Inside the ‘crazy grid’: why the future of energy needs everything, everywhere, all at once

21:20Amy Myers Jaffe:And that's been static for a few quarters now. Various reasons why that might be, I guess, maybe the unpopularity of Elon Musk with some people is part of it. Who knows?

21:31Ed Crooks:I've had some listeners write in, Ed, and they say that, you know, we're having a change in the model year for the Tesla. And therefore, you know, that always slows things down. The last year of a model when you're going to redo the car going forward. So they say it's not all branding. So just pointing that out.

21:51Amy Myers Jaffe:Right. No, you may be right.

21:53Ed Crooks:So when we get to 2026, it might look different.

21:56Amy Myers Jaffe:Agreed. Agreed. As you say, maybe it's just a pause and maybe next year it is all going to look different. But then meanwhile, in California, you have this very interesting situation where you have states set that goal of getting to all electric in vehicle sales by 2035. There's been a vote in Congress essentially to take away California's power to set that goal. At least that's my understanding of basically what's happened. But, I mean, Quinn, you can correct me if I'm wrong on that, if I've misinterpreted that. But anyway, point being, the bottom line, it seems to me, is that the future of EVs in the US in general, but in California in particular, is highly uncertain.

22:38Amy Myers Jaffe:And so when you think, again, going back to your point, Quinn, about how do you plan for this, what are you planning for? How are you thinking about the future of EVs and what that might mean for the grid? Yeah. So before we step into the grid, let me just echo kind of just some of my general thoughts around the health of the EV related market. And, you know, one of some of my frustrations in terms of kind of the current policies regarding electric vehicles is that if you think about in the broader context, which is globally, right, global EV sales have been going through the roof. based upon, like, if you take a look at data back from 2018, it was like 2.5 % of all vehicle cells were EVs.

23:15Up until now, where it's 18 % of all electric vehicles, all vehicle cells are electric vehicles, like this is a growing space. It's not just happening in the United States. It's happening all over the world, Australia, Europe, Asia, it doesn't really matter, right? Like, people are buying EVs. And if you think about even my own personal story, I used to drive a BMW 335i. And it was like this 300 horsepower, 300 pounds of torque, you know, beautiful ice engine BMW. I love this car. It's a nice car. I now own, you know, a Tesla Model Y long range. It's a seven seater. It holds on my kids. It's kind of like a family car.

23:49It's an EV. But it, I mean, that thing is a beast, right? It's 384 horsepower, 375 pounds of torque, 0 to 60 in 4.4 seconds like it outperforms my ice engine bmw sports car coupe that i bought when i was going through some sort of quarter life crisis in my life um and it just completely outperforms it and if you think about like even think about like two different trucks that are currently in the market today from a u.s manufacturer if we want to do this the silverado 1500 which goes between 285 horsepower to 420 depending upon what version you get to the silverado ev which goes from 510 horsepower all the way to 760 horsepower.

24:30I mean, these type of EVs that we're seeing come into the market, they have the range, they have the power. My wife doesn't even like driving our ICE vehicle anymore because when you're going on the freeway and you're looking to do lane changes, it's a lot easier to do with an electric vehicle. And globally, you're starting to see really, really cheap EVs coming onto the market from companies like BYD and other manufacturers that are saying, hey, we're going to double down, triple down into this market. It is a growing market, right? And internationally, they're going to double down.

25:04Ed Crooks:To Quinn's point, Ed, I was speaking at a conference in Houston, and somehow the subject of ICE engines reasserting themselves and, you know, blah, blah, blah. And of course, in Houston, everybody drives like a suburban. And so I asked this rhetorical question to an audience response, where I asked people to actually think through if you're a, you know, middle class person from Mexico, living in Mexico City or Guadalajara or some city like that, and your choice is a Chinese EV five years from now that might charge somewhere between five and 10 minutes and go 350 miles or farther and cost you between$25 ,000 or$27 ,000 versus an American Suburban, which costs$110 ,000 today.

25:58Ed Crooks:You know, which one do you think they're going to buy? Right. And so, Amy, the big thing that I want to do is I want to make sure that we as the United States can still be successful in this industry. And, you know, what I'm kind of seeing is like we want to really kind of ratchet back on some of this type of stuff. And where I feel like other countries in the entire nation, entire world are starting to ratchet up. Right. They're going to start investing more into innovation, more into their supply chain, more into their manufacturing capacities. Right. They're not they're not shying away from this.

26:37They're doubling, tripling their investments into this on a regular basis. Whereas kind of like in the United States, if we start, you know, really curtailing some of the investments that are required and supporting this particular industry, we are going to basically exit the industry. And it's kind of like the metaphor that I like to say is, hey, you know, there's a space race, love to get to Mars. The entire world is ratcheting up their investments to get to Mars. Meanwhile, we're like, you know what, we're going to give up that and we're just going to dig underneath the ground. Like, how do we maintain our national competitiveness in this and support the necessary components that help EVs make more successful?

27:16Support chip manufacturing. Support vertical integration of materials and rare earth materials to produce the batteries. produce the batteries here, support the ability to produce really cheap electric vehicles, and be able to compete in the global market, which is much bigger than the United States market in general for vehicles.

