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- [00:00]
Melissa Lott
Even massive increases in export capacity doesn't make it boring, doesn't make it high.
- [00:05]
Amy Myers Jaffe
But it comes to the price that whatever energy you sell, you should watch this topic. When the Chinese think about winning in AI, they're looking at innovating the architecture of how to actually do the compute. Whereas in the United States, the big focus is on scaling because the United States is taking a scaling approach. Approach. We're talking about big money.
- [00:31]
Melissa Lott
I know it's two years ago, it was like April 2023. Oh my gosh, that's almost three years ago.
- [00:37]
Unidentified Guest or Contributor
Now it's 2026. What happened?
- [00:39]
Melissa Lott
I know 2030 is around the corner, y'.
- [00:42]
Amy Myers Jaffe
All.
- [00:42]
Unidentified Guest or Contributor
I'm just saying.
- [00:46]
Ed Crookes
Hello and welcome to the Energy Gang, a discussion show from Wood McKenzie about the fast changing world of energy. I'm Ed Crookes and on this show, which is the first one we're recording in 2026, we're going to be looking ahead at the year to come. We're going to be talking about the places, the people and the technologies that we think will shape 2026. To talk about what's already been a highly eventful year in energy. Just a week in, it's a pleasure to be joined by the Energy Gang top team. Melissa Lott is a partner for energy technologies at Microsoft. Of course, always the standard disclaimer. You're speaking strictly in a personal capacity, not expressing the view of Microsoft Corporation or anything like that.
- [01:24]
Melissa Lott
I'm really curious how yalls holidays were. It's been a few weeks, but do you guys know Irving Berlin, White Christmas, the song Snow, Bing Crosby?
- [01:33]
Unidentified Guest or Contributor
Oh, we got snow, snow, snow right.
- [01:37]
Melissa Lott
Before the holidays and it was so fantastic. A lot of the kind of Sierra's ski resort world were really struggling and.
- [01:44]
Unidentified Guest or Contributor
So it was great to get a.
- [01:45]
Melissa Lott
Good dump plus for precipitation for the year.
- [01:48]
Unidentified Guest or Contributor
This is critical timing right now, people. Like we need the snow so it can melt later.
- [01:52]
Melissa Lott
So I'm all smiles.
- [01:54]
Ed Crookes
Fantastic. And that is, I have to admit, I did not know about your singing voice. Very good. I keep wondering if we should have Energy Gang karaoke now. I know what a great singer you are, 100%. We should definitely pursue it.
- [02:08]
Amy Myers Jaffe
Not a show I'm on cannot.
- [02:11]
Unidentified Guest or Contributor
Karaoke does not involve tone or knowing anything about music. It involves enthusiasm.
- [02:16]
Ed Crookes
Like enthusiasm, which certainly is what I've got. But. But Amy, apparently you don't. It's so my cue to introduce Amy Myers Jaffe. Amy is the director of the Energy Climate justice and Sustainability Lab at New York University. Hi, Amy, how are you?
- [02:33]
Amy Myers Jaffe
Happy 2026, Ed.
- [02:35]
Ed Crookes
Yes, absolutely. Happy 2026. Have a good holiday.
- [02:37]
Amy Myers Jaffe
I did. I had the opposite experience of Melissa. I managed to get out of New York City the day before the 10 inches of snowfall and hit sunny California where basically after we had this whole rain event. The weather has been beautiful. I'm a little tan and it's been a great holiday. Not in the snow that is surrounding my house.
- [03:02]
Ed Crookes
Indeed. Although, as Melissa was saying, I guess getting snow at this time of year is going to be very important for California through the year. Right. Because that's where a lot of the state's water ultimately comes from, isn't it?
- [03:12]
Melissa Lott
Snow in the Rockies and these rain things. I remember growing up in California on the military bases, we had like the month, like February was when we got rain, and then the rest of the year you were just, you know, taking your four minute shower with your little, you know, low flow nozzle on your shower head, plus the little on off switch. People think I'm crazy when I talk about the little switch. You could just knock to keep the water warm, but be able to use less water in your shower. This was like normal for a California kid growing up. So, yeah, when you get the rain, it's really good.
- [03:40]
Unidentified Guest or Contributor
You don't want it all at once, though.
- [03:41]
Melissa Lott
So, yeah, Amy, it's. It's nice when it trickles in as opposed to come down.
- [03:46]
Amy Myers Jaffe
It did not trickle the show.
- [03:48]
Ed Crookes
No.
- [03:48]
Melissa Lott
I saw the pictures. It was a heck of a thing. And all the radar looked really intense. So glad y' all are doing well and glad you're enjoying it and getting a little bit of tan. That's fantastic.
- [03:57]
Ed Crookes
So all of our kind of transition back to the world of work from the holidays has been not exactly quiet and relaxing because of the very dramatic news that we had over the weekend about Venezuela and the United States capturing President Nicolas Maduro. So the format we planned for this show, and I think still what we're going to do is to talk about the places and the people and the technologies that we think are going to be important in 2026. But obviously the first place that everyone's thinking about right now is Venezuela. And it's clearly going to continue to be a very important place for energy through 2026, and indeed beyond. The charges that President Maduro is facing are related to drugs trafficking. But of course, President Trump and other members of his administration have made it very clear that as well as drugs, the other big issue is in their move against him has been oil. So I think, Amy, you were choosing Venezuela as your place to watch in 2026. Do you want to talk about it? What's your view on what's been happening?
