In this episode, I talk with Taylor Krause, who went from working on hydrogen policy at RMI to finding a quantum physicist husband and unexpected fame on Netflix's Love Is Blind. We unpack her surreal journey from clean-energy wonk to popular influencer and how she's navigating using her newfound influence.

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David Roberts

Greetings and salutations, everyone, this is Volts for June 6, 2025, "A journey from clean-energy wonkery to influencer fame." I'm your host, David Roberts. A wonk with an advanced degree in policy working for a clean-energy think tank is a familiar character to Volts listeners.

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A wonk with an advanced degree in policy working for a clean-energy think tank who then goes on to feature on a reality TV dating show wherein she meets a man who falls for her and proposes to her without ever having laid eyes on her, and she says yes, and they go on to get married, becoming a popular influencer couple … is, I’m guessing, a much less familiar character to Volts listeners.

Yet that is the experience of Taylor Krause, who went from hydrogen policy work at RMI to the show Love Is Blind, in what sounds like a modern fairy tale but is, as millions of people apparently knew well before me, very real.

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I heard about this and thought to myself, "What a wild experience. I’d like to talk to her about it!" So, I did. Enjoy.

With no further ado, Taylor Krause, welcome to Volts. Thank you so much for coming.

Taylor Krause

I'm so excited to be here.

David Roberts

This is very, very exciting for me. It's a slightly different thing than I usually do, so I want to kind of take things chronologically. So, how did you end up at RMI?

Taylor Krause

I ended up at RMI. I was at a multi-client firm called Boundary Stone Partners that specialized in clean energy clientele, and I did my master's capstone in hydrogen, and then RMI just got this really big grant to hire a hydrogen manager, and so I was recruited.

David Roberts

And your degree, you got a master's specifically in hydrogen, like science policy. What does the master's in hydrogen look like?

Taylor Krause

I went to Johns Hopkins for their energy policy program, which I did at night, and then worked full time, pretty much as a lobbyist is the best way to describe my job, and then wanted to specialize in a certain clean energy technology. I had also worked in the nonprofit sector at Citizens' Climate Lobby for about five years before that. So, I kind of mixed my specialty in federal affairs, clean hydrogen, and nonprofit advocacy working at RMI, which is a think tank. It didn't. A think tank is kind of a meta thing. Right?

David Roberts

Yes, yes, I'm very familiar with RMI.

Taylor Krause

I'm sure you've heard from a lot of people at RMI.

David Roberts

Yes. So, when did you get bitten by the hydrogen bug? When did that start?

Taylor Krause

So, it's really funny because what happened was a very realistic story. I had to do a capstone for my master's and I wanted to make sure that I was doing something that wasn't just a long paper that I wrote, and then I never looked at it again. I think a lot of people in science can attest to that experience. And so, I asked my boss at the time what would be a prudent topic area to do my capstone in. And he said, "You know, everyone's talking about hydrogen and there's a lot of money going into it, but we have no idea what it is."

And so, I was like, "Great!" And so that's kind of how I got into the hydrogen topic area. Obviously, it was a very, or still is, a pretty exciting clean energy topic. It's very novel. It's kind of the Wild West compared to a lot of other clean energy technologies out there.

David Roberts

Ongoing wild swings in policy on that score. I just heard that the Republicans are thinking about revoking — which is the hydrogen tax credit, is it 45V?

Taylor Krause

45V, yes.

David Roberts

Yeah, yeah. I think they're thinking about revoking that entirely now. We'll see. Here's a question before we get into the other stuff. Do you remain as excited about hydrogen today as you were when you first got into it?

Taylor Krause

I would say I still remain really excited about the potential for hydrogen. I think everyone that's in the industry has joked that the clean hydrogen economy has been coming for the past 10 years, or the past 50 years.

David Roberts

Really, a century if you go back to the very beginning, it's like Jules Verne or whatever was the first person to describe it.

Taylor Krause

Yeah, I think that hydrogen as a clean energy technology, whether or not it has a supportive policy environment, remains to be seen. But as a technology itself, and in terms of, like, other companies that I think will survive, it still is an exciting opportunity.

David Roberts

So, you were at RMI for several years. This is in the sort of late 2010s, early 2020s. And you were young, single, dating and kind of getting sick of it and getting ready to leave, as I understand it, reading your story. And I'm just curious — as someone who's aged out of that world a long time ago — I'm just sort of curious, like, you know, if you're sort of attracted to, you know, if you go in for the nerdy types, which, you know, sort of spoiler alert that comes up later, it seems like those types are thick on the ground in D.C. and, you know, like, you're young and attractive and gainfully employed. What is —

Taylor Krause

Yeah, what the heck?

David Roberts

What's going wrong with modern dating? I'm just sort of curious, like, what's off with the vibe? Why were you so dissatisfied?

Taylor Krause

You know, D.C., in particular, because the show is based in different cities. Every city has a limiting reagent. And I do feel like — sorry, that's my chemistry background coming out. D.C., as a city, most people that move to D.C. want to change the world or, like, have that kind of internal story at some point. I know I did. And so, not trying to stick this against anyone, but I think that lends itself to a kind of personality type. And the demographic of D.C. doesn't lend itself to the best numbers. But I think, moreover, it's a transient city. And you're working a lot. I think a lot of your personality is tied up in how much you work.

David Roberts

Yeah, the culture of work there is crazy.

Taylor Krause

So, there's a couple of factors of confluence at play where it's like, maybe there was a good pool of guys, but maybe I just wasn't meeting them because I was, you know, working, or they were working and traveling, or we were just not in the same space to meet each other.

David Roberts

Yeah, yeah. So then you're thinking about leaving, and this crazy idea comes across your radar. How did it come across your radar for the first time? Was this something that you thought of, or did this something that someone else came to you?

Taylor Krause

Well, so they recruit heavily in the city that they're going to. I think anyone in the ages of, like, 23 to, like, 40 knows that this is happening. And so, by the fourth or fifth friend that brought me that, they're like, "There are applications for this. You should apply." I was like, "I don't know if I should be offended that you guys think that I should date blind."

David Roberts

Well, let's back up a little bit. Let's just talk about what we're talking about here. So, this is the show Love Is Blind. It's a reality show. I'm going to proceed as if my audience is full of people like me who don't know much about anything about this. So, pardon me if I ask a lot of dumb, naive questions about it. So, this show, Love Is Blind, the premise is they get a group of guys and a group of women, and they go on "dates" where they're talking with one another, but they never see one another.

Basically, that's the premise. And they were doing it in D.C. They were doing a D.C. season in whatever, 2023. And so, a bunch of people asked you, said you should apply.

Taylor Krause

Yeah. And shot my shot.

David Roberts

And so, what is that? Do you like, film a little thing like an audition? What is it?

Taylor Krause

Oh my God. I hope that they never release whatever audition tape that was. You basically — I filled out a very long, comprehensive questionnaire and I was like, "Oh my God, this took me two hours." And you basically submit all the things that you're looking for in a life partner and your interests, and you do a personality test, and you submit pictures of like people you've dated. So they make sure that like there's people that aren't out there, like that you don't end up meeting someone else on it. So it is a very comprehensive thing.

It's not like a Google form where you fill out 10 things and whatever. Like, they are trying to find regular but impressive people to meet other regular but impressive people that align a lot more on these internal personality life goal things rather than the physical things that kind of cloud, I think, our modern dating.

David Roberts

So, you fill all this out and then what? They call you and say, "Hey, you're on."

Taylor Krause

No, they kind of do, they flirt with you for months. It makes sense because you're also at the same time going through background checks. You're going through —

David Roberts

Yeah, I wondered how much of that stuff they do. Do they do like a psych?

Taylor Krause

They do a psych eval.

David Roberts

'Cause it's a high-pressure situation, you know.

Taylor Krause

Yeah, it's not for someone who is probably in a fragile state. Definitely not. They're also looking to make sure that you have more than one compatible person on the other side. But they're only picking 15 men, 15 women. So that lends itself to, I think, quite a bit of Tetris where, until the day before you go on set, you don't know if you're going to be in that group of people. You also had to take off time from work and, in D.C., that's not... That's why I think a lot of people were actually kind of annoyed that the demographic of people were mostly folks in the private sector or nonprofit sector rather than, you know, the "Special Assistant of blah, blah, blah."

Well, I don't know a lot of offices that would allow that to happen.

David Roberts

Take a few weeks off for a dating show — I don't know if the government has policies for that. So when it is confirmed that you're doing this thing, by that point, had you worked yourself up into being excited about it and really wanting to do it, or were you more scared, having been through some of the early — you know what I mean? Like, at that point where you just, like, fully committed?

Taylor Krause

I think I was just open to it happening and I didn't really want to get my hopes up and I didn't really think that I would get picked. I just kind of was like, my name's in the hat. If this doesn't work out, I'm actually moving out of D.C. I'm moving back to San Diego. And had, like, kind of one foot out of the city. So I was just ready for the next chapter. And then when it ended up getting the green light, I was like, "Okay, let's do this thing."

David Roberts

Do they. Is this the type of thing where they take you all and you go out to some remote location and you're sort of like quarantine there for a set period of time? You can't call out that kind of thing?

Taylor Krause

Correct. You are treated very well. Obviously, there's a demanding schedule and you don't have a cell phone, which I loved.

David Roberts

How long was the sort of quarantine?

Taylor Krause

Three weeks.

David Roberts

Three weeks. Oh, faster than —

Taylor Krause

But the whole process is six weeks. So halfway through, depending on if you're still in the show, you will. Because obviously, if you don't make it, for those that don't know, you basically, for the first 10 days, are in what are called pods, where you are talking to a viable, like, mate. I'm so scientific about this. You're dating through a wall and you get engaged or you don't get engaged, or you decide that the process isn't for you and you could leave, or you continue on and then you go on to a trip. We went to Mexico, which is basically like your honeymoon, where you get to spend time with this person on vacation, which lends itself to, like, you know, a very romantic, whimsical kind of experience.

And then you come back to what we call the real world, which was basically apartments that you and your person, like, cohabitate. Ours were in Ballston, so it wasn't actually like in D.C., but maybe that was more economical. And then you continue on meeting, like, friends and family, and then you're planning a wedding at the same time, which is nuts to say now, like, but it ended up working out, like, obviously super well for my husband and me.

David Roberts

What a crazy thing. Like, did you think going in, "I literally might come out of this married?" Did that seem like a realistic possibility?

Taylor Krause

You know, I went in — to be perfectly honest, and I've said this across the board — I went in thinking, "I'm going to learn a lot about myself in this experience," and "I'm probably going to have a more open mind about dating and find my person because of the things I learned in this experience." I did not think that Netflix would go through thousands of men to find a compatible great guy for me. I was like, there's a 1%, 0.01% chance that this is going to work out for me. But there were, you know, there were girls that went in, they had wedding dresses on hold.

And I was like, "Oh my God, what have I gotten myself into?" But luckily, I mean, my husband said no to the experience twice.

David Roberts

Oh, they tried to recruit him too.

Taylor Krause

Well, they don't have a problem recruiting women. They have difficulty getting guys to do it. So, I feel very confident that they were recruiting him for me.

David Roberts

Oh, like they wanted to be sure that someone in that pool was fit for you on paper, basically.

Taylor Krause

Yes, basically.

David Roberts

And I'm sort of curious, you know, you studied science in school and sort of science-minded people who love science tend to be sort of, you know, rational, left-brained types and you're thrust into a situation where A) you're making a lot of sort of instinctual rapid judgments and B) just also like emotionally very heightened, intense situations. Did you expect the level of sort of emotional involvement? Did it end up being more intense than you expected? Like, I wouldn't have any idea what to expect going in.

Taylor Krause

It was very emotionally intense, and obviously, I didn't think that I would get as far as I did. I honestly thought I'd go do this crazy thing for a couple of days and then be done. But it really did challenge you to sit with yourself and trust yourself. Because I feel like when we are dating, it's not just a solo choice a lot of the time. You are depending upon what your friends think, what your family thinks, what, you know, unfortunately for this generation of "What's their social media like?" or things like that that like shouldn't matter but they play a factor into it.

And so, for me, it was highly emotional and it was really fast. Like, to your point of being a more rational, scientifically logical person, you're like, "I'm feeling all of these things, but this just is nuts. Like, this does not make sense." But they do kind of structure it in a way that you are asking all these questions and getting to know this person in a way that accelerates the timeline of how you would have met them in the real world, where you're talking about finances, kids, and where to live.

David Roberts

Do they tell you what to talk about? How structured are these pod conversations?

Taylor Krause

You are not told what to talk about at all, but they do give you a structure of, like, "Today's theme is this." You can go in and talk about your favorite amusement parks all day if you'd rather do that and not take it seriously. But you'll probably be asked to leave if you aren't taking it seriously and you're not getting to know the person. And that's kind of a recipe for disaster. But you are given some structure and you can kind of follow it the way that you want to follow it. And, yeah, we have these journals that they provide, like, those questions and certain topics to touch on that we have in.

You'll see in the show, and it has our name on it and stuff. And, yeah, so there is some guidance, but there are no prescriptive rules.

David Roberts

So, it's like today's theme is whatever, family or religion, finances. You can see how that could strip away a lot of the extraneous stuff and get really intense really quickly. So, you meet this guy, "meet this guy" Garrett, who — I'm curious. On normal reality shows, there's some sort of process whereby people get eliminated, voted off the show, some counsel, something rejected, something. How do people get booted off Love Is Blind? Is there some sort of vote? Is this something the producers decide?

Taylor Krause

Oh, they should add that. That would make it — I'm just kidding. It's just the way that you're matched with each other. So on day one, you go on 15 dates because there are 15 other people on the other side. And then it's kind of like fraternity/sorority recruitment, where you rank each other and then they have an algorithm. My husband is a quantum physicist, and so he was like, "I need to know the algorithm," which is so funny. We met with the creator of the show afterward, and he's like, "The way that you guys would ask similar questions each day when I would talk to you guys and tell you what was going to go on for the day was just, you guys are both like, type A and clearly science people." So funny.

David Roberts

How does this work?

Taylor Krause

How does this work? And if you don't have a viable match, which kind of becomes clear, people start to break up and they don't continue on. As fewer people are there, stakes and emotions get higher because you are living with the other people that you are supposedly dating the person that you'd like to marry.

David Roberts

So does it come up a situation where, like, two of the women are after the same guy or vice versa? Or does everybody sort of pair off pretty early?

Taylor Krause

No, there are some triangles that happen, and it makes great television. I was not in a triangle.

David Roberts

Oh, lucky you.

Taylor Krause

I got very lucky.

David Roberts

So, you start talking to Garrett. You guys hit it off. You both have a science background. When did you get to see him? How does that process — you sort of checked his box. And then, what happens?

Taylor Krause

Then, they basically have you guys do what's called a reveal. So, you actually get engaged, not seeing each other.

David Roberts

So, you said "yes" to marrying Garrett, without ever having laid eyes on him, and vice versa.

Taylor Krause

Yes, I don't recommend doing that.

David Roberts

It is very crazy to me.

Taylor Krause

It's not sensical whatsoever. I do believe that I went into some metaverse and I called it, I kept calling it the simulation. Because, I mean, when you're going through it, I also had just a lot of these weird — I'm not a woo-woo person, I can't even tell you what my astrology sign is. But there's different, I don't know, different moments of when I felt like the universe, in a lot of ways, was telling me that this was something to keep going for. And there wasn't a reason to say "no" other than the logistical, logical, like, situation. But after nine days of talking through a wall, you see your fiance for the first time, which is an overstimulating experience.

David Roberts

I bet. Good God. Especially on camera.

Taylor Krause

Oh, yeah, there's like, 70 cameras watching you have this super awkward encounter and, like, your first kiss. And where do I, "Is he taller than me?" Or, like, "Do I smell good?" Like, just certain things that — I think awkward is actually really honest.

David Roberts

How could that conceivably not be awkward? I can't imagine that not being awkward for any human being.

Taylor Krause

I think, if it's not awkward, it might be a little dishonest, to be perfectly honest. Like, you might just be continuing on to be on television, which I don't knock against anyone. It's an experience that does not lend itself to always being a successful outcome. And it's a once-in-a-lifetime opportunity. And, like, how you want to spend it just really depends on the person.

David Roberts

So, I'm curious, is it built into the show, the marriage proposal thing, like, he couldn't just say, "I like you. Let's date more." Like, what's required by the show?

Taylor Krause

Yeah, there's no requirement. There's plenty of people that say, "This isn't for me, and I think we should just meet in the real world." Like, that happens pretty much every season.

David Roberts

So a marriage proposal is not, like, routine or built in, then?

Taylor Krause

No, it is. It's routine. It's part of the process. Like all the couples that continue on to the honeymoon and through the show, sometimes some people don't get engaged. They kind of just come back because there are those love triangles that happen. But for the most part, the people that continue on through the experiment, as it's referred to, are required to get engaged. I don't know if that's — I don't think they've ever had anyone that's continued in a way that they haven't been engaged. But I could be wrong.

David Roberts

And so, then the wedding and all that is all that. Also on camera, followed part of the show.

Taylor Krause

Yep.

David Roberts

And it's all wrapped up in one season. Like, if I went and watched this whole season, I would see that whole arc from you meeting to getting married at the end.

Taylor Krause

Yeah, you'd go to my wedding.

David Roberts

Well, I'm curious. Since you're not allowed to call out or communicate with the outside world while this is going on, you kind of disappear into this black hole and pop out with a husband. What did your parents think? What did your friends think? I mean, your friends must have been like, "I told you so."

Taylor Krause

I mean, they kind of know that if they don't hear from me by a certain amount of time, I got engaged.

David Roberts

Oh, right.

Taylor Krause

And so, all of my friends, I think after they met Garrett, they were just like, "Oh, wow. Yeah, this person's very compatible for you. I get why. This is still really insane. We trust you. We think you, of all of our friends, like, you would be the person that we would trust to do this and, like, have a good head on their shoulders about it." And I was like, "I mean, uh, okay." But my parents — my dad was not cool with it at first. He kind of freaked out.

David Roberts

Are your parents immigrants?

Taylor Krause

My mom is from Hong Kong.

David Roberts

So, this whole thing must have just been like Mars to her.

Taylor Krause

You know, she's very chill and she's been in the States since she was really young. So, she's very Americanized and very open-minded. She kind of basically got my dad on board, which was interesting because now they love Garrett and they think it's a wonderful blessing and a cool story and are very supportive now. But obviously, when it was happening, they were just like, "Absolutely not. What are you doing? We let you, we thought you would go do this thing and it would be fun. And now this has gone too far."

David Roberts

Well, you present them with this handsome outdoorsman, quantum physicist. You know, what are they going to do? What are they going to say?

Taylor Krause

They don't care. They were like, "No, no, no." I think it's also, you know, it speaks back to what building relationships, especially a marriage, can be to some families and like how participatory you are in something like a wedding. It really deconstructed the meaning of a lot of different things, which I really appreciated about the experience. Like, a wedding is about the two people that are getting married and it should be — you know, we eventually would like to do a bigger one, like ceremoniously like to bring our families together.

David Roberts

Did you do like a runoff elope by yourself kind of thing?

Taylor Krause

No, we did a big, on the show, you'll see at the end, they basically have the people who make it to the final stages. You've been planning your wedding this entire time, which Netflix completely pays for and was a beautiful, wonderful event for us. There's some couples that go and one person says "no." Both people say no. So they pent it up where you show up to the altar and you're saying yes or no. But Garrett and I knew. I was like, "I'm not getting in a dress in front of my family if I'm saying no or you're saying no."

David Roberts

What a crazy thing. So you haven't had a chance then to sort of like do, do the big family quasi — cause my wife and I kind of did the same thing. We got married on one coast and a bunch of our family couldn't make it. So we just got married again a week later on the other coast.

Taylor Krause

So, ah, you're onto something.

David Roberts

Everybody else could come.

Taylor Krause

Yeah. So we did our wedding here in Virginia, which was really fun. I mean, thinking it was 80 person wedding, it's obviously like all televised and probably the wildest wedding that most people will ever go to. So it was a cool experience.

David Roberts

Yeah. It must be super schmancy, right? With Netflix money, right?

Taylor Krause

It was great! I mean, and so we would love to do one back in California when it makes sense. Like, we just bought a home in D.C. and weddings are very expensive. And obviously, the show came out about six months ago, and so we have kind of just been thrown through a whirlwind, and I've never met anyone that's, like, planned a wedding and said, "Wow, this is really easy." So we're just waiting.

David Roberts

Well, I mean, you have all the time in the world now. You can do it at your leisure now. Last question about the mechanics of reality TV, which I've always sort of wondered, like, you are not seeing dailies or whatever. So, one of the things you hear about reality TV is, they're filming all of you for just dozens and dozens and dozens of hours. And so, once you have all that raw footage, you can edit it together in a number of different ways. And I know that, like, on reality TV, they need characters, you know, they need drama, they need whatever, so they can edit.

They edit certain people to make them into a character, basically. And some people come out of this complaining, some people don't. But I'm just sort of curious, like, did you know how you and Garrett were being portrayed, or did you just find out with everybody else when you saw the finished show? Like, did you? Were you completely throwing yourself on the mercy of the producers the whole time?

Taylor Krause

Yeah, I mean, you basically sign away all of your rights to the narrative. For me, I knew that I like the person I am. I know who I am. I'm always going to act, I think, out of integrity, and if I mess up, I will take full accountability. And for myself, I just did my best. And I knew that at the end of it — I sat there for a year because you get married and then you're in hiding for a year. Yeah, it's crazy that whatever ends up happening, if I get a bad edit, then the people who know and love me know who I am, and that's all that matters.

But to your point, like, yeah, you hear these horror stories, like, "This was edited this way, and they could twist my words and take things out of context." So, when the show came out, I was like, "Oh, okay, that wasn't so bad."

David Roberts

Maybe not even bad, but did anything sort of strike you about like, did you feel like watching the show "Yes, that's recognizably me?" You know, they sort of, got it pretty well right. Or was it just sort of, like, odd to see yourself? You know, there's a certain sort of out-of-body experience to all this. Like, seeing yourself as a character. Like, did the character you were on the show, did that approximate how you think of yourself?

Taylor Krause

I think, yeah. I mean, I genuinely thought I was going to be considered very boring and that no one would really care about me because I was so — you're surrounded by all of these relationships that are going through a rollercoaster of drama. And I was like, "Oh, my God, babe, we are so boring. Like, no one's gonna —"

David Roberts

Well, honestly, like, in the context of reality TV, a normal, psychologically healthy person is a little bit of a novelty. You know what I mean? Like a person who's just normal. Like, they do look for dramatic personalities. So, like, I can imagine there being a novelty to it. Like, "Gosh, she's just like a normal, nice person." You know, how odd.

Taylor Krause

A lot of my friends were like, "It felt like hanging out with you. It didn't feel as though we were watching someone on television. It felt like you were just being yourself." And I'm glad that that came through. You know, the other thing too, about the experience that I really learned about myself is that I am a bit more soft-spoken. When you're in the experience, a lot of the way that you have dialogue is by people just talking over each other, and that's just not my vibe at all. And I'm a bit more concise and to the point about certain things, which I just thought that maybe they wanted something more dramatic and ranty and crazy.

David Roberts

If I ended up in a situation like that, I would feel pressured to sort of, like, be more dramatic, you know, be a character.

Taylor Krause

Be a character, exactly. By the end of it, I was just like, or midway through, you really have to just be yourself because there's so much going on and I was filming at night while working full time and planning a wedding. So, yeah, I don't recommend doing that, but it was a blast. I met my person through it, I learned a lot about myself. I'm glad that I ended up being the fan favorite.

David Roberts

Do you have a good explanation for yourself in your head why you and Garrett ended up being such fan favorites? Is it just because you're, like, nice, intelligent people and got along?

Taylor Krause

It's funny, I was just talking with the Netflix PR team, talking about wanting to do this podcast. "Oh, just a reminder, like I'm doing this podcast, it's probably going to get nerdy." And they're like, "We love it and we need more nerdy people on cast." And I got a lot of feedback from people in STEM fields or policy fields that were so excited to see representation and from climate people. Like, people don't really know what a climate job is.

David Roberts

You know, maybe this will be what the reality TV producers of the world will take away from this. We need more nerds. We need more nerds on TV.

Taylor Krause

Yeah.

David Roberts

Well, speaking of the green thing, like, this is one of the main questions I wanted to ask you. You know, you went into a public-minded career, you care about climate, obviously, which is why you ended up in the profession you ended up in. And here you are going into this situation where millions of people will be paying attention to you, which might not ever happen again. No one understands how these things work. You know, it could well be a one-off thing. Did you think consciously going in about trying to convey some sort of green messages, like trying to work that in?

Did you ever talk to the producers, like, you know, like, "How nerdy am I allowed to get here?" Like, "Am I allowed to go on and on about climate change?" How did you think about or did you think about how much message to work into all this?

Taylor Krause

Yeah, I don't know if I thought too hard about messaging because, again, they have thousands of hours of footage and what they pick and choose is not up to me. But obviously, being someone from a clean-energy field, I went to school for it, I've volunteered for it, I've worked in it for almost a decade. It's pretty fundamental to me as a person. So being able to talk about that and convey that to a potential life partner was incredibly important to me. And so I knew that I would be talking about it. And if you didn't believe that climate change was real and we should do something about it, then you're not my person.

David Roberts

Yeah, I guess that came up with Garrett early on.

Taylor Krause

It came up with all my people early on.

David Roberts

Were there any — I'm just so curious —were there any, like, deniers? Were there any guys who failed that particular test?

Taylor Krause

No, I was — maybe they're lying to me, I don't know. But I was delighted that every single time I talked about my profession and climate change being important to me, everybody across the board agreed. But there are 15 people, so I don't know if that's a correct sample size.

David Roberts

Did you dare to? I'm always, like, one of the sort of recurring jokes on this pod is like, people who know a lot about this stuff completely lose their ability to gauge how much other people know. You know what I mean? Like, what the background level of knowledge among normal people is like. Did you ever get all the way into like, hydrogen and why it matters, or was this all just like, oh, it's like climatey stuff. How geeky did you get?

Taylor Krause

I got pretty geeky with at least the two. Which one is Garrett? And then the other person I was dating because it was my — I have a hydrogen tattoo on my wrist and it's the topic that I said 45V more than my own name last year. So, it was really important.

David Roberts

Did 45V, like if the words "45V" were actually spoken on the final broadcast show that would just be like the most thrilling thing for me in all of history.

Taylor Krause

It did not make it, but hydrogen did. Hydrogen did make it.

David Roberts

Oh, that's awesome.

Taylor Krause

Hydrogen did make it. I mean, my husband probably explained to me what a quantum computer is, and I can't convey that, so that's okay if he can't tell me about how the hydrogen tax credit should be structured.

David Roberts

What does he do? I mean, what is a quantum physicist? Is he in, like a lab somewhere?

Taylor Krause

So, he used to be an actual — he used to work in a lab, but now he works for a private company. He manages a bunch of technical people and engineers in building a quantum computer.

David Roberts

Interesting. Yeah, I just had the Governor of Illinois on a few weeks ago and he's very excited about quantum computing, although he didn't seem to totally understand what it was either. Nor did I when we discussed it.

Taylor Krause

You can have my husband on.

David Roberts

So, at some point, maybe I'm going to have Garrett on, and we could figure out what the hell quantum computing is once and for all. So, you are now a year out of this. Two years.

Taylor Krause

Year and a half.

David Roberts

A year and a half out of this, I guess probably the actual, like, "Love Is Blind" related hubbub, has died down somewhat?

Taylor Krause

I mean, every season, I think that will come out after you do. I think, reflect back on the people that get married and are successful from it. And so, that does come up. But yes, my time, the most relevant I will ever be, has passed.

David Roberts

Your peak cultural relevance.

Taylor Krause

I'm good. I did it. I don't know how people that are actually famous do it.

David Roberts

So you are leaving RMI now?

Taylor Krause

I have left RMI. Yes.

David Roberts

You left RMI. What was the thinking behind that? And what are you doing now? Like, what are your plans?

Taylor Krause

Yes. So, at RMI, my job was being on the federal policy team. And so, for everyone that doesn't know...

David Roberts

I almost appended to the question "and how much does Trump have to do with these answers?"

Taylor Krause

I think there was kind of a nexus and a confluence of factors that happened for me where, like, we had a big election. Obviously, it changed what my day-to-day looked like dramatically. And for content creation from being on a reality television show, I had zero clue. I had no idea what the opportunities were from it. I didn't realize that I had this, this really creative, fun side of me that enjoyed creating content. Like, I've always kind of been more of a behind-the-scenes lobbyist person that's been, you know, generating influence in a different way. And so, making more of a salary doing content creation versus working at a nonprofit became very clear very quickly. And I really loved doing it. I mean, I'd love to hear your tips on, like, content creation, but I'm very new to this space.

David Roberts

Well, I meant to ask, like, before you went on this show, did you ever, prior to that, have any sort of, like, thoughts or aspirations, like, "I want to become a content creator. I want to become an influencer. I want to be better known. I want more attention." Like, was any of that in your brain before this actual opportunity came up?

Taylor Krause

No, I thought I'd like to go be the Director of Federal Affairs at some hydrogen startup. Like genuinely. And so, being able to talk about sustainability in a different way, because obviously the federal avenue to do that is very fraught. The opportunity to have an impact in that way very much changed.

David Roberts

It's all grinding, defensive, depressing work for the foreseeable future.

Taylor Krause

Yes, and so, being able to work with other companies and create content about things that I care about and think are impactful or creative or fun, I'm very lucky to have that opportunity. When I told my colleagues that I think I want to make the transition into doing this full time, when the Institute and most people working in climate and clean energy are tightening their belts and being very diligent, I was like, "I don't want to take the space of someone else that I know can give, like, 200% when I'm interested in maybe making a pivot." So, it just kind of became pretty clear after six months under that administration that I wanted to take content creation full time.

David Roberts

Totally understandable instinct there. So, like, now you're an influencer. What does that mean exactly? What is, like...

Taylor Krause

It's a great question.

David Roberts

You have this now, attention. You have this fan base. You have a lot of people who know who you are and care what you think and have developed this parasocial fondness for you through this experience, and you can take that and use that attention for good, is what you're saying. What does that mean, though, concretely? Companies that are selling sustainable goods come to you and you...

Taylor Krause

Yeah, so to be fully transparent, I'm dependent upon income from different companies that want me to basically put together endorsements for their product. And I'm still in the process of creating what is my brand, because I'm just my brand. And what does that mean? And what is, like, the clear messaging of that? And, like, obviously, climate and clean energy was such a core tenant of mine. Being able to promote sustainable things is something that I'm prioritizing. I can't endorse it. I don't think I've gotten a deal yet for a hydrogen car or something.

Which shouldn't be used for light-duty vehicles anyway.

David Roberts

It'd be like a hydrogen reduction steel furnace.

Taylor Krause

Just, everyone should have an electrolyzer in their home.

David Roberts

Sponsored by an electrolyzer company. That's some influencing I'd like to see.

Taylor Krause

That'd be great if I could pivot into. It's been mostly things that are, you know, for example, Subaru, which is a great. They are the first zero-waste automaker and they're generally just a leader in the conservation space for automakers. I just did a partnership with them where they had an Earth Day campaign with the Arbor Day Foundation. And there's, for example, another company that, that's my favorite, which is Ritual, which is a supplements company that is woman-founded and they basically have done like a full analysis of their Scope 1 to 3 emissions and trying to decarbonize their supply chain with actual tangible targets and clear roadmaps, which is much more granular than I think an average influencer probably is getting.

And there's other things like a hair care company called Kitsch that reduces plastic by using shampoo bars and different accessories from recycled plastics. So like there's very — it's very new to me what sustainability is and being wary of greenwashing.

David Roberts

Yeah. Do you have help? You're sort of like you are your own brand, your own company. Now you are Taylor Krause Inc. Do you have employees to help you sort of like filter through this stuff? Because I'm sure everyone's coming at you.

Taylor Krause

I did my due diligence. I had a lot of agencies coming at you that they'll bring you different partnerships for a certain amount of money and they take a commission. But I, the type A person that I am, I interviewed probably a dozen different agencies and then I took my top two and I had them basically compete against each other for a certain amount of time and then went with that agency. And so now they manage, I'm exclusive with them, they manage the different partnerships. And I've said that these are the kinds of companies that I am trying to work with.

And obviously most people working at an influencer agency, they're not — they don't know what Scope 1 to 3 emissions are and things like that. So we work together to do that kind of vetting. But they know where I stand in terms of who I'm trying to partner with. And just because something's labeled eco-friendly doesn't necessarily mean that it's an authentically like, sustainable brand. But I think there is kind of this gray area that I'm figuring out in real time of, okay, where are companies that are genuinely trying to do better and the right thing, but maybe they're not like at a true net-zero place.

And so, yeah, it's tricky. And my brand is a lifestyle brand, so it's not necessarily just sustainable, eco-friendly, clean energy, climate things at all. I don't think that that's for me necessarily the holistic part that I want to convey. Like I want to convey that a person can be a multifaceted person and still care about these things and still want to travel and still like, want to talk about their home decor, you know?

David Roberts

Yeah, yeah. I honestly think that like, you know, I'll never forget — this might be dating me —but back in the mid-2000s, NBC had Green Week. You might remember the first Al Gore wave of sort of green hype.

Taylor Krause

And everyone got light bulbs.

David Roberts

Yes, everyone got light bulbs. All the magazines did a green issue. It was the mid-2000s, but I remember NBC basically told all their producers, "Put something green on your show this week with clearly no further guidance." And so what popped up again and again is a character on the show got obsessed with green stuff, became annoying and naggy about it, irritated everyone else, and then eventually got over it. Right. So it's like, I think this has always been part of the public's perception of like, people who care about this stuff only care about this stuff and they're self-righteous about it and they're annoying.

Taylor Krause

Yes, exactly. Thanks for saying that better than I could say.

David Roberts

I do think there's value in showing that you can be like a normal person, you know, like a normal aspirational person. And care about this stuff organically.

Taylor Krause

Thank you. Trying to be as authentic as possible and sharing parts of a normal life that are in some ways inspirational to other people, but not in an oversaturated way is something that I'm really trying to just figure out so.

