscow think-tank reported that 35% of manufacturing businesses lacked enough workers, the highest share since 1996.
  • Russia’s Population Nightmare is Going to Get Even Worse — Russia lost an estimated 1.9m–2.8m people beyond its normal demographic decline over a roughly three-year span, combining pandemic deaths, war casualties and emigration. Life expectancy for Russian males aged 15 fell by nearly five years, and women now outnumber men by at least 10m.

AI Summary. A New York Times/Siena College re-interview of nearly 2,000 voters found the group's support for Trump over Biden narrowed from three points to one point after his conviction for falsifying business records. About one-quarter of those who had said they backed Biden in 2020 but would switch to Trump said they would stick with Biden.

Nate Cohn and Ruth Igielnik New York Times
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Circling back with previous respondents, NYT/Siena found a 2pp shift towards Biden after Trump’s conviction in New York. Trump now leads by 1pp. @Nate_Cohn

Does a criminal conviction shift voter support in a presidential race?

Core argument: In re-interviews with nearly 2,000 prior New York Times/Siena College respondents, Trump's lead narrowed from three points in April and May to one point, following his conviction for falsifying business records.

In interviews with nearly 2,000 voters who previously took New York Times/Siena College surveys, Biden appeared to gain slightly in the aftermath of Trump’s conviction last week for falsifying business records. The group favored Trump by three points when originally interviewed in April and May, but this week they backed him by only one point. The shift was especially pronounced among the young, nonwhite, and disengaged Democratic-leaning voters who have propelled Mr. Trump to a lead in the early polls. Of the people who previously told us they had voted for Mr. Biden in 2020 but would vote for Mr. Trump in 2024, around one-quarter now said they would instead stick with Mr. Biden.

Takeaways by Macro Roundup® AI

  1. In re-interviews with nearly 2,000 prior New York Times/Siena College respondents, Trump's lead narrowed from three points in April and May to one point, following his conviction for falsifying business records.
  2. About one-quarter of voters who had said they backed Biden in 2020 but would vote for Trump in 2024 told New York Times/Siena College interviewers they would instead stick with Biden.
  3. The shift toward Biden was especially pronounced among the young, nonwhite, and disengaged Democratic-leaning voters who had propelled Trump to a lead in the early polls.

Related Articles:

  • Trump Leads in 5 Key States, as Young and Nonwhite Voters Express Discontent With Biden — Polling of registered voters showed Trump ahead of Biden in five of six battleground states — Michigan, Arizona, Nevada, Georgia and Pennsylvania — with Biden leading only in Wisconsin. Trump and Biden were essentially tied among voters aged 18-29 and Hispanic voters, groups that each gave Biden over 60% of their vote in 2020.
  • The Shaky Foundation of Trump’s Lead: Disengaged Voters — Polling shows Trump's narrow national lead is built on gains among voters who pay little attention to politics, don't follow traditional news, and don't vote regularly, while Biden leads among those who voted in the prior presidential election. Almost all of Trump's gains have come from these less engaged voters.
  • American Politics Is Undergoing A Racial Realignment — National election surveys and Gallup polling show the Democratic Party's advantage among Black, Latino, and Asian voters at its lowest level since 1960. The article argues this shift reflects fading civil rights-era ties, a weakening link between income and party choice, and non-white voters with long-held conservative views aligning their votes with those views.

AI Summary. SpaceX's Starship completed its first return from space, with the booster setting down in the Gulf of Mexico and the upper-stage spacecraft surviving atmospheric re-entry for a controlled splashdown in the Indian Ocean. The flight was not flawless — the vehicle lost many heat-shield tiles and sustained a damaged flap — and technical hurdles remain.

Kenneth Chang New York Times
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SpaceX claims its Starship accomplished a set of ambitious goals on Thursday, including soft landings of both the booster and main Starship components.

Has the largest rocket ever built returned intact from space?

Core argument: SpaceX's Starship completed its first return from space, with the booster setting down gently in the Gulf of Mexico and the second stage traveling halfway around the world to a controlled splashdown in the Indian Ocean.

After it dropped away from the upper stage, the booster was able to gently set down in the Gulf of Mexico while the second-stage spacecraft traveled halfway around the world, survived the searing temperatures of re-entering the atmosphere, and also made a controlled splashdown, in the Indian Ocean. The flight was not flawless, and tough technical hurdles remain. The successes, surpassing what was accomplished during the previous test flight in March, offered optimism that Mr. Musk can pull off his vision of a rocket that is the biggest and most powerful ever and yet entirely reusable. “Despite loss of many tiles and a damaged flap, Starship made it all the way to a soft landing in the ocean!” Mr. Musk wrote on X.

