C (3:05)

Awesome. Glad to be doing this again.

B (3:07)

All right, so we gave ourselves a prompt here, which is that each of us have come prepared with three questions we are eager to see answered in the next five to 10 years. I assume we both came with backups as well in case we overlap. I don't think. I bet you we're not going to overlap.

C (3:21)

I tried not to overlap with you, so I think we will. It'll be funny if we both tried so hard that we're going to like leave some very obvious questions.

B (3:31)

We probably will. Yeah. I didn't try to go super esoteric, but I at least tried to get,

C (3:35)

I tried to get like medium esoteric. So we'll see. We'll see. You want me to go first?

B (3:40)

Yeah, you go first.

C (3:41)

Okay. So just to review for listeners, the prompt here is questions, important questions facing the clean energy world that you might reasonably think will get some kind of answer in the next five to 10 years. And that turned out to be really interesting, really difficult because I kept thinking of questions that I was like, well, will we really know in 10 years? You know, there are like lots of big. There are lots of big questions where I don't think we'll really know until like 20 or 30 years out. So that was sort of interesting as a way of bracketing my thinking about this. So anyway, long story short, my first one is so self driving cars are here, which is puzzling in itself since there was all this chatter and talk for years in anticipation of their arrival and then they arrived and like nobody talks about it. Like they're operating in several cities now and nobody talks about it. So it's a little weird. But there are lots of really, I think interesting questions about the macro effects of self driving vehicles that I think we will get answers to pretty soon because now that San Francisco has been doing it a while and it seems to be working basically and I think Seattle's starting a pilot. There's like pilots starting in a bunch of cities. We're very close, I think, to basically widespread adoption. And then we'll start to get answers to some of these questions. Like, you know, the fear that I have that I think that I think a lot of people sort of climate people have, greenies, have, is that making it easier to take a car around is going to result in a lot more people taking a lot more cars around, basically. Like, even though people might not necessarily own their own vehicle, even if these are, even if they're shared vehicles, just the level of Use of cars is going to rise sharply when it becomes so easy and so convenient, which will translate mathematically into greater congestion. So like you could see like deaths going down as I think we're already seeing in San Francisco. You could see noise going down if they're all electric. You could see pollution going down if they're all electric. But, but on the core issue of urbanism they are going to. The fear is that they are going to work against density basically. They're going to make it easier to live far out. They're going to make it easier to commute like a commute. You're not going to dread an hour long commute if you can just chill and like read and tap on your phone or watch a TV show or something. So that's just going to make it a lot easier to decide to live an hour outside of town. So anyway, I think within five to 10 years we will at least see cities where these things become ubiquitous. And then I think at the very least we'll have directionally answers to some of these things. I'm very curious Shale, from your perspective what your level like of anticipation versus dread versus you know, now that it's here, it's just not that big of a deal either way. I'm curious what your disposition is on self driving cars.

B (7:37)

Good question. And so many things to say about it. Okay, let me offer you a few bits of exposition first. So I live in the Bay Area, as I think you know, I don't live in San Francisco but I live outside the city and I've.

C (7:47)

You've taken, you've taken.

B (7:49)

Of course I Waymo suburb regularly. Yeah, of course. And, and you're right that like it's just not a thing. It' Francisco anymore. Not a thing in the sense that like one out of every three cars in the city is a Waymo. And, and that's just how it is. And it's become pretty normalized to anybody who's not a tourist. And I agree with you, it's coming everywhere. And I think five to 10 years is also it's kind of the right time frame for this. My other tidbit for you, I have a 4 year old son and I've been making bets about his future with anybody who wants to take them with me since he was born. And the one of the bets is that he will never drive a car, he'll never get a driver's license. I mean he's growing up, you know, in kind of suburban Bay area California. So take that into account because this is specific bet to my son but you know, I think 12 years from now, when it would be time for him to get his driver's license, he's not going to need to. Right. And already lots of kids are just ubering around.

C (8:45)

Yeah, yeah, yeah, yeah, yeah.

B (8:47)

That said with your question, it's interesting the framing of it to me because I, I had anticipated you were going to raise a climate concern, which you're not. Right. Like you're saying

C (9:01)

I think urbanism and density are climate related. Like I think if you, if you lose density, even if the cars aren't polluting, you're still going to get greater pollution and greater impact. Like I think there are second order

B (9:14)

climate effects probably, but I would bet, I don't have data on this, but I would bet that those effects, one of the main reasons why density is lower emissions per capita is transportation. That's a big part of it. And so if it is true, the benefit of self driving vehicles from a climate perspective is that it makes a lot more sense for them to be electric. The utilization pattern, they're all weibos, they're all electric.

C (9:44)

All the extant self driving cars on the road are electric today.

B (9:47)

They're pure EVs and it just makes more sense. Right. You drive high utilization, you pay back the added capex of the EV much faster. It's better for a bunch of reasons. So I think if you assume that our self driving future actually accelerates vehicle electrification then to a first run from a climate perspective it's not inherently a bad thing. Now that would be weighed against your question, which is I think a question of will there be more vehicle miles traveled total?

C (10:14)

Yes.

B (10:15)

And so those kind of weigh against each other to some extent but it's not obvious to me that that transition to autonomous vehicles is bad. From a climate perspective it might even.

C (10:24)

No, no, I, I would not, I mean I would not have the arrogance to put my flag on either side of that. I don't think like, I, I think we just genuinely, genuinely don't know. I think that's right. That it's going to eliminate a huge chunk of emissions, of emissions. The question is all these second order effects and how you even really trace them. But like I do think that continuing to sprawl outwards is bad for a number of reasons. Extraneous to climate.

