The Times they are a changin. Remember that Dylan song?
Well, we are at the beginning of a massive change in one of the biggest industries on earth: the business of electricity. Freeing Energy Project founder Bill Nussey takes us through this change, what lessons history teaches us, the opportunities ahead and how this change will affect us all.
Listen to this podcast and others in our series at:
http://freeingenergy.libsyn.com/website/bill-nussey-the-clean-energy-renaissance-and-what-it-means-for-all-of-us
Additional reading
- This podcast is a deep dive on the key themes of the upcoming Freeing Energy book
Full transcript
Sam:
The times, they are a-changing. Remember that Dylan song? We are at the beginning of a massive change in one of the biggest industries on Earth, the business of electricity. I’m your host, Sam Easterby. Freeing Energy project founder, Bill Nussey, takes us through this change, what lessons history teaches us, the opportunities ahead, and how this change will affect us all. This is the Freeing Energy podcast, and these are the personal stories from local energy champions and leaders in the world of renewable energy that are shaping our future.
Sam:
Today, I’m talking to Bill Nussey who is the founder of The Freeing Energy Project. Bill, this has been a journey that has been over two years in the making so far, and over that time, you have learned a tremendous amount about some of the elements that are shaping the future of how we get electricity in our homes. Today, we’re going to talk a little more about some of the topics that you see shaping where energy is going in the future.
Bill:
Thank you, Sam. I’ve been looking forward to this recording with you today because we’ve gone really deep on a couple of topics, but they’re all on one broad category, which is how do we get to clean energy faster. Today, I think we’ll have a chance to talk about that broad topic in the terms that are really driving it at the industry level and the societal level, and so, looking forward to diving in on that today.
Sam:
Bill, the central motivation behind The Freeing Energy Project as a whole really has been to find ways to get to clean energy faster. That has resulted in tons of research that you’ve done, hundreds and hundreds of interview, and more and more, this is starting to crystallize in your mind. I’d like to use today, if we can, to catch up with you on where you are with regard to that vision and where you see things going in the next, oh, year, five years, 10 years.
Bill:
This is what I wake up in the morning thinking about and go to sleep thinking about, and it’s the magnitude of the opportunity, the magnitude of the challenge has no precedent, and really, has almost no precedent in human history. At the very beginning, one of the things that surprised me the most about this whole journey of getting into this industry was just how fundamental, how gigantic, how essential the grid is to our lives, and I’ve seen it by visiting these rural, low-income, subsistent farmers in Africa, people that have never had electricity and get it for the first time. I’ve seen it visiting some of the largest power plants in the world. I’ve seen it in every dimension, and wherever you go, you have this constant theme of when there’s electricity, when it’s affordable, when it’s reliable, it fundamentally changes the lives of people. It changes the society that’s benefiting from it, and the scale of it was surprising to me. Electricity is one of maybe the largest industry in the world at two trillion dollars a year, and most people don’t stop long enough to realize how central electricity is to what we do. Obviously, it runs our computers. It runs our lights, our microwaves. Every bit of medicine, whether it’s a computer that has your medical records to the X-ray machine to electronic thermometer, electricity is the center of all of this.
Sam:
The grid is a big complex thing to a lot of people. So, by the grid, we mean that system through which we get electricity into our homes. It’s not the generation side. It’s not the creation of the electricity, but it’s the means through which it arrives into our homes. Is that how you’d put it for folks?
Bill:
I think you can look at it both ways, and it’s used pretty interchangeably. So, I think, in the broadest sense, that the fact that I can flip on a switch, and instantaneously, the lights go on, and I know that 99.999% of the time, that light will turn on, that miraculous system, one of the biggest, most sophisticated machines ever built, is broadly defined, for me, as the grid.
Sam:
So, we’ve got the grid, and that includes the generation side, and on that generation side where the electricity is made, it covers a whole broad spectrum of things, including coal and nuclear and hydro and, well, batteries now and solar and wind and kinetic energy, lots of new ways to generate electricity. The power generation capabilities of solar and wind now have actually gotten less expensive than other means of generating electricity. Is that important?