David Roberts

Well, this is, you know, Chris Hayes, the MSNBC host, has a book out on attention recently and I interviewed him about it on the pod. And you know, it's just all about sort of how attention is sort of like the coin of the realm these days. Everybody's got a million different competing demands for their attention. Screens everywhere. And it's also about sort of the kind of mind-f that is involved in suddenly getting a lot of attention, you know, all the different ways that it can mess you up.

And, you know, I just sort of wondered, like, how self-aware or how self-conscious are you going into this about the sort of danger of, like, you know, it's one thing if you're just, like, showing people your life, but, you know, the danger is always there of, like, "Am I crossing a line where I'm sort of, like, performing now? Am I performing all the time?" Like, what still is my normal life versus me performing? You know, just like, the psychology of it all is so daunting to me.

Like, are you thinking proactively about sort of how to, like, keep your wits about you, how to keep your sanity about you?

Taylor Krause

I think I was really lucky to have gone through the experience and sat there for a year.

David Roberts

Yeah. That's so weird. Can you just describe that? So you went through it and got married and did all that, and as yet, no one knew.

Taylor Krause

Yeah.

David Roberts

So you had to, like, basically be in hiding with your new husband for a full year before the show came out.

Taylor Krause

Yeah, yeah. We just didn't have a digital footprint. But you could still do, like, Christmas with, like, your family somewhere, go to dinner. But when the show came out, you couldn't be out in public together until it was done airing. And I'll just say that, like, the Internet, like, just people are the FBI. Like, it's crazy.

David Roberts

No kidding. Especially on, like, reality TV. I mean, these. Like, everybody's a sleuth about these things.

Taylor Krause

Yes. And most people that watch reality TV are women. And I now believe that if women solely ran the CIA, there'd be no crime. No crime in this country.

David Roberts

Did you get sussed out? Did you get exposed? Did someone track you down?

Taylor Krause

People, yeah. They went through every nook and cranny. And luckily, I think I'm just a good person that hasn't done anything terrible, that nothing happened. But to your earlier question, like, I just was myself, because clearly you're making the biggest decision of your entire life. And so I just showed up as myself with my husband. I would be doing myself a disservice by not doing that and to him, obviously, as well. But I thought that I would just be perceived as, like, a very boring person. So when it turned out that, like, just being myself and being celebrated for, I think, an authentic kind, genuine person that's really stuck with me.

And I'm lucky that that was my experience, that I'm carrying that forward. And for me, that's the only way that I'm gonna be able to do this sustainably. But to your point, I have not figured out or thought too much about the fear of whenever you put anything out there, that people — you probably have this all the time — have opinions.

David Roberts

Yes, people, I mean, are at least just judging my professional work. Once you become an influencer like this, people are judging your life, you know, and there's like millions of them doing it. That's part of what's such a mind screwer about it.

Taylor Krause

The human brain is not supposed to undergo that much attention. No, let alone — it was very positive for me and it was overwhelming. So having it be a majority negative, like I feel for my colleagues and I have bad days, I still, I'll get mean messages or things that really, you know, make you question yourself sometimes. And that's okay. Like, I think it'd be super weird to not have those moments of really questioning things or not feeling good. I think that's just human nature. But being able to pick myself back up over those moments and try to be better.

I do appreciate when people call me out, especially as I'm learning how to do this. And this is an extension of myself in a lot of ways that I've gotten a lot better at not taking things as personally and taking it as feedback to get better and increase my influence and impact. Because if I'm not constantly learning and taking feedback from the people that follow me, I don't think I'll be successful at this. So that's what I'm trying to do. Maybe let's circle back in a year.

David Roberts

How about Garrett? Is he equally enthused about the life of influencing or is he sort of like, along for the ride? Does he still have his day job? What's his disposition towards the influencing game?

Taylor Krause

So for, I guess, more from a brass tax perspective for influencers, women just tend to be able to make a living from it much more easily than guys can.

David Roberts

Huh. I guess if you're a guy influencer, you gotta, like, eat meat and whatever, like pump, pump iron. I don't know what that you gotta get into that you make protein shakes or whatever the hell that all that is.

Taylor Krause

Yeah. And I mean, even looking at our Instagram, I think is kind of the most tangible metric for whatever influence means coming from a show. And we went through the same exact experience with the same exact outcome, and I have twice as many followers than he does from it. I think the opportunities are not the same. So it has to make sense for him, too, where, like, I'm able to, I think, authentically show up and be able to monetize that more than he is. And so we're still doing brand deals together, and we'll be doing maybe different shows in the future together.

And, like, we'd love to start a podcast or something else together. So I think there's more opportunities. We just have to create them.

David Roberts

Well, I've been told by several people online that I'm supposed to ask you about his glow up. I had to Google what a glow up is, but he's looking quite dapper these days.

Taylor Krause

Thank you, my little model husband.

David Roberts

Did you. Are you are we thanking you for that?

Taylor Krause

No, he genuinely was just a person that lived in Fredericksburg and just did physics and went fishing and didn't really care about how he looked. But he kind of always has had this, like, flair for fashion and stuff. And, I mean, he had this, like, haircut that was this, like, this military haircut. And I was like, I don't care. Love is blind. I don't care what you look like. But I'm someone that, I like to dress up and I like to travel and I'm from D.C. which is very different than Fredericksburg.

And so, I think it gave him the opportunity to do that stuff. Like, there was no opportunity to do that before. And so, in terms of his glow up, like, I just say this, like, if a woman went on and, like, had a "glow up" and they attribute it to her husband, like, people would, be raked over the coals. So, my husband makes his own choices, and I'm very supportive of it.

David Roberts

Well, everyone's pleased with the results, so I think that's the important thing. Well, final question, then. You have been catapulted from one life into a very different life, a life now which sort of lives or dies by attention. And it's sort of kind of a law of the universe that anyone's tumble in that particular barrel is limited. Right? No one knows. No one ever knows how limited. You know what I mean? I think particularly these days, the sort of fickle nature of attention. I don't think anybody really has a handle on the whys and how's of it.

So, have you — I mean, and maybe this is premature since you're just getting your feet under you — but have you thought at all about the lifespan of this life, of the life of the influencer? Do you know what I mean? Like, how long could it last and are you going to be pushed out of it, clinging the whole way? Or have you thought about, like, what is the end state of this? Like, what is a graceful exit from this? What does the lifespan of this look like, start to finish?

Taylor Krause

So, I did think maybe not the way that you're framing the question. But I thought about it obviously, like, really long and hard before leaving a great job, a great place, like something that I've worked really hard to have a position in, to kind of take this leap into of way more risky career. Career is maybe not the right word, but opportunity. And so, I think I understand that I probably have, I think I understand that I have an opportune Overton window of like, influence.

And I really have the opportunity to make whatever it is that I do into, have a following from it that's sustainable, that can maybe materialize into other opportunities for the next year. And so, I was kind of like, I'm gonna give it as much as I got and do something that I think is fulfilling and interesting and cool. And then if it doesn't work out, I'll hopefully, like, in the next couple years, like, could come back to a different, like, environment. But yeah, it's a great question. I know that there's finite time to really make something of it.

And so, I'm kind of in that window of really giving it a go and making it into something that's successful.

David Roberts

Still is fascinating. Yeah, I'd love to come back and talk again in a couple of years just to hear, like, what is the, you know, as you sink into it and learn more about it.

Taylor Krause

Yeah, I'm gonna have to read Chris Hayes', his book on attention because —

David Roberts

Well, he doesn't — spoiler — he doesn't have it. He doesn't have any great answers. There's not really anything to be done about it. It's just the nature of the world these days. We're all being called upon to deal with levels of attention, even people, you know, like me, who's like modest niche podcast, like everybody who's got any kind of online presence is getting more attention than humans are built for. So we're all. Almost everybody has to deal with it on some level or another.

Taylor Krause

Well, if it's any consolation, when you reached out, I was over the moon because obviously being a climate and clean energy nerd, you're like, "Oh my God, David Roberts. Like, this is crazy."

David Roberts

Oh, well, thank you. Vice versa. Yeah. Let's reconnect in a couple of years and see how things are going.

Taylor Krause

Okay. I won't disappoint you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I chat with Johanna Wolfson, co-founder of Azolla Ventures, about their unique philanthropic-backed VC model tackling the tough problem of sustainable mining for the clean energy transition. We explore the promising tech Azolla is backing to reduce mining's impact, from using electrochemistry to refine copper without dirty smelting to advanced techniques for processing low-grade ores and even waste.

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Text transcript:

David Roberts

Hey everybody, this is Volts for June 4, 2025, "How to reduce the impact of mining." I'm your host, David Roberts. When it comes to the subject of mining and the clean energy economy, it is important to keep two truths in mind at once: First, relative to the fossil-fueled status quo, a clean energy economy will involve vastly less disruption of the Earth's crust via digging, drilling, and mining.

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The materials that compose clean energy technologies only need to be extracted once. When you build a fossil-fueled machine, you have to keep extracting fuel for it as long as it runs. There's no comparison.

That said, it is also the case that clean energy technologies involve much more of certain minerals and metals than fossil energy technologies, and will require much more of certain kinds of mining. As listeners surely know, that mining — of copper, lithium, rare earth metals, etc. — can have extremely damaging social and environmental consequences. Clean energy advocates shouldn't wave those consequences aside or ignore them. They should think about how to reduce them!

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Obviously, a comprehensive approach to mining will involve social movements and public policy, not just technology, but it's still worth seeking out the technologies that could help. That is what Johanna Wolfson set out to do when she co-founded Azolla Ventures, a VC firm that is distinguished by deploying, in part, philanthropic money, for explicitly pro-social purposes. The mining industry is one of Azolla's main targets, so I thought it would be illuminating to talk with Wolfson about the kinds of promising mining tech she's funding and how it might help.

All right then, okay. With no further ado, Johanna Wolfson, welcome to Volts. Thank you so much for coming.

Johanna Wolfson

Thank you. It is awesome to be here.

David Roberts

So we are here to talk about mining, but what tell us your life story and how did you end up where you are and where are you? What is it that Azolla does?

Johanna Wolfson

So, I'm with Azolla Ventures. I'm a co-founder there and we are bringing a different way of investing forward in climate tech. What makes us unique is we are impact-first investors. That's not because we're such great people — though we like to believe that — it's really because we aggregate philanthropic tax-exempt capital as the heart and soul of our fund and that lets us take on outsized risk relative to what other venture funds can and really should do. And it requires that we're impact-first in our mindset and methodology and deployment of capital. And so, we're out after big swings in climate and taking on pretty meaningful risks.

Most often, that means science and engineering risks. That can also mean market and other sorts of risk. But we've gotten to do some interesting things along the way. And the way I got here was, I'm a scientist by training, physical chemistry, and came to think that all the amazing science getting done in lab benches around the world didn't have the right way out. That's not an original thought, but I really wanted to do something about that and wanted to spend my career on it. And so, found my way through working at initially an industry lab, then spent some time at the Department of Energy in D.C., getting to know what government can and can't do, and decided to work on the capital problem for early-stage companies and probably wouldn't have been that compelled to go to an investment firm for its own sake.

But the idea to build something different in terms of what types of things we could do and invest in, and bring a different model forward, was super compelling. So, we've been at it for coming up on eight years now.

David Roberts

This went by really quickly, but let me just pull it back up. You are deploying exclusively philanthropic capital?

Johanna Wolfson

Not exclusively. So, we have built a fund structure that pairs philanthropic capital with more typical impact-aligned but not tax-exempt capital. And by drawing on those two different pools side by side, first weighted toward the higher risk and then later when companies graduate from that especially high-risk zone, pulling on the more conventional capital, we're able to both kind of launch, catalyze, and then scale companies that we partner with.

David Roberts

You know, when I threw this out there online, a lot of people's questions were related in one way or another to "How does the VC model line up with this?" So there's sort of a broad discussion in our space. I'm sure you've followed it, that like the limitations of the VC model. The VC, they're looking for unicorns, they're looking for 10x, you know, etc. And they're looking for relatively quick payouts. Whereas lots of infrastructure-type things, you know, that type of capital doesn't work well in this type of business. And I would think intuitively that mining is sort of paradigmatically conservative, slow, doing investments that are multi-decadal.

You know what I mean? It's like big and conservative and slow. So, the match between the VC model and mining is not obvious to me. So, maybe talk through a little bit about how you think about that.

Johanna Wolfson

Yeah, how long do we have here? Okay, so lots to say there. For one, climate tech generally, yes, absolutely, all of those critiques about venture are true and make a lot of sense. And yet, over the last five plus years, a great deal of climate tech capital, as I'm sure you've known, covered extensively, has shown up. And some of those sources of capital have more patient structures associated with them. We're the only one I know of that has this tax-exempt philanthropic angle, but lots of them have longer timelines, so that helps somewhat.

David Roberts

So as far as you know, you're the only fund that is doing this blending of philanthropic and private capital?

Johanna Wolfson

As far as I know, we're the only fund doing this blending in climate tech at this scale. So, there's a couple of other kind of smaller, earlier efforts. But yeah, we're a $250 million fund and we'd like to see more, but as of now, not yet. So, we do see increasingly more patient capital coming into heavy infrastructure technologies, which you could say about a lot of climate tech, not just mining. On the mining front, all of those challenges are super real. So, I could speak from experience with many of our portfolio companies starting to pilot with mining majors or starting to get out in the field.

I mean, it is slow. The challenges are real. Not a sector historically known for quick innovation. You can imagine all of the things that make it hard. So those are all true. Over the last couple of years, I've actually seen more of our peer investors start to make mining investments and that is probably driven by a recognition of both the extraordinary need for securing critical materials in light of a coming clean energy transition, which I'm sure we'll talk more about, coupled with, you know, mining is a pretty stable and reliable sector. And so if you were canvassing across all the different things in cleantech, it's actually, I would argue, one of the more reliable places you could invest.

Now that said, it doesn't make any of the challenges around integrating with existing legacy infrastructure or selling to mining majors that might be fine with the way things are going now. It doesn't make any of those problems go away. But in across all the areas that we invest in, some of which are more challenging for VC to engage in, I wouldn't say mining is among the most challenging. Now, the other thing I'll say — just in terms of where we're seeing other capital show up — this is kind of my bugbear issue about clean tech investing in general. Where I really wholeheartedly agree with those questions and maybe the critique that's coming behind them is that just because you can find technologies or companies to invest in with a venture mindset doesn't mean that you're going after the biggest set of problems that we need for achieving a clean energy transition.

These are two totally different mindsets. And I think the venture community can get caught up in a story that, "Oh, because I'm able to put together this company markup or this narrative, therefore look, venture is working!" It's like, well, we're not looking across the broad swath of emission sources.

David Roberts

The worry, I think, is that the set of things that are receiving investment, that set is being shaped more by the sort of character of the investors than the shape of the problem. Do you know what I mean? It's like it's the VC susceptible problems that are getting invested in.

Johanna Wolfson

I'm like raising my hands in cheer right now that you said that. And this is a whole separate area that I'm looking into and working on with some like-minded colleagues at other places. It's just, you said it so well. The places where money is going are being shaped by the venture mindset and we're leaving a lot of impact on the table. And by the way, I'm not supposed to say that as an investor.

David Roberts

Well, I guess my follow-up question is the answer then to broaden the types of things that VCs are comfortable investing in or is the right answer to bring in other types of funding that aren't VC?

Johanna Wolfson

I fall into Camp B. I think that you can only push the VC model so far, and that's not because of closed-mindedness or anything. It's because of the type of capital that's being aggregated, the expectations that sit behind that capital, and the nature of running a conventional VC fund which is, you know, I'm going to go ask these folks for more capital in a few years and they're going to want to see what I've done with it. And you know, so it's very all natural in terms of the incentives and there are some things that we can do that I think we're experimenting with at Azolla successfully about changing that model or pushing it or prodding it or making it extend in a different direction.

But can that get at the whole of the impact that's being left on the table? I don't think so, unless you come at it with a new set of capital constraints.

David Roberts

Yeah, someday I want to do a pod on what those alternative investing vehicles are.

Johanna Wolfson

Because everyone says venture is not the only path and then you say "Great, what are the other paths?"

David Roberts

Yeah, yeah, that's right. There's a lot of hand-waving around that.

Johanna Wolfson

Yeah, yeah, I have more thoughts on that. We can keep talking about it. I kind of am assembling a group of people who want to figure this out, and I'm happy to keep in touch about it.

David Roberts

I mean, it comes up on this pod again and again and again. We just need capital that will hang out longer and accept lower returns over longer periods of time, basically. Like that comes up over and over again.

Johanna Wolfson

Right. And as excited as I am about our model, and I think it's extraordinary, the premise is not quite that it's, we're taking higher risks. But we don't think it's practical at this point, where there aren't other pools to draw from, to go after lower returns. There could be other capital that is suited for that. But we're saying, "Let us take on the highest risk right now, the risk that something might fail is higher." But the potential that it has extraordinary impact is higher too. So let us underwrite that risk where other funds aren't able to go, and we'll get something ready for more mainstream VC.

David Roberts

Right. It would be nice, I mean, in some bright future, to have a funding ecosystem where there's a smoother sort of like, "We'll help you on this bit, hand you off to these people who will help you through this bit." It's a little scattershot right now and every company is sort of wandering in the wilderness trying to assemble its own contract. But anyway, let's not get too diverted. Let's talk about mining.

Johanna Wolfson

Yeah, we should do that.

David Roberts

So share, as you see it, an overview of the mining challenge and in particular, sort of which materials you have your eye on, either sort of as problems or as opportunities?

Johanna Wolfson

So, at the highest level, the mining challenge stems from the fact that we're going to need a lot more of certain materials to enable the clean energy transition that we are striving for. And in terms of which materials, I will tell you top, top, top of that list are copper and lithium, and I would probably say copper even higher, because copper is the backbone of electricity. So whether you're talking about the grid, wind, solar motors, batteries, electric vehicles, everything requires copper. And that is set against a background where to meet clean energy demands that are forecast — you know, demand will double, which means we need to, some estimates say, double mining production and triple recycling, something like that.

Ore grades are declining, so we're, we've gotten the easy stuff already. The harder stuff is what's left. Permitting is really hard and takes forever. And that's for some not-so-good reasons and some very good reasons, which is that the backdrop, as you know, of the mining industry, is in many ways incredibly problematic in terms of environmental justice issues. Not a great record. And so, and then you add, there are other things bound up in the copper ball.

Like, because copper smelting, which is the majority of how we process copper today, is incredibly hazardous to the environment using traditional techniques, we actually have closed down most of the copper smelters in the US, which is a good thing for people who breathe that air. But it also means that we are taking, you know, copper mined in Arizona and we're offshoring it for refining and then sending it back, you know, as refined copper ore in products. And so that is challenging from a global supply chain risk standpoint, not to mention emissions associated with that transport. And so there's just a ton bound up with, "Okay, we need more copper, but..." And then there's a long list of buts for why getting more copper is hard.

David Roberts

And more lithium. Just briefly, because I want to talk about copper a little bit more, but briefly, it's striking that you don't include, I think, what a lot of people think about when this comes up, which is these allegedly rare earth minerals. The word "rare" is so unfortunate in that term because people think that those are kind of the linchpin.

Johanna Wolfson

Well, rare earths are interesting, and we haven't invested in that area yet. We may, but you're right that they didn't top my list. So we're talking about things like neodymium. Right. And the materials that go into magnets. And then, depending on your definition, you may or may not be including nickel, cobalt, manganese, and other things that go into battery chemistries, which I put those in the second tier only because, you know, I think we have more tunability and flexibility in battery chemistries on the margins. But rare earth elements, to your point on the word "rare", we are actually not at a global deficit on those, but 80% of the materials are in China.

And so, until recently, there was a risk and now, recently, a reality that, you know, China might withhold rare earth exports into the US, and that is what we're now seeing. And that, you know, probably will upscale domestic efforts. But on the other hand, then there's always the possibility that China will flood the market and disrupt the pricing, and it's just incredibly fraught. That's why they didn't top my list.

David Roberts

For instance, China might withhold them if we slap them with 100% tariffs.

Johanna Wolfson

Just as a forensics.

David Roberts

I always think it's hilarious. We're like, "What's China going to do?" And then we just go like, punch China in the nose, "Well yeah, they're going to do it."

Johanna Wolfson

Yeah, absolutely.

David Roberts

Our worst fears will come true if we go force them to come true. In the larger sort of policy community, there's all this concern about reshoring and all this concern about China dominating supply chains. Those are, though, economic security, political security, national security concerns. Do you adopt those? Is reshoring and securing supply chains part of something you think of as a goal of yours?

Johanna Wolfson

Not explicitly for that reason. I mean, we see geopolitical constraints and risks as something that could hold back the clean energy industry as a whole. So, in that sense, yes. But it is not a principal goal of our fund to specifically have a US mineral supply, although we think it's a good idea for a lot of reasons in terms of having optionality. So, I guess that's how I would thread that needle.

David Roberts

Yeah, let's talk about copper then. And taking a kind of step back, I'm just sort of curious, as a VC, when you approach something like copper, you know, you get these stats, "We're going to need twice the copper," "Copper ore quality is declining," etc. Copper is a problem. How do you go about approaching that sector? Because I'm sort of like all my training and the way I think about it is from a policy perspective, like that's sort of how I think, but that's not your angle. So when you approach something like copper, are you going and looking for companies that are just getting started, are you going to an area where you think there needs to be a company and sort of planting a flag and looking around saying, "Hey, somebody come start a company here." — like what is a VC methodology when you approach something like copper?

Johanna Wolfson

Yeah, that's a great question because it is so wide open. So, I'll say a couple of things. One is that we tend to, just as a firm, seek opportunities both ways, both opportunistically, "come one, come all," we kind of want to look at everything. And then we also do a lot of thesis-driven work and, in particular, an associate on our team, Cass Vickers, put together a pretty comprehensive look at copper over the last couple of years in terms of "Where should we be looking?" Because of our unique vantage point in the venture investment scene, that also means we're looking, where are others funding already? We don't need to go there, but let's go where others are not funding.

So, to take one example of that, there's a process called heap leaching where mining companies take degraded ores that are uneconomic assets, put them in a heap, it's called a heap, and they leach, you know, an acid through it. And there are companies like Jetti and Ceibo who have been very well funded. It's very exciting, actually, for the sector that these companies have been well funded by climate tech VC, not us. And those are kind of novel leachates that they're putting into solution to get more out.

We looked at that and we said, "We're not really needed there." But guess what, this whole idea of a heap leach process is really a data-starved process overall. They're not distributing those assets correctly.

David Roberts

It's extremely analog; one might even say, kind of gross.

Johanna Wolfson

Yeah, absolutely, yes. They don't even try. Right, with the word. It's heap leaching.

David Roberts

Yeah, they don't even try to disguise how gross it is.

Johanna Wolfson

So, we invested in a company, you know, just very, very pre-seed stage that, you know, in many ways we partnered with hand in hand to just get a narrative together around, you know, instrumenting that heap and being able to — I know I'm trying to make it sound more glamorous and it's just not going to happen. And being able to, you know, actually achieve the yield enhancements that should be possible if you're treating that like an instrumented asset, which it's traditionally not done. It's like an 18th-century technique.

David Roberts

What was that one? It's called Muon, right?

Johanna Wolfson

It's Muon Vision.

David Roberts

They're shooting muons, which are what? Subatomic particles? What the heck are muons?

Johanna Wolfson

The universe is shooting muons. We don't have to do anything to get them. We just need to bury a scintillator under the heap and watch the muons come in and see how the liquid density is varying as a result.

David Roberts

So, what it's telling you is like, where is the liquid in the heap coming down through? Like, where is it coming faster and slower? Where do you need more liquid? Basically, it's like telling you a little bit about what's happening inside.

Johanna Wolfson

Exactly, yes, exactly. And to put this in the broader context of the copper industry, you've got pyrometallurgy, which is the traditional way of mining copper, hard rock mining, and you put it in a smelter and you go, there's more work to do there. And I mentioned earlier that smelters are pretty bad, so there's more to do there. And we've actually made another investment on that side into a company called Still Bright. But the industry as a whole is actually wanting to shift more to what's called hydrometallurgical processing, which is how they might be able to get at some of these lower-grade ores that aren't as much using the traditional methods, but they're going to need help to do that.

And that's part of why we see, you know, a lot of opportunity here.

David Roberts

And just broadly, we don't have to get too deep into it. But pyrometallurgy is basically like, you burn things to separate them. Basically, you're trying to get something out of the material and you burn it off, burn it with the presence of various chemicals that separates it.

Johanna Wolfson

You got it.

David Roberts

Super dirty, super energy intensive — just like the iconic, unpleasant industrial process.

Johanna Wolfson

It is the iconic, unpleasant industrial process. It is the reason we barely have any smelters left in the US. Like, that is a good thing. But, we need alternatives.

David Roberts

But hydrometallurgy, just to orient people, is basically, you are immersing the stuff in a solution of liquids that contain various chemicals that leach the materials apart. So, you don't require heat. I mean, basically, it's like a room temperature process. Is that one of the big advantages?

Johanna Wolfson

You don't require heat, although it's interesting that you get more out if you do heat it. And so, some companies are looking at, you know, siting geothermal alongside heap leaching to, you know, make it even better. But it kind of needs to be geothermal to make it worth it. You can imagine it's always, you know, a spreadsheet exercise. But that's right, that's a good description. And you know, it should be said, just because I'm so focused on the environmental justice aspect of all this stuff, is that heap leaching is not, you know, it's not some glorious alternative that doesn't touch people either.

You know, it takes up a lot of space and, you know, it leaves behind an asset.

David Roberts

It's a giant pile of waste with acid running through it.

Johanna Wolfson

It's exactly, yeah. Look, none of this stuff is what we might choose to do just for fun. It's all about what, you know, what are the cost-benefit trade-offs that we have to make if we decide we are prioritizing and how do we minimize damage in doing that? And I want to, if I can just go to one other thought on, you had asked me how do we think about scoping the space and how do we think about making investments? And as I was reflecting on the investments we've made, I realized something, which is that while the high-level point to do any of this is what we started our conversation around, which is to enable the energy transition because we're going to need all these materials.

That almost ignores this big thing underneath, which is how emissions intensive all these processes are. And you went there on the smelting side. But we've actually, because when we make an investment, we underwrite not just to an eventual financial outcome that we know the financing sector will pay attention to, but we underwrite to a gigaton scale of impact. And we've decided to, when we do that underwriting, focus on the process emissions, not whatever downstream enablement and unlocking of a clean energy industry might occur. And I think that's important because it keeps us focused on making sure whatever we do, it has to be better than what's been done before.

David Roberts

Right. Although, it is worth saying, just as a bit of information, that the emissions of the copper-making process are relatively modest in the grand global scheme of things, especially compared to all the clean energy, you know, technology that it enables. Like, if you're going to spend emissions, you know, getting copper is pretty good.

Johanna Wolfson

Yeah. They are certainly modest in the scheme of what could be avoided and unlocked by the industries they are enabling. Otherwise, I hope we wouldn't be even doing this. But they're not tiny. They're meaningful enough to clear our bar, which is the gigaton scale bar on process emissions alone, which in some cases I was surprised by.

David Roberts

Let me get into a few of the nooks and crannies of copper here. First, I want to talk about electrochemistry because here at Volts, we love ourselves some electrochemistry. You mentioned a company that is using electrochemistry.

Johanna Wolfson

Still Bright.

David Roberts

Still Bright, yes. Talk a little bit about what they're doing and what it is substituting for.

Johanna Wolfson

Great. So, we talked a little bit about the traditional pyrometallurgy and the smelting process. And so, Still Bright is essentially taking out the smelting process, which is really awesome. So, they are going after what's called chalcopyrite, which is part of the universe of sulfide ores that pyrometallurgy traditionally goes after, although chalcopyrite is generally considered a lower-grade ore. So, there's a lot of it lying around. And it's been challenging for smelters to extract copper from, not least because it's a dirtier, lower-grade ore. And so, when you put it through a smelter, it emits all sorts of nasty stuff, notably arsenic, which is like, could you think of a worse thing to be, you know, gasifying and spreading into a community?

And that is one reason why it's just not done. But again, if we're going to meet this demand, we need to find clean ways to go after the ores that we do have. And so, Still Bright has — this is a spin-out from Columbia University, tremendous technology — they essentially react copper concentrate through a vanadium redox flow battery and they're able to produce solid copper through that electrochemical process and have demonstrated pretty extraordinary efficiency. And they're going to market with the case that we can do processing of sulfide ores right here in the US and we don't have to smelt them and we're not going to emit anything.

David Roberts

So this is an alternative to smelting?

Johanna Wolfson

This is an alternative to smelting, which makes it pretty powerful.

David Roberts

Yeah, we can take these ores and produce copper with them on site. So, you don't have to ship anything away for processing. And this is just a gleam in someone's eye, what's the state of it?

Johanna Wolfson

This is excitingly, you know, a few steps beyond that. So a couple of years ago it was. And Jon Vardner, who's the founder of this company, was kind of working on it after his PhD postdoc at Columbia University and realized he had a pretty powerful concept here. And so, in the last couple of years, he spun that into a company. He got some preliminary funding from us and others, and he recently, I don't think it's been announced yet, but closed a pretty meaningful series seed round and is going to be building the first demonstration of this at a demonstration but still meaningful non-lab scale.

And that's going to be for the world to see within about 18 months from now. So, a lot of exciting things to watch there. And they've seen really promising results in the lab. Of course, new engineering challenges do emerge when you take it up the next level, but the numbers that we're seeing are pretty promising and we're excited to be able to see that at the next scale.

David Roberts

Yeah, I'm so excited about electrochemistry. It seems like the solution to all the most difficult problems. I've had someone who's making steel with electrochemistry on the pod, someone who's making concrete with electrochemistry, basically substituting electrons for carbon molecules. What a beautiful thing. You just need a lot of cheap electrons.

Johanna Wolfson

To me, it is the most exciting way to interpret "electrify everything" because once you see it, you can't unsee it.

David Roberts

For all the "difficult to abate" sectors, electrochemistry is the answer. Almost every one of those, I think, in the long term, we'll see.

Johanna Wolfson

And we've made a number of electrochemistry-focused investments and the challenges are hard. Like the engineering, it really, truly is very hard and I don't want to dismiss that. But they are tractable. It's not an intractable set of challenges.

David Roberts

Interesting. And what about something I sometimes hear about mining in situ, mining underground? Are you invested in that? And how the heck does that work?

Johanna Wolfson

Yeah, so we have not invested in that. I've sometimes heard that term applied to heap leaching, but I don't think that's what you mean. I think you might be referring to an electrostimulation approach that we've seen, it's called ISR mining. Where you can sort of stimulate to the surface the ore that you're after. But I don't know a ton about it. We haven't made an investment in that area.

David Roberts

And what about these two different methods of basically mining waste? One is mining what are called tailings. Are you getting involved in that and how much promise is there in that? Because there's a lot of mining tailings lying around the world.

Johanna Wolfson

It is a huge opportunity. It is a tricky one to crack because typically the tailings are what's left behind. And sometimes those are, you know, inactive sites. And there's a question of who owns it and how do you get access. But putting that aside and just thinking about an active mining operation with tailings, we think about separations there. So another one of our portfolio companies, SiTration, which has developed a silicon-based membrane that shows really tremendous selectivity for multiple of these elements that we care about, copper, lithium and others, it can be tuned and be highly selective to not only size but valence of the ion you're after.

So, some of these technologies that were actually, they have flexibility in how they can go to market in mining. You could think about them as technologies to deploy in the secondary recovery market, which we didn't talk about yet. But we need to, we should do just a ton more of because it is maybe the one way we avoid some of these most thorny community and justice issues. And then secondly, they could go to market on the tailings front, you have these waste streams on site at mines and you should be able to valorize them.

And that's, you know, kind of, it's in many ways it's a variation of the heap leach concept. I have now what I have designated as uneconomic or what previously, according to my prior technology toolkit, was uneconomic and it's just a calculation of what's my ROI on bringing this new tool on board and whether I can reliably valorize what was previously written off as a waste stream. So there's quite a lot happening there. And also on the, we talked briefly up top about the rare earth elements. I've seen a lot of companies going after mining tailings to find the little stuff.

This might be a copper, a silver, a gold, or a lithium mine, but there's other stuff in there. You know, the earth's crust is very interesting that way. And so, if you can find cheap enough ways to go get after it and recover, you know, smaller amounts of still valuable materials, if you haven't invested all the upfront, you know, CapEx to mine those, the mining company did that for its main thing, but it can have secondary revenue streams. That's where we're seeing a lot of activity and there's quite a bit of innovation on that front from, you know, materials innovation like the one I mentioned to biological leaching microbes that secrete kind of an especially effective leachate for some of these rare earth minerals.

So there's quite a lot happening there.

David Roberts

And the other waste stream to mine that gets discussed, which I've always thought seems promising, is just landfills. Like, people throw away a lot of metal. A lot of processed pure metal in devices and so little of that gets separated, so little of that gets recaptured. I just feel like we're in a world with tons of landfills with tons of valuable materials in them. But then I also think, what is the cost structure of schlepping through a landfill picking out good stuff? Is that a reasonable thing that we are ever going to be able to do?

Johanna Wolfson

Well, I love that you went there. I was just on the phone yesterday with an entrepreneur who I was asking some of these questions to, not for the metal waste reason but because she's working on — to keep it the heap topics — instrumenting landfills to find where RNG pipes might need to be rerouted to capture methane. But anyway, so I was asking some of these questions about landfill economics and operations and probably not a shock, but it's not like the most innovative sector. And so, you can imagine sets of drone-based scanning or, you know, AI-driven imagery deduction that's saying, "Well, look here, you know, there's something promising and you know, go send a robotic arm to pick it up and then send it through, send it through a line that can do some visual analysis" and we have seen companies by the way doing that visual analysis of waste not from landfills but just online and recycling facilities.

And so, that technology is developing. And so, I can certainly invent in my mind a future where what you describe is real, but it's probably not an especially soon thing. Although, I will say that this is an area where I think in the US, we're pretty far behind Europe as an example. People just, I think, care more about separating and the landfill setup, and actually, the innovation landscape in Europe is quite a bit more evolved from what I understand. So, maybe we need to go over there first and see what our future looks like.

David Roberts

One thing I thought was interesting in your sort of investment thesis document about copper was that you are going to steer clear for now of the seafloor stuff, which is a hot topic now because Trump, I don't know exactly what he did, it's just all these executive orders. I think he, at one point, it was either an executive order or a Truth Social post. It's hard to keep them distinct where he's like, "Yeah, go mine the seafloor." But you for now are staying away from that. What's the thinking there?