27:37Amy Myers Jaffe:Yeah, I have to say, I'm afraid I'm a bit of a pessimist or a fatalist about the US ability to win in that competition. I mean, I absolutely agree with everything you've been saying about the way the global market is changing. I've just got back from China. And it's incredibly impressive, the number of EVs you see and of really nice EVs. One of the things, as you say, what BYD is doing, and we've had these big price cuts announced by BYD recently, they're very, very aggressively competitive. And they're starting to spread all over the world as well. But they are just one company. There's at least half a dozen other companies making really good EVs in China.

28:15Amy Myers Jaffe:There was a lot of brand names I didn't even recognize when I was driving around there. And so it feels like the US is already a long way behind, actually. And it's not like, you know, the US is not at the cutting edge of the technology. China is at the cutting edge of the battery technology and a lot of the other technologies associated with EVs. And as you say, it would be great if the US could make low cost EVs that would be cost competitive with internal combustion engine cars at the moment. Feels like they can't do that. And if you look at the average price of an EV sold in the US, it's kind of$10 ,000 per vehicle higher than the cost of an average cost of an ICE car.

28:58Amy Myers Jaffe:So as I say, I'm kind of worried. And I could absolutely imagine a world basically in which the whole of the rest of the world goes to EVs. But the US kind of remains an island in the auto industry sticking to ICE vehicles long after most other places have given up on them. Yeah, well, and this gets back to like, do you just want to give up, right? Do you want to give up the manufacturing of automobiles so that the only place that we can sell these type of automobiles is to the United States? I don't think that the United States really wants to do that. I don't think that's the intention.

29:32Ed Crooks:Let's not exaggerate. There are going to be places that don't have a good electricity system or whatever, and people are going to buy, you know, oil-based cars. But I do think that when you're talking about being in sort of an advanced economic society, right? The reality is, again, with China and others leading, that automated vehicles are also going to be the future in terms of public transportation even. And almost everybody's, you know, I mean, I get it, you could have an auto, you know, my ICE engine and my EV both have cruise control and so on and so forth. But the emphasis on these AVs is, again, Again, electrification, because there are these whole integrated systems, right?

30:18Ed Crooks:And so there's like so many different things that countries are going to go to over time, you know, which we can talk about again on this whole subject of EVs and the grid. You know, you get bi-directional charging and discharging from the batteries from these EVs and EV trucks. And so it's like, are we going to be played in that or not? The analogy I like to use, Quinn and Ed, is I like the ones you've made, but the one I like to say is imagine if the United States decided it's cheaper and easier for everyone to go back to analog phones in their homes, so we're just going to put telephone booths out again.

30:56Ed Crooks:Would anybody else in any other country in the world stop making apps and programs for smartphones? No, because it's like such a different technology. It's a different forward-looking way of organizing the life and the world and younger generation and how they operate in the world. Yeah, so this gets back to like, you know, what can we do here in California, right? And as a utility, how can we still help with electric vehicle car sales here? And I don't know what exactly California intends to do about some of these federal things that are happening, whether it's the tax credits being eliminated or some of the ability for CARB with the California Air Resource Board to be able to enact specific type of regulation in California that's California specific.

31:39But what I would say is that, you know, EVs are still growing here in California today, right? Despite all this uncertainty. And, you know, taking maybe the Tesla car sales out for a second and putting that to the side, you're starting to see EV car sales from other OEMs starting to increase here in California. And, you know, if you think about the performance of these EVs, as well as the potential that in the second generation of these type of EVs will contain vehicle-to-home backup power, Now you're not only driving a car, but now your home is resilient to any type of outage. I mean, these are huge, huge upsides that if we can figure out how to really reduce the cost.

32:18So what we're doing here in California is we know part of the barriers to buy an EV is two things. Public charging, which we're managing through and we're trying to get as many public charging as possible. We can talk a little bit about the innovations that we're doing here in California to get them out faster as possible. The other piece about this is the home, right? And if you think about, like, for example, half of our service territory, half of our customers have a 60 amp or 100 amp panel. And you slap on an EV charger onto your 60 amp, 100 amp panel, your electrician is going to tell you you need a new panel upgrade.

32:54And here's all the costs that are incurred beyond that. And you're going to have to call the utility. It's going to take them four months and additional couple thousand dollars to be able to upgrade their infrastructure. And now it's going to take you four to six months and thousands of dollars, if not tens of thousands of dollars to get an EV charger at your home. Like that obviously will dissuade a lot of customers from making that conversion. Well, we have technology that we're rolling out here today in California that'll be made available in the next year that basically will say, hey, as long as we can control your EV charging rates, we will be able to, hey, let you have your 100 amps and maybe your EV can't charge full rate when your air conditioning is running or when your heat pump is running.

33:42It charges maybe a little bit slower, but by 6 o 'clock in the morning, I mean, like, heck, even in like two hours, your car will be fully charged instead of one and a half hours. Like, I don't think that's going to be too big of a deal, especially since most people are on time of use rates. Don't charge until midnight anyways. And your air conditioning is not running full bore between midnight and 6 a.m. You'll have plenty of time to charge. And it's about being able to manage through these limits. I don't think our customers are actually going to feel any type of impact at all. They're not even going to realize it.