Bill:
The big story is that in the last 10 years, we’ve seen a pretty significant shift in how we generate electricity. When I flip my light switch on, the light still comes on, but how those electrons are being created has changed in some big ways. The biggest change is the shift from coal to natural gas, driven largely by the fracking revolution and the lowering cost of natural gas. So, it’s kind of flipped where coal is about 40%. Now, it’s about 30%, and natural gas is the largest source of electricity in the United States, but happening much faster is clean energy, what I call clean energy, from solar and wind, solar power, those panels that you see on the rooftops of houses and on the top of buildings and across hundred-acre fields as you drive down the highway, and of course, the wind turbines that you see in certain parts of the country, where you see hundreds of these beautiful, gigantic, slowly-spinning wind turbines, and those are generating increasing amounts of electricity in the United States. But they’re still, together, probably around five percent or even less of the US electricity generation. So, there’s a lot of room to bring more of that to bear.
Sam:
And the economics have changed quite a bit in their favor, it sounds like.
Bill:
That’s probably the biggest story and one of the reasons I got excited about this space. When I started researching it, we were on the precipice of solar becoming less expensive, and in the last couple of years, it has become one of the least expensive ways to generate electricity. It is substantially less expensive than coal, substantially less expensive than nuclear, and it’s on par, and sometimes cheaper, than even natural gas.
Sam:
So, okay, we’re in Atlanta, and it’s been cloudy out here for days and days and days. Those solar panels don’t generate quite all that I might need at home. What do I do about that?
Bill:
This is the Achilles heel. This is the amazing irony of clean energy. One of the great thinkers in clean energy is a guy named Michael Liebreich, who started Bloomberg New Energy Finance. He says it best. He says, “Even two cents a kilowatt-hour is not enough to motivate the sun to come out at night.” And it’s a great way of saying that solar is really cheap, and wind is really cheap when the sun’s shining and the wind’s blowing, but it doesn’t always blow, and nighttime aside, it’s pretty unpredictable about when you’re going to have clouds and when you’re going to have wind. So, that intermittency is the Achilles heel of clean energy, and to a certain degree, it’s one of the reasons that when you put more and more clean energy on the grid, it gets more and more complicated to manage the grid. When the sun isn’t shining, most of us still want our lights to turn on. We still want to be able to keep our refrigerators running.
Sam:
Well, I would imagine so.
Bill:
And so, the grid operators have no choice but to fall back to fossil fuel generation, and that’s the irony because the success of solar and wind actually makes it more dependent upon fossil fuels rather than less.
Sam:
Thinking about reliability and resilience of the grid and making sure that electricity is always there, and while solar and wind seem to be growing, it’s still missing that facet.
Bill:
Getting past that challenge of intermittency is the single largest stepping stone, single largest bridge we have to cross in order to get to clean energy being two, three, four, five, six percent to being 50, 60, 70, even 100 percent of the grid. That’s the challenge, is intermittency.
Sam:
Sun’s not shining. I’m not going to have any solar power. So, how do you get past that?
Bill:
The way that it’s worked, if you’re a resident or a homeowner or a commercial building to date has been that you stay connected to the grid, and you use the electricity generated from your solar panels when they work, and if you’re generating more than you need, you sell it back to the grid. That’s called net metering. In many cases, getting paid back by the utility for your excess solar is necessary to make at least the older and more expensive solar panels work economically, but you still had to be connected to the grid. That has been the case for the last 5, 10 years. What’s happened really recently, in the last year, is that the cost of batteries, which is dropping just as precipitously as the cost of solar and wind, the cost of batteries is not low enough that it starts to make economic sense to use all of the solar, and when you don’t need it that moment, to store it in a battery, and then, you can use it later. So, for example, store the solar during a bright day and then use it at night. So, your air conditioner and your stove, your electric stove, and your lights and your televisions continue to work whether the sun’s shining or not.