Johanna Wolfson

Well, and we haven't made any definitive, "we will never" kind of statement about it. I will say we do talk to companies doing that. We find it interesting. As of yet, we haven't made an investment in that area. My thinking is maybe twofold. One is that there is, we were talking earlier about how mining is a data-starved industry and we were just talking about landfills where the same is true. And I think if you think about low-hanging fruit, there is quite a lot of it on land or I guess out of the sea.

And so, in terms of just like where to focus time and energy in dollars, it hasn't been our focus. It would be reasonable for someone to make a different decision. But that's true as of now. And then secondly, we do a fair amount of active investing in ocean tech. It has tended toward shipping and carbon removal. And so, we know a little bit about, and I emphasize a little, about maritime regulation and international waters and the complexities associated with that and I think are under no illusions about, you know, what would need to be sorted to responsibly and reliably do deep sea mining.

And it's not to say that it's an intractable problem. It's just again, like we're, you know, I'm always staring down the clock, I feel at 2050, and thinking about what this trade-off between we're, we're a risk-embracing fund that can do really big swings, but we're increasingly hurtling toward some points of no return here. And so we have to make tough trade-offs about what is likely to come to fruition in time. Oof, that got dark.

David Roberts

Yeah, let's talk about a more pleasant topic, which is recycling. I think everybody holds out hope when they think about the far future, you know, that we can get to a place — I mean, this is the idea, right — eventually we get to a place where we've mined enough and we are recycling and we've created something close to a closed loop. I mean, this is sort of like the dream. It's pretty far off. I noticed a note of caution about recycling in the document. So, how are you thinking about recycling?

Just, I mean, physically and environmentally, obviously, it's a dire need. But in terms of like VC, you know, targets, where do you find in there?

Johanna Wolfson

Well, we actually see a lot of activity. So, I don't know if that note might have been referring to less critical need for catalytic capital. I would have to look back to see if that's maybe what it was referring to. But because there are a number of companies that are out there and doing a lot and, you know, looking successful. Redwood Materials and lithium would be the prototypical example — Glencore. But there are others. And then we see emerging companies and Cycle is a good example that I think are going to maybe give some of those a run for their money.

And so, there's some promising activity. And I think the revenue model is tough. It's a tough nut to crack, but again, probably a tractable one. And I think some of those founders and entrepreneurs are really paving the way to figure some of that out.

David Roberts

There's some cool electrochemistry.

Johanna Wolfson

There's electrochemistry everywhere.

David Roberts

I know once you start, once you start seeing it.

Johanna Wolfson

Yeah, and I mentioned earlier, SiTration, who plays in that space. But I think recycling is so interesting because, you know, keep in mind for these mining and materials calls to action, it's still a little bit future looking. It's, you know, over the next 10 years or out to 2030 or 2040, copper demand will double and lithium will quadruple or whatever it is.

David Roberts

But copper demand has not. I mean, you make a note of this in the document. Copper demand has not gone up yet. So, this is all "probably."

Johanna Wolfson

It's all predicated on predictions, which are just that. Right. So, well, I'll come back to that. But to finish the recycling, I think it's interesting. Let's assume for a moment that those predictions do come true. It's actually very hard to see, see permitting and the ores in the quality that they are, really meeting that. And so, the demand for secondary materials will probably skyrocket in a way that we don't yet feel today. And so, I love those companies that are kind of getting ready for it because I think they're going to be really well positioned. It's just we're not feeling it yet.

But to your point, this is all predictive and they're just that. And so, it's kind of this strange thing that we're doing when we invest in this space. We're sort of warding off a future what could be a lock in the future, but it's not an active unlock. And so, one of the things I think about while this space is really important to me, and I think there's a lot that can be done especially to clean up the mining industry in the scheme of climate tech investing. It's just one prong. And when it's an indirect prong that is predicated on a future thing, we're always weighing — when you compare that to, you know, taking a molecule of methane right out of the atmosphere, you know, how should we be weighing that?

Which is, you know, that doesn't have a simple answer. But it's an interesting question.

David Roberts

Yeah, a certain amount of skating to where you think the puck is going. You talk to the people in the long-duration storage crowd, those poor people who are hearing simultaneously, "There's no current demand for your product. But yeah, don't you worry, in 10 years there's going to be so much." It's sketchy. Tell us about lithium. So, copper is the big one. I don't really feel people get that the need for more copper. So, I'm glad we're highlighting that. But also lithium. And as a background to this question, this is also a general question about materials.

So, I frequently, I've been doing this for 20 years now. You frequently hear like, "This or that material is rare." You know, "There's going to be exploding demand and there's not enough supply. There's going to be a giant choke point. It's going to stop everything." And like, it just inevitably never happens. Like, somehow or other, we innovate or substitute around materials challenges and so like this, all these projections of like in 10 years, you know, "X material is going to be $2 billion a pound," they just never come true. Which seems to me, it makes it tricky to invest in this area.

And so, this brings us to lithium. Like you undoubtedly recall, it was not that long ago that people were saying, "Lithium's price is skyrocketing. Everybody wants lithium. We're heading up to a giant, a giant lithium shortage that's going to grind the whole industry to a halt." And now, lithium's like dirt cheap again.

Johanna Wolfson

Yeah, it's dirt cheap. But will it go back up?

David Roberts

Yes, well, again, who knows? So how do you think about that in terms of investing? Are we going to need a ton of lithium? Is it going to be cheap? Is it going to get scarce? How do you begin to approach that?

Johanna Wolfson

So, that is totally true, that deep and staggering uncertainty. But that's no different than anything else we should be looking at as good venture investors in terms of whether we're talking about carbon markets or something even further afield. So I guess, you know, there's comfort in that discomfort. But I think your point is right and the, you know, the way we've thought about this and you know, we actually made our first lithium investment back in 2018, which is a long time ago and not many people were talking about it. That was in Lilac Solutions, which is, you know, doing direct lithium extraction from brines.

And then, more recently, we invested in a company called Rock Zero, which is doing hard rock mining of lithium, which is sort of a different part of the landscape. But we think that there will be, even if you don't get into the game of what exactly will the demand curve look like and when, what you can be pretty sure of, or at least I think so, is that if you have an extraordinarily better way of doing something, then you're going to be able to unlock value in that. And the market projections that may or may not come to pass are kind of unbounded upside on that. So that's a little bit about how we think of it.

And we have to remember that this is a long game. So, lithium prices crashing are unhelpful for a lithium company out raising money during that time. But it's not probably a statement about yes or no on the long-term target. But I do value your point that we tend to find a way, and that's probably what is behind my statement about in the grand portfolio of technologies to be supporting, I think this has a role. I think it's a role that needs to be kept in balance to all the other problems we're chasing after for those of us who care about achieving this transition.

David Roberts

So then, mining-wise, you guys are all over copper. You're in several early stages, sort of improving copper mining. You're in a couple of lithium. Are there other mining... is it just copper and lithium? Mostly like those are the big buckets. Are there others in this general area that you are excited about?

Johanna Wolfson

So, in terms of investments that we've made, it's copper and lithium and the company that's going after secondary extraction, SiTration, that can be deployed across many materials. We've also looked at others. We may make other investments, but it's no accident that we focused in on copper and lithium. And I displayed my bias upfront that those are the two that are really most critical. I would say there are others that we'll continue to look at. There are other companies though in our portfolio that touch on mining, even though they're not part of this critical or rare material conversation.

And those interestingly tend to fall into the carbon removal space where we're talking about, you know, doing some form of enhanced rock weathering or accelerated weathering of limestone, where if those approaches are successful, and I'm thinking, you know, in our case companies, Calcarea going after decarbonizing shipping and Vesta, which is doing coastal carbon capture. But there are many others, you know, going after different iterations of that carbonate chemistry. Basically, if those types of approaches are successful, there are some meaningful mining implications there too, in terms of where those materials are being sourced from, how they're transported, grinding costs, grinding emissions and so forth. So it really does, I think, underline how foundational the mining industry is to a lot of what we care about, even if we don't always look directly at it.

David Roberts

Yeah, yeah. And I should make my point that I always make when mining comes up. It is true that clean energy technologies require more per unit of generation of these materials than fossil fuel generating energy generation technologies require. But what you don't have to do is mine a continuous supply of fossil fuels to dump into those machines. So, you just need the materials once and then you're done. As opposed to needing fewer materials to build the machine, but then needing a continuous stream of fossil fuel to put in the machine, which does more landscape, social, whatever damage you want, whatever kind of damage you want to talk about, lots more being done by fossil fuel, you know, digging up than there is by materials mining.

So, yes, more mining of these materials, but less overall disruption of the Earth's crust, let's say.

Johanna Wolfson

Right, but I'm so glad you brought up that point because just the truth that there is more of these materials in the renewable energy and electric energy sector, you know, it just, it drives home the point that we have to do mining better. And I know we've said it, but I just, I do worry about sometimes the conversation in climate tech around mining seems to be, you know, just, "Let's get more." And it's like, no, that's not it. "Just get more" hasn't served us that well as a human race, so we have to do it better.

David Roberts

Yeah, there's like, there's two unproductive sides of that conversation, which I saw online when I threw this out there. One is just like, "Why are we worrying about these relatively modest impacts when the whole fate of the planet is on the line? Blah, blah, just mine what you need to mine, et cetera." That's that attitude. And then there's the sort of like, "Mines are bad, they ruin communities, they ruin landscapes. Let's get rid of them. Just recycle." Yeah, I got, I got that one thrown at me several times. And it's worth saying that, like, if you're gonna need 2x the copper, even if you recycle 100x of the copper that you currently have, you're not gonna turn it into 200x. So, like, just reinforcing your point, like, there's a lot of mining needed, no matter which direction you face, no matter what you want to do. So you might as well do it better.

Johanna Wolfson

You might as well do it better, and you might as well kind of throw yourself into the learning of that. So, if there's one thing that I would say that I've really benefited from, it's kind of throwing myself headlong into what is hard about mining and not looking away from it, and, you know, talking to folks in the communities affected and visiting them. And that's what I advise portfolio companies to do when we make an investment: go there, feel it, and talk to people. So, this is not academic for you, because if it's academic, you're going to make the wrong choice.

You're not going to be able to fully value the complexity of what you're engaging in. Doesn't mean that you shouldn't do it. Like, let's grapple with it, but let's grapple with it for real.

David Roberts

Yeah, final-ish question. I think maybe energy, in a way that is unlike sort of digital tech, which is the tech that everybody's kind of more familiar with, kind of what they think of when they think about tech. Like if you're developing apps, it's kind of a wild west, you can kind of do what you want. But in energy, everywhere you turn, there's policy, there's politics and policy that are incredibly relevant and germane to a lot of these industries. You know, depending on which way the policy winds blow, entire industries in this area can be sort of like created out of whole cloth or shut down.

Johanna Wolfson

Totally. I mean, I saw the announcement yesterday, "Coal designated as a critical material." No, I'm serious. Because of metallurgical steel.

David Roberts

Hilarious.

Johanna Wolfson

Metallurgical coal for steel. So yeah, there you go.

David Roberts

Yes, yes, I know. So, but just like my impression is from the tech and investor community that they're super informed on tech and tech risk and business risk, but maybe aren't super savvy when it comes to politics. Of course, I think that about everyone, I yell at everyone about that. But like, how do you think about policy risk? Is that a big column in your spreadsheet or is that, do you just sort of treat that like, you know, acts of God that you can't, that you have no control over?

Johanna Wolfson

Are you asking for mining in particular or for our investing practice in general?

David Roberts

Well, let's start with mining in particular, but I'm interested in the general answer too.

Johanna Wolfson

It's probably different between the two. So for mining in particular, I think by and large, in terms of the march of history and mining, hopefully getting better over time, currently lax regulations notwithstanding, I think that in general, policy forces will be tailwinds for most companies innovating in this sector because they're doing things better, cleaner, more efficiently. And that's where all the pressures over time are going to point things. So there will be differences in terms of which geographies is that true in first? And by the way, there's a cautionary tale there because startup companies need to, we often say everyone needs to go fast. But in areas where there's kind of really heady, fraught issues, you sometimes need to go slower now in order to go faster later.

And so, don't go necessarily to the place to deploy where you have the most lax regulations. Right. So, either apply more strict regulations to yourself elsewhere or actually start in a place with stricter regulations so that you have kind of a squeaky clean reputation from the start. So, that's just kind of a side note of the playbook. But, I think in general, the policy factors will be tailwinds for startup companies in the sector generally.

And I guess that does map to how we think about policy risk more generally at Azolla, which is, we both eschew and totally welcome policy risk on different timescales. So, on the near-term timescale, what we probably will never do is underwrite an investment that requires a subsidy of any kind to be economic because it's not reliable, it's not durable, and it's not the way we think people are incentivized, and it's just not the political system that we've seen. But in the longer term, we have made a declaration that in certain cases policy will land.

We may not know the specifics, but we know that in the arc of time, mining regulations will tighten or regulatory carbon markets will grow. That kind of macro confidence we do sometimes have about the policy environment and —

David Roberts

The arc of history bends towards justice?

Johanna Wolfson

Yeah, there we go. Absolutely.

David Roberts

Yeah, well, let's hope so. I mean, and in a certain sense, like if it isn't, we have bigger problems, we're all screwed anyways. Might as well fill your time with something. Mining, as you say, as I think everyone acknowledges, globally, mining is a grim, not just grim physically, but like the industry has a terrible record. It's been rapacious, it's destroyed a lot of landscapes, destroyed a lot of communities and has a sort of established a history of "We're gonna do the cheapest thing, come what may." So, I guess just like an actual final question which is just like until and unless these things you're investing in become cheaper than the alternatives, do we have any reason to believe that the mining industry is going to make sort of good faith efforts that they will spend extra money to clean themselves up or they're just going to...

In some sense, you almost need policy to force them to clean up to make these things you're investing in viable. Do you know what I'm saying?

Johanna Wolfson

So, I mean, look, good faith efforts, probably. I mean, I think that there are good people who work on the community engagement sides of mining companies that are kind of trying to do the right thing. Like, I really believe that. And you know, you look and you learn about the programs going on at say, the Resolution Copper Mine in Arizona, which has met with a lot of challenges and they're not doing negative things in the community alongside the mine, they're doing positive things. How does that weigh? Well, the community should decide. But just to say that there are good faith efforts, but I would say good faith efforts are probably not enough.

And so, I just agree with your actual conclusion that you probably need policy to force it. And that's because every incentive, by the way, for a mining company is to kind of promise the world and then it's actually very, very hard to deliver the world because reality intervenes. And so, you're just like setting up for this huge disparate outcome in terms of what the vision was and what the reality was. But I do think that policy and regulation is totally critical here because I don't think mining companies really have the incentive to go as far as absolutely possible, which is what's necessary.

You know, it's not necessary to do a little bit more here or there. And then, maybe a final thought here, and this is where I'm going to start to sound like an optimist, which is that these companies that we support and others support and that are bringing in many ways the new front of mining technology, whether that's cleaner or more efficient or more intelligent, they actually have an extraordinary opportunity to sort of demand a different set of behaviors from the mining companies that will be their customers if their technologies prove successful. And so, if you have the most, you know, the most promising electrochemical approach to refining copper and you are licensing that out or deciding where to site your facility, you are going to call the shots. Now, the startup companies that are developing those technologies today, they're not yet in a position to call the shots, but if they are successful, they will be.

And that's why, to me, it's so important to kind of, from the start, think about what kind of business you are trying to build and what is the change you're trying that you might be able to demand just by dint of having a better solution.

David Roberts

Yeah, the landscape looks different when there's no other way of doing it but the bad way. Like the minute there's a different way of doing it, even if the new way is more expensive, the whole sort of social and political landscape shifts.

Johanna Wolfson

That's right. But I think, I mean, for a lot of these companies, the new way of doing it won't be more expensive. It's actually a win on many levels.

David Roberts

Well, your lips to God's ears. All right, well, Johanna, thank you so much. It's really fascinating. I'm glad you've dived into this, you know, sometimes unpleasant area. I appreciate it.

Johanna Wolfson

Absolutely, I had a lot of fun. Thanks for the discussion.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

This week on "What the F is Happening" (periodic episodes in which we reluctantly discuss current events) we talk with Adrian Deveny, a former Senate aide who was in the trenches for the IRA's creation, about the House GOP's "Big Beautiful Bill." In its current form, it amounts to wholesale destruction of the last four years of climate policy. We ponder…

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In this episode, I talk with Catie Gould and Alan Durning of the Sightline Institute about the "dark matter" of urban land use: parking — specifically, the municipal parking mandates that help make housing more expensive and scarce. We discuss a landmark new parking reform bill in my home state of Washington, what it does and the coalition that made it possible, and point to other places where parking reform is coming soon.

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Text transcript:

Parking reform in Washington, parking reform everywhere!

David Roberts

Hello everyone. This is Volts for May 28, 2025, "Parking reform in Washington, parking reform everywhere!" I'm your host, David Roberts. When it comes to urban and suburban land use, there is no topic more delicate and contentious than parking.

Just between us here on the pod, the real reason to think poorly of parking is that, ipso facto, it works against density: the more land devoted to concrete car stalls, the less devoted to everything else, including uses that create much more tax revenue. Excess parking creates urban and suburban dead zones.

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But reformers who work on the ground trying to change this stuff will beg you not to talk that way in public, because the average voter's disposition towards density ranges from uncomprehending to neutral to negative, whereas parking is something everyone knows, often needs, and is generally happy to find. "Less of something you like in the name of something you don't give a damn about" is not exactly a political winner.

So how can reformers work to remove some of the onerous parking regulations that make building housing more difficult and expensive than it needs to be? What kind of coalitions do they build? What kind of policies do they push?

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To get into all of that, today I am going to talk with some folks from my home state of Washington, where an absolutely kick-ass bit of parking reform was recently passed by the legislature and signed into law. They are from the Pacific Northwest's own Sightline Institute, which is, in my humble opinion, pound for pound, one of the best think tanks going — they choose good fights and have an impact well out of proportion to their size. And they played a key role in this parking victory.

Catie Gould is a senior transportation researcher there, and Alan Durning is the founder and executive director. They're going to fill me in on what's in the bill, how it got done, and what's next. So, let's parallel park this thing.

With no further ado, Catie Gould, Alan Durning, welcome to Volts. Thank you so much for coming.

Catie Gould

Thanks for having us.

Alan Durning

Oh, thank you for having us.

David Roberts

Very excited to get into this. This is juicy, juicy stuff. Catie, I want to get to you in a minute for the details of Washington's bill. But Alan, maybe let's just start with you. You have been running Sightline, gosh, since the 1900s. So tell me, when did urban land use come on your radar and become a priority? And then secondarily — this is a tripartite question — secondarily, when did parking reform emerge out of that as its own distinct fight? And then third, why do you think parking reform is a good fight to pick?

Alan Durning

Wow, right up front, three hard questions. Just to tell the historical answer and wind up to the big one about why parking is so important. Since 1993, Sightline has been focused on making Cascadia, the Pacific Northwest region, a model of sustainability. And quickly, like within the first year, we were focused on urban sustainability as well as rural. At that time, the big fights were about salmon and old growth forests and things like that. And we said, "Look, climate change is the epochal challenge before us, and to get to that, we need to look at the shape of our cities and sprawl and all the rest of it."

So, land use was on the agenda from the very beginning. In 1994, I was doing an interview for our flagship book with a transportation scholar in Victoria, and he turned me on to parking. He was talking about this guy named Donald Shoup.

David Roberts

Yeah, Shoup goes way back.

Alan Durning

Exactly. He went on to become the patron saint of parking reform. May he rest in peace. He passed away earlier this year. The author of an amazing book called "The High Cost of Free Parking."

David Roberts

Highly recommended on this subject.

Alan Durning

It's the way to get parking-pilled. Catie and I have each read all 733 pages at least once. But in 2012, I think I was just wrapping up a series of articles about silly regulatory barriers to doing common sense, good green things. And I thought, "Oh, I'll just finish out the series by doing a single article about parking regulations." And that metastasized into 40,000 words and 15 articles. You know how this goes, David.

David Roberts

I'm familiar.

Alan Durning

You're familiar. Yeah, I just thought I'd do it, I'd just whip out a quick article, and it turned out that parking connects to everything that we care about in the world. It connects to economic opportunity and prosperity. It connects to climate, of course, a core issue for Sightline, but also it attaches to and is important to the cost of housing and the opportunities to start and operate small businesses. Everything turns out to be connected to parking. That's why I say we're kind of parking-pilled. So, in 1993, we started writing about it.

David Roberts

So you were on urban land use then, before, it was cool?

Alan Durning

That's true. I mean, is it cool now?

David Roberts

I think it's cool.

Alan Durning

Is it?

David Roberts

We're making it cool, Alan. Come on, buck up. It's cool now, we're cool.

Alan Durning

Okay. Well, it's news to me. My children will be delighted to learn that I'm cool. And why parking? I just kind of gave the answer. Parking turns out to be — it's like dark matter. It's like most of the universe turns out to be dark matter, according to the cosmologists. And parking policy turns out to be just similarly influential in how we live our lives and how our cities are shaped. It's this invisible force that shapes how cities develop. It affects everything that we care about. Most prominently in Washington, the cost of housing, which is the key driver of most political movement in the states, is the top political issue.

David Roberts

When we talk about parking regulations, are we mostly talking about parking minimums, parking mandates? Is that the evil here that we're after?

Alan Durning

Well, let's not define it as an evil, but it is the dark and invisible force. And yes. So, when we say parking regulation, what we're talking about is that cities all over the United States and other countries as well, to a certain extent, have hidden in their code books, in their local ordinances, requirements on every building lot about how many off-street parking spaces need to be provided based on what type of building it's going to be. And these mandates, these parking mandates, dictate what home builders can do and what developers of office buildings can do, and so on and so forth.

These lists of these mandates, these requirements run to, you know, sometimes dozens of different rules for like what, what's required of a bowling alley? What's required of a daycare?

David Roberts

Yeah, and the really fun part is that like a bowling alley in one town might, you know, be required to have like two parking spaces per lane, and in another town it's five, another town it's ten. These things are not derived from any formula or math or science.

Alan Durning

Like, I think it's 12.5 in Puyallup, Washington for bowling.

David Roberts

Completely arbitrary.

Catie Gould

Because they don't regulate it per lane, they regulate per square footage there. And bowling alleys require huge amounts of square footage. So, if someone was actually going to build one, they would be proposing their own number and having to provide their own study because no one could build that much.

David Roberts

Yeah, yeah. And we should say that, like parking, is expensive. Like, this is another thing I think people intuitively don't necessarily get about it because it looks like it's just a patch of concrete on the ground. But that's expensive. It's expensive to build, it's expensive to maintain. It's not a small thing to require it of a builder.

Alan Durning

Yeah, that's exactly right. And I maligned Puyallup, mistakenly; it was Redmond that required 12 or the equivalent of 12, and Catie can explain all the details of it. We need to get Catie into the conversation. But let me talk a little bit about the cost. The cost of parking is really very substantial. The real estate value of a parking space in the Pacific Northwest, just as space, starts at at least $5,000. And if you're talking about a constructed space, like underground parking or something, it might cost, like, $60,000 or more. In fact, there are calculations that we did years ago that suggest that the aggregate value of our parking exceeds the aggregate value of our vehicles.

Yeah, this is just epic quantities of money because we're allocating 10-20% of the surface area of our cities to parking.

David Roberts

Yeah, what blew my mind in this — I mean, you know, I've gotten a little parking-pilled, too — and one of the things that did it for me is these aerial maps that they have now where they just shade parking in a city. And you look at these aerial maps, and you're like, "Holy crap, that's like half — that's literally like half the city is just dead concrete. That's, like, occupied, like, 5% of the time." It's really insane when you contemplate it. So when we talk about reforming these parking mandates, generally, what we want is just to get rid of them.

And to be clear here, we'll probably say this 10 times throughout the pod. That does not mean getting rid of parking. Getting rid of parking mandates does not mean getting rid of parking. You just are allowing the developer of the bowling alley to determine on their own, contextually, how many parking spaces will be needed. Is that right? I mean, that's the nut of it.

Catie Gould

Yes, it's really about who gets to make this decision about what is an adequate amount of parking. Is it the property owner deciding what they want to do on their own land or what they think they need? Or is it someone from the city planning office, whoever was on city council back in 1967, the last time that these rules were updated, which is the case in many places.

David Roberts

I know. And they were just pulling these — it's not like there was good science in 1967, either — they pulled them out of their wazoo 50 years ago, and they've completely shaped urban space ever since. It's wild. Like dark matter, I think, is a good comparison. All right, so that's background. Catie, let's talk about this bill. Very exciting, the Parking Reform and Modernization Act just passed legislature, just was signed by the governor a couple of weeks ago. I want to talk about some of the background of the bill, but first, let's just get to the meat and potatoes of what it is and what it does.

Oh, and one other note before I toss it to you, I just want to put on record here that this bill was sponsored by Senator Jessica Bateman, who may be familiar to Volts' listeners who knew her two years ago as Representative Jessica Bateman. I talked to her two years ago just after she had been instrumental in passing a bunch of incredible housing reform through the House. Now, two years later, she's in the Senate and she's passing kick-ass parking reform. We stan Senator Jessica Bateman here on this pod.

Alan Durning

Absolutely.

David Roberts

All right, Catie, go for it. What does this bill do?

Catie Gould

The bill does a lot of things, but the basic summary is it removes parking minimums as a binding constraint of construction in most circumstances in Washington State. So anyways, I'm going to go through a list of the specifics, but generally, that's going to be the future of Washington.

David Roberts

Right. And the core of it is certain building types are exempted whole cloth. There's like a set of those. What are those?

Catie Gould

So, that includes, this is going to sound really basic. Existing buildings that are changing from one use to another use. Maybe a hotel turning into apartments or an office turning into a restaurant. Whatever amount of parking you already have is fine. It's very hard for existing buildings to add more parking. This is a big barrier that keeps buildings vacant or kind of stuck in a use anyway. So, that's the first on the list. Others are small residences. So, any housing that's smaller than 1,200 square feet, this is the vast majority of apartments that are getting built today.

David Roberts

So, any apartment under 1,200ft, there's no —

Catie Gould

Sure, or an ADU or a house, any type of residence.

David Roberts

Right.

Catie Gould

Commercial spaces under 3,000 square feet, affordable housing, senior housing, childcare facilities, any ground floor use on a mixed-use building. Think of something with a store on the bottom and apartments on top. That bottom floor is not required to have any parking.

David Roberts

Ooh, that's a good one.

Catie Gould

Yeah, mixed-use buildings where there are multiple types of uses are particularly challenging for parking mandates now, because additional uses, they get added up together. So, if you have three different things going on in one building, you have an apartment, a store, an office, those peak times are going to happen during different times of the day. But city code usually assumes that nobody is sharing the parking lot, or they might give you a little 10% reduction or something. So anyways, we know this is going to be a really impactful reform. So, those are the list of spaces that no longer are required to have any parking.

And for situations outside of that, cities and counties are limited to requiring only a maximum of one parking space for a single-family detached house, a half a parking space per home for multifamily housing, and two parking spaces for every thousand square feet of commercial space.

David Roberts

Okay, so for those of us who are not sort of like parking mandate literate, what is the significance of these caps? Are these caps low? What's this going to translate to?

Catie Gould

They are low. So, we did a huge survey of zoning codes in Washington. We probably spent a year working on it, off and on, to put it together. So, for reference, the average in Washington state of how much parking is required for just a typical office is three parking spaces per thousand square feet. That is a general rule of thumb. Three parking spaces per thousand square feet means that the parking lot is required to be equal to the size of the building. Because parking takes up a lot of room. So, if you're kind of doing this math, right, if you want to build an office, the city is requiring half of that property to be a parking lot.

This is the low end today. It goes up from there. The average is for a retail store, four parking spaces. For restaurants, the most common requirement is 10 parking spaces per thousand square feet, which means the diner is taking up a really small percentage of the property, and most of it is required to be a parking lot.

David Roberts

So, if you wonder why you drive around the state and you see all these little, like a Denny's, plopped in the middle of a giant sea of concrete, that's why. They have to.

Catie Gould

Yes, there are many factors that go into anyone deciding how much parking they want to build, including what the banks and the lenders are expecting or what comparable buildings are like. How are they doing? But this is kind of the first step of what can you legally do? What can you legally build?

David Roberts

Right. Okay. So, you have a set of building types that are exempt completely, and then you have these caps for everything else. You are not allowed to require more than one space per detached house, two spaces per thousand square feet of commercial, and half a space per home for multifamily.

Catie Gould

Correct.

Alan Durning

And this is a good moment to interject, which does not limit any property owner in the state of Washington to install exactly as much or as little parking as they would like. It just says, "What can cities require of them?"

David Roberts

Can't repeat that enough. None of this specifies what developers have to do. It just says the city cannot require them to do more than this.

Catie Gould

That's right. So, this bill just gives builders more flexibility, more choices, more options.

David Roberts

Right, right. So, the bill excludes cities with populations under 30,000. That just looks to me like a classic bit of, like, horse trading there. There's no substantive — I mean, all the reasons parking regulations are bad still apply when you're in a small town. What is the sort of politics of that? How did that come about? Like, is 30,000 — did someone just make up that number?

Catie Gould

Well, it's a great story, actually. So, just from the policy perspective, there is no justification for parking mandates anywhere, right? I would like to be absolutely clear. They do not make sense in rural places. They do not make sense far away from transit. These numbers are made up everywhere. They cause problems everywhere, right? One of the little stories that I found over the last year was this mini mart in Mattawa, right, which is way out in eastern Washington, a very small little town. Someone wanted to build a mini mart and they just wanted to build 33 parking spaces, but the zoning code required 10 parking spaces per thousand square feet, so they would have to build 100, right?

And they applied for a variance and got denied. Now, the Port of Mattawa is sending a letter to the mayor, saying, "This number's too high. We would love to have this business in our community."

David Roberts

And who wants a mini-mart if it's surrounded by 100 parking spaces? Like, in a small town? That's not a small amount of the total land. You know what I mean? And we've all been to these small towns in Washington and elsewhere where there's just like 12 people here. "Why is there so much parking?" I always think that when I go to those places. Anyway. Go on.

Catie Gould

Yeah, nobody loves a huge empty parking lot either, right? They're kind of universally hated, but this is like one of the ways that they come into being. So, the main opposition to any parking reform bill comes from city councils, mainly in different types of communities of different sizes, for sure. But many people say, and this is true, "People in my community drive. They're dependent on our cars, our built environment. You have to drive to get around." This is kind of the argument against parking reform. And there's a fear, "What if there's not enough parking?"

You know, people drive, therefore they need parking. This is a true statement, right? Cars have to be stored somewhere.

David Roberts

And if you're just a normal, everyday driver, like, that's your experience of things. Like, you don't experience excess parking, you know, on a sort of macro level from your little micro level, driving around. Parking is almost always something you want.

Catie Gould

Yeah, so the bill started out when it was introduced. It applied to every community in Washington. That was the correct place to start. It got narrowed down to just cities, over 20,000 people in the Senate and then in the House to 30,000. And that amendment specifically came from Representative Stuebe, who is the mayor of Washougal.

David Roberts

Which, let me guess, has between 20 and 30,000 people?

Catie Gould

It has 17,000. But they're also one of the few cities that have recently increased their parking minimums. A couple of years ago, they increased their parking minimums downtown. I hate to say it, but this is what happened in response to a presentation about an affordable housing project.

David Roberts

Ah, that's perfect, of course, beautiful. Let's get parking in. Keep the affordable housing away. Ah, love it. I'm guessing the rhetoric around that was like, "Out here in, you know, the sticks, we don't want you city folks telling us what to do with our land." This type of, I mean, was that the shtick?

Catie Gould

Yeah, "The people here drive. We don't have good transit. People are going to keep driving." Yeah. So that's all true. This is the kind of the biggest narrative fight that we're constantly arguing is that, you know, actually nobody has to stop driving for this reform to make sense. What we're talking about most often is situations where, you know, there's room for a 19 car parking lot but 24 are required by code. That's the problem that is most common. We're not talking about a ton of new buildings having no parking at all. And that all of a sudden, Washougal is going to become this like car-free community.

David Roberts

I know you have to imagine — to be scared of this — you have to imagine a developer coming in, building a big new building, purposefully not building enough parking, and then several more developers doing that too over the course of years. Such that what, like in 10, 20 years it's hard to find a parking space? Like literally, what is the fear? I can't even sort of construct a worst-case scenario that they're imagining here. Developers don't want to put in too little parking. You know what I mean? It's weird to imagine that they would do that systematically.

Alan Durning

There is a good faith argument for parking requirements, which we think is mistaken, but at least it's somewhat rational. And then there's bad faith arguments. The Washougal example is a bad faith argument where an off-street parking requirement is being used to exclude certain types of land use.

And so, it's a pretext. It's not the actual reason. The actual reason is that Washougal doesn't want affordable housing, and it is entirely within the state's purview to intervene and say, "No, every community needs to take affordable housing," which is why affordable housing is now exempted from off-street parking requirements statewide in Washington. But the rationale that's often given, and that most cities gave in their testimony on this — or the cities that opposed, we had the support of a number of cities — but is the idea that developers will shirk on their responsibility and that there'll be visitors to their buildings who will end up parking on the street in the neighborhood, and that the people who already live there will dislike that.

Those people may put pressure on their local elected officials. Nobody gets elected to a city council or mayor because they want to work on neighborhood parking conflicts.

David Roberts

Even the phrase itself sends a shiver down the spine, doesn't it?

Alan Durning

You do not want to get yelled at by neighbors. And so, off-street parking requirements evolved, we think, as best we can tell. This has not actually been carefully studied by historians, but we think that they developed as a defense against neighbors getting mad about what's called "spillover parking."

David Roberts

Yeah, this is something you hear on Nextdoor a lot. It's just like, "If this happens, these people are going to come park where I'm accustomed to parking in front of my house."

Alan Durning

So, if the council says to the planners, "Bring me a policy that will prevent me from ever getting yelled at by neighbors about some stranger parking in front of their house..." And the planners also don't study parking policy in school. They're not trained in parking policy. They're like, you know, trained in, like, how to design nice things and where to put the streets and where to put the parks and so on. And so they look around for some solution. And in one study, it showed that 45% of them were just copying and pasting the regulations from some other nearby community.