34:17It's kind of like my fiber connection back at home. I have a fiber connection and they curtail me all the time, but I have no idea what's happening in the background. It doesn't inconvenience me at all. And how can we go ahead and put these technologies where you don't need to do any type of upgrades to your home and get access to level two charging tomorrow, right? That's exactly the type of systems that we're putting into play.

34:38Amy Myers Jaffe:So that's really cool. Are you the first utility in the U.S. to be installing this kind of technology? Is this something that other people are starting to experiment with? Well, when it comes to avoiding your own panel upgrade, there are technologies out there that do that. Tesla has the ability to put like a CT clamp on your breaker and be able to modulate, you know, the charging rates based upon your panel size. But to be able to say, hey, we can eliminate the secondary upgrade to your house, the service transformer upgrade, some of which, you know, you will be on the hook to pay for if we can even eliminate that.

35:14Now, you don't need to wait four months to be able to interconnect that heavier load onto your system. We don't need to upgrade our system. and it benefits not just you as a homeowner who's looking to get a level two charger. It benefits all ratepayers because now I don't need to do those upgrades or defer them for a little while.

35:32Ed Crooks:So I'm going to weigh in here as an EV owner who did put in a home charger. And I admit I'm in a state where apparently when I was researching an article, actually I realized that my utility will put a meter in my house and then kind of do, not with technology, but I think they will charge me differentially based on when I charge my car, which would work for me because I usually charge my car on Sunday, right? So the question is, I feel untrusting, though I have no reason to, that I'm going to do all this thing. I'm going to make the appointment. I'm going to go through the hassle of getting this meter.

36:12Ed Crooks:Hopefully it won't mean that I can't charge my car because sometimes my car is finicky and it's really a hassle. So the question is, after I do all that, will I actually see a difference on my bill? You know what I mean? Like I think from a consumer point of view, if you're having one of these cars, it's like, you know, at first I couldn't tell when I was charging my car if it changed my electricity bill at all. It didn't seem like it did it and nothing was different. And then all of a sudden in the last three months, my electricity bill has gone out of sight. And I don't know, and it's not even hot yet.

36:45Ed Crooks:So I don't even know, like, what caused that? Is that just they have these surcharges where I am that's paying for some nuclear plant that they had off pay? And then it was the whole we gave electricity for free to people during COVID. And now you wealthy people have to take your fair share of your bigger load to pay off that off. I mean, I can't even tell what's going on. So if I was still in California, Quinn, if I still lived in Northern California, would I be able to tell from my bill how much is my EV charging and what benefit I would get from my charging on Sunday? Is that even transparent now in California?

37:20I'm not going to say it's transparent in the way that we need it to be, but we're making it so. Like, if you think about these next generation meters that are coming out, right, they're basically a computer with apps that you can program onto it directly into the meter that you can now interact with in real time. So, like, you know, I can see a world where we create a customer experience, and we're thinking about doing this today, where on a day basis, I can tell you how much you saved. If you had an ICE vehicle, your average commute looked like this, and you used this much wattage on the EV, because we can tell what you charged, and say, hey, listen, you just saved$5 today from your commute, right?

38:00That if you had an ICE engine like you did before, you would have paid this much. And I mean, that's easy to calculate. We can do that through that type of real-time experience. And we want to take that even further. We'd love to have the ability for these type of meters. And we can do this all with privacy in mind for our customers where it can show you, hey, listen, I'm looking at your usage, your utilization. And we noticed that you have a baseboard running, right? A baseboard heater running. You know, you could save X hundreds of dollars per year and pay off the system within three if you transferred over to a heat pump.

38:38Click here to learn more, right? And then as soon as you do that and you make that installation on a daily basis, weekly set up, whatever you want, it could tell you how much did you save today? That if you had that old baseboard heater that you had before and changed over to a heat pump, here's how much you save. Like we can do all of that. These new meters and these technologies can give you that customer experience.

38:57Ed Crooks:But this is what I want to know. I want to know if I charge, you know, if I was, you know, plugged in at four versus if I plug in on Sunday, I want to know if I'm really actually getting a break. Because how would I know? Like if I always plug in on Sunday, how am I going to know? I mean, I'm always plugging in Sunday now. So how do I even know if I'd save money if they put the meter in? Well, these are those things that you have as like rate calculator tools. And all of these things will take a look at your historical usage and then they'll forward calculate. And they'll say, if you were on this rate plan versus this rate plan, if you charge your car at this time or at this time, you save this much money in like a calculated benefit, annualized benefit.

39:39And, you know, that creates a certain decent customer experience. I think we as utilities overall can do a lot better to make sure that you know exactly how much you're saving so that you're looking at your accumulated savings over time. And you're like, holy cow, this is totally worth it. Right. We need to do a better job at that. I think one thing, other thing that's kind of cool that's happening here in California is that we're really trying to accelerate high speed fast chargers, right, to make public charging more accessible to our customers. And like, if you think about these like four megawatt, five megawatt, seven megawatt high speed fast charging stations, you might run into periods where you're constrained on the distribution grid.

40:16Some planner will take a look at it and say, OK, on a really hot day in October, you would overload the system. And so, you know, maybe that fast charger can only get half of what they want during the summer and they can get everything that they want during the winter. Well, I mean, OK, that's not really what the high speed fast chargers really want. So what we've been able to do is we are now having a system in place, you know, a DERM system, a distributed energy resource management system that calculates what the constraint looks like for tomorrow.