Bill:
Batteries are finally becoming economic. We can store solar energy during the day and use it at night. This is a breakthrough. This allows solar to go from being an intermittent, hour-to-hour energy source to something that can power our homes and businesses throughout a day, and this is the beginning where you started to see the acceleration of clean energy. When we can solve the problem of solar energy throughout a day, we’re off to the races.
Sam:
But just one day. Now, you got to kick it into gear and say, “It’s been cloudy for a week.” How do you get past the week?
Bill:
So, there’s three kinds of intermittency in my research. There’s the daily intermittency, which is clouds, and then nighttime. Night’s pretty predictable, fortunately, but clouds are not, and batteries are becoming economic, particularly if your electricity’s very expensive, like say, in California or Hawaii where the cost of electricity is several times what it is, say, here in Georgia. And so, buying a battery is now cheaper than paying the full rack rate from the grid. Every bit of solar you generate you can use them or store and use later, and it’s still cheaper than buying from the grid. This is a breakthrough, and as batteries and solar continue to go down in price, it’s not just going to be expensive areas, like Hawaii and California, but areas like Georgia and Wisconsin and Texas, it’s going to be cheaper, too. We’ve still only cracked the code on solar for a day. So, what happens if you have four or five days of rainy, cloudy weather. Currently, you’ve got to fall back to the grid, which is largely fossil fuel based. Now, there’s a couple of suggestions on what to do by the experts. One is that we can build even more transmission towers across the United States.
Bill:
So, inevitably, there’s sun shining somewhere, and so, if we can just get the power from the southwest and bring it up to New York, then even though it may be cloudy in New York for a week, we can have plenty of power up from the southwest. That’s one answer. It’s expensive, but still, as solar continues to drop in price, it could be less expensive than even fossil fuel grids in New York. There’s a lot of other suggestions, just getting more batteries. So, instead of a day’s worth of batteries, you have three or four days worth of batteries, and there’s new battery technology that allows you to think differently about storing it. Today, if I need to store it for a day, I need X number of batteries. If I need to store it for two days, I need two times X. Well, there’s new battery technologies that allow you to store electricity differently. So, the cost of additional days isn’t nearly as expensive as simply buying that many times more batteries.
Sam:
You are very, very optimistic about this transition and about the ability to get to that long-term sustainability and reliability using clean, renewable resources. It seems awfully expensive to put all of that into place and to let go of that thing, which assures us that when we turn on the switch, the lights are there.
Bill:
Well, first of all, I don’t think anyone has an appetite to let go of that comfort. Even the vast majority of clean energy advocates, climate advocates, are probably going to think twice before they want to live in a world where electricity is unreliable. The great news is I don’t think we have to make that choice. I think we’re going to be able to sail through the transition to clean energy. We’re going to be able to do it more quickly than most experts think, and at no time will there be a risk any higher than there is today of your light not turning on. In fact, one of the most important transitions happening is this shift to what I call local energy. Rather than generating energy in the way that it grew up in the last hundred years, which is gigantic, remote, typically fossil fuel power plants, massive economies of scale, and then, bringing it over transmission lines and then distribution lines, the power poles you see in your neighborhood, in your city. We’re going to be able to generate more and more of our electricity locally. That has a couple of major benefits, like farm to table.
Bill:
A lot of people just want to see it. They want to know that it’s made in their community with their jobs. They can see it. So, they can put up their own solar panels. They can put up batteries, and they can power their local communities. It has a benefit of reducing the need for all that expensive wiring to connect you to the remote power plants, but the other thing is that nearly all outages that occur aren’t because the coal plant or the nuclear plant goes offline. It’s because somewhere along the hundreds of miles between you and the nuclear plant, the power lines go down, anywhere, a tree, a squirrel, a lightning strike, but somewhere along that distant run, the power lines get cut, and you lose power. If you generate it locally, you cut by hundreds or thousands of fold the risk that a power line goes down because it’s right there next to you. Your generating plant, your solar plant, is right there in the same community, maybe on your own house. So, the move to local energy not only allows us to lower our costs, but in many ways, it increased the reliability of the grid. So, it’s a wonder twofer benefit.
Sam:
Talking about the size of some of these plants. They’re very big. They’re very expensive. Are we making a transition away from that?
Bill:
We’re already past that transition. This is a really big story that just doesn’t get any attention. For almost a hundred years since Edison and Insull and Westinghouse and Tesla created the basic technology and business model of the modern grid, we have been building larger and larger power plants, and the idea is really simple, which is the bigger you make a thing, the bigger you make any kind of factory, the cheaper each widget that comes out of the factory becomes. And in this case, the bigger you make the coal plant or the nuclear plant … The nuclear plants are, by the way, the biggest of all power plants, the cheaper each kilowatt-hour coming out of it tends to cost. We rode that larger and larger scale for the last hundred years. I think of it like the mainframes. For the first 20 or 30 years of computing, the way we got computing less expensive was to build larger and larger, more sophisticate and more expensive mainframes, but then, something happened. Something happened that changed computing, and I think it’s also changing the way we generate electricity. We shifted from a model of scale, which ultimately peters out. It just gets too complicated to build a giant plant any larger, too complicated to build a giant computer any larger.
Bill:
And so, it forces the industry to think in a different way. What we saw in computers was a shift to microcomputers, to laptops and desktops, and ultimately, even smartphones. In that transition, the cost of computing plummeted because it was no longer trapped in the ivory towers of the giant computing companies that had lots of existing customers and lots of commitments, but it went into the garages of startups and entrepreneurs, and in that transition, people, they took wild, stupid risks, and hundreds, thousands of companies inventing the next kind of small, cheap computer went out of business. But collectively, all that innovation results in a few breakthroughs. It changed companies. And so, if you look at the cost of computing versus the days of the mainframe 40 years ago to do a certain set of calculations about 100 million times cheaper, no way are we going to see that kind of drop in electricity, but as we start to move towards local energy, we’re going to allow entrepreneurs and innovators and people in the garages, in their tops of their office buildings and venture capitalists and people that don’t have the scale to build a nuclear plant, but they can work with small scale solar and small scale batteries that are now affordable for the first time, and they can try different things.
Bill:
They can take risks, and a lot of them are going to go under, but they’re small, and it doesn’t have any economic effect, but in their failures will become some of the most exciting innovation that will, then, come back to the grid, and the most important shift of all is we’re going to move from a world of economies of scale to what I call economies of volume. Economies of volume are an idea we’re all familiar with, but we don’t hear the name as often, and that is the more we make of a certain widget, the cheaper it gets, and it turns out, if you make a lot of coal plants, they don’t get any cheaper because each one’s different. You make a lot of nuclear plants, and there’s only 99 in the US. It’s hard to sort of crank them out. So, the cost, they’re all one off projects, super expensive, decade to make one, but I can make a solar cell cheaper and cheaper and cheaper with each new one I make. Here’s an interesting fact. Last year, 2018, 20 billion solar cells were made. 20 billion solar cells were made in the world. So, we have gotten really good at making each one of these six-by-six inch pieces of silicon super cheap, and it’s just going to continue to get cheaper as we get better at it.
Bill:
The other technology that benefits from economies of volume is batteries. If you go and look at an electric care or you go look at a giant battery storage implementation, like the kind that Tesla’s power packs are put in place in California and Australia, if you open them up, you’ll be shocked to find that they’re nothing but lots of little, tiny batteries that look a lot like the AA batteries you put in your flashlight. It’s like making microchips. And so, economies of volume are the new trend pushing cost down, and really, only solar and batteries benefit from economies of volume. So, that’s why we’re seeing so much traction in lowering costs and adoption rates, and there’s so much reason to believe that we’ll see incredible cost declines in both of those technologies in the coming decade. So, what we’re witnessing, really, starting in the last year or two is a shift from economies of scale to economies of volume. I believe that shift will continue for decades, and it means that the cheapest way to generate electricity is no longer building a giant coal plant or nuclear plant.