We continue to see that happen. So, His Highness, Donald Shoup, the great theorist of parking policy, described this process as "nonsense on stilts." It's pseudoscience.

David Roberts

If you study policy long enough, you find lots of things like this, like, "Why do we do things this way?" And it really turns out to be there's no reason other than, like, the last person did it that way and the person before that did it that way. And you can trace that line back for decades, sometimes, decades since anyone sat down and said, "But why?"

Alan Durning

And it's completely true. In this circumstance, it solves a political problem for local elected officials that they don't have to hear anymore. But it imposes enormous costs because it ends up with putting — Catie was saying that, to steal your line — this is like trying to hang a picture with a sledgehammer. Like maybe you'll get the picture hung up, but you're going to put giant holes in the walls and you're putting giant holes in our communities by requiring so much off-street parking that no visitor ever might park on the street. There is a legitimate on-street parking management issue and cities need to figure out how to manage that.

But they can do that at a much lower cost than the current policy.

Catie Gould

Parking mandates are the worst tool for the job. There are so many examples that I've seen where, you know, the street parking is full. It's becoming an issue. Meanwhile, the off-street parking, like there are thousands of parking spots off the street, and they're half full. But they're not being managed in a great way because they're all owned by different entities.

David Roberts

Well, I believe King Shoup was a fan of pricing as a way of managing scarcity, which I believe, you know, it's really a favorite way of managing scarcity going back centuries now. But good lord, I imagine if you go to a small town and propose charging them for what used to be free parking, you would get run out on rails. Catie, talk a little bit about the significance of this. Also covering commercial uses because as I understand it, that's unique to Washington that we got that in. Is that true?

Catie Gould

Yes, I believe it is true. I mean, there's a lot of focus, rightly so, on housing right now. But the commercial does help the housing as well. And I'll give you an example. In Olympia, there's the Capitol Mall. I don't know if you've ever been there. It has a huge parking lot that is mostly empty most of the time. And officials from the city and planners, they would love to grow that whole area into, you know, a denser, walkable, mixed-use area where there's housing and different types of businesses and to really focus some growth there.

Currently, they cannot. You cannot take away a single parking spot from that mall because it is under parked. Right. If that mall was built today, it would need over 200 more parking spaces just to meet the zoning code today.

David Roberts

So even if you updated the building, you would trigger those new mandates.

Catie Gould

Yes, you cannot do anything to the building right now because the category that it's under in the commercial code requires 4.5 parking spaces per thousand square feet. That's the current requirement for that mall. And that is stopping any development from happening in that area. Right. So now, they have space to play with because of this bill.

David Roberts

Yeah, it's madness that we did this to ourselves. I wonder what is the opposition from the commercial sector relative to opposition from homeowners? Like, do business owners also get upset about this or were they easier? Was it easier to sort of roll them into this? What's their political sort of disposition?

Catie Gould

Every business owner is a person, so I'll start there.

David Roberts

So you say.

Catie Gould

And everyone has had experiences of where it's hard to park. And I would say the business community is not a monolith; they all want lower parking mandates. I think sometimes businesses have a lot of fears that if it's harder to park to get to my store, that's bad for me. And all the decisions that are happening outside of me kind of impact that, you know, and what we talked about were some very specific, really sympathetic cases. One of the stories that was just really emotionally resonant was about this daycare that couldn't open in Ridgefield. Dana Christiansen, she runs another daycare.

She is on the board of the Washington Childcare Centers Association, and she found this large property that seemed suitable. She made an offer and purchased this property. She and her architect were working through the layout of the site kind of in this 60-day period. They could only find room for 29 parking spaces, which, for the record, was way more than she thought she needed. She thought, you know, a dozen, 18 spaces would be totally adequate for her. But that land is regulated by Clark County, and they require two parking spaces per employee for daycare centers.

So, she needed 32 parking spaces.

David Roberts

Per employee? Every one of these sounds more random than the last.

Catie Gould

I mean, we can go all day. So, they were trying to — we're three spaces short. They're trying to figure this out. And then the city calls and says, "Don't forget about the landscaping islands that are required to be in the parking lot. To like, ameliorate the impacts of large parking lots with the stormwater runoff."

Anyways, they walked away from the site. This area is in a daycare desert, where there's a real lack of childcare spots compared to the number of children. Most Washington families live in childcare deserts. So, I think, no matter where you think about parking mandates, this is a great story that I love to start with because I think most people could agree it's ridiculous to not be able to open a daycare over three parking spaces. That's what these rules do.

David Roberts

I know people love stories; the public loves stories. But I'm a nerd, and I love studies. So, talk about that study that the Colorado government did, because I thought that was very striking. Like, I think people can sort of accept on an intellectual level, yeah, if you need more parking, you're going to get less other stuff, but it's not a small effect.

Alan Durning

Yeah, it's dark matter.

Catie Gould

So, there was some analysis in Colorado that got published this fall that really helped push the salience of the bill this year where they modeled — not no parking buildings. Right. Just for the record, we're not talking about any buildings having no parking. All buildings had some parking, but they modeled for new buildings that are going to be near transit. They're building a half a spot per unit, and then everything elsewhere is building one parking space per unit. So, we're making assumptions about lots of car ownership here. And they found that those numbers compared to the current zoning codes in those Colorado cities, it meant an overall increase, 40% more homes would become financially feasible to build.

And the main mechanism for that is, think about a multifamily building that's already planned. Right, that's going to happen maybe no matter what. But they can only build, you know, 20 apartments. They're limited by the parking. And once that barrier goes away, now they can add an additional floor to the building with the same amount of parking. So that's how those numbers happen.

David Roberts

Yeah, that's the biggest effect. It's adding more units to existing buildings in a way that you couldn't if you had to add a bunch more parking.

Catie Gould

Correct.

Alan Durning

That's exactly right. And that's why there's such a huge effect on housing costs. On the one hand, housing parking is expensive to build, but even more importantly, physically, you just can't put an apartment and a parking space in the same location on a lot. You have to choose one or the other, and it ends up being a huge constraint, reducing the number of units that can be built, the number of dwellings, maybe as much as a third in some cases. So, this is why the issue of parking in Washington's legislative debate ended up being part of the multi-year effort to address Washington's housing shortage.

I think we'll maybe come around to this more. But the reason that I think we were able to win this was that it wasn't a debate about transit and transportation and people's cars. It was about where are we going to live, where are our children and grandchildren going to live? And that trumps people's love for parking.

David Roberts

You wrote that this parking reform was unthinkable even two years ago. Like, it actually, there was a failed attempt, I think, prior to this. So, things changed pretty dramatically in two years. And you wrote a really great article about why — you have seven, I counted them, seven reasons why this was able to happen this time and not last time. So, maybe let's just go through a few of those because I think they're really educational. Because a lot of this I want to orient toward like other people in other places who want to get into parking reform.

You know, what helps, what's good. So, let's talk about a few of those reasons that enabled this sort of a really transformation.

Catie Gould

Yeah. Hold on, let me pull up my own article.

David Roberts

Well, starting with, I'll cue you for the first one, which I thought was interesting. The previous attempt had gone after parking mandates via their proximity to transit.

Catie Gould

Yes.

David Roberts

It had attempted to say, if you are X distance from transit, you have lower mandates. That ended up kind of falling apart. A lot of arguments about what counts as transit, what counts as proximity, what counts as this or that. And so, there is a different focus for this bill. Talk about that a little bit.

Catie Gould

Yeah. So, that initial bill two years ago, and this is kind of where I enter the Washington story. I'd been doing work in other jurisdictions on parking reform, including Oregon and Anchorage. This was a copycat essentially of California's successful AB 2097 that did eliminate parking mandates near transit. That happened maybe in the fall of 2022. And Washington legislators said, "That sounds like a great idea. Let's do that here." And yeah, it really fell flat. There was, I think, a lot of opposition. "People still drive," you know, like "More people aren't going to use transit. There's maybe one qualifying bus line in my community, but the transit's enough to get around."

David Roberts

Yeah, this is what people hear that and they're like, "Well, I'm close to transit, but I can't live without a car." You know what I mean?

Catie Gould

And they cannot imagine giving up their car. And when the conversation is over there in that space, there's just no possible way to win it. Like, you get stuck, you know, in this just like, pit of, like this is not even the right issue to be talking about. And transit kind of pushes the conversation that way. It's also very vulnerable to being watered down. I think to get a vote out of one committee, they shrunk the radius by half. And that cuts your reform area by 75%. Right. So these small tweaks in the numbers, all of a sudden, all these properties that were going to see benefits from reform now aren't.

David Roberts

And it seems like you're going to get — I mean, I don't know if this is going to happen in California or not — but you're going to get weird things where, like, builders are sort of like targeting areas based on their distance to transit. You know what I mean?

Catie Gould

Yes, I mean, people want to — it's a good idea to maximize the number of homes and businesses and services near transit. Of course, that's a good idea. These are areas where people want to build anyway. So there's nothing wrong with eliminating parking mandates near transit. But the issue is so much bigger than that. So what we did kind of after we lost that fight was really to focus on stories about how parking mandates cause issues everywhere in all these small communities, places that aren't well served by transit. So people can think about the issue more broadly.

And the bill was designed to go after these, you know, kind of sympathetic uses, but I would say high impact uses. One of the findings that came out of Oregon, they had some administrative rules that went into effect a few years ago where parking mandates were eliminated near transit, but also this whole host of other kind of equity uses, which, if you notice, is going to look very similar to what we passed in Washington. And in the case studies, when I was talking to builders about "I'm trying to find examples of, like, how are people using the parking reform? Let's see examples of projects that wouldn't have been possible before."

A lot of those projects, yes, they would have qualified in their transit proximity — Oregon also had a very generous transit proximity — but they also would have qualified for being a small residence, for affordable housing. For some of these other uses as well.

David Roberts

So, you want to get the public thinking, "Should we really require X amount of spots for a daycare?" It's just a better context to be contemplating these things than this transit distance.

Catie Gould

It is.

David Roberts

And so, that won a lot of people over because, you know, it's a lot harder to argue, you know, like, "This small town is better off without this daycare because God forbid they had, you know..."

They don't have enough bus service for a daycare.

Catie Gould

Some backup in the morning, pickup line. We don't want that. All right. Focusing on building types and sort of specific situations, contexts rather than transit distance was a real key. You also mentioned pulling together real stories. You mentioned this woman with the daycare. Like, that's gold. People whose lives are concretely affected by these things. By the way, how do you find those people?

David Roberts

Do you just, like, put out a bat-signal? People who know someone who knows someone. Like, how do you come up with those?

Catie Gould

I think I found her specifically. I was going through a different bill in the legislature a few years ago that was about daycare-related zoning. And she kind of told this story in her testimony. So then I reached out to her. But, you know, sometimes people come to me to say, "Oh, this thing happened to me. Can you help? Do you know how to help me with this situation?" That happens sometimes. People give me tips for stories all the time. But also, and I'll just say this to, like, any regular listener, if you just look into the notes of what's happening at the planning commission, these cases happen all the time.

And I love working with city planning staff because they know all the projects that are not getting built in their community. This stuff is universal.

Alan Durning

That's right.

David Roberts

The third thing which I'm also really interested in is, you come at this with a broad coalition, which, you know, on one level, like, "Duh." Obviously, a broad coalition is better than a narrow one. But on the other hand, it's a little mystifying because, as I said up top, like, this is not something that spontaneously moves — most voters don't think about it at all. And if they think about it at all, they like parking. Who's in this coalition and how are you pulling them together?

Alan Durning

Maybe I could jump in and help with this one. John F. Kennedy said, "Success has many fathers, but failure is an orphan." And we've been an orphan on this issue for a lot of years. We've been howling in the wilderness about parking reforms. Three years ago, we couldn't find anyone to sponsor a bill. This year we had Jessica Bateman, who is the ace of the legislature, and her leadership was incredibly important. But Catie and the rest of Sightline's team were able to assemble an amazing coalition in support of this reform. And it's partly, you have to understand this in the context of seven years of Sightline working on abundant housing legislation in the Washington legislature and in neighboring jurisdictions as well, where we've been having one conversation after another with legislators and with other interest groups, with the AARP and the Habitat for Humanity and the realtors and the builders and the trade unions and everyone else gradually building up understanding of the importance of zoning regulations and parking regulations as well.

Catie was able to pass a bill last year that was kind of a starter bill. It was rather modest in scope, but it, for the first time, got the legislature to begin intervening in parking regulations statewide. Then, building on that, this year, she and the rest of our team were able to assemble what, 56 different Washington organizations and cities spanning the political spectrum, from the Building Industry Association of Washington, which is usually a very conservative Republican-aligned organization, or the realtors or the master builders, all the way over to the social justice and climate justice organizations on the left. Everyone was in lockstep on this, along with lots and lots of individual elected officials from localities, all lined up against basically just the Association of Washington Cities whose job it is to defend the prerogatives of cities.

It's their job to protect local control. So, it's no surprise that they would be standing up. But, we did not find huge opposition from other organizations. The homeowners did not mobilize against us.

David Roberts

Interesting.

Alan Durning

AAA didn't mobilize against us. This was largely a process of building enough comfort among the legislators by surrounding them with supportive messages. We built a — Catie and her team put together a huge parade, and then we invited Jessica Bateman and other legislators to walk in front of it. And we ended up winning with bipartisan support. A majority of Republicans and a majority of Democrats in the state Senate.

David Roberts

Wild.

Catie Gould

And I'm going to fact-check you on that, Alan. I don't know, I don't think it was a majority of Republicans.

Alan Durning

In the State Senate, it was, Catie. I looked it up on your fact sheets. In the State House, we did not have a majority of Republicans, but we had a substantial number of Republicans in the Senate.

Catie Gould

Great.

David Roberts

Yeah, and this is — how to ask this question? Like, there are some issues where you win, where most of the people in your coalition are in your coalition for sort of contingent or unrelated reasons. But is this more of an issue where persuasion worked? Like, all these people are on the right side of this because they heard the arguments and they were convinced?

Catie Gould

Yeah, a lot of these organizations have direct experiences with these regulations. And I think, at least on my end, talking to these organizations over the years, as I'm doing reporting on this issue, is that lots of people would love to see reform. They just don't think it's politically possible and therefore they're not going to make it their top issue for the next session. And we say, "Okay, well, we're going to make it our top issue and you can come along with us." And I think when Bateman decided to sponsor the bill that year, it really changed the dynamics and all these organizations are going to invest more of their time into making this pass.

David Roberts

Well, this is a classic case of pluralistic ignorance, which I'm sure you guys are familiar with, which is like, everybody's sort of on the right page on this, but they don't know that other people are. So in those situations, like an organization like yours coming in and saying, "Hey, look, you all already agree."

Alan Durning

That's right. Lots and lots of individual conversations. And remember, this is part of an effort where there's a lot of other housing-related bills. Sightline worked on seven and there were a few others as well. And so the strength of relationship and trust that had been building over these years carried over into parking. When we and others said, "You know, the next thing on the agenda is parking. We're going to go big on parking this year." And folks who we'd worked with for years on things like legalizing accessory dwelling units or legalizing duplexes, were like, "Oh, okay, well, you guys keep nattering on about parking. We'll listen a little more closely this year." And this year, everyone was ready to go.

David Roberts

And, Catie, you also mentioned local progress. So, there are towns and cities in Washington who have removed parking mandates. And so, we're not guessing or speculating about what happens when you do this. So, share a little bit about what happens, because it's like, it's one of those things where when I read it, I was like, "Oh, well, obviously." But I wouldn't have guessed beforehand, but basically, what happens is very little. Like, people continue to build parking.

Catie Gould

Like, yeah, the sky doesn't fall.

David Roberts

Everything's fine. Yeah.

Catie Gould

This was certainly really helpful, I think, in making legislators more comfortable. Back in 2023, no city in Washington had fully repealed their parking minimums. And this year, coming into the session, three had. Right. Of all different sizes. Port Townsend, Bellingham, and Spokane.

David Roberts

Ooh, go Bellingham! All right. My kids go to school in Bellingham, so I love a Bellingham story.

Catie Gould

And we had public officials from all three of those cities in support of the bill, so that was really helpful. Some things that have happened, let's see: In Bellingham, their reform is really, really recent. They just adopted it in January, but their planning director testified at the hearings, and they're already having some buildings — what's happening is there are buildings that are already somewhere in the permit process, and now the builders are going back and adding more housing units because they have that flexibility. So they have one building that went from 60 to 80 homes, another from 12 to 40.

So, those are just some examples, right? Of, like, more housing is happening because of these reforms. Spokane, which is a much bigger city, said that it's only in really rare circumstances where a property is really oddly shaped or there's some really constraining circumstances, is no parking getting built at all. The vast majority, they're still building parking.

David Roberts

Yes, like, developers will build enough parking to service the buildings they're building. Like, why wouldn't they? So, like, the sky doesn't fall, and generally, the amount of parking doesn't change dramatically. It's mostly just these sort of edge cases, like a few more units here, squeeze in a daycare here that you couldn't before. It's mostly these sort of marginal cases that are on the verge that are helped.

Alan Durning

Well, Catie might mention that we actually have some numbers on the reductions in parking from Seattle and Buffalo.

David Roberts

Buffalo, New York, they did reform?

Catie Gould

Yes. So, these are two studies that came out, academic studies that measured — there was more flexibility given in parking, Buffalo, no mandates, Seattle, no mandates in some areas — and how much of an impact that had on housing. And surprise, the vast majority of new buildings still built parking. 70% of new multifamily buildings in Seattle still built parking. 83% of new multifamily buildings in Buffalo still built parking.

Alan Durning

And how much did they reduce the parking that they provided?

Catie Gould

So in Seattle, out of what ended up being built, they ended up with, when there's no parking required, those new buildings had on average, a half a parking space per home ratio.

David Roberts

So, they end up roughly where the cap is in the new bill.

Alan Durning

That's right.

David Roberts

In the neighborhood. So, this again, it's not going to require dramatic change on any particular person's part.

Alan Durning

A modest reduction. What we see in apartment buildings across the Northwest where this has been studied is in the middle of the night, between midnight and 3 a.m., if you go look in their parking lots or parking garages — and people do this, planning students are sent out in the middle of the night — they're finding like, you know, 30 to 40% of the slots are empty because the parking requirements when those buildings were built were excessive. All the parking requirements are just a little bit too high. Everyone errs on the side of it. It's a little bit like in the electricity sector, where you're planning for the peak.

David Roberts

Yes, exactly.

Alan Durning

And so, every parking lot is built for the peak maximum occupancy on Christmas Eve or something. When everyone's going to be at home or for commercial parking at retail establishments, they go out and measure how many people are parking there the Saturday, a week before Christmas, and then they make that the law for the entire state all the time.

David Roberts

That's so dumb. Catie, you mentioned guardrails, including some guardrails in the bill to make people feel more comfortable. Like what?

Catie Gould

Yeah, multiple exceptions got added to this bill.

David Roberts

Oh, yeah, yeah. These little side deals. None of those are — I mean, you can tell me, but just from my glance at those, like they're a little, you know, maybe not totally savory, but they don't seem like they hurt the bill particularly.

Catie Gould

Yeah, there was a concern about what about these really rural county roads where there's no parking on the shoulders. It seems like there should be some off-street parking. We still should require parking there. So, one of the exceptions is that for properties along county roads that do not meet the current local standards, roadway standards, the parking minimums still apply. And I'm going to add a "but" here. But if you're — and this isn't even that rural, there are places in Clark County that are building multifamily apartment buildings that are technically unincorporated Clark County.

It is true that, like going in — I talked to a planner, we looked at some aerial shots — this road didn't have any sidewalks, didn't have any street parking. Often in the development process, builders are required to do what we call frontage improvements, where you have to build a sidewalk, you have to maybe widen the street along your property to get it up to code. And in that case, it seems like they would get the benefits from this parking reform. So, it's hard to say how often this kind of scenario is going to play out in real life.

David Roberts

Yeah, but it made somebody feel better and presumably got a vote.

Catie Gould

It gave reassurances, and the county's lobbyists stopped testifying against the bill.

David Roberts

So, yeah, there's a real art to concessions that do not hurt the main mechanism of the bill. I always love to follow the sausage-making. You said it accommodates disabled drivers quickly. What does that mean?

Catie Gould

Just before we move on, there are two other study options that cities or counties can make a case to commerce that parking mandates, getting rid of them, would pose a safety issue or that their regulations are already close enough to the bill that they don't need to do anything else. So, we'll see how many of those actually get sent in.

David Roberts

Safety? I don't even... I'm trying to construct a scenario where more parking saves a life or whatever. I'm not sure.

Catie Gould

I'm happy to see them make the case.

David Roberts

Yeah. All right, so what do you mean by accommodating disabled drivers?

Catie Gould

One of the provisions of the bill — and this idea came from Disability Rights Washington in a meeting that we had — was that we're directing the Building Code Council to look at the state building code, the kind of ratio of parking spaces that need to be made accessible. Right now, these ratios follow the federal ADA, which was last updated 20 years ago. We have a growing senior population. Right, Adam? And like many people who need those spaces, they feel like the supply is already inadequate. And they have, I think, a very real concern that if the number of parking spaces goes down, these spaces will reduce.

So, we just asked for a study to look at these ratios and maybe update them to go above and beyond the ADA.

David Roberts

Got it. And then the final item on your list is to have good legislative champions, you know, which is obvious, but really crucial. And so, it's good that Senator Bateman was there and is on the right page. And, you know, I just love to see competence these days in our current circumstances. I'm developing a real competence fetish. So, with our time left, let's talk a little bit about beyond Washington here. Who else has done this, is doing this, will do it next? Are there exciting stories outside of Washington?

Catie Gould

Absolutely. Montana passed a very similar bill. It looks a lot like Washington's, just days after we passed ours.

David Roberts

So really substantively similar?

Catie Gould

Yes, I'm friends with the parking advocates in Montana. So, it is a small community of reformers across the country that get online for regular chats about different flavors of bills and different messaging that's working in different places.

David Roberts

Montana is just such a fascinating story, though. I mean, it's housing absolute housing champions here in a red state. I'm going to get some Montana people on the pod soon. Talk about how they did that, how they're talking about it.

Alan Durning

It's a perfect example where Sightline was able to support a Republican-led coalition in Montana and a Democrat-led coalition in Washington to pass basically the same legislation.

David Roberts

Really interesting.

Catie Gould

Yeah, there's also, I'm keeping my eye on this year, there are two states that have full repeal bills in the legislature right now. That's North Carolina. They're very focused on water quality. The Riverkeepers organization is the main driver behind that bill.

David Roberts

Is this like impermeable surfaces and runoff type of thing?

Catie Gould

Yes, runoff. They're also like, most of the argument has been about banning this certain type of pavement sealant, which is also part of the bill. And then also, Connecticut is running a full repeal bill.

David Roberts

Interesting. Is there something we can say to generalize about what states are doing this, or is this just like somebody in those states got a wild hair and did it? You know what I mean? Like, what makes a state a good candidate?

Catie Gould

I think it's the right combination of people getting together to make this possible. These rules are arbitrary everywhere. They're causing problems everywhere. You just need the right collection of people with the right messengers to kind of make this politically possible.

Alan Durning

I think that Washington's win is going to give courage to others in other places. The YIMBY movement, the pro-housing movement, is having increasing success in more and more states, red and blue. And I think that the win in Washington will give them courage to take on housing, which some have regarded as sort of a third rail — that is, you touch it and you die. But we should also mention that there have already been wins in Oregon where we were very involved in getting a rulemaking from the Department of Land Conservation and Development that is resulting in, now I think, 40% of the population of the state is in cities that have no off-street parking requirements.

And more and more cities are coming into conformity with the new state rule. And by the end of the next few years, we'll probably be in a situation in Oregon much like the situation in Washington. California eliminated off-street parking requirements close to transit. And British Columbia, not America, but part of the Cascadia region, so we have to mention it, has similarly eliminated off-street parking requirements close to transit on the California model. Anchorage, Alaska did the same thing thanks to Catie's leadership. And there are a lot of cities that have done this, not just states. Catie can maybe tell us what the current tally is?

Catie Gould

It's constantly changing.

Alan Durning

Constantly changing, yes, but in the scores of American cities that have eliminated their off-street parking requirements, giving flexibility back to property owners.

David Roberts

And not a single traffic apocalypse to point to out of all those examples.

Alan Durning

Absolutely not.

Catie Gould

I mean, the average person will have no idea that this reform passed.

David Roberts

I know it's one of those reforms that's a little frustrating in the sense that, once you've succeeded, no one will remember these things and they will not even believe that they existed. In like 10 years, you try to convince someone that this used to be the case, they'll be like, "What, no?"

Alan Durning

But hopefully, the result is more abundant and therefore affordable housing, nicer neighborhoods, main streets, old-fashioned main street neighborhoods, redeveloping where you can go for a nice walk.

David Roberts

Let's pause there because, you know, as I mentioned in the intro, nobody wants to hear about density. Yeah, I'm constantly getting people yelling at me for using the term density. Like, average people do not care about density. If they care about it at all, they sort of don't want it. So, how do you talk about the pleasant experience of density that is enabled by these reforms without saying the word density? You invoke old-fashioned main streets. I think that's quite clever because that really is, for most people, for most Americans especially, their only personal experience of walkable density is that one block in the center of their town that hasn't been ruined yet because it came in before the —

Alan Durning

Before the parking rules, yeah, mostly the pre-war parts of our cities.

David Roberts

And you couldn't make that street in most places today because of parking mandates. So, I think personally, that's a very clever rhetorical bit.

Alan Durning

Sightline, as you mentioned, we published lessons from this parking win for advocates elsewhere in the country who want to learn about them. And we will soon be publishing an article about the messaging lessons that we've learned from this fight and from some opinion research we've done as well.

David Roberts

Could you give us just a couple of top lines preview? Are there big obvious lessons? Don't say "density," I'm guessing it's one.

Alan Durning

The ways that Catie and I have been talking during this podcast, I hope, embody or else we're going to get a tongue-lashing from our communications boss after it airs. But generally, we anchor in housing costs. When we're talking about homes and small businesses, we're winning. When we're talking about cars, we're losing.

David Roberts

Yeah, more of what you want, right?

Alan Durning

You're right. When people are in a car, they're worried about parking. But people are complicated beings, and they can want multiple things. They know there are trade-offs in life. They know they would like more ice cream, but they may not want the consequences, and the same thing they like to be in, as you said, you latched onto the idea of talking about main streets, walkable neighborhoods where you can wander down the street and window shop and walk your dog and not be worried about cars coming in and out of parking lots. Focus on the wastefulness of these expanses of asphalt is a good place to go in conversations. So, those are some of the things.

Catie Gould

And my number one tip is just to focus on the real-life stories of these regulations. I'd like to tell just one more kind of non-scary one.

David Roberts

This will be our finale here. Take us out with an anecdote.

Catie Gould

In the city of Mount Vernon, there is this woman, Mary Jean Rack. She moved there to take care of her aging mother and she is a schoolteacher. She purchased a property with the intention of building a home. She wants just a small, thousand square foot, single level, you know, no stairs, a place where she can also age in place. The city of Mount Vernon requires four parking spaces.

David Roberts

For a thousand square foot single home? Holy crap!

Catie Gould

It doesn't matter the size, just for any detached home. The most common requirement is two parking spaces for a single-family home. But there it is, four.

David Roberts

Four. So, every home in that town has four parking spaces?

Catie Gould

No, that is not correct. Because most homes were built before these rules went into place. So, she did a little survey, in the two blocks around her property, about how many parking spaces houses actually have. And at the time, because this was a couple of years ago, two of those spaces were required to be in a garage and two in a driveway. And she said only 1% of the houses in her little neighborhood had a two-car garage. So, that's how many houses would have actually complied with this code. Most of them just have a one-car garage.

But over a third of the houses in our neighborhood had no off-street parking at all.

David Roberts

I mean, that's just a very stark "don't build new housing" rule. You know what I mean? Like, it could not be more, I don't know if that was the intent when they passed it, but it could not be more clear.

Catie Gould

We're trying to constantly say these rules are above and beyond what is common in our existing neighborhoods, and we just want to lower the bar so that she can build a house. We're just really lowering the barriers to make buildings possible to build. And I think everyone can kind of relate to stories like that, you know, "Don't you know how much parking you need for your own home better than the government?" Yes, I think most people would agree with that statement. And the same thing for building, you know, a little backyard cottage.

"Like, it should be really your choice, and now it is your choice about if you want to build additional parking or not."

David Roberts

Did you go after Republicans with the property rights and "Why should the government be telling you what to do with your own land?" kind of arguments? I'm guessing those are potent on that side.

Alan Durning

We didn't go after the Republicans at all. They were our partners in this effort and they talked about property rights, individual liberty and freedom, and supporting the development of businesses and people making good choices for themselves. Absolutely. The last lesson for our parking allies elsewhere is exactly what Catie just demonstrated. Just tell stories. Once we started doing it and inviting these people to testify, legislators themselves started telling stories from their own communities about properties that they knew about that couldn't be converted from a furniture store to a cafe because of the rules or what have you.

Everybody knew a story about these regulations, and that was uniting and ultimately helped us win.

Catie Gould

Yeah, and it's helpful because there are all these future fears about what might happen, and there's — I can have all the data in the world and none of it is going to be really reassuring. So we're just constantly going back to, like, what's happening today because of these regulations.

David Roberts

Yeah, we can see now that they're safe, which is a huge step forward. It's good. I do think this Washington win is going to uncork a lot of momentum. Well, thank you both for walking us through it and for all your work on this bill. Really cool stuff.

Catie Gould

Thank you.

Alan Durning

Thank you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

This week, I chat with Dawn Weisz of MCE Clean Energy about the nitty-gritty of community choice aggregation, where local governments take control of their electricity procurement. We get into issues like navigating utility obstruction, the complexities of rising grid costs they don't control, and their push for smarter, more autonomous regulation.

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Text transcript:

David Roberts

Hello and greetings, everyone. This is Volts for May 23, 2025, "The past and future of community choice aggregation." I'm your host, David Roberts. Some communities do not like the way their utility purchases and manages energy. In 10 states, they can do something about it.

"Community choice aggregation" goes by various names in different places — "community choice energy," "municipal aggregation" — and the legislative and regulatory details vary from state to state, but the basic idea is that a local government or a group of local governments can opt out of their utility, procure their own electricity, and in some cases manage their own efficiency and DER programs.

The utility still manages the physical infrastructure, the grid itself, but it becomes the community's responsibility, through a new nonprofit entity, to decide what kind of energy it wants and to buy it.

(I did a podcast on CCAs with MIT professor David Hsu in 2022 — I recommend going back and listening if you haven't heard it.)

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California is generally acknowledged as the leader and pioneer in community choice aggregators (CCAs), which now serve almost 40% of the state's total load, over 6 million people. CCAs tend to be bigger, beefier, and more powerful in California than in most other states: they can represent multiple communities, sign long-term contracts, engage customers in demand-side programs, and support local development.

To discuss the long history and uncertain future of California CCAs, I thought I would talk with someone who goes back to the very beginning. Dawn Weisz helped launch the state's first CCA, Marin Clean Energy, in 2010 and has led it ever since through feast and famine to its impressive current size: Now called MCE Clean Energy, it serves over 1.5 million people in 38 member communities.

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I am eager to talk to Weisz about some of that history, the cool programs that CCAs are offering customers today, and the difficult current challenges facing not only CCAs but California electricity generally.

All right then, with no further ado, Dawn Weisz, welcome to Volts. Thank you so much for coming.

Dawn Weisz

Thanks so much. It's a pleasure to be here.

David Roberts

To begin with, let's start with just a few basics. I sort of passed over it quickly, but let's talk a little bit about what a CCA is. One question I think a lot of people have when I try to describe them is, how is this different than a municipal utility? Like, people have heard of municipal utilities. So, maybe just describe what a CCA is and isn't, to give people a good sense of what it does.

Dawn Weisz

Yeah, that's a great way to start. So, CCAs are local government agencies that can become the power purchasers for their communities, and that means for all the load in their communities. And the way that we're different from municipal utilities is that we aren't in charge of the poles and wires, but we buy the generation and we're in charge of getting the generation purchased and onto the grid. Then, we're in charge of serving customers with information about that energy and making sure it's accounted for correctly.

David Roberts

So what about like billing, like customer interaction? Does the utility still do that or do you do that or do you both do it?

Dawn Weisz

By law, the utility still handles all of the billing, and the CCA charges show up on the bill. That tends to work pretty well from a customer simplicity standpoint. However, it does take a bit of question answering when customers see our charges on the bill and want to understand and make sure they're not being double charged.

David Roberts

Right, right, right. And so, when people pay utility bills, in part, they're paying for energy for procured electricity, but in part, they're paying what are called "fixed costs" or just costs to maintain the grid, do upkeep on the grid, manage programs required by the government, et cetera, all these costs that aren't energy. I'm assuming that customers of your CCA still pay those to the utility? So, their bill is like, "Here's your utility bit and here's your CCA bit." Is that roughly what they see?

Dawn Weisz

Exactly. And I think an easy way to refer to those charges is transmission and distribution charges, or T&D charges. So, those show up on the bill as a separate line item. And the line item we're responsible for is the generation line item. But the T&D charges are paid directly through to the utility. Also, gas charges are paid directly to the utility, and any generation revenue collected by the investor-owned utility is sent to the CCA to cover our cost of buying that energy.

David Roberts

In my understanding, California electricity bills are rising, have been rising — it's kind of a problem, people are upset about it — and that most of what is responsible for those rising prices is T&D, is transmission and distribution costs. Actual generation costs have actually been steady or falling, which means that your customers' bills are rising, but it's not your fault. How do you explain, what's that process of trying to explain that to people look like? Has that proved problematic to you?

Dawn Weisz

Yeah, it's problematic. But what I think is really surprising is that 15 years ago, when we launched MCE as the first CCA, the big concern at that time was, "How can we increase the amount of renewables on the grid and how could we ever afford to get more?" And you know, at the time that we launched, PG&E's renewable content was only 13%.

David Roberts

And it was extremely expensive at that time, too.

Dawn Weisz

Yeah, yeah, yeah. And you know, at that time before launching, we asked, "Hey, could y'all double our renewable content? Could you get us more?" And they said, "Oh no, you know, it would never be affordable. We couldn't do it." So, you know, after doing a lot of analysis, we realized we could launch this CCA program and end up with prices that were at or below what PG&E was charging and double the renewable content that we were supplying. And we were able to, in year one, we started with 25% renewable energy and then by the next year we were able to bump that up.

