The Exchanges

Q So sticking in the world of crops for a moment, we have a question from at new underscore energy dude, which is, what are the likely implications of rising crop commodity prices for biofuel productions and CCUS projects looking to sequester carbon dioxide from biofuel plants, CCUS being carbon capture utilization and storage?

A Oh man, that's such a good question. And we've been spending a bunch of time looking at the world of biomass and it's kind of what all the various pathways for it for decarbonization in the, in the future. It's really complicated, right? So you've got biomass is not monolithic. There's many different sources of biomass and there's, and then there's many different uses for it. There's also biomass that is, uh, you know, produced specifically to For fuels. So this is the issue that we created with all of our ethanol subsidies. We grow a lot of corn, use it exclusively to Produce ethanol. Um, I think generally that is viewed as having been a bad idea from a climate perspective, at least. Uh, but then there's a whole, there's also a ton of waste biomass, be it from agriculture or forestry, and that stuff is going to decompose and go into the atmosphere and create CO two emissions. So there's a whole category of things you can do with a waste biomass. Bex is one thing that I mentioned before that you can do with it. There's also other approaches like pyrolyzing it, turning it into biochar, which is stable form of carbon. It can also be a soil amendment, so that can be permanent carbon removal. Um, you can turn it into bio-oil and inject it underground, which is what a company called Charm Industrial is doing. Um, and, and you can do any of that with both the waste biomass and the pu…

AI assessment note: “we've been spending a bunch of time looking at the world of biomass”

Q Right, right. But it's like, okay, we hear you. We understand this pain point. How can we work together to target that particular pain point?

A Yeah. Um, staying on the power theme for a second. Okay, so one of the Emergent results of the backlash and of the political response to the backlash has been states and others starting to really push hard on this bring your own generation, bring your own capacity concept. You see this with what Governor Rabbit's doing in Texas, Governor Shapiro in Pennsylvania, other places as well. Um, and, and as I understand it, most of those, they're, Implied behind the meter. It's not like always entirely clear whether they mean that or not, you know, and so I'm curious your perspective on it, but I know you historically have been, uh, generally skeptical of behind the meter generation, and so I wonder what you think about that trend that we're seeing right now.

AI assessment note: “I wonder what you think about that trend that we're seeing right now”

Q thermostat already, and people just don't think about it? You know, like, what are the, what are the equivalent things like that, though, where you could make money? Certainly, Nest was a handsome exit for its venture investors, but how many of those are we going to find, and how many of those are, are applicable across a, I mean, like, a much bigger, broader market? I don't really know.

A Right. Okay, let's back to your list of interesting tidbits from regulatory filings. Um, you did some clever sleuthing to find some cost data on natural gas on, on what combined cycle turbines, which is a topic of much discussion these days. In part, I think in particular spurred by the CEO of NextEra, who has been, I think in the context of, uh, advocating for continued tax credits for solar and wind, and just support for solar and wind and storage, saying, like, You know, we're going to build lots of new natural gas in the United States, new gas generating capacity, I should say. Um, but it's worth noting, not only is the timeline elongated by the turbine shortage, but also the costs have gone up a lot, and he's cited some numbers that are, that are sort of anecdata. Um, so I think more data that, that Supports or doesn't support the, how much is it going to cost to actually build these plants is, is pretty valuable because it speaks to alternatives, but it also speaks to what we were talking about before, like where are rates going to go? So anyway, what'd you learn?

AI assessment note: “Okay, let's back to your list of interesting tidbits from regulatory filings.”

Q Well, why, why, what's your hypothesis there? What are you imagining?

A Uh, I don't know the, well, maybe I'm just, like, reflecting my own personal experience. That's an interesting question, which is, we didn't, You know, we were in this old house that didn't have central HVAC, and, and we just needed to add it, but it wasn't, like, an immediate overnight thing, but we didn't need to do it, and actually, it was exactly the same situation as you, where we, we did it in, we, we bought this house, we had a few years with no HVAC whatsoever, other than some, like, room units, and then my wife got pregnant, and we were like, oh, we're gonna have a newborn, we probably should figure out a way to keep his room the right temperature, and that was what caused us to do it, and admittedly, then we did have a time constraint, so maybe I'm arguing against my own thing, but Uh, but no, I could imagine, I don't know why, that maybe, like, mini splits are less of a, uh, episodic purchase behavior.

AI assessment note: “maybe, like, mini splits are less of a, uh, episodic purchase behavior.”

Q the most interesting, I think, debates right now is like, Do you really need to spec to 40 dollars? Even if you do in terms of like the size of the gen sets, can you actually get that much fuel on site or can you expect it to be delivered or is it sufficient to go with something that's like a two to six or sort of eight hour solution?