- [05:04]
Amy Myers Jaffe
I felt a little deja vu, as I kind of indicated in the Houston Chronicle, because for the listeners, I began my career not in the tech side, which I love and teach and enjoy now. I began my career in sort of international relations with a specialty on oil. And so therefore, back when the United States invaded Iraq in 2003, I was the foremost expert on the oil fields of Iraq and so spent a lot of time on that issue. Unpleasant time, I would add, trying to explain how the Iraqi system was run, how difficult it would be to privatize it, what the pathway would be to have the state oil company refurbish its own fields, how, what condition those fields were in after years and years of sanctions. So one of the interesting things about Iraq is because they did have this bureaucracy, they used to rotate their fields to prevent field damage, even though they could only produce, like, you know, one tenth of what their potential was. They rotated all the fields that were still online, even with sanctions. And so the fields didn't get all that damaged. I mean, there was some damage because they injected fuel oil, because they had no way of getting rid of their fuel oil because they didn't have an export market for it. But the interesting thing is that did not happen in Venezuela. In Venezuela, people forget around 2018 and 2019, there was terrible chaos in the country, vast humanitarian crisis with food shortages and medical shortages. People were in a desperate state. At that time, not only was the Venezuelan oil industry suffering from mismanagement because Hugo Chavez, when he came in, had fired the top 20,000 leaders of the state national oil company. But you had looting all across the country. People would grab anything that had value in the black market, and that included all the computerized equipment that was in the oil fields, all the copper in, all the wiring and surface equipment, other kinds of metals and things in the pipes. And so you had this combination of no money for maintenance to no people in some places to do the technical work. The surface equipment in Venezuela was highly damaged, Right? And so even though they have the same other problems that Iraq had, which is, you know, spotty electricity, lots of blackouts, because, you know, people forget you need electricity to produce oil, but also no fuel. Like, they have fuel shortages there as well. So, like, if you don't have electricity, you can run a diesel generator, but then if you don't have diesel, that's also a problem, Right? So Venezuela has a very Complex set of problems that in my opinion are deeper than the problems that people faced in Iraq. And Iraq had these giant oil fields. So if you damage one part, you might be able to refurbish some other section and redrill. Right. Or do infill drilling or do some kind of remediation. In Venezuela, there were some fields I hear that were so depressurized it's unclear whether they can be repaired or not. And they're smaller, more complicated fields. A lot of the stuff that's actually still operating, like Chevron's facility, is ultra heavy. You know, think asphalt heavy, tar heavy oil that has to be upgraded, it's expensive. So Chevron's still there to do that part, but no one else. The other ventures that were doing that also have been pretty much shut down. And so Venezuela's production is low and there's a lot of damage to clean up to get it back to any kind of state of normal operation.
- [09:11]
Melissa Lott
Yeah, I don't know about y', all, I'm thinking about. So we were talking, we were going to talk about places that we're watching and we can go down a long list. But I mean Venezuela is, is the focus right now in terms of discussions and the knock on effects from what's going on right now. And so I don't know about y', all, but I'm thinking about it. And three buckets that are mostly around time when I'm thinking about the near term and by that I mean like the next six months, it's like geopolitics, humanitarian concerns, I'll just use that word. It's broad and there's a lot going on there that go way beyond oil and then prices, like what is this going to do to markets and the impacts that those are going to have both within the country and outside of the country. And so those are my three that I'm watching. When it comes to the near term, like what's being decided today, tomorrow, next week, next month that is going to affect things here in the short term. And then there's this near medium term which is in all eventualities that I can. There's questions about investments in supply chains, investments in equipment within Venezuela, but in other places what's going to happen there? To me, like those decisions really start to gain momentum in like one to three years. Like what are we talking about there? And then there's a longer term. To your point, Amy, so longer term, let's go 3 to 10. So that 10 year, I'm going to grab that one that you just highlighted what does this mean in terms of energy infrastructure investments in different technologies and what does it mean for the energy transition and what does it mean specifically within Venezuela but in the broader market? So it's like in my mind it's those three timestamps.
- [10:34]
Ed Crookes
Right. And I think that's really interesting then your point, Melissa, about that long term perspective, because that's where I think there is an interesting analogy that can be drawn with the invasion of Iraq in 2003. And Amy, I'm interested in your thoughts on this, whether you think this parallel holds up that clearly when the George W. Bush administration looked at the world and looked at the position for oil in the early 2000s, they thought that US production was in inevitable long term decline. They didn't predict the shale revolution, the tight oil revolution. They couldn't see that coming. They thought US Oil consumption was only going to grow and its production was only going to decline and therefore imports were going to rise and rise and rise inexorably without limit. And that led to a lot decisions in terms of US energy policy in the 2000s to energy policy acts, the massive growth of corn ethanol and so on. And it seems very likely. And obviously there's still a lot of arguing even now 22 years later about exactly, sorry, 23 years later now, still a lot of arguing about exactly what the US Motives were for invading Iraq. But it seems to me highly plausible that at least one of those motives was was thinking that the United States is going to be increasingly dependent on oil imports and therefore it needs regime change to create in Iraq a friendly country that has a lot of potential for oil production growth and can act as a supplier to the United States in the long term question, is there anything like that in the current situation with Venezuela where obviously the position of the US Is vastly different? The US Is the world's largest oil producer by a long way. The US Is absolutely not reliant on oil imports right now. But if you look at the projections, it is not impossible that US Oil production will level off, flatten out sometime in the early2030s. The real kind of go go years of growth in the US have gone and at the same time other countries with production, with oil production that are broadly speaking friendly to the United States, their production may be in decline and oil demand globally is still growing. And again, that's probably going to hit a plateau sometime in the2030s, but certainly at least for a while, it's continuing to grow. And so is it the case that despite being an Oil superpower. Now, the United States still has an interest in encouraging increased production from other parts of the world and in particular, kind of broadly speaking, friendly countries such as Venezuela. And that is a key motivation behind the action against President Maduro. I mean, do you think there's anything in that, Amy?
