Latest / Energy Empire / The Utilities Want $1.4 Trillion. The Hyperscalers Want a Gigawatt. Nobody Did the Math.

Transcript

The Utilities Want $1.4 Trillion. The Hyperscalers Want a Gigawatt. Nobody Did the Math. · Energy Empire

0:00
PGM is basically saying that like we are no longer going to
0:03
honor that consumers can do whatever they damn well please.
0:07
And we have to meet that requirement, right?
0:10
We're going to set standards such that consumers can't just
0:12
do whatever they damn well please.
0:13
And that's how we achieve a more cost effective grid.
0:22
Hello, my name is Jagger Shaw and I'm a clean energy
0:25
entrepreneur. Thanks for joining us on Energy
0:28
Empire. As you may have noticed, my Co
0:31
host Jamie Nolan is not here for this part of the podcast mainly
0:36
because it's her anniversary. So let's all wish her a happy
0:39
anniversary, but I just wanted to, you know, give you guys
0:44
kudos for all the great questions we're getting in the
0:47
ass Jigger segment. We've already gotten fantastic
0:51
questions. I've already answered several.
0:53
Some of them were, I think, what you would expect me to say, and
0:57
some of them weren't, and so hopefully you found them
1:00
entertaining. I think we also had a pretty
1:02
spicy back and forth on Reddit, so thanks for all of those who
1:06
participate in the Reddit side. This week we have a fantastic
1:10
episode from my good friend Catherine Blunt from the Wall
1:14
Street Journal. She has been leading the charge
1:18
on originally the PGD bankruptcy, which is How I Met
1:21
her, but more recently she's been really leading the coverage
1:25
on Alphabet or Google. And you can imagine that the
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hyperscalers and their load growth and what's happening with
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the regional transmission operators like the PJM and how
1:37
many data centers do we need that are one GW in size.
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All of that stuff came up in our conversation.
1:43
I think she tried hard to pass the buck back to me, but I kept
1:46
it on her. So super exciting conversation
1:49
and hope you guys enjoy it. Energy Empire is powered by
1:58
octopus energy. I hear it at every conference.
2:02
We need more generation, more transmission.
2:05
You're saying we don't? We do, but we're ignoring
2:09
something faster. Sitting in people's homes and EV
2:12
is basically a 60 kWh battery idle most of the day across the
2:18
US. That's gigawatts we're not
2:21
using. Utilities have pitched demand
2:23
response for 20 years and it still hasn't scaled.
2:27
Why is this time different? Because we're not asking
2:30
customers to change behaviour, we're automating it.
2:33
The grid treats customers like demand.
2:36
They're actually distributed infrastructure.
2:38
Connect those assets and you can shift load overnight at scale.
2:42
So the constraint isn't technology, it's.
2:45
Coordination the solutions already deployed, we just need
2:49
to use it. Thanks, Natasha.
2:51
That was Natasha Crowe, vice president of marketing and comms
2:56
for Octopus North America. If that's the version of the
2:59
Grid you want, check them out. The link is in the show notes.
3:09
Catherine, welcome to Energy Empire.
3:12
I I was looking around and it's not clear to me that you've done
3:15
a lot of podcasts. I think I've done a fair number
3:18
of them, but I I haven't in a while so I'm super happy.
3:23
Well, you certainly did a lot when your book came out.
3:26
California Burning, which I mean to this day is sort of the book
3:30
that all of the books I think on the electric utility sector are
3:33
compared to. It came out with just
3:35
extraordinary fanfare. I think Patty Poppy said that
3:38
she made it required reading, I think when she became CEO.
3:41
Yeah, that was, that was really gratifying, right.
3:44
It's just like if it if it even helps, like we know one person's
3:47
decision making or understanding of the the challenges.
3:50
That feels really good. Well, now there's like 500,000
3:53
people who I think are cosplaying electric utility
3:57
experts in the AI industry. And so I think there's a lot
4:00
more people who need to like to read your book.
4:03
So it hopefully sales spike here.
4:06
I wanted to start with part of what you talk about in your book
4:09
is that PG&E really focused more on shareholders over their
4:13
repairs for a long time and that really caused a lot of their
4:16
challenges. Today.
4:17
You know, the electric utility industry seems to be doing the
4:20
same. I mean they're sort of at, you
4:22
know, I think there were a $20 billion a year of CapEx in 2003.
4:27
There were $178 billion of CapEx last year.
4:30
They're going to be at 2:15 next year.
4:32
The Edison Electric Institute said that from 2025 to 2029,
4:36
they were going to spend a trillion dollars.
4:38
They just updated that number to $1.4 trillion from 2026 to 2030.
4:43
You know, like governors or like, apoplectic, right?
4:46
They're just sort of like, why are we running in a race where
4:49
we have to talk about electricity costs?
4:51
And so like, I'm wondering whether anyone has learned a
4:54
damn thing from your book. Yeah.
4:57
So it's a fascinating, extraordinarily challenging
5:02
time. And I think when you think about
5:04
CapEx spending, right, I mean, some, some of this needs to be
5:07
done. The grids old stuff needs to be
5:09
like replaced or upgraded or whatever.
5:11
But yeah, I mean, what an opportunity to generate returns
5:14
for shareholders, right? And, and sort of justifying
5:17
massive spend because of this AI boom and AI race and, and trying
5:21
to make it happen for these companies that are saying like,
5:24
we absolutely need this, we needed it yesterday.
5:28
How fast can you deliver? And I mean, it's, it's a
5:29
fascinating convergence, 2 of these industries, one that is
5:33
notoriously slow and backward looking and like just really
5:37
can't move quickly risk averse versus, you know, the AI giants
5:42
that are not risk averse trying to move, trying to move
5:45
mountains in the span of days. Move fast and break things.
5:49
Move fast and break things. Although the thing this time is
5:52
the grid, I feel like that's not something you want to break.
5:55
Yeah, you don't want to break that.
5:56
And I think that, yeah, the challenge is that I've been, I
5:59
I've been very interested in what's going on in in PJM these
6:02
days. This seems to be, you know,
6:04
Ground Zero for some of the challenges you'll you'll begin
6:06
to see elsewhere as the NEWS CENTER build out continues.
6:11
And I'm curious on the politics side, it feels like when PG&E
6:14
went bankrupt, Gavin Newsom sort of made it his mission in life
6:18
to get them out of bankruptcy and back to investment grade
6:21
status. Today it doesn't feel like the
6:24
36th governor is running for election, Republican or
6:28
Democrat, right, like want to protect the electric utility.