Takeaways by Macro Roundup® AI

  1. SpaceX's Starship completed its first return from space, with the booster setting down gently in the Gulf of Mexico and the second stage traveling halfway around the world to a controlled splashdown in the Indian Ocean.
  2. Elon Musk wrote on X that Starship made it to a soft landing in the ocean despite the loss of many tiles and a damaged flap, and the flight was not flawless, with tough technical hurdles remaining.
  3. The flight surpassed what was accomplished in the previous test flight in March, offering optimism that Musk can pull off his vision of a rocket that is the biggest and most powerful ever and yet entirely reusable.

Related Articles:

  • Building an Enduring Advantage in the Third Space Age — The United States and China each logged their highest-ever annual launch rates, at 103 and 66 launches, while Russia fell to 19 and Europe recorded three. The US accounted for roughly half of global launches but 81% of effective launch capacity, since Falcon 9 and Falcon Heavy comprised 93% of US launches.
  • SpaceX Starship Nears Orbit, But Is Lost Before Return to Earth — SpaceX's Starship rocket flew farther and faster than in its previous test flights, separating from its Super Heavy booster and reaching near-orbit before contact was lost during its return to Earth. SpaceX confirmed the vehicle was lost, likely destroyed, cutting the mission short.
  • Space: The Missing Element of Your Strategy — Private-sector funding of space-related companies has topped $10bn, close to a tenfold rise over the past decade, though the US government remains the largest source of space funding. If current momentum continues, commercial funding for space ventures could surpass government funding within 20 years.

AI Summary. A genetic analysis indicates the H5N1 bird flu virus jumped at least three times from wild birds to marine mammals along South America's Pacific coast and then acquired mutations enabling spread between elephant seals, which died in large numbers. The authors warn the virus could similarly adapt to cause large-scale infections in other mammals, including humans.

Apoorva Mandavilli New York Times
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Scientists confirmed that an H5N1 mutation allowed spread among elephant seals, causing up to 95% mortality for Argentine elephant seal pups born last year. Since March H5N1 has been detected in cows in nine states, and in wastewater from several others.

Has the bird flu virus evolved to spread between mammals?

Core argument: A genetic analysis suggests H5N1 jumped at least three times from wild birds to marine mammals along South America's Pacific Coast and then evolved to spread between elephant seals, which died in massive numbers.

Elephant seals in South America died in massive numbers because the bird flu virus acquired mutations that allowed it to spread among mammals, according to a new study. A genetic analysis suggests that H5N1 jumped at least three times from wild birds to marine mammals on the Pacific Coast of South America, and then evolved to spread between elephant seals. The research offers the first genetic and epidemiological evidence of bird flu virus transmission among mammals. And the findings hold a warning: The virus, called H5N1, may similarly transform to cause large-scale infections in other mammalian species, including people. The bird flu virus is responsible for an ongoing outbreak in dairy cows in the United States. Since March, it has been detected in cows in nine states, and in wastewater from several others.

Takeaways by Macro Roundup® AI

  1. A genetic analysis suggests H5N1 jumped at least three times from wild birds to marine mammals along South America's Pacific Coast and then evolved to spread between elephant seals, which died in massive numbers.
  2. The study offers the first genetic and epidemiological evidence of bird flu transmission among mammals, and warns that H5N1 may similarly transform to cause large-scale infections in other mammalian species, including people.
  3. H5N1 is responsible for an ongoing outbreak in U.S. dairy cows, detected since March in cows in nine states and in wastewater from several others.

Related Articles:

  • Animal Farm — The H5N1 bird flu virus spreads among wild aquatic birds before passing to domesticated animals, with highly pathogenic strains killing 90%-100% of infected poultry within 48 hours and causing the death or culling of 82m US poultry and $2-$3bn in losses. The virus has also spread to US cattle, reducing milk production in infected herds.
  • Bird Flu Is Infecting More Mammals. What Does That Mean for Us? — The H5N1 bird flu strain now circulating globally has spread not only among farmed and wild birds but into many other animals, unlike earlier versions of the virus. Outbreaks in mink and in South American sea mammals suggest the virus most likely adapted to spread between mammals.
  • This May Be Our Last Chance to Halt Bird Flu in Humans and We Are Blowing It — An outbreak of H5N1 avian influenza in U.S. dairy cattle has spread to at least 33 herds across eight states with one confirmed human case, and Texas's agriculture commissioner suspects it began earlier and may have infected up to 40% of Texas Panhandle herds. An H5N1 expert argues containment becomes unlikely once around 10 human cases are detected.