- [13:26]
Amy Myers Jaffe
I mean, I mean, let me just try to deconstruct that. It's so challenging. Now I'm going to make a nerdy comment. There are different kinds of oil, believe it or not. Some oil is like alcohol and it's just like gasoline. It's almost like an alcohol liquid when it's produced. And some oil like in Venezuela is very heavy. And some of it's so heavy it's like tar. And they have to do things to loosen it up and heat it, even to ship it. Right. So it happens that we have some refineries in the United States, like Chevron's Pascagoula refinery, that were specifically built to refine very heavy oil. And the oil that gets produced in North Dakota and in the Permian bases in Texas is more like the alcoholic kind of fuel. And so that actually can't be really run in some of these heavy crude refineries. And so one could argue that the Venezuelan oil could be very useful, though now it's all going to China because of sanctions. So I think the thing that never made the news and was really a critically dangerous issue was two things that never get discussed. The Biden administration did military operations around this and it just never hit the news. So Venezuela threatened their neighboring country, Guyana, and they said that the territory where Guiana's become a very big oil producer and they're an important part of the market. You know, the Venezuelans kind of said, hey, you know, we got this border dispute and this Guyana oil isn't theirs, it's our oil.
- [15:03]
Ed Crookes
And a border dispute. You know, history fans will know it's a border dispute. Going back to the early 20th century into the 19th century, there was some of the earliest kind of discussions about the Monroe Doctrine and what that meant in terms of US influence. Go back 120 years and more. It's fascinating the way history kind of repeats itself.
- [15:23]
Amy Myers Jaffe
And let me just be clear for the listeners because it's just kind of interesting because it never hit the news. I mean, like it was in the Miami Herald one week.
- [15:31]
Ed Crookes
Yeah, but it was not a big deal.
- [15:33]
Amy Myers Jaffe
The Venezuelans built up a tremendous military buildup of drones and ships and all kinds of things to attack Guiana. The United States military had to threaten them to back down. Then we started doing military flyovers. Then the Russians sent a warship which was spotted from the coast of Miami. So there was just this minute of high escalation, which eventually resulted in sort of a de escalation through diplomacy and through military. You know, the United States Air Force really engaged on the problem in a way that again, never hit the news because no shots had to be fired. And the Russians moved their warship back from its routine mission in the Americas. So there was like a week or two where the rest of you were all doing what you were doing. And I was in the world thinking, Cuban Missile Crisis, Cuban Missile Crisis, Cuban missile Crisis. And then it kind of dissipated. So if you're the Trump administration and you come in and you saw that the Biden administration had to deal with that, and you're negotiating these very tricky negotiations over Ukraine and so forth, then making sure that the Russians and the Venezuelans don't attack Guyana in your hemisphere is an important thing to eliminate.
- [16:59]
Ed Crookes
Yeah, that is a great point. It's not just about the outlook for Venezuela's oil production. It's also about Venezuela not seizing control of Guiana's production, which, as you say, is becoming increasingly important to global markets. So we ought to move on from Venezuela. I think we could clearly talk about it for the whole of the rest of the show, but there's various other issues that we're going to be talking about that I do want to get to. Before we do, I just wanted to flag up one other place to watch, which I do think is important and I think people should be thinking about, which is the US Gulf coast, the Gulf of America, Gulf of Mexico, whatever you want to call it, and very specifically the LNG terminals along that coast. There's a huge investment boom going on there right now, a lot of construction happening, which is adding massively to US Gas export capacity. The US Is already the world's largest LNG exporter by some distance. Over the next few years, it's going to extend its lead. We've got forecasts at Wood MacKenzie showing that US LNG exports will roughly double from 2023 levels by about 2030, and they'll increase by about the same amount again. So tripling from their 2023 levels by 2035 or so. And there is a real question about who's going to buy all of that extra gas. There's clearly going to be downward pressure on international gas prices over the years to come. And it's a big question, I think, of how low prices will go and what the Consequences of that will be, will it start to cause financial strain? Will we see some of those LNG exporters starting to get into real difficulties? And so I think that's going to be another big story to watch. May not fully play out actually this year. It may be something more for 27, 28, 29 and so on. But definitely over the next few years, that's going to be a really important trend to keep an eye on. So that's something else I would like to flag up for people.
- [19:01]
Melissa Lott
Yeah, and just a flag on that one really quick around the price consideration. As someone who's paid utility bills and four countenance and counting, you know, we're talking about Europe, asia, just the U.S. these are going to be very diverse impacts, I think it is fair to say. And so I'm very curious how that's all going to play out and what other geopolitical things are still going to be going on.
