Latest / The ReForge Podcast / Dirty Power Is Killing American Factories (with Brian Keith) | ReForge 016

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Dirty Power Is Killing American Factories (with Brian Keith) | ReForge 016 · The ReForge Podcast

0:00
if you're sending dirty power into a factory that doesn't have the appropriate front-end filtering systems or phase correction systems, what you're gonna end up doing is burning up all your motors inside the factory, burning up computer systems and power modules inside the factory because they weren't designed to filter out bad utility power.
0:26
Welcome to the Reforge podcast.
0:28
I'm Matthew Chang, and we're here to explore all things AI, automation, and the American worker, proving that the American re-industrialization is possible, pivotal, and pressing.
0:40
Thanks for joining us today.
0:41
Let's get into the episode.
0:43
Welcome back everyone, and welcome to episode 16 of"The Reforge Podcast." We have got a full house today with Brian and Matt and myself joining, so this should be a good one.
0:56
Today we are going to get into the topic everybody has been clamoring about, electricity, power, and all the things that go along with it.
1:05
So get ready for a good one.
1:08
Matt, you...
1:10
The other week, you know, when we were talking, you'd mentioned one of the big things, that y'all are doing is advising customers on basically their on-site, you know, energy storage, adding batteries to the factory.
1:23
so I guess let's maybe kick off, you know, with that.
1:27
Let, let's maybe start with, you know, some of the reasons that drive that.
1:32
Obviously, everybody knows AI data centers are consuming mass amounts of energy.
1:38
Everybody's bill is going up, reliability issues, all that good stuff.
1:42
We can get into it, but in the context of reindustrialization and factories, you gotta run the machines.
1:50
So, you know, If it's not just plug and play, what, why, why are you suggesting batteries?
1:56
Yeah.
1:56
Let me, let me start off by telling you what's driving it up.
2:00
Okay.
2:00
And this is, this is very fluid, but I think The analysis is gonna hold up for the next couple years.
2:06
We already had the EV car wave, right?
2:09
Tesla sales keep going up, Rivian sales keep going up.
2:12
We're adding new electric vehicles to the marketplace.
2:15
We've now learned how dense in energy fossil fuels are.
2:20
And so when you take that gasoline for propulsion of cars out of the mix, you do it in electricity instead, that's a huge hit to the grid right there.
2:29
I routinely post my Cybertruck charging stats on X, and it continues to amaze me that I charge it somewhere between fifty to two hundred houses worth of power when I plug that thing into a Supercharger.
2:41
That's number one.
2:42
Number two, you've got the data center and AI hub, you know, power increase.
2:47
That is having a more localized impact, right?
2:50
Because the communities and the power systems that permit those facilities, they're the ones that are getting hit.
2:57
In Florida, we've kinda decided we're not doing that, right?
3:01
And so it's got limited impact on us, even though we have the newest nuclear plant in the country in my market, we're not doing AI data centers.
3:09
But for the communities that are, they're having massive rate hikes, and it's become a federal policy issue with the White House and Department of Energy having to step in and say,"Hey, here are the ground rules for new AI data centers.
3:20
You can't pass the costs onto consumers," which is what's been happening.
3:25
then on top of that, you have this overall trend of more electrification.
3:27
New construction, right?
3:30
Housing continues to expand at a decent clip.
3:33
factories are expanding.
3:35
And you have certain sectors of the economy that are electrifying previously fossil fuel power systems.
3:42
So airports is a perfect example.
3:45
Airports have forecasted over the next ten years to increase power requirements by five X, five times.
3:53
As they try to get all their runway equipment off of diesel and, gasoline, they're moving that over to electric vehicles.
4:01
The heating of the airports is being converted from gas-based heating in the building to electric-based heating.
4:08
So you have three factors, ele-electrification from buildings, electrification from cars, and the new electricity required for AI data centers all hitting at the same time.
4:19
What that means is that factories are not getting high quality power So these are- Yeah you know, I've been to factories that are 50, 60 years old that are now suffering from rolling brownouts, and that's ubiquitous across the country.
4:32
It almost doesn't matter where you are.
4:34
So that's why one of the first things we talk to customers about is reliable power.
4:39
Now, in any system you've been around, Colin, for critical data systems like servers and IT systems, you have a UPS, an uninterrupted- Yep uninterrupted power supply.
4:49
For a lot of buildings, they have emergency backup genset, diesel gensets that will power the life safety systems, so if the power goes down you can still exit the building safely, operate the fire sprinkler pump, those sort of things.
5:01
But now we're in this paradigm of you need to have real-time power backup for your manufacturing systems.
5:07
That is a way larger demand, right?