B (10:56)

Yeah, I guess I don't really have an opinion on that. I'm not a, I'm not an urbanist I guess I would say in that way. And so I don't have strong Opinions on whether adding more sprawl is bad. I could see it happening. I actually have a. I have a friend who's a long term real estate investor who is amassing a portfolio of land in the exurbs of certain cities under the bet, under like a multi decade decade. That exactly what you're describing. So I totally could see that happening. I guess I just don't inherently see it as a bad thing.

C (11:29)

Well, the question of whether exurbs are bad or not, it's a large question that we don't have time to address here. So I mean, I think this would just reinforce the worries of the urbanists, which is that they see the tech guys pushing this and I don't see any sign from the tech guys that the tech guys care about this. They drive themselves. They drive themselves everywhere. They drive themselves everywhere. They don't live in walkable places. I don't like Silicon Valley. The physical form of Silicon Valley is so gross. It's so gross and deadening. But I guess that that's all they know anyway, so. But at the very least, like we'll be able to see if that sprawl happens and then I guess we'll be able to, you know, answer the question of whether, whether we like the effects or not.

B (12:23)

I think what we can measure to answer your question of will we know in five to 10 years is in the cities where there is high proliferation of autonomous vehicles. So San Francisco and five to 10 years from now, probably a bunch of other cities will total VMT have gone up over that period.

C (12:38)

Yes, because they are pushing in the other direction in California with policy. They are trying to restrain sprawl with a lot of other policies. So how will that balance out? And. Or it might even be more interesting to see like what would happen to a city like, you know, Cleveland or whatever if they get a bunch of AVs because they do not have a strong overlay of other laws restraining them. So it'd be more of, I guess like a clean, like a clean experiment. And we'll probably see something like that

B (13:08)

where Phoenix has been the test bed for autonomous vehicles.

C (13:11)

Oh, are they, are they a thing there now?

B (13:14)

Oh, yeah, that's where, that's where a lot of the early testing was in some ways because it's obvious Phoenix is a simple grid. It's not hilly, the weather's good. Yeah. So it's kind of the opposite of San Francisco. San Francisco was like trial by fire for Waymo. But Phoenix is.

C (13:29)

Phoenix is already sprawling like crazy. So it's A little tricky to separate the signal from the noise, but yeah.

B (13:36)

Okay. Can I give you my first question?

C (13:38)

Your first one?

B (13:40)

Okay. So I think the obvious question that of course I'm going to ask. I'll try to ask a different version of the obvious question that I'm going to ask is how hot will data center fever get and will it break in the next five to 10 years? Five to 10 years is probably the right timeframe to ask that question.

C (13:59)

I was wondering about that.

B (14:00)

You could argue it could be sooner, but who knows, Right. But within the next 10 years will we will see some directional thing here. But instead of asking the question of how hot will he the data center fever get and will it break, I'll ask a different question which I think is like a second order effect of that, which is how much large load goes off grid in the next five to 10 years. Because to walk through the chain of logic, the kind of going assumption right now of what's happening is that there is so much demand for new data center capacity that we are going to be bursting at the seams on the grid. In any market that has demand for data centers, we're basically going to tap out everything we could possibly do on the grid and so much so that maybe we need to go to space. Right. But I think before we go to space in significant volume, there would be a good chance we would go off grid. We've never seen a lot of large industrial loads go off grid apart from like mining and things like that. We're starting to see glimmers of it right now in data center world.

C (15:07)

Are we not seeing law? Someone just proposed or passed a law that basically said you have to.

B (15:14)

Josh Hawley in the Senate and somebody else, I think introduced a bill that would essentially mandate data centers to go off grid. My presumption is that doesn't pass.

C (15:24)

Well, like I've said several times, like there's a world of difference between bring some generation and bring enough generation to cover yourself if you go off grid entirely. That's a very. You know what I mean? I know. And I'm asking hundreds of megawatts.

B (15:39)

Yeah, yeah, yeah, yeah. I mean, what's happening now? To be clear, there's an enormous amount of bring your own generation. Yeah, yeah, yeah, yeah. No, no question about that one. That's an answered question. The question that has not been answered is. And actually to add to that, there's also an enormous number of projects that are saying, okay, we'll do bridge power, so we are going to be off grid until we get the grid connection. And that's going to be a year, three years, five years, whatever it might be. I'm saying forget the grid. How many large loads will just be fully off grid with no intent to get a grid connection? Will that happen in significant volume? That is an interesting question.

C (16:15)

It is interesting. I'll just say my gut instinct strongly says no. I just think like the arguments for a grid, like a grid is handy, you know what I mean? Grids are extremely useful and like a lot of, a lot of policy discussion right now is, is being forced into weird shapes because it's trying to work around the fact that we can't do the obvious thing, which is just build more grid, right? Like that's like that would solve all the problems. That's what everybody wants. It's what everybody needs beyond data centers even like for the future period. We just need to do that. And we're like torn between trying to make that happen and then trying to sort of weasel our way around it, you know what I mean? And so I guess how that question the case, right?

B (17:09)

Like the fact that we're not solving that. I mean you could make a case that we will solve it, but if we don't solve it, then what happens?

C (17:16)

Yeah, well, I mean this, this, that's an interesting, even broader question. Like what could it. I could, I could imagine a story where our sort of social and political dysfunction, our in ability to build quickly forces these weird around the edges solutions that end up like growing and developing in ways that we can't anticipate now and bringing new things into the world, you know what I mean? It will spawn invention and innovation. I think even though if you had your druthers, you would not choose this situation. But I do think it will force some very creative thinking.