40:47Amy Myers Jaffe:Yeah, sorry. Let me just zoom in on that. A DERM, so distributed energy resource management system. So what does that exactly mean? It's basically a way that we can send signals over to a particular site and let them know how to dispatch their energy or how to reduce their load on their system. It's that type of system. Right. And so the advantage of that then for a fast charging system is what? Because surely, I mean, it's still the case, right, that if you have to throttle back the amount of power that's going to that station, then the amount of charging they can do also has to be throttled back.

41:22Right. And so the way that the current planning systems work is we'll give you a six month type of D rate, right, which means that you wanted four megawatts. But for the entire summer season, you can only have two. Right. It's a very kind of, how would you say, a much more crude way to make sure that we're not overloading our system. This new type of technology that we're putting into place will give you a day ahead hourly constraint so that you're only constrained on the days, on the hours where we're projecting an overload on a real time basis. And so that might be, hey, listen, I can give you all four megawatts 98 percent of the time.

42:02Now, on this particular day in September where it's really, really hot on these hours, two-hour window, I need you to not charge as fast on the high-speed charger. Can you just lower your load a little bit, maybe a one megawatt down? And I can give you more and more load on my system until eventually I do the wires upgrade. And then you can get whatever you want, however you want, whenever you want. Yeah.

42:28Amy Myers Jaffe:Yeah. But this is a way of getting those stations up and running faster before you put the wires upgrade in. That's right. Yeah. Got it. Got it. And now that's really interesting. Let's get more power to these places, get more public charging available, get more home charging available, make it really cheap for all of our customers, which will actually help reduce rates and accelerate electric vehicle adoption by just eliminating all these barriers wherever we can. That's kind of what we're trying to do in the innovation space. So what a lot of these things remind me of then is the debate we've been having a lot on this show about virtual power plants, VPPs.

43:02Amy Myers Jaffe:And it seems like when you have these kinds of technologies like advanced metering in homes, when you have things like this DERMS, as you say, that you're talking about distributed energy resource management systems. You know, all of these things are these things that are ways of providing additional flexibility to the grid on the demand side, which can help manage some of the pressures we've been talking about.

43:28Ed Crooks:But Ed, remember that it can also be connected with batteries. So it's not just that I'm reducing load. I could actually be sending back to the grid. You know, you could have a car that's bidirectional charging. So that could be sending back to the grid. You get a home solar that's sending back to the grid. So it's actually, you know, my students have been working with me on this study on VPPs. And, you know, the definition, we've been working with these different databases, you know, EIA put this great database together. You have RockCrest had this great database, but everybody defines it a little bit differently.

44:07Ed Crooks:And so thinking about VPP as this sort of collection of hundreds or thousands of small scale energy resources pulled together or demand management systems pulled together, your smart meter is kind of a resource, your HVAC could be a resource. You know, there's so many different parts to this that I just sort of, you know, throwing it out there because thinking about it, you know, what makes it the VPP, I guess, is sort of just the aggregation. Some people say, well, if it doesn't have a software system, then I don't count it as a VPP. So there's a lot of ways of thinking about this. And they gave me these four words to like think it through, which I'm sure Quinn will disagree with because they're very, you know, like I'm writing an essay.

44:49Ed Crooks:Right. So there's shedding. Right. Like I'm using my smart thermostat to get rid of electricity to load at peak, right? Or I'm shifting. That would be like I'm not going to charge my EV at peak, but I'm going to do it on Sunday. There's shimmy, where my battery is going to adjust its power outlet to help maintain the grid's frequency, right? And then there's generate, where I'm literally, I have my solar or batteries that are putting electricity into the grid.

45:25Amy Myers Jaffe:Shed, shift, shimmy, and generate.

45:27Ed Crooks:Correct.

45:28Amy Myers Jaffe:So your students came up with that?

45:30Ed Crooks:Well, I don't think they came up with it, but they gave it to me as the way that we're all supposed to be conceptualizing VPP. Yeah, okay.

45:36Amy Myers Jaffe:I think that's pretty neat. That's a good way to think about it. That's interesting.

45:39Ed Crooks:I bet that's not the way Quinn thinks about it when he's organizing his business for VPP. So maybe he wants to give us a more professional.

45:48Amy Myers Jaffe:Yeah, go then, Quinn. Yeah, I think it's a little simpler on our side. We just think about it as a firm resource or a non-firm resource. And so, like, for example, you can aggregate a whole bunch of air conditioning systems and call that a VPP. But the second day of a heat storm, those people are not going to allow you to touch your air conditioning system. And we know from various demand response programs that like, listen, it's great for the first day. But when you get to that second consecutive or third consecutive day, it really sucks. And so we think about it as.

46:21Ed Crooks:Now, when you say when you say really sucks, do you mean the person who signed into the VPP feels hot in their home or you mean that they refuse to give you the ask? They refuse to give us the ask. Right. And then they disenroll themselves out of the program whatsoever. Like I have a 10-year-old and a six-year-old. I can imagine a world where my home is like 85 degrees four days in a row. And, you know, we get those type of heat storms here in California. You get a three-day heat storm. I may be able to convince my wife and my kids to suffer for one day, but not for the second, not for the third.