- [19:24]
Amy Myers Jaffe
Well, and indeed, if we could hope that we would see an end to the Ukraine war in 2026, that would unleash more investment potentially in Russian gas. And so that would make the oversupply situation in natural gas 10 times worse. And so it's a very interesting dynamic to think about what the global natural gas picture is going to look like in the next five years.
- [19:53]
Ed Crookes
Yes, absolutely. And this is something you'll know, Melissa, as you say, if you pay energy bills in different parts of the world. For the past 20 years or so, since the shale gas boom started in the U.S. the U.S. has enjoyed this massive advantage of significantly lower gas prices than many other parts of the world, most other parts of the world. The US has essentially been a gas island, wasn't connected to global gas markets because you've built all this new export capacity and more coming on all the time. The US Is increasingly becoming connected to global gas markets. And so you're seeing more arbitrage opportunities. And so that price differential is under pressure. And I think it's quite possible one of the things we'll see is that you'll see gas prices in Europe fall as gas prices in the US rise and that differential between the two markets gets arbitraged away. And so that's going to be a very interesting kind of new world, as I say, that we haven't really been in for the past 20 years or so as that gap closes. And so that's another important trend to watch, I think.
- [21:03]
Amy Myers Jaffe
And for our clean tech listeners, like, you know, if there is a peace agreement in Europe, then you have this really Interesting question because you have a lot of countries in the world that looked at this highly volatile, very expensive LNG global market and switched to solar. If LNG becomes inexpensive, does that slow down China's electrostate strategy or not? I mean, it could be a very interesting competitive market for different fuels and technologies going forward. If we get both this surge from the United States and a peace agreement in Europe could be a very interesting dynamic where technologies will really have to compete price by price. By price.
- [21:50]
Ed Crookes
Yeah, that is a great point. Low cost gas very much undermines the competitive position of renewable power generation.
- [21:57]
Melissa Lott
Well, and here's just a comment to make though, within all this for those who don't study, don't know how the technologies work as you go through lng when you talk about ed, the pressure on prices. Just to be very clear though, I mean there's still a huge advantage to not having to liquefy your gas, ship it across an ocean and gasify it again and then get it to you. So, so it's not a.
- [22:20]
Unidentified Guest or Contributor
We're all going to be paying the.
- [22:21]
Amy Myers Jaffe
No. And the US is where it gets shot in because it's so expensive to liquefy and ship from the United States that you know. But it could have the opposite effect in the sense that if, if all those people wind up losing money because they can't sell all their LNG because the price internationally is too low, how that feeds back into the United States is that the domestic U.S. natural gas price would be low and that again would be make it more competitive with clean tech, at least here in the United States.
- [22:53]
Melissa Lott
Exactly. So just highlighting that even massive increases in export capacity doesn't make it boring, doesn't make it high, but it is.
- [23:00]
Amy Myers Jaffe
Close to the price that whatever energy you sell, you should watch this topic.
- [23:05]
Ed Crookes
Yeah, yeah, that is a great point.
- [23:07]
Melissa Lott
Yeah. And I'll just say your place and spoiler alert and my person that I'm going to be watching this year amongst others are very related. So when we want to get into.
- [23:17]
Unidentified Guest or Contributor
That, let me know.
- [23:18]
Ed Crookes
Yeah, let's do that in just a moment, just before we get to that because I have such a lovely image for your point, Melissa, about as you say, the difference between gas that comes in a pipeline and. And gas you have to liquefy and ship in a tanker and then re gas again. Heard a Chinese gas company executive talking about this. He said the difference between pipeline gas and LNG is like the difference between tap water and bottled water. Is it tap water? If you can get it, it's better quality, it's cheaper, it's super convenient. Bottled water is a pain. It's more expensive. There's so much hassle attached to it. But if you can't get the tap water, bottled water is okay. You know, you can make do with that. But if you can possibly get tap water, that's what you should have. And that's a great analogy. I think that makes that point really clearly.
- [24:10]
Unidentified Guest or Contributor
Yeah.
- [24:11]
Ed Crookes
Person of the year, Melissa, who is that and why?
- [24:15]
Melissa Lott
Ed, I'm not going to spoil who yours is because I do know it. However, there's a reason why we're focused on people in the US for this particular conversation right now because there's lots going on internationally. I debated between doct Doug Burgum over at Interior and Chris Wright at Energy. Chris Wright won out and a lot of it has to do with our places that we're following and who's in the middle of those conversations. So I was leaning towards Burgum and I'll still follow all the stuff coming out of Interior because again, thinking about supply chains, thinking about how we're diversifying, thinking about where investments are happening, where might we see more like up the supply chain minds and refining and all of that. But Chris Wright, I mean, is at the heart this last year at so many conversations at office about how we think about enterprises, energy investment at the federal level in the US how we invest in clean tech, how we think about lng. And now we're talking about oil and investment in different countries. And I won't open up Venezuela again, but it's just at the heart of all of it. And DOE is always relevant, but oh man, I'm going to be reading all.
- [25:18]
Unidentified Guest or Contributor
Those releases and following it this year.
- [25:19]
Melissa Lott
I mean, I, I do, but I'm not going to be waiting for the summary on Fridays. I'm going to be going through it as it comes, comes in. That's where I'm at in terms of my person. It happens to be at the federal level. I know in a previous year's shows we've talked about people I follow at the state and local level, local, regional level that. But to me it's D.C. what's happening at Doe? What are we doing?
