Loading summary
Transcript153 lines
- [00:00]
A
A very brief word before we start the show. We've got a survey for listeners of Catalyst and Open Circuit and we would be so grateful if you could take a few moments to fill it out. As our audience continues to expand, it's an opportunity to understand how and why you listen to our shows, and it helps us continue bringing relevant content on the tech and markets you care about in Clean Energy. If you fill it out, you'll get a chance to win a $100 gift card from Amazon and you can find it@latitudemedia.com survey or or just click the survey link in the show notes. Thank you so much.
- [00:34]
B
Latitude Media Covering the new frontiers of the Energy Transition.
- [00:40]
A
Oh my God, look at my beard. Look how white it is.
- [00:43]
C
Yeah, I got my first white eyebrow hair.
- [00:49]
A
I've had a mustache for a year and then I just grew back in my beard and it's now almost completely white.
- [00:56]
B
Like the advantage of blonde hair is that the white is much less noticeable.
- [01:02]
A
From Latitude Media this is Open Circuit. Now let's be honest, this year In Energy has had the vibes of a family gathering where everyone shows up with big feelings and no one agrees on the menu. So for Thanksgiving, we're going to process some of that chaos right at the dinner table. We've built a three course holiday episode, a quick appetizer of the week's news, a main dish we're calling Thanksgiving Table Steaks and and some leftovers. The unresolved stories will be carrying into next year. A feast of hot takes is coming right up.
- [01:38]
B
Next. Tracker is now Next Power as electricity demand surges With AI data centers and electrified infrastructure, solar is the only power source that can scale fast enough to meet this moment. Nextpower is the revolutionary technology platform ready to deliver it. By designing connected systems that unify the structural, electrical and digital technologies of a Solar Power Plant, NextPower is enabling smarter, more resilient energy generation that's ready to power our electric future. Powering what's next@nextpower.com OpenCircuit is brought to.
- [02:10]
A
You by Natural Power. For nearly two decades, Natural Power has provided engineering and consulting services for renewables projects across the US Natural Power supports clients in wind, solar and battery storage with a focus on independent engineering, technical due diligence, energy estimation and developer support. With more than 245 gigawatts of project experience in North America and acceptance from major financiers, Natural Power is responsive, able to meet tight timelines and pragmatic. Natural Power works with you to understand, quantify and mitigate Risks. Learn more@naturalpower.com or click the link in the show notes. Hey everybody. Welcome to the show. I'm Stephen Lacey, executive editor at Latitude Media. The seating chart is the same as always. At the table with me are Katharine Hamilton and Jigar Shah. Kathryn Hamilton is the co founder and chair of 38 North Solutions. How you doing?
- [03:07]
B
I'm doing great. We're about to get into my favorite holiday of the year.
- [03:11]
A
You have a big family. So Thanksgiving is quite an event for you.
- [03:16]
B
Absolutely. It's chaos and I love it.
- [03:19]
A
Do you do a lot of cooking?
- [03:22]
B
Oh, yeah, yeah, yeah, yeah. We all do. All of us pitch in. I. I have to go after this. I'm going to go make some biscuits. I'm really good at the biscuits.
- [03:31]
A
Can I tell you a little secret? A couple of years ago, I do a lot of cooking. My mom does a lot of cooking. We spend a lot of time in the kitchen together. But I got sick of spending the whole day cooking and so we just started getting it catered. Is that a bad thing?
- [03:48]
B
No. If you need to, you got. You do what you gotta do. It's just that I like to cook and so if I have the time to do it, I will.
- [03:54]
A
Yeah, I do like cooking, but full days cooking felt a little much. So I'd rather just sit around the fire and chat.
- [04:00]
C
But did Walmart short you 25% of the Thanksgiving basket?
- [04:05]
A
Yes. This is a funny story. Walmart has this Thanksgiving basket every year and the President came out. Actually Walmart came out and said the Thanksgiving basket this year is less expensive than last year. But what they didn't tell anybody was that they actually took a bunch of items out of the basket. Chigarh Shah is the co managing partner at Multiplier. He's the former director of the DOE's Loan Programs Office. Chigarh, how do you feel about the DOE's reorganization? They're calling your former office the Loan Programs office, the Office of Energy Dominance Financing.
- [04:39]
C
So funny story. I was talking to a friend who still works there and she told me that the reason it got renamed was because Chris Wright accidentally called it the Office of Energy Dominance Financing.
- [04:53]
A
Oh, get out of here.
- [04:54]
C
Even though it was only the 1706 program that was renamed Energy Dominance Financing. And so it was literally just an episode of Veep. Like everyone was like, oh well, if he called it that, I guess we're going to have to call it that. And so they weren't prepared. Right. So they didn't change the social media. They haven't changed all the other stuff, because they didn't know that this change was coming. And so, like, it was a last minute thing that got done because he called it something different.
- [05:26]
A
Something tells me that that is how a lot of decisions are getting made in the government right now. All right, we're gonna do things a little differently this week for Thanksgiving week. A bit later in the show, we're gonna talk through some of our choices for the top storylines of the year, but in the form of Thanksgiving guest archetypes. And I promise it'll make sense when we do it. But first, let's bring out the tray of appetizers and take a quick look at what's happening in the headlines. And I think we have to just start by mentioning COP30. So the climate talks wrapped up in Brazil with, let's call it a shrug. Many of the participating countries called the outcome disappointing. The US wasn't there, of course. No one can agree on whether to identify fossil fuels as a problem jigger. Have these climate talks reach their expiration date, you think?
- [06:14]
C
Well, I certainly haven't gone since 2012, so if that's any indication. But I actually don't think this year's COP was a bad one. I think that two things happened which I was really impressed with. One was I think they shifted the voluntary carbon market so that countries could issue sovereign carbon credits. And I think you had that big transaction with Deutsche bank and Honduras and Suriname, which I think is awesome because that means the money goes directly to the government and not through some third party or whatever else. And then the other big thing that occurred was everyone had to update their NDCs, right? Which is their like, sort of ambition. And the ambition was way higher than people expected because a lot of people actually see solar, wind, battery storage and EVs to be so cost effective that they hired consultants and they know like how to get private sector folks to implement it. And a lot of folks are now estimating that those NDCs will drive between 400 billion and 1.2 trillion doll trillion of new investment into these countries every year to implement the NDCs. And so in some ways, I think that the technology curve has gotten to the point where Paris did its job, right? That folks view this as a commercial opportunity.