B (17:57)

Yeah, I mean, I think to me it really comes down to this question of is it really true that for an extended period of time into the future we're going to have dramatically more demand for data center capacity than we have ability to serve it on the grid with money attached to that demand that is willing to take some risks that maybe hyperscalers wouldn't have taken in the past, for example. And if those things are true, then it is kind of inevitable to me that some amount of it, and I don't know how much is going to take the one risk that is introduced by not being on the grid, which is largely reliability. Right. You don't have as many nines of reliability unless you really overbuild a bunch of on site stuff. But what you get in exchange is you get unleashed from a citing perspective. I mean imagine how easy it is to cite something if you remove the constraint of the transaction.

C (18:52)

But you are, I take it, imagining very large gas plants a lot. I'm not imagining a lot of them.

B (18:59)

I'm watching them get built.

C (19:00)

A lot of them. I would, you know, I don't, I have not accommodated myself to that yet. I, I don't want that to happen, you know.

B (19:08)

Oh, but that's happening, right?

C (19:10)

I know, I know it's happening.

B (19:12)

And by the way, it doesn't inherently have to be gas, right? Like there's a good study that paces and scale microgrids put out a while ago that was, that was, you know, what would it. Can you actually run at high utilization a data center fully off grid with, with mostly solar and storage?

C (19:29)

Yeah, yeah.

B (19:30)

You generally do need a little bit of dispatchable generation. So you mix your things together and you end up with some gas.

C (19:36)

But like it, you know, it's just a microgrid, right? It's the same question. It's the same question that faces any microgrid like you, you same question that faces any grid really. Like you can do X amount with variable and you need some marginal amount of dispatchable to firm up. Like it's going to be the same in miniature batteries or more batteries. That's what that's like, that's what I want to see. Like that's what I think could straightforwardly, more straightforwardly substitute for natural gas is more and bigger batteries. But they're like as you know, because like half of your shows and my shows are about this now. But like this question, the way you ask it is also tied up intimately with a bunch of other super fascinating questions. Like are data centers going to continue evolving in the direction of gigantism or is there a serious prospect for distributed, more distributed, more modular, more grid edge data centers? That's a super interesting question. Then there's sort of the bigger question of like will there be radical efficiencies in chip design that mean we don't need the sheer quantity we think now or will the bubble pop or something? You know what I mean? Like the question of how many data centers there will be is lots of people want to know the answer to that question. Not just the power people and the grid people. So how do you think about. And this is something I, and we can move on to the next one. This is something I try to think about how I talk about I, what I want to Say or here's another note I would put before they take the extraordinary step of trying to build their own. I mean if you've got a gigawatt, gigawatt data center and you're trying to go off grid, you're basically building like a pretty large grid. Like you're building like a city's worth of like electrical infrastructure. It's a pretty extreme step. I would like to see them because they can't get nuclear plants quickly or coal plants quickly or natural gas plants quickly. I would like to see them get serious about exploiting distributed capacity. I think that's faster and cheaper than on site generation if we can get the financial and institutional arrangements lined up the right way.

B (22:00)

I think this is all, the whole scenario here is all a yes. And like the presumption, the presumption is there will be enough demand. We're going to tap out every available possibility. We're going to do gets and we're going to get more on existing lines. We're going to do some distributed capacity aggregation which is all these things are starting to happen. I think they're going to continue to happen. And yet in the absence of building out like a entirely new transmission system on top of our existing transmission system, we're going to hit a ceiling basically. Or at least we're going to hit a ceiling from a time to power perspective.

C (22:35)

Yeah. And I guess the fact that all these forecasts are saying we're going to build more data centers than we could conceivably power is just good evidence that it's not going to happen. I'm just very skeptical. I guess I would just ask you the central question. What do you think? Do you think demand is going to get even close to the higher end projections or are you a deflationist on this?

B (23:01)

I don't think I am smart enough to know the answer to that question. I don't think anybody really knows the answer to that question. I do think that there is pretty universal agreement amongst people who are building these models that we're going to need. To your point on sort of the like, will it shift to the edge? Yes, inference might. And that's like an open question. There is going to be for some period of time in the future demand for more and more and more powerful models. Those require the centralized big, big ass data centers. We are already starting to have a harder time to find sites on the grid to power those in the time period that people want. And so I think there's going to be some period of time where we are bursting at the seams from an electricity perspective. I don't know how long it lasts.

A (23:51)

Right.

B (23:52)

And I don't know whether it gets to the point where like Elon wants to put 100 gigawatts a year of orbital data centers in space.

C (24:00)

Do you think there are going to be space based data centers? You did a pod on it, didn't you?

B (24:05)

We talked about it a bunch. I'm doing more on it. I've spent a lot of time now understanding the economics. It's sort of to me the answer to that question is the answer to the question you asked me. Because I think that orbital data, I mean Elon says he thinks that they will be the cheapest way to get new compute in like three to five years. I do not think that is possible. Not in that time.

C (24:29)

He says a lot of things.

B (24:30)

Yeah, but, but if you do think that there is going to be this insatiable appetite and we're going to need to scale to hundreds of gigawatts a year and we are not going to have the ability to do that on the grid, then I think the interesting question is your options are kind of off grid or off world. And then it's a different comparison and it's interesting to think about. We should get off of the data center thing.

C (24:54)

Yeah. The final thing I would say about it, and this is the note I wanted to say earlier, this is just when I talk to people who are, as you know, there's a very loud constituency to the left that hates data centers, hates AI, hates the whole discussion. All I would say as a final note is even if you think that data short term data center demand is radically overstated and that these data centers are not going to. You're not going to end up with as many as currently forecast, it is nonetheless the case that we're electrifying transportation and we're electrifying heat and cooling and we're electrifying industry and we're just going to need lots, lots, lots more electricity and a much stronger, better grid in the future, regardless of what happens with data centers. So I just think like that should be. I don't want those two questions to start to be conflated in people's minds basically.