Friday, June 7, 2024

AI Summary. Countries with more efficient business bankruptcy systems fare better after credit booms: the authors estimate that a 10 percentage point rise in business credit relative to GDP is followed by a roughly 3 percentage point decline in real GDP over five years in countries with low bankruptcy efficiency, but almost no decline where efficiency is high.

Martin Kornejew, Chen Lian, Yueran Ma, Pablo Ottonello and Diego Perez National Bureau of Economic Research
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Data from 39 countries show that countries with low bankruptcy efficiency experience a 3 ppt decline in GDP following a 5-year business credit boom, while in high-efficiency countries GDP barely declines.

Does bankruptcy efficiency determine how badly economies suffer after credit booms?

Core argument: Following a 10 percentage point increase in business credit to GDP over five years, real GDP declines about 3 percentage points over the next five years in countries in the bottom quartile of bankruptcy efficiency, while barely declining in top-quartile countries.

Institutions for business bankruptcy resolve firms’ distress and default through two main approaches: terminate firms’ operations, liquidate their assets, and pay out the proceeds; or restructure viable firms where “going-concern value" is greater than the liquidation value. Well-functioning restructuring systems reduce inefficiencies from liquidation. We measure bankruptcy efficiency using the total recovery rate, i.e., total payment to claimholders net of total bankruptcy costs normalized by 100 (the full value from continuing operation). In the sample we use for analysis, which is restricted by business credit data from the Bank of International Settlements, the average bankruptcy efficiency is higher at 63%. Even in this case, the average loss of value is substantial. We trace out how economic activities evolve following changes in business credit to GDP, in countries with high and low efficiency of business bankruptcy. Figure 3 visualizes the GDP trajectory following a 10 percentage point increase in business credit to GDP over the past 5 years. A business credit boom on the scale of a 10 percentage point increase in business credit to GDP occurs in roughly a third of our sample observations. Following a boom of this size, real GDP declines by about 3 percentage points in the next 5 years for a country at the bottom quartile of bankruptcy efficiency, whereas real GDP barely declines for a country at the top quartile.

Takeaways by Macro Roundup® AI

  1. Following a 10 percentage point increase in business credit to GDP over five years, real GDP declines about 3 percentage points over the next five years in countries in the bottom quartile of bankruptcy efficiency, while barely declining in top-quartile countries.
  2. Bankruptcy efficiency, measured as total payments to claimholders net of bankruptcy costs normalized by 100 (the full value from continuing operation), averages 63% in the sample restricted by Bank for International Settlements business credit data, leaving a substantial average loss of value.
  3. Business credit booms on the scale of a 10 percentage point increase in business credit to GDP occur in roughly one-third of the sample observations.

Related Articles:

  • Corporate Debt, Boom-Bust Cycles, and Financial Crises — Using a dataset on sectoral credit exposure for 115 economies, the authors find corporate debt accounts for two-thirds of credit expansion before financial crises and three-quarters of nonperforming loans during busts, and that corporate debt expansions predict crises similarly to household debt. Recoveries are slower after corporate debt booms.
  • Credit Allocation and Macroeconomic Fluctuations — Credit expansions disproportionately channel credit to non-tradable sector firms and households, and the authors find that the sectoral allocation of credit predicts future GDP paths and the likelihood of systemic banking crises. Credit growth to non-tradable industries predicts boom-bust output patterns and elevated financial fragility, while credit to tradable industries is associated with higher future productivity growth.

AI Summary. Forbes valuation indexes for major sports leagues have outpaced the S&P 500 over the past two decades, with most teams valued at 5x–12x sales versus about 3x sales for the S&P 500. Global sports media contracts have grown from $24.5bn to over $62.4bn.

Michael Cembalest J.P. Morgan
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Michael Cembalest @jpmorgan notes that since 2005 the value of sports franchises has significantly outpaced the S&P 500; franchises are currently richly valued, trading at 5-12x sales relative to ~3x sales for the S&P 500.

Have sports team valuations outpaced the stock market?

Core argument: Forbes' league valuation indexes have substantially eclipsed the S&P 500 since 2005, with most teams valued at 5x–12x sales compared with roughly 3x sales for the S&P 500.