- [07:30]
B
Yeah, it's really interesting because since the US was not represented officially at all, that kind of had two sides to the coin. One is that you did not have US leadership and buy in, and that is in and of itself an act. But on the other side, it meant that everybody else had to kind of come together and step up. And I think that's pretty much what happened and I'm glad for that. So I think the U.S. as we're saying, is going to be falling behind on things. I think everybody else wants to keep moving ahead and they'll accommodate the US in some ways. They've done some dominance financing projects, programs put into place. But I think as Jigger says, everybody is kind of moving forward and they see the pathway to do so.
- [08:17]
A
I mean, there's so much nuance to the different types of negotiations here and I don't follow each track very closely at all. But you know, I do feel like that COP is just so structurally stuck with these consensus based talks. They just can't really deliver and there are too many veto points. And so I agree with, we talked, you know, a few weeks back about Michael Lieberck's take on the, the climate reset. And his take was like we need to break these talks into sector by sector deals. You know, get these practical coalitions together on aviation, on shipping, on steel, cement, methane, etc. Instead of like these one giant agreements that, that often collapse or slow down. And I, I very much agree with that approach. I just think that we absolutely need to rethink here. And going sector by sector is one way to do that.
- [09:09]
C
Well, where they made a breakthrough this year was on nature based solutions. And land use has always been a big challenge for many of these countries. Right. So I think that sort of supports your point. I mean, I think if you had like a nature based track and figuring out how you actually put the money in to protect a lot of these rainforests and protect a lot of these, you know, undisturbed lands, I think that's going to be super important going forward.
- [09:34]
A
So a bit of disappointment coming out of cop, but certainly movement in some areas. Let's go to a story back home. Big development here. Grid Strategies has released its most recent load growth analysis. And if you remember a couple of years ago, Grid Strategies looked at all these load forecasts and showed a period of significant growth. And their new analysis looks at all these load forecasts and finds that we're going to see 166 gigawatts of projected peak load by 2030 here in the US up 38 gigawatts from two years ago. So that's a quadrupling. Catherine, do these load forecasts change your perspective on the urgency of the moment?
- [10:15]
B
So what's interesting is I went back because there's never anything that you can say that it's like never happened before or at least the trend line. So I went back to see, all right, where else have we overestimated or underestimated electricity demand and load growth? And it's like been from the beginning of time. But right after World War II, the 50s and 70s, they overestimated electricity demand. There was a strong post war electrification, but the they did not expect that there would be efficiency standards. There was an assumption that electricity use would grow indefinitely with gdp. And a lot of the early load forecasting relied on trend extrapolation and so it just was way off. So they expected 7 to 9% annual growth and it was really like 4 to 6%. And then one of the next portion of time was like the 1970s to the 1980s. And that was the biggest forecast miss in US history. And those projections were far too high. And that's almost where I see us now. And this was in part due to the oil shocks. There was a recession, there was an industrial slowdown, Appliance and building efficiency gains were huge. Electricity prices went up. And then there were federal and state conservation programs. So a lot of this had to do with public policy put into place that prevented load and demand from growing too much. And so as a result of that, what they did was they put into place these modern integrated resource planning processes to try to get utilities which had been like really increasing their debt. They had projects canceled as a result of this over forecast. They needed to do better planning. And over since the 80s we've had in the 90s underestimation of demand. And that was in part because there was the tech sector that boomed that we were not expecting. And then the mid 2000s there was an overestimation before the Great Recession and then another overestimation in the 2010s in the early 2020s. Right before this we can see in grid strategies, there were projections in 2022 of 24 gigawatts of growth rather than they found 166 gigawatts by 2030. And so we look now as if it were an underestimation. And that's as a result of unforecast data center growth, manufacturing resurgence, electrification, extreme temperature, having to adjust to that, et cetera. But I actually think, and I think a lot of folks are saying this too is like as we move forward toward 2030, that may actually be seen as an overestimation of where we think we might be going. And I think part of that will be because we will need to because of skyrocketing prices adjust. Not to IRPS even. I mean IRPS have been a bit of a cudgel too and they haven't taken into account any of the demand side. And I think that will adjust over time so that we will be able to forecast much better and plan much better based on being able to look at this whole system of systems rather than just supply and demand. And I think that will, so I think it will be mitigated, the forecasting will be mitigated over time even though it's still growing. I also think it won't go as far as they say.
- [13:36]
A
That's a really helpful history jigger. Forecasting is really hard. How accurate do you think these load core casts are?
- [13:43]
C
Oh, not at all accurate.
- [13:44]
A
But like, I mean, you know, in which direction?
- [13:47]
C
Who knows, right? Like, but they're, they're the best guests that Grid Strategies has and I think they do thoughtful work and so I think it's great. But I, I think the big thing is, you know, we are in the middle of a transformation of how we run our utility grids. Right. And you see Texas basically meeting almost all of their load growth, which has been ridiculously impressive. Right. They're expecting to go from 70g a peak to 130 gigawatts a peak. Right. A full 30% of all data center load growth is expecting to go into Texas and almost all of it's been met with solar, wind and battery storage. And so when you think about what we said in the virtual power plant liftoff report that was published in 2023 was we said we have the technologies today and the venture capital backed companies to have a full 20% of our peak load in our country, which is magically 160 gigawatts that can be flexible by 2030. And if you did that, then rates would go down, bills would go down by 20% by 2030. So we'll see if people want bills to go down 20% by 2030 or whether they actually want to do things in the most backward ass way that they could possibly do it, which is to serve people in real time. Oh, you have load growth. Let me build new generation, upgrade the transmission and upgrade the distribution just for you. Right? That is dumb. But that is what everybody wants to do because that is how their grandfather taught them how to run the grid. And so we'll see if we decide to move into the 21st century or whether we actually continue to do things exactly the same way we did in the 1980s.
- [15:30]
A
I'm not totally optimistic. Old habits die hard. One thing that stood out to me about these numbers is that for the first time, data centers really are dominating these load projections now. I think they're 55% of the total. That's a big shift from the previous forecasts. I also wonder, actually, since data centers are a big piece of this and there's so much uncertainty about the Phantom Q. Right. Like, a lot of these data centers are going to shake out the friction in the electricity market, the friction being able to connect these data centers, just the regulatory friction, the long time it takes to build these facilities and connect them to the grid. I think that they're kind of a moderating factor right now in the current bubble environment around data centers.