B (25:51)

Actually I. Okay, put a pin in that when we get back to my next question.

C (25:56)

Okay, this is another one that I sort of brought because I don't think tech people are thinking about it enough or taking it seriously.

B (26:05)

So I love that I represent tech people.

C (26:08)

I'm sorry, I'm dread. I'M sorry, I'm dread crafted you into this unenviable spokesperson job. So here's my thought. Basically you and I know that the way the long term evolution is that basically everything that is plugged in is going to become a resource. Eventually the notion of DERS as a kind of distinct category I think is just going to kind of fade away because eventually everything that plugs in is going to be managed by software that is in communication with larger grids. Basically that's just going to become kind of the default on some time horizon. We can talk about how fast we think that's going to happen, but it's going to happen basically. So to me what that means is that a lot of things that we have held as distinct from software are going to become software, like driving in cars and living and homes. And on the one hand I think that's immense. I think there's immense potential there as I've done a kajillion podcasts on. I think it's going to be extraordinary. Going to have a much more stronger grid, we're going to make each electron go further, we're going to utilize our grid better, we're going to like everything's going to, we're going to have a more small d. Democratic grid, et cetera, et cetera. For the most part. I love this trend and I'm very hopeful for it. The internetification of the grid, but capital B. But when I think about software as it exists today, it's awful. The situation is awful, I think, and I'm not far from the only person saying this like it feels these days like tech. The tech sector, which is basically we think of as the software sector in public, is kind of exploitative, out of touch, you know, like kind of getting increasingly deranged, talking about their bunkers on their islands, talking about the Antichrist like all fucked up on ketamine just off in la la land. Basically software feels exploitative these days almost everywhere you encounter it. Inshidification, you know, I did a whole pod on insidification. Basically platforms enter what seems like this inexorable cycle where they inshidify and so this trend of, of your house and your car becoming software. I don't see enough people raising red flags saying do we want intrusive ad based, ad supported, subscription nagging, different tiers, you know, real time, variable pricing, all these sort of exploitative things that we're running into. Do we want that in our cars and, and in our homes? Are we going to end up within shittified Homes, you know, is the promise basically of coordinated distributed energy going to manifest in reality like just another chapter of sort of chintzy, exploitative and shitified software that ends up exploiting the people who get stuck with it? I worry about that and I don't hear any, hardly anybody else worrying about that. Do you worry about that?

B (29:50)

Do you have a Nest thermostat?

C (29:52)

I do not. My house is so analog and primitive. My current house, I guess I don't see.

B (30:00)

So if I think of like what are the things in the home that tie to electricity that have been software Ified thermostats are the obvious one to me via Nest and Ecobee and other companies like that. You know, people who have EVs have an EV charger and then they have a software platform that goes on top of that. So there are EV owners. I have an. I drive an EV9. I'm sure you're an EV driver.

C (30:23)

A Kia. The big one. The big one is a nice big one. Super nice.

B (30:27)

It's the best. Yeah. So there's, there's the vehicle, there's the thermostat. I mean if you want to go newer, newer age. I am an owner of a quilt which is a. Oh, you got one of those. Version of a heat pump. We're, we're EIP is an investor. So I was actually customer number seven of Quilts.

C (30:46)

Do you have one of the newer. Because didn't they just sort of like refresh the look of their, of their, of their wall units? I feel like, am I making that cool looking?

B (30:54)

But, but it is what you're saying, right? It's like software ification.

C (30:57)

Yeah.

B (30:58)

App. It's much more controllable. I mean my personal experience with all those things is that they're better. And I don't know that anybody, I've heard anybody saying like, oh, Nest and shit. Ified the thermostat or the Tesla app and shit. If I, if you're charging or my charging experience.

C (31:16)

If you're familiar with Corey's work, you know that always stage one on the platforms is that they're good to users and that they offer genuine value to users. That is step one of this process is you attract the users with genuine value and then over time work to make leaving the platform difficult. And then when people are locked in, that's when you start exploiting them. And like I will, I will happily agree that all of this is so nascent and new and, and barely there that we're just on the front end of this. So A lot of this is speculative, but like it sure seems like that is the direction everything travels. And like one way I think about this, and this is probably something you've heard me talk about before. Like one thing that I'm just waiting for is if, if, if the self driving cars become ubiquitous, what is to stop them from offering a free tier that is ad supported which everybody then chooses because nobody wants to pay up front. And then that's one more little area of our lives where we are constantly beset with customized advertising. Like that's one way I could think of.

B (32:37)

Yeah, maybe I'm gonna, okay, I'm gonna own, I'm gonna own my, my tech broness. I, if I decide to choose to take, to get free rides around in my future Waymo or whatever it is in exchange for being served ads, that's a trade I make deliberately and happily. Right? And I get free rides and that's worth it to me. I don't, I don't see that as being inherently a bad thing. I mean, I think they, the, there are challenges obviously to the ad ecosystem.

C (33:07)

But, but you, you, you recognize inside ification as a thing that happens on other platforms. Or are you skeptical more broadly about Corey's work?

B (33:16)

I don't know Corey's work. So let me preface with that, but I would say I think I see what you're talking about and I think I can come up with examples of it. I don't know that I see it as like the inexorable direction of travel when things become software Y. Particularly as it pertains to me, it's

C (33:38)

less software Y than platformy. It's the platforms. So this is like, this is why I want, if you're on, like, if your water heater is signed up to some VPP and your thermostat's signed up to another one, they're both on different platforms. I want interoperability and I want the ability to move from one platform to the other without penalty. Basically. I don't want lock in. Like that's what leads to platform and shitification is lock in. And I think we could, I think we could avoid a lot of that up front if we just went in with some clear privacy laws and some clear rules and regulations about interoperability and transparency.