5:09
We're gonna measure that in megawatts, right?
5:12
And so what we're helping clients decide is how much backup do you need.
5:16
Is it 30 minutes on the plant?
5:18
Is it two hours?
5:19
Is it six hours?
5:20
And this can be a lot of battery backup on the front end of a plant.
5:24
Yeah, I mean, a lot of it comes down to how big a check can you write.
5:28
I mean, you can keep adding batteries till you're blue in the face, but at a certain point, you know, the cost element of it comes into the equation.
5:34
Now, you mentioned 30 minutes there.
5:37
You know, is that the right answer?
5:37
Is it an hour?
5:38
What is it?
5:39
A lot of people don't realize that adding this battery backup or any backup power solution to it isn't necessarily about just continued 100% operations.
5:50
A lot of it is just a matter of how can we safely shut down our machines so either, A, we don't damage the machines, you know, we don't damage the work pieces we've got in place, or B, just so we can figure out what the heck is going on and be able to plan accordingly.
6:04
These aren't, you know, most, most factories aren't running quick, you know, five-minute jobs type things that are talking about this.
6:10
They've got full scheduled production plans, so they have to be able to reevaluate and figure out what makes sense.
6:16
It's a concrete truck problem- So batteries...
6:18
What's that?
6:18
Where a concrete truck, if a concrete truck stops spinning, how long do you have until the concrete hardens?
6:23
And if the concrete truck...
6:24
And so my dad was a concrete pourer, and so I grew up around concrete trucks.
6:28
And if you, those things stop working, you don't have very long until the entire truck is dead, and that's a catastrophic cost for the companies that are hauling this concrete.
6:39
And concrete, it's utterly critical.
6:40
You have to have it, but if you screw that up, it is, you just cannot allow that to happen.
6:46
It is very expensive to chip all that concrete that's dried outside the inside the drums.
6:51
Fun fact: every concrete hauler keeps a jar of honey in the cab of the concrete truck So if you pour a jar of honey into the concrete batch before...
7:00
Let's say you get stuck on the highway in Houston and you're gonna drive your concrete.
7:04
Even if the truck's in operation, it's spinning the concrete, that honey will, one jar of honey will buy you enough time in the whole, truck that you could probably survive until you can dump that concrete, even if you're not dumping it, you know, on the job site.
7:17
Interesting.
7:18
So yeah, what we're doing, we can't do a honey jar on the front end of a factory, but we can do Tesla Megapack.
7:25
Colin, a few weeks ago you and I talked about the new Ford system that they have.
7:28
Ford, yep.
7:30
We can put a power system on the front end of the factory that buys you enough time, like you said, Colin, to safely shut down the operation.
7:39
yeah.
7:40
The startup on a factory, on a large scale continuous operation factory, the startup could be measured in eight hours to 24 hours, right?
7:47
Just to turn everything on in the correct sequence, bring up the temperature levels, start the batch and the processing, you know- it's not just flipping a switch like most people think of when they walk into, you know, a room.
7:57
Right.
7:57
it's a process in and of itself.
7:59
Yeah.
8:00
Yeah.
8:01
So the concrete truck analogy is good.
8:02
It's, we, our factories need a way that they don't just turn everything inside the production system into that batch of hardened concrete within the system.
8:11
They gotta safe it off before they can shut it down.
8:14
And it can't include heroics either on the part of the people that, you imagine a concrete driver, let's say yes, they could throw this thing of honey in there, but if they're parked in some dangerous area at the time, your plan A can't be the dude takes the honey, climbs over the truck on the bridge in the fire or whatever, in heavy traffic, and throws the thing in.
8:31
It has to be a reasonable request of somebody.
8:34
We're all addicted to action movies- Tactical honey bomb myself included, where the person last minute runs up and does the thing and then they save the day.
8:40
Woo-hoo.
8:41
That's actually a horrible workplace design.
8:43
and even if it's very exciting to write it down on paper, if the reality is that someone got injured because the business plan was they're gonna have to be a hero to save the plant in order to...
8:53
that's just a terrible design.
8:54
So we have to not have our superhero brains on, but instead say,"What's a reasonable request to people that they can be properly trained in how to do?" Have I told you guys the story of when I was a security guard?
9:06
Do you know that story, Colin?
9:07
Brian the security guard story.
9:07
So one third time- We've, we've heard of...
9:10
part of it before.
9:11
I'm not sure whi- which story this is, we'll see.
9:13
Well, this is a story of when I saw a guy almost murder his girlfriend, so I thought.
9:18
But he was pushing her on the edge of a train platform at night when they shouldn't be there, oncoming train coming really quickly.
