← Shift Key with Robinson Meyer
Shift Key with Robinson Meyer
How EVs Can Actually Help the Electricity Crisis
01:21:12
Rob and Jesse touch base with WeaveGrid CEO Apoorv Bhargava.
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- [00:00]
A
You are listening to Shift Key Heat Maps weekly podcast about decarbonization and the shift away from fossil fuels. On this week's show we're talking to Apoor vargava. He's the CEO and co founder of WeaveGrid, a company that helps everyone charge their EVs in a way that's cleaner and better for the grid. We're chatting to him about why EV charging remains way too complicated and frankly, way too mediocre, why charging your EV should be more like paying your cell phone bill than filling up at a gas station, and how the utility sector has been transformed already by the AI bo. All that and more. It's all coming up on Shift Key after this. America's future depends on reliable power provided where and when it's needed. It depends, in other words, on long duration energy storage. Hydrostor's advanced compressed air energy storage technology is helping build the grid of tomorrow with secure, reliable power and thousands of American jobs. With bipartisan support and a flexible supply chain, long duration energy storage is the missing puzzle pie piece to scale energy independence. Learn more about Hydrostor's Willow Rock project and the future of energy storage at Hydrostor ca. Electricity demand is growing faster than ever, creating an unprecedented opportunity to meet load growth with customer owned distributed energy resources. Uplight is a clean energy technology company that unlocks grid capacity by activating energy customers and their devices to generate, shift and save energy. The uplight Demand Stack integrates integrates energy efficiency rates and virtual power plant programs into a cohesive portfolio to meet surging demand while improving grid resilience, accelerating decarbonization and reducing costs for energy providers and customers. Learn how Uplight can help your utility harness existing customer assets to meet the moment@uplight.com Heatmap hi, I'm Rob Meyer, the founding Executive Editor of Heat Map News.
- [02:11]
B
And I'm Jesse Jenkins, a professor of Energy Systems Engineering at Princeton University.
- [02:15]
A
And you are listening to Shift Key Heat Maps weekly podcast about decarbonization and the shift away from fossil fuels. On this week's show, we're talking about, are EVs going to be good or bad for the grid? It turns out it depends, but it's going to depend in part on what our guest does today. On this week's episode of Shift Geek, we've got someone who we've wanted to have on the show for a long time here. He's the CEO and co founder of WeaveGrid. They're a software company that helps integrate electric vehicles into the grid. They work with more than 15 utilities across the United States. Their technology integrates with more than 80% of the EVs on the road in the US today. They're a really interesting company at the forefront, I would say, of electricity moving from just being an energy story to being like a neo industrialized story.
- [03:03]
B
Yeah. I think the big question is how do we orchestrate all of the millions of electric vehicles that are going to be out there charging at various times at work or at home or on the road to avoid putting a huge strain on the grid and instead make them an interactive part of how we manage the grid as a whole. And that's exactly what Weave Grid is up to. So we're excited to have him.
- [03:21]
A
There's so many topics we're going to talk about. Why EVs shouldn't be like gas stations, how managed charging can produce electricity abundance, how EVs can help manage the huge crisis in electricity rate increases. It's really interesting conversation and so let's get to it. Apoor Varava, welcome to Shift Key. Thanks so much.
- [03:42]
C
Really excited to be here, guys.
- [03:44]
B
We have wanted to have you on for a long time, so I'm looking forward to this conversation. Thanks for joining us.
- [03:48]
C
Likewise. It's actually really weird for me listening to both of you in 1x because I listen to podcasts in 2x and so all I have is your voices running at 2x speed. But now I'm like, oh, they talk really normally, actually.
- [04:02]
B
That's hilarious. So maybe I'll kick off with a question. We are at this point where everybody's talking about two things I think right now. One is demand growth. A lot of that, of course, is being driven by the conversation around data centers. But it's not just data centers, it's other drivers as well, including electric vehicles. And two, affordability. Right. Growing concern about rising electricity bills. We've had previous episodes on this about the impact of capacity markets and pjm, about growing distribution and transmission wires costs that are really driving up bills across the country.
- [04:33]
C
Can you just start by talking about.
- [04:35]
B
What is the economic case for flexible charging of electric vehicles?
- [04:40]
A
What?
- [04:40]
B
Where are we headed if we don't do this? And where are we headed if we do? What are the savings and potential there?
- [04:46]
C
Yeah, I mean, I think first things first, like we are part of like massive integrated systems moment, and integrated systems changing is very difficult. Right. And so when you really think about the electricity markets, when you think about electricity as a product, as a service, as a societal benefit. Right. As an economic driver of all of our economy, not Only are we in this like radical moment where what we've considered stasis, but significant amount of change, of course, with decarbonization is like rapidly changing in front of us with load growth simultaneously. You're seeing the completely separated systems of transportation and energy going from being isolated and distinct to becoming more integrated and fused and becoming one. And so we're going to move to a world where not only is transportation dependent on electricity, but vice versa. Electricity is going to become very dependent on the services that EVs are going to be able to provide and are increasingly providing to the grid itself. But zooming back out like, this is the frigging most amazing time ever, just to be frank, in this industry, right? Like, I have lots of fears about how AI data centers are going to cause rate increases. But it isn't just data centers. And I think Robinson wrote one of the finest pieces I've ever read on what is causing the rate increases out there. We all know that it's primarily being driven by T and D infrastructure, but really D distribution spending is like the number one thing that is causing rates to go up. Number two, resilience. Number three, AI data centers and extra load growth from data centers. Electrification, re industrialization, resharing, onshoring. And I think in this moment, like as rates go up, we need solutions that are going to help target those places and those areas that are driving that systematic rate increase. Right. Electrification offers an incredible opportunity to improve the utilization of our distribution system. And I think one of the things that most people purely like just completely misunderstand about EVs is number one, they are the largest DER load out there by nameplate capacity.
- [07:12]
A
There are more. What's der? You have to, you gotta, you gotta. We're going to de. Initialize der.
- [07:18]
C
We gotta de. Initialize. Oh my God, I'm so happy to hear that. I actually don't even like the term der. So this actually works in my favor. I love customer owned resources. I think that there are so many resources like electric vehicles, like thermostats, like solar panels, all of which of course are increasingly now participating in the modern grid and are being requested to actually add value and not just be a cost on the grid. But the reality is like most of these devices do very little in terms of intelligent participation. And so when you think about the actual nameplate capacity of customer owned resources, there are more electric vehicles than residential solar panels and residential batteries combined in the United States. And there are more gigawatts of of EVs than any other customer side resource, there's about 40 gigawatts of nameplate capacity sitting around in people's garages, right? That's absurd. Because EVs are also fascinating in the fact that one, they are uniquely a cost driver on the distribution system. Let's not kid ourselves. EVs do cause in a poorly managed way, they do cause costs in the distribution system. Because if everyone starts charging at 9pm Then guess what? You may have solved your bulk system problem, AKA you may have moved it to a cheaper time, but you just caused your local transformer to overload. So number one, EVs are a cost driver on distribution, but if managed appropriately, because number two, they are incredibly flexible, they are actually a cost reducer on the distribution system. And that's where we'vegrid and the tools that we've built around maximizing the utilization of this flexible capacity that's embedded in all these EVs is just that's where we shine. That's where we drive real value for customers and for all ratepayers. There's a third piece about EVs that makes them really unique in my view as a customer resource. And that's the fact that unlike a lot of other, I now will use the term ders. But unlike any other resource, there's a much stronger customer affiliation and attachment with EVs. Like, I've never named my thermostat. Frankly, I've never even thought about it. I've never named or kept kids stuff in my solar panel. I don't even have solar panel. I live in an apartment. Whereas like, you do actually think about your brand of your car, you do actually have loyalty, you do have familiarity. And there's like a whole Americana around vehicles, right? And there's 280 million cars out there. That's double the number of households in the United States. So the opportunity to take what is going to be just like one of the largest load draws in the US and turn that into a flexible resource that is today predominantly being managed to improve that load factor on the distribution system, drive down rates, and then tomorrow, as more and more of these vehicles become bidirectional, actually use them as mini power plants, I think that's really exciting. And that's really where we'vegrid operates today in the US and before we go.
- [10:39]
A
Further in this conversation, can you give us the 60 second intro to what exactly we'vegrid's business is?
