Jul 16, 2025 · 49m · a16z
America's Energy Problem: We Need A New Grid
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z Podcast, partners David Ulevitch, Ryan McEntush, and Erin Price-Wright analyze America's electrical grid crisis and explore solutions spanning nuclear power, software, and decentralized energy. They outline actionable opportunities for startups to rebuild energy infrastructure to power AI, reshoring, and national security.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 1.1 Guest teaching 4.3 Guest disagreement 1.8 The host pushing back 0.6
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 19:40 Erin Rejects Residential Thermostat Control
Erin forcefully rejects Ryan's proposal for demand response via residential thermostats, declaring that American consumers will 'fully organ reject that level of dictation' over home comfort.
Hardest push from the host ▶ 15:07 Host Challenges Erin's Oil & Gas StanceThe host confronts guest Erin Price-Wright with her college yearbook quote 'drill, baby, drill' to explicitly challenge her perspective on balancing fossil fuels with green technology.
Biggest teaching moment ▶ 25:55 Ryan Explains Weather-Based Grid Load ForecastingRyan reveals that multi-billion dollar day-ahead power market load forecasting largely relies on basic local temperature weather forecasts, surprising listeners with the primitive nature of grid telemetry.
The host holds their own ▶ 0:52 Host Cites Comparative Per Capita Energy UsageThe host demonstrates domain research right at the opening by highlighting that U.S. per capita energy usage peaked in 1973 while China's expanded ninefold over the same period.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Program Disclaimer and Title Sequence | 3 | 4 | 1 | 2 | The host opens with historical context on U.S. vs. China per capita energy usage since 1973 and asks probing questions about why the U.S. grid frozen in development. Guests explain grid ossification, supply chain bottlenecks for transformers, and long interconnection queues. | |
| Resiliency, Nuclear Workforce Attrition, and National Security | 1 | 4 | 1 | 0 | The host asks a broad open-ended question about reasons for optimism. David Ulevitch delivers an extended monologue on nuclear workforce attrition after Vogtle 3 and 4, rising demand from AI/EVs, and military grid resiliency requirements. | |
| Texas Grid Adaptation, Local Batteries, and Supply Chain Vulnerabilities | 0 | 4 | 1 | 0 | The host does not participate in this segment. The guests discuss ERCOT's rapid deployment of solar and batteries in Texas following heat waves, while warning about extreme U.S. supply chain vulnerability to Chinese battery manufacturing. | |
| Balancing Intermittent Renewables with Baseload Dispatchable Power | 3 | 3 | 2 | 2 | The host playfully challenges Erin with a quote from her college yearbook ('drill, baby, drill') to ask how oil and gas fit into modern strategy. Erin and Ryan explain the 'yes and' energy approach, balancing cheap intermittent renewables with baseload thermal power. | |
| Data Center Loads, Peaker Plants, and Demand Response Debates | 0 | 5 | 4 | 0 | Host is entirely absent while guests debate load management. Erin sharply rejects Ryan's suggestion of utility-controlled consumer thermostats, prompting David to reframe demand response around non-critical AI compute shedding. | |
| Evaluating Wind Energy Deficiencies and the Grid's Control Plane | 0 | 4 | 2 | 0 | Without host involvement, the guests systematically critique wind energy deficiencies, noting that turbines feather and shut off during high wind conditions and suffer frequent outages. David highlights the lack of an in-band control plane on the electrical grid. | |
| Unlocking Grid Telemetry, Load Forecasting, and Weather Data | 0 | 4 | 1 | 0 | In another host-free segment, guests explain that grid operators rely surprisingly on rudimentary local weather forecasts to model day-ahead market load demands. Erin notes that top weather PhDs earn huge compensation on hedge fund energy trading desks due to this information asymmetry. | |
| Nuclear Sentiments, Regulatory Roadblocks, and Portable Micro-Reactors | 2 | 5 | 3 | 1 | The host asks a brief status update question on nuclear bottlenecks. David harshly criticizes Taiwan's decision to shut down its last nuclear reactor as 'colossally stupid' and details how portable micro-reactors like Radiant can be shipped on C-130s to replace expensive military diesel logistics. | |
| Military Fuel Logistics, High-Temperature Reactors, and Building at Scale | 0 | 4 | 2 | 0 | The host does not speak during this exchange. Ryan breaks down the economic advantages of high-temperature nuclear reactors and criticizes U.S. megaproject inefficiency, contrasting it with successful nuclear builds in China and the UAE. | |
| Infrastructure Delays, AI for Mega Projects, and Utility Software Strategy | 0 | 4 | 2 | 0 | The guests engage in banter regarding California's high-speed rail project and discuss software go-to-market strategies. Ryan points out that startups now bypass conservative utilities to sell grid management tools directly to data center operators and energy developers. | |
| Requests for Startups: Grid Telemetry, AI Permitting, and Co-Located Power | 2 | 5 | 1 | 1 | The host prompts the guests for startup ideas and highest-leverage technological interventions. David outlines opportunities for 'Splunk for the grid' and using LLMs to navigate thousands of pages of nuclear permitting documentation. | |
| Macro Energy Strategy, Industrial Robotics, and National Defense | 2 | 5 | 1 | 1 | The host poses a hypothetical scenario asking how strategy would change with billions in capital. Ryan describes China's aggressive 4x expansion of its grid via HVDC lines, while Erin and David highlight industrial robotics and workforce training necessities for national defense. |
Statements from this episode (36)
McEntush: The next-generation power grid will be highly decentralized
“This sort of next generation of sort of what the grid looks like is going to be in a much more decentralized way.”