Forbes constructs a valuation index for each league. As shown on the left, these indexes have substantially eclipsed the S&P500 since 2005. To be clear, sports teams are much more expensive than equities: most teams are now valued at 5x-12x sales compared to ~3x sales for the S&P 500. In the NFL and NHL, the valuation gap between the least and most valuable teams is ~2.5x compared to 3.2x in the NBA and 7.6x in the MLB. Less revenue-sharing, the lack of salary caps, and higher exposure to local media rights are part of the reason why the MLB range is much wider. Global sports media contracts were worth $24.5 billion in 2011 and are worth over $62.4 billion today, according to Forbes. A new NBA deal is expected to be announced this week with a reported value of $76 bn over 11 years with NBC, Amazon, and ESPN; that would represent a 2.6x increase in annual contract value over the 2016-2025 deal with ABC/ESPN/TNT/TBS.

Takeaways by Macro Roundup® AI

  1. Forbes' league valuation indexes have substantially eclipsed the S&P 500 since 2005, with most teams valued at 5x–12x sales compared with roughly 3x sales for the S&P 500.
  2. The valuation gap between the least and most valuable teams is about 2.5x in the NFL and NHL, 3.2x in the NBA, and 7.6x in MLB, with less revenue-sharing, no salary caps, and higher exposure to local media rights cited as partial reasons for MLB's wider range.
  3. Global sports media contracts have risen from $24.5 billion in 2011 to over $62.4 billion, according to Forbes, and a reported NBA deal worth $76 billion over 11 years with NBC, Amazon, and ESPN would mark a 2.6x increase in annual contract value over the 2016–2025 deal.

Related Articles:

  • It’s Mostly a Paper Moon: Alternative Investments Review — Venture capital financing has tightened: the median time between funding rounds has lengthened, more startups have shut down through bankruptcy, and the share of "down rounds" — new financing at a lower valuation — rose from 8% to nearly 20%, with those rounds cutting post-money valuations by more than 50%.
  • Global Views: A Global Perspective on Monetary Easing — US growth is projected to slow to about 2.2% from 4.1%, close to potential given the boost to labor force growth from recent immigration, while growth in other advanced G10 economies is projected to pick up from about -0.4% to +1.2%. Core inflation estimates point to two Federal Reserve rate cuts, with timing sensitive to incoming data.
  • The Big Picture: Back to the Future — The secular backdrop has shifted from disinflationary to more inflationary, with interest rates no longer near zero and real rates no longer negative. Household balance sheets are as healthy as they have been in 20 years, leaving room to borrow, while the public sector is as indebted as it has ever been.

AI Summary. Census data show 64 of 91 large U.S. cities improved demographically after the peak pandemic year, with larger population gains, smaller declines, or shifts from decline to growth. Fifteen very large cities, including Boston, Denver, Detroit, Washington DC, and Atlanta, flipped from population losses to gains.

William Frey Brookings Institution
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As of July 2023, 2/3 of US cities with over 250,000 residents saw annual population growth, suggesting concerns about an “Urban Doom Loop” were overstated. @uscensusbureau

Are large U.S. cities regaining population after pandemic declines?

Core argument: Census data show 64 of 91 large U.S. cities did demographically better in 2022–2023 than in the prime pandemic year of 2020–2021, posting larger population gains, smaller declines, or flips from decline to growth.

64 of the 91 large cities did demographically better—registering larger population gains, smaller declines, or flips from declines to gains in 2022–2023 compared to the prime pandemic year of 2020–2021. This was especially true for the 38 cities with at least 500,000 residents. Seven of the nine cities with populations of at least 1 million, and 27 of the remaining 29 cities with populations between 500,000 and 1 million, exhibited demographic progress in terms of population gains or slowing population decline. Among the 34 very large U.S. cities that did demographically better in 2022–2023 than in the prime pandemic year, 15 flipped from declines to gains, including Boston, Denver, Detroit, Washington DC, and Atlanta; 8 posted larger gains including San Antonio and Charlotte; and 11 experienced smaller declines, including Los Angeles and Chicago.

Takeaways by Macro Roundup® AI

  1. Census data show 64 of 91 large U.S. cities did demographically better in 2022–2023 than in the prime pandemic year of 2020–2021, posting larger population gains, smaller declines, or flips from decline to growth.
  2. Among the 38 cities with at least 500,000 residents, 7 of the 9 with populations of at least 1 million and 27 of the remaining 29 showed population gains or slowing decline.
  3. Of the 34 very large U.S. cities that improved, 15 flipped from declines to gains, including Boston, Denver, Detroit, Washington DC and Atlanta; 8 posted larger gains, including San Antonio and Charlotte; and 11 saw smaller declines, including Los Angeles and Chicago.