- [10:44]
C
First, Weave Grid is the leading provider of what is called vehicle grid integration, or essentially using electric vehicles. To provide grid services. And we're starting with EVs, and that's definitely our bread and butter because again, of these unique aspects of electric vehicles and the fact that they're the fastest growing der out there. But we build software that inherently works closely hand in glove with automakers and charging companies to tap into their connected vehicle data, to tap into their charging data, and then appropriately manages that charging to the needs of utilities all the way from the distribution transformer all the way up to the generator. Which is to say that we're maximizing the benefits that consumers can receive by managing that charging in a far more sophisticated way than just setting your timer for 10pm And I think the best part about it is that as a consumer who's our third party in this equation, utilities, OEMs, and of course consumers. Consumers can sign up for these programs, can benefit from recurring payments from upfront payments from their local utility, and most importantly, and this is I think the most critical part in this moment of the rate crisis that we're seeing the value of what weave grid does by managing people's charging, especially down at the distribution system, drive savings for what are known as non participating customers, AKA we actually drive down rates. And that is something that we've uniquely done as an aggregator of customer resources versus a lot of other programs that, you know, to get a little spicy, don't actually pencil. It's great for somebody who owns a solar panel to participate in some sort of quote unquote vpp, but if anyone else isn't benefiting from it, then you just saved a bunch of money and no one else did.
- [12:35]
A
I'm going to add just for our listeners, you know, we always say shift key listeners are like the most advanced amateurs and the most sophisticated professionals. Right. They run the gamut. So I just want to add, we talk VPPs, it's virtual power plants. It's stitching together lots of different electrical appliances and batteries, solar panels, any place where you can get more power on the grid by dropping usage from certain assets such as appliances or EV charging or residential batteries. And when we talk about demand response or DERs, that's just a factor of something that goes into so called VPPs, which are the assets that are able to achieve demand response. Right. Is that a fair summary?
- [13:18]
C
Yeah, I mean, I think for the most part one of the reasons that I have, I am known in the sector for being a little terse about the term VPP is because I love my Voltaire, which is like the Holy Roman Empire. Was neither holy, neither Roman neither an empire. And I think the challenge with the term VPP is is that an aggregation at best of batteries, because those are truly bi directional and theoretically the most akin to a power plant. An aggregation of batteries doesn't perform the same way as a true power plant. But an aggregation of batteries can also do a lot of things that power plants could never do on the local grid, notably the distribution system. And again, if we go back to our causes of rate increases today, yes, it's really eye popping to look at capacity market spikes and all of that. And those costs do flow through, notably in places like New Jersey, of course, where Jesse is and where we're seeing those pain points show up. But it is not the only driver of cost. And in fact the primary driver of cost remains our grid itself. And so anything that can help reduce the cost of the grid I think is really, really critical in this moment. Look, utilities are our primary customer. We work with several of the largest utilities around the country. At this point. Utilities are actually very open to procuring flexible capacity and real flexibility services in a way that they haven't really been willing to do outside of a compliance mandate in yesteryear. It's really upon the industry, notably the VPP industry, flexible capacity, ders, whatever you want to call all the jargon, jargon, jargon, the kinds of things that people love to talk about at conferences like Durvos. It's really upon the industry to show up in this moment and deliver services at a high quality bar. And I will say, and this is one of the challenges right now, a lot of people have said if I just dial down this one device by x percent, I'm the same as a power plant, give me the same money. And it's like that's absurd. I don't believe it. You're wrong. As an engineer, I dispute that fact. It doesn't work as well, it doesn't show up reliably and I'm not going to believe it. And I do think that companies like we'vegrid have definitely and a lot of our peers out there have done the hard work over the years of showing that we are reliable to deliver certain kinds of grid services in a very robust way. And I think that's led to the trust with utilities that has really mattered. And now that's led to a lot of scaling, which is really what's exciting in this moment.
- [15:49]
B
So I want to get into the wizardry of how exactly you do that. But before just can just set the stage a little bit more you mentioned the unique aspects of EVs. I want to give a sense of the scale of an electric vehicle. So you mentioned there's like 4 million EVs on US roads now.
- [16:03]
C
7. 7.5 million plugins.
- [16:05]
B
Oh, plug in. Including plug ins. Yeah. And we've got like 280 million vehicles in total. So we got a long way to go.
- [16:10]
C
Totally.
- [16:10]
B
But each of those millions of vehicles out there, when it charges, it charges at probably somewhere between 5 and 11 kilowatts of total load average. 7 to 10 is probably pretty typical now for a new installation. Just to put that into context for the power draw. So when you're actually charging at full speed, a window mounted air conditioning unit you might have in your apartment is about half a kilowatt and a whole home central H vac system might be about four, four. So you're plugging that sucker in and it's like 15 window mounted air conditioning units or two or three whole home H vac systems. So it's a substantial load when it draws. And that gets to the point about needing to upgrade the local distribution network. When you do that at the wrong time. Right. You do that at the time that it's overloading infrastructure. The second piece though is the scale of the battery itself rolling around in here. So I have a extended range EV, a Mustang Mach E with roughly 300 miles of range. It has about a 90 kilowatt hour battery. A bigger vehicle like a Rivian or F150 Lightning is kind of even a massive battery. Even bigger than that. A typical Tesla powerwall for scale is about 14 kilowatt hours of storage. So the capacity that we have in terms of the available energy that we can move around when we actually charge this thing and the amount of energy we have relative to how much we need on a daily basis to drive to work that 300 mile range, I might use that on a road trip, but on a typical day, I might only use 15, 20, 30 miles of that range. So we can move around demand across days, not just hours. And when we do move it around, we're moving a lot of kilowatts as well. So I just wanted to set that stage. These things are big assets compared to other distributed resources or loads that we might have on the edge of the grid.
- [17:49]
C
And what's fascinating and what I think is just like, again, it's one of those, one of those facts. Because EVs have shown up quietly over the background. They're a large sort of like boiling the frog problem. Unlike data centers which show up, take your local rights, take your water rights.
- [18:09]
B
Cause protests, a city's worth of electricity.
- [18:11]
C
Demand on one location in the grave city. I mean, a state sometimes worth of electricity into a single place. But it is again, a really important point that you brought up, Jesse, which is that look at seven kilowatts, right on seven kilowatts with seven and a half million EVs out there, we are looking at, and I'm now averaging down, we're looking at about 40 gigawatts of load, which I'm not saying everyone is ever going to charge all their evs at exactly the same time, but this is about probabilities. And when you now start doing the probability math, that's 40 nuclear power plants or the equivalent of 40 different of 40 Stargate data centers. That's insane, right? Like, that's a lot.
- [18:52]
B
And it's only getting started, right? We're going to add tens of gigawatts more over the next few years.
- [18:56]
C
And I think I like to use that, especially when I talk to investors or other folks in the market, because it's a healthy reminder too that like when you look at anthropic, they're projecting 50 gigawatts of data centers by 2035. And I'm like, we have 40 gigawatts of flexible capacity on the roads in people's garages today. What are we doing with that? And one of the things, and you'll be surprised by this, but one of the things, the terms I actually deeply dislike in our industry, in my sub, sub, sub subcategory of the industry, back to shattering jargon, is this term called managed charging. Companies that do manage charging budgets for managed charging. It's just.
- [19:32]
A
What is it? Before we get, before you knock it down, what is managed charging?
- [19:36]
C
No, it's a great. I'm not even here to knock down the outcome. I'm here to knock, like the way that it's created, but basically the idea that a customer signs up for a program or the customer can sign up for a program where utility has the rights to manage their char in a much more continuous way. And I think this, Robinson, is where it's very different than demand response. Demand response was all about five times a year. We just got to shed the load. We just got to shift the load. Managed charging. And what I think much more demand flexibility, which is a much broader category, one that I'm much fonder off. Demand flexibility is much more about how do we make managing people's demand a part of continuous Operations of running the grid. Managed charging is the sub bucket off demand flexibility that lives within broader EV filings. That is an appendage to an appendage right now. And I think when you just consider the fact that we are still spending somewhere in the order of $300 million of compliance demand response programs at utilities across the US and I'm probably wrong on my number, but it's on that order of magnitude. Meanwhile, managed charging is like this tiny budget because it's almost viewed as like a curiosity, whereas the reality is like we're doing spectacular things with tens of thousands of vehicles around the country and some of our peers, I mean, we're talking about hundreds of megawatts of vehicles that we'vegrid and our peers are managing every single day. I have programs in Excel Colorado where thousands of vehicles every day are actually increasing their charge at the moments when there's too much wind energy that we would be otherwise curtailing. So what Weave Grid has done in collaboration with Xcel Energy is actually do something that will make Jesse's ears perk up, especially which is called value stacking, where not only do we absorb all of that excess wind that otherwise would be curtailed, where we basically taking negative price power and are charging people up in the middle of the night, we're also then staggering that charging so that the feeder doesn't overload. And we're doing that all intelligently using, yes, believe it or not, our own AI and machine learning. But like that is still leaving the customer with a fully charged vehicle at the end of the night. And they're getting an extra $150 off their bill every year for doing this. And we're saving ratepayers hundreds of millions of dollars.