B (34:18)

I guess I don't, I don't disagree with that. I think that's a pretty innocuous statement to make to me. I guess at the high level, the things that I actually think about that are in our homes, I'll just focus on the home for now that are hopefully going to be transformed such that as you said eventually all of them are software enabled. Interact with the grid, enable them to be responsive to the needs of the grid, but also have more capabilities for the customer. When I think about them one by one and what I think the future of those things are going to be, I generally think it will be better and certainly the ones that I can think of today that have already started to be that way feel better to me. I can see how it could go off the rails like I've watched Idiocracy but but as where we stand today, I don't see evidence of that.

C (35:04)

Yeah, I guess. Yeah, I guess it's early enough now that I don't have a lot of concrete examples to hang this on. So mostly it is just a generalized fear. But I look at the exploitation and the crappiness around us in every other area and I just don't want that coming into my home and Hearth Catalyst is brought to you by Antenna Group, the OGs of PR and marketing for climate tech. Is your brand a leader or challenger? Are you looking to win the hearts and minds of customers, partners or investors? Are you ramping up your new biz pipeline? Are you looking to influence policy conversations? Antenna works with leading brands across the energy, climate and infrastructure space to do all of this and more. If you're a startup investor, enterprise or innovation ecosystem that's helping drive climate's age of adoption, Antenna Group is ready to power your impact. Visit antennagroup.com to learn more.

A (36:05)

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B (37:30)

okay, can I come back to the last statement you made? The last question to ask my next yes segue me. You said you didn't want to see, you wanted to be careful to separate out the we need to improve the grid because we're going to be electrifying all these other loads from the like, you know, some, some people just don't like data centers thing. And I, and I sort of agree with that generally. But here's my question that I, here's my concerning question. I will say that I think we may or may not have fully answered in the next five to 10 years, but we will know the direction of travel, which is is electrification dead or will electrification be dead as a pathway for industrial emissions reduction? So just to walk through the logic

C (38:25)

here, will it be dead? When, for what reason?

B (38:28)

Well, for what, when. I mean, will it appear dead over the next five to 10 years? And for what reason is because you have two things happening in my mind right now that are pushing against it. By the way, for a long time I've always said to a first order, the simplest way to solve climate change is clean up electricity, electrify everything that you possibly can, and then go fill in all the pieces of the stuff that you just can't possibly electrify. So that implies electrifying a big portion of heavy industry. For example, okay, if you are trying to electrify something in heavy industry right now, you're trying to build or even not something that hasn't been electrified but is already electrified. Take an aluminum smelter, right? You just want to build new aluminum smelter uses hundreds of megawatts of electricity. You can't find a site because every site is being taken up by a data center and your prices are higher and you're super sensitive to electricity prices.

C (39:21)

Oh, I see where you're going with this.

B (39:22)

So if you, so the, the premise of industrial electrification is you get cheaper, you know, operating costs because it is electrified. You're going to get probably higher capital costs. This is the trade with everything that you electrify and then you save money over time because it's so much more efficient. And that, that is a function of the spark spread the difference between the price of electricity and the price of natural gas.

C (39:45)

And I also think less waste and less regulatory compliance and yeah, yeah, sure,

B (39:51)

easier to permit, but, but in a world where you have a really, really hard time citing because there are not that many places to put 100 megawatt, multi hundred megawatt loads and where there is inflationary price pressure on electricity, which there certainly is today, that value proposition is eroded. And so I wonder what happens.

C (40:12)

Yeah, I mean, more broadly, both of us wanting to electrify everything, I think naturally leads to both of us being daunted at the fact that electricity prices are high and rising. Those are very obviously at odds on every level, industry particularly, but also residential, also transportation, also everything else. Which gets us of course to the, the question of the day, the political question of the day, of the decade really, which is how you bring down electricity prices while continuing to rapidly and aggressively electrify. Yeah. And another question I had about industry that I almost brought, I'll just throw in here. One is, does it in fact start electrifying in this circumstance where electricity is expensive and data centers are bullying them out of the way and grabbing all the electricity? Yeah, yeah. And then another, another question is that I have that I didn't bring today because it's definitely like a 20 year plus question is when we say electrify everything, do we mean industry too? And by that I mean how much faith do we have in electrochemistry to replace like right now you can make steel with zero emissions. Electrochemically it's just wildly expensive. Same thing with, you know, the concrete or concrete you can do same thing. Like electrochemically you can do it with zero emissions, it's just much more expensive. So is electrochemistry, is electrochemistry going to come along enough, fast enough that we could really electrify everything? Everything. The reason I didn't bring that question along is that it's definitely like a 20 plus year question. But I think hope, think slash hope, let's call it a 50, 50 split. That in the long, long term I really think we're going to electrify everything. I'm an absolutist. I think once you've built a single unified system that is providing power to 98% of stuff, whatever that 2%, it's the same question. The benefits of just being able to hook into that system, system are so immense that it's just going to overcome whatever barriers they are.

B (42:43)

I mean, I think I agree with you in the long term, I mean right now we're at 25% in the U.S. right. Like 25% of final energy consumption is electricity. 75% is not worth remembering that.

C (42:56)

But yeah, it's a long way to go.

B (42:57)

Yeah, it's a long way to go. And for a long time, I think people who were seeking to electrify, particularly industry, sort of rested on this belief that the marginal price of electricity was, was plummeting towards zero. Right? Yes.