- [25:38]
Ed Crookes
Yeah.
- [25:39]
Melissa Lott
Where are we going?
- [25:39]
Ed Crookes
Absolutely. Absolutely. Clearly it's a very big year there. And that is a good segue into my person to watch in 2026. Who is Laura Sweat, who is the new, well, newish chairman of ferc, the Federal Energy Regulatory Commission. She was appointed in October and really the reason I'm picking Her very much connects to what Melissa's just been saying, that this is a very exciting, fluid and challenging also time in US Energy because of electricity, demand growth, all of the issues around the development of AI and data centers to support it that we've talked about so many times on this show. And this is going to create a whole new set of challenges for regulators of all kinds and probably ferc, the federal regulator in particular. And the big reason for choosing Laura Sweat is she has a big issue to contend with early in her chairmanship, which is coming from Chris Wright. This initiative to give FERC more control of the interconnection process for large loads such as data centers. And this really is pretty radical change to the way that that interconnection process has been done in the past, been very much handled at a state level. Chris Wright, as we've discussed many times, sees AI as a national security priority, really wants to accelerate the development of AI in the US as rapidly as he possibly can and sees marshalling energy infrastructure to support that as the top priority, a top priority certainly for his department. And so he's proposed this shake up, which I have to say I think probably makes a lot of sense. It does seem like a good idea to treat some of these investments, which are nationally significant, as areas of federal responsibility rather than state responsibility. But as it's undeniable also that there are a lot of concerns about this plan. Mark Christie was not the most recent previous FERC chair, but the one before. He said he's worried about whether reliable power service got a quote from here. He says would reliable power service could be threatened by FERC mandated interconnection of large load customers without sufficient generation capacity available to the grid operator. In other words, you get this mismatch between FERC approving the large loads while the state regulators are handling, estate planners are handling, investment in generation does seem to be a totally legitimate thing to be worried about, even if you think the general principle of what Chris Wright is trying to do is correct. So as I say, I think that's a big challenge for ferc, big challenge for Laura Sweatt. It's going to be very interesting to see how in this new role she's just taken on, she manages that over the months to come. Amy, what's yours?
- [28:53]
Amy Myers Jaffe
So my person to watch in 2026 is Xi Jinping, the President of China. He gave a very rousing New Year's message to the population of China where he highlighted China's advances in artificial intelligence that please us into your people of the year because we're all talking about AI. He interestingly talked about the bond between Chinese on either side of the Taiwan Strait as being a trend that is unstoppable, which was sort of interesting post Venezuela. Little bit of a interpretation has to be made there about what's the thinking of China about the United States action in Venezuela and what it means for their own geopolitical responses globally. Definitely something to watch. And the Chinese are, are moving, making some progress in their work on AI. And Bloomberg in its 2026 wild cards suggested that China surpassing the US on AI models could be a top wild card in 2026. So of course the US currently seems to be very ahead. But some people are saying because China has focused on an open source policy, whereas the US companies are working in a very proprietary fashion, could give China an advantage. Other people say, well, you know, on the other hand, the censorship that goes into working on AI in China is a real hindrance to China being able to make progress. And then the financial numbers are really different. When the Chinese think about winning an AI, they're looking at innovating the architecture of how to actually do the compute. Whereas in the United States the big focus is on scaling. So in terms of the billions of dollars being spent, because the United States is taking a scaling approach, we're talking about big money, venture capital investing 193 billion, big tech investing 370 billion, you know, over the last year, whereas the Chinese numbers are smaller. The government's put in 56 billion and their private sector, big tech has put in 24 billion. But there's still this idea. What's going to be very significant and why I'm picking Xi Jinping is that this is the year that China does its next five year plan. And that is going to be something to watch.
- [31:42]
Ed Crookes
Yeah, that's really interesting. That would also be a very good contender for technologies to watch in 2026. Certainly going to be very important to watch what happens in AI. Such a fast moving area with such huge implications for energy. But what else have we got? Who wants to pick their technology to watch? Melissa, what's yours?
- [32:04]
Melissa Lott
So talk about a segue. You didn't know this because I didn't tell you all before this. Amy and I chatted briefly, but for me I'm looking across energy storage technologies. I'm looking at it from two different ways. One, where are we seeing different technologies get off the learning bench and go into commercialization? And two, where are we seeing for kind of like already commercialized focusing on the Whole thing. But already commercialized technologies, investments in developing a more diverse supply chain, like where are we seeing that? And also just a deeper supply chain, where are we seeing more capacity, period, and then more capacity in different geographic locations. And I am following what happens in the US and what investments happen there, but I'm looking globally like who's stepping up and who's digging in the dirt and pouring the steel down. So it's battery chemistries at that really launch into full commercialization, demo to commercialization, and then also who's investing in the supply chain. That's what I'm looking at.