Related Articles:

  • Booming Southern Cities and the Shrinking Northeast — Population growth since 2020 has been concentrated in southern cities and across most of the West except its largest metros such as San Francisco, San Jose, and Portland, while the Midwest and Northeast have lost population, especially in smaller towns. Larger places continue to grow faster than smaller ones, though by a narrower margin than before 2020.
  • Young Families Have Not Returned to Large Cities Post-Pandemic — The under-five population in large urban U.S. counties fell 6.1% while overall population in those counties fell 0.9%, with declines exceeding 10% in the largest counties including New York, Cook County, Illinois, and Los Angeles. Losses of young families were more severe in the Mid-Atlantic and West Coast, while the under-five population grew in Southeastern urban counties.
  • Work From Home and the Office Real Estate Apocalypse — The authors estimate New York City office values fell 45% in 2020 and 39% in the longer run, a $453bn value destruction, with lower-quality buildings hit hardest as tenants shifted to higher-quality space. They argue this has implications for local public finances and financial sector stability.

AI Summary. U.S. federal grants are funding technologies that raise the capacity of existing power lines—such as devices that automatically redeploy power around overloaded lines and sensors that measure in real time how weather affects line capacity—which are cheaper and faster than building new transmission. A Minnesota pilot found such sensors could increase transmission capacity by about 40%.

Scott Patterson Wall Street Journal
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New technologies allow electric utilities to monitor transmission capacity in real-time, a system known as dynamic line rating. A pilot project in Minnesota showed this technology could increase existing transmission line capacity by about 40%.

Can new technologies raise capacity of existing power lines cheaply?

Core argument: A Great River Energy pilot project in Minnesota showed that Heimdall's sensors, known in the industry as "magic balls," could increase transmission capacity by about 40% by measuring in real time how weather and other factors affect power lines.

The country’s aging power grid is about to leap into the 21st century as the Biden administration scrambles to meet a coming burst of new power demand. To boost the grid’s capacity, the administration is pushing to step up efficiency of existing power lines with new technologies. The upgrades are far cheaper and faster than big transmission projects. In Illinois, Algonquin Power won a $42.9 million grant to install devices that automatically redeploy power when lines are overloaded. Virginia’s Dominion Energy won $33.7 million for a project that includes devices that will let it adjust power distribution in response to changing conditions on the grid. In Minnesota, a pilot project by Great River Energy showed that Heimdall’s sensors could increase transmission capacity by about 40%. Known in the industry as “magic balls,” the sensors measure in real time how weather conditions and other factors affect power lines. When the wind blows, for example, power lines are cooler, allowing for more capacity.

Takeaways by Macro Roundup® AI

  1. A Great River Energy pilot project in Minnesota showed that Heimdall's sensors, known in the industry as "magic balls," could increase transmission capacity by about 40% by measuring in real time how weather and other factors affect power lines.
  2. The Biden administration is pushing technologies that boost the efficiency of existing power lines, upgrades that are far cheaper and faster than big transmission projects, to meet a coming burst of new power demand.
  3. Algonquin Power won a $42.9 million grant to install devices in Illinois that automatically redeploy power when lines are overloaded, and Dominion Energy won $33.7 million for a Virginia project including devices to adjust power distribution as grid conditions change.

Related Articles:

  • The U.S. Urgently Needs a Bigger Grid. Here’s a Fast Solution — Replacing existing power lines with advanced conductors made from state-of-the-art materials, a technique known as advanced reconductoring, could roughly double electric grid capacity in many parts of the US and accommodate much more wind and solar power. Many US utilities have been slow to adopt it due to unfamiliarity with the technology and regulatory and bureaucratic hurdles.
  • Resurgent US Electricity Demand Sparks Power Grid Warnings — US electricity demand is growing after years of stagnation, driven by artificial intelligence, electric vehicles, and announced industrial projects, prompting warnings about power grid stability. Nationwide forecasts for five-year electricity demand growth rose from 2.6% to 4.7%, based on utility filings to federal regulators, with retail sales projected at a record.
  • Electricity 2024 — More than 8,000 data centers operate globally, with about 33% in the United States, 16% in Europe, and close to 10% in China. US data center electricity use is projected to rise from roughly 200 TWh in 2022, about 4% of US electricity demand, to almost 260 TWh, or 6% of total demand.