A There's like two thing, two pieces here that I think are connected to each other, but, but also are distinct that, that I always find people conflate, which is using some onsite asset, could be a battery, could be a generator, um, could be curtailable load as a mechanism to get interconnected faster. And that's sort of the crux of what this FERC directive is all about. And then there's the, what are you using for backup power? Which is the, what you were just talking about. Right. And you theoretically can use the same, some of the same asset battery in particular has like a role to play potentially in both, but you can easily imagine that there are distinct things and distinct assets. I mean, currently that's how it's, it is right. Like the diesel generator is just a backup asset and it probably doesn't have as runtime limits. They're going to keep it from, you know, operating too much. Um, so depending on the amount of curtailment you need to do, like that just might not work for it anyway.

AI assessment note: “And then there's the, what are you using for backup power?”

Q doing. And he asks, has anybody thought about what happens if we have a major volcanic event and put a lot of pollutants into the atmosphere and how that would impact solar production? And I like this question because it points to how we sort of collectively fail to anticipate all the way things can go wrong when we're mapping these Giant transformations, and so I'm curious. Take it away.

A I have no idea, I have no idea the impact on solar production that you would expect from a volcanic eruption, but I do have a volcano climate-related story, um, actually. So, you know, what we're, what we're talking about doing when we talk about solar radiation management or geoengineering, that, that portion of geoengineering, Um, is, is very similar to deliberately doing what volcanoes accidentally do, which is spitting a bunch of these, this, this, the sulfur-based compounds into the atmosphere. And the story that I like that relates to this, if you want to take an extreme version of what we'd be talking about doing with geoengineering, so in, I'm going to butcher this a little bit, so listeners don't Google too closely, but broad strokes. One of the largest, Volcanic eruptions in history was in 19, I want to say it was 1915. This is where I'm going to get it wrong, but it was a, it was a, um, huge eruption in Indonesia, and it was so big that it effectively cooled the planet by something like half a degree Celsius for, like, the next year, um, and had all sorts of weird climatic effects all over the world, including, so the next summer, After that volcano erupts while the world is still feeling all those, those effects. Mary Shelley is in Switzerland in the summer at Lake Geneva, where she's supposed to be vacationing. Um, you know, Lake Geneva in the summer is supposed to…

AI assessment note: “I have no idea the impact on solar production... but I do have a volcano”

Q Okay, final question, which comes via producer Daniel Waldorf, who asks on behalf of a non-Twitter friend, Sarah Lehan, the question is, what sci-fi story is the most compelling depiction of the dangerous possibilities of our energy future?

A I don't have enough specific examples to give a good answer to that question. What I will say that I think is interesting about any, like, futuristic Um, movie that has any depiction of climate or energy. I feel like they come in two categories. There's either the apocalyptic, uh, day after tomorrow, climate change has ruined the world. Every, you know, we're, we're, um, we're living in hell because we didn't solve this problem. And it's very prominent. It's like the, the whole topic is how climate change ruined everything. Or it is this sort of more idyllic version of the future, but then it's just in the background, and so the way that you see that is, like, some movies will, you'll just, like, pan over a landscape, and there will be a bunch of wind farms, or whatever it is. It's never discussed, right? Nobody ever, because it's not that interesting to say, we solved climate change, and here's how we did it. Uh, but, you know, you'll just sort of, like, it's, it's, Embedded in the ecosystem, in the, in the, um, landscape that we have a hundred percent clean energy future or whatever it's going to be. But I don't know. I don't have any specific examples That come to mind. What, can you think of anything?

AI assessment note: “I don't have enough specific examples to give a good answer to that question.”

Q Well, yeah. Well, briefly, what should people do with that knowledge? Like, what can, what can be done about it other than suffer? Like, is there A checklist of things that you should do in atmospheres of high interest rates?

A Oh, that's a good question. I mean, I think the, it's worth noting, this is to the point you made earlier. I think one thing that we have grown accustomed to saying is, oh, thank God renewables are so cheap now. And they're not actually today. You know, the PPA prices for renewables have been going up for the past year in the U S both because of interest rates and because some component prices had been rising as well. So like, let's, I want, I think we should be careful in the longterm. I think we, Probably agree that trajectory of renewable costs continues to be down, but in the short to maybe midterm, um, the actual delivered cost of energy or, you know, mobility, if you're an electric vehicle on or whatever it is, it might go up if you're choosing the clean option.

AI assessment note: “I think one thing that we have grown accustomed to saying is, oh, thank God”

Q this data, right? I mean, their core business is sort of keeping the lights on, and, uh, and, but I think more and more, as more and more customers are sort of, uh, asking for new energy products, um, this is going to become, like, a necessary thing for every sort of utility executive and regulator to figure out. How do we expose more and more of, um, this data?