- [33:01]
Ed Crookes
Yeah. So I think I should go next because my technology is also about energy storage and actually one specific issue there, which is iron air batteries. The iron air batteries produced by Form Energy. I'm sure you know, Melissa, I know you've been following the story. So they're first commercial installation. Absolutely, yeah. So been working on it for years. It's now kind of coming to fruition in the sense that their first commercial installation, the Cambridge Energy Storage project in Minnesota, it's expected to be fully operational this year. Huge interest in long duration energy storage. Tremendous excitement over form. Still, I think some big questions over that technology. There have clearly been some significant challenges that they've been facing in scaling up their manufacturing and now they're going to need to scale the capacity again very significantly if they're going to meet all the future demand. Great piece. I would recommend to people, if you're interested in reading more about Form Energy. Latitude Media had a good piece in October of last year. They quoted the CEO Matteo Jeramillo as saying there had been immense learnings, as he put it, over the past year, about how to manufacture those batteries at scale. So it's clear they've had some issues in terms of what they've been doing and I think will have further issues as the company grows. I think there's also interesting questions about actually where their particular technology fits into the market. So they talk about these storage batteries for 100 hours. 100 hours is quite odd as a duration for storage in the sense that it's kind of too long to be useful for just time shifting between day and night. For a system dependent on solar power, you don't need 100 hours for that. And does look increasingly likely that that time shifting can be done by lithium ion batteries, which are of course the technology that's absolutely dominant in terms of energy storage installations today. But on the other hand, 100 hours is also not really long enough for what they call The Dunkelflauter, if you're thinking about the dark doldrums where you have very dark conditions and the wind isn't blow, so wind and solar generation is very low. That kind of weather can go on for two weeks at a time, three weeks sometimes. And so 100 hours doesn't really cover you for that. So I think we're going to learn about exactly how these systems perform, where the market for them is going to be. As I say, don't want to take anything away from what they're doing. It's very exciting company, a very exciting product they've got there. But I think we're going to learn a lot more this year about what it really amounts to, what the issues are with manufacturing at scale and what its commercial and technical place on the grid is actually going to be.
- [35:58]
Melissa Lott
And can I say two quick things before we go to Amy's technology around form? 1, form was actually part of that. Do you guys remember when I did that PBS Nova thing with Miles o' Brien and we did like a whole, okay, transitions of pathways. So form was profiled in it. And so for those who aren't familiar with form, I know it's two years ago, it was like April 2023, oh my gosh, that's almost three years ago.
- [36:20]
Unidentified Guest or Contributor
Now it's 2026. What happened?
- [36:22]
Melissa Lott
I know 2030 is around the corner.
- [36:25]
Unidentified Guest or Contributor
Y', all, I'm just saying.
- [36:26]
Melissa Lott
But it gives you a breakdown of like what kind of things. But to your point, what kind of things form has developed, you know, where they were and you can kind of see the trajectory and it breaks down the basics on it. But to your point, Ed, I'm all about caveats, but I would just say, man, if I had a one size fits all, perfect solution for all situations, including multi week drops in energy, I'd.
- [36:48]
Unidentified Guest or Contributor
Be, I don't know what I'd be doing by probably what I'm doing today.
- [36:50]
Melissa Lott
But I would be, it'd be great when stuff goes wrong. I want lots of tools in my toolbox. And so I would just focus on all these different chemistries. When I'm thinking about them, it's like what are their best applications? Because back to the diversity standpoint, the supply chains, geopolitics like that diversity is really good from a resilience standpoint, but that's resilience supply chain and resilience in operation. You have different things that are meant for different things. So they're not trying to do a job, they're just not trained for ready for ideally situated for. And this is a big industry. It's not a we need one solution. We need need lots of stuff in lots of places. So I just would bring that out so it doesn't sound too dark that they're not capable of everything. It's like they've got some interesting 100 hour battery. A one hour battery. They both have different value propositions that are very interesting and great tools to have in your toolbox, depending on what you're facing.
- [37:41]
Ed Crookes
Yeah, no, great point. Certainly it's an exciting technology as it does have bags of potential. I certainly really hope they succeed, see how they go. Because definitely, as you say, there is a real need for that as part of the toolkit. Amy, what's your technology?
- [37:59]
Amy Myers Jaffe
Well, I'm going to take a slightly different turn here. So my technology of 2026, because the year started out with a little bit of news on it, are humanoid robots. Okay. So in the past we've used algorithms to train robots and it hasn't been all that successful. For those of you. I got a beautiful Roomba vacuum from my daughter for one Christmas and I can attest that the thing did not work. So I'm not surprised that they went bankrupt and are now being taken over by the Chinese manufacturer that was making it. But that said, you have a lot of money going into robotics. Goldman Sachs is estimating that the market will be 38 billion over the next 10 years. And you have Hyundai making a big investment. They've bought and you've mentioned on a past show, Boston Dynamics. So Hyundai now owns 88% of that. They're saying they're going to commit to that field and put a lot of money in to have. They want to be able to produce thousands of humanoid robots by 2028. They're starting to test them in their car manufacturing plant in Georgia. And the Chinese really want to dominate this space as well. You know, the idea in the US is they're putting Nvidia chips in the head of these robots and they're teaching it the way you would actually teach a person. So some person puts on virtual reality set and controls the robot and teaches it over and over and over again to do some repetitive thing. Or there's some body suit that you put on apparently and you do some motion that you want the robot to do. And then it learns from watching that repetitive movement of this special suit. So it's a totally different paradigm. So maybe it's come to its time.
- [40:05]
Ed Crookes
Vacuum.
- [40:06]
Amy Myers Jaffe
I'm not sure from my experience with the vacuum I'm definitely not going to be an early adopter. And in China, the ones they have that supposedly work cost like $90,000 a robot. So not a cheap technology anytime soon, but definitely a space to watch this year.