We're now at 60% renewables for our default product, and we have a 100% renewable product. And you're right, the generation costs have become less of a concern than the T&D costs.

David Roberts

So, do you have a way of communicating that fact to your customers? I guess they can see it on their bill if they're paying attention. But like, people don't pay attention.

Dawn Weisz

We have an in-house call center. So, our CSRs are our MCE staff, and we take calls all the time with questions about bills. Often, folks are asking about the T&D side of the bill. We do our best to explain based on the information that's provided.

David Roberts

Talk to PG&E?

Dawn Weisz

Yeah, we do. And we also have a number of staff dedicated to the policy side of the shop, and we're engaged at the California Public Utilities Commission (CPUC) to try and make sure there's good accountability for how those dollars are being spent.

David Roberts

Well, let me ask a question then about prices, since you brought it up. So, back in 2010, I'd say probably like the 2010-2015 era, PG&E had, as you say, California generally had pretty low renewables penetration and it also had extremely expensive renewables. This was sort of a notorious problem. It even remains a problem today in California, which is that there were long-term contracts signed with extremely expensive renewable generation. And a lot of those long-term contracts, PG&E is still dragging them around. So, from your perspective, from a CCA perspective, you can say, "Well, look, we can, if we opt out and procure our own power, we can opt out of being saddled with those long-term contracts."

We can opt out and just buy like cheap RECs, or even just buying new power. Like by 2015, just buying new power, you could buy it at like half the price of what you were paying with those long-term contracts. In other words, there's a very obvious reason why a CCA could get lower prices than PG&E back then when it was starting out. Like, I always understood why they had cheaper power. It's like, "Yeah, PG&E is stuck with these horrible contracts," but it seems like that should have kind of worked itself out by now.

And yet, you still got a little bit of a price premium over PG&E. So, how and why, and do you expect that price advantage to endure?

Dawn Weisz

Yeah, there's a couple of things that aren't quite right with that line of thinking. And it's understandable because I think from the beginning, we've had to correct a lot of misinformation that's been put out, sometimes by the utilities, sometimes by others who don't want to see the change that's been happening in the market. But first of all, I want to correct that when we entered the market, the cost of renewables was very high. It was still very high. And we entered into quite a few long-term, 25-year, 20-year contracts for solar, wind, waste, and landfill waste to energy.

We entered into those contracts too. And those contracts are still in our portfolio. So, it's not just, you know, we might hear that the IOUs, PG&E in particular, might say that they're the martyr that helped, you know, bear that load, but that's really not accurate. And the primary reason, you know, in addition to our portfolios which are similarly situated, PG&E and all IOUs in California have access to what's called the Power Charge Indifference Adjustment or the PCIA, which is an exit fee. And it accounts for any above-market costs of power that the utility bought on behalf of the customer before they departed.

And that PCIA is on every customer's bill for probably the next 40 years; it doesn't fall off quickly.

David Roberts

Oh, it's not a one and done?

Dawn Weisz

Oh no, it is not a one-and-done. And it includes the utility-owned generation; the UOG is part of it. And that's one reason it lasts for so long.

David Roberts

Yeah, let me clarify that quickly. So, when I'm a local government and I go to PG&E and I say, "I want to opt out," right, they charge me a fee for exiting the utility setup. And that fee is supposed to cover the difference between the market price of the power I'm going to procure and the extra cost that they have to pay by virtue of being the utility. So, the idea is that you shouldn't be able to opt out of those extra costs. So, you'll have to pay them over time through this fee.

Dawn Weisz

Yeah, and to put a little bit of a finer point on it, it's really the assumption that is made that they could sell that extra power in the market. What is the value of that power today? If the power is worth more today than it was yesterday or when they bought it, the PCIA could actually become negative. And we've seen that happen in the last couple of years. The PCIA has gotten very low.

David Roberts

Interesting.

Dawn Weisz

Because power supply costs were really going up. But when you see the opposite, when you see power costs low, the PCIA tends to be high because the value of that power has gone down. But either way, the IOUs are made whole. And we would argue that the playing field is tilted a bit in their direction. They're being made more than whole.

David Roberts

Well then, I'm even more confused. So, you are buying power off the same wholesale market that they're buying power off of, and you're paying this extra fee, yet somehow you're getting cheaper power. So, why and how long will that last?

Dawn Weisz

Yeah, well, as a local government agency, we're a not-for-profit. We do not pay shareholder profits. We tend to have more modest compensation structures, salaries. And we entered the world in a competitive market and we are very careful with what types of power supply contracts we enter into because we do not have a guaranteed cost of recovery the way the investor-owned utilities do. So we're more efficient. I think we are really driven to find those good counterparties that can supply renewables to us. And I think we work hard to keep our prices low for customers.

David Roberts

And so how much cheaper is your power than PG&E's like currently?

Dawn Weisz

Well, our power isn't always cheaper than PG&E, and we don't have a guarantee because we can't control PG&E's rates. But our power does tend to be cheaper because of the reasons I just mentioned. About 75% of the time, customers get a bill savings with us. And if you add up all the bill savings since we launched in 2010, it adds up to $97.5 million saved for customers on their generation.

David Roberts

Yeah, I guess, I just still don't completely get it because from what I've been able to tell, pretty much all the CCAs are beating — I mean, there's like 25 CCAs in California as far as I can tell. Like most of them, almost all of them are beating PG&E on the price of power. And it's just amazing to me, I guess, like they're all smarter and more efficient than the actual professionals whose job it is to do this all the time. It's just, it's puzzling.

Dawn Weisz

Yeah, keep in mind that we are run by professionals too. We pull from the same market that PG&E does to hire folks. In fact, we have several former PG&E employees with us and other great utility folks working with us. So, we have the professionalism, we have the experience. We're years old now. We just celebrated our 15-year anniversary. But I think the key is that we're not paying shareholder profits and we're publicly accountable. We're managed by a public board. So, when it comes to raising rates, it's not as easy as going into the CPUC. I think often there's kind of a "check the box" exercise.

David Roberts

So you think it's actually easier to get a rate boost through the CPUC than it is through one of these municipal sort of boards?

Dawn Weisz

I do.

David Roberts

That's funny. That's really funny. I mean, sad but funny.

Dawn Weisz

Well, yeah. I mean, think about it. All local government agency meetings are open to the public.

David Roberts

Yeah, right.

Dawn Weisz

They're subject to the Brown Act. And so, we have members of the public giving us input, giving us advice. We're accountable to the local community. So, every dollar really matters. And we think carefully about how we can provide the best service at the most efficient price point.

David Roberts

One other technical question I'm trying to figure out, sort of like where your authority ends and the utilities begin. Like, you are out there running distributed energy resource programs, doing stuff with EV charging. You've got green loan programs where you're doing cheap loans to low-income customers. You've got VPPs you're starting up now. All of which I want to talk about later. But like, what can you not do? What is reserved for the utility? Like, where are the edges of your power and authority?

Dawn Weisz

I think the primary difference between what we can do and what the utilities can do is transmission. The transmission and the interconnection really need to be done by the investor-owned utility or someone else that has the ability to do that. But we are able to offer all sorts of programs: energy efficiency, electric vehicle charging, our virtual power plant program. We do a lot in the multifamily sector and we do a lot through an equity lens. There's a lot of untapped energy efficiency out there in the low-income sector. So, we really focus on that.

David Roberts

So, all the utilities do, once a CCA has sort of claimed this right to buy the power, is just maintaining the grid and just charging customers for grid costs and interconnecting people to the grid. Everything else in terms of interfacing with customers is on you guys.

Dawn Weisz

Correct, yeah.

David Roberts

Got it. And so, I don't want to spend too much time on the history here because you've logged quite a bit of it at this point. But I do think it's sort of interesting and telling to talk a little bit about the early days, all the ways the utility tried to prevent you from existing in the first place, then tried to kill you once you existed, and then the sort of, like, hostility. I'm just sort of curious, like, the utility's attitude towards you at the beginning and how it's evolved over time.

Dawn Weisz

Yeah, great question. And, you know, I will say it was a very interesting ride, you know, getting things launched. There really wasn't a roadmap for how to launch a CCA in California.

David Roberts

Were you the first state to legalize these things?

Dawn Weisz

No.

David Roberts

Oh, no, it was Massachusetts. Right. I did a podcast.

Dawn Weisz

Massachusetts and Ohio had programs. So, yeah, California's enabling legislation passed in 2002. It was AB117 by Carole Migden. And it took us a long time. You know, I was with the county of Marin at that time, and we supported the bill, and then we wrote some grants to do some analysis and see if we'd be able to launch a CCA program, really, because we had set some carbon reduction goals, and we were looking for ways that we could reduce our carbon impact without really having a budget to do that.

David Roberts

And you're at the mercy, you find yourself at the mercy of your utility, basically.

Dawn Weisz

Yeah, exactly. And, you know, the buildings were a big piece of our carbon emissions. And, you know, we looked at, "Well, we've only got 13% renewables in the mix. How can we really move the needle here?" And, you know, so lo and behold, this bill comes along that would allow local governments to redirect where we're getting our power from and run it through a local agency. And we thought, "Well, gosh, this could be a relatively small change that could have a really big impact." And it seemed really promising and compelling, but it also was daunting.

And, you know, we didn't know if it could work because it had never been done before. So, you know, we did some analysis, and over many years, analysis and peer reviews kept coming back looking good. And so we partnered with the other local governments and the water districts and a few other interested large businesses and started developing a business plan. And it was around the time we were developing that business plan that PG&E got really engaged in trying to stop us. They would show up at our local, you know, small little city council meetings when we'd be presenting on the idea, and they would have someone get up and present kind of a counter presentation on "What are all the risks?" And, "Oh, it's really not going to work out. And this is a really bad idea."

David Roberts

I'm just curious, like, what were they saying the risks are? Like, what was their — I can imagine a substantive case against CCAs, but I'm guessing that what they were stressing were just scary stuff. So, what scary stuff did they try to scare people with?

Dawn Weisz

Yeah, well, you know, they had the not-too-distant energy crisis in the 2000s to point to. And that was scary, you know, for local government agencies' reps who weren't doing energy yet and weren't eager to add something new to their list. You know, PG&E talked about the high cost of power, the volatility in the market, the fact that there might be blackouts, and, you know, "What if things went wrong?" And, you know, "You really don't have the expertise to do this." So those were some of the things that they said. Since then, we've developed a more collaborative relationship.

David Roberts

Wait, before you skip past. You launched in 2010, and didn't they then immediately launch a ballot initiative to try to kill you right after that?

Dawn Weisz

Yeah. As part of our process of launching, PG&E put $45 million into a ballot initiative called Prop 16.

David Roberts

I'm guessing you did not have $45 million to counter that.

Dawn Weisz

We did not. And we also had to adhere to the law which says that local government agencies can't spend public money on ballot initiatives.

David Roberts

Oh, funny.

Dawn Weisz

So, we were kind of in a fight with our hands behind our back. But PG&E did spend a lot of money on that campaign and set up a number of other hurdles, including a phone banking campaign through a third party that called, as far as I can tell, every customer in our county.

David Roberts

$45 million will get you a lot of phone calls.

Dawn Weisz

Well, that was in addition. They spent $4 million just in our county on phone banking. And mailers, they sent out a lot of mailers. One of the funny ones said that MCE is a huge government bureaucracy and would be serving customers with coal and that the prices would be double what customers are paying now. And I looked around and it was me and one part-time intern. And I was like, "Gosh, where is this big government bureaucracy? I really could use a little help."

David Roberts

I mean, it's very rich for PG&E to come along and be like, "You don't want a big bureaucracy. There might be blackouts, power might be expensive." Like, yeah, don't throw me in that tar pit, PG&E.

Dawn Weisz

So, there were a lot of tactics used. There was kind of interference with the banks we were trying to work with. There was interference with the water districts we were trying to work with. There were threats of California Environmental Quality Act (CEQA) lawsuits for buying renewable energy, which is also a bit rich. But, you know, a lot of scare tactics and a lot of misinformation that we had to counter. And the ballot initiative narrowly failed. We actually had to speed up our launch in order to complete the one-month process of enrolling customers, our first set of customers to be completed before the vote.

Because we determined that if the vote went the wrong way, we might not be able to legitimately continue.

David Roberts

So, the way it works is, you send something to all the customers in an area like this and there's like a checkbox — as I understand it, it was opt-out, not opt-in. So, you sent out a mailer saying basically, "If you don't want to be involved in this new CCA thing, check here to opt out." Is that right?

Dawn Weisz

Yes, we send five mailers, two before and three after.

David Roberts

And do people, I'm guessing, just knowing what I know about human behavior and behavioral science, I'm guessing most people did not opt out. Like, what was the, what were the percentages on that first signup?

Dawn Weisz

Yeah, on the first signup, we saw about an 80%, 83% participation rate. Since then — and I'll fast forward because after we launched, we worked with the legislature to pass a code of conduct that prevents misinformation from being sent around by the utilities — we've enrolled other communities since that time. As you noted, we've got 38 member communities now. We've seen much higher participation rates in our other communities where that negative marketing campaign didn't occur. We see around a 93% participation rate in those communities. And it's interesting because that marketing was a long time ago, but the effects have persisted.

We've noticed the communities that received that negative marketing back in 2010 still have lower participation rates.

David Roberts

Oh, interesting. Propaganda works, I guess.

Dawn Weisz

I guess.

David Roberts

So, the people who opt out, they just stay with PG&E, continue paying the rates they were paying before. Nothing changes for them, basically. And so, I guess I'm wondering, like, I'm opting out of this program. My neighbor's opting in the next month. My neighbor gets a cheaper power bill than I do and gets all the same electricity. Why don't I then opt in the following month? You know what I mean? Like, why are people still opting out? If you're offering cheaper prices to the people who are opting in, what is keeping people away anymore?

Do you do any sort of opinion research about this kind of thing?

Dawn Weisz

Yeah, I think this will probably come as little surprise to you and most of your audience, but electricity bills are really confusing, and it's hard for customers to decipher what's going on. So, a lot of the calls that we get from customers are, "Hey, my bill is higher than last month. I don't understand why." Often, we get a lot of those calls in the winter when folks are using more gas and they don't quite realize, or "Oh, well, did anything change recently?" "Well, I did buy an EV." And, okay, well, that might be why.

But, you know, folks don't spend a lot of time digging into the weeds or comparing with their neighbor or, you know, knowing what the options are out there. We try to make it as easy as possible. You know, as a public agency, we're all about transparency. So, we've got a cost comparison tool on our website where folks can figure out what they would be paying with PG&E versus MCE. We include that exit fee, of course, so they can figure it out. But a lot of folks don't want to spend the time doing that.

Or, they might want to just set it and forget it, and not revisit every year to see if they could save a little more.

David Roberts

So, explain why PG&E wouldn't want a community to break off and form a CCA. I mean, I guess in some sense it's intuitive, like they're losing customers, but they're a monopoly and they get a guaranteed rate of return. Like, what's it to them? I guess I'd like a little bit more explanation. Like, what is their beef? Why don't they want people doing this?

Dawn Weisz

Yeah, I share your curiosity. I'm not certain, and I think there's a difference of opinion depending on who you talk to at PG&E. I have spoken to folks who have since retired and felt that PG&E's approach maybe wasn't the right one. So, I don't know. You know, it might just come down to control. And I think that we have proven that a different business model works.

David Roberts

Well, it is humiliating if you're running this thing and like town after town is opting out and providing their customers with cheaper power than you are providing. Like once is one thing, twice, three times. But like, if 25 separate towns all bail out and then they all end up better off, it's embarrassing, if nothing else, I guess. You know what I mean? It's like, it is embarrassing. It's like a big signal to the entire world that you're not doing your job very well, I guess.

Dawn Weisz

Yeah, possibly. And I, you know, and I don't want to be disparaging PG&E, you know, too much because I think they do a lot of things well and we collaborate with them in a lot of ways. But I do think that, you know, we have opened up a new way of doing energy for the public good in California by saying, "Hey, we can double the amount of renewables and keep prices the same. Hey, we can offer a 100% renewable option at a small premium." And folks signed up for it.

David Roberts

Again, like PG&E's been telling people, "No, you can't" for years and years. And then you just go do it. I think that's part of the explanation for what they're up to. But I should say I'm piling on PG&E too much too. I will say they have changed an enormous amount since 2010, since your launch. And as you say, they've launched lots of cool programs. They're doing lots of cool things now. So, I'm sort of curious, what is your current relationship? Are you closely involved with one another?

Are you sort of on parallel tracks? Like, do you work with one another? What's the current relationship look like?

Dawn Weisz

Yeah, I think that we work really well together on customer engagement because we see the customers as our shared customers. We have a great point person at PG&E that we meet with on a regular basis and compare notes on issues that are coming up. Sometimes their call center will provide inaccurate information that we can help correct, and vice versa. We compare notes, making sure that their team has accurate information about what we're doing so that they can be accurate with customers. I feel like that part of the relationship and the logistics in interfacing with customers is going really well.

I think there are areas of improvement. You know, one area you touched on earlier is there's a lot of load growth in California.

David Roberts

Yeah, that's my very next question, actually.

Dawn Weisz

Well, maybe it's a good segue, but we aren't getting informed by PG&E when they have big loads anticipated, like data centers.

David Roberts

Interesting.

Dawn Weisz

We kind of need to know that. We're buying the gen. So, that's a bit of a sore spot right now that we're hopefully going to be able to work through.

David Roberts

So does that mean you're doing your own load forecasts separately than PG&E?

Dawn Weisz

We always have. Yes, we do our own load forecasts. We're looking at weather.

David Roberts

You would think they would share that. I mean, you would think. I mean, you would think the CPUC would tell them to share that.

Dawn Weisz

Yes, agreed.

David Roberts

But they don't. So, they don't have to share their load forecast. So, the way it currently works, a data center can go to PG&E, work out a contract, and connect to the grid. And you find out about it when they connect to the grid?

Dawn Weisz

Yeah, something like that. We're still getting the timing down. And one other area where I think we can do a better job is we have a lot of programs, and we would like to know which programs PG&E has that they're already offering to which customers so that we're not spending time double enrolling customers. It's not efficient for us to be reaching out to customers they are already working with, and vice versa. We, of course, will share with them who we're reaching out to and who we're working with. But we'd like to have more of an equal exchange there so that we could both be more efficient and keep costs down for customers and keep confusion down.

David Roberts

Right, well, let's segue then, because how are you thinking about — everybody in the electricity biz is grappling with this right now — how are you thinking about this supposed giant demand growth that is impending? Like for one thing, are you serving areas where there are likely to be lots of data centers cited?

Dawn Weisz

We have the potential for data centers in our service area. We have some areas where there are mothballed fossil facilities that could be a good location for that type of thing. So, yeah, we certainly do. And there's certainly a lot of demand and load in our area. We're looking at ways that we can serve that load with a lot of load flexibility.

David Roberts

Yeah, yeah. I was going to say, you know, you're not in control of the grid or T&D costs, as you say. Mostly D costs, if we're being honest, T&D cost is like 75% distribution cost. You're not in charge of that. So, you can't directly reduce those costs for your customers, but you can do demand-side stuff that enables them to generate, store, and manage more of their own power and thus just require less distribution.

Dawn Weisz

Exactly.

David Roberts

So, talk a little bit about what you're doing along those lines.

Dawn Weisz

Yeah, so we have a number of load-shifting programs that are aimed at aggregating load shift, being able to bid it into CAISO, and reduce the amount of supply that we need to put on the grid, particularly during the peak hours that happen in the evening.

David Roberts

VPPs, right. And this, and this is all in California, this is all legally — like you don't need any rule changes or law changes. You can form a VPP and bid into the wholesale market today?

Dawn Weisz

Yeah, we sure can. And I think there are some structural simplifications that could happen that could make it simpler, but we'll get there. And we're working with CAISO and the regulatory bodies to try and streamline. Practicing with different program elements is a great way to figure out where the pain points are, where adjustment is needed. But we have a bi-directional EV charging tariff, for example, we have a battery storage tariff, which by its nature would be bi-directional as well, as long as we have the protocol set up to allow for that at CAISO. We have an MCE Sync program which is managed EV charging.

And that program has been really successful. We've been able to shift 96% of participants' EV charging off of peak periods. And we have thousands of customers in that program, so that's helping them and us avoid buying extra power during that peak. And like I said, we bought a lot of expensive solar back in the day. So we have a lot of solar on our grid during the middle of the day. So we're trying to make the charging happen then as much as possible. We're putting in a lot of workplace charging, multifamily charging and that sort of thing.

David Roberts

When you say "we're working on" you just provide incentives, like the customer buys it and you help defray the cost, or you buy it and install it in customer houses, what does that mean? How do you encourage batteries? Are you just like trying to make them slightly cheaper or are you actually going beyond that?

Dawn Weisz

We're going a little beyond that, both for EVs and for batteries. So, we will often provide technical support if there's a need, particularly in sectors that have the need, like multifamily and some small businesses where they can't access the bigger rebates that are set up for bigger businesses. So, we'll go in and help connect customers with technical support to plan out their EV charging and their battery installation. And then we'll also provide incentives. Sometimes the incentives will cover most of the costs. Sometimes the customer will have to pitch in a bit, but over time they come out ahead within a year or two.

So, we try to do a little bit of both to move the needle.

David Roberts

I'm curious about the VPP thing, how far along that is, do you have a VPP up and running and selling power into the market?

Dawn Weisz

We have a VPP up and running, and we are a month or two away from doing our first bid into CAISO. So, we're at a really exciting, pivotal point.

David Roberts

Can I ask about the size you're going to sort of launch with?

Dawn Weisz

Yeah, so our target is 100 residential customers; these are homes. And a few of them — I just have to add this element to it — because we're doing this in Richmond and we've partnered with the Richmond Community Foundation to buy dilapidated or abandoned homes and turn them into smart homes and offer them up to first-time home buyers to make sure that the frontline communities, which in many cases have really borne the brunt of the difficult impacts of energy for many years, we want them to be at the forefront of getting some of the benefits of the green energy transition. So, we're offering these smart homes up to these customers and they have mini splits, solar battery, EV chargers, efficient induction cooktops, efficient washer, dryer, and heat pump water heaters.

David Roberts

And no gas hookup, I'm guessing.

Dawn Weisz

No gas hookup. That's right. And we're using Home Area Network (HAN) devices to control the load, and we allow customers to override our signals if they need to. If it's a hot day or they need to charge their EV and avoid our signal, that's fine. But, you know, as long as they're sticking with our signal, there will be some financial benefit to them, and we split the benefit between them and us to make it fair.

David Roberts

I mean, I'm sure, I'm guessing it's too early to know, but do you have any sense of the scale of that benefit to the customer? Like on a monthly basis, is this like a couple of dollars, you know, $20, $100? I have no sense of what's possible.

Dawn Weisz

Yeah, we think it could be between $15 and $20 a month, but at some times of the year, it could go much higher. And it really depends on how much load they have in the home. These are small homes without a lot of fancy equipment. So it's really the scale that's going to make a difference here. And that's why we want to grow our VPP beyond this hundred home pilot to encompass a lot of bigger chunks of load throughout our service area.

David Roberts

Yeah, sort of curious. Like, 100 homes is clearly a, you know, a starter pack, an experiment to make sure it works. Is your thought, idea, vision here that eventually something close to all the homes in your service area will be participating in this kind of thing? Is that where you see this going eventually?

Dawn Weisz

That would be our vision. That would certainly be our goal.

David Roberts

And then, would that really allow you to suppress those peaks? I mean, once you have over half a million customers you're currently representing, that's a lot of potential load.

Dawn Weisz

Absolutely.

David Roberts

At this point, you are pretty empowered. The legal structure is set. What, at this point, would be helpful from either the California legislature or the CPUC? Do you have a list of asks to either of those bodies?

Dawn Weisz

Yeah, our number one ask is maintaining local control and CCA autonomy because we've really been able to lead the way for the creation of more than 25 CCAs across the state. What sets us apart as CCAs is that we're governed by a board of elected officials with a unique ability to tailor our programs and services to meet the needs locally of our customers and our service area.

David Roberts

It's kind of like you're getting all the good bits of being a municipal utility without the hassle of maintaining the grid. It kind of seems like the best of both worlds, a little bit.

Dawn Weisz

I don't know about that. I mean, we really are constrained. You know, our local government members come to us all the time saying, "How can we speed up getting this facility connected?" You know, we have a hospital or, you know, an affordable housing complex.

David Roberts

You can buy it, but you can't interconnect it. You're still waiting for the utility to do that.

Dawn Weisz

Yeah. And that has a real impact on our electrification programs. You know, we're trying to help folks switch to heat pump water heaters and all the other great gadgets that you talk about on your show.

David Roberts

Has there been any discussion in taking that further step and becoming a full-on municipal utility?

Dawn Weisz

There's been some discussion. It would certainly be a lot more to bite off. I know that some of our sister CCAs have been working towards that for many years and have run into a lot of hurdles.

David Roberts

Yeah, well, I think everybody heard about Boulder's experience and has been slightly daunted away from that.

Dawn Weisz

Yeah, I mean, ultimately, there isn't really a level playing field, and that can make it challenging to consider.

David Roberts

So when you say protect their autonomy, is there some current threat, what are the current dangers that you're facing, the biggest challenges facing you right now?

Dawn Weisz

Yeah, I think sometimes, well-informed or well-intentioned regulations can have unintended consequences that really constrain innovation. And, you know, this is a theme I've heard about on a number of your shows where it really resonates with me. When making a rule, sometimes you think you know the right answer, so you say, "Oh, just do this." But instead, what you should say is, "Hey, here's the goal we want to get to. Please avoid doing X, Y, and Z and figure out the best way to do it." We often get pushed down a specific path that isn't the most efficient path.

And instead, I think the way to set rules is to kind of put out a high-level standard. I think the Renewables Portfolio Standard (RPS) is a good example of a great standard.

David Roberts

Right. Well, you say, "We want X outcome."

Dawn Weisz

Yeah, right.

David Roberts

You regulate the outcome and you say, "You figure out how to get there."

Dawn Weisz

Exactly.

David Roberts

Every regulated entity in the world wants that. I don't know why, regulators, but for some reason, regulators really don't like doing it that way.

Dawn Weisz

That's right. And what you get if you do it that way is innovation, creativity, flexibility, and ultimately affordability. Because we're always looking for the cheapest way to do it.

David Roberts

Is there a handy example offline where you feel like the CPUC or the legislature has sort of gone overboard on specificity?

Dawn Weisz

Sure, I can give two high-level examples. One is when we get procurement mandates to buy a certain technology within a certain timeframe, say within two years, everyone has to buy this large amount of geothermal, for example. Well, if you own geothermal, all of a sudden your negotiations might be put on hold and your prices might go off double or triple. So that's not a smart way to do it. Instead, regulation could say, "Hey, we want this amount of reliable clean energy that generates during these hours." So that's one example of a regulation that causes non-affordability in the market, causes prices to go up a lot, and also causes constraints in the market because everyone's trying to get the same thing within a very small time period.

Another example is when load-serving entities are told to enact real-time rates that have these very strict parameters, using certain named databases and following protocols that really aren't the most efficient protocols. That sort of requirement eats up a lot of time and prevents us from doing the things we're already doing, which are working better and are more efficient.

David Roberts

So, what would it look like then for the California legislature to grant you more autonomy? Are you talking about something like CCAs are exempt from XYZ regulations as long as they achieve XYZ targets? What would it look like to boost your autonomy?

Dawn Weisz

Really, what I'm saying is that we don't want to have any more encroachment on our autonomy. I think having a clear standard like an RPS, for example, is a great way to keep us all rowing in the right direction. And if there is going to be a new standard set, give the market some time to adapt to it. Say, "Hey, in four years we want everyone to do X and in 10 years we want everyone to do Y." And then we might meet those standards. You know, for example, the current target for renewables for the state, the 2030 target, we met it 13 years early because our board believes in getting those renewables on the grid as fast as possible.

David Roberts

I feel like the state should say, "If you get to this target early, you get a treat, which is exemption from all further regulations." You did it. Clearly, you know what you're doing.

Dawn Weisz

Yes, yes, good one. I like that.

David Roberts

So, maybe from the legislature and the CPUC, a lighter hand and more sort of outcome-oriented regulation. What about from incumbent utilities? What would be helpful to get from them?

Dawn Weisz

Yeah, I think better information flow would be great, particularly around customers and programs, and more collaboration. You know, I feel like the VPP that we're working on is very, it's cutting edge, and that can sometimes be painful because, you know, there are rules that haven't yet been set up to align with what we need to do. Like, as an example, right now, every time we want to enroll an asset like someone's water heater, we're going through a very complex process that was really set up for a large generator.

David Roberts

Oh, you're talking about small-scale interconnection to the distribution grid.

Dawn Weisz

Yeah, and I think that we could partner with the IOUs in a collaborative way to scale up the programs that we want to see succeed. And you know, in my mind, it's about leadership. You know, I think leadership isn't about the spotlight, it's about responsibility. And when you're in a position of power where you have the ability to influence the way people are using their power and having to pay for their power, it's your responsibility to do the very, very, very best that you can to keep it affordable and make it work efficiently. And there's not time for, there shouldn't be time for holding information hostage and not just collaborating openly to try and find the best solution.

You know, we're in a climate crisis and I think we need all hands on deck, working together in parallel, to find the best end result.

David Roberts

Yeah, I did a whole podcast in August of last year about the data that utilities get from smart meters and stuff like that, and their unwillingness to share that with VPP companies and all sorts of other entities that sort of need that information to plan their businesses or to plan their futures. I think this is a widespread problem, the sort of unwillingness of utilities to share information.

Dawn Weisz

Yeah, and what the result is that we are having to physically go to each of our customers' homes and businesses and put a HAN device in their facility so that we can read their load and control their load because the smart meters really aren't smart. We don't get information in real time. We get information with about a 72-hour lag.

David Roberts

Yeah, that's hilarious.

Dawn Weisz

It's not even in hourly increments.

David Roberts

Yes, the failure of the first generation of smart meters is... I should probably do a podcast completely on that at some point. Yeah, I've just been doing some podcasts recently on people who are basically inventing devices that are either collars that go on the meter or sort of adjuncts to the meter to sort of boost the function of the meter. Like what it can know and what it can do.

Dawn Weisz

Yes, I heard your Span panel a couple of weeks ago. That was fantastic. And that's one example where I was excited to hear that PG&E is interested in that. But I'm frustrated to hear they haven't done more already. Like, you know, if you have this huge volume of customers, you have power, you have control. And I feel like it's our responsibility as load-serving entities to find those good outcomes and get them going.

David Roberts

What about CAISO, the grid manager? Is there anything in particular that CAISO could do that you would find helpful?

Dawn Weisz

Well, I found CAISO to be really innovative and a great partner, and I feel like they're always looking for the best solution to keep things flowing well, often with an eye towards economics. I think they understand the market because they're in there every day working on it. So, I've really enjoyed collaborating with CAISO. I think they are looking for ways to grow the VPP interface from a pilot-based model to a scalable model and to break down the silos. I think right now there are a few distinct ways you can engage with them with your VPP, but there's not really a way to optimize a device to move across platforms.

And one day, it might behave as an exporter, and on one day, it might behave as absorbing load at a different time. And so, being able to optimize is, I think, the next frontier for CAISO, and I'm so happy to see that they're already working on that and we're excited to be partnering with them.

David Roberts

Are you engaged at all in the discussion about a shared Western grid? You know, because there's no, you know, CAISO is just California and there's all these, I forget how many in the west, but there's like dozens of different little balancing areas in the west and there's all this talk about trying to create a larger western ISO. Are you engaged in that? Would that help you at all? Are you involved in that discussion?

Dawn Weisz

The discussion around regional coordination is really a discussion about affordability. And we're very engaged and we're very supportive. I am worried that if it doesn't move forward, California is going to become a bit of an island that is going to make it much more costly to serve our load and use our resources efficiently. We have some of that expensive solar power in our portfolio in the Central Valley being curtailed, and we're losing several million dollars every year or every month to account for that. And if there were places for that energy to go when it's not needed in California, that would help with affordability.

And if there were more resources for us to access across the grid. You know, already the trading across states is saving $800 million every year on California's electric bills. With regional coordination, we would see 10% less curtailment of California's solar and wind. That's a lot of dollars. It would also reduce the use of in-state fossil gas power by 31%.

David Roberts

Oh wow.

Dawn Weisz

Yeah, so that would help us reduce our GHGs and also improve our air quality and health outcomes for communities living near those plants. And it would give us access to 25 GW of added supply that we could tap into during extreme weather events when our grid is stressed.

David Roberts

Yeah, of all the difficult decisions in electricity, just like hooking up grids over larger geographic areas, is just such a no-brainer. It's just such a... It's good, it's good for literally everyone.

Dawn Weisz

Yeah, I agree.

David Roberts

Final question. When I checked in on CCAs in 2022, there were 10 states that had enabled them. I checked back on that. It's still 10 states in 2025. Two-part question: Is there some momentum for expanding these things? Is there still a push to get them passed in new areas? Is that still ongoing? And then two, what advice would you give city leaders in a city or town that is thinking about doing this, that is thinking about launching their own CCA?

Dawn Weisz

Yeah, well, to answer your first question, there is still an interest in other states regarding CCA enabling legislation. There was definitely a lot of buzz around this back in 2018 through 2020, and sometimes it can be driven by the success of some communities. The word spreads and that can spark others. I'm not aware of big pushes right now, but I do tend to stay a bit more focused on what's happening in California. One thing I'll note though is that the California model is a bit different from some of the other states in that the local government agency is really holding the reins, managing the budget, doing the procurement.

You know, we have 75 different energy suppliers that we work with, so we're putting together our own portfolio.

David Roberts

How big is your staff right now? How big is the MCE operation?

Dawn Weisz

Yes, about 100. We have a little over 100 staff. And then we also have some external support on the legal and procurement side and a few other areas. But we do all of our procurement. You know, we schedule our resources, we schedule with CAISO, we manage our budget, we manage our credit ratings.

David Roberts

So, in some other states where there are CCAs, CCAs are not that empowered. They have somewhat less authority than that, as I understand it.

