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- [00:01]
A
Hey, it's Stephen. Before we start the show, I want to give you a quick heads up on something we've been working on at Latitude Intelligence. Utilities are in the middle of figuring out how to serve all this data center load.
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B
We know that we talk about that a lot on this show.
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A
And they're basically building a new rate structure from scratch. 25 utilities across 19 states have already filed these data center specific tariffs, and that didn't even exist five years ago. So our analyst Nick Zenkin just published a white paper breaking them down. The first comprehensive look at how these tariffs are actually being designed across the country. And what stood out to me is how quickly the industry has moved to protect against risk. Long contracts, demand minimums, big financial backstops. But we're not really designing these tariffs to capture the upside either. The flexibility that data centers could actually provide to the grid. And that trade off is going to matter more and more over time. So if you want to understand how this next wave of load is going to get built and who's going to pay for it, I'd really recommend taking a look at this white paper. You can find it@latitudemedia.com research search or
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B
just find a link in the show notes. I think it's going to be worth
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A
your time, particularly if you're in this market building right now onto the show.
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C
Latitude Media, covering the new frontiers of the energy transition.
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B
Yeah. Brian, do you like my shirt?
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D
I do. It's awesome.
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B
I dressed up because I knew I was recording with a modern day Landman, as the New York Times calls you.
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E
Oh my God.
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D
I expected nothing more than to get made fun of for that.
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E
Seriously, why didn't you call me? Like, why couldn't I have been there with you and dressed you and like, made sure you were in a white linen shirt, which would have been far more appropriate for the New York Times.
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D
Yes, yes, it would have.
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B
I thought you might show up with like a Stetson and Wrangler jeans today.
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D
Oh, next time. That's a missed opportunity. I need to just lean into this whole Landman thing.
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E
I'm expecting a Netflix show.
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D
Yeah, me and Billy Bob. Yeah, yeah. We're gonna get him out of the oil industry and get him into the data center industry.
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B
From Latitude Media, this is open circuit. We are entering an electricity super cycle. It's reshaping how power gets built, what
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A
kind of power gets built and who controls it. Across the US Developers are scrambling to
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B
lock up land with access to electricity and the grid. This more than century old machine is being pushed in ways it wasn't design. And this is feeding a new debate in the industry about what to do with the grid, because for all this talk of scarcity, the system we've built sits idle much of the time.
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A
A new report from Brattle suggests the grid is only being used about half
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B
the time, and that better utilization could unlock 100 gigawatts of capacity while saving ratepayers tens of billions of dollars. So the question is, do we build
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A
our way out of this moment with
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B
more transmission, more generation, more steel in
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A
the ground, or do we use what we already have more efficiently, more flexibly, more intelligently?
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B
The obvious answer is that we need both. But there's a surprising amount of disagreement on this front, and we're going to wade in. A look at grid utilization versus Grid expansion is coming right up.
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A
OpenCircuit is brought to you by the Yale center for Business and the Environment. They offer Yale's Financing and Deploying Clean Energy Certificate. This certificate is a fully online 10 month program built for working professionals who who want to shape the clean energy future. The program focuses on building real world skills in clean energy policy, technology, project finance and innovation all in just five hours a week. Learn more and apply @cbey yale.edu or just follow the link in the show notes and good news. You can use the discount code OpenCircuit26 to save $500 on tuition applications. Close April 20, 2026 the AI Revolution
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C
is intersecting with a critical moment in the energy sector. I'm Stephanie Huang, host of where the Internet Lives, a podcast from Google and Latitude Studios about the unseen world of data centers. This season, explore the new era of AI innovation. Hear from Google leaders on Energy for AI and AI for Energy and how to build data centers that are good grid citizens. Find where the Internet lives wherever you get your podcasts.
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A
After four sold out shows, Latitude Media is bringing Transition AI to San Francisco. The two day conference on April 13th and 14th will bring together the people and companies who are successfully getting digital and energy projects cited, financed and built
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B
in the AI era.
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A
The solutions are getting more sophisticated, but there's still no uniform blueprint for building at gigawatt scale. Join attendees from Google, pge, edf, Energy Impact Partners and AES to align on what's real, what's what's possible and what can get built. Head on over to latitudemedia.com events or just click the link in the show notes and there you'll see a full
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B
agenda and you can Register for Transition
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A
AI 2026 and as a Bonus for our listeners. Use the code pods10. That's P O D S10 pods10 for a 10% disc. Welcome to the show.
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B
I'm Stephen Lacy, the executive editor of Latitude Media. Thanks so much for being here. Joining me this week are Caroline Golan and Brian Janis. Caroline is our frequent co host and chief growth and policy officer at nrg. She is with us from Sarah week in Houston. Caroline, good to see you. How's Sarah week?
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E
Exhausting as always. Yeah, it's good. It's good this year. Yeah.
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B
What's the vibe?
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E
I think the vibe is concern. Honestly, there is a, there is a lot of undertone of concern right now. Just geopolitically, locally. Very different from last year, I think. Yeah.
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B
Yeah. I want to get, get some more of your thoughts on how the current moment is resonating because saraweek is considered like the super bowl of energy conferences. So it sets the tone for the industry. Let's turn to Brian Janis. Brian is joining us from Seattle. He's the founder and chief commercial officer of Cloverleaf Infrastructure, a company pushing the boundaries of powered land for digital infrastructure. Brian, how are you? Good to see you.