C (43:14)

And that's electrochemistry in particular. Very much depends on copious cheap electricity.

B (43:21)

And that is not the world we're living in right now. It's probably not the world we're going to live in for the next few years. Now it may turn back, right? This could be cyclical and five years from now it'll turn back. But like the current state of affairs is electricity prices are going up, not down.

C (43:35)

I mean, one thing that might be answered in the next 10 years is everybody's freaked out about electricity prices now. Right. The entire Democratic Party is seized with, seized with this.

B (43:45)

Right.

C (43:46)

So will we actually be able to pass policies that reduce the price of electricity in an enduring way? Like, you know, reform utilities and like

B (43:57)

infrastructure permitting reform, build more transmission permitting

C (44:00)

reform, stuff like that. Like, will we be able to actually, will we be able to do that? That's a, that's an open question.

B (44:07)

Yes. I don't know. And maybe. Right. And So I think five to 10 years is an interesting time frame under which to think about this question. But, but I could tell you, I think over the next three years, you know, electricity prices are probably going up, not down.

C (44:19)

Yes.

B (44:19)

And that's going to just make that value proposition.

C (44:22)

And that's, and that's bad. So I think everybody in our world really needs to upgrade. The question of making electricity cheaper, it really is kind of a pivot on which everything else turns. And that alone could screw us, could screw everything else if we can't, if we can't deal with that.

B (44:40)

I agree with you. But to your point, I think actually a glimmer of hope here is that there is alignment. Everybody, everybody, the word affordability is going to be the key word in many, many, many circles for the next couple of years. It has become, as you said, a political hot button thing. It's the word of the day amongst utilities, amongst data center companies and amongst everybody else. Like affordability is the thing. So there will be big folks and

C (45:05)

we are in the lucky position that the kinds of energy we favor are the cheap ones. So like, you know, like, you can, you can take climate out of the, take climate out of the picture. There's still going to be a lot of moneyed interests pushing for lots more clean energy and batteries for reasons having nothing to do with the environment. Okay, so I'm on my third one. Yes, I think so. Okay, my third and final one. This is something I've been thinking about. So here's how I'd phrase it. Is JB Strubble going to turn out to be as, or more significant to the long term fortunes of clean energy than Elon Musk? By which I mean, you know, JB Straubels set up this big recycling company, this big battery recycling company set it up. Redwood set it up. Arguably before there were many batteries, enough batteries. So they were scrabbling to collect old vacuum cleaner batteries and double A's and stuff just to keep going long enough for the batteries to show up. But now I think we're just on the cusp of the first kind of wave of, of used up batteries coming in. And the reason I raise all this is that, you know, there's the whole, there's this whole question about critical minerals, about materials and about who dominates supply chains. As you know, everybody in the world is freaked out because China dominates all the supply chains. They mine all the critical minerals, do all the processing, et cetera. And so we're very dependent on them. And so there's been a lot of talk about how the US can sort of stand up a supply chain of its own. And so there's been lots of talk about mining and stuff like that in the U.S. although not a ton of action. But I think we should start viewing electronics themselves, clean tech itself, as like a source to mine. Do you know what I mean? Like, if we can capture those materials and reuse them effectively infinitely, then when you buy a solar panel from China, it is as though you are both buying a solar panel and mining a certain quantity of materials that will be available after the solar panel is dead. Do you know what I mean? So recycling is a source of critical minerals, basically. Like it is a strategic source of critical minerals. And I think once you, you know, if you take the sort of growth numbers of EVs and solar panels and all the rest of it, seriously, it's going to be a very large source of minerals, large source of raw minerals and raw materials. Which means, all of which just means that I think that recycling is going to go from a sort of like environmental nice to have, which is what is kind of how I think people are thinking about it now, to something like a national security, energy security imperative. In other words, like if you get your hands on some of these materials, it is absolutely in your interest to make sure that you keep recycling those materials through your economy forever, basically. I just think so. I think recycling in the next five to 10 years is going to A, take off and B, just become much, much more, I think, viewed as much, much more strategically important. Wonder whether you think so. Wonder whether you agree.

B (48:57)

I do agree generally. I mean. And I think it's not just EV batteries either. Right. So there's. So redwood is recycling EV batteries and a bunch of other old batteries and getting out of it. The lithium, nickel, cobalt, stuff like that. We invest in a company called Cyclic Materials that's doing recycling for rare earth elements. Rare earth elements are like the least recycled critical mineral, which is crazy.

C (49:19)

Out of coal piles.

B (49:20)

No.

C (49:21)

Or is that a different company? No, no, no.

B (49:23)

Not tailings or coal piles or anything like that. This is out of.

C (49:25)

I saw a different company doing that.

B (49:27)

Motors and magnets and stuff like that. There are companies that are now doing solar panel recycling. Yeah, I mean, I think that where I agree with you is I'm like a recycling maximalist. We should recycle all this stuff. It has high value at end of life and we should take advantage of that value and that should mitigate the amount of new virgin mine stuff that we need in any category where we possibly can, particularly in those where there is a geopolitical reason that we want to have our own sovereign supply. The only thing I would push back against, I guess, is just that the challenge. Let's just take battery recycling. If you believe that we are on a steep upward trajectory of demand for new batteries, then you're forever going to be in a position where the amount of supply that you have to recycle is the amount of demand that there was 10 years ago. And so you're never forever. Well, until.

C (50:24)

Not literally forever, but until you hit the top of the S curve.

B (50:27)

That's what I mean. Right. So. So unless you think we're already at the top of the S curve, which I don't think either of us do think, then it will matter some. But it is not a solution to our sovereign mineral supply problems.