Dawn Weisz

Well, I wouldn't say they necessarily have less authority, but they often are using a third-party vendor to handle everything for them: to handle their customer interface, their customer acquisition, their billing, and their procurement, all through a third-party shop. And so, that's a bit of a more volatile model and it doesn't allow for as much continuity as we've seen in California. Because in California, these are local government agencies that are built to stay and we've really redirected a revenue stream that exists in all of our communities. And I guess this gets to your second question, which is, you know, what would we tell someone at a local government agency that doesn't have a CCA?

David Roberts

Because you are making it sound like, you know, like if I'm a small town, you know, whatever mayor, and you're describing like, "Oh, we're, I've got 100 people and we're procuring and scheduling," you know, it sounds daunting.

Dawn Weisz

Yes, but it pays for itself if you do it well. You know, if you're hiring experts and professionals that know how to do their jobs, then you can run a load-serving entity very efficiently and effectively. And you know, with a strong credit rating and with a large budget, you know, we have an $800 million a year budget and a lot of that goes to energy. We've built up reserves and developed those strong credit ratings as a result. And that allows us to buy power at a cheaper level than entities that don't have as strong of a credit rating.

David Roberts

So what's step one then for my little small town mayor? How do you get into this?

Dawn Weisz

Yeah, well, we have developed a trade association across the state called CalCCA that is really a connection point for any local governments that are interested in community choice and want to get involved. We share everything, and that's what I really love about working in the CCA space or the local government space. We share our marketing information. Here's our business plan. Here's how we address this compliance obligation. We have working groups and teams across the CCAs that really help each other out. We have a list of best practices, and we have ongoing calls and gatherings where we're sharing information and helping each other.

And we don't have to reinvent the wheel as a result. I can learn from one of my sister CCAs.

David Roberts

Yeah, I was sort of wondering. I'm guessing it's a lot easier now than — I mean, obviously, it's easier to do it now than it was when you were starting.

Dawn Weisz

Yeah, I think it is because there's such a great network across the state.

David Roberts

Awesome. Thank you so much. This is really fascinating. I feel like these should be better known. A lot of people out there in the world wish that there was something like this, and there is something like this. You know, you could have this in your state, theoretically, if you did some organizing and pushing for it.

Dawn Weisz

Exactly.

David Roberts

Thank you so much.

Dawn Weisz

Thank you. My pleasure.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I sit down with Page Crahan, who leads Tapestry, an audacious effort to “make the grid visible.” We explore how disparate, scattered data sources can be stitched together by AI into a coherent realtime map of the grid, to slash operation and maintenance costs and speed up the grid interconnection process.

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Text transcript:

David Roberts

Hello everyone. This is Volts for May 21, 2025, "A Google Maps for electrons." I'm your host, David Roberts. Birthed out of Google some 15 years ago, X — not to be confused with the other X, run by that other guy — calls itself a "moonshot factory." It's best known for spinning off Waymo, the self-driving taxi company, but it hosts all kinds of quirky research into sci-fi long shots from robotics to molecular recycling.

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One of the more recent moonshots launched out of X is called Tapestry, and it is devoted to our favorite subject here at Volts: the electricity grid. It bills itself as a “Google Maps for electrons” that will "make the grid visible," using AI to map and model grids in a more comprehensive and cohesive way than current tools can manage.

Tapestry has worked with the government of Chile and, just a few weeks ago, announced a big partnership with PJM, the mid-Atlantic grid operator. The idea is that Tapestry's tools will allow PJM to accelerate its glacial interconnection process, enabling more power to be added to the grid faster.

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I am somewhat skeptical of AI, and somewhat skeptical that any technological tool can cut through the Gordian knot that is the US grid, with its Rube Goldberg regulatory regime and lack of central planning. Nonetheless, making grids work better is my jam, and I am extremely geeked to hear more about it from Tapestry General Manager Page Crahan.

With no further ado, Page Crahan, welcome to Volts. Thank you so much for coming.

Page Crahan

Thank you so much for inviting me to geek out with you today on this great topic. Dave, it's great to be here.

David Roberts

You know, when your guy got ahold of me and he's like, "Hey, we're doing this. Would you like to talk about it?" And I was like, "Well, that certainly sounds like my kind of thing." But, having dug into it now, there's not a ton of public information available on it. So, I'm going into this a little bit more wide open than I usually do. I'm very curious to hear what the heck you're doing. So, maybe the place to start is, were you at X when they came up with this or did you get hired into X to do this? What is the origin story of Tapestry at X?

Page Crahan

Great question. It's interesting. When I joined X about seven and a half years ago, there were a heck of a lot of people — and there still are — thinking about energy. I think the impetus of working in this building is you come and you really want to address one of the world's biggest challenges. And a lot of people think energy, climate, etc., is a big topic. So, you will have maybe thought about some of the things that have come from this building, like Malta, which is storage technology, etc. So, when I joined, there were a lot of folks thinking about all things energy and grid — like it has to connect to something. So, what do we do about the grid itself?

And so, there was a sort of band of hobbyists, enthusiasts thinking about coming together, as folks do here at X, to just think about topics and maybe someone who's a mechanical engineer and a mathematician kind of having lunch and thinking about, "Well, what do we do about the grid?" So, I would say that there has been a longstanding dialogue that is interested in energy in general and the fact that the grid itself and the network that connects these things is a really big component.

So, I joined and there were folks thinking about this space, but it was definitely a nascent — what is now Tapestry — quite a nascent team. Kind of a handful of folks about seven and a half years ago getting started, thinking about, "Well, gosh, what about the grid itself and how much data and how we could run it differently...?" There's the preamble.

David Roberts

Yeah, well, I mean, thinking about energy for any length of time, any solution you come up with, you realize the grid is like — what's the right analogy — it's the eye of the needle that the camel has to get through to have any effect on the world. Like, it all has to go through the grid. And as I'm sure all you smart people noticed after doing this for a few years, it's awfully hard to make anything happen through the grid these days. Is there like a clear mission statement, or is this just like, "We're going to approach the grid and try to figure it out as we go" kind of thing?

Page Crahan

No, no. Tapestry's vision and mission statement is really to make the world's electric grid visible so that everyone can access reliable, affordable, clean energy. And we chose that language largely because it feels like better data, better information, better insights about the network will unlock a lot of the decision-making and sort of improve the way we handle an increasingly complex system. And I think an analogy that has remained apt even from the early days of the project was thinking about building that Google Maps for electrons. Waymo incubated here and I like to learn from other efforts and I think the notion of course, when Waymo was created, there were maps that got drivers from A to B. We all had maps.

They were good or bad, or however we sort of thought about the accuracy of the maps. But what needed to be, you know, the technology that allowed Waymo to really take root was the ability to map the physical world around it. Because if you have a map, you don't necessarily know that there's a pothole or the road is at a slight grade, and that might be information that's important to you. And so, I think when Tapestry thinks about making the grid visible, it's not because we're unaware that there are current maps and tools. It's that we think that because of how complicated the grid is itself — humankind's largest machine, transmission, distribution, generating energy, using energy — we think we just need much better visibility.

David Roberts

Yeah, and so, you know, when Google Streets set out to do its thing, and I will just say, like, just as a matter of historical curiosity, I sort of remember. I'm old enough now to remember when Google said, "We're going to make maps of everything everywhere. And we're not just going to make maps, we're literally going to drive cars over every square inch of it and take pictures of every square inch of it so that we literally have a picture of every juncture of every street in the world." My first thought was just like, "That's crazy. That is an absolutely crazy thing to set about to do."

And they did it. So, these things are possible. So, is the idea here just the same thing? Drive cars around and take pictures of the grid? Is that sort of the root of it here?

Page Crahan

Well, I think, to extend your analogy, you think, "That's kind of crazy." And then you think, "Could they do it?" And then you think, "Well, what would it be useful for? Because I've gotten along okay without pictures." But then once you have them, "Oh, wow!" And you can sort of imagine all the value. So the analogy for Tapestry is what we looked at is there are not just Google Street View, but many, many different types of geospatial — you know, there are drone programs that utilities run. Yes, of course, there are Street View cameras that are still mounted on cars that Google uses to increase the sort of fidelity and accuracy of those maps.

There are satellites that are run for various things that you can hop on the Internet and find. So, the thing that gets me really excited about this particular moment in time is, as a species, we've gotten really good at mapping stuff. And so, Tapestry doesn't think we need to go create that wheel again. What we think we could maybe be quite helpful with is taking the existing imagery and maps and drones and satellites and insert all of the amazing things that are happening and synthesizing that information, drawing insights from it in ways that perhaps haven't been looked at before.

And again, I will take your bait of appropriate skepticism about this sort of panacea of AI, but that is actually a place where, if you take sort of a vast amount of information, especially about the built world, our physical world, one can apply artificial intelligence to derive insights from that geospatial information that are sort of repeatable and scalable and knowable. And so, yeah, the vision for Tapestry is not to start from scratch. It's to say, "Gosh, look at what we've created already with all of these tools."

David Roberts

So, your idea is that through one way or another, through some combination of these cars and satellites and everything else, there are already pictures of the whole grid out there and you're just gathering them.

Page Crahan

That's right. I think the name Tapestry hopefully evokes weaving, weaving things together. And that is really the thesis for us. There are wonderful images — for sure, you can't get everything from imagery. Some of this is either not visible, maybe it's underground, or maybe it's inside of, you know, other apparatus.

David Roberts

Yeah, I was going to say, this is not like streets in a lot of ways. There are parts of the grid that are not on a public right of way. There are parts of the grid, technically these days, like DERs, etc. Some of them are behind the meter, they're literally on private property. Some of it's underground. So, what do you do about all those patches?

Page Crahan

Yep. I think that is the exciting part of this challenge. You start with what is sort of easy, which is what you can get from a basic street view map. But a lot of the grid is not visible. A lot of the components that we care a lot about, when we think about reliable infrastructure, are maybe behind a breaker box or something, maybe just not visible. But what we think is interesting is, again, it's sort of this, I'll use a phrase, the multimodal insights. So you can use a schematic or a single line diagram to augment what you can see that is visible.

And then again, it's the weaving together of — in one voice, we could say that we have a lot of data and insights about the electric grid. And in that same conversation, you could say, well, we also don't have enough. And those can both be true. Right? And so to us, it's really about weaving together those insights. Some may be visual, some may be acoustic or thermal or schematic. When you think about what is already happening and with the distribution utilities or DER providers, folks that are connecting things or managing things on the grid, they actually have data about the network.

Our partners fly drones on their own to manage their assets, which makes sense because maybe this is happening in an area that wouldn't be visible by a car driving by on the road. But if you're a distribution utility, you need to understand what's happening to your assets. So maybe you have flown a drone. So we can use that existing information and we can draw inferences. And so to me, the thing that's been most exciting is looking at how rich some of the insights are about the grid and seeing if we can stitch together, weave together those insights to create better maps.

David Roberts

Definitely, I want to get to the insights. I just want to get clear on what is the kind of source of the raw data that's going into this. Like, what are all the sources?

Page Crahan

Our own information partners. One of my terrible jokes is, "We don't have a grid to sort of experiment with." There is no kind of like garage grid to experiment with. So, we had to, at the very beginning of this effort, partner with distribution utilities and others around the world to try to understand, "Well, what data do you have, what's missing?" And so, happy to talk about that more. But this would not work, this effort would not work without amazing partners.

David Roberts

Okay, so say, just hypothetically, like the state of Washington came to you and was like, "We want to do this. We want you to map our grid so we understand it better." And you gathered all these sources of information, gathered all the data sources that you could find. Is there a case in which you would look at that and say, "There's just like a piece missing here that we don't have. We're going to send someone out to get that." Like, do you have resources at all to go get information you lack, or are you dependent on what you can find?

Page Crahan

Well, I think we always will use what is available, and there's a question of what data is needed to make which decisions. So, we may want to have a, you know, millisecond model of every node of every grid. But if you really think about it, you probably don't need that for much of what is decided. And so, this is again the sort of "fit for purpose" information. What decision are we trying to make? There may be a section to your example where we say, "We believe this area of the network might be more fragile and we don't have great information about it. We think it actually would be valuable to gather more information."

Tapestry, we don't fly our own drones. We're not an image collection entity. But we would offer the insight to our partner and say, "Hey, we think over here you might have something you want to look into. And this is why we believe that." And that's how we think about sort of completing those gaps.

David Roberts

So, you have all this data that you're pulling together into a big comprehensive map. And when we say map, just to sort of spell it out a little bit, we're talking about where the lines, transformers, circuit boxes are, you know what I mean? Like, we're literally just mapping out where all the physical chunks of the grid are.

Page Crahan

That's exactly right. First, it's where everything is. And you listed a few components, but you can go pretty deep on the components that you might want to understand. You know, a switch or an insulator, et cetera. But you're exactly right. First is, where are these assets? The second set of questions you might ask for your map is to apply a little time series information. When was this picture taken? Is this current? A lot of components, particularly on the distribution grid, actually do change. Not every day, but relatively often. You might have a storm, you might have an upgrade or a maintenance issue.

So, the grid is dynamic, not every component changing every five minutes. But we do need to layer in a sense of time to what you're mapping. And then of course, the final piece are the physics and sort of power flow and that's kind of differential equations and those sorts of things. So when you really think about the robust "Google Maps for electrons" — the reason we use the word electrons, it's a bit provocative, right? Do you actually need to see what every electron is doing? We'll save that for a rainy day. It would be nice, right?

And sort of be aspirational, but it does bring that final kind of component of physics and harmonics, and sort of exactly what's happening from a mathematical perspective on the network.

David Roberts

Well, on that though, aren't there lots of appliances and devices, basically, that would have some effect on power flows, etc., located on private land, where you can't take a picture of it? Do you know what I mean? Where you just are sort of having to estimate what's behind the meter from what you can see in front of the meter? Is that sort of how that's working?

Page Crahan

Yeah, and again, it goes to the earlier point of what level of information do you need to make good decisions about the network? I don't think we're going to need to know when I turn my toaster oven on in the morning to make regular decisions about how we run the network. That's just not required. But we can use the grid-connected smart devices to help us understand. To help us, I will talk about utilities as well, to understand the health and safety of the network in certain areas. So, you might not need a sample from every node of every network to get a sense of what's happening on the grid, but you might need to know that, you know, some particular component of the grid is regularly seeing challenges or reliability challenges. That would be enough information as an energy provider to sort of investigate more and want to reinforce the network.

But there is no requirement, sort of behind the meter, device level information needs to be part of a fulsome picture. I think what is most exciting to us as we as Tapestry starts building out this technology is we can get a lot of information from — it doesn't need to be a perfect map to drive insights. And that's really exciting and helpful in the near term to distribution utilities, for example.

David Roberts

All right, so as far as I can tell, you've got kind of like once you have this information, there's sort of two tools that you've developed out of it. One is this what you call the GridAware tool, which is just, the way I read it on the website, it's almost meant to augment utilities. You know, distribution utilities have to go inspect things periodically and frequently do not have the resources to inspect them as often as one might like. And so, part of what you're doing here is just sort of automating and speeding up that process.

Is that a fair summary of that tool?

Page Crahan

Yes, and it is again, if you sort of step all the way back and think about what's happening in the network. We do have good information about a lot of things on the network, but this information is really siloed. So, the reason GridAware, for example, is so helpful is if I want to plan for the future of my network, I want to think about my community adopting a lot of EVs or I want to think about retiring a certain generation asset and replacing it with another generation asset. The very first thing I'll need to think about a long-term infrastructure upgrade will be to understand what my current network looks like so that I can map what those changes would be.

And today, the tools that manage the current network might not talk at all to the tools that plan for the future of the network. So that's sort of how we came about this set of products or tools that all together bring that kind of Google Maps for electrons view. But first step, where is your stuff and what state is it in? And that's what GridAware really helps with. And the place that that's most helpful is generally in the distribution network. We'll talk probably later on about our work with transmission folks. And in general, there is better, you know, higher quality information about high voltage and transmission networks.

So, they might not have that same issue from which to run their planning. But you're exactly right. The GridAware product seeks to give distribution operators richer insights about the current state of their infrastructure to augment inspection cycles, but most specifically to help them prioritize where they perform proactive maintenance for reliability, et cetera.

David Roberts

Right. And I think maybe not everyone listening appreciates the fact that you can — lots of the signs of incipient problems, let's say on a distribution grid, are visually identifiable. Like, you can look at a line and say, "That's sagging too much, that is going to turn into a problem soon." So, just having their eyes on everything makes this much easier.

Page Crahan

Well, and it's really amazing, the experts in this field — again, Product 101: go walk a mile in the shoes of someone who does this job. And early on when we were building Tapestry, we drove around with a lot of career field technicians, distribution network operators, and you hear those folks exactly what you just said. If you're driving in a car with someone who's run that network for 20 years or of their career, they can look up off the side of the road and say, "Oh gosh, I need to send a note to XYZ person because that isn't supposed to be sagging or tilting that way," or whatever it is.

And that insight is intuitive to an expert. And so, to me, this is like, "Wow, that's gold." Let's take those insights that are hard-earned, those engineering insights, and this is where computer vision can really help. That expert can train the computer vision to say anytime you see something that has those characteristics, it's sagging in this area or whatever it was that alerted the engineer or the expert. We can train a model to proactively look for those things.

David Roberts

Right. And I've often, you know, I often say on this pod that a lot of people underestimate how analog the grid still is. You know, I think they think about it the same way they kind of think about the Internet. I think people don't appreciate how many, like, you know, some technician named Bob who's been on the job for 20 years and has developed this sort of like intuitive, this sort of instinct for things. You know, the whole thing relies on Bob continuing to be out there and it's just not a particularly secure way to run a railroad.

Basically, like hoping Bob doesn't get sick or whatever.

Page Crahan

If you gave me a magic wand, and I don't know if you have one available, but if you did, the thing that —

David Roberts

Well, look around you. If I had a magic wand —

Page Crahan

Might be some other things you would start with. One of your top five would be to call me and say, "Okay, what were we going to do again about the grid?" And I think the grid topic is sort of at a fever pitch. We're reading about it in periodicals that normally wouldn't write about interconnection queues, et cetera. And so my magic wand is like: let's get everyone who's worried about the grid and the network to spend a day with Bob, go ride along with him and see what tools we have Bob using to run this equipment. Because I think it would be an incredibly sort of galvanizing reality check.

To your point, the tools that we're asking these folks to use, many of them predate the internet. And so, it's like, "Come, let's help Bob."

David Roberts

Yeah. So, then you have this. It helps a distribution utility identify problems in advance, do some preventative maintenance, save money, you know, a better alternative to waiting for something to break and then again, like waiting for something to break and then very often, like waiting for someone to call them on the telephone and tell them that the thing broke. Which again, is just like crazily primitive when you think about the kinds of things that we're doing with electricity. It's just crazy that that's still the case. So, like this will save distribution utilities money and help them maintain their grid better.

So, then what is the, what you're calling, the grid planning tool, which is less sort of like day-to-day maintenance and more long-term thinking. Who's that for and how does it work?

Page Crahan

Yeah, and a little context. So, I came to Tapestry and X from Sunrun and a few other renewable energy kind of experiences, and this notion of wanting to make faster decisions about deploying infrastructure, period. Just please, can we please speed it up?

David Roberts

Also a hot topic these days.

Page Crahan

Yeah, and before it was en vogue, we were thinking about it. Those of us who have been in the energy space for a while, we're kind of watching. Wow, this is really more laborious than it should be to evaluate how to deploy capital and capex infrastructure into the network. And so, that's what the planning tool was designed for. It cannot be the case that we are asking a decision maker to hand create a model for every possible scenario in the future: sunny year, a lot of EVs, not a lot of EVs, a drought year. For 20 years, assign probability to that and then make a recommendation.

And that was so alarming. We just talked about our friend Bob and his job, making sure that the distribution infrastructure is reliable and resilient. But Bob's got a cousin, for lack of naming our new best friends, who's sitting in a transmission planning role and is trying to assess with the number one objective of meeting energy demand with reliability. And we're asking this person to run all these scenarios and counterfactuals and then come back with an answer that would never compromise reliability. And so now here we are with a six or seven-year interconnection queue process. So the planning tool, we started working on this about five years ago because we saw interconnection requests increasing, we saw the challenge increasing, we saw the actual simulators that this industry uses to assess "Can this connect to the grid?"

You run steady-state power flow simulation, you run economic simulation, you run several simulations in parallel. And those were again designed to run in a world where we were connecting — I don't know, 10, 20, 30 things to the grid per year. And now we're using those same tools and we're evaluating thousands of connections. And so the planning tool is really designed to kind of supercharge transmission planning. And again, step one is to just evaluate the current process today. And as I always promise folks, there is not a single grid planner, transmission planner anywhere on planet Earth who comes to work saying, "I'd like to do this really slowly and painfully today."

David Roberts

Well, I mean, I think it's worth calling out and just sort of making explicit, like if your mandate is reliability, and that is the number one thing, the number one thing you're judged on, the number one thing you have to pay attention to, and you have tools that have limited information and in which you have limited confidence, all of that adds up to conservatism, basically. It just adds up, I think, to institutional, endemic conservatism about doing anything. Do you know what I mean? Like, if it has to stay reliable, your inclination is just "Let's not mess with it because we don't have the tools that will give us the confidence we need to mess with it."

Page Crahan

That's right. But if you ask that same person whose job it is to keep the lights on and keep it affordable, just imagine that I gave you perfect information, you could simulate anything. What would you do? And then they'll happily tell you, "Oh, it would be great because I could make this decision or I could run some if-then scenarios. If I connect this, then I will need to change that." And so that, in my mind, is beautiful because you say, "Well, I understand we have some work to do to get to that nirvana state as an industry, but if we could make progress on it."

And so, Tapestry started working — the first transmission planning team that we started working with was in the country of Chile several years ago — and the very first thing we did, before we even tried to augment the process in completely new ways, was just speed up what they do today. To your point, that decision maker may be resolute in using their current tools, but if it takes them two days to prepare a model and then 24 hours to run a simulation and then a week to review the results, well, if Tapestry could help them do that in a couple of hours, that whole process, wouldn't that be better? And then from there, we can sort of add new features.

David Roberts

Yep. And as with any sort of automation like this, you have to think about not just the benefits of having the existing process be faster and better, but also the sort of second-order benefit. Bob's cousin used to spend 80% of his time on laborious math calculations, now has that 80% of his time to do higher-level stuff. Right. Planning or thinking or, you know, things more suited to human minds.

Page Crahan

This is the most, you're spot on. And the folks that are, that have the role of transmission planning for a country or for an RTO or regional transmission operator, are exceptional. They're expert engineers and they don't want to be managing paperwork and assembling PDFs and like, you know, highlighting data entry issues. And so, I think we owe it to them as an industry to give them better tools so we can unlock them to do what they're experts at. Which is, you're exactly right, might include creative, wonderful solutions to keep reliability high and affordability high, costs low, were they to have the time to run those scenarios.

David Roberts

Right, right. Part of my question about this is, especially in the US context, the US RTO, how much of that slowness that exists today is a technological limitation versus bureaucratic cruft that has just kind of built up over the years. Do you know what I mean? Like, is it the case that if you give them a much better tool, that would sort of clear the way and then they would start moving much faster? Do you have any reason to believe, have you seen a success story along those lines?

Page Crahan

Yes, we have. And I don't believe that this challenge, the energy transition, the breadth of that challenge, is a "technology will solve it all." Because there are politics, policy, people, all of that. We're all in this together to figure it out. But the piece that I get excited about is when I see evidence that if we could bring better tools to bear, better technology. That is a major tailwind in sort of moving some of the other barriers, creating confidence in decision making. And Chile is a great example. You know, we worked in that network for about three years. We'll continue to grow and expand the features there.

David Roberts

But, so wait, can I, when I think about what you said earlier about there being existing sources of information scattered all over the place and if you just gather them all together, you can get a good picture of the grid? It makes total sense to me in sort of like wealthy, advanced US. Is it true in all other countries? Is it true in Chile? Like, did they have all the information you needed?

Page Crahan

It is not the case that every country has the same level of, you know, data and insights around their physical network. But what is the same everywhere is this issue of visibility on the network and what can we, Tapestry, and just basically the energy community infer. So, Chile has, we work with the transmission operators. They've got a good set of information about their network. We have not worked with their distribution utilities.

David Roberts

So this was transmission planning?

Page Crahan

This was transmission planning only in Chile, with SEN, the national transmission operator, which is a slightly different world a bit. The challenges are not totally dissimilar. But as you know, transmission and high voltage networks are different than distribution networks.

David Roberts

And Chile is, you know, legendarily very tall and skinny. So, it's very, very long transmission lines.

Page Crahan

It's a fascinating network for grid nerds.

David Roberts

Yeah. Such a weird geography, or whatever the word is. The shape of it.

Page Crahan

The shape of it, with load in the center and generation at the north and south with a lot of sun and hydro, but all the load in the center and then this long skinny radial grid and only one connection elsewhere. So, it kind of operates like an island, like super fascinating as a place to assess information. But again, I think what we see in Chile is this synthesis of information. They have a lot of exciting generation from renewable energy sources. Really growing wind and solar kind of generation community.

When I think about kind of where you're getting at with scalability, and if we go to a geography that might not have as rich of a data set as another geography — and not to be just extolling the virtues of AI when we talk about this — but sitting next to a bunch of machine learning engineers for seven years has kind of made me not an expert, but a bit of a believer in what it can do. And I think what I'm excited about is the physics of the networks that we work on, that Tapestry works on. The physics are the same everywhere in the world. The laws of physics don't change. What we see in a simulation in Chile that has certain physical conditions or scientific conditions, we will expect the same outcome everywhere in the world with the same conditions. And so this is what I get really excited about in terms of, you know, moonshot type advancements.

How can Tapestry help ensure, but also the kind of community that's working in energy transition, that each region around the world doesn't have to relearn the same lessons? If someone in Australia has seen, you know, interaction between two wind farms, can that insight just be baked into the simulations and models that Chile or US or someone else runs?

David Roberts

Well, this actually brings me to my very next question. So, you teed me up perfectly, which is I know that like, you know, the laws of physics are the same everywhere and I guess at a rudimentary level, grids are kind of the same everywhere. They're wires and transformers and stuff. But there are differences from grid to grid. And I think the probably wider differences if you go to different countries and I'm thinking of stuff just like transformers might be shaped differently or placed in a different spot on the pole or like more or less sagging might be allowed.

You know what I mean? I guess what I'm asking is, how much of the learning that you derive from a particular geography is transferable? Like, how much of it is sort of universal? Are you finding that most of what you learn applies to the next one you go look at?

Page Crahan

Yeah, I'm going to give you two data points because I wake up and think about this all the time. You know, if the ability for the Tapestry team to make an impact on planet Earth relies on us learning every geography on planet Earth one by one, I might not get there by the time I retire. So, that cannot be the case. So, let me give you a few data points that give us a little enthusiasm that there is a lot of transition ability here. 50 Hz, 60 Hz, European grid. We know that there are both visually and physically differences, although they're not infinitely different.

Right. There's sort of a few different ways that we look at things and those are knowable. What we've seen, we applied our computer vision to the distribution assets of a network here in the US, in the Midwest, and we took that same computer vision model and we applied it to some of the work we're doing in New Zealand. Again, those grids are very different. To your point, transformers, pole mounted or ground mounted, 50 Hz, 60 Hz, et cetera. And we saw that for some of the components, about an 80% accuracy is sort of off the bat.

Now, not for every component, some are different. 80% is good, but we'd like it to be better. So, I'm not saying it's solved, but I do think that gave us a strong indication that there is transferability and we'll get smarter and smarter on these different types of grids. And ideally, the dream would be you could show up to grid number 15 and say, "Yep, we've seen it all before. It's right off the shelf. This is exactly what's here and we're ready to rock." The other thing that I think is interesting, and now that we're starting to get working on the planning tool, the transmission tool in the US with PJM, we are applying the lessons from Chile, which is a very different network.

A lot of hydrology, a lot of hydro. And so, we're assessing what is transferable and interoperable. And again, this gets to sort of software development basics. No matter what grid you're operating in, you need to plug in a forecast of the generation. In Chile, that includes a really important forecast around hydrology. Yeah, in PJM, they're going to say, "Yeah, we don't need the hydrology forecast, but we need — " insert what it is that they work on. And so, what's again exciting is assessing the consistent kind of components that we can build. And then, as you go to these different geographies, you allow the reality of that network to kind of, in a modular way, plug in the part that's most important to that network.

David Roberts

So the PJM partnership, the idea, is it specifically to speed up interconnection? Like, is that the main thing or is that just one part of a larger project?

Page Crahan

It is one part. And because I think you have some grid nerds that listen, and I'll do the grid nerd. Thank you, bless them, I hope I meet all of them someday. High fives. We think about transmission planning. I mean, interconnections become a topic — when my mother knows what interconnection is, I know we've sort of gotten to a special place, but interconnection is one component, a very sort of au courant component of transmission planning. And so, we are trying Tapestry's work really everywhere. And PJM thinks about, "Can we rethink transmission planning, of which interconnection queue evaluation is of course a component?"

And PJM is the first time, to our knowledge, that artificial intelligence will be applied to really intelligently manage and optimize that fulsome transmission planning process, end to end, of which one of the things that is evaluated, of course, is interconnection queues.

David Roberts

Well, this gets back to the sort of tech versus bureaucracy question then, because when I think about the difficulties of transmission planning in the US, a tool like this could solve the problem of "Where on a physical basis do we need more energy?" Or "Where on a physical basis do we need to connect load and generation?" And that can be helpful, I'm sure. But then I think about transmission planning and I'm thinking about perverse utility financial incentives. You know, just sort of the lack of inter-regional coordination, the intense and endless debates over cost allocation, et cetera, et cetera.

Just like this isn't going to cut through that whole Gordian knot, right? I mean, this is just going to help them know things better. You still have to solve all those other problems, right?

Page Crahan

The magic wand would still be helpful. That is correct. I also think that just forward momentum helps start cutting the Gordian knot. And so, while we do need a lot of other — we as an energy community, you know, not just PJM, not just Tapestry, it's all of the above and that's a phrase we use now. But it is incentives. It is, frankly, the work you're doing, storytelling, helping communities understand what the heck's going on with the grid. Why did the lights go out? Why is my bill going up? All of that stuff is so, so important.

But what I think I am excited about is, at its foundation, giving better information to the people who make decisions about our energy is how you start. I think loosening up this Gordian knot that could be for all many different stakeholders. I think starting with PJM is so important to us because they are kind of that hub of everything here. But I just come back to, if you give more stakeholders high quality, trustworthy, visible, consistent information, they will be able to make decisions that are aligned with the energy needs of their community. Which is everyone's job, right?

Whether it's politicians, utility workers, or renewable energy developers, that's our job.

David Roberts

Well, one of the main questions that pops up out of this, and this, I got a lot of this on social media, you'll not be surprised to hear. The public discussion over AI is vexed these days. And lots of heat, not tons of light. But one of the things that has definitely come up is that the AI that people are familiar with, these large language models, have what are called hallucinations. Basically, they'll just confidently tell you the wrong answer, they'll just make stuff up, and we have backup sources of information against which we can thus identify hallucinations when AI spits them out.

And I guess everybody's first thought when they hear AI managing the grid is, "What about AI hallucinations? What if the AI just gets it wrong?" In this case, they're doing something that's so complex and multi-layered that humans can barely do it at all. So, you know, I wonder, will they spit out hallucinations and if they do, will people be able to identify them as such?

Page Crahan

Hopefully, we can talk about Bob again, our best friend from a couple of minutes ago. Yeah, but I think the first step of it — so first of all, this is the right topic to have on what is the reality of the technology, what should we consider? There are some certain upsides and there are things we need to understand. What I have been seeing in the energy industry and how we as a community are adopting this technology is the explainability and the kind of human in the loop is the only way that this technology will ever be adopted and deployed, period.

So, what Tapestry thinks about is, "How can I give Bob, remove all the junk that he spent the day doing so that all Bob's doing is like double-checking the work and confirming it or updating something?" And that is in my mind what will happen as practitioners accept this technology. Because again, back to our earlier point, under no circumstance will folks working, making decisions about the grid, compromise reliability, period. So, if they can't explain what is underlying the decision, if there's not a human looking at it and saying, "Yep, I agree." I think we're not talking about self-driving grids now, we're talking about supercharging the tools that our amazing intelligent experts use to make decisions.

David Roberts

Yeah, I think, I mean, this is one of the things people worry about, you know, is like, is AI making decisions? Is AI eventually worming its way to a point where it is actually making decisions? And of course, legally, regulatorily, morally, you can't really hold an AI accountable for those decisions. You know what I mean? Like, are you confident that this will stop short of self-driving grids, or do you think it'll get better enough that it could drive the grids well? Like, where do you see it going longish term, 10 years out?

Page Crahan

Yep, I am completely confident and excited with all of the brilliant people that are working on where does AI stop on planet Earth beyond just grid delivery? Because that's sort of one of the questions of our generation, right? How will this technology —

David Roberts

I don't know why I expect you to have the answer to that.

Page Crahan

I don't know. I would love it. I love that you have that confidence in my ability to deliver that answer. But I think what I know is, or what I believe is, that holding back from applying the technology until we answer, "50 years from now, what will AI be doing?" is not good for addressing some of the biggest challenges of humankind. If I look at some of what AI is doing today in medicine, a field that I'm not an expert in, I think, "Great, we would all say, if it can supercharge the way we do drug discovery, please do that."

And I think the same here with the grid. I mean, the reality is what we just talked about today, the folks that make decisions are comparing PDFs and I think before we talk about sentient grids or I don't know how far we want to go, we can just say, "Can we please do better so we can meet today's needs?" and let's start there and be honest and have the dialogues. I'm super excited that people like you are asking this question. I think as an industry, we will all need to figure out how we use the technology that is machine learning and AI.

But from now until then, we've got a lot of good work to do to help people make decisions today.

David Roberts

Well, actually, I forgot to ask, but what is X? Are you a business? Are you licensing this to partners? Are you selling it to them? Are you donating it as a service? Are they buying a service? What is the, what's the financial situation?

Page Crahan

So, X is — the job is to invent and launch the technologies that will build the businesses that will make the world, you know, improve the world.

David Roberts

Like an incubator, I think is the term.

Page Crahan

You're exactly right. It is an incubator. And an incubator eventually builds a business. It is not a not-for-profit or research. And that's for a reason. There are great folks that are doing research and our job is to deliver the technology to users and support a business. So, Tapestry thinks about our technology that same way. What can we build that is massively useful to address a problem? And what is the delivery mechanism to the industry that can endure and last for a real, real long time? No one on the Tapestry team wants to do a research project, get it published, and then have no one use it.