A What do you think about, um, the sort of next categories of things people are going to have in their homes? I mean, you've sort of alluded to big categories already. You talked about community solar, we talked about EVs, we talked about some, like, thermostats and IoT devices, um, batteries. Is this going to be just an ever-expanding category of different devices that need to all, you know, have common characteristics about how they need to be sold and Managed on behalf of the customer? Or, you know, is there, ultimately, there's like five things that matter. You know, if you just look at our home energy, certainly for residential, if you look at our home energy consumption, you know, like half of it is HVAC, generally speaking. If you add an EV, then that adds a big category to it. If you add a battery, that adds a big category to it. But beyond that, everything else is pretty small. My plug load is pretty small. My lights, my fridge, all those kinds of things. So like, at what point do you get You know, to your, what points does the eighty-twenty rule take effect, and if you've got these, these sort of four or five things managed the right way, you're basically all the way there, or do you think that the category just keeps expanding?

AI assessment note: “What do you think about, um, the sort of next categories of things”

Q new car ASPs go up and up and up? What's going to be the market for those used cars in developing markets versus a brand new Chinese made car? So very roughly speaking, what's the market for my 15,000 dollar Corolla That might be acquired in Mexico or Brazil versus a 10,000 dollar brand new Chinese made car. And I, we haven't played this out very well yet at all.

A This is a good question. Okay, so then the next two slides that I want to talk about, slides one 21, one 22, are an addendum to this, which is China doesn't just make passenger vehicles. Um, they make and they deploy or they buy mid and heavy duty electric vehicles. No surprise to anybody here that that is happening. I think the pace at which it is happening, uh, is not well appreciated, and especially because we're sitting here in the U.S., and like the electrification vehicle electrification thing is sort of, it's happening still, but it's a little out of vogue for various reasons, and particularly in mid and heavy duty, it feels like that timeline has been pushed out. Not so in China.

AI assessment note: “China doesn't just make passenger vehicles. Um, they make and they deploy”

Q don't show up? What if we build for them? And then they don't actually materialize, you know, which is the, I think that could normally happen in normal grids is that you plan for demand, uh, Uh, that never materializes, and then what? If they plan for the kind of demand that wouldn't materialize until the year 2250 without, without data center mode, who's going to be paying for it?

A I was thinking about, like, so this is happening all over the place, and in fact, I think on our list of things to talk about, there are more large load interconnection dockets to talk about, because this is sort of like one of the bigger things that's happening all over the place. Uh, and, and it is, as you said, uh, There's a lot of nuance to it that has to be figured out in each individual case. There are these questions of how you structure the tariff in the first place, how you ensure cost allocation is done right. Are you demanding some sort of flexibility or bring your own generation or bring your own storage or whatever it might be? How, how does the asset interact with the grid? Is there demand response? I mean, there's like a million things to figure out, but it's interesting. The fact that this is happening in so many places, kind of all at once. And At least in some of the places, the magnitude of the impact that it will have on the overall system. I was trying to think back on the last time that some, that this sort of level of change was afoot in electricity in that quick a timeframe. And I wonder whether we could make one argument. It was like when we were doing our natural gas build out in the country, but that felt like it was over the course of a decade or something like that. I don't know. Maybe it wasn't quite as dramatic. But maybe it was deregulation. It w…

AI assessment note: “There are these questions of how you structure the tariff in the first place”

Q do you know how much you've actually sequestered, given that there's a lot of, um, there's a lot of unknowns as we're, as you're introducing this into the water? And then in addition, how, how do we measure and estimate any local impacts that you might have on those ecosystems? And so this is an area that's like both, uh, innovation in science as well as innovation in business models.

A Yeah. As with many of these things, it seems to come back to this, these core sets of questions of like, sort of, let's make sure we're not messing with the ocean as we do these things and the life within it. Let's make sure we know what it's actually going to do and can we measure it or is it all going to be modeled? And if it's all going to be modeled, then how Certain is our science, and how precise is our science around it, and then how long is it going to last, basically. And so each of those things for a number of these categories, whether it be Ocean alkalinity enhancement or enhanced weathering, whether it be kelp sinking, you know, those questions seem cross-cutting to me. And there's, my understanding is there's a lot of work being done on each of them, but they're all sort of gating before any of these things can really scale. Cause you, I mean, sort of, I think you made this point. If we were going to really scale this to, to global impact from an emissions perspective, you know, the amount of Any given one of these that we would be doing is sort of staggering. The amount of kelp we'd be growing and sinking, the amount of olivine we'd be spreading, uh, is, is an enormous amount, orders and orders of magnitude more than we're doing today. And so before we start getting to that scale there, it seems like there's a fair amount of, of work still to be done. Is your sens…

AI assessment note: “those questions seem cross-cutting to me. And there's, my understanding is there's a lot”