46:54And over a sudden, you're looking at the type of compensation you get for this. And you're talking about the hardship. And you're like, it's not worth the money. And this is where it gets to like firm versus non-firm. Firm is great. You dispatch it, you get it, right? These are like, you know, mini power plants that whether it's a generating resource or an energy storage resource, you get what you ask for. Then you have the non-firm, which is all behavioral based, where you hope you get something. You're not exactly sure what you're going to get. HVAC systems, you're not exactly sure what customers are going to do.

47:28EVs, you're not exactly sure what you're going to do. Our car is even plugged in to not charge during that period of time. So for us, it's really more about firm versus non-firm and how we think about what they're able to do.

47:43Amy Myers Jaffe:And do those non-firm resources have any value at all then, really? If you've got to rely on it, then, you know. Again, from an operational perspective, they have value, right? Because you can call on it and you'll get something. You'll call in on it the next day. You'll get something less, but you'll still get something. And that's really more from an operations emergency and maybe a little bit about like high prices that are on to be able to suppress really, really high prices. But from a planning perspective, it gets really hard because if you're planning for a one in like a 10 year worst case scenario, you can't just say, well, that that worst case scenario is only going to happen on one day of that year.

48:26It could happen in consecutive days of that year. Right. And so your planning process has to scrutinize those type of non-firm resources a little bit harder.

48:36Ed Crooks:So the interesting thing, Ed, like in Vermont, where Green Mountain Power and some of the co-ops have really embraced the VPP model. So the interesting thing is, you know, in a state that where solar is, you know, a little bit handicapped seasonally, they have actually say that they've completely eliminated peak load. And so, but then they say they have these weird events, which gets to Quinn's point about, you know, how do you plan your resources? They get these weird events where they don't actually have, you know, these surges and if it's hot during the summer or whatever, because peak has been eliminated and smoothed out with these resources.

49:15Ed Crooks:But you'll have a snowy day and the snow will cover the solar panels. And all of a sudden you'll have this one hour deficit that's really hard to manage. And it could be like at 11 o 'clock in the morning. And so it's even less predictable because at least with peak, if you were in California, you know, the governor can come on TV and say, I need everybody to stop charging their car and turn off the thermostat, right, for an hour. And then maybe people would do that. But in Vermont now, they don't even know when that's going to be. And this gets back to like when we talk about VPPs, it's like VPP for what?

49:51And I think that's really important to distinguish about what are you using the VPP for? Is it for a system resource, for emergency conditions? Is it a planning resource? Is it something that will help you reduce LMP prices and maybe use it in that perspective? Are you trying to use it to defer a distribution or transmission upgrade? So like all of this matters.

50:15Ed Crooks:I mean, I think what's being underutilized, you know, talk about places like PJM and other places where they're not really using it yet, is did I have a place where I had system congestion and I thought I was going to build, I'm telling my rate payers I want to build some multi-billion dollar baseload plant when that's not really needed, where I really could put in some kind of VPP system and eliminate that upgrade. that needed upgrade for some period of time. Here's what I would say is, and this is going to get to a broader contextualization of where we are in the energy market. We need everything that we can get, right?

50:56And so to say that, oh, like VPP is going to be a cure for wires upgrades or generation-related needs, and that's not the paradigm that we need to be talking about here. We need everything. And the reason why is that when you're double, Like it's fine if you're 0 to 2 % load growth, if you have minimal load growth related concerns, you're not having a lot of data centers. Great. Use DER resources and you can defer all these wires investments. And, you know, you have a lot of predictability about what's going to happen, when it's going to happen. And you can use it as a planning piece. For today's world, that's not how that works.

51:32We need absolutely everything. And what's the frustrating portion about some of the things that are happening kind of more on the federal level around like the infrastructure acts and the reduction of, for example, tax credits is that we have a lot of things that are in the pipeline. And this is across the entire nation. It's not just in California. A lot of things that are in the pipeline today that are going to give you energy storage, more solar, just more generation resources because all of us are looking at electrification or we're looking at even data center loads. And we're saying, hey, listen, we need to throw everything at it.

52:07And the problem with some of the things that are happening is that if you eliminate a particular tax credit on a particular technology that is already in the pipeline to be built, what ends up happening is you're going to get some sort of delay, right? And that delay is you don't have any just shovel ready projects of natural gas fired turbines or natural gas fired reciprocal engines or any other type of technology that just ready to replace something that's already in the queue and or something that is about to be placed into the queue. Right. And what you want, if you if we want to stay competitive, for example, in data centers and AI, which I think all of us want to do, regardless of if you're red or if you're blue, I think all of us can agree that we want to be competitive in AI.

52:57For us as a utility and an energy market to be able to support that, we need to bring on as many resources, whatever resources we can, as fast as possible, right? Any type of delays in that will cause us to now not be able to interconnect that data center as fast as they want it to be because we're going to have some sort of constraint. And this gets back to we need to have flexibility. That needs to be a part of the equation. But it's not, oh, because I have flexibility, I don't need to do generation or because I have flexibility, I don't need to do transmission. No, no, no. We need all of that.

53:32Right. And so this is where it really comes down to this. this, I go back to Ezra Klein's book around abundance, we need to create energy abundance, but do it in a smart way. And flexibility is the do it in a smart way. But we need this energy abundance to be able to support this high level of growth we're seeing, so that we can maintain national security on dominance in these particular areas that we want to be dominant in. And so that's kind of where I would get off my little high horse here about what's happening.

54:02Ed Crooks:So but but but let me just make this, you know, just to be like the VPP proponent of the world. Right. I mean, there is this thing about speed, like the speed at which I can put in a VPP is quite fast, whereas the speed at which I can plan and implement a major transmission upgrade is slow. And then even slower is to build some giant centralized nuclear plant or even with the backlog for gas generation units. I mean, we're talking about a multi-year backlog. Yeah. And I would say, like, listen, if there's resources out there today that we can tap into as a VPP that can take some of the constraints off, great.

54:45Let's use that. Right. But when you talk about the type of needs that are happening both on the distribution and the transmission system, we're not talking about kilowatts of load. We're talking about megawatt and megawatt hours worth of load. And you can't just VPP your way out of those localized constraints to be able to interconnect that load at that location at that particular constraint point. Now, could you procure it?

55:07Ed Crooks:Is that really right? Because, you know, I got my piece of paper here, you know, let the listeners know I'm waving a piece of paper around, which are all the VPPs that are 300, 400, 5 ,000 megawatt systems. Great. And that's right. I mean, they can be that's great for the. And let me give you my list of utilities besides your own. Green Mountain, Portland General, Eversource, Entergy, AEP, Con Ed, Nevada Power, you know, Hawaii, right? The co-ops, I guess now that Virginia passed this law, you know, Dominion. Totally. I mean, we're talking about not small players. And so this is great from a system perspective, right?

55:45As a system resource, these VPPs can be tapped in and you can try to figure out how you might be able to optimize it at the grand system level. The problem is if I am on the Oakland X 1102 and I have a capacity constraint because I'm trying to land a fast charger there, something that's on the Bangor 1104 way out 30 miles away and VPPing that thing is not going to do you any good for the constraint that I have on the Oakland X, right? Or on that local transmission system, I can only call upon the resources that are within that that actually are associated with that particular constraint. I can't take a resource way down in Bakersfield and help me out with a constraint that's in San Jose.

56:29And so, you know, yes, from a system perspective and being able to manage through the peaks and lower LMP prices and lower wholesale prices and figure out how to optimize for total that peaky generation. Don't get me wrong. I think there's value and there could be value on the distribution and the transmission system. But it's super localized and it's kind of like a what if. And I get back to what could you procure your way out of it?

56:56Ed Crooks:Is part of that the pricing system problem, right? We're not pricing to incentivize it in the locations where we need it? Well, here's what I would get to. We're not getting it. Here's what I would get to is that let's just take a look at an energy storage, behind-the-meter energy storage system, right? Cost you$10 ,000 installed. Eh, you know, on average, right? It gives you 13.5 kilowatt hours. But let's say I only can tap into 10 of those, right? So if you do the math, and I'll skip the math about how this math gets calculated, but it's going to cost you about$6 to$8 million to get you around 3 megawatts to 6 megawatt hours, maybe 4 megawatts to 8 megawatt hours.

57:36So then what can I get with a new feeder at 600 amps? If I have a 12 kV system on a three-phase system, and ignore the math. The math is all in the background. I can get—

57:48Amy Myers Jaffe:And to be clear, sorry, just to jump in, a new feeder would be what then? A new circuit. A new circuit, right? Okay, so new generation or just a new?

57:57Ed Crooks:So we're going to make a new distribution line on a new substation?

58:01Amy Myers Jaffe:Yep, on a substation that already exists. It might have new generation attached to the end of it.

58:04Ed Crooks:Okay, on a substation that already exists. So I can get, for a 12 kV system, I can get 12.5 megawatts or 300 megawatt hours out of that thing. For a 21 kV system, I can get 21.9 megawatts and 525.6 megawatt hours. So pound for pound at six to eight million dollars, what do you want me to build? And so what I get back to is if we have significant amount of uncertainty and growth, and especially in areas that are going to be high in growth, what I want to do is I want to get it out of the way so that those people that want to interconnect to the system can do it as fast as possible in the most economic way.

58:43and pound for pound for six to eight million dollars what do you get from a distribution perspective just talking about distribution you know you get so much more by building a new feeder

58:53Ed Crooks:that allows now new businesses yeah but that but you have to have the capacity to service that feeder i mean a lot of places they don't have the capacity to serve well and that's why you would build a new feeder or you would build a new bank at a substation that then opens up so much more Now, I think what you could do. But the substation cost could be like a billion dollars. No, new substations don't cost a billion dollars. Sure. If you need to build out full new transmission systems on the 500 KV system to be able to interconnect all of this together. That's one thing. Right. But when you're talking about localized needs and being able to open up the local pocketed area.

59:30No, you don't need a billion dollars worth of investment in that local pocketed area. However, I will say there is value in doing both the wires investment and doing the load type of things that you can do to shift the peak off the off peak because now you're freeing up even more capabilities to be able to interconnect more load. And I think what we really need to focus on here as we think about growth, electric vehicles, building transportation, data centers, whether they're distributed or they're centralized on the transmission system, we just need to open up more of everything. So I want more feeders.