9:24
He's shugging her back and forth.
9:26
I was not right there, because previously he had thrown her purse on the other side of the tracks across the fence.
9:31
I went to go look at it, and then I saw him come back, and ended up he ran away, didn't actually hurt her.
9:36
Never ran as fast in my life.
9:37
But I- That's a cliffhanger right there.
9:49
Yeah.
9:50
I'm, I'm, I'm- Oh man, they're gonna die in the worst time.
9:52
So there's this person on the train tracks, and I call dispatch and I say,"There's this per- it's blocking the train tracks and it's only a person, so it's not like it's gonna derail a train.
10:00
Should I get it?" And what does dispatch say to me?
10:03
They say,"We cannot advise you about picking up the person on the train tracks they're not authorized to be on." So there I am, a lowly paid night security guard, having to myself decide...
10:14
Now, I can see there's no trains coming, but train tracks are not very safe places to be.
10:18
But also there's now debris on the train tracks, and I'm having to decide what to do.
10:22
That's not a great situation to put a worker in.
10:25
You decide how much you should risk your body to make your workplace safer, and we don't wanna design factories like that, that involve heroics in trying to save people's lives.
10:34
Yeah.
10:35
So let me give you the, Yeah, we don't.
10:37
we want there to be a safe procedure for everything.
10:39
You know, licensed engineer here, it's my job to make sure it's designed that way.
10:43
My legal and professional liability comes in when we've created systems that require the heroics, right?
10:50
and so yeah, safety is always number one.
10:53
The other reason that we need to have power systems on the front end, Colin, it's not just battery backup.
10:57
it's filtration and harmonics, capacitance.
11:01
We need to have these systems there because when in a brownout condition or leading up to a brownout condition, the power will usually get very dirty.
11:10
And for the audience, what that means is dirty power, especially at high voltage.
11:14
Dirty power is basically out of phase.
11:16
we typically buy clean power.
11:18
It's very dangerous very quick.
11:19
Yeah.
11:19
and then it's kind of a ripple effect.
11:21
As you send dirty power into the system as the the utility provider, it ends up getting worse and worse down the line, th- down the literal transmission line because you start getting all this feedback because you're sending bad power out and you're getting bounced back into the grid.
11:36
So things like the frequency, the hertz, the phase, appropriately phasing the power really matter.
11:43
And so if you're sending dirty power into a factory that doesn't have the appropriate front-end filtering systems or phase correction systems, what you're gonna end up doing is burning up all your motors inside the factory, burning up computer systems and power modules inside the factory because they weren't designed to filter out bad utility power.
12:05
And that is not picking on any jurisdiction around the country.
12:08
That is happening in every power grid around the country.
12:12
Well, and, and that's, you know, I think a great kind of point to get into is when we look at y- the ac- not just the distribution system itself, which America's distribution system is severely antiquated, is just in a very disappointing poor shape.
12:28
But, interstate transmission, you know, even if you're talking within the same, RTOs, the transmission side of it, our capacity is so limited because it is so dated.
12:38
It is so...
12:40
I mean, we're talking 50, 60-year-old technology is, you know, best case in most places.
12:46
so we don't have the infrastructure in place to account for these types of edge scenarios.
12:52
You combine that with Factories or, you know, job shops that are not high-tech, they've been around for 20, 25 years.
13:01
They haven't been investing in the latest systems, hardware, all of that.
13:06
They don't have the capacity to manage dirty power.
13:09
They don't have the capacity to manage influxes, brownouts.
13:14
Like, that's a just nail in the coffin for them.
13:17
I mean, that shuts them down completely.
13:19
So while we've got batteries, it's great for new builds.
13:23
They can have, you know, high-end switch gears, transformers on site, everything you need.
13:29
You know, they're in much better position.
13:31
But the vast majority of American manufacturing is, you know, running off legacy infrastructure from distribution and transmission to just the, even the factory front end of it.
13:41
It's, I mean, a huge risk that really does not get much attention.
13:46
Yeah.
13:46
And so what we're typically doing as a solution is on top of the hardware, which is, you know, batteries, obviously emergency gen set, power filtration, harmonics, you know, those sort of pieces of equipment that require CapEx, you have to buy that stuff.
14:01
what we're also doing is putting in a what's called a PMS, power management system.
14:05
It's basically a software connected to sensors and it's giving you the analytics you need because when the utility sends you bad power and you have to filter it out on your end, you shouldn't be charged for that bad power.
14:17
Rebate time.
14:18
Rebate time.
14:19
you need to have...
14:20
But to get a rebate from the utility's not as simple as calling and complaining,"Hey, you burned up my motor." You- you're gonna have to show them the data so they can rebate the bill.