- [22:04]
B
Yeah. So let's talk about the like different ways we charge right now. So there's sort of three ways to do charging, I think. One is the kind of I come home and I plug it in and I don't think about it again. Right. Basically I plug in and it starts immediately pulling whatever my rated, my charger's capacity is 7kW or whatever, and it will continue to pull that until my battery is full. The second is scheduled or programmed charging where I might come home and plug it in, but I've programmed my charger or my car, depending which one I'm interfacing with, to say I would like you to start charging at 9pm because that's when my time of use rate goes down. Or in the case of New Jersey, PSEG offers a Off peak rebate only for EV charging. It's not a time of use rate for the house. But if I have the right charger or a car that can talk to their system, I get, you know, basically 75% off my charging if I do it after 9pm or on weekends. I come home and plug it in as soon as I get home, but I schedule it to start at 9. And I think you alluded to the risks of that. I want you to come back to that in a minute. If everybody's EVs on my block turns on right at 9pm and then there's managed or controlled charging, which is the type you're engaged in, where you're dynamically controlling when different vehicles charge, and not just at the individual vehicle level, but across multiple vehicles, so that their demands for a certain amount of energy are met by a certain time. As a user, I would program in, you know, 150 miles of range tomorrow morning or 300 miles of range tomorrow morning or whatever it is. And that's all I really care about as an EV driver is how much range I have when I need to use the car, and then you handle all the rest. So maybe talk about those three kind of modes and what they do to the grid, how different they are in terms of their impact on the local grid, and why it's so important to be doing what your company's doing, which is spreading out and managing actively when these vehicles are charging.
- [23:45]
C
I like metaphors, and Robinson has clearly told me, let's not use dorky terms. So I'm going to use my metaphor, which I'm fondest of. As an immigrant, I used to have to call Grandma in the middle of the night for cheaper landline times. I hated that. That was really dumb. I don't want to call Grandma in the middle of the night. I don't want to have to only talk on weekends. I want the ability to call Grandma whenever I want. I think time of use rates are sort of that. It's actually a control mechanism imposed on folks to solve for only one of the challenges, which is the wholesale market. It's fundamentally about saying wholesale market. The sort of generation side of the stack has found that it is easier and cheaper for you to just charge at 9:00pm or 10:00pm and so that's what that, number two that you were talking about. That's what that is. Look, number one, I think we're moving away from a world where number one makes any sense, where people will just come home and plug in their car. I Think, number one is the ideal experience that you as a user should have where you never have to think about it.
- [24:56]
B
Number three, plug it in and walk away.
- [24:58]
C
Right, plug it in and walk away. Number three, what weavegrid does manage charging programs or like at scale flexibility programs, demand flexibility programs. That is the ideal customer experience we should have from a outcomes perspective where we are able to orchestrate the experience of you come home, you never think about it. We're able to orchestrate, you get the lowest cost like you were talking about in number two. And we're able to orchestrate also the lowest cost to the grid, the whole grid, everything from the generator, that power plant, all the way down to the local transformer. Because the challenge is that when everyone, Jesse and Jesse's three neighbors plug in at 9pm, guess what you do Create a secondary surge. And that secondary surge is illogical for the distribution system. And the thing we don't want to do is have everybody having to check what price it is at what time every single day. As the conditions change dramatically, day to day, neighborhood to neighborhood, the renewable energy production to production. Like you don't want people to think about all those parameters. You want it to be sort of like my AT&T plan. I pay $45 a month and I never think about how much AT and T is curtailing me behind the scenes. Where I'm going from 4G to 5G to 4G LTE, that's just happening. That's continuous load management. That's happening in the background. But yeah, it means if I want to stream Netflix in a really crowded part of Manhattan, it's probably not the smartest thing. And that's what they're doing, right? They're curtailing me in that way. But I can absolutely get a very reliable service of $45 a month and have to the sort of word of du jour, abundance off bandwidth.
- [26:40]
B
Yeah, all you can use, all you can use.
- [26:42]
C
And I think you can do that in the lowest cost way, which is the key thing here, right?
- [26:48]
A
This episode of Shiftkey is brought to you by Hydro Store. The US economy is growing fast and so is its demand for reliable energy. But generation alone isn't enough. Long duration energy storage is the key to building a resilient, secure grid that can meet tomorrow's needs. Hydrostor's advanced compressed air energy storage technology stores clean energy for hours at a time and then delivers baseload power when it's needed most. Hydrostor's Willow Rock energy storage center includes California will provide 500 megawatts of storage enough to power a city of half a million people for more than eight hours and employ over 6,500 people during construction. Backed by bipartisan support at all levels of government, Hydrostor is leading the charge in utility scale storage. With projects underway across America, we're helping communities unlock economic growth and achieve energy independence. Learn more about Hydrostor's unique technology and how it's powering America's future@hydrostore ca.
- [27:53]
C
So.
- [27:54]
B
What is the customer experience? Somebody who is signing up for a program that you're managing? What do I need to do as a customer to specify my needs that you're going to respect or what's the interface look like?
- [28:04]
C
Something that's pretty unique about weavegrid is we decided that the only way to make this kind of flexible demand reliable to utility engineers, and I actually will say specifically utility engineers, we work with distribution engineers, not just with customer programs. People at utilities. In order to make it reliable, we needed to go and have really high quality telemetry and controls, basically really high quality data coming off of the vehicle or the charger and then the ability to send back signals to those cars and those chargers in a way that ultimately at the portfolio level gave utility engineers their three nines or five nines of reliability, where they could trust that this thing will make sure that when I'm calling it every day, not five times a year, but every single day, it now is becoming a part of my core operations. My transformer will not fail. And that led to us building really deep integrations and partnerships with several automakers. When you think about how hard utilities are to work with, let me tell you, automakers are way worse. But like working with automakers to understand their telemetry and their connected vehicle stack and their controls layer, building high quality connections and then stitching that together with the utility data is how we end up orchestrating all this. But as we started building those connections, we realized, wait, the best customer experience would be if a customer signs up for the program through their automakers app. It'd be so much better if they can just set their settings in their car or in their app and then that is what is pushed back out to us so that the customer doesn't have to think every day about interfacing with Weave grid, quote unquote. Because we just want to be behind the scenes. We want to be doing this behind the scenes with their.
- [29:49]
B
So what is it that I set in my app? What am I telling the car?
- [29:53]
C
Well, first of all, as a customer, let's say you were in PGE's territory out here in Northern California, you might get an email from PG&E that says, hey, Jesse, you can sign up for this program. And by doing so, you're going to save X amount of money over the next year on your bill. And also we'll manage your charging, such that will actually solve for your lowest cost of charging, which can amount to about a couple hundred dollars of savings per year. Pretty meaningful. And the utility is adding more incentive on top of that, which is almost like a capacity payment to the customer for access to resource. I am paying you a little something. And so you go, you sign up, you log into your utility account, you log into your Tesla or your Rivian or your Toyota or whatever account, and then what we do on the back end is we connect those two streams of data and we connect those two accounts together. A new experience that we've actually launched recently with Toyota and very soon to come with Rivian and very soon to come with Tesla is it actually shows up in your app. So in the Toyota app, if you live in Baltimore, for example, where we are running one of our longest running programs in Baltimore, gas and electric, in your Toyota app, if you drive a BZ or a RX with the Lexus, it literally shows up in your app and says, hey, you can save an extra $10 on your bill every month for signing up for a managed charging program called Smart Charge Management in Maryland. And what we're doing then is we just, you click the button and it's two steps to enroll and boom, boom, we connect you with your BGE account, we connect you with your Toyota account, and then on the back end, every night, we're managing your charging to avoid both the strain on the PJM grid, of course, but also avoiding strain on your local grid.
- [31:32]
A
In your experience, are consumers willing to make this deal where they get some money off on their power bill in order to change how their car works? Because it does seem to include a kind of mindset change for people where they're going from thinking their car as a machine. I mean, this is part of the broader transition to EVs. But there's an even further mindset shift that seems to me like it would be required here, where you go from thinking about your car as a machine that you wholly own that enables your freedom, that is ready to drive a certain amount of miles at any time, to a machine that enables you to have transportation services, but also is one instantiation of the kind of great big cloud of services and digital technologies and commodity energy products that surround us at any time.
