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Transcript

Ask Jigar: Should You Cut the Cord on Your Utility? · Energy Empire

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  Hello, welcome to Ask Jigger, a weekly segment on Energy Empire
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  where I answer your energy questions.
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  Ask Jigger is supported by our friends at Octopus Energy.
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  If you want to submit a question, the link is in the
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  show notes. All right, let's get into it.
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  Our first question is from our good friend Andy Refkin and he
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  asks when you were running the energy loan program, there was
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  an abundance and federal assets for clean energy inefficiency.
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  You wisely told me that the key need was for community based
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  energy mavens to connect local decision makers with federal
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  resources. What's your advice to local
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  leaders now? I would say that my advice is
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  the same, right? I mean, I think when you think
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  about how much energy costs have gone up and just how many
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  solutions we have that are right to go, whether it's solar and
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  battery storage or whether it's electric vehicles, whether it's
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  heat pumps or insulation or you know, these days there's next
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  generation technologies for heating, ventilation and air
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  conditioning, right, to really reduce your costs of managing
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  your HVAC units at your work. We have a lot of technologies
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  that have paybacks that are less than four years that just aren't
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  being installed. And when you ask people, they
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  say, well, we've never heard of them.
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  We don't know those companies, right?
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  I mean, and so I talk about a lot of those companies on my
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  LinkedIn or on my podcasts or on Twitter.
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  But I think that we've got to collect that information.
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  And we've got to go to City Council meetings.
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  We've got to go to County Council meetings.
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  And we've got to go to the school board meetings and say,
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  hey, you know, this stuff is cost effective.
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  How about we figure out how to deploy it at this moment of an
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  energy crisis? The next question is from Joe
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  Murray. And he's a student at Duke
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  University and he was talking about being at a Goldman
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  recruiting event this past fall and asking a managing director
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  what he thinks about virtual power plants and how it'll
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  influence valuations for utilities.
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  Look, I think that at the end of the day, the virtual power plant
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  grid utilization stuff that I'm working on, other people working
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  on is not going to reduce utility stock prices.
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  I think what it'll do is to get them to stop overspending on
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  infrastructure that is underutilized.
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  And so today, we're faced with 9% rate increases for as far as
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  the eye can see. Whereas if they deploy virtual
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  power plants, if they deploy grid enhancing technologies,
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  advanced conductors, lots of stuff that's lower cost, then
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  you could imagine using the grid that we've already paid for more
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  efficiently and keeping rates flat, right?
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  And then if you then add data center load growth, then you
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  might actually be able to reduce the utility bills by 10%, right?
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  So I think that this is not a bad thing for utilities as much
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  as it's a culture change. And they're used to doing things
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  the old, most expensive way. And we got to get them to do
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  things in a way that's smarter for their repairs and their
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  governors, frankly, many of whom are running for election right
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  now. The next one is from Rod Adams.
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  He asks, please explain why nuclear energy supporters should
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  love cheap battery storage. And the answer is because it's
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  not about nuclear and it's not about solar and it's not about
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  wind. It's not about natural gas or
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  coal or hydro. It's about the grid.
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  The grid is the greatest engineering accomplishment of
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  the 20th century, not any of those one technologies.
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  And battery storage actually allows you to manage the grid
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  better. So we have the largest commodity
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  supply chain in the world that doesn't feature storage in the
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  electric utility system. What do you think about our food
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  system? Or we're all learning about
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  storage with the Straits of Hormuz challenge in fuels, or
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  whether we talk about other commodity supply chains, we
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  feature storage. But in the grid, we don't really
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  feature storage except for some, you know, like pumped hydro.
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  And so now I think we're adding storage.
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  And the storage helps nuclear, it helps solar, it helps wind,
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  it helps natural gas, it helps everything run better.
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  And higher grid utilization is how we get to lower electricity
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  bills for everybody. Our last question is from karma
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  dispensary from the energy subreddit on Reddit.
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  And he says or she says. I live in Northern California
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  and the utilities feel less reliable every year after buying
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  a place. We're in the process of getting
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  enough solar and batteries to be entirely self-sufficient.
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  I know there are many benefits to distributed grids.
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  I can't shake the impression that if everyone makes this
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  decision, grids will be much worse off.
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  Fewer users to spread capital investments over.
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  Is mass disconnect something you think about much?
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  And if it is a significant threat to the grid, look, I
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  think mass affection is a significant threat to the grid
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  as is not metering 2 point O as you get to 10% of all the homes
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  in California having solar on them.
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  But now we have NEM 3 point O NEM 3 point O features a much
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  higher fixed cost and it also features that you don't really
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  get paid much to export power back into the grid.
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  So you're really running your home more like a micro grid
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  where you basically take it off grid, right?
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  That's awesome because remember, we are going to have to
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  electrify everything. So right now the United States,
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  our primary energy is roughly 25% electricity, 75% non
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  electricity. China is at 35% electricity, 65%
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  non electricity. So we should be able to meet
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  what China has done if we went from 25% electricity to 35%
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  electricity, right? That means a lot more electric
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  vehicles. It means a lot more heat pumps.
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  It means maybe induction stove, all of that is increased demand
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  on the circuit that your home is on.
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  And the question becomes how do we get the utility to use the
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  battery that you're going to install as part of the grid?
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  And that's a lot of the work that we've been doing in
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  California through a nonprofit I support con deploy action, but
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  it's also a lot of the arguments that we're having across the
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  country. So when you think about data
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  center load growth, when you think about all these other
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  things, figuring out how to do virtual power plants with your
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  battery is how we actually get to electrify more of the grid,
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  more of our primary energy, while reducing electricity costs
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  for everybody. So everybody should be thanking
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  you for putting solar and battery storage in.
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  And when the utility finally offers you a virtual power
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  plant, you should opt in and get the discount that they offer you
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  for doing that. That's it for this week's Ask
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  Jigger. Thanks to our great friends at
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  Octopus Energy for supporting this segment.
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  If you've got a question you want me to answer, send it in.
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  The link is in the show notes.