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D
I'm great. Thanks for having me.
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B
You've been hearing a lot about being called a wildcatter in modern day Landman. I take it that New York Times article, highlight, like profiling, you went around a lot.
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D
It got a little bit of circulation. And yes, I've been made fun of a lot, particularly by people on this podcast. Thank you, Caroline.
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E
I. I thought it was great.
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B
This is very loving, by the way. I thought it was a really good article.
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E
I mean, I cut out a picture and put it on my wall.
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D
That's great.
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E
You know, next to all the pop stars I've loved for my entire life.
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D
Next time in town, I'll sign that for you so you can have an autograph copy.
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E
Yes, thank you. I mean, I was thinking maybe a tattoo, like on my right shoulder that would be better.
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D
You and my mom can both hang that up in your. In your living room.
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E
I'm. I'm glad to know that's the cohort I hold with you, you and your
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B
mom, if you couldn't tell. Brian and Caroline know each other well. Brian is the former VP of Energy at Microsoft and Caroline is of course, the former global head of energy market development and innovation at Google. So you two are like building clean energy strategies at Google and Microsoft. Microsoft at a time that kind of bridged the early hyperscale days, the commercial breakout of renewables and into the early AI days. Do you, would you Brian, would you recognize this market a decade ago?
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D
No, not at all. I mean it was just such an entirely different time in sort of the sort of uber energy system development. Right. Like when we were building out the cloud, there was excess capacity everywhere. Right. We had, we had overbuilt in the 2000s and so, you know, going and asking a utility for. Well, and at the time, of course we're asking for much smaller tranche sizes every year. But going and connecting a 50 or 100 megawatt data center did not entail the complexity that we have today. And the focus during that decade of the cloud build out in the 2000 and tens was really around energy, it was around megawatt hours. And procuring via PPAs, largely virtual PPAs, as many megawatt hours as you could get. Capacity was an afterthought. No one was really thinking about capacity enablement time to market resource adequacy. That just wasn't part of the calculus. And I remember this is around 2020. This is even before AI took off. Just looking at growth rates through this decade, if we just kept the same growth rate that we had been on in the prior decade, it was pretty clear that by mid decade we were going to have a problem that the size of these additions every year was going to continue getting larger and it was going to start to cause constraints. Of course then ChatGPT3 comes along in November of 22 and then it becomes really clear in 1H23 that we have a real problem. And I remember having a discussion with some folks at Microsoft early in 23 and there was a debate about whether we're going to run out of chips or run out of power first. I'm just sitting in the back of the room chuckling. I'm like, guys, we're going to run out of power before we run out of ships. That's where the constraint's going to come.
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E
Yeah, we had that same conversation. I think I remember talking to Brian about that. Sometimes later we're like, yeah, we were both those people in the corner going, so we're on a two year, I mean now like 18 month chip destruction cycle at best. We get a two year planning cycle for where we're going with load. And you plan power over 30 year cycles. The two just never matched. And I think we were all sort of in that struggle from I guess 2021 to 2023. Those of us who could see what was happening, to try to explain the timeline by which power, which is not a real commodity, you know, and the way that the rest of the tech world thinks about commodities works, you know. And then Brian left and just solved the problem on the other side. And then I left and I'm trying to solve the problem on the other side too.
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D
I'd wager to say that the, the difficulty of explaining that and bridging that gap was a good part of the reason why Carolyn and I both have different jobs right now.
- [10:36]
B
Yeah. Caroline at SARAH Week right now, like, is how sophisticated is the conversation around load growth and serving AI specifically?
- [10:46]
E
Oh, I think, I think it's getting incredibly more sophisticated. I think it's. It's also becoming what I see happening. And I actually was in a roundtable about this yesterday. What I see happening is the tech companies. For such a long time we call each other tech companies. Everyone else called us hyperscalers. Now I guess we need to refer each other as hyperscalers. The tech companies. We were having this global conversation about our energy portfolio, we were having this global carbon conversation, our sustainability role, our role in driving innovation, in spurring new technologies, in creating a decarbonized grid. And we missed the local conversation about what our footprint was doing. And so I think that marginal large margin between this sort of theoretical, abstract conversation about what our capital was going to do in a decarbonization rhetoric versus what our capital needs to do at a very local level and the power system and the grid. That is the leapfrog that I've seen over the past two years, really. Right. So I would say three years ago at SARAH Week, it was still much more a global conversation, driving global financial markets, driving new technology. Last year I saw it sort of with the onset of the nuclear conversation, I think it became a little more grassroots. This year it's very clear that this is about local impacts. Right. And interestingly enough, you're. That's juxtaposed against what's going on in the Middle east right now, which is a global geopolitical impact. Right. So it's a very different change. I would say that we as a tech industry fail to get the local conversation right, which is why it's great that Brian is doing what he's doing because his entire focus is the local community. We failed at get that local conversation right, not because we're doing the wrong things or because we don't care, but because we've been stuck between these two stratospheres, I think, for quite some time. And I'm hopeful that the tip of the spear is going to be more about the local community, more about the local power impacts, and less about the global theoretical space moving forward. But you can see that transition and that conflict on stage big time here this week.