And so, for the industry, energy industry, to adopt some of this technology, we know that the products and the delivery are a big part of what we do.

David Roberts

Okay, and I'll just, I've already asked this, but I want to push on it maybe one more time. So, step one here is pulling information together and drawing insights out of that information. Insights which you then hand to a person and the person makes the decision. Maybe not 10 years out, but three years out. You know what I mean? Like, what's the next proximate step? I mean, the first, obviously, is you want to get your tool performing well and in as many hands as possible. Like, what are the, what's, like step two, three, and four here?

Page Crahan

Yep. Well, step one is exactly what you just said. How do we deliver this to more grids more quickly? Because we have, you know, we need to build as a society 80 million kilometers of grid in 15 years. That's step one. I think step two is once you've described insights turn into decisions. What I'm really keen to think about is how can we introduce predictable insights on those decisions? So it's like, I like to use the analogy because a lot of us, you know, when we type our email, it will guess the next few words in the sentence.

And to me, it's like, "How can I do that for our good friends that are working on the grid?" Not only is it the decision, but it's like, "Oh, the last time you wrote this sentence, you did this, but the last time you made this decision, you did this." And so, I think what the crawl, walk, run is, you know, insights to decisions and confidence. Decisions become familiar and predictable, and those allow us to potentially optimize the decisions, have better information. What I get, you know, I have a lot of energy nerd friends that are working in new technology and startup spaces, can those decisions start introducing some of the new technologies we want to bring to bear on the grid?

Can I talk about, you know, dynamic line rating? Can I talk about what a virtual power plant could do in this moment? So, if I'm thinking about the progression over the next couple of years, it's... I really don't want every grid on planet Earth to have to learn lessons on their own over and over again. And then number two is, I want everybody who makes decisions about this network to have, you know, at the tip of their finger, insights about the best decision, what others have done in that moment, whatever it is.

David Roberts

Not just like, "Here's what the Bob before you did," but like "Here's what Bob in another county did or another country did or..." You know what I mean? Like, there are Bobs all over the world making these decisions. So, in a sense, just sharing the heuristics is a big step.

Page Crahan

That's exactly right. And then, eventually, all of those heuristics and all of those Bobs are bringing together totally different kinds of tools and insights that maybe someone else hadn't seen. So, you do create, in the very, very long term, this sort of marketplace or management of electrons. Because all those Bobs have so many tools in their tool belt and they're so confident and comfortable with what happens when they choose that tool, they can do anything. They can make any decision they want.

David Roberts

Yeah. Maybe they could make bolder decisions or try more experiments or whatever, if they had a little bit more confidence that they knew the bounds, that they could predict the bounds of the results a little bit more precisely.

Page Crahan

That's right.

David Roberts

Might make them more adventurous.

Page Crahan

I think the Bobs want to be adventurous.

David Roberts

All right. All right. Maybe that'll be my takeaway here. Thank you so much, Page. This is really super interesting and what a fascinating job to have. What a fun place to be.

Page Crahan

It is very, very fun. Lucky us. And thank you so much for talking about one of my favorite, favorite topics. Dave, it's great to talk to you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I’m joined by Marissa Hummon, whose team partnered with NVIDIA to tuck a credit-card-sized GPU computer with AI software into the humble electricity meter. We discuss how that edge computing digests 32,000 waveform samples per second, spots failing transformers, and orchestrates VPPs — plus the guardrails that keep it from becoming Skynet.

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Text transcript:

David Roberts

Hello everyone, this is Volts for May 16, 2025, "Embedding intelligence at the edge of the grid." I'm your host, David Roberts. One problem that we discuss frequently here on Volts is that there is a tidal wave of distributed energy devices heading for the grid out at the edge, at the distribution level. Utilities currently have very little visibility into that level, at least on any granular real-time basis.

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Many people are taken with the idea of gathering real-time data at the grid edge and using AI to analyze it in real time, providing utilities and device manufacturers with valuable insights on where and how to improve performance.

One company that has been at it for a while now is Utilidata, which has created a special version of an NVIDIA chip, an AI module specifically designed to gather and analyze real-time data on electricity flows. It's already being integrated into smart meters and used by utilities in the field.

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Today, I'm speaking with Marissa Hummon, the chief technology officer at Utilidata, about why grid-edge data is needed, how to protect its privacy, what it enables grid operators to do, and whether an AI-infused grid is going to lead to a Terminator-style dystopia.

All right, with no further ado, Marissa Hummon, welcome to Volts. Thank you so much for coming.

Marissa Hummon

Thank you, David. I'm very excited to be here.

David Roberts

Let's just begin by telling me what this thing is. I tried to sort of briefly describe it in my intro without saying anything too specific, because I don't know that I totally have my head around it. So, the best I can tell is you have these NVIDIA chips and you have sort of made a customized version of that. Is that what's going on?

Marissa Hummon

Yeah, that's correct. We've collaborated with NVIDIA to create what they call a module. So, the chip part is the silicon; the rest of it, you know, surrounding it, is the module. And that module is something that is specifically designed to be embedded in grid-edge devices. Things that sit outside, things that need a high degree of security and reliability. They need to be able to sit on the grid for, you know, 10, 15, 20 years without, you know, sending a truck out to repair it. And so, all of those kind of like physical characteristics are part of what we did with NVIDIA to bring that compute into the utility space.

David Roberts

Yeah, and this might be a futile question since I don't know anything about this stuff, but just like when I think of chips, I just think of sort of computations, you know, sort of like raw computations, and then I think of software as, like, things you tell arrays of chips to do. So the whole idea that you've packed software onto the chip itself is blowing my mind a little bit. Is that something that other people do for other reasons? Like, is that a thing?

Marissa Hummon

In the field of embedded intelligence or embedded systems, that has been around for a long time, but for the most part, people have built, you know, single-purpose chips that do like one, one thing, and they do that one thing really well and they do it really efficiently. But what we saw a need for, and NVIDIA agreed, was to have a, like a real computer that you could program and you could reprogram it later if you wanted it to look at something else or calculate something differently or take a different action. And in order to have a real computer, you need a lot more than just a chip that does one thing right. So you need an operating system and you need memory and you need storage for data, connectivity to things.

David Roberts

And all that is on the chip?

Marissa Hummon

Yeah, and it's less than the size of your credit card, and about as thin.

David Roberts

Yeah, the size involved in all this is a little bit mind-boggling. So, it's a programmable computer with sort of like your proprietary software on it, embedded on a chip?

Marissa Hummon

Yes, and proprietary software being — I think that's probably the wrong term for us. I think what we have done is build a platform on top of NVIDIA's tools. So, we incorporate all of the NVIDIA tools that allow you to utilize the GPU part of that chip efficiently. And we've just made it really easy for somebody else to build an application, manage that application, make sure it's secure, make sure the data is secure. Because all of those building blocks, the things that you were mentioning at the beginning — this device can't create a security risk for the grid, and it can't be something that the utility has to worry about servicing at a hardware level over a long period of time.

And so, we took all of those requirements and turned them into a platform that is easy to embed in a meter, a transformer, or a switch on the system.

David Roberts

Mm. So, the idea here is you will sell these chips to entities that will then program them to do specific things.

Marissa Hummon

Yeah, your use of the word programming is very similar to how we would think about an IoT system. Right. So, this idea that you could take a sensor, you could program it to look for, maybe it's a temperature sensor, and you say, "Okay, I'm going to take temperature sensor readings continually and every one hour, I want you to send me the average for the last hour." That's a program. And this is much closer to your computer. So, you have an operating system, you have some libraries and services, and then you have applications that maybe you wrote your own applications, but maybe somebody else wrote an application and said, "Hey, if you run this, you'll get this really cool thing out of it."

David Roberts

So, the analogy, or maybe it's not even an analogy, is you would sell these to people who would then put their own apps on them, basically? Apps to do specific things. And so when you say it can be embedded in any electronic device, does that mean any "any"? What is the class of devices you're targeting? It can't just be all things that are electronic.

Marissa Hummon

So, the class of devices for the electricity system that we target are ones that are measuring properties of the electricity system. The meter is measuring the voltage and current at the house or the building premise. A transformer also measures voltage and current, and then it has additional things that it's trying to control for. We're suitable for anything that is making a measurement on the grid that you would like to turn that measurement into better information.

David Roberts

And just to be clear, because one of the things I wondered about this is just measuring. So, if you're going to do something with the insights you've gained, you can't do anything with this chip. This chip is just measuring. In other words, is that...?

Marissa Hummon

No, actually, the meter is measuring and we're taking the data feed off of that meter and bringing it into the chip. Then, the chip actually computes things like: Does it see if an EV is starting to charge? And if so, was there a degradation in power quality that the utility wants to be aware of? Or has it increased the loading on the transformer near that premise above 50%? And again, the utility might want to start to take action or at least, you know, start to manage for that new event. So, it really is the piece of the meter that is going to understand what those measurements mean.

And because it has local communication and backhaul communication capabilities, it can take that information and either create the right event packet back to the grid operator's room, system operator's room, or maybe it actually does something locally in real time to make the grid more reliable, more secure.

David Roberts

Like if it measures, you know, if it's measuring an EV charging and the voltage is getting too high or something, or something's happening? Can it intervene in that and dial back the voltage? Can it do things, in other words?

Marissa Hummon

Yes, absolutely. It can do things. But what it's allowed to do is part of that programming you were talking about. Like, the utility can decide how it wants the intelligence at the edge of the grid to manage the actual grid.

David Roberts

Right. So, in theory, if a utility wanted it to, it could measure the EV charging happening, determine that something's going wrong, and it could respond with an automated routine that then dials back the amount of power going to the EV. Like, you can program it to take action in response to the things it is measuring.

Marissa Hummon

You could choose to have it do that. And I would say that might be — I think that is something that will be necessary when we have enough EVs on the grid that the utility needs to manage their charging in order to keep infrastructure up and running.

David Roberts

Yeah, I guess what I was just trying to get at is this purely to show what's going on in the grid, or is this also a tool to manage the grid and make the grid do things? That's kind of what I was trying to get at. So, you call this an AI module. You probably decided on that terminology before the current war over AI broke out. And AI sort of has gotten a bit of a — at least in my social media circles — gotten a bit of a bad reputation, mostly associated with large language models confidently telling you false things, that kind of thing.

This, I think, is what people associate AI with now. The other thing that makes people mad about calling everything AI is, and there's a lot of the nerds in my social media circle saying, "Look, what you're doing here is like advanced sensing and measurement and automated routines and analysis and telemetry software. This is just all software. This is all normal stuff. None of this deserves the term AI." So, you get people mad at you from both sides. So, maybe you could just tell us a little bit, like, what do you mean and what do you not mean when you say this thing is an AI module?

Marissa Hummon

So, it's a great question. I think you can kind of divide AI into pre-ChatGPT and post-ChatGPT. AI, at its kind of basic elements, is using data to build a model, not based necessarily on the physics that would explain the phenomena, but just letting the data speak for itself.

And what large language models did was they took that way, way further than we've seen in the past, and they built those huge inference models based on reading the Internet, for lack of a better term. And the computational infrastructure you need to build a really big language model is these graphical processing units, these very specialized transistors that can, in parallel, like in massively parallel, compute across a whole range of things. And so the reason why we call ourselves an AI module is because that module has the capability to do that. We have a CPU and a GPU.

We have that graphical processing unit that allows you to do some really computationally intense modeling. I think this is the part that I think is really interesting and was not available five years ago, is that it's really power and thermally efficient. So, like, you can get 100 or a thousand times more math problems done for the same amount of power delivered on a GPU. And that's important because — well, first of all, inside of a meter, it's a closed space. So, you've got to be really cognizant of how much heat you generate.

David Roberts

Yeah, true.

Marissa Hummon

But also, you don't want to use a lot of excess power to do something if you don't need to.

David Roberts

Yeah, what is the power draw on this relative to a normal NVIDIA chip? Like, it's also microscopic. It seems like it couldn't be that much, but I guess it adds up.

Marissa Hummon

It's actually really slim. So, the off-the-shelf version is in that kind of 10 to 15 watt range. Probably peaks out at 20 watts. We've pulled that back to right around 5 or 6 watts is what we're aiming for. And that is mostly through, like how we actually handle the operation of the computer and then a little bit of how we handle the data going into it.

David Roberts

And so, that is technology, basically, that was not around five years ago, like making things this small and this power-thrifty.

Marissa Hummon

Yes, and the credit goes to NVIDIA for this, not Utilidata. We just happened to pick the right base technology.

David Roberts

Yeah, they sort of really grabbed the AI chip thing a few years ago and kind of ran with it. And now they own the world. This is kind of my — and just tell me if this sounds right to you — this is the way I've tried to conceptualize AI: it takes a bunch of data, finds patterns in the data, uses the patterns to sort of build a model of how the data works, and then uses the model to predict the future. Predict what will happen next.

Marissa Hummon

Correct, yes.

David Roberts

And so in this case, what is the raw data?

Marissa Hummon

So, the raw data that you have at the edge of the grid is the voltage measurements and the current measurements, and it's across any of the legs that are being measured. Most of the houses in the United States have a split phase. So, it'll measure the voltage and current on all of those pieces that are coming into the house. Upstream, you'll get that full three-phase measurement. The thing about the digitized voltage and current data is that it resolves the waveform at a really high level of resolution. So, we have about 32,000 measurements per second.

And at that sampling rate, you can see things about the grid — if you analyze it correctly — that you wouldn't be able to see if you needed to bring that data back to a data center. Right. So, like, to get that kind of data back from the edge of the grid would require a massive pipeline.

David Roberts

Right. It's a lot of data, and you have to send it back to the cloud and then send it back to the meter. Presumably, that lag is too long; it will no longer matter by the time it gets back.

Marissa Hummon

And too expensive, frankly. So, having the compute right there allows us to extract things from that waveform data that we haven't been able to do in the past. So, we can see specific harmonics in the power quality that will tell the utility, it's an indicator of when other equipment is going to break down sooner. We can actually see a transformer's insulation is starting to fail. We can see things like tree branches rubbing against a line or when a power line starts to become a risk.

David Roberts

So, when you say you see tree branches rubbing on a line, what you see is several hundred thousand data points about current and voltage. And the AI is looking at those and inferring from that there must be a tree rubbing on a line somewhere.

Marissa Hummon

Yes, and at the beginning of the journey, it will not know that it's a tree branch. It will just know that something is wrong.

David Roberts

Right, right.

Marissa Hummon

And after, you know, after enough data and enough connections, then it will be able to identify that as like, "Oh, that's a tree branch and you should send a truck that can trim trees," as opposed to some other kind of truck.

David Roberts

Well, here's a question. If you're measuring like 32,000 times a second, you're measuring sub-second events, basically. And I wonder, do we have technology that can intervene in sub-second events? Do you know what I mean? To harmonize the three phases, are we capable of doing that, like on a sub-second level?

Marissa Hummon

We are, and we do it right now for transmission lines on a regular basis. It's part of the protection of power flow at the transmission level, and the measurement device there is called a PMU, a phaser measurement unit. That has about the same resolution, but it's looking for very specific faults and events in order to protect the system so the grid can take action that quickly. The other thing that I guess is important about being able to measure at that higher resolution isn't so much about how fast you could take action, but if the event itself is very, very short, but you know that it's forecasting a problem in two minutes or five minutes, you want to be able to capture that very short event that is going to become a problem.

David Roberts

I see. Well, that's sort of my other question, what are you learning from these sub-second events that we couldn't know before?

Marissa Hummon

The first kind of bulk of work is really — you asked me earlier if it's just visibility or if you can take action as well. That first piece of visibility has been an amazing adventure. So, as in, I think there's a lot of things that are happening on the grid that the utility just wasn't aware of. And now that they are, they can manage to that.

David Roberts

What we always hear about the grid is that it's this super finely tuned and balanced machine where, you know, it has to be balanced exactly. You have to be putting on exactly as much as being consumed and keep the wave phase. So, like, it sounds intuitively like it's already dialed down to the sub-second level, you know what I mean? But now you're telling me that there's all this stuff happening out there that grid operators just didn't even know was happening at all.

Marissa Hummon

Yes, and I think the example is that — okay, I'll take my neighborhood as an example. So, this is a 1950s neighborhood. The grid is about 75 years old now. It's above ground. So, it's wires strung between poles. And when they originally built this neighborhood, no one had an air conditioner and no one had an EV charger. I have both. I know all my neighbors have air conditioners, and I think probably 10 or 15% of them have an EV. And when they originally designed the equipment for this neighborhood, they anticipated some level of load growth, but they probably didn't anticipate that level of load growth, at least not uniformly across the whole area.

David Roberts

I mean, in the 1950s, there literally were not consumer devices available that could consume that level of power.

Marissa Hummon

Right. So, their design criteria fit the needs at the time. But now, the utility needs the insights into where those hotspots are. Which transformer is routinely at 75% of its capacity and peaks at 100% of its capacity, and which transformers are not, because those surrounding houses or buildings don't have as high of a load? And so, having that granular information allows the utility to invest in infrastructure upgrades where they know they need it right now and defer the ones that they can defer till later.

David Roberts

I see. Does it allow them to do anything in the moment? Do you know what I mean? Like, they can go build more capacity to handle the higher capacity, obviously. But like, if that one transformer is getting dangerously overloaded, do they have the tools to route power away from it? Do you know what I mean? My sense is that their control over the grid is much more kind of chunky and not quite as sophisticated as people have in their heads, you know what I mean?

Marissa Hummon

Yeah, I think the tools for really fine-tuning power flow, those tools have not been invested in. And frankly, if you were to invest in them, you would want to do it on the basis of where you need them most. But back to your question of, "Hey, could we turn down your EV charger because the voltage is peaking too high or the transformer load is reaching its capacity?" Today, you could do that if you had the right information and you had the right agreements with the customers.

David Roberts

That's what a VPP is, right?

Marissa Hummon

Exactly. But this would be a VPP that would be directed at managing local power flow to alleviate a congestion problem, as opposed to most VPPs, which are like a big supply/demand balance, part of the balance equation.

David Roberts

Right, but presumably, if you had the VPP, you could do either thing with it or both.

Marissa Hummon

Yes, absolutely.

David Roberts

So, let's talk about privacy a little bit, because I feel like now when people hear AI, the first thing they think of is just data mining and all this kind of stuff to like customize ads at you and things like that. So, it sounds like when I threw this out on social media, I'm like, "Oh, we're putting AI at the edge of the grid to gather data." Everybody immediately is like, "Oh, they're going to know when I turn my stove on and when I'm driving my car," and you know, their heads go to privacy invasion. It sounds like these devices could know that stuff, like by measuring current and voltage could be like, "Well, now Dave's turning a stove on."

So how do you think about privacy? Who has access to this data? Does the homeowner have ownership over the data? Who gets the data and is that kind of a little bit downstream of you? Like, what privacy mechanisms are you thinking about and building into the thing?

Marissa Hummon

So first, I'll kind of set the stage. Data privacy and data access rules are state by state, because this is governed at the state regulatory level. But I'll use California as one example because they are probably the most strict on privacy. Their rules kind of mimic what's going on in Europe. And I think the ability to do that kind of analysis at the edge of the grid gives you two things. One is that the data doesn't have to leave your premise. Right. It's on the side of your house. And then I think both the utility and the customer now have a choice as to how that data is used.

Maybe that data goes over Wi-Fi just to your phone, and you can see the information. But maybe the only thing that makes it back to the utility is events that are going to cause a grid reliability issue. And so, if you have that computation infrastructure, you can program that in. Does that make sense?

David Roberts

To your app? To return to our previous analogy, your app can have privacy built into it?

Marissa Hummon

That's right. And basic things like encryption of the data at rest, encryption of it in transit, all of that is built in from a security standpoint. But what you were asking for was, "Who will know what's going on in my house?" And I think that by having a more sophisticated computer at the edge of the grid, you can actually keep that data local if you want to. And you can, you know, your application can have specific permissions from maybe the customer or the utility about where that data goes and how it's used.

David Roberts

You could program your app that way. You could program your app to be invasive and terrible, but basically, like, the app programmers are downstream from you, I guess, is what I'm trying to get at. Like, do you have any influence over them? Are there things you can hard code to prevent them from doing? Because it's just like everybody's very paranoid about this now, about misuse of their data.

Marissa Hummon

Yeah, so what we have built in on the platform side is some basic frameworks for handling different kinds of data: This is PII (personally identifiable information), this is not. And again, the utility could use our platform to grant a particular application access to only non-PII data, or they can grant access to all of it, but what is sent back to the cloud has to be non-PII. And we could check that that data is actually non-PII. Does that make sense? The platform can provide some governance and some oversight.

David Roberts

I want to talk a little bit more about what these insights allow you to do. What do you do with this information? You said you can look for particular transformers that are getting overloaded. You can look for voltage or current flaws or fluctuations that indicate some sort of developing problem. What are some other things? Maybe talk about the EV study just as an example of what you can do with this information.

Marissa Hummon

I think one of the biggest use cases that utilities are looking for more advanced computers at the edge of the grid to handle is distributed resource management. And that's both things that produce power like batteries or solar panels and things that consume power in a variable way. So, you know, your air conditioner has some leeway in exactly when it turns on and your EV charger, you could decide, "Oh, I want to start that at 12:35 am instead of 12:30 am" and what the utility has noticed is that some of those devices, especially devices that push power back onto the grid, like solar, that the local conditions are the most important thing to solve for. And you do need that reaction time to be very fast.

So, you don't want to send the data back up to the cloud for analysis, especially if the analysis could take place locally and not have to worry about it not making it back down. Like, the analysis doesn't make it back to the device in time. So, the utility is looking at this AI compute to manage the coordination of those distributed energy resources in a highly localized and highly real-time way. There still needs to be something that coordinates across locations and over broader areas of time, so the next day or something like that.

But it's that autonomous kind of grid operations that the utility thinks having an intelligent decision-maker and orchestrator will really help them better utilize and better incorporate those resources into their grid.

David Roberts

Well, here's a question: Are distribution grid operators equipped to deal with the amount of information incoming being exponentially increased? Are they equipped to do anything with this data? Because one of the things we discuss here on Volts a lot is a bottom-up grid and distribution service operators like they have in England, just sort of like utilities dedicated to distribution systems that can do more detailed control and management. Because you know, managing them from an ISO a million miles away is... So, are there utilities ready to handle this amount of information?

Marissa Hummon

I think that, like real-time, lots of insights, I actually think that they're probably not. And maybe I should say, I don't know if their system operations room needs to. So, I think what happened or is happening on the grid is that the amount of change at the edge of the grid, new types of loads, new types of resources, that has evolved much faster. And if there was a technology that could manage that, that was complementary to, like, the system operations, the coordination of generators and loads, the coordination of the substations, I think that's the system where we're trying to get to.

And I think it's complementary to what the utility's toolbox is today. This is adding a new layer of information and controls, and hopefully, the information that comes back into the system control room is fairly sparse in terms of really only sending back the things that the system operator needs to know in order to run the whole grid. Does that make sense?

David Roberts

In other words, these local problems will be sort of diagnosed and solved locally without the utility having to hear about it at all in most cases. Like these sort of micro, little micro events, micro corrections.

Marissa Hummon

I think we might be like a couple of months, maybe a year away from that. But, yeah, that is where we're going.

David Roberts

But the idea is that eventually, the grid edge will have enough intelligence and computing power on it that it will be sort of continuously diagnosing and smoothing out these micro-fluctuations at the edge of the grid. And you're not going to need some central person pulling levers, basically. It's going to be automated; this is the shorter way of saying all that.

Marissa Hummon

Yes, I mean, imagine it's very analogous to your Internet service, which is managed by routers and distribution devices for all of those packets. And those packets have a little bit different quality than electricity. But the concept is the same, that there is automated management of the system.

David Roberts

One of the things I think is difficult for people to wrap their heads around is, I think people have it in their heads that we already have something like this. You know what I mean? I think people have it in their heads that the grid is more sophisticated than it is. But it is a little wild to me as I learn more about the grid, how kind of analog it remains even in 2025. Like, how kind of crude the information is and how much of it still involves, like, making phone calls to people and asking them to turn things off.

So, this is just all part of the march toward digitization and automation. So, you've got a meter company that is building these into its meters now? And you've got those meters installed in some numbers. What have you learned from actual field deployment of these equipped meters?

Marissa Hummon

Well, I think the first thing we learned is that you can have an AI meter. So, you know, meters traditionally are designed to accurately measure how much electricity a premise is using and then to bill that customer accurately. Right. So that is the primary purpose of it. And I think there was not skepticism, but hesitance to turn that device into multipurpose: This is not just for billing, but this is for billing and for grid operations. And so I think the first major achievement is just getting, frankly, it was us and Aclara, NVIDIA, the utility, to all work together to make sure that that specification was going to meet everybody's needs and then to build it.

David Roberts

Because it's a very basic building block for utilities. I mean, it is sort of the foundation of everything they do. So, you can understand why they're nervous about messing with it.

Marissa Hummon

That's right. And we're working on putting that meter through UL right now. I should say Claire is doing that, and we will be deploying it this summer. The devices that we have in the field today, where we've been kind of getting our insights, are actually in a meter collar or a meter adapter, which is basically a device that you can put between the meter and the socket. It has its own measurement device. It has its own communications network. And that's where we've been embedding Karman as a way to test or trial. And that's because we didn't want to get in the middle of the billing system right away.

David Roberts

Why not just stick with that? Because you could put a collar on any meter. You know, you could just go stick your collars on all the meters in the world. Now, why build a custom meter?

Marissa Hummon

So, when you roll out meters with Karman in them, it is a little bit cheaper than putting — actually, it's probably a lot cheaper than putting a collar behind it. And then it's an extra piece of equipment that the utility wants to not worry about. So, I think that it's a great way for utilities to get comfortable with the technology, to understand how they want to use it, and to write their specification into their next meter RFP. The meter collar is a good way to do that. And then, I think it makes a ton of sense to not repeat the metrology, not repeat the communication network, and instead just add the right computer into the meter.

David Roberts

Yeah, I mean, there is a certain logic to putting all this stuff in the meter. Like, it is the one piece of equipment that literally every building has; all the electricity goes through it. Like, you know, it is a pretty obvious gateway for putting a lot of intelligence in. Although, I'm sure utility executives everywhere are listening to this and cringing in fear. But let's talk about, I mean, one of the things that actually brought this all to my attention is the sort of application of this same model. So the model here is that on the distribution grid, you've got all these little micro-events and flaws and fluctuations that could be smoothed out to make a more efficient grid that would do the same amount of work with less energy input, basically.

And your idea that they originally emailed me about is that the same basic structural problem is replicated in data centers. Tell me a little bit what you mean by that.

Marissa Hummon

So, the design for power delivery in a data center is very akin to how the distribution system is designed. They are looking for reliability and risk management. The traditional data center, especially when we weren't power constrained for them, delivered 2x what they anticipated using. They would have a full failover. If they lost one power source, they could fall over entirely to another power source.

David Roberts

And when you say 2x, you mean the pipe. Basically, the electricity capacity reaching that building is 2x what they typically use on a day-to-day basis.

Marissa Hummon

Yeah, so if it was a 50-megawatt data center, 100 megawatts would be delivered. But then, and actually, I'm not even sure what a 50-megawatt data center means exactly. Because in addition to that kind of like site-level reliability, there's also over-provisioning of power for every server rack row. And that is because of the anticipation of power spikes at full capacity utilization of the servers.

David Roberts

So basically, yet another system — I end up discussing these on almost every Volts episode, it seems — yet another system that's basically built to the peak, built to satisfy the peak. In this case, the peak being demand for compute which has these weird spikes. Not really — I mean maybe I'm wrong about this, but you know, when you look at like electricity demand at a distribution area, there's variation, but there's patterns day to day, month to month, it's semi-predictable. Is that true in data centers? Like, is there any rhyme or reason to the spikes in demand for data centers or is it just like anything could happen anytime?

Marissa Hummon

No, no, I think there is, there are patterns and I think there are qualities you can predict. And we've started to do a little bit of that with a data center kind of POC. And you're right that when we build power delivery for that very worst-case scenario, we're leaving a lot of opportunity on the table, basically an opportunity to use that excess power for additional computation. What I think the parallel that we've seen between the distribution system and data centers is that it is the lack of visibility and the lack of controls that are preventing somebody from changing the way their data center could be operated.

Now, there's probably also like a bunch of resistance to change and fear of risk. But when you get into kind of that server level or rack level architecture, the crossover from like power delivery to power utilization is not well coordinated. So, the power that comes into the power distribution unit and then the way that power is distributed amongst the servers, those are not well coordinated and they could be. And we could save quite a bit of power that is wasted right now.

David Roberts

So, the long and short of this is a lot of the power that is going to current data centers is being wasted by inefficient distribution. Basically, maybe the way to think of it is like inside the data center there is another distribution system, another electrical distribution system that basically replicates the flaws of the larger distribution system that it's embedded in and thus could have the same types of solutions, basically.

Marissa Hummon

Absolutely, yeah.

David Roberts

And so the idea is you would put these AI-enabled chips all throughout the data center and it would just read the power demands of the servers more closely, distribute it more accurately, like what exactly would it be doing in the data center?

Marissa Hummon

So, the first thing is, you do want to pair the measurement of what's going on, so that is the measurement of power flow, with the compute. Because you do want to immediately take that high-resolution information, turn it into a forecast. And that's that AI model building that we can do on chip that we can't do on a regular computer. So, we'll build that model, you know, the inference model of like, "What's coming in the next 2 seconds, 5 seconds, 5 minutes?" And then yes, connecting that up to the control system to change the way the data center is operating in order to get more compute for the same amount of power delivered to the site.

And that's kind of the metric that is used for efficiency, like site delivered power and the amount of compute you could get out of that.

David Roberts

Right. So, give us some sense of the magnitude here. You've got your 50-megawatt data center, 100-megawatt pipe coming to it. Could you, through your clever use of AI, cut that down to like a 75-megawatt pipe, could you cut it down to like a 51-megawatt pipe? You know what I mean? How efficient is efficient? How much energy could we save from these data centers?

Marissa Hummon

We're estimating that we could increase compute utilization at the rack level by about 30%.

David Roberts

Interesting. That's big. That's a big chunk.

Marissa Hummon

It's a big jump. And that one is very low risk. Taking away the redundancy of power delivery is a different calculation. And I think that one, visibility and forecasting come into that, but we're not currently trying to tackle that. I've seen some universities put together models and demonstrations that they think that that could also come down by about what you were saying, like 25%. So instead of delivering 100 megawatts, they could deliver 75. And then there's basically a risk calculation going on about how you manage the compute load to that new failover capacity.

David Roberts

Right. But basically, if your system is smarter, you're going to end up needing less redundancy. It's sort of the take-home there. And is that like, are you doing that in a data center currently? Like, are you getting data back about performance? Like, are you seeing this at work in any data centers yet?

Marissa Hummon

So, we have a proof of concept running on our own NVIDIA servers that are the rack type that would go in a data center. But we're not fully deployed in a data center and that probably won't happen until 2026. We're working through the research phase. This is very new compared to where our product that's going out on the grid is fully commercialized, productized, ready today.

David Roberts

Right. Let me ask you another, what is probably another dumb and naive question about AI. So, say I have this AI and I put it to work in this data center. It is learning, as you say, so like its performance will improve over time as it learns the details of how the servers work and how the power is distributed, etc. And I've just always wondered about an AI, will it get better and better and better forever, amen? Is there some asymptote we're reaching of like perfect reliability that it can't get any better than? Or is that just like different from system to system?

You know what I mean? This whole thing about their learning, is there an upper bound on the learning or how much better can they get? Do they just keep getting better forever or is there like a ceiling?

Marissa Hummon

So, there are two, in my mind, factors that go into that. One is the quality of the data you're training on. So, we'll take the data center analogy. Let's say this is deployed on the power flow, the distribution of power inside of a data center. That's a fairly limited set of data. I mean, you're probably going to see the full breadth of power flow characteristics in a three to six-month timeframe. And so, that will probably limit how advanced that piece can happen. And then, the other side of it is, what's the size of the computation that can put that model together?

And this is where I think we had that kind of big breakthrough in language models because we really increased the amount of compute that we could give it.

David Roberts

So, there's the data and the compute. Would there be any way? Obviously, the chip in the data center is learning about that data center that it's in. But presumably, there would be something like shared learning across data centers, patterns that hold across data centers that could inform the operation in a particular data center. Do these things have ways of sharing their learning and knowledge?

Marissa Hummon

In theory, absolutely. And we can definitely transfer learnings without transferring private information. And I think we'll see how that plays out in data centers because I think —

David Roberts

I'm sure they're very paranoid about any information leaving the data center.

Marissa Hummon

Yeah, I think any sort of operational devices are entirely isolated inside of the data center. They're not connected to the internet.

David Roberts

But maybe to take it back out of the data center, just in normal distribution systems, like presumably if you have these AIs, you know, they're learning all the granular details of like Dubuque and then, you know, Tacoma and etcetera, there's going to be commonalities and patterns. Are those able to share or are distribution utilities also paranoid about information?

Marissa Hummon

Yeah. So, today our load forecasting algorithm builds the model on the device, shares model parameters to the cloud. So, that's very obscured from the actual data that it used to get those model parameters. And we use those model parameters across devices to build a better load forecasting model, and then we push that model back out to the edge. And that sequence is a way to share insights and share learnings without sharing the actual raw data.

David Roberts

And my other final, dumb, naive question about AI is, you know, everybody's favorite sci-fi vision of AI is, it eventually AI no longer needs you running it because it has in a sense learned enough to start self-improving. Is that possible here? I wonder, at some point, is the level of data and information they're getting going to be so granular and so complex and so voluminous that it's going to be a little bit of a black box to us that we're just going to have to trust the insights that come out of it?

And I think that's kind of what makes people nervous. Do you know what I mean? Like, does that apply here, or am I just rambling at you?

Marissa Hummon

I think that concept is really far in the future compared to where we're at today.

David Roberts

I keep hearing podcasts telling me it's like a couple of months away.

Marissa Hummon

Well, I can tell you, on the grid, it's not a couple of months away. There's still a lot of humans and paperwork in the loop, so don't worry there. And really, it comes down to — you put guardrails around what you're allowing, what are the decision parameters that this device has to stay within? So, as humans, we have full control over how we see this implemented.