McEntush: The US lost its ability to build power megaprojects
“And so for the last like 20 years effectively the grid has sort of ossified. We forgot how to build new sort of power plants. We forgot how to build new power projects new loads, sort of large data centers, large factories, large mega projects.”
Price-Wright: Grid interconnection takes a decade; transformers face 20-year backlogs
“Getting a new project onto the grid today, you know, you sign up for interconnection, it could take a decade. There's a backlog of twenty-plus years to get a new transformer.”
Price-Wright: Only one US plant produces steel for electrical transformers
“First of all, there's, like, one company that makes these. And there's, like, one plant in the U.S. That produces the right type of steel that you need in order to make these transformers.”
Ulevitch: Georgia's specialized nuclear construction workforce was dispersed after Plant Vogtle
“We had to go out and train, hire and train entire specialized crews, specialized people that work with cement and concrete. Specialized people that work with steel to go build the large Vogel reactors in Georgia. We put them on Vogel reactors three and four. W…”
Ulevitch: Future grids will co-locate power generation, transmission, and storage
“The energy grid and electrical grid of the future, it's not just going to be the dichotomy of generation, transmission, and storage, but as Aaron brought up, like, you might do all three of those things in the same place and not have to worry about how... How …”
Ulevitch: AI will streamline grid monitoring, efficiency, and regulatory permitting
“We're also at this sort of technology inflection point where AI can help some of these things not just be a consumption driver, but even be an enabler and facilitating more efficient use of electricity, better monitoring of the grid better, better ways to even…”
Price-Wright: Texas doubled its solar power capacity in three years
“Texas has doubled their solar capacity in the last approximately three years.”
Ulevitch: Chinese battery cutoffs have severely impacted a16z portfolio startups
“Being cut off from being able to buy batteries from China is incredibly punitive to a company, and we've certainly seen that happen with some of our startups, and then they have to go, you know, then you find out quickly that the ability to procure and source …”
McEntush: Residential solar installation is cheaper in Germany than the US
“I think it's actually cheaper to put residential solar on your home in Germany than in the United States.”
McEntush: Grid costs spike once renewables reach 50-75% penetration
“As you attach more of these sort of renewable resources or sort of these non-reliable resources, while they're incredibly cheap and works most of the time, sort of this long tail risk, you know, once you get to like, 50 to 75% of the grid is gonna become very,…”
Price-Wright: American consumers will reject utility control over home thermostats
“I do think though, okay, pushing back on that, like, I think that the, American consumer will fully organ reject that level of that dictation over how they use that.”
Ulevitch: Meta contracted nearly all power from Constellation's reactivated nuclear reactor
“I mean, I think that Constellation just turned up a new nuclear reactor, or is reactivating a reactor, and I think Meta immediately sucked up all of the power that they're going to generate, or nine 10th of it, or something from the new Constellation reactor t…”
Ulevitch: Society is underestimating long-term electricity demand for AI compute
“And so, I do think that compute is gonna just, I think we actually probably are underestimating the amount of compute that we're gonna soak up over the, with electricity over the next, you know, 10, 2030, 4050 years.”