14:29
We have, I mean, pretty much all of our customers run more than a million dollars a month in terms of electricity, so this can be a major savings for the factory to be able to go back and get your rebate on a monthly or annual basis based on the bad power.
14:44
It can have a major impact on the P&L for the factory.
14:48
And, you know, what we have seen more and more jurisdictions that are looking to push AI data centers, for example, say you have to co-locate your power.
14:56
It's gotta be behind the meter, basically bring your own power.
14:58
We're not going to, or they claim they're gonna try not to shift those costs onto the consumers via rate cases, rate increases, all of that.
15:10
But, one of the things that, you know, gets, I guess maybe isn't discussed as much is factories don't have that CapEx to spend$100 million to build their own little power plant.
15:23
You know, it's not...
15:25
They don't have that flexibility.
15:26
So having the insights like you're talking about, whether it's their, you know, power management systems, whether it's just having real-time sensors to actually be able to monitor what's coming in and what their actual consumption is, without having, you know, frankly lower cost options that give them some insight, they're held hostage by, you know, the things going around them if they don't have a big checkbook.
15:47
That's right.
15:47
Further, the best place to create power is not the best place to have a factory.
15:51
If you're a hydroelectric dam, that's probably not the right place to have your factory.
15:56
If you are next to a coal field, not a great place to have a factory.
15:58
If you're in an area where you can have a lot of solar, not the best place for a factory.
16:01
Until we get to the age of really good, house size or smaller atomics, your factory should be close to your distribution, close to your inputs, not close to the places where you're gonna be generating power, which is ge- in general, a very dirty process or very consumptive land well, I don't know that I necessarily agree with that.
16:19
I mean, I, in, no, I don't wanna have a factory right next to, you know, a dirty coal plant.
16:25
But at the same time, you know, down, you know, in the same jurisdiction and the same neighborhood as a natural gas-fired plant, you know, Midwest, you know, the Marcellus Shale is pretty flush with, you know, natural gas.
16:37
Quite a few factories in the Ohio, Pennsylvania, that region.
16:41
It's been effective.
16:42
Same thing, Niagara Falls, you know, up in, up in, in New York area, you know, Rochester, Buffalo, pretty good manufacturing operation there.
16:51
And solar, you know, I'm a huge fan just because it's so quick and easy to deploy.
16:56
Unfortunately, the reality is, you know, you- for every square foot of factory space, you need, you know, around four to five times a- as much solar density as you're getting right now.
17:07
So it isn't there, but it offsets it.
17:10
So I don't know that I would agree with where you generate your power isn't necessarily the best place for your factory.
17:16
I do 100% agree, as soon as we get those small modular reactors, you know, widespread, affordable, that unleashes a whole different animal of being able to park a semi-trailer outside your factory and have, you know, your infinite money power glitch basically parked there.
17:31
that's gonna be great.
17:32
How far- Yeah Matt, are we actually out from the atomics, just pull up a semi-truck size atomic to your factory?
17:40
I mean, you're a decade plus, you know, on, on it.
17:44
I thought we were supposed to have one by the 4th of July this year.
17:46
Isn't Valor one of those- You might have one that was out one by 4th of July?
17:50
You might have one, and Colin, you and I are calling for 10,000 to start with, right?
17:54
Yeah.
17:54
So- we might need a few more the challenge is around a couple things.
17:57
One is the regulatory framework is still not clear, right?
18:00
so what we call gen two and gen three nuclear, you know, Jack- like I said, Jacksonville market has the newest large scale, nuclear in the country.
18:08
but we decided to put it in Georgia'cause we're Florida, we don't actually want it in our state, so our power plant's in Georgia.
18:14
but the, you know, there's not a clear regulatory framework of how to handle it.
18:19
Part of the reason is all the different companies that are going after it now, we see them on X all the time, they're using different tech stacks, right?
18:27
They have different technologies for the heat transfer and for managing, you know, the nuclear material.
18:32
So it's hard to regulate when everybody's doing something totally different.
18:36
So until the regulatory picture comes into view and you have a clear framework, I think you're gonna struggle with deployment and adoption.
18:44
And in the same way that you have this kinda NIMBYism in terms of AI data centers- Oh, boy getting more popular, you're gonna have NIMBYism on nuclear because, you know, people don't know, and they're gonna gravitate towards fear.
18:55
So that's part of it.
18:57
the other part of it is, just the practical logistics So if I have a mini nuclear plant, whether it fits in a house or whether it fits in a, tractor trailer truck, how do I protect that?
19:11
How do I defend it from a physical security standpoint?
19:14
How do I transport spent nuclear material that is radioactive?
19:19
And how do I get that to a central location so that it can be safed off and further processed, or buried or whatever we end up doing with it So I think until you have a regulatory framework and then a clear logistics plan around physical security and transport of materials, you're gonna continue to struggle.
19:38
You're definitely gonna see pilots, right?
19:39
The, the Department of Energy and Department of Commerce are actively funding pilots right now.
19:45
I'm aware of a couple companies that have already proceeded into the contract negotiation with the federal government to get federal government money to prove how you can stand this up.
19:54
I do see the direct tie to national security, right?
19:57
We need to have more abundant, more available power.
19:59
We're already moving at the fastest solar deployment rate in history, so solar has just kinda...
20:05
I'm drawing my ramp the wrong way with my hand, but it's continued to go up.
20:09
you're not gonna accelerate solar past w- the current acceleration rate is my view.
20:15
It's already growing at a significant year-over-year increase.
20:18
you're bringing coal more and more kinda offline.
20:21
Like, coal plants are generally a downtrend right now.
20:25
I mean, we're seeing the economics, you know, the shift of'em, I think with the attention finally focused on nuclear, those economics are gonna get more competitive, and we're gonna see that hockey- Yeah you know, that, that hockey stick curve start to take off, too.
20:37
I think, I think nat gas and, natural gas power generation, sometimes called peaking plants, which you have in Texas and the Marcellus Shale, I think those have already hit their kinda full maturity, and they're kind of on the downtrend.
20:49
The biggest reason is the physical bottlenecking, right?
20:52
You can't get a natural gas turbine in any sort of reasonable schedule, right?
20:58
I think it, last I saw, it was four to five years, somewhere out for net new.
21:02
And even the refurb conversions from jet turbines is, you know, 18 to 24 months, and those aren't as efficient as the actual, you know, purpose-built ones.
21:11
That's right.
21:12
Yeah, I mean, to me, the only thing that makes sense is build it once, build it right.
21:15
You know, I saw a lot of...
21:16
I saw some really smart comments that were saying,"Hey, here's the power level that exists in all the Airbus planes for Spirit Airlines.
21:23
We should rip those engines out, and we should build power plants." in principle, it sounds good.
21:28
The practicality behind it is we're taking aviation capacity out of the marketplace'cause we're pulling perfectly good aircraft out of service that we need to move people.
21:37
And then to your point, Colin, that, that engine was built for a different purpose.
21:41
It was built for thrust to move an aircraft.
21:43
It wasn't built to create power.
21:45
you have a lot of novel concepts, so I'm very bullish on the emergence of technologies like purpose-built turbines, that are domestically produced.
21:56
also the SMR, small modular reactor nuclears.
22:00
But I'm it's 10 years, man, till we get this sorted out.
22:03
It's not in the near term.
22:05
What about space- No based power?
22:08
Space-based solar collection There is a wonderful startup in Jacksonville- Ooh that is building power plants for satellites.
22:17
So they, they, It's called Starcatcher.
22:20
It's, it's about 10 miles from my house here.
22:21
Great name.
22:22
Great name.
22:23
And they build these, they build these solar arrays that convert the solar energy to optical energy, and then they beam a power beam at existing satellites.
22:33
And in their lab space, what they've proven is that they can increase a existing satellite throughput capacity by about 5X by just kind of turbocharging the existing solar arrays that are in space, which, you know, Elon's launching new rockets every day, right?
22:48
So that's super interesting, but that power is not coming back down to Earth, because that power has to be transmitted through a laser.
22:57
And so the problem with getting a laser back to Earth is you have to go through our atmosphere, right?
23:02
And so the other problem with it is, Brian, if they have enough power that it can power up a factory, that they're beaming it from space- Could be a weapon pretty easy do you trust any company to beam it to the factory near your house, and trust them completely that they don't hit your house, right?
23:19
And so that's the question is, what's gonna happen first- Good, good luck with fire insurance the lasers from space that power factories here, or is it actually easier to build a factory in space than to power a factory on Earth with space-based solar?
23:31
I mean, I think it's a fun exercise, but again, you know, w- while- SpaceX has shown a remarkable ability to consistently launch rockets with, you know, a high degree of confidence.
23:45
We saw last week that there's still a lot of learning, le-lessons- Yeah to be learned from the other market entrants out there.
23:53
SpaceX has done an amazing job getting the payload costs, you know, down, but it's still nowhere close to what it sh- needs to be for us to actually be able to say,"Yeah, we're building commercial, you know, consumer goods in space and shipping them back to space." That it's somehow cheaper to get either mined from an asteroid in space, process that in space, produce, manufacture, and then ship back to Earth.