David Roberts

For now, okay, final question. You've built this Grid Edge Advisory Board. I spend so much time on Volts on this grid edge stuff. Like to me, it's just the most exciting thing going on, the coolest thing going on. And I'm just sort of curious — it's another difficult question to answer — but I'm just sort of curious like what the vibe is among grid edge people. Like, I guess one question is because, as you notice, I keep raising privacy because I did this pod with Cory Doctorow about, I don't know if you followed his work about enshittification of tech platforms. Basically, about the way tech platforms and modern life kind of capture customers by promising them all sorts of great service and then once they're captured, start degrading the service to the users in favor of serving advertisers or corporate users.

And then, you know, the whole nine yards. So, like I've become nervous about tech platforms and I've become very nervous about them — you know, it's one thing if it traps you on a social media site, but it's another thing when these things are like controlling your home and your hot water heater and your furnace. It seems to me like the possible consequences of platform capture and abuse are much worse when we get into this area. And I just want someone to tell me that the people who are coming together and talking about this stuff are appropriately sensitive to that danger and the possibility of consumer blowback if they're not sufficiently sensitive to it.

Marissa Hummon

So, these are utilities and their risk aversion is very high, and they're regulated.

David Roberts

It's also true.

Marissa Hummon

And they can't sell your data to an advertiser. They are very limited in what they're allowed to do with your data in order to serve you better, you know, by either making the grid more efficient or providing you directly with services. But there's a huge amount of governance over the utility and then us as vendors trying to meet that governance requirements. And then when we get those utility execs in a room to talk about AI on the grid, of course, that is top of mind for them is the security, safety. And then you know, obviously, like this has to pose no threat to the reliability of this system.

So, we spend a lot of time talking about that. And the utilities that are there, they're there because they see the possibility of serving their customers better if they had better tools.

David Roberts

This is the. My other question is about the Grid Edge Advisory Board. Everybody's sort of on this, has mixed feelings about utilities. Everybody involved in this area has mixed feelings about utilities. I'm just sort of curious, like in your experience, when you're talking to utilities about the general subject of just sort of like grid edge computing, grid edge energy, grid edge energy management, all this stuff. My sense, at least in the early years, is that utilities were very slow, very averse, very... they didn't like distributed energy, it takes away from their revenue model, et cetera, et cetera.

Are they catching on to the sort of scale of what's possible? Do they view it with dread or are some of them actually like excited about doing cool stuff with it?

Marissa Hummon

I agree with you that two years ago, if you'd asked me that question, I would have said that the utility still has a lot of questions and needs a lot of convincing. If you walked the DTEC floor this year, that's the trade show. The idea that AI is inevitably going to be part of grid operations was highly apparent. I think it's not so much as to whether or not they believe it's the right technology for the edge of the grid or believe that it's going to help them. I think they've concluded that it will and now they're working on all of those things, governance and implementation and execution of that strategy, and obviously coming up with the right benefit-cost analysis to justify the investment in that technology.

I think the other shift that happened is distributed resources were initially seen as, at least the ones that produced power, as maybe a threat to the utility. But I think as that adoption of that has occurred, it has also become apparent that the grid is essential. Like, even if you want to be off-grid, you still want to be connected to the grid. The grid is the backbone of the country.

David Roberts

Well, these entities were on a self-identified death spiral just a few years ago. And now we're like, "Guess what, not only are you not dying, you're like the hot center of literally everything in the world now." Like, "You're the hot molten core of tech advancement in the world," which is like vertiginous and odd in a different way, I imagine, for utilities. What a decade for utilities, right?

Marissa Hummon

Absolutely.

David Roberts

So, they're clued in on this and active. Yeah, I've just been wondering about that. Also, here's a final question, which maybe is outside of your area of expertise, but similarly about big institutions. One of my theories is sort of that the hyperscalers, these big data center people, are just going to be a forcing agent to drive all kinds of change. That has been sort of in the works for a while, but now all of a sudden, like there's big moneyed corporate people here demanding this stuff. And as I've said many times on this pod, the logic to me is they need energy fast.

That is their number one thing now, right? It used to be like energy, siting, water, whatever. Now it's just like energy, energy, energy. And it's just inexorable in the logic of the power system that the slowest way to get new power is a nuclear plant. You know, the next slowest is gas, then wind, then solar. But if you really want it fast, the fastest way to get it is by exploiting the spare unused capacity that we already have lying around everywhere. And that is the kind of thing that you're doing on the grid edge. I'm sort of curious, I've been wondering, are the hyperscalers going to eventually realize that, eventually realize that the fastest way they can get power is through the VPP kind of stuff? And your conversations with them, are you getting a sense of that?

Marissa Hummon

I think the answer is definitely yes. There will come a point where they have either to wait a long time for a new interconnection or they can take an existing site and get more compute out of it. The investment in the technology to get more compute out of it is going to be pennies compared to what they can actually make on it. And so, I think it's going to be a no-brainer for them. And I really liked your description of the cheapest and fastest capacity is the capacity that is already there and is just not being utilized.

David Roberts

Yeah, I feel like that logic is inexorable and eventually all the hyperscalers are going to show up demanding VPPs and AI-enabled computing at the edge of the grid and all this stuff that I'm so into. Eventually, they're going to realize this is our golden goose here. This is where the most capacity fastest can be found. Fun and exciting stuff, Marissa, thank you for coming on and talking through it. I'm sorry if my questions were dumb. I always feel like I'm asking dumb questions about AI, but I guess probably everybody feels like that.

Marissa Hummon

There are no dumb questions about AI.

David Roberts

All right, thanks for taking the time.

Marissa Hummon

Thank you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

The hype about hydrogen is back with a vengeance, and thus, so is Joe Romm, who just issued a revised and updated version of his 2003 book The Hype About Hydrogen. We discuss the persistent economic and technical hurdles that make widespread hydrogen adoption unrealistic, explain why most applications are better served by direct electrification, and scrutinize the massive investments and motivations behind the current hydrogen push.

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Text transcript:

David Roberts

Hello, everyone. This is Volts for May 14, 2025, "Taming the Hydrogen Hype." I'm your host, David Roberts. The idea that hydrogen might serve as the foundation for a new energy system dates back to the 1800s, long before anyone was worried about climate change, and hydrogen hype has come and gone in cycles and waves ever since. You might recall that George W. Bush took it up in the early 2000s, promising hydrogen cars.

In the last five years, the hype has returned with a vengeance. Governments and private investors are pouring resources into the promise of clean hydrogen. Virtually every major oil and gas company has some kind of hydrogen strategy. The Inflation Reduction Act directed hundreds of billions of dollars in subsidies to it.

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Despite all that, the fundamental problems facing hydrogen as an energy carrier — its low volumetric density, difficulties transporting and storing it, its persistently high costs — have not gone away and have not been solved. That is why hydrogen, though it is quite commonly used as a chemical or industrial feedstock, remains, after a century of hopes and dreams, virtually invisible in the energy system.

One early voice calling foul on the hydrogen hype was famed climate blogger, author, and researcher Joe Romm, who wrote a book in 2003 called The Hype About Hydrogen. Seeing the hype return, Romm has returned to the book, substantially rewriting and expanding it for a revised edition that came out on Earth Day this year. I'm excited to dig into it with him and talk about realistic expectations for hydrogen.

With no further ado, Joe Romm, welcome back to Volts. Thanks for coming.

Joe Romm

Oh, well, thanks for having me back, Dave.

David Roberts

Let's talk hydrogen. First, just tell me, like, what is it that sort of tripped it for you, where you finally said, "I gotta go back and bulk this book up." Why return to this book at this particular moment?

Joe Romm

Well, it's like a vampire. It's hard to kill. 30 years ago, I was helping to oversee the billion-dollar Office of Energy Efficiency and Renewable Energy at the Department of Energy. And one of the things that we did was the hydrogen program and the fuel cell program, and there were some advances at the time, so I was supportive of increasing the budget. As you mentioned, about 10 years later, George Bush gave his famous speech, "That a child born today," you know, "their first car, would run on hydrogen and it would just emit water."

And I think that was like a $1.3 billion program. It was a lot of money at the time. It's sort of like Dr. Evil. But then, I proposed to Island Press that I would do a primer, because it wasn't until I started writing that and talking to people and reading the literature and doing my own calculations that I realized that there were multiple problems that were going to make it unlikely that hydrogen was going to be able to compete with electricity. And the book came out then, as you said, and I gave a lot of talks and wrote papers and then moved on to the rest of my life and all of the other things, including the real solutions.

And 20 years ago, I don't think we would have imagined all of the amazing advances in electric cars, electric batteries, electric heat pumps.

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David Roberts

I would never have allowed myself to be so optimistic. Never.

Joe Romm

Yeah, I mean, I knew when we were at the DOE that eventually — and solar and wind, I should have mentioned, obviously — we knew that those would eventually be able to come down a learning curve. And so today, hydrogen makes less sense than it did 20 years ago, mostly because the competition has gotten so much better and hydrogen hasn't. Then, a year ago, this guy named Neal on LinkedIn wrote a review of my 2004 book and said, "Oh, well, this is a pretty good book. It could have been written almost today. And, you know, this guy was right that, you know, electric cars were going to beat hydrogen cars."

And I read that and I was like, "Oh, well, but it's come back." And before, I was worried about spending a billion or two. Now, as you say, it's hundreds of billions and everywhere in the world.

David Roberts

Yeah, every country. You know, I do these little pods on different countries here and there, just kind of parachuting in, seeing what's going on. Almost all of them, some part of the government is like, "This is going to be our part of the energy transition." You know, like, "This is our niche. We're going to do the hydrogen thing." And I'm like, "Well, everybody's going after that, and nobody's succeeding. Like, why is everybody so excited?"

Joe Romm

And so, yeah, I got motivated to rewrite the book. Originally, I thought I was just going to put an appendix on the end saying, "I told you so." But I ended up rewriting large parts of the book because people started talking about making hydrogen from nuclear power, or they started talking about the e-fuels, where you would take direct air capture CO2 and combine it with hydrogen from electrolyzed water that was made with renewables, and then run it through a Fischer-Tropsch plant and turn it into e-kerosene and run airplanes on it.

David Roberts

We're going to get to that. Joe, quit jumping ahead.

Joe Romm

No, I'm sorry, it's just so. I ended up writing about all these other things too, like direct air capture and carbon capture and storage. So anyway, now the interesting thing is, over the course of the last nine months when I was writing the book, a lot of sobering stuff came out. And it became clear that some of the problems that I and others had identified long ago were not just challenges, but remained quite unsolved and might be intractable, not the least of which is, "Can you make green hydrogen from renewables affordably?" And because of the events of the supply chain problem and inflation — originally, a lot of people had predicted that electrolyzers, right, electrolyzers are the key component.

You run electricity into an electrolyzer and it will split water back into oxygen and hydrogen. And I think people, maybe when they were in high school chemistry or physics, probably placed two electrodes in water and noticed that at each end of them bubbled up: one oxygen, one hydrogen. And if you captured the hydrogen, you could ignite it. But they're not terribly efficient.

David Roberts

I want to start back a few steps. First, let's start by talking about what hydrogen is used for today. What is the current hydrogen market? How much clean hydrogen would it take to replace just what we're doing now? You know, then we can go on to expanded uses. But let's just talk about sort of like, what is the situation with hydrogen now?

Joe Romm

Excellent. Yes, I do get ahead of myself. So, hydrogen, there's about 100 million tons of hydrogen used globally. The main use, number one use, I think, is making ammonia for ammonia fertilizer. Ammonia is NH3, one nitrogen, three hydrogen. So we have to do nitrogen fixation, that's what fertilizers are a big part of. So that's one of the biggest uses. The other big use is sticking hydrogen onto petrochemicals. When you're refining oil, if you add hydrogen, you can make the gasoline cleaner because hydrogen burns cleanly. And I should say, if you want to get to very basics, hydrocarbons: coal, oil, and gas, they're made up of hydrogen and carbon.

When you burn the carbon, it oxidizes, gives off heat, and turns into CO2, a greenhouse gas. And when you burn the hydrogen, it turns into water and gives off heat. So it's the clean part of the combustion. So we use the hydrogen sometimes to make gasoline cleaner, reformulated gasoline, and hydrogenation of petroleum. And we also use it for other things like methanol.

David Roberts

So, most of those are chemical feedstocks, basically, like using it as a chemical additive in an industrial process. In terms of the things people talk about doing with it — so this is a fundamental distinction that we need to make upfront, the two separate uses of hydrogen. One is as an element in an industrial process, as a feedstock, a raw material.

And the other is as an energy carrier, as a way of basically taking energy from one place to another. All the excitement is around hydrogen as an energy carrier. But today, in the world, is hydrogen used that way in any substantial way anywhere?

Joe Romm

No. And in fact, while I was doing the book in the fall, the International Energy Agency came out and said, and there's a quote I use in the book, "That under 0.1% of global hydrogen is used for these advanced purposes." So, yes, it is a feedstock. And in that sense, hydrogen is actually not a solution to climate change. It's currently a problem. Virtually all hydrogen is made from fossil fuels, principally natural gas, which is mostly methane, which is to say one carbon, CH4, one carbon and four hydrogens. And so that's responsible for 2% of global greenhouse gas emissions right now.

David Roberts

Right. So, today, hydrogen is made from fossil fuels and thus is responsible for a lot of greenhouse gases in its production. So, give us some sense of the scale of just scaling up clean hydrogen enough to replace that hydrogen, the raw material hydrogen.

Joe Romm

Absolutely. It's quite a stunning number. If you were to replace just the 100 million tons of hydrogen used as a chemical feedstock around the world with green hydrogen, which is to say, we take renewables, we run it through an electrolyzer, we split water, we end up with pollution-free hydrogen. That would require the equivalent in renewable electricity of the entire US electric grid, which is to say everything, nuclear plants, coal, oil, plus all the renewables. It's funny because someone read a draft of that book, said, "No, you made a mistake, you must mean it's just the renewables on the US grid."

No, no, it's the whole grid. So, yes, and this is one of the points I make in the book: It would be a mammoth undertaking, I think we could agree, just to do that.

David Roberts

Yes, yes. And that has to be done. I mean, sooner or later that has to be done. So there's reason — separate from all these energy carrier dreams — there's reasons to work on electrolyzing and try to drive down the cost, etcetera, because we are going to need a lot of green hydrogen just to replace dirty hydrogen in current uses.

Joe Romm

Right. And I'm going to leap on your phrase "sooner or later" because one of the points of the book, one of the points, hopefully in this conversation, is that some things are harder and more expensive to do and there tend to be niche things and we do have to do them sooner or later. But there's a lot of "sooner" stuff that is easier, which is, and this is a key point in the book, we don't have an infinite supply of renewable energy.

David Roberts

Not yet.

Joe Romm

And so, using renewable energy to make hydrogen and solve a hydrogen problem is a lot less efficient than simply using the renewable energy directly to replace fossil fuels on the grid.

David Roberts

You mean efficient in terms of greenhouse gas reductions?

Joe Romm

In terms of efficiency and cost, because you don't have to buy the electrolyzer and you don't have to throw away the 30 plus percent of energy you have to do for the electrolysis. So, if I said to you, "I want to reduce 100 million tons of CO2 cost effectively," what would be the best way to use my money and my renewables? My thing would be, you should replace fossil fuel power plants and then you should also use renewable electricity directly to power electric vehicles that replace gasoline cars or to power electric heat pumps to replace gas boilers.

Those would get you a lot more CO2 for a lot less money.

David Roberts

Well, one of the responses might be, and this is sort of kind of been my take on hydrogen for a while, which is like, "You know, why not throw a few billion at it while we're doing everything else, if it makes people happy, if it brings new constituencies along?" But there are real questions about opportunity costs. There are real questions, like if you're throwing money at that, that's money you're not throwing at something else. And so there are trade-offs we have to consider.

Joe Romm

Could I comment on that? So, there are two points. One is the opportunity cost. And when you say "throw billions," as you know, I ran a billion-dollar research, development, and demonstration program. So, I'm a very big fan of that and I agree: Let's do R&D. You know, the Inflation Reduction Act is deployment money. That's the key thing. The money that we're talking about in the world that totals hundreds of billions of dollars is "We're gonna build some steel plants that run on green hydrogen, we're going to build pipelines." "We're gonna try to make hydrogen in Namibia and somehow ship it up to Germany." Which Bloomberg did a story on and the German Government still seriously talks about.

So, you know, I don't want to say it's crazy stuff, but it's just way disproportionate to the plausibility. Let's solve some of the basic problems. And I'll throw out one more thing which can't be avoided. It's something we didn't know 20 years ago, which is when this great interest in hydrogen became clear to everyone. Several years ago, scientists used their better understanding of atmospheric chemistry to ask the question, "What is the impact of hydrogen leaks and emissions on the warming of the planet?" Because although hydrogen is not a direct greenhouse gas, it is an indirect greenhouse gas.

Because releasing hydrogen into the atmosphere changes the chemistry. And the number one thing it does is increase the lifetime and therefore duration and quantity of methane in the atmosphere. So, the global warming potential of hydrogen over a 20-year period is around 35 times that of CO2. And methane is already 80 times CO2. That's why we're all obsessed with these short-lived climate forcers I'm sure you've talked about.

David Roberts

So, hydrogen is in that bucket of short-lived climate forcers? Because the promise, you know, around methane too, the promise is like as we're working on the long-term gases, CO2, we can avert some short-term warming quickly by reducing these short-term forcing gases like methane. And so, hydrogen is one of those. So, it's again not innocent to build a hydrogen — it's not just some idle sort of like demonstration exercise. You are risking making climate change worse. You're risking, you know, exacerbating climate change.

Joe Romm

Especially because hydrogen is the leakiest gas known to humankind. It's tiny, it is very hard to detect those leaks. And we already see significant leaks in the natural gas system of methane, which has, as you know, and I'm sure you've done pods on them, you know, the leakage of methane because of its huge global warming potential over 20 years, changes the environmental benefit of methane immensely. And so, if you imagine now let's throw in a leakier gas and imagine scaling that up in volume. It's just like, well then you have to ask, is the benefit really that overwhelming to justify this kind of risk?

And the answer is no.

David Roberts

Yeah, it's amazing how much of the hydrogen dialogue these days is like tons of short-term risks and costs, all with this sort of Valhalla in the far distance that you can barely see shimmering in the distance. It's worth being suspicious about. So before we talk about the various ways of making hydrogen, which I want to get to, let's just talk about what you do when you have it. You have some hydrogen. Why is it so difficult to use and manage as an energy carrier? Let's just talk about some of the intrinsic qualities of hydrogen itself that make it difficult for that purpose.

Joe Romm

Well, sometimes they say it's got the highest energy density per unit weight, which is true, but because it's so diffuse, you have to add a lot of weight to move it around, right? If you put them in, you know, 10,000 pounds per square inch canisters, right. Most of what you're lugging around is the canister.

David Roberts

You can't, this is crucial, you can't transport it in large quantities as is because it's so diffuse, because it's gaseous. So, you have to compress it before you transport it and there is additional energy and additional weight.

Joe Romm

Or, you have to liquefy it, which is even more popular because then it gets to about half the density of water. But unfortunately, liquefying hydrogen takes you down to about below negative 400 Fahrenheit, and it uses about 40% of the energy in the hydrogen simply to liquefy it. So, you lose massive amounts of efficiency. And you get this other problem, which is it's hard to keep at that temperature. If you, for instance, want to truck it around or put it in a truck as a fuel, it's going to slosh around and it will start to evaporate and it will create internal pressure, which you have to get rid of, generally by venting.

So, that boil-off and venting problem: not solved yet.

David Roberts

And that's venting hydrogen into the atmosphere.

Joe Romm

And we're talking a lot. So, if you wanted to have these trucks, lots of liquid hydrogen trucks, as some people propose to fuel whatever it is you want, ships, planes, long-distance trucks, you're going to be venting hydrogen into the air and it could be 10% of the hydrogen that you have. It's not a trivial matter.

David Roberts

What about pipelines? Is that why everybody's converging on pipelines? What is the energetic requirement for pipeline transport?

Joe Romm

Pipelines are by far the best. That is the desired end state. And you need special pipelines because hydrogen will, in fact, embrittle typical steel. So, you've got to use specially coated pipelines. You cannot run this through a natural gas pipeline.

David Roberts

So, let's put an exclamation point on that. You cannot use existing pipes for this. It would entail building a new set of pipes and pipelines.

Joe Romm

Yes, and the other key issue here, and this is where you move into the realm — and a lot of what I focus on in the book isn't so much "Is something theoretically doable?" It's "Is it practical and scalable in the real world?" Because in order to justify the financing of a pipeline, you need a long-term offtake agreement. You need a long-term guarantee of a supply at a fixed price. And here's your problem, and this is the famous chicken and egg problem which I wrote about 20 years ago and it affects many other industries.

But you aren't going to get someone to make the investment in the hydrogen production and pipeline side, which could cost tens of billions, until someone has shown that they have a successful hydrogen-using technology that's going to compete in the marketplace and can make a guaranteed offtake agreement for 10 or more years. On the other hand, no one's going to build the factories to build this, let's say, hydrogen-consuming vehicle, a fuel cell vehicle, unless they know there's a guaranteed producer of low carbon, preferably green hydrogen, at a low cost. So someone has to gamble, someone has to take a large gamble.

David Roberts

Our governments have to come in with sort of like brute force money, which appears to be what a lot of them are doing. Like a lot of governments are trying to get past precisely this chicken and egg problem just by dumping hundreds of millions of dollars on these things to get them started.

Joe Romm

And unfortunately for governments, these things are expensive and they have taxpayers and they can't make any guarantees on either end. They can't guarantee that if you build this new steel plant for several billion dollars, that somebody could give green hydrogen at a price that anybody would be interested in. And you can't tell the green hydrogen producers, "I can guarantee you 10 years of sales needed to justify this." And so the result has been, for instance, in this country, after 20 years of trying, there are about 56 hydrogen fueling stations for cars, one of which is in Hawaii and the rest are in California.

And because they were promised a lot more sales in order to justify the sales of hydrogen — in other words, the utilization rate of these fueling stations was over-promised. No one built all those cars. And that's why in the last few years, the price of hydrogen in the state tripled, making people, as you can imagine, the owners of these cars very worried because their cars now would cost 10 times as much to fuel.

David Roberts

I don't know. I feel like if you bought a hydrogen car, your life has been nothing but regrets ever since for all kinds of reasons.

Joe Romm

Well, absolutely.

David Roberts

Well, let's talk about, I mean, what people really want to hear here, let's get nuts and bolts about the various uses of hydrogen and let's try to do this relatively quickly because there's a lot to go through. So, I'm going to start at the kind of the dumb end: Cars, I think, are the dumbest. And I know, like your original version of this book, spent a lot of time on the car question because it was a live question back then.

Joe Romm

Still is.

David Roberts

Ah, is it?

Joe Romm

There are still major auto companies introducing cars into the US market that are hydro. I'm not going to say — you and I think it's ridiculous, but it's still happening. It's not the big delusion it used to be, but it is still happening.

David Roberts

I feel like we don't even need to spend much time on why hydrogen cars are delusional. Just like you have to build a giant infrastructure, you have to hyper-pressurize the hydrogen, which makes it dangerous and difficult to move around and dangerous in the car. On and on and on. And the evidence that that's never going to happen is just look, they tried and tried and it didn't happen. It's not happening. EVs are stomping all over the place.

Joe Romm

A thousand to one sales.

David Roberts

A thousand to one sales. So, I think cars we can check off.

Joe Romm

Yes.

David Roberts

Next, dumbest is heating buildings, mixing hydrogen in with natural gas to moderately lower the carbon intensity of the natural gas in pipelines that are used for heating and cooling buildings. I think it was Michael Liebreich who compared this to pouring champagne in your municipal water supply. But this is, to me, if anything, dumber than cars.

Joe Romm

I was going to say it's not fair to —

David Roberts

But alive. More alive than the cars, as far as I can tell. Like, they're actually doing large-scale tests of this, I think, in the UK.

Joe Romm

Right. And the reason it's more alive is because it's more straightforward and because it's an existential issue if you are a gas distributor. Because if the future is, in fact, all carbon-free electricity producing, heating people's homes with better and better electric heat pumps, then where's the growth market, let alone the saving the existing market for the natural gas distribution system? But there are now, as I'm sure you may know, literally 50 studies, at least 50 published studies on why this idea makes no sense.

David Roberts

Yeah, it's funny. Like every new study that comes out, researchers are getting, you can sort of see them losing their patience. The conclusions get more strident and unequivocal. Every time I see a new study, they're like, "People, this is dumb! We told you already."

Joe Romm

And let's be clear why, among other things, already commented on the point, you can blend a little bit of hydrogen in with natural gas in an existing pipeline. Exactly how much? Not quite yet proven at scale, it is viewed that 20% is max. But people start to worry when you get above 10%.

David Roberts

And that's about the embrittlement of the steel?

Joe Romm

And of course, the problem is that hydrogen is so diffuse and the methane has four hydrogens and a carbon. So, the extra energy of throwing this diffuse hydrogen in there is even less a percentage than whatever the percentage of hydrogen is. So, you might have a 20% hydrogen blend, but it only might be, let's say, 70% of the energy content in the whole thing. And what's the point? Because you're still committing to natural gas, right? It's a microscopic benefit for a huge amount of money and a headache.

David Roberts

And if you think that replacing all existing chemical uses of hydrogen is tough, imagine trying to produce enough clean hydrogen to heat and cool the world's buildings. Like, I don't even know how to do that math. But suffice it to say, it is exponentially beyond what we can imagine producing. So, it's really just, I mean, I hesitate to be, you know, strident like this, but specifically, hydrogen for heating seems to me just a pure natural gas propaganda play. They're just completely fooling and manipulating governments about this. There's no chance this is going to work or matter.

Joe Romm

And let's remember, by the way, that electric heat pumps don't make heat the old-fashioned electrification way of running electricity through a resistor, right? They actually have a net gain in so-called coefficients of performance (COP) because they use the electricity to move heat from outside to inside.

David Roberts

And so, if you're combusting a fuel, you are physically, mathematically getting less energy out of the fuel than is contained in the fuel. You can't get a COP above one, right? Physically, whereas every heat pump has a COP above one.

Joe Romm

And people are heading towards, as you know, COPs of three, four, and now even five, right? Which is to say, you put a kilowatt hour of electricity in and you get four units of kilowatt hours of heat back. So, you know, this is, I don't want to say it's a no-brainer because there are issues involved. And that's why, by the way, there's a massive campaign to spread bad information about heat pumps throughout the world, and particularly in Europe. But yes, we know what the future is. It's not always the case that we know what the medium and long-term winner is, but we do here.

David Roberts

Right, okay. So, let's go to more challenging — those, I think, are just dumb and dismissible, cars and heating. Silly. Now, let's talk about e-fuels, which is more complicated.

Joe Romm

Well, we should say there's a lot of uses for heating. There's not just heating homes and buildings. You know, this gets to the secondary issue, which is at what point, how high a temperature can you beat burning natural gas with electricity?

David Roberts

Yes, a moving target for the last several decades.

Joe Romm

And industrial heat pumps are now getting up to pretty high temperatures, enough to already get close to 40% of industrial heat. Then, I know you've probably had a number of companies interviewed here. I think I've heard you do some —

David Roberts

Box of rocks, box of rocks!

Joe Romm

And so, this is one of those classic cases where I say something I said 20 years ago: If you can do something directly with electricity, hydrogen will never compete.

David Roberts

Yes, I mean, I think you could even say as a general takeaway from this pod, the extent to which we're going to use hydrogen is directly correlated to the extent to which electricity is going to fall short. You and I, of course, are on Team Electron and believe that electricity is going to do a lot more than anyone thinks. So, our sort of low estimation of hydrogen's contribution is basically tied to that high estimation of electricity's.

Joe Romm

Which is not based on flights of fancy, but staggering advances in batteries. Not just in the battery cost, but in the energy densities of the—

David Roberts

And the evidence of markets. I mean, it's what's happening. So, even industrial heat, I think, used to be one of those things where people are like, "Oh, it's difficult to decarbonize, you're going to need some liquid fuel." I don't think so. I think we're going to get to industrial heat purely through electricity.

Joe Romm

Certainly, 80 to 90%.

David Roberts

Something like that. So, one of the challenging areas to me then is these e-fuels you're talking about. So, the idea here is specifically with aviation and shipping. You are moving giant vehicles and thus you need an incredible amount of energy density on board. And the idea is, or the thought is, you are never going to get that energy density out of a battery. So, you need a liquid fuel and you need a carbon-free liquid fuel. And the only way we know how to do that is making these e-fuels which, as you say, is using renewable energy and then carbon captured from somewhere, either from a flue gas or from the atmosphere, and then you refine those into basically a carbon-neutral liquid fuel.

And there's a lot of work going into that, tons of startups, tons of activity and, as far as I know, no one yet has — well, actually, I've talked to a couple of guys in aviation who will be bold enough to say this — but very few people are bold enough to say that electricity is going to get good enough to do those directly. So, do you see a niche for e-fuels and, if so, what are the policy implications?

Joe Romm

Well, we're going to jump to the "sooner or later" here again. If you're talking about long-distance intercontinental air travel — let's just put that in the category of replacing hydrogen directly — a small, growing but small, 2-3% of global greenhouse gas emissions and one of the three or four hardest, so deserving of a lot of R&D but not the priority for scaling up deployment. We have a long way to go on all these other things we just talked about, which is electrifying ground transport, electrifying heating, and getting rid of the fossil fuels already producing on the grid.

We have how many years of that? We're not moving at a fast pace, let's say two decades. Right. So we're talking about things, technologies that would be good to have in the 2040s. We don't have to go to zero-emission sustainable aviation fuel for all jets today. Right. That's not the right order of things and it's certainly worth putting a lot of money into figuring the problem out. But it's not worth saying, "Oh, I know it's gotta be this. So let's bet the farm on this." And let's be clear what we're talking about with the sustainable aviation fuel which would be basically e-kerosene, the equivalent of jet fuel, something like that.

You have to have green hydrogen. So, that green hydrogen is going to need its electrolyzer, and it's going to need 100% new renewables, hourly matched. You've had Jesse Jenkins and others on. So, you got to have the renewables running that. If you use direct air capture, then that direct air capture plant also has to run on 100% new renewables, hourly matched. And whatever plant you use, this Fischer–Tropsch or some other plant that's going to combine the CO2 from the atmosphere and the hydrogen from water and back into a hydrocarbon. And I'll just say, what you are doing here is reversing entropy, right? You burned the fossil fuel in the first place.

David Roberts

You're trying to put the molecule back together.

Joe Romm

So, there are two things you're trying to do: You're trying to take a diffuse gas right in the atmosphere, 420 parts per million, right? You have to capture that. You took a solid or a liquid that was storing that hydrogen, that carbon very easily, it's got diffused. You're going to spend a lot of energy getting it back in that form. And then of course, you're splitting the water, which is, remember, water is the waste product of combustion, much as carbon dioxide is the waste product of combustion. And we're going to take two waste products and try to convert them back into the original so we can burn them again.

Okay, now if that isn't clear, clearly one of the most inefficient last things you would ever do. And you'd never do it until you had so much excess renewables that you would solve every other problem first.

David Roberts

Well, let me pause here because this is — I do think that the people working in this area are betting on abundant, trivially cheap renewable energy. But I will also say that lots of other people working in lots of other areas are also betting on abundant, trivially cheap renewable energy. Like a lot of things that we want to work are not going to work without abundant, cheap renewable energy. So, do you know what I mean? Like, I don't know if we should hold that against e-fuels specifically.

Joe Romm

Well, if what you're telling me is that there are a lot of business plans out there that assume that they're going to be using dumped excess renewables, then I would say to you, "Good luck trying to get an offtake agreement if you're trying to use the same stuff in your business plan 10 years from now." If you think that there's going to be zero-cost renewable electricity 10 years from now, that this isn't going to get bid up in price by all the electric vehicle companies who at least have a product people want to buy, right? Or the people who want industrial or smaller-scale heat pumps.

I think between data centers and electrification, there will be people bidding for that renewables. And by the way, that renewables is not predictable. That's the dumped renewables. Most of the things we're talking about, like electrolyzers, do not like to run on randomly delivered amounts of power, right? So, because they again, these are expensive devices, they have to run round the clock. And that's why this is the great, we'll get to it, I guess, the green hydrogen failure. There's a reason why literally 99% of all green hydrogen projects out there do not have guaranteed, do not have firm offtake agreements and are in the process of going bankrupt, shuttering down, or selling off to somebody else.

That's the big failure that has happened in the last six months as people have realized, as Bloomberg New Energy Finance, which in 2021 said, "Oh, we think electrolyzers are going to come down a learning curve like everyone else, 10% per year." And now, three, four years later, "Oh, actually electrolyzers went up 40 to 50% in price. So we're redoing all our numbers and we now think by 2050 they might come down 50%, if there's free trade."

David Roberts

That shouldn't be a problem.

Joe Romm

And I just want to say this generically because I know you've brought on some very sophisticated people to talk about the literature on learning curves, but everyone in their business plans assumes that their new technology will come down a learning curve. But as we know, most things actually aren't batteries or solar panels. And so, electrolyzers are mostly not composed of things that have any reason to believe are going to come down a learning curve. And the same is true of a direct air capture plant. Right. We're talking steel, cement.

David Roberts

So you don't think on either of those can be modularized and replicated and factory produced and all the other kind of things that bring that bring cost down over time?

Joe Romm

Well, the problem with this, the same problem with nuclear power, is that there are vast economies of scale for making these things bigger. That's why we built 1,000 megawatt plants. We don't have the 200 megawatt plants because it doesn't take five times as much steel and five times as much concrete and five times as many people. Right? So, most industrial things have big economies of scale, right? There's this imaginary world where, "Oh, I'm going to shrink down the cost, but the cost per unit is also going to go down." That requires magical thinking. It requires making it so small that you can make it in a factory and ship it in a shipping container.

But again, that's small. I mean, shipping containers are big, but they're not big in the world of power. And so, I talk about all this in the book. I don't want to say it's crazy, but — look, I'm a physicist. I don't want to say things are impossible. But in the history of energy, in the history of products that you buy when you go to the store, the little packages are higher cost per package, per unit. I hope that's called shrinkflation. There's a whole word for it. So, no, I do not believe that things that have big economies of scale can mysteriously have even larger economies of shrinkage that make up for the diseconomies of shrinkage.

Again, and I say this to you, