I was recently invited to speak to a group of Georgia-based technology executives. My presentation focused on the rapidly growing clean energy industry and why the skills and experiences of tech executives can make a huge impact there.
Here are a few of the slides from my deck (the entire deck is at the bottom)…
The grid has barely innovated over the last century
What would the ghosts of America’s greatest entrepreneurs think of the industries they created after a century of progress?
The Wright Brothers might be stunned by the size and the range of a modern 747. Alexander Graham Bell would be amazed that a smartphone, smaller than his candlestick phone, could wirelessly call anyone on the planet just by speaking their name. Henry Ford might be impressed at the speed, acceleration, comfort, and range of a modern car.
But, what about Thomas Edison? Looking at a modern substation, he might scratch his head and think, “well, this looks an awful lot like the ones we built in the early 1900’s. Even the basic architecture seems pretty similar. What have you people been doing?”
Solar and wind have quietly become the lowest cost way to generate electricity
Something amazing happened around 2016… without a lot of fanfare, solar and wind became the most cost-effective way to generate electricity. Even without tax incentives, solar and wind are extremely cost competitive. And, unlike coal, nuclear and even natural gas, the cost of wind and, particularly, solar will continue to shink for years to come.
The price disruption from clean energy sources opens a window of opportunity for entrepreneurs that are able to find fast, cost-efficient ways to bring these new energy sources to customers.
Note: people outside the industry are often skeptical of cherry-picked data. This graph comes directly from a 2018 U.S. Government report. The government tends to be very conservative about the value of clean energy so these numbers are particularly compelling given their source. Other analysis, like Bloomberg and Lazard, calculate even lower prices for solar and wind.
Solar is a fuel, not a technology
People in the energy and electricity industries consider price shifts of 10 or 20 percent to be disruptive. In the 40 years since most of the US nuclear power plants were originally built, the price of solar has dropped 300-times (the price of electricity from nuclear has gone up slightly in that same time).
The secret is that solar is a technology, not a fuel. In other words, the economics of solar are more like microprocessors and hard drives than natural gas and coal. These massive price declines are a day-in-the-life for technology executives which gives them a distinct advantage in navigating this new era of electricity.
Batteries will be the largest disruptive force in the history of the grid
Precipitous price declines in solar and wind already represent a significant disruption to the power industry. But there is a far bigger disruption barreling down the road… batteries.
Like solar, batteries are a technology. We’ll only make a few dozen nuclear plants, maybe a few hundred coal plants, and even a few thousand gas turbines. But we will make literally billions of solar cells and hundreds of millions of batteries in the near future. No other power technology has the economies of scale and the economies of volume.
Batteries aren’t just getting cheaper. They represent an even bigger disruption because they will fundamentally change the way the grid works. I asked the technology execs in the room to imagine the 1960’s when the earliest computers required around-the-clock attention. Data had to be fed into the computers the moment they were ready and output had to be captured as soon as the computer was done calculating. But, then hard drives entered the industry. When they became cost-effective, the entire computer industry changed. Now, data could be teed up at convenient times and the computer could automatically retrieve it when ready.
Today’s grid is like computers before hard drives – everything has to be done in real time. Batteries are about to change all of it. Not only will they lower the costs, they will create entirely new business models. Batteries will usher in a new generation of entrepreneurial opportunity that rivals a century ago when Edison, Telsa, and Westinghouse were inventing the original grid.
The entrepreneurs and innovators are already here
I wrapped up my presentation by talking about some of my favorite startups and innovative companies, including several based in Georgia:
Allows anyone to buy community solar anywhere in the US, regardless of state regulations.
A large provider of solar-electricity to rural Africa. A leader in the novel pay-as-you-go (PAYG) financing model via cell phones.
Highly cost-competitive micro-hydro. Brings the promise of clean, 24/7 water-powered electricity to much smaller streams and canals. Based in ATDC.
Helping small utilities offer clean, local energy to their customers.
ATDC-based next-generation software for designing and operating a decentralized, distributed grid.
An ATDC-based company making solar covered parking lots and other canopy solar projects safe and cost competitive with traditional ground-mount solar.
A new approach to electric vehicle charging stations. Started at ATDC.
Data and platforms for the rapidly emerging digitization of electricity and energy.
Thank you to everyone who attended and particular thanks to those many people with great questions/comments during and after the presentation. And, of course, thank you to the event host for inviting me to present.
You can download the full slide show here.