24:19
W- we are...
24:20
I wish we were 10 years away from that.
24:22
I think we're further out.
24:23
I think we will get there.
24:24
I think there's absolutely, you know, a viable path for it, but the solutions we have from small modular reactors, solar, nat gas peakers- Yeah you know, nuclear on Earth is a much shorter time horizon and a much clean...
24:40
Even with all the regulatory nonsense, your, you know, FERC headaches, your transmission interconnection, all that, that is still a, a cleaner and faster path, for producing here.
24:51
Yeah.
24:51
Just kind of a prediction and this is kind of the physics-based part of the conversation.
24:56
So let's ground ourselves.
24:58
SpaceX is yet to send a heavy payload to space.
25:01
You know, we're all rooting for it.
25:02
we're talking about their IPO a lot, and Starship is close.
25:06
It's showing a lot of promise.
25:07
But they have yet to send a p- heavy payload to space.
25:10
The types of loads that Colin and I ship around the country to build manufacturing are very heavy payloads.
25:16
so I don't think it's practical that we're gonna R&D all of our manufacturing process so that it's light enough and compact enough to go to space to make something and bring it back down because we had the one-time advantage of free power in space.
25:29
I'm hopeful.
25:30
I'm hopeful.
25:31
Just to add on, I'm hopeful that happens.
25:32
I wanna build sweet spaceships in space, but- I'm a little more pessimistic.
25:36
Let me be the hater in the crowd.
25:37
I think you're gonna make in space for space.
25:41
So production will exist in space, and that production will be for space people, and space equipment, and space colonies.
25:48
I don't think it's ever gonna make sense to overcome Earth's gravity to send material up there, produce, and then send it back.
25:56
I just don't see that happening.
25:58
I think we're gonna make on Earth for Earth, and then over the long haul, we're gonna increasingly make in space for space.
26:04
Hat tip to another Jacksonville company, Redwire Space is headquartered here in Jacksonville, and that's exactly what they do.
26:10
Their original name was called Made In Space, and they put the first 3D printer on the International Space Station, and they made parts for astronauts that didn't have the parts they needed, and they could just make'em right there.
26:22
That paradigm is gonna continue to increase.
26:25
so you know, you're gonna make in space as a percentage of what you consume in space.
26:30
You hope it, you know, decreases and it eventually becomes 100% of space items are made in space.
26:36
but right now, I mean, it's at best you could do maybe 1%, right, with the current technology we have.
26:41
So it's gonna take a while.
26:43
so I don't necessarily think we're gonna ship anything up.
26:46
I think there's dramatic innovations in power abundance Domestically, terrestrially, that are gonna happen here on Earth.
26:54
And that power abundance is what's gonna free us up.
26:58
So let me give you a couple practical things we can do right now.
27:02
Number one, it's my belief that every building that has an open roof should have a microgrid with roof-based solar.
27:12
Takes no extra land, and I'm gonna add on to that, and parking lo- say parking lots to go with it.
27:18
Oh, you mean so that I have a sun shade here in Florida so I don't have to park out in the- Exactly.
27:22
So- You don't have to bra- brand yourself with your seatbelt anymore.
27:25
That's right.
27:26
So that, those are some simple examples of what we can do as kind of interim steps, is start to take properties, office buildings, distribution centers, houses, schools, take those off grid so they're running a microgrid on site, and you're no longer...
27:40
You don't care what's happening on the grid most of the year.
27:40
You have solar generation, you have onsite battery storage.
27:46
Facility just kinda runs itself.
27:47
So that's a little step.
27:53
While it might sound trivial, when you multiply that across all the people in our 300 million plus country, it starts to make a major impact.
28:01
If you just drive down any city street and look at all the buildings, they could all be small producers, right?
28:07
And go pretty darn close to off grid, with the exception of these heavy consuming facilities.
28:14
Hospitals, manufacturing facilities, AI data centers, those are gonna require, continue to require new power.
28:22
EV charging hubs, gonna continue to require new power But the key thing that you just hit on there, Matt, is if we're building more of a distributed, distributed power grid, or excuse me, distributed power generation, these microgrids that are, you know, distributed across communities, lots of little ones, what that does also is that's pulling demand off of the existing grid.
28:43
So these big consumers, not only does that help improve reliability of our distribution and transmission system, you avoid a lot of the thermal fluctuations, frequencies, a lot of the issues that we are experiencing today across the country because of the aging system.
29:00
By reducing that demand and strain on it, we're able to improve reliability of the transmission distribution system, and in turn, you're also gonna see your act- many of your costs, particularly on the supply side of it, going down to help make services, I mean, as input cost, you drop your energy, you know, that's huge for manufacturing.