Bill:
The cheapest way is to take these hundreds of millions of batteries and solar cells and just put them together into whatever size you want, the size that fits your house, the size that fits your building or your campus, or the size that fits your city. You can put them together any way you like, but in every case, we’re using more and more, driving up the volumes highers, and driving the cost down. This is the essential transition that is going to make clean energy happen much faster than most people think.
Sam:
As we go through this transition, right now, we’re dealing with the giant utilities, the big centralizing generation facilities located far from urban centers, out of sight, out of mind somewhat, but the cost associated with getting that power to the homes, are we going to see a change around that? If you started implementing lots and lots of little locally generated power plants, if you will, how do they all connect up? How important is it to connect up New Mexico with New York?
Bill:
That’s a great question. I think there’s a lot of aspiration, even a little fantasy around how people think of this, and I had to tell you personally, when I started this quest to understand clean energy and local energy, I had this idea that we may not need the grid as much as we used to, and I’ve got to tell you that I think we still need the grid. But as you were asking earlier, there’s a big difference in the grid between the giant power plants and the wires that connect them, and I think when I say we need the grid, I mean in this particular case, we need the wires that connect them. Here’s the metaphor I’ve used to think about the grid, both power plants and wires. I think of it as a hotel. It’s a service that people want. You build a hotel, and your goal as hotel builder/owner is to build something everybody wants, and then, keep it as full as possible all the time, but imagine there was a law, which in the case of electricity, there is, that you have to always have enough room for as much as anybody ever wants.
Bill:
You have to build probably a larger hotel than you really would otherwise do because it’s got to have enough room for everyone who ever wants to stay, even if they all come to town for one big event. You have to have a hotel large enough to support them all. So, the economics of building a grid are all about peak capacity. Not how much we use in a day, but the peak capacity, that one day in the middle of the summer where it’s 110 degrees in the South or the worse long winter where it’s zero degrees in the northeast, and you need all these electric heaters running, and the grid is just maxed. You have to make sure the grid’s ready for that degree of peak, and so, the utilities are tasked with making sure that their grids are always able to handle the peak. Now, what happens as we move towards local energy is that we still need enough wires to get within the communities to tie in the local community solar or even the natural gas plant, but we may rely less on the giant, really expensive transmission towers that tie power between cities.
Bill:
That’s the most expensive part of the power system, and as we generate more and more locally at the community level, the city, state, county level, we’ll reduce our reliance on some of the transmission. That’s a possibility, and that should change the economics because that is one of the most expensive parts of the grid.
Sam:
To coordinate all that electricity flowing around, it’s cloudy in New York, sunny in New Mexico, but I’ve got to get power to New York, and New Mexico’s still using power. All of that sounds like it requires a massive amounts of, what, data. The grid is going to become more digitized?
Bill:
What you described is what everyone calls a smart grid. It surprised people to learn that the grid as it exists today is literally one giant circuit. There’s actually several sub-grids within the United States that are electrically separated from each other, but within each one of those sub-grids, half a dozen or two dozen states, you have one single circuit, and what’s amazing, technically, is that because it’s AC power, which means that power’s going on it backwards and forwards at 60 times a second, every single power plant on that grid has to be in perfect synchronicity with every other power plant. It’s a miracle of engineering. What’s even more a miracle is that it’s all an analog system. For the most part, these grids are based on technology that was invented in Edison’s and Tesla’s day, similar to the way they did 130 years ago. What’s happening that’s driving that old model nuts is this intermittency of solar and wind, the fact that instead of having a couple hundred power plants in a region, you now have people with solar on the roofs and buildings with solar on the roof.