- [16:21]
C
Well, I mean, you also have everyone, and I mean everyone that hates data centers. I mean, that's crazy. It's not just Bernie and the MAGA people who hate data centers. I mean, the Bulwark Podcast hates data centers. Those are center Pod Save America came out against data centers. I mean, that's like the ex Obama people. The entire magnet is against data centers. And so if you're a governor that just got elected in Virginia and New Jersey, you're like, I don't know how much I should do for data centers. And then if you're like a red state governor, every red state governor's coming out against data centers. Indiana. Right. Florida, like, all these red state governors are like, I don't know. I think politically we should be against data centers. And so I think they're losing. Losing their social license at the same time. And so the question is, how do they get their social license back?
- [17:14]
B
It seems to be a disconnect between, like, everybody wanting AI dominance and the actual having to build data centers to get the dominance.
- [17:23]
A
Yeah, I hold that thought. I totally agree. And I think it's going to create some really weird factors in politics, and it is going to be one of my choices for stories of the year. So we will get to that. I guess that brings us nicely into our main course and we're calling it Thanksgiving Table Stakes. So here's how it's going to work. I am going to introduce a classic Thanksgiving table archetype, and we're going to choose which trend or storyline in the energy transition best embodies that character in 2025. Short answers, hopefully strong opinions. Let's get into it. First up, invited to the table is the drunk uncle who is loud, provocative, takes up all the oxygen in the room, and somehow dominates the entire dinner table conversation. Whether you Want him to or not. So in the energy world of 2025, who is the drunk uncle? Katherine.
- [18:20]
B
Ah, the drunk uncle in my book is local opposition, also known as not in my backyard or get off my lawn. And that is absolutely the drunk uncle. And I think of this because there has been a lot of opposition to wind and solar siting, utility scale siting. About a third of the wind and solar siting applications in 2025 were canceled. But if you dig down into the numbers, yes, local opposition is some of it, but most of them were because of policy uncertainty, tax credit risk, that sort of thing. So I think that even though the drunk uncle is quite loud and does have an impact and can make your life somewhat miserable, he's not the only one at the party. So even though NIMBYism is bad, it's not gonna win.
- [19:12]
A
Oh, interesting. So you think that, like, we're overselling NIMBYism as the reason for these projects getting derailed?
- [19:19]
B
Absolutely, yes.
- [19:20]
A
Okay, Jigger, what do you think about that? Do you agree?
- [19:24]
C
Oh, yeah. I mean, you know, I have spent a lot of time on this issue this year just because, weirdly, people have reached out to me on Linked and wanted to yell at me about it. And I talked to several county commissioners in Indiana, et cetera. And after I probed, it was like, 20 people who were against the projects, and they were like, yeah, but the property taxes have saved our school districts. And so I think in general, most people are pro builders, right? They're not necessarily pro solar and wind, but they're pro economic development and builders in their communities. And so I think largely this is just a failure in the solar and wind industry side to, like, donate $8,000 to local county commissioner races. Like, I think it's not that much money for their $400 million project to get, like, a hearing and love from the local elected politicians. But, like, I think they have to play the game a little bit more intelligently.
- [20:20]
A
That's. That's a good choice, Catherine. Jigger, who's your drunk uncle?
- [20:24]
C
I mean, obviously AI load growth, data centers powered by behind the meter, natural gas. I mean, if I have to hear one more tech online talking about how they should be spending so much money on running their data centers 100% of the time off grid with, like, highly expensive technology from Caterpillar, like, it'll be too soon.
- [20:49]
A
Oh, really? You think it's. I think it's data centers and nuclear. That's.
- [20:53]
C
I mean, the nuclear is even worse because the way that the nuclear argument goes Is, well, you know, they already have their natural gas turbines and then they're going to start building nuclear plants that'll come online by 2035. And I was like, hails, no, I am 100% sure that that is not going to happen, but I appreciate your enthusiasm, drunk uncle.
- [21:16]
A
So do you think their ideas, they're drunk because, like, the technology choice is wrong or because off grid data centers aren't feasible? What's the, the timelines are off. What are the reasons?
- [21:32]
C
I mean, it's just so much male energy. Like, so much male energy. And you're just like, you don't know what you're talking about. Like, for instance, right. Let's assume that, like, you really needed natural gas behind the meter, which I think you do. Right. A simple cycle gas plant is one third the cost of these expensive CAT facilities. And it meets the needs of like, you know, providing you power the 500 hours a year that you have a constrained grid and that you need the stuff. Why would you build a more muscular, you know, like sort of solar turbines, you know, whatever, whatever. Because you don't know any better. Right. And you're just like unwilling to educate yourself and you've like, heard Joe Rogan talk about it and you're like, damn it, like, we need that stuff. It makes me feel so manly. Right. And then you're like, I need a, I need a nuclear plant. And then like, I'm going to partner up with the ex governor of Texas and I'm going to go public and I'm going to make him a billionaire and oh, we're not going to build any of those nuclear plants. Right. I just like it. Like, I am a big nuclear fan, as you know, and there's a right way to do it and then there's the way they're doing it. And that is not going to work no matter how much energy dominance finance that you throw at it.
- [22:51]
B
Emotional energy dominance.
- [22:53]
A
Well, it's really interesting to see how the conversation has evolved and picked up, particularly on X as you've gotten a lot of people in the tech industry suddenly so focused on power. And I think that like, that part of the conversation is very much influenced by this huge shift into people who are paying attention to the power sector in ways that they weren't before.
- [23:13]
C
Yeah.
- [23:15]
A
My choice is. So if you're behind the meter, Gas and Nuke bros are over there on X. My choice, which are the water doomers are over on Blue sky. And I don't know if you've ever seen, you know, These people are all up in arms about water. Not only are data centers going to break the grid, but they're going to drain our watersheds. And if you actually look at the numbers, data centers themselves have a very small impact on water. There's this guy, Andy Masley, who has a great substack and he, he covers a lot of the tech industry. He's written some really super analysis on his substack. And here, here are some figures that I think show just how little water impact data centers have. So all US data centers consumed about 0.2% of America's fresh water in 2023. And about 0.04% was actually on site at the data center itself for like cooling. That's 3% of the water that, that American golf courses use. So he writes, which I really love this. It's a miracle that something we spend 50% of our time on, which is like the Internet, only consumes 0.2% of our water. And that water usage is about 8% of water consumed by US steel production. And so AI is about 20% of total compute load right now and data center electricity use. So if AI energy use increases by 10x by 2030, Masley estimates AI would still consume, assume 5% of total US Gulf course water use. So I don't dismiss this story entirely. I think water availability can absolutely be a challenge, particularly if you're building a data center in an extremely water constrained area or if there is an area with a lot of data centers in one location. But this is not like an industry wide problem where we're going to like run out of water. And I just think that, like, this is part of that emotional conversation. A lot of people are coming in with very strong feelings and there's a lot of hyperbolic nonsense. And so again, we need to pay attention to how water is used, particularly in sensitive areas. But we are not going to run out of water.
- [25:30]
C
All right. More importantly, is the water getting too warm for me to swim in during the summer? Because I have to say, if you go to Lake Anna in Virginia, I mean, that's nuclear power, it's the dirty gas state, the water's too hot in the summertime. And I just think that, you know, like, folks need to like, watch how much heat they're rejecting into that water.
- [25:54]
A
Yeah, that's a good point. Although if you go to Iceland and swim in the effluent of a geothermal power plant, that heat's a good thing. You ever been to the Blue Lip thing?
- [26:02]
C
Like, they definitely like take $40 of your money to like, like get you to wade into it and then put some mud on your face.
- [26:09]
A
I mean, anyway, so I, I think that like the water thing really annoys me and then just the, the energy. I think the similar crowd is arguing that data centers are going to break the grid. And as we have discussed, obviously they can potentially drive up rates. Obviously there are capacity challenges and if we don't solve those, there will be pricing and reliability challenges. But the idea that data centers are inherently going to break the grid, which is how a lot of these conversations are characterized, is, is very removed from.
- [26:42]
C
So that I will disagree with you on. I mean, I think the way in which they're building these data centers will break the grid.
- [26:50]
A
I mean, I think what, like what the large, like gigawatt scale data centers or.
- [26:53]
C
Oh, for sure. I mean, I think if you just put it somewhere and then you decide to build some behind the meter, you know, power generation, and you don't integrate it into the grid, you don't figure out a way to force them to put in battery storage or you don't figure out how to get them to like weatherize homes in the community by, and reduce, you know, like, like the constraints on the distribution grid, et cetera. Then that means the utilities have to upgrade all of those wires and then they have to rate base that. And I think that when you look at what Entergy is doing right now, it's crazy town, right? In terms of how much they're peanut buttering all of those costs from Meta onto all the rest of the ratepayers. And the new Amazon announcements that came out yesterday that are, you know, like basically the equivalent of all residential load in Indiana is crazy. And I don't trust those utilities for a moment to do things in a way that actually manages people's electricity bills. And so there's the right way to do it, which is virtual power plants and demand flexibility and grid enhancing technologies. And then there's the wrong way to do it, which is what most other people are doing.
- [27:58]
A
Wait, sorry, I might have misunderstood your argument. You said that installing behind the meter generation will cause that problem.
- [28:06]
C
Installing behind the meter generation does not reduce the electricity costs for your neighbor. All it does is basically make you into an island that like doesn't actually help anybody, right? And so like my problem is that if you're going to have all this load growth, right, which means the denominator, the number of kilowatt hours we're selling goes up, well then you have to make sure. The numerator goes down, right, the amount of investment that we're providing. Right. And so that means the investment by the data center companies, whether it's behind the meter, like with battery storage, or whether it's them. Funding heat pumps for people who are on electric resistance heating to free up capacity on the grid needs to be done in a thoughtful way. It can't just be done haphazardly, which is what we're doing now.
- [28:58]
B
Next Tracker is now NextPower. Electricity demand is surging due to AI data centers and electrified infrastructure. And solar is the only power source that can scale fast enough to meet this moment. Nextpower is the revolutionary technology platform ready to deliver it. Born from the leadership of NextTracker, NextPower provides connected systems that unite the structural, electrical and digital technology of a utility scale solar plant. By designing and delivering TurnKey integrated systems, NextPower is accelerating the deployment of reliable energy generation to meet the massive need around the globe. Powering what's next@nextpower.com Open Circuit is brought.
- [29:36]
A
To you by Natural Power. For nearly two decades, Natural Power has delivered expert independent engineering and consulting services for renewables projects across the US and beyond. Success in project transactions requires an independent engineer who's laser focused on timelines, understands the nuances of risk, and collaborates seamlessly to develop solutions tailored to your needs. Natural Power excels at working within tight time constraints while ensuring diligence never takes a backseat. With a deep expertise in wind, solar and battery storage, Natural Power delivers top tier support and independent engineering, technical due diligence, energy estimation and developer support accepted by major financiers. Their flexible approach ensures projects are built on a strong foundation powered by expertise driven by sustainability that is natural power. Find out more@naturalpower.com or click the link in the show notes. Finally, we've got some good disagreement here. All right, so let's shift gears here and invite the next person to the dinner table. This is our pragmatic parent. They're not flashy, they're not loud, but they're doing all the thankless work that keeps the whole dinner from collapsing into chaos. So in the energy transition, who is the pragmatic parent of 2025?
- [30:53]
B
Katherine, let me smooth my apron and come out of the kitchen for a moment to talk to you about that energy efficiency. Energy efficiency holds the grid together. It reduces stress on the grid. It cuts peak demand with things like efficient H Vac and building insulation during critical peak hours. It defers or avoids expensive grid updates upgrades. It reduces fuel and generation volatility. It Supports renewable integration, flattens the duck curve. It improves resilience during extreme weather. Energy efficient homes and buildings and appliances are able to maintain temperatures during extreme heat or cold longer. And then it's also the foundation for Jigger's favorite thing, virtual power plants. So I'm all in for energy efficiency, being the steady person at the table who is pragmatic and should always be the first solution.
- [31:53]
A
Tell that to lawmakers here in the Commonwealth of Massachusetts who are trying to gut our efficiency programs in the name of affordability.
- [32:00]
B
Yep.
- [32:02]
A
Do you think efficiency could suffer in this moment? I mean, actually, Massachusetts is a good test case here where some lawmakers are saying, why are we spending money on these programs that obviously do save consumers money, but if rates are going up, why are we spending money on these programs? Do you see it under threat in other areas of the country?
- [32:21]
B
Yeah, well, it's under threat federally, too. Like, the US Government is ignoring our statutes that say we have to be more energy efficient. And energy efficiency, as I said at the top of the show, is very much about why we have been able to manage demand in a way that's reasonable and has always been the first solution. And it's paid back in multitudes by a small amount on efficiency. Pays back enormously at the end.
- [32:48]
A
I must admit, it's been a while since I have really dug into the details of energy efficiency programs, and there has been this long debate over how we measure and verify efficiency. And there's constant debate over how to execute projects, how to verify that you're getting the energy reductions. Can you characterize the state of efficiency today across America? Like, have we figured out a lot of those problems? And how are programs being run differently compared to, I don't know, say, a decade ago?
- [33:21]
C
Well, I can add the flex market stuff. Right. So Matt golden has been working on this for the better part of 10 years, right. Where he has basically said that energy efficiency on its own doesn't always help reduce rates. It's energy efficiency that reduces peak demand, that, like, reduces rates. Right. And so Californ has deployed almost all of his policy recommendations through their Flex Market program. I think you're seeing New York and NYSERDA doing the same thing. And so, you know, that doesn't mean energy efficiency is invaluable, as Catherine suggested. And so, like, I think as you replace old appliances with new appliances, they're more efficient, et cetera. But I think what you're seeing is a lot of the thoughtful energy efficiency programs are moving their rebate programs to financing retrofits and things that actually reduce peak demand as opposed to, you know, know, providing more energy efficiency in the middle of the night.
- [34:14]
B
Yeah. And a lot of these efficiency tools, well, all of them now are pretty much connected to the Internet. So you can control them in a much more granular way. They become much more useful. So I think that's another piece of it.
- [34:24]
A
Jigger, who's your pragmatic parent?
- [34:26]
C
I mean, it's the workhorse, the transmission and distribution grid. Mostly transmission. I mean like God love Rob Gramlich and the grid strategies people, but like he has not been getting a lot of love the last 12 months. Months?
- [34:40]
A
I mean, why?
- [34:41]
C
I mean, Grain Belt Express goes away, you've got like all these like all of that work that we've been doing to be like we need thousands of miles of more transmission grid every year. Now, you know, SPP had their big announcement on their new transmission program, but I think it's one third of the program that they were supposed to announce. They were supposed to announce a $20 billion program and they instead only got like eight points. Billion announced. And so, you know, I think there's a lot of these folks who I think have started to, you know, like, sort of not really pay attention to the workhorse of, you know, the grid. That is the transmission grid that we need to continue to invest in. And you know, and even if we say we can't build new right of ways, maybe we need to like reconductor the existing right of ways with new technologies like DS Conductor and others that can, you know, triple the capacity of the grid we already have or deploy grid enhancing technologies or other things. But I feel like that conversation is not getting the love and attention that it should be getting.
- [35:47]
A
Cheers to that. I'll raise a glass and agree. And I actually chose just the grid. It's one of the most complex machines ever built. It operates in real time. It's got to match supply and demand every second of the day. We're asking it to absorb all this new load growth, integrate all these renewables, Host millions of DERs, support these new AI data centers, electrify buildings and transport. It is doing an unbelievable job and a lot of emotional labor for the entire energy transition.
- [36:19]
C
Not to be confused with the Wire, which was an extraordinary show that was, you know, like brought families together and great plot lines because I think we.
- [36:29]
A
Need a little disagreement here. I want to shake things up. I guess I'll also give a toast to utility. I mean they take endless criticism, but they've got these teams that Are quite, you know, many of them have teams that are quite forward thinking but they're buried under regulation legacy systems, they've got investor expectations that act as constraints, but they're keeping this massive machine operational. And we may not every love everything they do, but without them, none of this works.
- [36:56]
B
Oof. You've just gone from pragmatist to victim.
- [37:00]
A
I don't know you and I should.
- [37:01]
C
Raise a glass, Katherine, to you know, Boeing, because I feel bad for all those people who work there who don't make airplanes that you know, don't have like doors that fly off. Or Westinghouse, which is an extraordinary company who can't build a nuclear reactor to save their life. Or there's all sorts of CEOs who make $26 million a year that who I should cry because they can't seem to control their employees and help them, you know, reach high performing teams and you know, actually implement new technology and do all the things that we expect from for profit corporations. Oh, sorry, was I speaking speaking out of turn?
- [37:37]
B
Now I will raise a toast to the line workers.
- [37:39]
C
Those guys, those people.
- [37:41]
A
Oh definitely they work.
- [37:42]
B
It's dangerous, it's thankless. They're the good guys.
- [37:46]
A
A hundred percent agreed. Definitely a toast to the line workers. All the folks out in the field. I just, you know, utilities have a really hard job during this time. What about the lawyers, period.
- [37:58]
C
Would you toast the lawyers turn CEOs of large utility companies who basically don't have any engineering acumen whatsoever. But they rose to the top because they figured out regulatory capture.
- [38:14]
A
Let's invite one more person to the table here. This is our rebellious teenager, impatient contrarian, rolling their eyes at the adults and maybe, just maybe a little right about everything. Jigger, who's your rebellious teenager?
- [38:28]
C
Oh, you know, it. DERs, VPPs and distributed energy Resources. My man.
- [38:35]
A
Tell me more, tell me more.
- [38:37]
C
Look, I think when you look at the situation that we're in today, we are in a place where the electro state has succeeded, right? We have ridiculously low cost solar. We have ridiculously low cost batteries. We have ridiculously low cost electric vehicles. We have low cost wind power. And, and we have a utility system that does not know how to integrate these technologies into their system in a way that reduces electricity costs 20% by 2030. Right? We have all the modeling that shows that it should be able to do it. We have all the venture capital in the world that shows that like folks are ready with solutions. We have front of the meter solutions that utilities can rate base. We have behind the meter solutions, we have, you know, like, financing, we have all these things, but, you know, like, they're still treated like, you know, the sort of bratty kid in the corner that just won't shut up.
- [39:32]
A
Catherine, you've got four kids. When does the rebellious teenager get taken seriously by their parents?
- [39:38]
B
Well, the issue is when are they stopping kids? I don't think ever. Although I do take them seriously. I think it's when, you know, when costs get, get so high that they better be taken seriously. I mean, that's like, it's a real thing. And I think there, at some point we won't have any choice. We'll have to say like, y' all need to, y' all need to learn how to cook too.
- [40:02]
C
Well, that's right.
- [40:03]
A
Yeah. Jigger. I mean, are Ders, like, have the parents locked them in their bedroom or are they sitting in their bedroom unable to get out because they don't have the motivation?
- [40:13]
C
No, I think these analogies at this point are quite strained. Look, I think, I think where we are today is that that you've got two governor elects, right, in New Jersey and Virginia who are saying on day one, they need a solution that absolutely reduces electricity bills, not reduces the growth in the increase of inflation of electricity bills, but actually reduces electricity bills. And the only thing available to them is Ders. Right? Like, basically, when you look at the full implementation of first quarter 2222, there are already 10,000 megawatts of demand flexibility resources that have been contracted in the PJM that cannot bid into the pjm. Now the PJM is suggesting that they will have their final rules for that ready to go for the auction next summer. And so. Okay, but then they haven't forced the necessary data acquisition changes, right? So like they haven't allowed for statistical sampling to be used for residential. So they're basically saying no residential and small businesses should apply to this demand flexibility. Right? So they only want to do large scale commercial where you can overpay for the metering to be able to replicate the entire structure. So you start at 36 gigawatts worth of opportunity. In PJM, they're erasing 12 gigawatts of opportunity because you're taking out residential and small commercial. So now you've got 24 gigawatts left, 10 gigawatts of that is already under some sort of contract or has been recognized by some VC backed company.
- [41:50]
A
Right.
- [41:50]
C
And so look, I mean, there is a problem here and we need to figure out how to solve it. And I Think that the challenge that we have right now is that when you ask these governors, who do they trust to give them advice, it's only the utility CEOs, right? They don't trust a whole cadre of people to give them advice. And so you're in this weird spot right now where we all know that there's only one road that leads to political success. And now there's another 30 governors races occurring, you know, in the fall of 2026. Right. And all of them actually are going to be running on electricity affordability too. And so as Katherine suggests, there's only one road in nirvana. But you know, it takes some people a little windy road, you know, action to get there.
- [42:39]
A
Catherine, who's your choice?
- [42:40]
B
Yeah, so I looked at how old are teenagers? It's really the Gen Z folks. So between ages 13 and mid 20s are considered gen Z. And I think they're less rebellious. I mean what they rebel against is their parents who haven't done a great job in this world on energy. So all the studies show that Gen Z is much more willing to do electrification. And so my choice is electrification, especially EVs. So 57% of youth are willing to change their travel habits to make sure that they use electric vehicles of transportation. They're much more willing to pay for clean energy. They support energy efficiency technologies. They have a distrust of utilities and traditional providers, and they want to be included in the energy transition and often are more practical than their parents in making decisions. So their decisions are often about technology and apps rather than and gamification. But that all leads to really good results because it leads to more uptick in electrification, especially EVs. So all the studies show that the youth want, you know, electric scooters, electric cars, electric bikes. And so that's my rebellious teenager and I, I'm on their side.
- [43:58]
C
But the real question is whether they're going to abandon fast fashion and you know, like figure out a way to find a tailor to make high quality clothing.
- [44:07]
B
Thrifting is like the new thing. Everybody needs to thrift.
- [44:12]
A
I remember after Covid Jigger said we were gonna, everybody was gonna be tailoring their own clothes. I really, I really Fast fashion movement.
- [44:19]
B
Hit for like a minute and a half come true.
- [44:22]
C
Like I really want Taylors to make a comeback.
- [44:26]
A
Okay, you took this one very literally, Catherine, which I like a lot. I will say also the we, the electric technologies are often just better because we're used to being, you know, the younger generations have grown up in an environment where like they've Been around smartphones their entire lives. And now you have cars that are like iPads on wheels, right? You've got remote controlled heating systems that are on demand. They're just better technologies. And I think they fit neatly into the sort of digital, always on demand world that they grew up in. Okay, onto my choice. I chose for the rebellious teenager, the Abundance Coalition. And I feel like the reason why this is a rebellious teenager is because I think it's a major break from the historical left. This year we saw a general challenge to left orthodoxy on government rules and regulations. You have progressives who have traditionally viewed government rules as, as sacred, government process as sacred. And they're suddenly talking a little bit more like free market libertarians when it comes to regulation. So it's an interesting group of people. Obviously it comes from the progressive wing, like Ezra Klein and Derek Thompson, whose book Abundance really just exploded this year and has become a manifesto of the movement. But there's a lot of other people on the left who are part of this abundance movement and have been talking about this for a couple years now. And they're sort of forming with, with the tech wing, the Silicon Valley accelerationists, who are rallying around this concept mostly because they just want to build more data centers and support their companies. And you also have the libertarian wing, which are like the Cato Institute, our Street Institute, who have hated these regulations for decades. But it's really starting to look like a motley crew of teenagers all sitting around the lunch table together. And it's an emerging, emerging coalition that I think is quite interesting. And it's the closest thing we have to a rebellion against the current political status quo that has prevented us from building things. And I thought that that was, you know, a really interesting thing that broke out this year that I will continue to be following.
- [46:47]
C
I think you're hilarious that you think that Ezra Klein and Derek Thompson are progressives. I mean, they are basically the second.
- [46:55]
A
They label themselves progressives, they're the second coming of Al.
- [46:58]
C
Alex P. Keaton, who, like, has said we need to rail against all these excessive regulations. I mean, Matt Iglesias and Ezra Clyde have been in the center for as long as I've seen this stuff. I just think that I agree with you. To be completely clear, I think their central thesis is that blue states consider themselves super smart and are not super smart smart. Like they are actually not like figuring out housing, figuring out rail, figuring out like urban planning, figuring out all these things. Instead, they're figuring out red tape. Right. And so I totally agree with you that we should have higher expectations of blue states and blue cities to actually, like, you know, like, manage their shit. But like. But I don't think that they're progressive.
- [47:49]
A
Well, I mean, like, they've been quite progressive on criminal justice reform and on healthcare, et cetera.
- [47:54]
C
Quite progressive on one issue, like, I think we should have universal health care. I don't know why I have to be responsible for everyone's health care, but like.
- [48:00]
A
Well, I will say. I mean, I disagree with you, but. Because they identify as progressives, but whatever. But I do think that the real progressive wing of the party really does not like them very much. And that's. I think.
- [48:11]
C
Well, that's my point exactly. The real progressive party does not actually like them.
- [48:16]
A
But I grew, you know, I spent some time in the center for American Progress many years back, like a decade and a half ago, and I spent a couple years there. And I will tell you that there was an obsession with regulations, with defending regulations, with figuring out how to message around them to explain how they're good for business. Like, I spent a lot of time in some of those war rooms where like, that's all anyone talked about was like, how do you message to the world that we need more regulation? And you know, like, they're coming at it from a good place. Often it's about environmental pollution controls and, and, and. And climate regulations. And so like, that. That was the way they tackled these issues. It was coming at it from like, how do we support more regulations? And so I think that this is a big break from that mentality. And it's starting to seep into places like the center for American Progress. So.
- [49:15]
B
Yeah, but think about this. Every single organization you mentioned is like a think tank. It's not like real people out there. These are all think tankers. So they don't even get a table in the lunchroom. They have to like, meet in the music room. Cause nobody even wants them in the lunchroom. So like, this is all just people thinking about stuff and coming up with new ideas. Now we have to figure out, like, how do we actually get ideas to start organically in places where we need to get things done?
- [49:39]
A
Yeah, for sure. And I mean, it's gonna come down to a lot of local lawmakers. I mean, really, this all comes down to like, zoning boards and real local. You can, you can talk in the federal level about building all the housing that you want, but like, it really comes down to ultra local organizations like zoning boards.
- [49:57]
B
And then you get. Got to get past that drunk uncle yes, exactly.
- [50:00]
C
No, it's actually, it's always a drunk grandma. At least in my neighborhood. Like, it is crazy. When I first moved into East Bethesda, right? So I live six blocks from the Metro, right. And like all these people came out of the woodwork and were like, trying to like, assess where I was on this thing. And they all have like, like, communities, not canyons signs in their, in their, like, yard. And they basically don't want any of the two story buildings around the Bethesda Metro to be torn down and turned into 17 story high rises. And it, it took me a while because I'm dense to figure out what they wanted. And as soon as, like, I figured out, I was like, no, you're crazy. Like, I want 17 story buildings. I don't know what you think is happening around here. Like, if we're next to the Metro, I want high buildings and better restaurants. Like, what are we talking about around here? Like 100, you know, like, I, I totally, like, I, I think it's, frankly, I think it's mostly like folks who've bought their houses for $200,000 that are now selling for 2 million who are like, I don't want any zoning changes or anything else.
- [51:00]
A
Yes, definitely. It is people who are locked into housing who don't want their neighborhoods to change. That is a huge factor.
- [51:06]
C
Yeah. Which I, I am. I think the big problem with the abundance movement that I have is that I think they are totally dialed in on housing and they are not dialed in on anything else. So I don't think they really understand, like, the permitting reform stuff that we need to do to get like, residential solar costs down. I don't think they really understand, like, some of the other abundance areas where, like, figuring out how we find smart regulation and smart, you know, like, getting rid of red tape could accelerate building.
- [51:36]
A
I think part of the reason why I think the movement does have some power is because it's starting to influence a lot of folks who are working on some of those more niche issues. And, you know, I'm seeing it make the rounds and creating a lot more momentum on some of that regulatory reform that is not about housing. All right, let's wrap up with some leftovers. These are the stories that played out in 2025 that are unfinished and are absolutely coming out of the fridge again next year. We'll each choose one. Catherine, what's your leftover?
- [52:07]
B
Yeah, I'm going back to the initial appetizer because we're going to have a lot left over from that, which Is data SC center growth like is it real? Are we going to have affordable solutions to it? I think that's just going to be the gift that keeps on giving in the coming year.
- [52:23]
A
Yeah, it is the center of the energy universe right now.
- [52:25]
C
Oh, I think we'll have a lot less clarity next year than we had this year. Oh yeah, I think a lot of the basic concepts that we took for granted this year will be thrown out the door next year and we'll have to reassess everything from the ground up again next year. I think you'll see a huge move to edge data centers away from centralized data centers. I think you'll see see a huge move right, to demand flexibility away from new natural gas units that you couldn't get until 2032. Anyway, I think this FERC Anoper thing, I read a lot of the summaries of the comments that came in. I mean there's nobody who is vehemently in Chris Wright's corner. Even the hyperscalers were tepidly in his corner. So we'll see how that plays out. But I think that huge like hangs a huge cloud over a lot of stuff. So my sense is we'll have less answers next year than more answers.
- [53:18]
A
Katherine, are there any particular angles that you would be following into next year?
- [53:22]
B
Yeah, just like whether it does create more space for virtual power plants. That's kind of what I've been focused on. Or demand side solutions just generally jigger.
- [53:33]
A
What are your leftovers? What is your plate filled with?
- [53:36]
C
So I am obsessed about lawn care.
- [53:40]
A
So this year this is unexpected.
- [53:42]
C
I was really looking at. So we have 200 jurisdictions now, some states, but mostly cities and towns that have banned gas powered leaf blowers. Right. And you know some places they have these like tickets that they give you. Like in D.C. if someone uses a gas powered leaf blower you can rat them out and get you know like some sort of kickback. But in other places like they don't enforce the rules because you know they haven't really had a lot of solutions. But there's a new solution that's like gone like you know, crazy. And basically a lot of these, there's like 10,000 crews in the country basically that are professionally hired and they've been all rolled up by private equity companies, think Brightview and some of these other type of companies. And so they're all moving to electric appliances and they figured out an integrated charging solution to do that. And so so I think when you think about the electro state and one of the Most polluting things that we have are gas powered lawn equipment. I mean, they have no pollution control stuff on them at all. The amount of local pollution that comes from that is more than all the cars in your neighborhood. So I think we're on track to that problem actually getting addressed in 2026. And so I am watching that carefully and we'll be pulling that out of the freezer on a regular basis.
- [55:03]
B
That's awesome.
- [55:04]
A
So the regulations piece.
- [55:06]
C
Well, the regulations is what's causing it to, you know, I think spur. But you know, what you're finding is a lot of the private equity backed roll ups are saying, oh, this is 10% cheaper on an operating cost basis for us to operate than the gas powered stuff. So we're actually more profitable moving to electric. So I think they're going to go nationwide regardless of whether there's regulation or not. And the battery technology's gotten better, the equipment's gotten cheaper and so like it's, it's great.