29:21
Yeah.
29:22
So the way I see it, for the building owner, whether it's a house or an office building, it's sovereignty, right?
29:27
You're now sovereign over your own energy solution.
29:30
The other problem is, you pointed out, Colin, houses, and office buildings, places where people live, are generally the worst power consumers by far.
29:39
My factories have very level loading of power demand, and they're almost what we'd call 1.0 in power factor, and power factor is just a ratio the utility uses to charge you based on, you know, how much you're using in peak power versus average power.
29:57
When you have these huge peaks, the problem with us people is we all like to have a peak at the same time.
30:02
So in Florida, you can imagine the afternoon is our peak power because we're running that AC hot to fight the heat, right?
30:10
One of the bright spots in the country came out of California, and we love to probably dunk on California for regulatory policy, but a bright spot that came from California is last year at peak power, which happens, in California it happens around like 4:30, 5 o'clock in the afternoon.
30:27
That's when it's the hottest and the sun is shining on the side of the buildings and it's just heating up the buildings.
30:33
they pulled 14% of their peak power out of battery energy storage systems.
30:39
Texas did something similar about two weeks ago.
30:41
They hit over 50% basically covering the duck curve, which is your power consumption curve if you look at it visually, over 50% of that and basically smoothed it out from battery as well.
30:52
They've like you were saying, California kind of showed some of the stuff that's possible.
30:57
Texas has taken that and just sprinted with it and shown that it is not only possible, but can be done very quickly, too.
31:05
Yeah, and you have other markets where distribution isn't practical.
31:09
Like Australia has really led in this as well.
31:12
You know, it's kinda like Canada, great big country with only a few people, then all the people kinda live in, in certain little strips of the country.
31:20
Little spots.
31:21
and so they're doing a great job, in Australia.
31:24
You know, it sounds like Texas has now taken the lead.
31:26
California's a pioneer.
31:28
There, there are lots of energy solutions here that we can already implement.
31:32
One of the problems, too, is policy.
31:35
So I happen to live in a small township called Jacksonville Beach.
31:38
In Jacksonville Beach, the utility company will buy your power if you export power, like off residential solar.
31:44
They'll buy it at a dollar.
31:46
A dollar a dollar.
31:48
So whatever they charge you for a kilowatt hour, if you give it back to them, they'll pay you the same amount for a kilowatt hour.
31:55
Okay?
31:55
That- Net metering can be a beautiful thing that incentivizes, you know, installing these microgrids'cause you can be a money maker, a power exporter in your own community.
32:05
around the country there's some power districts that won't buy the power at all.
32:10
They won't even pay you for it if you're giving them back the energy.
32:13
And then there's, the, and that's called spinning the meter backwards.
32:16
If you spin the meter backwards, they won't even pay you.
32:18
There's a lot of major districts that'll pay you 40 cents on the dollar So there's really no incentive.
32:24
So I think from a policy perspective- Huge we can do some simple steps around the country to say,"Hey, look, all districts must pay a certain portion if you're gonna send power back to the grid.
32:34
'Cause you're part of the solution, you should be rewarded." and then I do think that we need to make it easier for people to install microgrids, because if we just take the houses and the office buildings and the warehouses, if we take those off grid right now, the schools, you know, the, all the people spaces, then suddenly we don't have an energy crisis anymore.
32:54
And the users, AI data centers, pretty level loaded, right?
32:58
That's a pretty decent power factor.
32:59
I don't think it's exactly a 1.0, but you're probably up at a.8 or something like that.
33:04
And then again, these heavy industrial processes that just crank.
33:07
If you wanna make steel, you wanna make aluminum, you wanna make magnets, you wanna do chemical refining, those are like a perfect 1.0 power factor.
33:15
That is the type of stuff we want connected to the grid.
33:18
I mean, you look at electric arc furnaces, I mean, you're seeing tons of those.
33:21
You had U.S.
33:22
Steel, you know, a couple weeks back announced major investment in their, big river plant down in Arkansas.
33:29
You know, that is huge electric loads.
33:32
A lot of that's served with na- natural gas peakers, onsite power plants, that sort of thing.
33:37
But to your point, Matt, you know, we start to claw back some of that, I'm not gonna go as far as say ancillary demand from the grid, but we take some of those pieces that you can cut up a lot smaller and feed from these distributed, this distributed power gen, you know, you truly unlock what is possible.
33:55
I mean, it, the economics change dramatically for business in that it's not just, okay, we can go to India and use cheap coal, or we go to China or whatever.
34:06
It's we have cheap power here in America.
34:08
Cheap power now unlocks industry across the board.
34:12
Yeah.
34:12
So let me just go on record.
34:14
I'm an all-of-the-above energy guy.
34:16
So that's my kind of final answer is new innovation, more distributed power, incentives, policy.
34:23
To me, it's one of those all-of-the-above problems, because we want, in our futures, we're building more factories and we're leading in AI, and then we're electrifying facilities all around us.
34:34
We don't wanna have to throttle that back.
34:35
Let's not put a constraint on progress.
34:38
Let's just attack energy by doing an all-of-the-above approach and do it all at the same time.
34:44
Brian, you wanna- I agree I think, I think you probably have some words of wisdom See, in 2019, I was, in 2019 I was staying, with a family in Germany, and this lady was telling a story about how everyone was really afraid because, of, Russia and the reliance on Russia for energy, even as in 2019 Germany and Russia did not have a great relationship.
35:05
this was before we blew up Nord Stream 2.
35:06
At the time it was much more positive than it was after that.
35:09
Who blew up Nord Stream 2?
35:10
I don't think it was we, but yeah, keep going.
35:12
I thought it was an accident.
35:12
It was a conversation.
35:14
Yeah.
35:15
It was- Sure.
35:15
It wa- Accident of course it wasn't we.
35:17
Of course it was someone else who has the ability to attack sub-sea infrastructure without the US knowing about it, obviously, for sure.
35:23
Mm-hmm.
35:23
but this lady, she said that she had bought solar because, and e- everyone was afraid because they knew that the Russians controlled their ability to heat their homes in the winter, and they were afraid the Russians would use that as a weapon.
35:35
This w- this was before Ukraine, mind you.
35:37
But the local, to your point, Matt, the local government had stopped, they, they'd, they'd tapered down how much they bought, would buy your power back for, and they'd tapered down all the rebates and all the bonuses and all that.
35:49
So the people who freaked out first and bought their power years before had these contracts with the government where they gotta sell their power back.
35:56
By the time we were talking to her, that was going away.
35:58
And so people were realizing,"Oh no, we don't have sovereignty over our power.
36:02
In fact, our enemy does, who have a very bad relationship with," this is the pre-war relationship, before, before Nord Stream.
36:09
And then now, and I don't know how she's doing now, who knows.
36:11
But they were coming to the awareness that power sovereignty is one of those things, it really doesn't matter until it does.
36:16
You don't care if there's a hospital nearby until you cut your finger off, and suddenly it's like, is where, how good is my local...
36:21
How long is the ER wait?
36:23
It's completely irrelevant until it's you in the ER or your family in the ER.
36:27
you don't care about do you have local power until a hurricane or an earthquake takes out your power.
36:31
Mm.
36:31
My longest power out of my life was two weeks and a day.
36:34
It was a huge ice storm, and then it was ice storm in an area that does not, in Washington State, does not get ice storms.
36:39
And so trees down everywhere.
36:41
I was on a little spur road close to the end of a line.
36:43
I remember we put out a sign saying,"Two weeks, please help."'Cause two weeks and a day with no power in the wintertime is actually a pretty big problem.
36:49
And and we're a very mild climate.
36:51
But other places that have more serious climates, that or summertime hurricane season in Florida, it's a huge problem.
36:56
Yeah.
36:57
People die.
36:58
It's that big of a problem.
36:59
We look at the AC crisis in Europe, there were more people die from heat in Europe than die in the US.
37:06
Like, the level of how many folks just die from the heat because they can't have AC because electricity's too expensive.
37:11
We have people dying because they don't have power sovereignty, and this idea of power sovereignty is actually as reasonable of a thing of knowing where to turn the water off to your house, knowing how to turn off your hot water tank- Mm and having these things where you just can yourself take responsibility for your own power, and take responsibility yourself for your family.
37:28
This is becoming more and more a normalized thing, and it's gonna be great for all of us, and also in- Oh, absolutely increased distance from us to the Europeans, where they're just a level of poverty where they cannot afford to do a lot of this stuff.
37:39
I mean, electricity, electric abundance is a matter of national security.
37:43
You can break it down a thousand different ways, whether it's our ability to manufacture more cheaper, or the inability for foreign state actors to influence policy with lots of money, or just even with nefarious acts of sabotage.
37:57
Doesn't matter how you cut it, you know, energy independence, energy abundance are a matter of national security.
38:02
So I'm with you, Matt, on the all of the above.
38:05
M- more the merrier, you know, more we can do, the better.
38:09
but great.
38:10
Guys, great episode.
38:11
Thank you.
38:12
And to everybody listening, thanks for tuning in to the Reforge podcast.
38:16
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38:30
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38:38
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38:46
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38:52
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