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B
Yeah. Brian, does that resonate for you? I think a lot of people would be familiar with your business model in our audience, but, like, just kind of recap how you're thinking about projects on this very local level. Like, what is the business model and how are you thinking about local impacts when you're pulling together capacity.
- [13:38]
D
Yeah. So, I mean, our big challenges as we think about enabling this, you know, hyperscale AI ecosystem is around how do we unlock power capacity, as we were just talking about, and then how do we generate local support for the build out of this infrastructure? Because all data centers are local. As Caroline is saying, we need to have good support at the community level. And this has always been a challenge, and we've seen it most notably in Europe over the years of getting this stuff built. But clearly that's become the topic du jour in the United States as well, is going to ask these communities and really having to have a frank conversation with them about why they should want this, you know, in their neighborhood or in their county. And. And I think there's a lot of misconceptions out there about the benefits that these bring. And, you know, my favorite story from the last several months is, you know, we were in a fairly rural county in Georgia, and we were talking with the head of the county commission, and he said, you know, he's. We're a rural county and we want to stay a rural county. And that's why we want a data center. Because if someone comes and builds an auto factory here, there's going to be 5,000 people that move to town and we're going to have to build a new high school. And if someone builds a distribution center on this site, we're going to have traffic 24 hours a day. But a data center is perfect. It brings jobs, but not too many jobs that we have to build a new high school. The high school we have just gets better. It brings tax revenue. And so I think a lot of this is about educating communities about truly the benefits that these things bring in terms of jobs and tax benefits, and then also working with the communities to find out where is and is not the right fit for these things, because not every community is the right fit for a data center, but we have to build them. So it really is about the kitchen table politics. And I mean, literally kitchen tables, the cloverleaf team sits at kitchen tables every week speaking with landowners and community leaders about what sort of benefits this AI infrastructure build out can mean for these communities.
- [15:47]
B
So Brian and Caroline are both going to be with US at Transition AI coming up in San Francisco on April 13th and 14th. And Brian is going to dig even deeper and present some real world examples of how Cloverleaf is unlocking and orchestrating capacity. And of course, Caroline will be with me and Jigger for a live episode of Open Circuit. So if Sarah week is the super bowl of energy conferences, let's think of Transition AI as like the NFL combine or something where these ideas get tested and brought into the real world.
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D
That's only if I job though, Steven, after tonight.
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B
That's right.
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E
Oh, you know, we can work on that. Actually,
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B
don't let him hear this.
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E
Oh, he'll hear it, he'll hear it. And I'll have a very long text message. It'll be great.
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B
Well, let's turn to this Brattle report now and talk a little bit more about how do we utilize the grid? Because this Brattle report is challenging, you know, one of the core assumptions in the transition right now, the assumption that we're fundamentally short on power. And so Brattle comes in and says, hold on, are we as short as people say we are? I want to interrogate that a little bit. But, you know, this report concludes that like, you know, the grid is only used half of the time. And so before we spend trillions of dollars rebuilding it, maybe we should step back and ask whether we're leaving capacity on the table. So we've of course, built the grid to serve peak demand a handful of hours out of the year, which means a huge amount of infrastructure sits unused a lot of the time. And so the argument that Brattle is making is if you add load in the right places at the right times or shift demand to better align with existing capacity, you can spread those fixed costs across more usage and that puts downward pressure on rates. And so Brattle's modeling shows that, like, that this could unlock another 100 gigawatts of capacity and potentially save $100 billion over a decade. And so I don't think we're talking about eliminating new infrastructure, just changes kind of how much you need, when you need it. So I want to interrogate this analysis first. Let's just start with the 100 gigawatt number again, Brian, this is literally what you do. Go out and find ways to unlock capacity. Does that seem accurate to you?
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D
It does, yeah. I think it seems it Seems right on, because. And that work is sort of built on the work that Tyler Norris and team did at Duke last year. And they got to sort of a very similar answer, which is if you had just a couple of percent more flexibility in the system, which is the inverse way of saying improving grid utilization, then you can add a lot more capacity to the system. And so I think this focus on utilization and this conversation is super important. And part of that work was, I think, spun up by the Utilized Coalition, which is just formed that's focused on this issue. But when we have this conversation about affordability, the only answer to affordability is improving utilization. Because with the current capital cost and inflation impacts to building infrastructure, there is no way, if we keep utilization the same, that we're not going to drive rates up. Regardless of how we structure rate design and how we isolate costs and different customer classes, you're still going to face upward pressure on rates if you don't do something about utilization.
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B
Caroline, what was your reaction to the report and this 100 gigawatt number?
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E
Yeah, I mean, I generally think that that's probably the ballpark there of capacity that we're leaving on the table. I think it's harder to get at maybe than most of these reports. You know, suppose, I think that there is a. There are a lot of barriers between what we can theoretically capture and some modeling and what we can actually drive. And I think there's ways to unlock it. But there's no question that our distribution system and our transmission system is underutilized. And also we are not putting in place the regulations or the policy structures to think of that as an asset that needs to be delivering speed to market needs to be utilized above 60, 70%. It's not built that way. And I think we're as a country with all this new load coming on, at real risk of just building a bunch of loops and building the same old system we've had for a long time. And you can ring fence those transmission costs and you can ring fence the generation costs for data center growth, but that's only 40% of where grid costs are going to go overall. Energy costs are going to go over the next, you know, five years. And so when you think about bringing on electric vehicles, when you think about new CNI, new residential growth, you know, if 50% of all rates have been subject to increased distribution costs, that's a huge aspect of, as you know, as Brian said, upward pressure on rates that we're just ignoring. Right. And so I think that there are regulatory ways to ensure. And I will say this by also saying is Brian being the architect of one of these and me being the architect of the other? We never went to market as hyperscalers trying to get residential customers to pay for our system. But there's a regulatory process to ring fence that. There isn't a regulatory process in place right now to make sure that utilities and, you know, overall D and D owners are doing absolutely the best that they can to ensure that that is the most utilized asset and that they're investing in the lowest cost way to get customers online and to make the grid interoperable. And I think some utilities are doing it on their own. They don't need it. You know, they see, they see the light and they are putting that customer sentiment forward. And some aren't right, but it's not uniform across the grid.