1:00:06I want more transmission lines. And I want the ability to shave the peaks and fill the troughs because that is the way that we interconnect all of these new businesses. And if you connect the new businesses, you spur industry, you create more jobs, you create more income for the state that can then have more taxes to pay for better services. Like there's this concept of abundance that if we build, the growth will come, it will reduce rates. And if we're able to do that, then we're creating this growth economy that could really help out with both our rate payers as well as the public sector. We need to do all of it.

1:00:43Amy Myers Jaffe:Right, so that is fantastic context for what I think, unfortunately, it's going to have to be the last question because I know, Quinn, you've got to run. But just thinking about that then in terms of flexibility, I don't know if you heard the show we did the other day with Tyler Norris from Duke University. I'm sure you read his work on adding new large loads to the grid and the massive difference it makes if those can be flexible. And you've made your point very clear. You're not rejecting flexibility. You say that's a very important part of the mix on the demand side. but the way Tyler Norris has calculated his numbers, they have these huge impacts from potentially quite small degrees of flexibility.

1:01:24Amy Myers Jaffe:As long as your large loads can have just quite a modest amount of flexibility, it can make a colossal difference in terms of the amount of additional infrastructure that you have to put in on the grid. Do you find that kind of work plausible? Is that something that actually makes a huge difference? And so from what you're saying, yeah, I mean, it feels like the implication a bit is that, yes, flexibility is important, but it can only make a contribution on the margin. Yeah, what I would say is that if you're going to interconnect a 400 megawatt data center somewhere or 300 megawatt data center somewhere, you're going to run into some sort of constraint that you're not going to be able to flexible way you're out of it or yourself out of it.

1:02:02But from a system perspective, as you think about system planning and what type of generation resources that you would need to bring on to bear for a 10-year forecast, 20-year forecast of total energy, it could be helpful. But locally, for that 400 megawatt data center that wants to plant right in a particular location or like the number of data centers that are looking to interconnect in San Jose is an example. I think, let me see here. We have maybe a 4.1 gigawatt of additional power demand from 21 new data center projects as a part of a cluster study that we launched. I mean, like, you know, you're not going to be able to flexible your way out of that type of investment that's required in order to support those data centers.

1:02:44But there is still value in that flexibility. The big thing that I would say here is that I think what we really are focused on here is how do we get those data centers interconnected as fast as possible? And one thing that, you know, we're thinking about here, and I'll leave this out as the final innovation that we're trying to figure out is, you know, right now, some of those constraints that occur when you're connecting those large data centers to the transmission actually aren't on what I consider normal operations. If all the transmission lines in that entire kind of web in that local area are fine and they're not, they're all in service, maybe you're actually okay from supplying that 400 megawatt data center load.

1:03:22But when we take a look at our studies, we take out one transmission line and then we take out another transmission line and we look for constraints. We have to do that because the transmission system feeds so many people. It needs to be much higher in reliability. And what you might find is that, oh, the constraints actually only occur when you lose two power lines, transmission lines in that general area. OK, well, let's talk about this then. If I ever run into those situations, can I either trip that data center offline or trip portions of that data center offline? But that means that you don't have to wait the five to seven years it takes for us to do our wires investment to get you interconnected.

1:04:06And that's value, right? Because if the frequency that we ever run into those scenarios are very low and limited, and data centers are willing to take those type of risks, maybe there's an opportunity for us to get you connected three years faster, four years faster. And then we can start playing around with how do we think about flexibility of those data centers to be able to even shrink that type of impact even lower. And those are the type of things that I think are really innovative. We're trying to work on with our customers to get these loads on faster, to get that competitive advantage in the AI market.

1:04:40Amy Myers Jaffe:Yeah, that is really fascinating. Are you getting anyone yet signing up for that kind of a deal? Well, we're still working on the details of how we would actually do this and how long it would take for us to be able to put together what we consider a customer RAS solution or radial action scheme. I don't want to get technical here. But those are the type of things that we are working on here right now today to try to figure out, can we technically do this? How much would it cost? How long would it take? And are our customers willing to entertain something like this? Really interesting. Yeah, we'll have to get you back on to talk about that as that model evolves.

1:05:11Amy Myers Jaffe:Because, yeah, that's fascinating to discuss further. Unfortunately, we can't do that now. We are going to have to go. Just before we do leave you, though, time for our free electrons, personal items that we've brought in. I don't know who wants to go first. Amy, do you want to talk about yours?

1:05:27Ed Crooks:Yeah, well, Ed, you know, because I'm digital, digital, digital the whole show and my free electron has to be digital. So when I first wrote about this, people were, you know, very skeptical. But listeners, I'm telling you, Aurora Innovations launched their first driverless semi-trucks down I-45, a highway I don't like to drive in between Houston and Dallas. I think it's one of the more dangerous highways I've ever driven on. But apparently we're going driverless on that highway. And Aurora says they're going to be able to do it safely, no driver. And they're going to be able to expand eventually once they're successful to a route to El Paso and Phoenix.

1:06:05Ed Crooks:So we're there for the first batch. And then, you know, there was the announcement that Tesla's finally getting their robo taxis up and running. And then for the listeners, the blimp thing running on Instagram with Amazon delivering you stuff by that's in a distribution center blimp was a fake AI, fake news. But Amazon Prime does have this one hour drone delivery thing that there are moving forward with. So, you know, I think we're just getting very modernized on freight.

1:06:38Amy Myers Jaffe:Yeah, I have to say autonomous vehicles is one of those things I've really had to revise my views on. I was deeply skeptical about that a few years ago, and I think I've been proved wrong. I think that, as you say, it does really look like it's working, or certainly going to work quite soon. Yeah, yeah. So, Quinn, what's your favorite electron? I think mine is just the fact that I want America to be hyper-competitive in all of these advanced industries that are coming up and are growing. And in order to do that, we need more energy. These are very energy-intensive related industries that we need to be walking into.

1:07:11do. We are poised to do that. And we need to do that with everything that we can. Wires, flexibility, new generation, renewable, non-renewable, like you just need to throw everything at it. And it is, you know, I'm so thankful for the book Abundance because it really brings it to light that the only way that we can do this is real focus on building and real focus on growth. And we are in the next industrial revolution here in the state of the United States and in the world. And we need to be competitive in that. And the only way that we're going to do that is if we energize our way through that.

1:07:46And it's an exciting place to be.

1:07:47Amy Myers Jaffe:Yeah, I clearly really am going to have to read that book. We should do a show on it, I think, at some point in the future, because as you say, it's clearly interesting and important ideas. And everybody is talking about it. My free electron is also highly relevant, in fact, to this discussion, because it's about nuclear, and what's happening in terms of nuclear policy in Washington right now. And just wanted to highlight the kind of extreme disconnect between what we're seeing from the administration, which is very much kind of pro-nuclear, wants to support new nuclear investment. There was a series of executive orders from President Trump coming out the other day in terms of accelerating approvals from the Nuclear Regulatory Commission, things like that, talking about using the Loan Programs Office to support construction of new reactors and so on.

1:08:31Amy Myers Jaffe:So you have all this kind of pro-nuclear activity from the administration. Meanwhile, Congress is talking about the reconciliation bill, which would cut tax credits for nuclear, would accelerate the phase out of the tax credit for existing nuclear plants, and it would take away completely the tax credit that would be available to advanced new nuclear plants. And You're not going to be able to get that unless you start construction on your plant before the end of 2028, which clearly is not going to be realistic for most nuclear projects. It's going to be very, very few able to get going by that time.

1:09:09Amy Myers Jaffe:Now, that was the version of the bill that was passed in the House and still needs to go to the Senate. It can make revisions and has to be reconciled between the House and Senate, come out with one version, et cetera, before it finally goes to the president to be signed. But I do think if that bill passes finally in the version that was passed by the House, it's seriously bad news for the U.S. nuclear industry. And again, to your point, Quinn, in terms of boosting energy supply, boosting innovation, supporting growth and development in the kinds of technologies that the U.S. wants to succeed in, passing that bill would be definitely detrimental.

1:09:53Amy Myers Jaffe:and I think would send a very bad signal. So that's something I've been writing about that. I've written a piece about that, which is on the Woodmac website right now, woodmac.com, if anyone wants to take a look at it. But yeah, definitely going to be an important issue to watch is what happens to nuclear power in that bill. And as I say, it's sort of, you know, when you think about tax credits for renewables also being cut back sharply under the proposals, That is, I think, also, you could argue, a bad idea, bad for energy supply and so on. But it's at least sort of consistent with the Republican agenda overall.

1:10:32Amy Myers Jaffe:This is something where it just, in terms of nuclear power, just seems strange for the Republican Party, supposedly to be pro-nuclear, pro-nuclear development and investment, but actually working to undermine it. So as I say, maybe it's kind of, maybe there's a chance that that will get changed for that reason, but definitely going to be one to keep an eye on. Yeah. And so, you know, one place to take a look at is a great case would be Texas. Dominating in renewables, dominating in non-renewables, dominating in AI, dominating in, and they're just like a great case study and a red state, right?

1:11:09Like, what is their model? How are they able to succeed? What is going to happen to them if this tax credit goes? I'm really interested to see what happens in that market to your point and how are they going to continue to dominate to bring all this type of stuff into their market.

1:11:24Ed Crooks:Well, and the interesting thing about Texas, just two seconds, is that in the past they haven't put their thumb on the scale. And so but now they want to put their thumb on the scale. But, you know, if that they might wreck their own success. So going forward. So it's really like an interesting place to look at in terms of that.

1:11:43Amy Myers Jaffe:Yeah, as you say, that is definitely going to be something else, which is going to be really important to watch as that evolves once this law gets passed. So anyway, we do unfortunately have to leave it there. Many thanks, Quinn. Been great talking to you. Thank you for having me. Appreciate the time. Yeah, I hope we can get you back on again very soon. Many thanks, Amy.

1:12:03Ed Crooks:Great to see you, Ed. Great to see you, Quinn. Wonderful show.

1:12:06Amy Myers Jaffe:Great to see you as ever. We'll be seeing you again very soon. Many thanks to our producer, Toby Biggins-Gilchrist. And above all, many thanks to all of you for listening. We do really value your feedback. Please do keep that coming. And we'll be back in two weeks with all the latest news and views on the energy transition. Until then, goodbye.