C (50:42)

I would just say that my. I guess my prediction would be that in 10 years maybe, or in 20, that just a unit of critical minerals drawn from recycling will be cheaper than a unit mined. I think, I think eventually, like, I think it will end up being our primary and cheapest source of those. Like we're never. I don't think we're ever going to. I Mean, maybe you maybe disagree, but I don't think we're ever really going to be in a position where we're fully like an autarky, where we fully have a contained and complete supply chain. I think mostly this is just about having a little bit of a buffer. But I just think people need to start rethinking thinking of recycling like they think of mining basically, like as a source of. As a large and probably the cheapest source of those materials.

B (51:37)

Yes, I agree with that. And I think to the point on it should be cheaper. I mean, I'll give you a specific example in the rare earth context, right, which is that there are actually 16 rare earth elements that are grouped together. We really only use four of them. Actually, we only care about four of them out of the 16. If you're doing mining, virgin mining, you get this basket of all of them and you have to do this complicated separations process to get the stuff you want. If you're doing recycling, you're only getting the stuff we were using in the first place already. So you've already cut out a bunch of expensive separation steps in the value chain there. So there's a bunch of reasons why fundamentally I think it should be cheaper.

C (52:13)

And I. And again, I think it'll be such a economic. And such an economic push on that that again, there'll be tons of innovation and we'll get something closer to an actual closed loop. We'll be moving because this is like, to me, this is like, like 50% of the, of. Of future sustainability. You know, we, we focus so much on the energy part, but also the closed physical loop, the reducing physical waste and physical throughput, I think is like the other half of the, the other half of the equation. And this is, you know, so like creating something like a closed loop of minerals where you're. Because the one thing that offsets that dynamic that you very accurately lay out, right, like the demand is going up faster. So sort of by definition, your recycling is behind your new demand. One force does slightly offset that, which is the lithium you get out of the old batteries will go farther in the new batteries than it went in the old batteries just because batteries are always constantly improving. So you, you will actually get more. You. I don't think you'll catch up to demand, but you'll get more, let's say, than, you know, it's not like it's not a fungible.

B (53:29)

Yeah, yeah, right. I think, I think the place you want to end up in all these other critical minerals is kind of where we are maybe a little better than where we are today in, in more mature supply chains where like aluminum, copper, recycle, a lot of that stuff. That doesn't mean we don't still need a lot more. So it doesn't solve your problem, but it's meaningful. All right, can I do the last one? I think this is. Yes, last one question to answer in the next five to 10 years. Maybe not next five to 10 years to be honest. Like maybe it's a question that gets answered and in 20 years, but nonetheless I'm cur. Will we see a meaningful scaled geoengineering demo?

C (54:06)

I thought you were going to say. I was like for sure you were going to go geothermal.

B (54:09)

Geothermal. Oh, that better get answered in the next five to 10 years.

C (54:12)

I know that's, that's a, that one I think will be, I think in 10 years we'll know whether geothermal is, is big going to pay off the promise. Do you think in 10 years we'll know?

B (54:25)

We'll know, we'll know. Yeah. I mean at least like traditional is for sure. Traditional hydrothermal, probably egs. Who knows about, you know, super hot rock anyway? I'm not asking about geothermal, I'm asking about geoengineering. Will we see somebody go do like a big solar radiation management experiment?

C (54:42)

I have a, I have a solar radiation expert coming on the pod in a couple of weeks to talk about just this. I'm so torn on this question. Like you know, there are, there are like a bunch of cowboy jerk offs in Silicon Valley doing this already. Like they're doing little. I mean, I don't know what counts

B (55:05)

as really one set. I just want to defend my, apparently my people in Silicon Valley. I would not say that the answer for them, the group you are referring to is not of Silicon Valley. They are not, they're not.

C (55:18)

And that's just like one balloon at a time or whatever. I'm not super clear what they're, what they're doing. So I guess I don't know if that counts as a test at scale. Like I do wonder. I'm so torn about this and I'm so curious what your thoughts are on the moral hazard side of things because like, you know, like depending on what side of the bed I wake up, I can take different sides of this argument. Like on the one side, and this I suspect is, is, is your side and a lot of people's side which is just, this is pretty cheap. Somebody's going to do it. You know, climate change is going to get so bad somebody's going to do it. So we might as well do it in a conscious, planned, controlled way. The other side is just, you know, in a sense the whole field is protected by being kind of obscure and not a lot of people know about it. Like what happens if you start doing high profile tests and experiments and make this a real thing? Suddenly then everybody around the world is going to be told, hey, you could like, you know, with like 150 bucks you could go fiddle with the climate. And then you're like got a whole Pandora's box thing going because you really, this is the scary thing about solar radiation management. You could stand up and do a reasonably large scale test on your own without a ton of money, arguably without being detected doing so by the world, you know what I mean? And the fact that no one's doing that yet, I just think they don't know they can yet. So like I kind of don't want them to find out. Like what do you think about the, what do you think about that aspect? The moral hazard part of it?

B (57:03)

It's so tricky, right? I mean to fear monger you a little bit more, I'm going to use a dirty word to you, I suspect, which is that a billionaire could probably get us half a degree C of cooling globally. Personally, like the, that's the crazy thing about SRM is that the estimates, like we don't really know, we don't exactly know efficacy, blah, blah, blah. But the, but the rough estimates just to an order of magnitude are that at least what I've seen, it might cost a couple billion dollars to, to deliver something like a half a degree of cooling, half a degree centigrade of glory.