Bill:
So, you go from a couple hundred power plants to be managed to thousands, tens of thousands, hundreds of thousands, and if you’re a utility, you’re trying to make sense of this and make sure that every person’s getting electricity when they need it. And going from hundreds to hundreds of thousands of sources of electricity, this is a headache, and this is why the smart grid is so important, and this is why there’s a rush to digitize and overlay this intelligence and computing capabilities so that utilities can actually manage this explosion in complexity, and that’s a huge business opportunity. And it’s also a necessary step for us to make the grid cleaner and to embrace solar, wind, and other clean energy sources more rapidly.
Sam:
By digitizing the grid, does that improve reliability and resilience?
Bill:
There’s two schools of thought on that. The people that have been managing it for 100 years, they’ve got their spreadsheets, and they’ve got their approaches, and boy, have they got them tuned, and the grid is amazingly reliable. They are hesitant to make any substantial changes, but for many other parts of the world, many other industries where computing has transformed the industry in a way that, perhaps, didn’t seem possible, but it did. Financial trading, it used to be that people on Wall Street would shout tickets to each other, and now, it’s all computerized, right? That transition, probably, was pretty scary, but it worked. Air traffic control, healthcare decisions, machines that keep us alive in hospital, right, they are more and more moving from analog systems to digital, and for the most part, almost every system in our life is digitized, and people have accepted that handing over control to a computer, to some degree, makes it better. I would argue that the electricity industry is probably one of the, if not the largest, holdout there is, and it works pretty well. So, there’s an argument, why mess with it? But we need to, and it’s happening regardless of whether people want it to happen, and so, I think that, as an optimist, as a person who’s pretty familiar with computer technology as well, I think it will be positively better when it’s done, but I would say that not everyone agrees with me.
Sam:
Bill, the model has been, for over 100 years, that giant utilities and governments have highly regulated the production of and the use and the transmission of electricity. That’s changing. What’s happening there, and how is it likely to affect businesses and individuals as we go forward over the next decade?
Bill:
The most exciting part of all of this for me isn’t just the transition to clean energy, which I think has a lot of tremendous benefits, not the least of which is cheaper, it’s the fact that we’ll no longer be entirely dependent upon large, centralized organizations for all of our electricity, and in fact, it’s not just electricity. We’re dependent upon large, multinational, government-run, whatever form and flavor it takes for all of our energy, whether it’s oil production and gasoline production. Virtually every kind of energy that we consume that makes modern society possible is brought to us by large, gigantic, colossal entities, governments and mega-corporations that span countries. This coming transition is the first one where people can create their own energy. What I mean is they can put up their own solar panels, whether you’re a household with rooftop solar, or you’re a company, a strip mall that you’re putting rooftop solar on top of your buildings or over your parking lots, factories, communities, towns. You have the choice of making your own electricity for the first time, your own energy for the very first time.
Bill:
And because of this critical transition I described earlier, economies of volume, we’re going to see what I call the consumerization of energy. This is, I think, the biggest deal of all the transitions coming. The term consumerization has been used many times in history, but it’s often referred to the consumerization of IT where, once upon a time, computers were this rarefied, super expensive thing only available to the elite corporations, controlled by giant corporations who sold it and managed it. And it turned into something we can put in our pockets, and it became something you can go to a store. You can buy a thing of flower. You can buy some strawberries, and you can buy a company, and the fact is that it went from this elite, super expensive, tightly controlled thing to something everyone can have access to affordably and on their own terms. And when people purchase a computer today, they are as concerned about the color of the case as they are about how many [inaudible 00:26:11] and megabytes it has because it’s so prevalent that even innocuous things like color and size matter. That’s consumerization, and that’s what’s going to happen to energy.
Bill:
And as we make more and more of these solar panels and batteries, they get cheaper and cheaper. There’s millions of ways they’re going to be put together. They’re going to create all kinds of products. Some people think that the largest competitor to the utilities in 20 years is going to be Lowe’s and Home Depot.
Sam:
I mean, it makes sense, right? You’re changing the way the power is both created and distributed.