- [22:00]
A
Are you ready to accelerate your career in clean energy? Of course you are. Yale's Financing and Deploying Clean Energy Certificate, a 10 month online program, is designed for working professionals ready to become the next leaders of the clean energy economy. You'll dive into real world frameworks in clean energy policy, project finance, technology and innovation all in just five hours a week. If you're passionate about clean energy and ready to level up your career, the Yale center for Business and the Environment is the place to start. Join this year's cohort by visiting cbey yale.edu to learn more and enroll today. And be sure to use the code OpenCircuit26 to save $500 on tuition. Applications are open through April 20, 2026.
- [22:45]
C
AI is pushing economic and technological progress into a full out Sprint and the energy sector is at the center of all. Explore the new era of AI innovation in the fifth season of where the Internet Lives, an award winning podcast from Google and Latitude Studios. What does it take for a data center to be a good grid citizen? How is AI revolutionizing agriculture, medicine, art and manufacturing? And what does that mean for the future of energy demand and digital infrastructure? Find where the Internet lives wherever you listen to podcasts or click the link
- [23:19]
A
in the show notes on April 13th and 14th, Latitude Media is offering the chance to hear from the experts on the front lines of the AI energy infrastructure buildout transition. AI 2026 is a two day in person conference in San Francisco addressing the challenges of building at gigawatt scale in
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B
the face of AI load growth and
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A
the programming includes two live recordings of our two original podcasts. That's Catalyst with Shail Khan and Open Circuit with me, Caroline Golan and Jigar Shah Shale's going to be interviewing Google's new chief of AI infrastructure, Amin Vadat, and you're not going to want to miss that. So our podcast listeners get a 10% discount. Use the code PODS10P O D S PODS10. When you check out, you can follow the link in the show notes or go to latitudemedia.com events to see the full agenda and register. We will see you April 13th and 14th in San Francisco for Transition AI. I want to bring in the debate
- [24:23]
B
over this report and I'm seeing a lot of conversation over on Energy Twitter. I'm still calling it Energy Twitter, not Energy X. It sounds way better. But there's been a lot of heated discussion on this and I think that the disagreements, there's a couple different camps. One is more philosophical and one is more technical. So I think some folks seem to believe that this obsession with utilization and distributed resources is kind of a small ball idea for a historic moment to build out new transmission reform markets. I wonder, I'm sure you guys know like people who are involved with the Utilize Coalition, etc. I mean do you think this is a fair characterization of the utilized proponents that like it's, it's small ball?
- [25:06]
D
I don't think so, no. I actually think it's a fundamental building block to get to the point where we're actually building large scale transmission in this country which is the hardest of all things to build. And we've had this conversation with utilities because of course, especially the vertically integrated utilities, their default is, well I want more capital spend and more rate base. That's how I make money. So when you come and bring me a DLR project or a VPP or something like this, they look at that and go well, I don't really make money on that. And our response to that is, well, what you make money on is load growth long term. And so if you are able to say yes to more customers because you can take some of these lower capex, more efficient solutions that lead to greater utilization, you're still going to get long term capex investment in your system. It's just you're now bridging to win that capex is sort of realistic to deploy. Because the fact of the matter is if your answer to every new customer is well I'm going to go build a combined cycle plant and I'm going to go, you know, upgrade a 500kV transmission line, your answer is always going to be 5 years out or 7 years out or 10 years out. Right. And that's not good enough for this market. You know, I, I still get calls from CEOs of, you know, some of the big tech companies and foundation models and everyone else saying, hey, do you have any power 12 months from now? Do you have a site? And I was like, well no one has power 12 months from now. Like, you know, like. But it happens all the time because they, they, that's sort of as Caroline said earlier, like their planning cycles are still 18 to 24 months out.
- [26:45]
E
Right.
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D
They're not even when we see all these big announcements about. I think the latest one I saw yesterday this week was OpenAI and Helion doing 100 gigawatts by 2035. Great. Maybe I'd take the under, but all those things are not solving the problem that they actually have today, which is they're trying to turn on a lot of GPUs in 2026 and 2027 and 2028. And what I think this utilization discussion helps with is hey, there is available capacity if you know where to look. And it's difficult and at least for the sort of the non energy person to think about how we would orchestrate those solutions. But they are there.