- [40:23]
Ed Crookes
Wow, that is quite something. I have to say, I feel instinctively, deeply skeptical about these. It just sounds like science fiction and not something that's going to be practical. But I have to admit I felt rather the same about autonomous vehicles, and they're clearly working very effectively right now. And that industry is becoming a real business with real products in a way that I didn't quite expect it would. I've been somewhat the same with AI as well, actually. I have to admit, where I was a bit of a skeptic originally about LLMs, but now I totally rely on them. And I was just having to do a client presentation this morning and relied very heavily on LLMs working through our data with McKenzie to kind of give me all the information I needed for that. And now it's sort of unimaginable to think how we would operate without them. So maybe this is something else where it's going to be a real thing. What are the first use cases going to be, do you think? Where are we really going to see these humanoid robots being deployed? I mean, do you think. I mean, is in factories, is that going to be.
- [41:32]
Amy Myers Jaffe
I mean, I mean, Hyundai is saying that they're going to try to train them to do simple processes along the assembly line. So I think the first thing they're doing is roof racks in Georgia. So I think that's probably the first application. Repetitive tasks seems to be kind of what they're good at. I mean, the Internet has all these funny videos of the fact that they don't have dexterity, so they can't pour you a cup of coffee without spilling it. So there are just some things they're not gonna be able to do. You know, it's hard for me to know. I mean, the Roomba, you could spill like a bunch of Cheerios on the floor if you were serving some young person, some very little tiny person. And the Roomba would sweep everything in the room. But the Cheerios. I would have to pick it up and put it in front of the Cheerios to get it to sweep those up. Do you know what I mean? So we're not there. We weren't there yet with however they. With the algorithm technology. But this sort of, you know, chip training, machine learning, I think has more.
- [42:36]
Ed Crookes
Legs, is a different thing.
- [42:37]
Amy Myers Jaffe
Yeah, it does have a lot of potential.
- [42:39]
Ed Crookes
Yeah, let's see. What do you think, Melissa? You. You skeptical about humanoid robots or do you think they're going to be a thing?
- [42:48]
Melissa Lott
Oh, man, I'm not going to tell the whole story, but for those who have not read any of Isaac Asimov's caves of steel, iRobot, like all those books, there's one called the Naked sun, which is based on this planet called Solaria. And there's like way more robots than humans. Every human's living on tens of thousands, maybe hundreds of thousands of acres. I'm gonna go reread this book this weekend. It's coming off the shelf, but it's that whole idea of when you go through the different planets in that book. I think there's a parallel here. I'm getting nerdy. I know, but it's like you saw the evolution of each planet as humanoid robots evolved. And Solaria was an extreme version of this. So coming back to reality, I had a Shar dark and not a Roomba and it worked great.
- [43:29]
Unidentified Guest or Contributor
I still had to touch up sometimes.
- [43:31]
Melissa Lott
But that sucker cleaned everything and mapped out my house issue. When I tried to go to a new house and I followed the instructions to like reprogram it.
- [43:39]
Unidentified Guest or Contributor
No, no, that was not gonna work. It was too much. The whole thing just kinda gave up the ghost.
- [43:45]
Melissa Lott
And so there it was. But I think there's a lot of potential in it. I'm with you. I mean, I will not be an early adopter, but I'm a nerdy, following it type person. And. And you're now reminding me how much I missed my shark because it didn't come to this new place because, you know, couldn't reprogram, got donated.
- [44:04]
Unidentified Guest or Contributor
Somebody at the Goodwill got to pick it up.
- [44:06]
Ed Crookes
Yeah, that is very interesting. And yeah, certainly a lesson there for the future of robotics, I think, in terms of flexibility being important. Thanks also for the reading recommendation. It wouldn't be a proper edition of the Energy Gang. We didn't give people a book recommendation to take away. Yeah. But unfortunately we do have to leave it there. Before we do, though, free electrons, Personal things we've brought in. Who wants to go first? Amy, what's yours?
- [44:35]
Amy Myers Jaffe
So mine is the blackout in San Francisco. You know, people in Silicon Valley design against their own personal experiences. And so the blackout in San Francisco really shocked everyone. And one of the things that happened is that the AVs, now that you praise them, Ed, the AVs stopped dead and then blocked traffic because they couldn't operate. And so the question is, you know, what does that send Back to the drawing board. What different things are now going to have to be incorporated into designs. The word resilience is a big trending word now in the Valley and in the United States in general about what we have to do to design for resilience. Now that all these people in San Francisco had a really horrendous evening, I think that might be an influence on, you know, the tech sector. So throwing that out is my free electron.
- [45:33]
Ed Crookes
Yeah, that is really fascinating and very much goes back to that discussion we were having earlier about the importance of energy storage and also the importance of flexibility in complex systems, particularly in a system as critical as the power grid. So, Melissa, what's your free electricity one?
- [45:49]
Melissa Lott
Did you notice I got a book recommendation out?
- [45:51]
Unidentified Guest or Contributor
I'm just saying early so I can.
- [45:53]
Melissa Lott
Make my free electron something else. Okay, so if I say this phrase to y', all, do you know what I'm talking about? Less talk, more steel. No, no, it's not Zoolander or anything else.