- [32:20]
C
Yeah, I mean, look, I think we have seen faster adoption rates than any other consumer side resources resource participating in energy has. So I feel very good about that. But ultimately I think of this as a transition to the normal experience for folks who are going through what is a new experience altogether. If again, similar to my cell phone plan, if this was just offered to me as a standard offering, you buy an ev, your utility offers you a plan, it's called the EV plan. In the same way that we have EV time of use rates, quote unquote. If you're just offered an EV plan where it's exactly the same thing, I'm going to make sure you're fully charged every night in the way you want it to be charged, with the cleanest, cheapest, most reliable charging possible. And it's just being taken care of. I think what's so hard for most folks to grok is that the way this experience works is it's supposed to be completely frictionless. Right? You're really supposed to not think about it. It's actually only in the few moments where you need to change your 99% behavior to the like 1% behavior, where you're like, oh I need to go to the airport, oh I need to go on a road trip. That's where you need to think about it. Versus it's flipped from thermostat management programs where you actually need to think about it actively. In the moments where the grid is really strained, where we've over invested, in my view, and this is a controversial view, we've over invested in trying to make EVs be like gas stations or like the gas station model. We keep talking about it all the time. We've over talked about range anxiety. The fact of the matter is 80% of charging still happens at home. Even in the long run, 30% of charging will happen in the workplace, 50 plus percent will happen at home. Like it's very little charging that's going to happen on fast charging. But we've talked so much ad nauseam about fast charging that we've actually forgotten that underpinning the iceberg off the electrification cost is the grid itself. And never before has the grid been so strained. And so here's this opportunity to ask a consumer buying a car, hey, there's another way you can save money. Not only are you saving by going from gas to electric, gasoline to electric, you can now save money by actually saving even more on your bill by letting your utility just take care of your charging for you in the background. And by the way, you're going to help other people save money on their bill too.
- [34:38]
A
Can you talk a little bit about the technical challenges of knitting EVs into the grid and into this massive existing machine that must operate all the time? You said that automakers are actually harder to work with than utilities. I want to hear a little bit more about that. But just like, what kind of technical challenges do you have to cross in order to turn EVs into the kind of flexible resource that you're talking about?
- [35:03]
C
We talk a lot about helping turn EVs from being liabilities into being grid assets. And then we talk a lot about our term that we coined was this concept of making it a grid interactive vehicle. And I think people just presume that if there's a plug on a thing, I can just plug it in and it'll work. I think EVs actually kind of shatter that paradigm because one, they do work, like you can go home and just plug it into your dryer outlet, but it could pop your panel, it could blow a transformer, it could cause a lot of issues up and down the whole system. And I think the interesting part about electrification in general is that it is really this opportunity to better utilize the grid itself. It's not about creating more cost on the system. It's that if we actually manage these vehicles, if we actually ask people to participate in these programs and just let technology kind of take care of it in the background, we have an opportunity to really improve the utilization of the system. Now the hard part, before I get into technical challenges, is actually it's more change management. It's about getting utilities comfortable with the idea that customer side resources can be trusted. It's about getting regulators to stop approving pilot programs, but to actually approve at scale budgets in the same way that they would approve an upgrade for a substation. It's about getting automakers to not think that just because their data is valuable that people can afford to pay hundreds of dollars in data carrying costs. It's about actually growing the pie of value and then finding the right way to apportion it. And that change management, frankly, has been one of the hardest parts that I think Weaver has tackled. The technical challenges then come down to stitching a lot of different types of data, cleaning up that data, bringing it into something that is usable by operators, building those trusted load profiles, showing what's shifting and orchestration can really do in avoiding those costs. And that technical work while really hard. And I think our team has done incredible work. I think it's all very known. It's about just like continuing to use all of the incredible sort of data knitting, for lack of a better word, and build trust with those stakeholders that matter. Regulators, utilities, operators, OEM cloud teams, OEM app. It's just a huge surface area that we touch and that's been a lot of our work.
- [37:34]
B
Let's use that cell phone analogy a little bit more and probe how maybe it's a little bit different today for the EV challenge and maybe how you're thinking you're going to bridge that. So if I buy any smartphone today, it can talk to any of the networks. Is that the case today? Any EV can talk to you and. Or can talk to the utility. It seems like that's very much not the case today. Right. Each automaker has its own protocol, its own communications, its own app, and you're trying to figure out how to stitch all of those together. Are we moving towards, or are we moving towards some kind of standardization of how these do that? Just like cell phones now have a standard protocol for communicating with different networks.
- [38:10]
C
And remember, it took decades for cell phones to get there.
- [38:13]
B
Right.
- [38:13]
C
We still have GSM and cdma, which are two different cell networks. And I'm not going to unpack those for the audience because to be honest, I'm not even sure what exactly they stand for. I just know that there are two different, completely different cell networks that still operate in the United States. And Veriz and everybody else is on the other. The reality is that every OEM in the US has built their cloud and their connected vehicle stack with energy management as literally never, ever, ever even factored into the use cases. There was like practically no energy management bidirectionality. All these things that people say, right? Oh, these cars come out with V2G, like they must be thinking about everything from top to bot. No, they didn't. They may have done it on the power electronics, Absolutely. They may have done it on maybe the consumer experience to some extent. They may have thought about it in inverter design. But end to end, it really doesn't exist. And so when you think about the tens of billions of dollars that automakers have invested into making vehicles smarter, right? Driven primarily by connected vehicle use cases like insurance and so forth. The move towards autonomy energy management was just not a use case. That kind of was factored in. What we've grid has done is we've basically built a standardization layer that we then turn into grid protocols. And so we view ourselves as almost the standard setting body that's enabling vehicles to now become participants in standards like IEEE 2030.5. But if today you took somebody on the distribution system at a utility said, who knows how IEEE 2030.5 works, a very specific grid standard, and you took somebody on an automaker in their cloud shop and you said, figure it out. They would never be able to figure it out. They would spend the next 10 years talking about it, as some of them have done.
- [40:05]
B
So you have to do that automaker by automaker. What's your coverage today?
- [40:09]
C
Yeah, so the key thing about weavegrid is we realize that not every automaker is going to get there. And also we realize that not every car even has the capability to get there.
- [40:19]
A
Right.
- [40:19]
C
Think about your old 2014 Nissan Leaf. That thing isn't connected. I mean, frankly, if that thing moves, like we're already in good shape, but like it's not connected for sure. So what we've built is an optionality set where we can cover 100% of customers. So you can do the connected vehicle services on the connected vehicle stack where it exists. But we want customers to use the best available technology to drive the most value for the grid, using the best available technology to them. And so we connect to either your ChargePoint or your Wallbox or your Emporia or whatever other chargers you may have. We also connect to your connected Toyota or your connected Tesla or your connected Rivian, if that's available. And then really our secret sauce, our magic, what we call disco, which stands for distribution, integrated smart charging orchestration. And yes, we have a lot of disco balls everywhere in the office. But what the magic of disco is like we take any of these different connected devices, whether a charger or a vehicle, and can turn that into a standardized protocol layer that we can then talk to the grid protocols to ensure that that orchestration is happening in the most reliable way possible. So it is really hard.
- [41:29]
B
That sounds like a huge pain in the ass.
- [41:30]
C
It's a huge pain in the ass. It is a huge pain in the ass.
- [41:32]
B
And I just got to say, from a customer experience perspective, it also, I think leaves something pretty lacking. So again, I have a Mustang Mach E. We purchased an LX charger, FUS.
- [41:41]
C
Charger we don't talk to.
- [41:43]
B
Yeah. And so I decided to go with nlx because, you know, here, big, giant European utility, I'm sure they'll stick around as opposed to all these startups selling chargers. Who are those guys? Well, NLX decided that they wanted to pull out of the US Market. And so my smart charger, which at that point was able to talk to PSEG's rebate program, got bricked and now it's a dumb charger. And so I said, oh no, no problem. Now they're starting to get all the telemetry off the cars themselves. When I first signed up, it was just had to have one of these four or five specified chargers. Now they're getting them off the vehicles and I go to the list of vehicles that they can talk to, and it turns out Ford is just not on the list. So what's going on here behind the scenes? I mean, can we get to a point where there is some standardization in how each of these companies makes their vehicle telemetry work so that as a customer I don't have to think about, oh, well, I know I can get on a managed charging program if I buy this type of vehicle, but not that type of vehicle, or this charger, but not that charger. It's just this, you know, it's like a smartphone. Any smartphone will work on my carrier, whichever carrier I want.
- [42:43]
C
I mean, yes, we want to be better, but I just want to be clear. Like you can only sign up with a Nest or an ecobee thermostat for any of your thermostat management programs, and that covers maybe 40% of the whole market, right?
- [42:55]
B
Yeah, but that also sucks. Again, I'm saying if the standard of ease of customer use is the cell phone or the mobile smartphone experience, then that, like we're a long way from there in utility.
- [43:03]
A
It reminds me a lot of a pre Apple CarPlay, Google CarPlay world where kind of every infotainment was a little different and some of them let you do amazing things and some of them were mostly bad, but had one really good feature and then or wouldn't would.
- [43:17]
B
Work with most phones, but not your phone.
- [43:20]
C
Right, Exactly. Look, I'm not going to speak for partners that we don't have yet and why they're making decisions on not just working with us. I mean, at this point, we cover 80% of connected vehicles in the United States, and then the remainder of those vehicles we. The remainder of the vehicles we cover through connected chargers. So generally we have very few Jesse Jenkins left behind in our programs. But the reality is that some OEMs are going to make different strategy decisions when it comes to how they want to partner and how they want to work with folks and so on and so forth. I think the more that we can bring value to utilities, customers and OEMs, the more they would be willing to move towards a platform model where they are not the primary participant in a pilot. Because some OEMs like the ones you mentioned have I think, spent a lot of time just piloting things. And I think it's great. Like you want to, you want to knock out a bunch of technical kinks like that's what a pilot is really good for when you're piloting for value. And I really draw the distinction between the two things. Piloting for tech Piloting for value when you're piloting for value, scale is the most important thing you can do in any customer aggregated resource. Because you're not going to drive value by having one connected car or one connected charger trying to do distribution services. You need to have thousands and you need to have them at scale.
- [44:48]
A
This episode of ShiftKey is brought to you by Uplight. Power demand is growing at unprecedented rates, creating a critical moment to meet load growth with customer owned distributed energy resources to ensure a reliable, affordable and sustainable energy future. Uplight is a clean energy tech company that unlocks grid capacity by activating customers and their connected devices to generate, shift and save energy. Uplight combines personalized customer experiences with an AI driven flexible load management platform that harnesses customer ders at scale to maximize program value. Uplight integrates energy efficiency, time varying rates and virtual power plant programs into a single cohesive portfolio. These solutions help meet surging demand while improving grid resilience, accelerating decarbonization and reducing costs for energy providers and their customers. Uplite serves over 80 energy providers, including eight of the 10 largest North American utilities. Learn how Uplight solutions can help your utility meet the moment with existing customer assets@uplight.com heatmap.
- [45:59]
B
Let me see if I can make your pitch here a little bit clearer, like from where I sit. If there are listeners here who work at an OEM or who work at a puc.
- [46:08]
C
I'm just not trying to be pointed. You can do that?
- [46:10]
A
Yeah.
- [46:11]
B
Well, let me do it for you. We want to live in a world, right, where every car can charge at a fraction of the retail rate today. Because that is a world where customers have more affordable bills, where electrification is far more attractive relative to the cost of filling up at the gas station, where we're using managed charging to avoid driving up distribution costs, where we're building load in a way that we can spread fixed costs around over a broader set of load, like all of these things. And if, if we're in that world, if I'm buying a car, I'M going to want to buy the car that lets me charge at 75% off and not the car that won't let me do that. So that's the value proposition for the OEMs is like, this isn't something that consumers expect, but it should be, and eventually it will be. And if my, you know, if your, your EV costs three times or four times or five times more to charge than your competitors, why would I buy your ev?
- [46:58]
A
Right.
- [46:59]
B
It just doesn't make sense.
- [47:00]
C
Exactly. And I think I'll say one more thing, right, which is like, unfortunately, due to the recalcitrants of some of these OEMs who I think have moved slower or just, I won't even say don't want to partner, just have moved slower. I think one of the bad habits we've seen in the industry pop up is this thing called screen scraping. And I'm being mild about it. The reality is it's essentially hacking your app. There are a bunch of people who are out there going and like reverse engineering the APIs on your vehicles, on your vehicle app, and are then going and turning that around and selling it to utilities and saying this is viable for grid services. It isn't. This stuff does not work at scale. It breaks, it causes customer pain, it causes utility pain. It leads to a lack of trust.
- [47:41]
B
I think you're saying you need to be integrated directly with the OEM system.
- [47:44]
C
I mean, in the same way that like when you control somebody's nest thermostat, it's not like you're going around nest like you have a contract with them, right, that says, hey, there's an sla, there's a certain response rate you're going to have when I dial down the thermostat and so on. It's the same thing with EVs. It needs to be that. It actually needs to be even more robust because we're talking about daily optimization, we're talking about somebody's freedom and mobility. Like that's really important, right? But I do think this challenge of how do we bring the market to a standardized layer of connectivity, I think that's a really big one. And I think what we've tried to do at least is put out a blueprint that other OEMs that can join us along the way on. And I think it's been really effective. And I think the more that they see the value of the piece of, especially in light of all the stuff going on with data centers, especially in light of all the load growth, right? The Opportunity to both deliver their customers savings and the opportunity to make money. Because we pay OEMs. Just to be clear, we go and in the back end, we pay OEMs for access to their APIs and access to their data and their controls. Like the opportunity to monetize vehicles and the opportunity to offer a better consumer. Offering both of those things are really attractive. And one of the reasons Rivian decided to partner with us where their first announced partner is because RJ was just like, we're going to get left behind if, like Tesla is doing this and we're not. What is this? This doesn't make any sense. We have to be offering people smarter charging and cleaner charging, offer options. And so I'm really excited about that partnership. You're going to see that rolling out on your screens if you own a Rivian.
- [49:11]
B
Do we need legislation at a state or federal level to drive this kind of standardization? Or are you comfortable that the automakers will figure it out as they become serious about selling their vehicles, that they just have to be part of this communication infrastructure or people are not going to buy their cars, they're going to buy their competitors?
- [49:29]
C
I mean, if I was to wave a magic wand, I would say that the bigger state or federal legislation that I would love to see is more definition around scale and outcomes and value off of load flexibility and demand flexibility, notably electric vehicle demand flexibility. I don't think EVs are the only things that have demand flexibility. Obviously. I do think the batteries and thermostats and so forth are also amazing. But that's a much more powerful signal to the market that they need to move. Because I think what a bill like that look like? What would a bill like that?
- [50:03]
A
What would a bill like that look like? Yeah, like, what do you mean when you say you need more certainty or definitions around scale and value?
- [50:10]
C
Yeah, I mean, I just require the.
- [50:11]
B
Utilities to all have smart management load management programs.
- [50:14]
C
Well, exactly right. Like a lot of what my policy team does is we work hand in glove with I think, a lot of stakeholders, state by state, helping them understand the value of managed charging, the value off all of the demand flexibility potential out there. And then we talk in terms of, okay, where is affordability going? Where is the distribution grid build out going? Where are all these things going? Where is EV growth going? And then we work together to make sure that there are opportunities for at least some form of program of EV management in the states. The problem is it's state by state. And the other problem is it's extremely crawl Walk, run.
- [50:47]
A
Right?
- [50:47]
C
It's like, oh, we always have to start with the pilot program. Why do we always have to start with the pilot program?
- [50:51]
B
Yeah, why? Like, if this is an energy affordability crisis, why are we piloting things that get adopted 10 years from now? Why aren't we taking.
- [50:58]
C
Let's be spicy now? Because I will be like the state feeling the most right now on this is California. And ironically, California is. We've got multiple projects in California. We've got multiple places where we're showing the value. We literally. The California Public Advocates office just launched the report last week talking about the impact of electrification on the distribution system. And we've grid was mentioned, I think a dozen times in there. People, the. The opportunity here to literally bring down bills and rates both. That is a systematic point, right? And yet the amount of effort we have to put in to just getting both the regulators and the utilities and staff and everyone else to make this a top priority, it's really painful. And I do think that sometimes, because the broader VPP industry has not done as much of a job in delivering what's known as cost effectiveness, AKA for every dollar I spend on this program, do I get more than a dollar out? I think overall demand flexibility suffers because we're not. To the point I was making. We're not actually defining the value we're looking for. We're not defining what scale this stuff needs to get to. And we're just kind of leaving a lot of dollars on the table. And so I think in this kind of crisis, we need to be doing this now, actually yesterday. So, yeah, that's my soapbox, I guess.
- [52:18]
A
You've been working with utilities now since before the AI boom began and since before the national run on electricity began. As someone who has this particular window into the utility industry, how has that changed over the past few years? And what do utilities. What do they like to work with now?
- [52:40]
C
So I'm one of the very few people who actually likes working with utilities. Let's just put it out there first and foremost, right? Most people are like, what? What are you talking about? You must be a masochist. I really think that utilities have an unparalleled view at the system and an opportunity to deliver benefits, notably clean energy benefits, reliability benefits at scale. And that's what's always attracted me since when I worked at a company called Opower. It's what attracted me to start this business. It's like truly the thing that excites me the most. This is an unparalleled moment Utilities, where we used to send, you know, pension funds to go buy utility stocks because they were about as reliable as a stock, as a bond.
- [53:19]
B
Right?
- [53:19]
C
It was a no growth reliable churns out a dividend every day. Now it's a growth stock. There are utilities that have grown faster this year than Nvidia stock. Growth, growth. It's insane, right? And so the biggest thing that changes when you go from a static world to a growth world is you need to have more of that mindset internally in your culture. And I do think that the load growth challenges have forced utilities to take pretty hard look at their team, at the kind of culture they have and what solutions are available to them on the table. Right today, not tomorrow, not in 2029, not in 2032, when Vernova puts out a few more turbines today, what solutions do they have on the table? And so what that's created is this really amazing aperture where if you are a trusted partner, you can put forward, I think, bolder proposals, bolder opportunities to scale things that work, that do drive down rates, that do ensure higher reliability on the system. And utilities are far more willing to engage and they're far more willing to kick it into fifth gear versus putting it through the pilotitis thing that they used to do previously. So I have actually never been as excited as I am right now. I think again, for us at Weavegrid, we have been pushing very hard to get out of these like pilot managed charging budgets into the broader conversation around demand flexibility, where we're saying, look like EVs still represent 40 gigawatts of untapped potential. What are we doing with them? And I think, like, seriously, we've had sit downs with exec teams at utilities where they're like, I didn't realize I had a gigawatt and a half of EVs in my territory. I've got like 3 gigawatts of data centers trying to connect. You mean you can give me outside the fence line gigawatt level flexibility from the EVs to match that data center? Oh my God.
- [55:09]
B
Right?
- [55:10]
C
That's exactly the kind of thing that I'm excited to offer to the market right now, which is like outside the fence line Flexibility is also very possible to help support this incredible load growth opportunity. And I think that conversation is changing in a way like I've never felt before.
- [55:25]
B
Yeah, I mean, so you know, as listeners may have heard, I worked on this utility, the Future study at MIT that came out in 2016, that was all premised around the idea that coming around the corner with this set of distributed resources at the grid edge, customer premises, including electric vehicles, distributed batteries, solar smart thermostats, et cetera, where we needed to rethink the regulatory environment that was needed to actually integrate these resources cost effectively. And I think that report in many ways was like eight years too early because it landed in this period of sustained flat demand growth in both the US and Europe, where big benefits were from avoiding capacity, right? They're avoiding underutilized investments in poorly utilized generation capacity or storage capacity or distribution network capacity. And in an environment where demand isn't really growing, there's just not a lot of that investment being made. I mean, capacity prices in PJM were flat. They were really low. They were guiding which coal plants to retire, not which gas plants to enter. So there just wasn't a value proposition at the time. And what has dramatically changed in the last couple years is now we're in an environment of demand growth where investments in capacity are necessary at generation, at transmission, at distribution. And all of a sudden these distributed resources have an enormous opportunity, by virtue of the fact that they are located right next to the customer at the district, at the edge, to to tackle all three of those pieces, right? A battery at grid level can only provide generating capacity alternatives, but a battery at the household or a smart car charger at a household can provide all three, can provide distribution, transmission and generation capacity. And all of a sudden that's a lot more valuable, right? And whether it's data centers or just local peaks driven by EV adoption or heat pump adoption in New York, who's trying to electrify all their heating, like all of these are going to be driving real capital investments that can now be deferred or avoided if we do this in a smarter way by taking advantage of flexible demand. And I ended that utility future study with the view that the best distributed resource is the one that's already there, right? It's not the battery I have to build and invest in because then I have the risk of building a bunch more underutilized capacity. Again, if I have to put In a Tesla Powerwall I only ever use for backup once every 10 years, that's not a very good use of capital. But if I already have an EV or an H VAC system and some thermal mass in my building, right? And I can unlock that potential, that is where the beauty is, right? Because the cost of that is customer acquisition and technical. It's not lots of capital sitting there that may or may not be used well.
- [57:55]
C
And I Think we've had a lot of conversations recently about like the electro economy or whatever you want to call it. Right.
- [58:01]
A
And of course the term electrotech revolution.
- [58:03]
C
The electric tech revolution. Right. I think one of the reasons that a lot of us don't grok like what that fundamentally means is that there is a willingness to pay for an electron that far, far exceeds anything that we have previously been doing in our sort of status quo. Right. What I mean by that is the term bit watt spread is showing up like no other out in Silicon Valley. You know, what we're willing to pay for a watt today is a lot higher because of the value of that bit that comes out of the watt. But I think similarly we forget how much more we're willing to pay for mobility services. And that somebody is willing to spend $70,000 or $50,000 or ideally one day $25,000 on a car. That's the other thing is like people are buying it because they care about mobility, getting from point A to point B because they want a car, they have a brand identity. That's what people are doing. They're investing in 100kWh of batteries in their home because of they care about the mobility watt spread.
- [59:05]
B
Right.
- [59:05]
C
And so I think that is something that again is just super underappreciated because now that those devices are out there in the field, you can either let them continue to be a liability. And God knows I've talked to so many distribution engineers who are like apoorv. I've literally had transformers just go overnight actually in certain states like New Jersey. I've definitely heard that story where it's like everyone just started charging, boom goes the local transformer. But if you can actually turn them into a grid asset, we're literally talking about the fact that you can bring down rates. Argonne National Lab ran a third party analysis with Exelon on our DOE funded smart charge management program in Maryland. And they found that literally we were putting downward pressure on rates and if we could scale this thing, it was going to drive even higher benefits at over like 2x, the number of dollars spent to the dollars returned back to customers. Customers. I mean, that's incredible.
- [59:57]
B
Yeah, there's not a lot of things you can do right now that actually lower energy prices. So as all these politicians start talking about, you know, energy affordability, you know, you could administratively freeze rates, but if costs are going up somewhere, there's some missing money that's going to have to come from somewhere. The sector's going to go bankrupt. Right so if you actually want to lower bills, there are only a few things you can do that would lower bills quickly. And one of them would be, like you said, turning all of those EVs that are already out there in New Jersey or California or elsewhere into grid assets instead of liabilities. This has to happen and has to happen far, far faster than it has been.
- [60:29]
C
And fundamentally it comes back to capital flexibility. Right, Flexible capacity. My one liner is weave Grid is one of the leading providers of flexible capacity in the United States. Flexible capacity drives flexibility in your capex as a utility and as a regulator of a utility. And what I mean by that is what is driving up all these costs? It's the fact that now utilities have to make capex decisions on do I invest more in generation, do I invest more in this local distribution system? Do I invest more in the transmission system to interconnect the AI data centers? If I now have more flexibility in my capex, if I have an ability to actually still put those dollars to work to enable maybe a data center to come to town because it is important for economic development. But at the same time, for every dollar that I expend in capital that people have already put out there, they've bought cars and I can use that to drive down rates. It's just offering me a ton more capital flexibility. And so at least in our conversations with utilities, that's how we frame it as well, where we're like, don't talk to me about your compliance budget because somebody told you you have to run a thousand car pilot. Talk to me about how I can save you, or let's talk together about how I can help you save 300, 400 million in your capital budget by actually doing this stuff at scale?
- [61:37]
B
Do you think we have to change the way utilities make money in order to do this? I mean, when we did the utility future study, again, in an environment of flat demand growth, our consensus was utilities in a cost of service regulatory environment today make money by deploying capital and earning a return on that capital. And if that's the environment they're in, they're going to be systematically biased against turning to your solution to avoid investing in capital. They would be perfectly happy if they can get away with it to build a bunch more transformers and upgrade a bunch more substations, because that's how they make money. In a world where demand is growing faster than they can deal with, maybe they can't get away with that. And so is that changing it? Are you seeing that maybe it's not Critical to do that because they're realizing more and more utilities realizing they're just going to fail unless they tap these resources.
- [62:21]
C
Yeah, two things I'll say. One is in a load growth scenario, you really don't need to change the cost of service model. What you need to do is drive equivalency. And what I mean by driving equivalency is I'll again give a shout out to the Maryland psc, which I think has done phenomenal work in this. The Maryland PSC basically treats weave grid as a regulatory asset. Exelon gets to treat weave grid as exactly the same as rate basing another transformer, which second point, you can't buy new transformers. So there actually is a needle for flexibility because it's actually become an economic imperative, not a compliance imperative. And so that was the challenge in flat load growth.
- [62:56]
B
Right?
- [62:57]
C
In flat load growth, all of these programs were merely compliance programs. You check the box because you had to, because somebody told you to. And that's good. Good regulation forces that kind of compliance and it forces people to actually make these investments. But there was an equivalency. And one of my biggest challenges still remains that a lot of utilities, even though theoretically they can rate based software, it takes actually more of a regulatory switch where you have to go to the regulator and say, but please, please, please let them invest in a VPP solution or a weave grid type solution or whatever.
- [63:28]
B
Yeah, it's discretionary on the regulator to say yes. Right.
- [63:31]
A
When you say they can rate based weave grid, what you mean is that the cost of the investment they make in using your services and working with you, they can just fold right back to ratepayers. Even though it will ultimately put downward pressure on rates. It's not the savings that they get from working with you, it's the upfront investment. They can just put that right in the rate.
- [63:48]
C
Correct. So the cost of the program entirely. So we've grid software cost the incentives that they're maybe handing out to consumers. If that is treated as a regulatory asset, what ends up happening is they can then capitalize that over, let's say 10 years or whatever else their sort of amortized payment schedule is according to their accounting rules. And what that allows them to then do is then as those savings accrue over the years, that's now putting downward pressure on rates, but it's happening over a much longer duration versus an OPEX spend, which is what a lot of programs are currently spent out of and.
- [64:23]
A
Which they, which is just a flexible cost that utilities Can't.
- [64:26]
C
Yeah. Which they don't want to really do.
- [64:28]
B
Yeah. Opex, they just pass through and they don't earn a return on it. That's the systematic bias.
- [64:32]
C
And the good thing about putting it.
- [64:33]
B
Into the listeners should go back to our episode. Utility Regulation Sucks think is the title. It really sucks. To learn more about how we can fix these problems, I think we touched.
- [64:42]
A
On what state legislation or what state regulatory changes need to happen to make this more doable. Is there anything that needs to happen at the federal level here, either administratively through executive action or in the Congress?
- [64:54]
C
Maybe I'm just jaded from having seen the back and forth of federal action.
- [64:59]
A
And maybe wait for the next question.
- [65:01]
C
Yeah, exactly.
- [65:01]
B
Oh really?
- [65:02]
A
Okay.
- [65:03]
C
Well what I would say is this. I think what is very clear and what I just want clear guidance from every layer of the regulatory apparatus, federal or state, is the clear need for flexible demand and flexible capacity. And I think creating equivalency for utilities to invest in that. I think what the DOE has done recently on flexibility for data centers, I think that NOPR is phenomenal, something like that. Asking other resources that are being built that are being procured, AKA people buying cars, somebody else doing us having a similar mandate for that kind of flexibility service, I think at every level is like a great thing. Now I don't think we need mandates. I think what we need is just like a mechanism for utilities to say, yes, if I procure a dollar of this, you will give me equivalency in the way I make money, AKA allowing me to like treat it like said.
- [65:55]
B
Totex, it comes back to toex total expenditure rate basing. You get to rate base a fixed portion of your total expenditures, not just your capex.
- [66:03]
C
Correct. I think the other part though then, and we came back to a little bit of data standards and so on and so forth. I think we should also be really, really aware that like this data connectivity stack that we're talking about, this is not also just a, ooh, we need standards. Because I'm an engineer and I like standards. It's also a cyber security thing. This is a really critical point today with all the connected devices out there, with all the connected like IoT out there, the ability to use these products in a way that is driving grid flexibility, I.e. driving grid value is huge. But also if bad actors, if bad state actors, if anybody gets involved and hacks these things and makes them go in the wrong direction in some sense because there isn't clear guidance and standards, then I think you could be in real trouble. And so we did actually recommend and intervene even at the federal level a couple of years ago talking about the cybersecurity of connected vehicles and their implications on the physical. On physical critical infrastructure, notably the electric grid. And so I do think there's guidance that we should be seeing and I hope we see more of out of both federal and state on things like that. So yeah, that's. Those are my two wand waves.
- [67:10]
B
Just to dig in on that. Is this something that a state like California or New York could pass on their own to say, look, if you want to sell vehicles in our state, you need to meet these kinds of standards? Or does it have to be a national standard that the federal government sets?
- [67:23]
C
I think California could do it. That might be. Yeah, that's a really good idea.
- [67:27]
B
Just put it out there just in case there are any California legislative slough listening to this show, which I know there are.
- [67:32]
A
You know, Europe always describes itself as the regulatory superpower, but when you get truly it's California. It's actually California. Yeah.
- [67:39]
C
Particularly given vehicle sales. Yeah.
- [67:42]
A
We're coming out of a time of enormous back and forth in climate policy under the Biden administration. There was enormously favorable climate policy. We've worked with DOE on a few programs. Now obviously there's this big backlash. What do you wish the Biden administration did differently on climate policy, knowing that there could be a next time?
- [68:03]
C
Yeah, I mean, I think it is healthy for democracies to continue having back and forth between different sides of the pendulum.
- [68:09]
A
Right.
- [68:09]
C
That's my very politically middle of the road thing to say, especially as an immigrant. What I would just say is I'm a big subscriber to the whole Ezra client abundance thing. I, I think there was too much process. There is. We should not kid ourselves that as a startup it is incredibly hard for a company with 70, 75 people to try and apply for programs where I needed to write extremely long answers or hire consultants that cost upwards of 50k to put it into a compliance standard that like worked for the DOE or this or that. It was just really burdensome. I think the outcomes were exactly what we needed.
- [68:44]
A
Right.
- [68:44]
C
We were shooting for exactly the right outcomes, but the sheer amount of process around it made it really, really hard. And so what happens in these moments, and not to go off on a soapbox here when we're running out of time, but it's like you do actually accrue the value in these moments to incumbents and I just saw much more incumbency take hold where A lot of folks who don't really want the system to change per se were able to just reposition themselves to try and apply for grants and funding and so on and get some of that out. But I think the goals were 100% right. And so next time around I'd just love to see the same clarity of thought on goals and also clarity, clarity and simplicity in process. And I do think there's a lot to be learned from the way this administration is doing it. I, I'm not necessarily a fan of every decision they're taking, but like the simplicity of programs is actually something where I think there's something we can learn from. So I really hope that over the next few years we get to a place where we can just depoliticize climate. That continues to be my number one hope and hopefully, hopefully we'll get there.
- [69:50]
B
Well, that's a good place to leave it. Thanks APUR for joining us.
- [69:52]
C
Yeah, this was a total pleasure.
- [69:53]
A
Thanks so much.
- [69:54]
C
Thank you.
- [69:54]
A
This is great. Foreign and now it's time for Upshift Downshift, our weekly look at climate and energy news. You know, each week on Shift Key, Jesse and I pull one item of current events from the great inventory of happenings across the world of climate change, decarbonization and energy. And we bring it to show it to the class like a butterfly. And Amber, if it's making us feel more upbeat about the energy transition, it's an upshift. If it's making us feel more downbeat, it's a downshift. Jesse, what have you brought to share today?