- [27:32]
E
One way that I would like to shift the conversation a little bit and it's, you know, I'm two weeks in nrg but it's been, you know, fabulous to be sort of on this side of the aisle, but which is that I think the conversation is always about how are we going to meet hyperscaler demand growth? Like how is this country going to meet the challenge of building 100 gigawatts of demand for the AI transition? And I would challenge the conversation to be how is this country going to take the capital that presents itself in this load growth and invest in the system that is best for everybody else moving forward, best for the communities, best for the residential customers, best for the other CNI customers. And I think if you take that posture first you start to look at, to Brian's point, those foundational elements that we absolutely need, irrespective of whether it's 100 gigawatts or 70 gigawatts or 30 gigawatts. Right. I think one of the problems that we always had at Google and Brian, I'm sure you shared this was that I was always looking for a way to get our energy strategy decoupled from what was an erratic load growth projection from where we were going with cloud or where we were going with AI. Right. And so, and in part that's what you're doing with Cloverleaf. But I also think we should challenge ourselves as an ecosystem to say what's the grid that we want that gets us out of this frenetic? Well, we're 50 megawatts short on that node, so we can't interconnect you for six years, whereas if you were 200 megawatts less we could interconnect you tomorrow. We have one solution for interconnection right now and it's pretty old. It's the same thing we've been doing for 50 years and we haven't thought about or really at scale deployed alternative solutions. And we don't have any solutions for a coming society that has mass scale electric vehicles, that has the smart home, that has, you know, rooftop solar and storage at scale, you know, which is all coming down in price and all coming down in, you know, accessibility. And so I think the conversation needs to be more about that in general. In general. But whether this is hype or not, I don't think it's hype. I think it's both and too. So Stephen, like we need, we need to build new power for the long term. And actually the problem with the scenario that Brian set up is that hyperscalers have a really hard time in planning for more than five years. So we get to like what do you have in two years? Well, I don't have anything. And then we come back two years later and say what do you have for the next two years? And you come back two years later and say what do you have for the next two years? As opposed to saying well what should I be building now? And of course you're going to be building new power plants. Absolutely. For the next five years out. But in this race to gigawatts, what is the best thing we can actually do to one, create that bridge power that's clean and affordable and also is going to leave the grid in a better place. Right. Everyone benefits if we utilize the assets we have and everyone benefits if we redirect our focus into saying how do we get the most capacity and the most savings out of, out of the existing system. And that's going to be through deploying things like, you know, standalone storage behind, behind the meter assets at the CNI and residential space dynamic line rating, you know, gets non wire alternatives, whole things. That's how you're going to get the most out of this system. It's a win win because it's to Brian's point, we're still going to build those power plants. We still have to build Those power plants, you know that's going to happen. But if we don't do this now, we're going to build a Frankenstein grid and we're going to build a bunch of loops to nowhere. And that's ultimately, that's the capital waste. I think that could happen. I'm not as worried about generation capital waste. I think it will get there because I think training will continue. I'm much more worried about grid capital waste.
- [32:08]
D
Well, I think there's still a question in my mind about how many of these mega projects. And gosh, just in the last week, what we had the Piketon, Ohio SB Energy at 33 billion for 9 gigawatts. We had NextEra in southwest Pennsylvania, 4 gigawatts at. I forget the 17 billion. You've had the N scale project. You had Fermi before that. I mean, you go down the list and you can quickly get to 60, 80 gigawatts of these sort of megaprojects that I'm not convinced are even financeable. Because what's notable in all these projects is the one missing piece is the actual customer signing up for a 20 year offtake. Sure, you have a developer who wants to build it. Sure, you have a big bank or sovereign that wants to lend money to it, but you don't see the customers right now signing up. And as Caroline's saying, the hyperscalers really don't plan that far out for this stuff such that they could underwrite a $33 billion project. Not to say that none of those will get built, but it's a lot harder than people think than just a press release or groundbreaking to get a project like that off the ground. I mean, I can drive an hour from my house out to the Washington coast and find the old satsub cooling tower that was supposed to be a nuclear power plant that's now just a, a giant concrete edifice that you can see from the road, which is fun little fun fact when you're driving the family out there and you can point that, hey, we tried to build a nuclear plant and we failed because it's actually really hard to build big things in this country. So I think people are underestimating how difficult it's going to be to really execute those megaprojects, that this path of least resistance, as Caroline was just talking about, is far more elegant. It's faster, it's cheaper, and it's more sustainable. So it is the right solution. Not that we're not going to build power plants. We will. But we should build A whole lot less of those. If we're focused on this issue of
- [34:17]
E
utilization well, and we should build them responsibly. I mean, I think that's the problem that you see happening. We've got car batteries and lawnmowers being strapped together in a way, and those are, are supposed to be very short bridge solutions, but they're getting 15 year contracts because the timeline for building out transmission into central Ohio is longer than that. I think what's going to happen is there's only a certain book of turbines that can and will be built in this country because there's only certain companies, one of them I work for now, who actually know how to build them and the workforce and the labor to do it. And if those are built responsibly and done well and integrated well, then that's going to be good for long term reliability. What's going to happen for everyone else who doesn't build those and they strap together some Frankenstein behind the meter solution and they're not doing that. They're not doing that because they prefer that approach. No one prefers that approach. They're doing that because they can't get transmission to pipe in generation anywhere that they're located. Right. So this idea, the reality of the congestion and the lack of alternatives on the transmission side is what's going to drive a lot of irresponsible behind the meter growth, which is not good for the community, not good for the environment and ultimately, you know, financeable in the short run. But I think long term has some, some real pain points. It's not good.