Price-Wright: Residential electricity costs spike 10x during peak 4-9 PM hours
“Like for me, my power is 10 X more expensive between the hours of four and nine PM. So we don't run the washing machine.”
Ulevitch: One third of global wind turbines are out of service
“I think I read that globally, one third of all wind turbines are out of service at any given time.”
McEntush: Grid operators must build redundant backup power for wind energy
“Grid offers, like, look at, they look at when it's like great when it's working, but they can't plan for it. They have to build other capacity to supersede that if it's not going to be there when they need it.”
Ulevitch: The electrical grid lacks a native control plane for messaging
“The electrical grid doesn't really have that, and so to be able to send messaging and things is very, very difficult, and now a lot of people just do it out of band using the internet.”
Price-Wright: Top-down software sales to utilities like PG&E are unrealistic
“The idea that you're gonna go sell a software tool to a PG&E or similar and have, like, a reasonably speedy top-down implementation where you actually get good signal and metrics and can actually do interesting things with that data, to me, I find, like, a lit…”
McEntush: Grid load forecasting relies primarily on weather and temperature forecasts
“Most of this load forecast is done by just looking at the weather. Like, they look at, like, basically, like, one of the best indexes, they look at where, where the homes are, like, what, how many people are there, and then what the temperature is going to be.…”
Price-Wright: Weather PhDs are the highest-paid personnel on energy trading desks
“When you look at energy desks, like for, you know, the big hedge funds or energy trading companies, their weather guy is usually the highest paid person on the desk outside the portfolio manager.”
Ulevitch: Taiwan is seven days from a blackout under a Chinese blockade
“This is an island country. That is, you know, seven days away from a total energy block, blackout if they get an oil and gas blockade from China so that they can't bring in ships to deliver oil and fuel.”
Ulevitch: Almost all spent nuclear fuel can be recycled and reused
“We should stop calling the spent fuel nuclear waste, because it's really not waste. Almost all of it can be recycled and reused.”
Ulevitch: Radiant Nuclear's 1-megawatt micro-reactor fits on an 18-wheeler truck
“It's a one megawatt reactor. It can be put on the back of an eighteen-wheeler and shipped around.”
Ulevitch: U.S. military spends up to $400 per gallon delivering remote fuel
“We've read reports that they spend well over 200 dollars a gallon at times, sometimes after 400 dollars a gallon for diesel, effectively, to get diesel into the right place at the right time.”
McEntush: Modular reactor startups requiring on-site construction remain construction firms
“If you build a reactor in a factory or you build modular components in a factory, but you still need to do construction work on site, you're still a construction company.”
McEntush: China and UAE build AP 1000 nuclear reactors far cheaper
“A lot of the existing AP 1000 technology is quite good, and other countries can do it quite cheaply. China is using a very similar design. The UAE just built one for incredibly cheap.”
Price-Wright: Venture capital won't directly fund multi-billion-dollar energy megaprojects
“We're not gonna move the needle on, you know, these multi-billion dollar megaprojects in the US. Like, it doesn't, you know, we're not gonna build, we're probably not the best people to figure out how to, you know, capitalize and build, you know, a multi-billi…”
Ulevitch: Enterprise software equivalents like Splunk do not exist for the grid
“There is no Splunk for the electrical grid. There's no Palo Alto networks for the electrical grid yet. Like there's a whole bunch of things that mirror the IT and OT landscape, whether it's around cyber, And monitoring and logging and analytics. You know, ther…”
McEntush: Falling power generation costs are offset by rising grid delivery costs
“The cost to generate electricity, the cost of like power, Has dropped immensely. Gas, solar, things like that. But the cost to actually deliver that electricity has increased a ton. And so in net, it's sort of not changed.”
Ulevitch: AI will collapse regulatory permitting times from months to minutes
“AI can just automate all these things that take armies of consultants, You know, months or years to do can be, you know, brought down into being minutes or hours.”
Price-Wright: The energy sector will be a primary market for physical robotics
“I think the energy industry is probably medium to long term, like, one of the most prime spots to deploy physical autonomy.”
Price-Wright: Microsoft contracted over a third of Georgia's electricians last year
“When Microsoft was building their new data center in Georgia last year, at one point, they had on staff at Microsoft, or on contract, more than a third of the electricians in the state of Georgia.”