- [55:32]
B
Yeah, we're, we're at the top of a mountain and we do have to do a lot of leaf blowing so that we don't, so that our road doesn't wash out every time it rains. And like everything we have is electric. We just have like a whole shop full of batteries charging all the time. Even our large, we have a huge tractor mower situation and it's all electric too. And, and my husband just went out and got another leaf blower so we.
- [55:54]
C
Could all have one.
- [55:55]
B
It's like a family event. You just like plug in the battery and go. And it's so much easier and it's way, way less polluting, obviously, but just an easy way to do it. And it's cheap. You can get this stuff at Lowe's or Home Depot. It's not a big deal.
- [56:10]
A
Yeah, we were joking about it before. I use this little squeaky mechanical lawnmower and some shears and human power, baby. Maybe. But I will invest it. I, I, I'm doing some landscaping right now, so I will have a bigger yard soon and I'm going to have to get something electric. So Catherine, I'm definitely going to look to you for a recommendation and then maybe if this blows up Jigger, we can create an electric lawn care spinoff podcast. I feel like that would do pretty well.
- [56:37]
C
I'm there for it. I'm there for it. I.
- [56:38]
B
Sponsored by Ego.
- [56:39]
C
Exactly. I've spent a lot of time on this. For instance, did you know that this year alone, landscapers spent $8.3 billion on spare batteries for their laundry and charging solution, they can eliminate almost all of those spare batteries.
- [56:53]
A
We can take all those spare batteries and create like we could use them for stationary storage for edge data centers or something.
- [57:00]
C
They can get a data center online in 20 days.
- [57:04]
A
Okay, so my final choice goes back to what Jigger was saying earlier about how we're seeing a lot of pushback, a lot of ground up pushback on data centers, which I think is a huge story, but is. It's not just a data center story, it's really an AI story. And so my left over is what I see as a possible looming political realignment from AI, like a scrambling of politics. And we're starting to see, you know, traditional political lines dissolve over this issue. So on the MAGA right, you have a split between the tech wing and the populist wing. So on the tech right, Elon Musk, Mark Andreessen, David Sachs, they view AI as the ultimate tool for American dominance. They want to, you know, bulldoze regulations to build gigawatts, lots of power in data centers. And then on the populist right, you've got like Steve Bannon, Josh Hawley, they look at AI as a existential threat to their America first working class vision. And you are starting to see a significant friction between these two fractions. And then on the local level you see a lot of alignment as well, as you were suggesting earlier in the episode, Jigger. So from the left you've got Democratic lawmakers, environmental groups thinking about how to block data centers because of water issues, land rights, carbon emissions. They argue there's a lot of environmental arguments to what they're doing. From the right you have conservative landowners, Republicans kind of blocking these expansions because of property rights, transmission lines, preserving natural character, et cetera. And then I find that clean energy is in this weird spot because for a decade or more, for forever, clean energy and environmentalism were kind of synonyms. And they aren't anymore. And the clean energy industry for the most part is kind of leaning into this build out. They want to build at scale, build more transmission, nuclear, solar grid infrastructure at this massive scale. But the traditional environmental movement is recoiling from this and I think that split is going to continue to grow as well. And then on top of this, you have this massive investment bubble. And when that pops, depending on how bad that is, I think it could be a real catalytic force for new political movements. I mean, you think about what happened with the Tea Party and the rise of populism and just distrust of institutions in the wake of the financial crisis. So all of this just feels really fluid and highly consequential. That's, in a way, that stretches way beyond the tech itself.
- [59:44]
C
I feel like the tech right is gonna come together with Ezra Klein and Derek Thompson. They might on the abundance side, and they're gonna create a bromance.
- [59:57]
B
Whew. Yeah. And Stephen, I feel like what you have described as the archetype of, like, the toddler at the Thanksgiving dinner that is just running around wreaking havoc and causing chaos and breaking things.
- [60:07]
C
Yeah, well, it's already scrambling politics. I mean, to be clear, right. I mean, kids that are under the age of 25 have a 25.3% unemployment rate right now, and that is double what it was in 2009 at the end of the first year of the great financial crisis. And so those kids have idle time, and they're doing the devil's work right now. So my sense is that they need to get a job. We need to get them into productive work. And frankly, a lot of those jobs are in clean energy. And so come on, home. Home. Like, we. We have places to. For you to work. And so I'm. I'm excited for the future, but I totally agree with you. The one thing that I think you should look for, which I think you didn't mention, is the ag community. I think the ag community is going through a huge amount of change because of all the trade tariffs and soy and that kind of stuff. And they have always controlled the Republican party. And you saw that with the O triple B where all the biofuels credits got in. You know, easy peasy, lemon squeezy. And you're seeing all of the ag hobby folks going big on the pro solar side of things because they want those rent checks that they're getting for solar on some of their less productive land. And so you're seeing a huge push there. And even the White House, I think, is backing that as well as usda, because they're recognizing that these farmers need relief, and a lot of them are looking to renewable energy to get that relief. And so it's going to be a fascinating 2026.
- [61:45]
A
Absolutely. All right. This was so much fun. We made it through dinner, guys. That is it for this circuit.
- [61:54]
C
Time to get the leaf blowers out and clean off the road.
- [61:59]
A
Jigger, you've got some lawn care to do. Catherine, you've got some biscuits to bake. Have a great Thanksgiving, Catherine.
- [62:05]
B
Thanks. You too.
- [62:07]
A
You enjoy the holiday. Jigger.
- [62:08]
C
Happy Thanksgiving.
- [62:10]
A
Same Kathryn Hamilton and Jigger Shah are my co hosts. Open Circuit is produced by Latitude Media. I am Steven Lacey. I'm your host and Executive editor and I edit the show. Sean Marquand is our Technical director. Anne Bailey is our Senior Podcast Editor. For more in depth reporting on all the stories and topics we cover on this show, go over to Latitude Media and you can subscribe to our different newsletters. And of course, of course, hit that subscribe button anywhere you get your podcast, if you don't already. And you can find this show anywhere you get your shows. And thank you so much for listening. We appreciate you all. This is a time of the year for gratitude and we are certainly grateful that you choose this show and we will catch you next week.