- [35:58]
B
Can I bring in another piece of this debate? I think the other track is a little bit more technical, which is like what value do distributed resources actually bring? So I think when a lot of people talk about opening up new capacity utilizing the grid, they're thinking about virtual power plants, distributed energy demand response, et cetera. That's a big component of what people are, are talking about. And you know, we see some pushback. And the energy community, I think articulated by Xiao Wang, who's a research scientist who's very active in these debates, and his argument is basically that not all capacity is interchangeable. If you've got one gigawatt data center showing up in a specific location, you can't necessarily solve that by turning down a gigawatt of load somewhere else on the distribution system. It doesn't actually solve your constraint. Does that resonate with you?
- [36:53]
D
It does. And it's partly why siting and planning for these things is so important. And this is the same I've had the inverse argument where people have come to me and said, well, such and such utility said I couldn't get power for 10 years, so I have to build a gas plant. I was like, well, maybe you're just building data set in the wrong place. Maybe you should think more strategically about where you place that asset. Because it's not true that you can't connect any Data center for 10 years in this country. There's lots of places you can connect them. So understanding the transmission system first, and this is how we do our planning and siting, is we do transmission load flow analysis as we look at withdrawal points and then we start to study what resources are available. And we'll be talking about this at the Transition AI conference around how we specifically have done that with level 10. But this is where I think the lack of sophistication of a lot of the folks that are trying to develop these assets comes into play. Because yes, it is true. If you just take a dart and throw it somewhere on the transmission system and then complain because the utility won't connect you for 10 years, it's like, okay, well if that's the level of sophisticated planning you're doing, then you're right. You need to build your own gas plant behind the meter. But, but I just don't think it's true that those resources that we've been talking about can't contribute a material amount to enabling load growth if it's done strategically.
- [38:23]
E
Yeah, I mean, I agree with Brian. I also would say though that there's a difference between real electrons and paper electrons. And part of the problem we have in this country right now is there are real electrons out there, but they don't exist on paper because of the way we do load planning, the way we do resource adequacy, how aware a utility is of where things are placed, where their demand is, where their load is going. So just that visibility into their system. So yes, I think that's true, but I would push back on that a little bit in saying that. I think that's an easy way to explain, explain why we don't invest in the market signals to grow the BPP as a legitimate commodity. Right. Because I think with a really strong interoperable visible system and a good partnership, you can work with the utility to say, where should I go where congestion is going to be top of mind, where can I go? Where you are looking at a place where that distribution relief or distribution investment is going to free up transmission capacity. And the problem with that is not only just planning, but it's also that we don't have markets like value signals for this. Whether you're in an, whether you're in a vertically integrated space and they do their resource planning and VPPs or DERs aren't given the platform to have capacity value within the resource plan or whether you're in PJM and you're not allowing aggregated VPPs to play in a special auction or even in ERCOT where there actually isn't a price signal for an aggregated VPP outside of just an energy signal. And we're working on that. But I think it's also a market signal situation and I think it's sort of a cop out for not investing in that. Because what Paige is doing over at Tapestry, they're actually trying to figure this out right now. How can you actually create the market signals for placement where maybe it's not a one to one swap, but it's probably at least a two to one swap. Right on something like this because you actually know how to operate your grid so well.
- [40:44]
D
Yeah, those lack of price signals, I mean that's a very real issue. And I think it kind of goes to why the industry that is like the data center industry and to an extent the IPP industry have sort of coalesced around this like well, let's just go build these mega energy campuses. Because the barriers to entry from a market standpoint are fairly low there, at least conceptually. Again, I challenge on the financing side, but the ability to deliver that actually is a lot harder than people think because of the financing, because of the scale. Whereas the market barriers around VPPs and other solutions are actually higher, as Caroline was noting. But the ability to deliver them is actually really easy. I mean there's very little friction in actually deploying those solutions in the real world from a physical standpoint. So it's not surprising that the market sort of coalesces around what seems like the easy path on the front end, which is just build big power plants and is not paying enough attention to this harder path because of the way that markets are designed, but really is in the long run the faster, easier path. If we can coalesce around getting the market signals right here.
- [41:58]
E
Yeah, especially for the bridge solution. I mean that's, you know, and that's what I really think. I think it's, it's a false argument to say that the vpp, the utilize concept I guess you would sell, that is the equivalent to building new power plants. I think the better conversation is what we see happening in these insane behind the meter solutions because to Brian's point, they're being told it's going to take 10 years to get transmission or build a gas plant. That's the really irresponsible thing that's happening right now. And that's the better data point for me in terms of if you're looking for the argument, because I think it is going to be a both and on building new power. And I think that what we're missing is sort of the real trade offs long term for the community, notally. And from a financial perspective between those two, that Frankenstein approach versus like hey, yeah, you could get. I mean I remember sitting with said utility at one point and we couldn't interconnect because of 200 megawatts, right? This was a multi gigawatt project and we couldn't interconnect because of 200 megawatts. And finally they looked at me and when we had this conversation through and the gentleman said, actually if you invested in X, Y and z on these three distribution units, I think I could get you 200 megawatts. But that conversation had never happened before in an interconnection conversation before. Right? They had never been forced to get there. So I think that if we had not had that conversation, if we had not pushed on that, what would have happened? We would have considered and we never would have done it at Google, but we would have considered one of these Frankenstein approaches. And that's the trade off conversation that I think needs to be more relevant and happening with utilities.