- [46:04]
Unidentified Guest or Contributor
The Blue stick. So it's the.
- [46:08]
Melissa Lott
Whoever did marketing for this company intersect, which is what I'll talk about in a minute. I like you.
- [46:13]
Unidentified Guest or Contributor
It's like practical pathways forward. Less talk, more steel. Whoever you are, good job. You're not in my field, but you're in the energy field. So we'll, we'll just, we'll just celebrate that tagline.
- [46:23]
Melissa Lott
So this company has a project portfolio that is like a bunch of different projects for like on site nearsight generation in Texas. So we're going back to my home state and Haskell County. They've got this big one that's was it solar PV plus best battery energy storage systems is in construction. They've got another one in Texas as well that, that's like solar plus wind to like, you know, complement each other. Start to fill in some of the gaps. But the big announcement that came out is that they are being acquired by Google. I guess it's Alphabet, but you know, that. That world. And so their technology is really interesting. A bunch of it's in construction. I followed them for a while. So that was just something. One of the many announcements that people snuck in over the holidays.
- [47:08]
Unidentified Guest or Contributor
I was like, why are we announcing the, you know, right over the holidays, y'?
- [47:11]
Amy Myers Jaffe
All.
- [47:11]
Melissa Lott
But I mean the newsreels were full. It was really hard to pick a free electron. But I just. Their technology is cool. It's really interesting. They're building it. I thought that was fun for people who haven't followed it.
- [47:21]
Ed Crookes
Yeah, that is fascinating. So how does it work then? What Is it exactly? They do, yeah.
- [47:25]
Melissa Lott
So what they talk about is essentially how do we build these combination like they do fossil fuels plus storage for carbon capture and energy storage and other things. They talk about that. But I've been focused more and I know a lot more about their renewable, renewable plus batteries which if we hark back to my days at Columbia University, we did a lot of studies on including in Texas, how much storage would you need to fully fill the gap for 24,7 power? So I do have questions for, for how the systems are being constructed, but they build these combinations. Okay. We have co located solar and storage. Solar, wind. Solar, wind and storage. You know, to get closer to a firm power dispatchable system. And there's lots of cool pictures on their website. They do have operating systems in Texas, you know, so you can read about it. They also operate, I think it's in California and a few others people can fact check me on their website. But that announcement was one of the ones that I was reading over the holidays with a bunch of other ones before, you know, other things we've already talked about on the show have happened.
- [48:28]
Ed Crookes
Yeah, that is really interesting. A very, very important area to be working in. So. And the name of the company again is Intersect.
- [48:35]
Melissa Lott
And I put a link that maybe we can throw up in the show notes or something, but it's interesting. And I was just looking at again back to supply chains, companies where investments are happening, who's getting acquired, what are they being used for, what's going on. So that was an interesting one to me. And I will say part of how I found it was shout out to my friend Doug Lewin, University of Texas Longhorn days. He is a fellow podcaster. Y' all may have crossed paths with him, but he accepted a job at Google two months ago. And so I celebrated his stuff going on. I've been kind of like watching, you know, what he and his colleagues are doing, doing as they talk about. He does markets in Texas. So, Doug, if you're listening, congrats on the gig. I hope you're having a great time.
- [49:16]
Ed Crookes
Yeah, absolutely. So, yeah. So my free electron then is a podcast recommendation. I just wanted to give a plug to the Energy gang sibling podcast, the Interchange Recharged, also produced by Wood MacKenzie, just because, well, I suppose partly because I'm going to be on it and also because it has a new temporary presenter, Silvia Levo Martinez, who you may well know if you listen to that podcast, has taken a break for a short while. And while she's gone, the chairing Hosting duties are going to be handled by another colleague of mine called Bridget Van Dorston, who is a very brilliant energy analyst that we've got. That will certainly be a terrific podcast with her in charge of it, and I'm very much looking forward to talking to her. We've got a conversation. I always enjoy my conversation conversations with Sylvia where we did the sort of the cross podcasting. Well, there's a technical term for that. Isn't that the cross promotion of the two podcasts? Anyway, going to be doing that again with Bridget, and I'm very much looking forward to doing that in a few days. So do look out for that when that gets published because hopefully that should be a really great and interesting discussion. So we do now have to leave it there. It's been great talking to you both, though. Fantastic conversation, fantastic. Look ahead to what we can expect. All the things we're going to be talking about in 2026, and no doubt a whole lot more things are going to come up that we haven't thought about. We're not even dreaming of right now, as you know, the way of the world and the way of this energy sector. But as they've been great to kind of think about a few of the things we're going to be thinking about. Amy, thank you very much indeed for joining us for this.
- [51:01]
Amy Myers Jaffe
Thanks for having us here.
- [51:02]
Ed Crookes
Thanks, Melissa. Thank you very much.
- [51:04]
Melissa Lott
Yeah, thanks for having us. Thanks for the conversation. Happy 2026.
- [51:08]
Ed Crookes
Yeah, thank you very much, Melissa. It's been great talking to you both. Happy 2026 to you, too. Look forward to many more great conversations as the year goes on. Thanks to our producers, Toby Biggins, Gilchrist, Stuart Duffy and Dan Cottrell. And above all, many thanks to all of you for listening. We really do value your feedback, so. So please do keep that coming. And we'll be back very soon with all the latest news and views on the future of energy. Until then, goodbye.