Bill:
The cost of a solar battery system will be probably cheaper than a car, and it’ll be installed right next to, in the same electrician, in the same wiring panels as putting a new air conditioning and heating system for your house. Something that’s accessible to everybody, just like putting in a new roof or a new air conditioner, you can choose to put in your own larger battery or put up more solar panels, and as a result, the market’s going to flourish. It’s going to embrace innovation. You’re going to have competition. You’re going to have crazy entrepreneurs doing crazy things, many of which will fail, a few of which will succeed wildly, and when we look back in 20 years, electricity is no longer going to be solely the province of giant corporations and monopolies and government-controlled. Electricity’s going to become something that’s accessible to anyone on any terms they want. A lot of people will still choose to just get the grid and pay their utility because it works, but a very large number of people, and I think an even larger number of businesses for purely economic sake, are going to choose to embrace it.
Bill:
They’re going to create it on their own, and they’re going to have, instead of one option, here’s who my utility provider is or a monopoly. I can’t choose anybody else. They’re going to be able to go to any number of providers and get all kinds of options. That’ll create competition, and you’re going to see innovation emerge. New kinds of technologies will come out of that, and essentially, the opportunity to create markets in choice is going to lead to a revolution in the kind of products and cost benefits and new ways to create electricity that’s going to change the entire way we think about electricity today. Electricity has been distilled down to its most essential form, which is the kilowatt-hour, and we pay for that. Here in Georgia, we pay 11, 12 cents as homeowners, and six, seven, eight, nine cents as businesses, but there’s a myriad of really important things we don’t have a lot of control over, like how much of it is generated from clean energy sources. We have very few options to control that. We have very few options to purchase what we want.
Bill:
On a previous podcast, we interviewed Greg Robinson whose company is really one of the first in the country to give us that kind of choice, and it’s a wildly new model that the world is just barely beginning to understand, but it’s working. It’s exciting. I think that’s going to be commonplace. Maybe I care more about very resilient electricity because I don’t want it to ever go out because my kids are afraid of the dark or because my factory can’t afford to be shut down or whatever the reason is. I can pay a little more or a little less, but I have choices. I might be okay to use some fossil fuels if I can have more resiliency. These are choices people will have, and choice creates markets. Markets create innovation, and that innovation leads to an entirely different grid in the future.
Sam:
Does that mean that the SEC fans are going to be able to get their electrons in team colors?
Bill:
I wouldn’t put it past them.
Sam:
Bill, this sounds like an awful lot of change that’s taking place. How do we get through this, and what are some of the dynamics from a historical perspective that are influencing how we’re going to move through this transition?
Bill:
For people like us in our lifetime, there really is little precedent for this scale of a change from something that’s so fundamental to us, but a quick review of history shows that this is, by no means, the only large energy transition that human beings and societies have gone through. A pretty famous historian, author, expert is a guy named Vaclav Smil, who also happens to be Bill Gates’ favorite author, and he’s written many books, including one called Energy and Civilization, and this man is the expert on what he calls energy transitions. And if you’re really interested in this topic, boy, you should read the book. It’s a long, tough book, but it’s brilliant in the way that it explains how human beings have gone from burning wood for flames to building early windmills for grinding corn, all the way to modern energy systems, like oil and coal and nuclear, but in summary, what he says is that these energy transitions have happened over and over again, and some of the really big ones are the creation of whale oil as an industry that sort of pushed back on candles and wood flames. They would make lamps from the whale oil, and this was a cleaner flame. It didn’t put out as much waste. It didn’t smell as bad in a gigantic industry.
Bill:
In the late 1800s, they discovered oil in the United States in Pennsylvania, and this man named Rockefeller, who everyone knows his name, John D. Rockefeller. He capitalized on this and took control of the world’s oil resources and made this thing called kerosene, and we don’t think a lot about kerosene today, but at the time, it was cheaper, and it became the source for lighting. So, that was going great, and he was living large. Then, along came a couple of entrepreneurs, a couple of crazy inventors, one named Thomas Edison, another one named Nikola Tesla, and some of the people that helped support them, JP Morgan and Westinghouse, and they said, “There’s this thing called electricity.” Electricity became an even cheaper way to basically create lighting because it’s very unlikely to catch on fire, super bright, super reliable, and so, electricity, basically, completely overtook kerosene lighting. Lo and behold, today, six billion of us have electricity, and about five billion of us have it with a reliability you and I take for granted. It’s an amazing story, but each one of those transitions from whale oil to coal, from kerosene lighting to electric lighting, you saw the same massive energy transition happen that we’re seeing today with clean energy.