- [43:59]
B
I can't think of two better people to have this conversation with and I hope it was clarifying for folks. I want to take a turn here and run through some big themes in the news. Everyone is talking about vibes right now. Vibe coding, vibe working, vibe forecasting. Vibes are ubiquitous at the moment and now a lot of people are suddenly paying close attention to energy that were never involved in energy. And a lot of takes on the energy industry seem to be based on vibes as well. So I want to run through some of the takes that I'm seeing.
- [44:33]
E
Steven, what does vibes mean? I mean you wrote that in the, in the show notes and I was like, like shoot feelings, feel it. Okay, so it does just mean feelings. There's not like it doesn't stand for something that I'm not cool enough to understand right now. It was too early for me to text my 15 year old this point what that meant. It just means feelings.
- [44:54]
B
Okay, yeah, like you sort of Let how you feel guide your point of view or maybe some technical thing that you're doing.
- [45:02]
E
Ah, okay. Sleep deprivation is a vibe, then. Yeah, we can go.
- [45:08]
B
Yeah. Have you mean. Have you been paying attention to the Vibe coding space with cloud code and.
- [45:13]
E
No, no, I know, it's really incredible. I. Okay, I will do that. I'm apologies for Claude Code that I haven't been paying attention to right now.
- [45:25]
B
Yeah, I mean, anyone can sort of take a feeling that they have, like, a little, like, an idea and execute it like an expert coder and.
- [45:33]
E
Oh, okay. Yes. Okay. Now I know what you're talking about, but also. No, I am paying attention.
- [45:39]
D
I told Stephen I was going to Vibe code a jigger emulator for this podcast, so I could always get the right jigger sort of answer. But that is literally something you could do. I could throw all Jiggers podcast at Claude Code and it could spit out.
- [45:54]
B
Totally.
- [45:54]
E
That's right. That's right. Okay, now I understand what you're talking about.
- [45:58]
B
There's a market for that.
- [45:59]
E
Please don't do that. Jigger needs to be singular in the world of frenetic rants about energy issues.
- [46:08]
B
All right, so I'm going to run through a few of the storylines. I've got a bunch here, but we'll see how many we can cover. And I want you to answer, is it real or Vibes? Cole is back.
- [46:20]
D
That's Vibes.
- [46:22]
E
Yeah. I mean, I think Cole. Okay, Am I just supposed to say yes or no or get my answer?
- [46:26]
B
I want to get. Yeah. Hear a little bit of an answer.
- [46:27]
E
Okay. Okay. So I think coal is staying online longer than it would have stayed online a few years ago. I don't know anyone who's building new coal, so. Back or just, like, hanging out for a little bit longer than it probably was going to a few years ago?
- [46:46]
D
That I would agree with.
- [46:47]
E
It's not making a. I don't think it's making a comeback.
- [46:48]
C
Comeback?
- [46:49]
D
I wouldn't call it a comeback.
- [46:50]
B
Yeah, don't call it a comeback. This is the golden age of gas.
- [46:55]
D
I think that's. I mean, I definitely think we're going to see growth in gas generation. I think a lot of this conversation we've been having right now will dictate whether that growth is predominantly, you know, baseload, you know, combined cycle plans, or whether it's more peaking and flexibility, simple cycle plans, like, you know, like. I mean, I'm a huge believer in decarbonizing the grid, and I also believe that 50 years from now we're still going to have gas plants online. Like, we cannot not operate this system without it. I think it'd actually be foolish to try to do that and not for very extreme events like even the heat wave we're seeing right now in the middle of spring have some amount of flexible gas to lean on, at least for the foreseeable future. So I think really the debate should be around are we building new baseload gas plants that we're going to have to run at a high utilization, or can we lean on this issue of flexibility and build more peaking plants?
- [47:58]
E
I think it's a very western view to say that gas went away. Gas never really went away globally. If you look at electrification needs across Asia and Africa, gas never went away, load growth went away and capital investment was on the offset. And you weren't offsetting with building natural gas, you were offsetting with building renewables. But I don't think gas ever went away.
- [48:29]
B
Certainly the Iran conflict might complicate many country expansions of systems to import lng.
- [48:36]
E
Absolutely. I mean, I think that was one of the themes here at zero week was that, you know, even if the conflict ended tomorrow, we are dealing with three years minimum of institutional interruptions and impact.
- [48:52]
B
Solar and batteries aren't real capacity.
- [48:55]
E
That's not true.
- [48:57]
D
Completely disagree. I mean, I think Google's announcement just last week about what they were doing in Minnesota and the degree they were leaning on renewables to enable interconnection of a gigawatt scale site. We did the same thing in Wisconsin last year. That's now the OpenAI Oracle Stargate site. That site leaned on 1500 megawatts of wind solar storage as part of its capacity stack. And I know we hear that a lot. I mean, I've heard that a lot out of the current administration that you know, and others have echoed that, but that's just not based in fact.
- [49:29]
E
Yeah, and I think it's even more interesting on the distribution system. Like, I think it's actually more. I think we're finally starting to have this conversation about what can distributed solar and storage do for reliability and capacity aggregation on the distribution system as opposed to utility scale, which is what anyone was ever interested in thinking about.