C (57:42)

Yes, but as you know, I'm sure if you follow the literature is the cloud of uncertainties around all of this, like unanticipated 100%. This is all the second order effects. Things could go so horribly wrong. And that is, I mean that is precisely, precisely the kind of question I don't want random individual billionaires answering. You know what I mean? Totally agree. But this is, this is to me argues for really wrapping our heads around and doing it explicitly just because somebody needs to wrap their hands around it and start controlling it.

B (58:21)

It's the kind of thing where like you want the equivalent of the International Atomic Energy Agency. Like you want, you want like the UN to take charge of this and say look, for the sake of the world we need to explore this. But it, it should only be done in a coordinated fashion. Or something.

C (58:37)

Yeah, but think about the difficulty that nuclear arms, like, you know, regimes have

B (58:45)

had

C (58:47)

ferreting out and finding out whether a country is actually doing a nuclear program. And a nuclear program is big and expensive and requires very specialized knowledge. It's very difficult to do that without being noticed. And people are pulling that off. Like, I can't imagine an international enforcement regime that could. That could. That could enforce this. Like, it's so easy to do. Like. And then if, like, a billionaire does it and another billionaire doesn't like the way the billionaire does it and decides to undo it or do it a different way or redo it. You know what I mean? Like, do we want billionaires getting the idea that they should be involved in this field?

B (59:29)

Well, yeah, I knew I was gonna. I was gonna trigger you with billionaires, but I. But I. I don't know. I think we have to. The problem is, I think the solution is not to put our heads in the sand, because the more we collectively put our heads in the sand about it, the more likely it is that that's the way it gets developed, ultimately.

C (59:49)

Yeah. Yeah, it's. Yeah. I mean, I guess trying to do it on purpose and with eyes wide open is the best. Is the best we can do, but, boy, am I nervous about how that plays out. I guess there's no. I mean, you can't not do it. You can't put a lid back on it. You can't unknow what we know about it now. So, like, I guess the only way out is through. But anyway, so we have three minutes left. You want to toss out one of your spares just to.

B (60:16)

Just.

C (60:17)

Just to intrigue the audience, just to titillate an audience with a. With a question we didn't get to.

B (60:21)

My spares weren't great, actually. I want to hear what you said.

C (60:24)

Oh, I had some really good spares.

B (60:25)

Hit me with some spares.

C (60:28)

Well, one of my spares I was surprised you didn't bring up. I almost brought up, which is what's going to happen with Permissionless Der.

B (60:37)

Oh, I just did an episode on this.

C (60:38)

I know. I listened to it. I listened to it, and I did one on Balcony Solar not long before that. So people know this as Balcony Solar. Basically, it's any distributed generation or battery that you can plug in without getting permission from a utility or from anybody, really. You can just plug in. So 20, last I heard, and it literally changes week to week, but last I heard, 25 states had laws either proposed or announced to be proposed to legalize Balcony solar. That's half the country right there. That's 25 states. That's probably pretty soon. And I'm sure many more will follow in the wake of. And I just think this. So, like, I'm just fascinated by what effect it's going to have. I think you and I probably agree that the net megawatts produced by this stuff is probably not going to be, you know, it's not going to be huge. The question is like, will the ability to put your hands on it and fiddle with it and play with it in a DIY way, like Legos in your backyard, is that going to spark a kind of subculture? Is that going to spark a lot more people to care and get involved and just be aware. Just be aware of solar? I'm curious what you think, the. How you think that's going to play out.

B (62:11)

Balcony solar punk. I don't know. I need to learn more about Germany. Like, I haven't spent enough time understanding, like, what. Balcony's always a huge thing there.

C (62:18)

It's a gigawatt. Yeah. They got like a gigawatt. So I guess it's not that small of a, of an, of a net amount. They have like 400 million or something like. Or 4 million. I shouldn't say. 400 million. That's ridiculous. 4 million, something like that. Systems installed from like 3 years of it being legalized. So clearly, like, people like it. Yeah. So I'm just curious, like, what the sort of distributed social effects will be of that. I know both of us will be translating. And my other backup, which I thought was good, but which you and I are probably not the people to discuss, but is China is in over a state of overproduction of batteries and solar panels, which means they're selling solar panels to their neighbors at just ludicrously low prices, which means countries like Pakistan and Vietnam are just being flooded with cheap solar. Like Pakistan went like, I think it was like two years or three years. 40% of its total load. Now it has imported solar panels equivalent to 40% of its total load. Give that another two, three years. So I'm very curious. So we're going to see what happens when a massive spontaneous upwelling of distributed solar energy meets rickety developing world grids. How does that resolve itself? Like, what happens when Pakistan has enough solar panels that like, it's more than 100% of its total load? You're going to get all these problems that grids get with lots of solar. Right. Like balance and frequency management and inertia. And all this stuff, but all of this is unplanned. Like, the leaders of Pakistan did not arrange this. They didn't have anything to do with it. Same it's happening in Africa, it's happening in Vietnam. So I'm just curious, like, what is the spontaneous unplanned profusion of solar at the ground level do to a country's electricity system physically and also just politically? Like, that's just a very big change happening very rapidly and we have no idea yet what's going to come out of it.

B (64:43)

Great question. Not one we have time to answer. Let's watch it.

C (64:49)

We'll leave you listeners to ponder what's going to happen in Vietnam.

B (64:53)

There we go. David, this was fun. Thanks for doing it again.

C (64:55)

So fun. Awesome. We'll do it again next year.

B (65:00)

David Roberts writes the Volts Newsletter and hosts the Volts Podcast. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. This episode was produced by Max Savage Levinson and Sean Marquan. Mixing and theme song by Sean Marquan. Stephen Lacy is our Executive editor. I'm Shayl Khan and this is Catalyst.