6:32
And now with all of this anti data center sentiment, it's not
6:35
even clear whether they think it's right for them to protect
6:39
the AI data centers, right? And so like I'm curious in this
6:43
moment, you know, like where the governor's you know, because I
6:48
mean, they need to get reelected, right?
6:50
They need to get elected. So where does this sit
6:52
politically in terms of, you know, whether folks really want
6:57
to see all this spending? Yeah.
6:59
So it's a tough question to answer because I mean, I think
7:04
it kind of varies by region, but I mean, certainly within PJM
7:08
the, just the, the incredible spike in capacity costs has made
7:12
it so that like people are thinking about electricity
7:16
prices, PJ Ms. role in that, what role the market plays.
7:19
I mean, I, I like, you know, three years ago, five years ago,
7:23
no one outside this business had any reason to even know what PJM
7:26
was, right, Much less like I. Still don't want to know what
7:29
PJM is? And they still, and even if
7:31
they're, if they try, they probably don't understand it.
7:35
But yeah, you saw it in Virginia, You saw it in New
7:37
Jersey, right? Like, just like this rally and
7:40
cry to bring down electricity costs, which of course is not an
7:43
easy thing to do by any means. And you know, PJM has a role in
7:48
this. But I mean, state policy has a
7:50
role in this. I mean, just like, it's just the
7:53
like, like so many things in the space, it's just the convergence
7:55
of so many challenges over many years.
7:58
And then you layer on top of that what's supposed to be
8:01
extraordinary demand, possibly inflated projections, who knows,
8:05
right? It's just like.
8:06
Well, most certainly inflated projections, right?
8:09
I mean, isn't this the story of the 1990s when MCI Worldcom
8:13
basically said we need to build like, you know, 12 coal plants a
8:17
month or whatever? Yeah, I mean, very well, very
8:20
well could be. But you know, I I sometimes say,
8:23
and this is this is not a popular thing to say.
8:24
It's like I think we've we've moved into an era in which
8:26
electricity necessarily has to cost more just because like the
8:29
grid needs to be upgraded for all different kinds of reasons
8:33
and just stuff is stuff is old, right?
8:35
I mean, especially. And is that your conclusion that
8:38
like out of all of that reporting you did that the next
8:41
generation of technologies, virtual power plants, grid
8:44
enhancing technologies, greater utilization, etcetera just isn't
8:48
enough? I don't think it'll completely
8:49
offset. I think it could like that could
8:51
be meaningfully, it can meaningfully mitigate the need
8:53
for some massive CapEx spending, I think.
8:56
What? What do you think about that?
8:58
I mean, I obviously served in the US Department of Energy for
9:00
four years. I think we showed through the
9:02
liftoff reports etcetera that you actually could get far more
9:06
utilization return back to the 1970s level of utilization right
9:10
through flexing demand with the same level of dexterity that we
9:14
currently only flex supply. And you could get to you know,
9:18
much cheaper rates for everybody, right.
9:21
And I think, but like one of the big challenges I see is that
9:24
that requires a level of coordination between the
9:27
utility, between the data center, between the governor
9:30
slash Public Service Commission that, you know, just rarely
9:34
seems to happen. Yeah, Yeah.
9:36
No, it's, that's exactly right. I think I've been very
9:39
interested too in, in various proposals to have to require
9:43
flexibility of data centers. Of course the AI companies say
9:46
like, oh, we're, we're happy to flex, but we would like that to
9:48
be a voluntary requirement right now, like.
9:51
Google has hired Tyler Norris and so he he now works there
9:55
inside. Yeah, I was talking to Jesse
9:58
Jenkins the other day and he was like, oh, I think most of my
10:00
friends work at Google at this point.
10:03
When's Jesse moving over? Although he's got that company
10:06
that. He works with now, right?
10:09
Yeah. I mean, so you've moved Beats
10:11
from PG&E to Alphabet Google. There's a lot of overlap here.
10:17
But, you know, talk a little bit about that move and why you made
10:19
the move from PG&E to Alphabet Google just.
10:22
I mean, obviously they're a $5 trillion company, but you know.
10:26
Just about yeah, it was about a year ago that after 7:00-ish
10:31
years covering utilities, I just thought it would be interesting
10:34
to take on a new challenge to try to do a different kind of of
10:38
corporate reporting. But I was also, and I made clear
10:41
in, in making the jump that I really wanted to, to continue to
10:43
keep an eye on the AI power Nexus, I mean, Google and
10:46
everybody else and what it, and then push to, to build out these
10:50
massive facilities. And, and like what it means to
10:52
even have half the projected demand growth for these
10:55
utilities. And it's been, it's, it's been
11:00
very interesting. And we talked about PJM, but
11:02
you're seeing it elsewhere. I mean, gosh, I think that
11:04
there's two projects in Wisconsin right now, one for
11:07
open AI and one for, I think for Microsoft.
11:11
And I think it's going to double the overall demand on the system
11:13
for that utility, like just those two centers, which is
11:16
like, it's remarkable, right? And it's been really
11:18
interesting, too, to try to like, understand and track the
11:21
ways that utilities are trying to design new tariffs to protect
11:24
other customer classes. But as with everything like the
11:27
devil's in the details. How's this all going to work,
11:29
especially in allocating transmission spending?
11:31
So it's. Yeah, I can't even imagine being
11:34
a reporter in this moment just because I feel like these are
11:39
esoteric concepts that matter, right?
11:41
I mean, it is what's driving inflation.
11:43
It's what's driving the GDP growth of our entire country.
11:46
It's certainly booing the stock market.
11:48
So it matters, right? But when you think about the
11:53
patience that people have for reading about these things, I
11:55
mean, when you think about like the structure that Google
11:59
created in Excel Minnesota's territory and then Alliance
12:02
Elites territory where, you know, they really went to the
12:06
utilities and said using Google Tapestry, we're going to teach
12:09
you how to do this better. And in a way that actually will
12:12
reduce rates for everybody in Minnesota by I think was like
12:15
$1.7 billion or something is what they filed with their ES as
12:19
their energy savings agreements, I think.
12:21
And you know, but like, like, I don't even think there's been
12:26
any reporting about the anatomy of how that deal came together
12:30
and sort of what that I. Should.
12:32
Right. But I mean, like, and what that
12:34
means, right? For like the fact that Meta did
12:38
nothing at all in the negotiations with Entergy down
12:41
in Louisiana or and what does that mean for Meta and
12:44
Microsoft? Are they just lazy?
12:47
Does it mean that like they actually should do the same
12:49
amount of work as Google? Because I think everyone sort of
12:52
suggests that data centers are good load growth, right?