Bill:
You saw the incumbents fight it, not because they thought anything was bad, but they had a lot to protect, and it worked. They didn’t want to mess with it. They didn’t want to break it. They had customers to serve, but you saw innovators whose technology and business models were so compelling that it was unstoppable, and a few visionary investors, like JP Morgan, they got behind it, and Westinghouse, they got behind it and created massive fortunes because they were on the other end of the transition. So, the whale oil people and the kerosene people went on and sort of faded away, and the electricity people became the next giant industrialists, and they rode that. So, we’re going to see the same thing as we shift to clean energy. We’re already seeing people who own and operate coal plants and coal mines are struggling financially, and we’re doing a lot to … The government is recognizing this and trying to help with that transition from a jobs and society point of view, but from a technology point of view, coal’s just too expensive. It doesn’t make sense anymore, and you see the rise of people making solar and wind and the companies managing and building it into technologies, and those companies are flourishing, and we’re just at the bare beginning of that transition.
Bill:
So, as we look back in 10 and 20 years, and instead of three or four or five percent of solar and wind, we’re going to have 20, 30, 40, 50, 60 percent, hopefully, bigger number, faster. That’s what I want to see happen, but you’ll see incredible companies being built. You’ll see innovations and inventions and inventors and policy makers who are going to be famous. I think the first one is the most famous so far, is Elon Musk. The first sort of clean energy billionaire, and he’s done it with automobiles, but he’s probably going to be remembered, if not even more so, for his batteries and the ability he’s bringing to redeploy the grid, remake the grid. So, we’re at the beginning of what I think is the greatest energy transition in history, one that’s going to create more turmoil, more opportunity, more improvement, more great battles, both legal and technical battles, but it’s going to be an epic story that historians will tell 50 years from now, and I’m incredibly thrilled to be a tiny, tiny part, maybe a small voice pointing out a few things along in this transition, but it’s incredibly exciting. And I think, as it grows, more and more people will join that movement to watch and help make this greatest energy transition in history.
Sam:
So, Bill, you’ve written about this clean energy renaissance on freeingenergy.com. Tell people how they can get to that article.
Bill:
Just go to the website and look for the article entitled, How Solar and Batteries Will Unlock the Electric Monopolies and Create a Clean Energy Renaissance. Arguably a long title, but it captures all the core thoughts that we’ve just been discussing, and it was published in February.
Sam:
Bill, this is a fascinating journey that you’re on, and for people to really, really get a little bit closer to this, they ought to go over and take a look at freeingenergy.com and look at some of the articles. There’s a lot more there than we’re able to share in this brief little time. What you have shared with us today is a description of a change that’s coming like we’ve never seen before. I really appreciate your time today and talking to us about this. I’m hoping that we can do this again. I know the book will be coming out sometime soon, and we hope to be able to share more of that with our listeners and followers on The Freeing Energy Project.
Bill:
Thank you, Sam.
Sam:
Thank you for joining us today. You have been listening to The Freeing Energy podcast, personal stories from the clean energy movement. To learn more about The Freeing Energy Project, visit our website, freeingenergy.com.
Sam:
I’m Sam Easterby. Bill Nussey is my cohost and the founder of The Freeing Energy Project. Visit freeingenergy.com to learn more about clean, local energy. The Freeing Energy podcast is a production of Frequency Media. Subscribe to The Freeing Energy Podcast on Apple Podcast, Spotify, Google Podcast, and anywhere podcasts are found. Make sure more people learn about clean, local energy by rating and reviewing the show on Apple Podcast.