- [49:56]
B
SMRs are the only real solution.
- [49:59]
D
SMRs have been the only real solution for the last decade and they'll probably continue to be. I've heard this most of my time at Microsoft. No, I believe in new nuclear. I think it's really hard to scale. I think we need to see a more concerted effort between the large energy consumers around betting on certain technologies to make it work. But we can power the energy system without smrs. Would it be helpful? Sure. But is it necessary?
- [50:35]
E
No, it's not the only solution, but it's one I'd like to see in the mix. Yeah.
- [50:39]
B
In an era of capacity constraints, levelized cost of energy doesn't matter anymore.
- [50:45]
E
To whom?
- [50:48]
D
Well, I think let's see if some of these mega projects actually get financed. Right. Because when you look at the cost of at least the stated cost of the two projects I just mentioned earlier, you know, they were like $3,500 a kw, which translates.
- [51:03]
E
Are you serious?
- [51:04]
D
Yes. Which translates into a very high lcoe. And what I would say, and I think this is where people sort of misunderstand this issue. Cost still matters and margins still matter to these business. But speed is the imperative. And so where they're price insensitive is around short term capacity. Right. Bridging for two years, they'll pay a lot for that. But if your answer to bridging two years is building a 40 year asset, then you're not really using the right tool to solve that problem. And so they will pay a lot of money to go faster. And this is where this whole utilization conversation comes back around. Because if those solutions can deliver that bridge, there's again a lot of price insensitivity there. Which means there's a lot of solutions we can bring to market because there's a willingness to pay. But I don't think a lot of people are going to be signing up for $150amegawatt hour power for 30 years. There's not a lot of appetite for that.
- [52:08]
E
Yeah, I couldn't agree more. In fact, that's a great way of pulling it all together, which is that I do actually think that the LCOE for certain customers, if you have power before 2020, it really doesn't matter because there's no way. And the math is sort of. Brian, check me on my math here. But generally speaking, I would say that 10 cents is the LCOE for power across the board that we were used to for the past five years. 10 cents at kWh. Sorry. And if you think about that and what the value of compute was, compute is at least 200% more valuable than the cost of power at that time, at least. And now it's probably even more.
- [52:59]
D
Even though.
- [53:01]
E
Yeah. So there's no way that the cost of power is ever going to become that demonstrative of a barrier in terms of continuing to want to grow and chase market share. And we're in a market share, you're not going to be able to say, hey, we're just not going to run for the next couple of years. No, no, then your business is over. You're not in the game anymore. Right. And so I think that's where, why these utilization and VPP solutions we've just never explored what's the actual strike price for that? We're just assuming that the strike price is what we've been putting forward for the past couple of years, which is like maybe 5% above avoided cost. No, no, no. I think the strike price is much, much, much higher in terms of getting those on the grid. But I think the LCOE does matter to residential customers and to CNI customers that, you know, are going to be part of this system for a very, very long time. So we should invest in the things that are going to make their lives better in the short term.
- [54:02]
B
All right, final one here. For two people who are building a lot, America has lost its muscles to build big things in space.
- [54:12]
E
No, I'm sorry.
- [54:17]
D
I believe that's true. I think that that's just not a muscle that we've exercised enough. And there's way too much friction in the system. And it's unfortunate because, you know, China does not have that constraint. So as we think about, you know, winning the AI race, which is also about winning the energy race, we're not good at this as a country. We just have lost that, that muscle. I believe we can get it back, but part of the way we're going to have to get it back is, as I mentioned before, a focus on affordability and doing this the right way. Because if what we're doing is just driving up everyone's energy rates, then that's going to be even further headwind for getting big things built in this country.
- [55:02]
E
Yeah, I think there are very few players in this country that know how to, to build big things. The only thing I would add, you know, we always say if there's a will, there's a way. I would say if there's a workforce, there's a way. And we don't have the workforce right now. And that's my bigger concern. Capital's not a problem, but you don't have enough skilled labor out there that actually knows how to do a lot of this. And that's another reason why I say power plants are going to get built. Solar, wind, gas is going to get built and storage is going to get built. And it needs to get built and we want it to get built, but there's only a limited amount of workforce that knows how to do that. What can we do with our existing system when that is a real factor? I'd like to see a lot more going into developing that workforce.
- [55:57]
B
Caroline Golan is the Chief Growth and Policy Officer at nrg. Thanks Caroline. Make sure you stay hydrated there at Sarah Week.
- [56:05]
E
Oh my gosh, just like I need an IV of caffeine straight into my right arm.
- [56:11]
B
Brian Janis is the Co Founder and Chief Commercial Officer at Cloverleaf Infrastructure. Brian, so good to see you.
- [56:16]
D
Likewise. Thanks for having me, Steven.
- [56:24]
B
And remember, Brian and Caroline will both be@ transition AI tickets are selling fast. The crowd, the level of quality of people buying tickets is really great. So please come join us in San Francisco April 13th and 14th. Open circuit is produced by Latitude Media. The show is produced and edited by me, Sean Marquand and Ann Bailey. Find all of our episodes of open circuit on YouTube and of course the audio versions anywhere you get your shows, your podcasts, and for more in depth stories on all the topics we cover, go to latitudemedia.com and you can get transcripts of this show there. Thanks everyone. We'll catch you next week.