12:57
But it feels like it's only good load growth if people like
13:00
coordinate. Yeah, I would say this, it has
13:01
the potential to be good load growth eventually.
13:06
It's just like how do you manage the upfront costs of integrating
13:09
them into the system? And it's, you make a great point
13:11
about Google. I think that, and I've written
13:14
this, Google has assembled one of the smartest teams I I think
13:19
in the space on energy, right. They've been paying close
13:22
attention to this for a long time and I think their
13:25
understanding of the system really outshines most other
13:28
competitors. And I think it'll allow them
13:32
most likely to to get stuff moving more quickly because they
13:36
like actually have answers to some of the the hurdles, right.
13:39
Whereas I think the competitors, its competitors have been slower
13:43
to try to come to reach the same sort of understanding and and
13:46
certainly don't have the same bench of talent.
13:49
Yeah. The other part that I think is
13:50
so confusing and you know, for everyone is what's true and
13:55
what's not true. Like when I try really hard to
13:58
figure out why do we need one plus GW data centers, right?
14:02
Why can't we have a network of 100 MW data centers, which you
14:06
and I both know would be a lot easier to fit into the grid?
14:09
You know, people say to me, well, you know, for the final
14:12
training runs we need the chips were to be right next to each
14:16
other, otherwise they can't work in synchrony and you know, and
14:19
get everything done right. Fine, so then I'm like, great,
14:22
how much of that do we need? And it turns out a lot less than
14:25
I thought, right. The current models sort of use
14:27
like 200 megawatts worth of power to you know, run the
14:31
models. I mean they think that by 20-30
14:33
they're going to need maybe 4 gigawatts of capacity to be able
14:37
to run one of these final training models.
14:39
And then when I dig in deeper, I hear, well, the R&D runs don't
14:43
need to all be with chips right next to each other.
14:47
The R&D runs that they do or batchable and they can sort of
14:50
like find them out to 100 MW data centers.
14:52
So I'm like, great. So then, so then what's the
14:55
answer? Like how many, how many one GW
14:57
plus data centers do we need for training?
15:01
Right? And, and everyone's like, I
15:03
don't know, but I'm lazy. I'd rather all of them just be
15:06
one GW plus data centers, even for, you know, inference or
15:09
whatever. And I was like, but that would
15:10
break the grid. They're like, not our problem.
15:13
We don't care. And I, it's just like, I'm
15:15
curious like how transparent these companies are about these
15:20
big questions, like how many mega data centers do we need?
15:24
And like, because Jensen Huang has been talking about inference
15:27
and how he's got 5 MW data centers with Prologis and now he
15:31
just did a test with Span, right?
15:33
And Pulte homes. And then he's like, no, no, this
15:35
stuff can be spread everywhere. Inference can be done easily.
15:39
You know, like I just, if the electric utilities are going to
15:42
say we need to raise rates on all these people to like upgrade
15:44
all of their facilities, they're by definition sort of assuming
15:48
that these inflexible very large loads are the way that we have
15:53
to serve AI data centers, right? And it doesn't seem like there's
15:57
any answers coming from anybody that I can say.
16:00
Yeah, it's a great question. I I think like, I don't even
16:04
know if anybody really knows the answer to that or has given it a
16:07
lot of thought. I think right now there's just
16:09
such a scramble. There's just been this movement
16:12
building bigger and bigger data centers.
16:14
There are other ways to do it as you were just discussing or
16:17
alluding to. I, I I am not smart enough to
16:20
tell you like exactly what loads.
16:22
I've read your reporting for years, so I know that you're
16:24
smart enough. Well, I appreciate that.
16:31
I wish I had better answers as to like, you know, what is the
16:34
actual need for like a super science data center versus
16:38
something that's more, you know, small workloads aggregated,
16:41
right? I mean, it makes sense and well.
16:43
It's not that you have to have all the answers.
16:45
I'm the, my question is really, who's supposed to have all the
16:48
answers? Like, you know, with all of
16:50
these smart people working at Google, should they be revealing
16:52
these answers to you? Like what about like Epoch AI
16:56
Research, which seems to be this nonprofit that like, publishes
16:59
everything? Is it the US Department of
17:01
Energy or APRI? Like it just feels like someone
17:05
should be on top of all of this stuff with a PhD telling me what
17:10
like the answer is. Totally.
17:12
Gosh, when you think of like, who has any actual oversight
17:16
over any of this? I mean, is it FERC?
17:17
Is it at the state level when the utility comes forward with
17:20
being like, we have to serve this one GW data center?
17:22
And then should the regulators ask, like, does it need to be
17:25
all situated on that plot of land?
17:27
Or is it possible that it could be, you know, broken up into 16
17:30
pieces and aggregated, right? I, I don't know.
17:33
It's like, but it's imperative that we begin.
17:36
We, I mean, not me. Well, me as a reporter, sure,
17:39
but like also like as someone at the regulatory level or within
17:42
the administration or something, right?
17:44
Basically being like some sort of stress tests or some sort of
17:48
like analysis as to like, is this, is this the most prudent
17:52
way to do things? You got to ask that question
17:53
because it's untenable. What's being proposed, right?
17:57
It can't. It really can't.
17:58
Happen. I think so, But I feel like the
18:01
utilities are just pushing their way through.
18:03
You know, one of the organizations I'm a part of
18:06
called Deploy Action, you know, paid for some polling and, you
18:09
know, you saw that Josh Shapiro wrote that letter and, you know,
18:12
and basically got a utility to just withdraw their entire rate
18:15
increase. And so it does seem like the
18:18
polling is suggesting massive majorities of voters in
18:22
California are saying PG&E shouldn't get any rate increases
18:26
at all until they've demonstrated increased grid
18:29
utilization, right? And using the grid that we've
18:31
already paid for more cost effectively.
18:34
I mean, it just feels like there's a trust breakdown now
18:39
where electric utilities are looked at and saying to, is your
18:44
stuff old? Does it need to be replaced?
18:46
You said that five years ago. You said that two years ago now
18:49
we're paying $0.44 a kWh. We went bankrupt.
18:52
We had wildfires. Like like, I don't know that I
18:55
could trust anything you say. Like, I'm just trying to figure
18:58
out how you think about operating in this environment
19:02
where these utilities are coming to the regulator asking for
19:08
these rate increases. There's really no transparency
19:11
as to whether the AI data center companies really need one.
19:14
Plus, GW data centers and gradualization is at historic
19:19
lows. The ability for utility
19:21
companies to use technology is heroically, you know, like
19:25
something that they're not good at, you know?
19:28
How do you view this trust breakdown?
19:30
Almost been happening for a very long time and then with the with
19:33
the AI build out, it just comes in exactly the wrong moment,
19:36
right? It's like it's, it's a really
19:39
bad time to try to make this happen.
19:41
I mean, sometimes when the utility comes forward with a,
19:44
you know, re increase your spending, sometimes the answer
19:46
is yes, some of that spending is prudent and necessary.
19:49
I mean, we all know, though, that sometimes it's not.
19:51
And it's basically, it's very hard for, you know, overworked
19:55
regulatory staffers to like, parse every single project and
19:58
figure out whether it's, you know, gold plating A substation
20:01
or actually making an upgrade that's going to be beneficial
20:04
for the entire system, right? And so with PG&E in particular,
20:08
I mean, they've just had such an awful run of it over, you know,
20:12
20 years, capped by the awful fires in 2017 and 2018 and the
20:15
bankruptcy. And it is so eye wateringly
20:19
expensive to live in California as it is.
20:20
I mean, gas right now is at 7 bucks.
20:22
I, I, I think I paid $7.00 for premium gas the other day.
20:25
Right? And it's just like no one.
20:27
Wants you live in California now.
20:28
Like, I mean, you're eating the dog food here.
20:31
Yeah, totally. And I'm lucky living in San
20:34
Francisco that like I can mostly keep the windows open and I've
20:37
got to, you know, I don't really need to run the electricity all
20:39
that much. But for, for folks in the
20:40
Central Valley, I mean that we're heading into summer,
20:42
right? It's like it's those are some
20:44
really significant power bills. So Peter thing lost the trust of
20:47
customers a long time ago just because of like certainly the
20:49
extent of the disasters. Other utilities have had major
20:52
disasters as well. I mean, we're also living in an
20:54
era of, you know, changing climate and different stress on
20:56
the grid, right? And this is a backward looking
20:58
industry that had like there's a.
21:00
Well, look at George, right? I mean Georgia with the Vogel
21:04
nuclear plant. I mean, two of the long standing
21:07
Republican public service commissions can voted out by
21:09
like 20 points, like in a, in a, you know, arguably RedState,
21:13
right? And so, you know, that's crazy.
21:16
I mean, but what do you think is the right way to build rebuild
21:19
trust? I mean, should regulators force
21:21
the utilities to demonstrate and to prove that they're using the
21:25
this stuff they've already paid for more efficiently before they
21:28
ask for more poles and wires? Like, I mean, you know you've
21:31
covered that dynamic, right? I think that should be, that
21:36
should be part of the solution. And there's, there's a lot of
21:37
companies right now that are trying to work on that problem,
21:40
right? To figure out how to find change
21:43
into the couch cushion, so to speak, right?
21:45
Like to find the ways in which you can slot stuff in here and
21:49
there. And like, you know, what's not
21:50
being, you know, from from a transmission standpoint, what's
21:53
actually not being used at this time.
21:54
Like all kinds of ways to like you say, like just to make
21:58
better use of what's already in the ground.
22:00
It would be great I think to see greater interest in that as as
22:04
as part of the suite of solutions And like from a
22:06
regulatory standpoint, I think it does make sense to ask the
22:08
question for sure. What do you think?
22:10
Well, I mean, I've just been shocked by in the polling, the
22:14
voters are not mad in a vague way, right?
22:17
Like they actually support like super specific things like
22:21
saying we should tie executive pay to, you know, some of these
22:26
metrics, right? I mean, I guess what I'm trying
22:29
to figure out is with with your reporting, what is required to
22:35
rebuild trust, right? Because I just think, you know,
22:38
when you look at Georgia and the Vogel nuclear plant, when you
22:41
look at like Duke Energy and the fact that, you know, they got
22:44
credibly accused of really dumping coal fly ash into the
22:47
waterways during hurricanes. And now they're asking for 15%
22:51
rate increases. When you look at PSE&G in New
22:54
Jersey who credibly got dinged for gold plating all of their
22:59
infrastructure post Sandy, you know, now that investor owned
23:02
utilities are at 30% above the cost of rule electric co-ops and
23:07
municipal utilities, right? Like what is sensible, right?
23:11
Like, like what can voters expect or what are ratepayers
23:17
expect to like achieve accountability?
23:19
I mean, should we be putting this into executive pay?
23:22
I don't know the answer to that, and I don't frankly know the
23:27
answer as to how some of these companies rebuild trust after
23:30
everything that's happened. I think that like, you know,
23:33
rightfully so ratepayers voters are wary of a massive projects
23:39
or spending or really anything that has the potential to let go
23:42
South become stranded asset be, you know, be cost overruns a la
23:46
the nuclear plant in Georgia. I mean, that was massive, right?
23:49
Or like, you know, what, what are you doing with all this
23:51
CapEx and then what are you doing with O&M, right?
23:53
That's the that's the PG&E story, which is that they were,
23:56
they were focused on, you know, anything that can add value to
23:59
the system and not paying as much attention to doing the
24:01
day-to-day inspections and maintenance that would have made
24:04
their, you know, pipeline safer. And San Bruno happened, made
24:07
their transmission line safer. The campfire happened.
24:09
The thing though, and I'd, I think that people are becoming
24:14
more aware of this. Interestingly.
24:16
I mean, gosh, the number of regular people I see intervening
24:19
in rape cases these days is really pretty remarkable, right?
24:22
And they didn't all find their way there by themselves.
24:25
Like there's certainly groups that point people to ways to
24:27
make comments and things like that, but utilities, and I
24:30
sometimes say this somewhat jokingly, but it's not a joke.
24:32
I mean, they do actually write everything down seriously.
24:36
Like, I mean, like most things can be found in various
24:39
regulatory repositories if you know where to look.
24:42
And so it's just like this question of like oversight and
24:45
asking more creative and probing questions about the necessity of
24:50
any of this and like, like what the alternatives might be is
24:54
imperative. And like, I mean, as the system
24:56
as it stands, that means that has to come from the probably
24:59
state regulatory level and FERC probably has a role to play to.
25:03
Are we going to see that meaningfully change?
25:05
I don't know. So if you were to write a story
25:08
on PG&E now, given that you're APG and E customer, is the story
25:13
basically that you know people hate their utility or is the
25:17
story that the old utility model is breaking down and that it is
25:24
going to have to be sort of replaced in order to gain voters
25:28
trust? I mean, I think it's very fair
25:30
to say that the old way of doing things doesn't work in this new
25:34
environment. When I try to think about it
25:36
pragmatically and how difficult it would be to change, you know,
25:40
do some sort of wholesale change, right?
25:42
I mean, after PG ES bankruptcy, there was talk about trying to
25:45
make it into a Co-op or would the state take it over?
25:47
And I don't think that meaningfully solves the problem.
25:51
Honestly, I don't. And I think that there's the
25:54
most pragmatic way to think about it is like, I mean, how do
25:57
we identify the points that need to change the most within the
26:01
way that it already works? Like how do we, how do we make
26:03
the current system work better, ask better questions, have
26:07
better oversight, you know, maybe like like reduce our OE,
26:12
right? Maybe like that.
26:14
That's probably an obvious one that I think should should
26:18
definitely be explored in this environment if they're proposing
26:20
to spend however much you said 1.4 trillion through, right?
26:25
All of the EEI utilities across the country.
26:28
Yeah, it doesn't have to be 12%. I would say no like I'm and
26:33
often I mean they're able to exceed that sometimes.
26:35
Should that be allowed? Probably not.
26:37
What additional risk will shareholders take on right.
26:40
That's a that's a difficult question.
26:42
We saw PG and EI mean they were supposed to in a, you know,
26:46
perfect world shoulder the liability costs of the of the
26:48
fires, but that didn't happen, right?
26:50
They all cut and run. And how do you reduce, like
26:54
reduce costs and reduce risk to the residential customer class
27:00
as you have like these massive commercial interests coming in
27:04
and wanting all kinds of things built on their behalf?
27:06
I mean, that's, that's the best, the big question.
27:08
How do you do it in a traditional way?
27:10
How do you do it in a novel way? And these are questions that,
27:13
that I, I hope people are asking and all I can ask, but I have
27:17
no, I have no power over whether it, you know what happens,
27:19
right? No, no, I mean, I, I'm asking
27:21
just mostly because you covered them for so long and your book
27:24
was so comprehensive. I think moving to the next sort
27:28
of section, there's been this whole conversation around cost
27:31
allocation, right, and who pays, right, between the utility and
27:35
the AI data centers, right? I mean, PJM just announced the
27:39
largest upgrade to their transmission system in a very
27:41
long time of $12 billion, half of which was peanut buttered
27:45
over all of the rate classes, right.
27:47
And so part of what I'm trying to understand is, on the one
27:51
hand, you've got the data center companies who've made pretty big
27:56
sort of promises, right, not to shift cost to consumers.
28:00
But then on the other hand, you're like, you just, like,
28:04
shifted $6 billion worth of transmission cost to all the
28:07
ratepayers that had them all pay their fair share.
28:10
Like, how do the AI data center companies do this at a media and
28:15
comms perspective? Like, how do they convince, you
28:19
know, voters that they've actually succeeded in meeting
28:22
the pledge? Yeah, Yeah.
28:25
I think frankly all of the companies are trying to staff up
28:28
in this regard and trying to tell that story differently just
28:31
based on what I can tell. It's been interesting.
28:33
So I've written about this a few different Times Now.
28:35
And I would say even like a year ago when you looked in the
28:41
various filings related to, you know, creating these large the
28:45
quote, UN quote large load tariffs, right?
28:48
Everybody, Microsoft, Google, Amazon, we're like, really?
28:51
Do we actually have to pay more? I don't know, like that doesn't
28:54
seem very fair. Like we're we're all these
28:57
upgrades are going to be beneficial for everybody and
28:59
like that that we're. Used to being on the economic
29:02
development rate. Right, right.
29:04
And so there was a lot of not too long ago, there was quite a
29:08
bit of resistance to some of these new measures that were
29:11
meant to, you know, guard against the, the risk of
29:14
stranded costs, guard against the, the risk of like massive
29:17
cost shifting. I think they, they got wise
29:20
pretty fast and realized that that's not really a tenable
29:23
position to hold. And also like, as they began
29:26
printing more of their own money, so to speak, they're like
29:28
whatever, like we'll just whatever it costs will pay.
29:31
But to your point, transmission spending in particular is going
29:34
to be the toughest, the toughest thing to address as it relates
29:39
to to cost allocation. PJM is a good example, but
29:41
there's other, I mean massive transmission spending plans that
29:44
are going to be largely in service of the AI companies.
29:48
But you know, you can make some sort of argument that it's going
29:51
to be an overall system upgrade. It's just like by like, to what
29:54
extent is that actually necessary?
29:55
That's a very difficult question to answer.
29:58
Yeah. And you know, part of this
30:00
actually then contrasts with the electric utilities and their
30:04
conservatism, right? I mean, because they don't
30:07
necessarily want to take advantage of demand flexibility,
30:10
like not all the utilities have actually required data centers
30:14
to sign interruptible rates, right?
30:16
So that they can, you know, mandate that, you know, in
30:20
period of most stress, you know, they have to turn down.
30:23
I mean, it got, it got so bad in Texas that the legislature
30:27
passed SB6, right, and said, no, we're passing a law that
30:32
requires you to sign interruptible rates on these
30:35
data centers. Correct me if I'm wrong, but I
30:37
think that's the only place right now in which it's a
30:40
requirement, I'm pretty sure. I think that's the only place
30:42
which requirement in California. Obviously PG ES got the flex
30:46
connect for distribution and then T flex for and so there's
30:49
there's lots of utilities who are moving that direction, but
30:53
they're trying to make a mandatory.
30:55
Right. They'd be like you can have a
30:56
faster interconnect if you agreed interruptible service, at
30:58
least for a period of time. And I think that's right.
31:02
I mean, and it's basically because when you look at the way
31:06
in which utilities have adopted the NURC best practices, right,
31:10
the National Electric Reliability Council, like these,
31:15
these acronyms get me to, there's a lot of places on the
31:18
grid, right, that Grid Care and Google Tapestry and Camus and
31:21
Thinklab and others have identified that can accommodate
31:24
these load growth opportunities on the existing grid during
31:28
normal situations. But then, you know, what the,
31:32
you know, normal utility standard is, is that if this
31:35
line goes down, what happens if this generator goes down, what
31:38
happens if this happens? If that happens, this sort of n
31:40
-, 1 - 1 sort of standard, right?
31:43
And so then, you know, what they find is they have to magically
31:46
spend $8 billion worth of upgrades to be able to meet that
31:49
standard, right? And so if they can get data
31:53
centers to sign interruptible tariffs, then they can say,
31:55
well, we'll make best, we'll do the best we can, right?
31:59
But ultimately, if worse comes to worse, then we're going to
32:03
have to get you to shut down because like we have to save the
32:06
grid. But in the meantime, you know,
32:08
like I think when you look at PG ES, Tflex standard, the way that
32:13
they're implementing it, you would only have to turn down
32:15
your data center once in 10 years, right?
32:19
So it's not like it's going to happen for 200 hours a year.
32:22
It's if you back tested it rarely happens, but that really
32:27
simplifies the way in which the utilities can do the
32:30
measurements. But then it reduces their rate
32:32
base, right? It reduces the amount of money
32:34
they can spend on their system. Yeah, it does.
32:36
And I mean, it'll be interesting to see what happened in
32:39
California. I think that like for the most
32:41
part, I think tech companies would mostly prefer to go
32:44
somewhere else just because it's electricity costs are so high.
32:47
But sometimes they can't. I mean, California does need
32:49
compute, right? Sometimes they can't, Yeah.
32:52
I mean, a huge thing that that complicates all of this is the
32:57
fact that real expertise on the way that grid actually works is
33:00
is very hard one. And as people get more up in
33:02
arms about it, they're paying closer attention, but they don't
33:05
necessarily understand it better, right?
33:06
That's something that motivates me and in my reporting and
33:09
trying to at least just help people understand why the thing
33:14
isn't working. You know, I, I wrote a story
33:16
about PJM back in a long one back in, in January.
33:19
And just like it wasn't, you know, this like colorful yarn.
33:23
It was just like a long story about why PJM is pretty close to
33:27
being in shambles, right? And it was like, it was like I.
33:30
Think they are officially in shambles.
33:31
They put on a white paper. Shambles.
33:34
I think they put on a white paper last week that basically.
33:37
Said. This doesn't work anymore.
33:40
Like what was a fascinating, it was a fascinating white paper.
33:42
It was it did start off saying like this doesn't work anymore.
33:45
Here's three ideas that we might explore or combine going
33:49
forward. And the 1st one and the third
33:52
option or each sort of like somewhat confusing and
33:54
convoluted, but the second one is very easy to understand,
33:56
which is that we might move into an era in which reliability is
33:59
not guaranteed for anybody. And like, how do we figure out
34:02
who loses power when? Which is.
34:06
Warrant, which is like, so politically unpalatable, right?
34:10
Well, but it's it's just a glass half empty way of saying what
34:13
I've been saying. That's glass half full the way
34:16
that I say it is. Hey, for people who want to opt
34:19
in to demand flexibility and to allow their thermostat to be,
34:23
you know, varied by two degrees or to let their water heater be
34:26
controlled by the utility or let their Tesla power wall in their
34:29
garage be, you know, flexed by the utility, they should get
34:32
paid something for it, right? They should get paid that thing,
34:35
right? That's just the other way of
34:37
saying what PJM said, which is PJM is basically saying that
34:40
like we are no longer going to honor that consumers can do
34:45
whatever they damn well please. And we have to meet that
34:48
requirement, right? We're going to set standards
34:50
such that consumers can't just do whatever they damn well
34:52
please. And and that's how we achieve a
34:55
more cost effective grid. I mean, if you put it strictly
34:58
in the terms of like Dr. like, then that's fine, right?
35:02
It's like, I think though, I mean it's been a while since I
35:05
really dug into this, but it's been interesting how challenging
35:08
it's been to like get good demand response programs on the
35:12
residential side integrated in different market structures.
35:14
Right. We had 75 case studies in the
35:17
VPP liftoff report that we published in January 2025.
35:20
I think they have them. I think the problem is, is that
35:23
it's culturally like unacceptable right now.
35:27
Like, I mean, what Tyler Norris said in his work, right, is that
35:32
for I think it was like 74 hours of grid flexibility with no
35:36
event being more than two hours, right, You would capture like 74
35:41
gigawatts of additional capacity on the grid.
35:43
Yeah, yeah, yeah. That's a that's pretty
35:45
staggering. Yeah.
35:47
But I'm just saying like right now the standard is no hour left
35:50
behind. And so like, we will spend
35:53
whatever it takes to not have 74 hours of demand flexibility.
35:58
I mean, that's basically what PJM I think is saying in that
36:00
white paper is they're saying maybe we should allow for 74
36:05
hours of demand flexibility and then we'll allow each state to
36:09
set their own standard. If Ohio wants to spend ungodly
36:12
amounts of money and let the utilities rate base it to not
36:14
have those 74 hours of demand flexibility, they can do that.
36:19
If Virginia does want to do that, then they can do that.
36:22
If certain states want to add a bunch of batteries, they can do
36:24
that. If certain states want to add
36:26
this, they can do that. Like I think, I mean, I think
36:29
that's what PGM was saying is it?
36:31
We'll provide you a certain standard of reliability which is
36:33
not 100 percent 8760 and you at the state level can decide
36:38
whether you want to fill in that gap or not through demand
36:41
flexibility or whether you want to over build your system.
36:43
Yeah. I mean, I think that the
36:45
question is like how bad might it get, right?
36:47
Does it get to the to a point in which there is some sort of
36:50
actual need to, I don't know, make it more, more dire than
36:55
that, right? More so than like there's.
36:57
Meaning do we still need generation and transmission
37:00
upgrades? I just mean in terms of like
37:02
what the, the prospect is for like the the need for outages in
37:07
different regions, could it get worse than what you're saying?
37:09
And it would is it all addressable through some
37:11
combination of like you know, investment and and demand
37:14
response? Well, I think it's very obvious
37:16
that we need investment, right? We've got 250 gigawatts of
37:20
solar, wind and battery storage that have been Safe harbor,
37:23
right? So that stuff's going to get
37:24
built by 20-30 because no one put all that money aside to safe
37:27
Harbor to not build those projects.
37:29
So that's happening. You've got natural gas power
37:32
plants obviously that are happening because they're sold
37:33
out through 2031. So those projects are going to
37:36
get built, right. You've got $12 billion for the
37:38
transmission upgrades at PGM push through.
37:40
So those projects are going to build.
37:42
But I think when you look at like reliability, like you look
37:45
at Snow Crete that occurred like in what was it January,
37:48
February, like I've got PTSD, so I can't remember.
37:51
The PGM did fine. There's no creep, right?
37:54
Like it went like we didn't have any power outages.
37:57
And so my, my sense is, is that what modern technology allows us
38:01
to do is to ride through this stuff, right?
38:03
And, you know, I mean, the deal we at that time said we should
38:06
be able to run backup diesel generators and backup natural
38:08
gas generators, right, to be able to ride through Snow Crete.
38:12
And in the end, they didn't need them except for maybe Maryland.
38:15
And then Maryland didn't end up needed them needing them either.
38:18
So I think there's actually a lot of near term data that shows
38:21
that, you know, PGM did just fine through one of the worst
38:24
crises that it could have had, right in the polar vortex where
38:27
people needed heat for, you know, 10 or 12 days in a row.
38:32
Yeah, well, we'll see what happens this summer.
38:35
I like it. I like it.
38:37
So last question I had was, I mean, what should the Trump
38:41
administration do, right? I mean, like, so they, they
38:44
passed this, you know, like sort of or they announced this, you
38:48
know, ratepayer protection pledge, right?
38:50
But the deal we has the right through the 2005 and 2007 Energy
38:54
Policy Act to mandate certain critical transmission lines get
38:57
built. They have the right to actually
39:01
unlock all those backup utility generators right through EPA and
39:05
of the things in a formal capacity, they have the ability
39:08
to do all of that modeling work we just talked about, right?
39:10
They could just give Grid Care or Google Tapestry or Cameo
39:14
Energy or Thinklab $50 million of cold hard cash and just say,
39:18
you know, run this analysis for free for all governors in the
39:22
country so that they are not sitting in the dark, right?
39:25
Like, what is it that the American people or the Wall
39:29
Street Journal reader should expect that the US government
39:32
should do with all of its national laboratories and, you
39:35
know, expertise? Yeah.
39:37
So what do we have going on right now?
39:38
So that with the repair protection pledge and also the,
39:44
gosh, I can't remember the formal name of the, the edict
39:47
that they came out with in, in January trying to push PJM to do
39:49
an emergency backstop option, but there was a cost allocation
39:52
piece in that as well as with everything.
39:54
I mean, this is, this is so complicated, right?
39:56
It's like that they, the government can come in and but
39:58
with the cost allocation pieces relates to the backstop auction.
40:00
I mean, making sure that that's overseen appropriately is at
40:04
each state level within PJM, right?
40:07
And like, it's not, that's not within PJM's purview.
40:10
Is this sort of like out of market action?
40:13
Necessary and appropriate. I'm, I don't know, it's never
40:16
been done before, but it's interesting.
40:19
And like the new CEO of PJM certainly has a big challenge
40:22
in, in figuring out how to implement that within a matter
40:24
of months, right. It's supposed to be no sorry I
40:25
couldn't hear my my dog barking. I love the fact that your dog is
40:29
into our conversation. So into it PJM Yeah, but it's a
40:34
great point in terms of like, what should the government be
40:36
supporting right now? I mean, I think that Good Care
40:38
is a fascinating company. I think Tapestry is super
40:39
interesting. I think they're all interesting.
40:41
And I think, like trying to figure out how to expand or, you
40:46
know, incentivize some of these more novel solutions to
40:49
unlocking capacity in different places.
40:51
I mean, makes sense to me. All right.
40:53
I'll put you on the spot for one last question.
40:56
So with all of your extensive reporting on PG&E and now your
41:00
extensive reporting on Alphabet, Google, what is the one thing
41:05
that you think could be mandated, right?
41:08
Not just volunteered or whatever.
41:11
That could make this entire situation around AI load growth
41:17
easier, more palatable, more tolerable.
41:20
Yeah, I mean, I, I don't think it's going to be interruptible
41:24
service. I don't think it's even going to
41:26
be bring your own generation. Like I, I don't know, I but like
41:30
maybe maybe it's having the analysis that we've been talking
41:35
about this entire time, right? Does it have to be 1 GW?
41:39
Could it be 1 GW aggregated? Could it be 500 megawatts here,
41:43
500 megawatts there? Does it have to be 5 nines
41:46
reliability? I don't know, like it like what?
41:48
Like does it have to be the, the most extreme thing that everyone
41:53
seems to be proposing? And I think certainly in, in at
41:56
least some cases the answer is no.
41:58
So like could we sort of mandate that as being even part of the
42:02
interconnection study maybe? What do you think?
42:06
Well, I mean, I'm all in on team interruptible tariff because I
42:10
think that like as soon as you just mandate an interruptible
42:13
tariff for everybody, then they start thinking, OK, what do we
42:16
do to not get interrupted? Do we like do everything?
42:19
Do we do the analysis differently?
42:21
Do we be more honest with you about like our form factors?
42:25
Do we like put behind the meter gas and right, do we build long
42:28
duration energy storage like Google did with form energy in
42:31
Minnesota, right? Like, like what do we do to not
42:34
be interrupted? Right?
42:35
You're like, great, that's on you now.
42:38
Like it, you know, because you've signed an interruptible
42:40
tariff. Like I, I just think that with
42:43
all of the resources of the data center companies, it's shocking
42:47
to me how they just shrugged their shoulders and go, I don't
42:50
know what was me. I don't know how to do any of
42:52
this stuff. Yes, I hear you.
42:57
Let's see what happens. Let's see.
42:58
Let's see who's the next to mandate it outside of Texas.
43:01
Well, with that, Catherine, it's always been a pleasure to talk
43:05
with you. And I know your family has a
43:08
place up in Deep Creek, Maryland.
43:09
My family has a place up there, so maybe I'll see you there this
43:12
summer. Yeah, I can't wait.
43:14
It's always great to talk to you.
43:15
Hope to see you soon. Take care Energy Empire is
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Sound interesting? Go find the S2G podcast and
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start with the global energy order has changed Now what?
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Welcome to Ask Jigger, a weekly segment on Energy Empire where I
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answer your energy questions. Ask Jigger is supported by our
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friends at Octopus Energy. If you want to submit a
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question, the link is in the show notes.
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All right, let's get into it. Our first question is from Diane
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Boss. You are a proponent of nuclear
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energy development, but I never hear you talk about nuclear
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waste. I'd like to hear your thoughts
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about that. It's an important question.
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For many years we've talked about Yucca Mountain is the
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repository that obviously never came to pass.
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Today, a lot of our nuclear waste from our government,
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nuclear waste is stored in New Mexico.
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When we were in the Biden administration, there was a
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process called consent based sighting, which meant we asked
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people whether they actually wanted the economic benefits of
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storing nuclear waste at their site.
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And that process has led to a lot of interest from the folks
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in New Mexico, but other places around the country to store
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nuclear waste. It is a big deal.
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It's a great question and one that really should be talked
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about more. But I think we want to put this
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in perspective. The total amount of nuclear
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waste that we have in our entire country is so small that we
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actually can fit most of it at existing nuclear sites, which is
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what we do now. And it probably, I think, fills
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up an entire football field of space, you know, something on
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the order of around 15 feet high.
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And so it, it feels like a lot, but that's the amount of waste
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is produced by a coal power plant every hour from coal fly
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ash. And so it really is, you know,
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night and day in terms of how much waste is there.
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And the value comes from the fact that 20% of our entire grid
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is produced by nuclear power. And so I think there are really
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good solutions. I think we're on track to
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implementing those solutions, but agree that it is something
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that should be talked about more.
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One of the other options that people have been talking about
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for years, the French of course do it now, is recycling nuclear
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waste. We have been avoiding that for a
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long time because President Jimmy Carter was really against
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recycling nuclear waste. Today, I'd say that many people
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are thinking about it again. There's a lot of innovative
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approaches to how you take the useful part of a nuclear fuel
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rod and put it back to work. Just to put it in perspective
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for you, when you have a used nuclear fuel rod come out of a
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nuclear power plant, less than 10% of the potential energy in
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that nuclear fuel rod has been used.
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And so, so it really is mostly unused.
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And so it is a travesty that we don't recycle nuclear waste.
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And I think you're seeing a tremendous amount of movement
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now out of the current administration to revisit
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recycling nuclear waste. Next question is from William
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Bonagoura. What's the best way for retail
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investors to actually support the development and deployment
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of clean tech? There are all sorts of green and
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ESG funds out there, but their impact is murky at best, and
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they mostly seem to invest in large cap companies that say the
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right things. I think there's a significant
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number of high income earners who'd accept slightly lower
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returns on a portion of their investment if that money were
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actually leading to projects being built.
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It's a great question and one that I've tackled and wrestled
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with myself. So I've never invested in a
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green or ESG fund. And mostly it's because I agree
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with you. It mostly sounds like you invest
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in large cap companies that talk about their green investing.
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And so I don't find that to be that interesting.
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I mostly just put money into the S&P 500 and go with low fees
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from Vanguard, but they've been some great opportunities
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recently. There was a great effort done by
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Greenbacker several years ago to let retail investors invest
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directly into funds. There have been other areas
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where accredited investors could invest in Angel investing or
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things like that. The most recent one that I've
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been investing in that's interesting is a group called
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Energia. And Energia actually owns solar
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projects from other countries, something Colombia or Brazil or
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parts of Africa or India. And they're actually giving
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people 8910 percent interest on investing in those things.
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And you can pull your money out at any time.
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And so there's a lot of people that have been putting money in
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there. I think they have over $450
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million now of money that's been invested by mostly high net
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worth individuals into those types of things.
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But you know what I one of the things I've done is I've owned
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solar projects on churches and schools and things like that in
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my community. And those have been fantastic
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investments. And they seem very similar to
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people who buy real estate and rent it out to people.
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And so obviously do your own due diligence.
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I'm not here to give you investment advice, but I agree
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with you that just investing in a broad ESG fund is not the way
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that I prefer to invest. I like to invest in physical
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assets and there's a lot of platforms now that are out there
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that let you invest in physical assets.
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Next question is from Nicholas Sweeney.
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Is the US equipment supply chain transformer switch gear, busbar
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Gen. sets about to become the binding constraint on the energy
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transition or is manufacturing capacity catching up in time?
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A trillion in hyperscaler CapEx doesn't matter if the equipment
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can't be built and delivered. This is such a good question and
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such a timely question. I look, I think that in general,
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many of us lived through COVID and during the COVID period
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there was a run on toilet paper. People are asking whether we
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were short toilet paper. And the answer is people were
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not using more toilet paper as much as they were hoarding
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toilet paper to be able to try to get through what they thought
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was going to be a period where they couldn't get any.
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And I think you see a similar issue happening in the supply
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chain. Yes, there's an increased demand
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for Transformers and switch gear and busbar Gen. sets.
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But in general, what you're finding is a lot of people have
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bought these pieces of equipment before their hyperscaler, you
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know, data center has actually been installed, right?
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So Tesla famously has many Transformers sitting in a lot in
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Austin waiting to be used in some of their future projects.
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Gensets are the same, right? A lot of people have bought
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gensets believing that their data center is going to go into
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service in the next 18 months, only to find out that they're
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delayed by three years. And so you see a lot of
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hoarding. So there is an increase in
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demand and there is, you know, some new manufacturing coming in
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place to catch up. But I would suggest to you that
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we actually have plenty of manufacturing capacity and we
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also have a lot of excess manufacturing capacity in places
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like India, the places you're starting to see companies bring
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that capacity over to the United States to try to meet the
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backlog. You know, people are four years
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behind right now on Transformers, but I would
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suggest to you that we're not structurally short Transformers
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and switch gear bus bar and Gen. sets as much as there's a lot of
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hoarding going on. And I think if we really took a
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longer view, you're going to see that there's probably over
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capacity in these areas probably six or seven years from now.
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The next question is from a user on Reddit.
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The username is spelled DJIIVU. Thanks for your question.
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You're asking what do you think is the gateway drug to
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renewables and why is it balcony solar?
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I think when you say the word gateway drug, I think you're
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talking more about residential installations as opposed to
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commercial or utility scale. Balcony solar is a great choice.
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And what that is, is there's a lot of folks who are buying 2
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panels with batteries and just plugging it in to an outdoor
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wall socket. This really originated out in
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Germany, has taken a life of its own, and now you've got I think
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over 15 states in the United States that are passing laws to
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make balconies so illegal. Utah started the craze.
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Virginia has passed a law recently.
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I think other states are starting to pass laws as well.
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So very exciting times in general.
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I would say that what's more exciting is that there are
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companies who are now making manufactured solar arrays that
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can be placed on the ground and be drop shipped to your home
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with a battery installed within it.
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And those systems are going in at roughly $2.00 a Watt.
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So like 1415 kilowatt systems going in for 30/30/2000 dollars
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fall in installed and at that price you're below $0.10 a kWh
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delivered to the home. And so I think for a long time
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the United States really has been a high cost place to do
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distributed renewables right there.
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Just a lot of margins and aggressive sales tactics and
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other things that have been happening.
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But I think what I'm really excited about is that solar plus
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storage, at least you're seeing specific companies going to
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market later this year with a packaged solar system that is
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much cheaper than what's been offered before, really breaking
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that $2.00 a Watt mythical area. And not only do you save a lot
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of money on your electric bill, but if you have a battery, then
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you can participate in virtual power plant programs, which many
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utilities are starting to offer around the country.
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And that means that you can get even more revenue.
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So some markets you can get $10,000 over a five year period
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just on virtual power plant revenues.
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So super exciting times. That's it for this week's Ask
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Jigger. Thanks to our friends at Octopus
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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. Thanks for listening as always,
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you can find us an Apple podcast, Spotify, our YouTube
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channel where we'd love for you to subscribe and you can see our
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back catalog there as well as on energy empire dot FM Thank you.