- [70:31]
B
Well, I think in keeping with the theme of today's show about electric vehicles, I have a downshift, which is news on the sales of electric vehicles in the United States in October. October is the first month after the expiration of the federal EV tax incentive or tax credit that offered $7,500 off the cost of buying a new EV that ended at the end of September. On September 30th. As has previously been reported, that drove a record surge in EV sales in September as customers all rushed to purchase their vehicles before the end of those incentives. So we actually set a new high water mark in September, but as expected, that gave way to a substantial crash in October. The first reporting on this estimates from J.D. power&S and P Global Mobility both estimate that In October the EV market share plummeted from about 12% of vehicles sold in September to only 5% in October. It's a decline of about 50 plus percent in terms of absolute Vehicle sales as well. That's right in line with where Jim Farley, the CEO of Ford, actually projected a few months ago that after the EV credits expired that EV sales would fall back to about 5% of sales. That's basically winding us back in time to early 2022, which was the last time that eShares made up only 5% of US vehicle sales. We've also got numbers by automaker starting to come out and we're seeing, for example, Kia and Hyundai are seeing declines of between 50 and 70% in sales from September to October across their EV fleet. We are seeing an uptick in hybrid sales. That's something else that was predicted that as less consumers buy EVs, there will be some of those who are kind of shopping between an EV and a hybrid and will go back to purchasing a hybrid. So maybe from an emissions perspective that somewhat softens the blow. This is obviously just the first month after the expiration of the credit. We've got this boom and bust. And I think the big question in everybody's minds, of course, is where does this go next as the market sort of stabilizes to a new post subsidy equilibrium? If we look at what happened in Germany when they reduced their subsidies by a similar magnitude, the eventual reduction in sales was on the order of about 35%. So I'd say we're in that ballpark. Right. If the initial crash is by 50%, perhaps as that hangover of all the folks who rushed to buy their vehicles last month and would have otherwise done it this month kind of works its way out of the system, will probably be somewhere in that 50 to 35% decline year on year before the market then starts kind of growing again, naturally. So this is in line with what I was expecting. It'd be interesting to see though, whether we start to see this kind of uptick a little bit again or whether that 50% decline sticks around for quarter or two going forward.
- [73:09]
A
I think it seems like the big question is, is this the biggest. October is the month you would expect anyone who was car shopping at this period of time to have pulled forward a sale in September.
- [73:21]
B
And I should be the biggest hangover month, right?
- [73:23]
A
This should be the biggest hangover month, Right.
- [73:26]
B
That's what I would expect.
- [73:27]
A
And I guess we'll have to see if that's real or not.
- [73:30]
B
Yeah, well, definitely keeping an eye on what happens over the course of this quarter and I think probably first quarter of next year is going to be the real bellwether to see how the market stabilizes. In this new environment, we've already seen automakers adjusting to that by changing their vehicle mix. Acura, for example, stopping production of the ZVX electric vehicle that they are producing in partnership with gm. We've also seen automakers offer substantial discounts to make up for the loss of the tax credit. Those obviously are not really sustainable for a long period of time. You can't discount your car by 7,500 to $10,000 and do that on a long term basis. So what are they going to do on the price side? What are they going to do on the innovation side in terms of the next generation of vehicles that they can bring to market? How are they going to get those costs down? Right. We know that it's possible to build a much more affordable ev. Just look at what's going on in China. The question is, can U.S. automakers build that kind of vehicle here in the United States? Rob, what do you have for us this week?
- [74:21]
A
I have an upshift.
- [74:23]
B
Ah, there you go. That's nice.
- [74:24]
A
I have an upshift. I know it is that. According to the New York Times, Lee Zeldin, who's the administrator of of the epa, has backed off his plans to cancel Energy Star, which is the federally backed program that helps consumers understand energy savings and energy efficiency.
- [74:40]
B
I guess a canceled downshift counts as an upshift in this day and age.
- [74:43]
A
I think that's an upshift. I think. Yes, exactly. Two downshifts.
- [74:46]
B
It's really just maintenance of the status.
- [74:48]
A
Quo, but yeah, precisely. It's maintenance of the status quo. Yes. I think what's interesting is not only has he backed off his plans, but in fact, the EPA has quietly renewed its contracts with Energy Star. And so. So the program is likely to continue until at least September 23, 2030, according to the Times reporting. I just want to flag this as like, the EPA has now killed so many programs that it's cutting into the programs that actually underline key aspects of the American economy or American corporate competitiveness. The other place that they haven't yet backed off on yet is that back in September, Zeldin moved to repeal and get rid of the Greenhouse gas reporting program, which is this really interesting and quite sophisticated program run by the EPA that collects greenhouse gas emissions data from lots and lots of different parts of the economy. And this too turned out to be, I think, getting more blowback than Lee Zeldin expected. All he could see was that it cost $2 billion and it had greenhouse gas in the name. And so he wanted to get rid of it. But it turns out that the greenhouse gas was reporting program is how if you are a carbon capture company or if you are doing any kind of carbon capture activity, including carbon capture activities that facilitate oil exploration, then you need the greenhouse gas reporting program to exist because it's how you prove to the IRS that you've captured a requisite amount of carbon to qualify for a tax credit. And so if you were to get rid of the greenhouse gas reporting program, then companies like Occidental, I think even Exxon, would no longer be able to claim a tax credit. Now you may hear that and go, oh my gosh, what is this climate program that these oil companies are taking advantage of? However, it also I think underpinned the emissions from this program, underpinned a lot of arguments that oil companies were making to the European Union that U.S. oil and gas is especially low carbon compared to foreign equivalents. And so it was a key part of this kind of broader story that, that to be clear, oil companies were telling. But look, it proves that just because a program has greenhouse gas in the name doesn't mean that it is, I guess, good for climate necessarily, but at least that the Trump administration should get rid of it. At least according to friends of the Trump administration. What I'd flag is that though Zelda hasn't backed off that plan yet, that too I think caught unexpected to him blowback from the very industries that he thought he was helping. Because it turns out that actually the American economy is relatively sophisticated and energy efficient and ekes out some of its kind of global competitiveness through the lower pollution and efficiency and lower carbon aspects of its commodity products and other products it sells in the global market.
- [77:34]
B
Yeah, I wonder at one point they just realized that whatever you think about the US's preferences, it's a global world and the rest of the world still cares about this stuff. And if we want to export our products, it's increasingly important that we can put a clear number on what the emissions impacts of that are. Whether that's trying to export US oil and gas to Europe, some of the very clear emission standards that Europe has placed for lng, for example, or the carbon border adjustment that they're starting to put on an increasing number of products as well. This is just tracking important numbers. You can ignore it in the United States if that's your policy predilection, but it is handicapping US businesses in their international trade if we are not able to do business on the terms that.
- [78:12]
C
Our trading partners care about.
- [78:14]
A
I Don't think they will realize it. In fact, I think it should.
- [78:16]
B
No, I don't think so either.
- [78:17]
A
Yeah, to be clear, I don't think. But I do think it should make people feel more open. Look what the Trump administration is doing on climate diplomacy. There's this amazing piece, talk about a downshift in the Financial Times this week about how the Trump administration basically waged this unprecedented diplomatic war against countries that were going to vote for the international maritime organizations.
- [78:41]
B
My downshift from my last episode.
- [78:44]
A
Yes, exactly. And what we now know is that the Trump administration was threatening diplomats and threatening countries. This had been a policy that, as you mentioned last week, Jesse, two weeks ago, this had been a policy that was on track, that was uncontroversial, that was industry supported. That industry supported. And American diplomats threatened tariffs on countries, they threatened travel bans, they threatened to impose passport controls, all of this stuff to basically keep what had been this very moderate middle of the road climate policy from passing in an international environment. And that is a market change, America. Listen. It's played a complicated role in global climate diplomacy over the past 30 years, but that is a marked deterioration from the role that the US has played in previous years. And it was seen by the global diplomatic community as a marked deterioration, as a real aberration from how the US had previously acted or how from any country had acted. And I think we should just say that is not inherent to US diplomacy and we should be willing to rate worlds where that doesn't happen, worlds where the US Steps back and allows the rest of the world to move forward on decarbonization, even if the US doesn't participate in them really highly as fans of decarbonization. And it turns out that there's a lot worse outcomes here than the US simply not participating in climate treaties. I think either of us could have told you that earlier, but I think it just matters for when we step back and think about evaluating different kind of outcomes of political processes in the US we should rate worlds where the American government does not behave exactly as it's behaving right now.
- [80:26]
B
Really, really like a mob boss, to be clear.
- [80:28]
A
Yes. Anti climate gangsters. And really, really highlighted. And that leaves us with so many more topics to discuss on future episodes of Shift Key.
- [80:36]
B
There's always more to talk about.
- [80:37]
A
There's always more to talk about. Thanks so much to Apor for joining us and thank you for listening to Shift Key. You can follow me on Bluesky under my name or LinkedIn under my name or on X at Obertson Meyer. Jesse, where can people find you?
- [80:48]
B
I'm on bluesky@jesse djenkins.com, on xessejenkins and on LinkedIn.
- [80:54]
A
Shipski is a production of Heatmap News. Our editors are Gillian Goodman and Nicole Loricella. Multimedia editing and audio engineering is by Jacob Lambert and by Nick Woodbury. Our music is by Adam Komalow. Thanks so much for listening and see you next week.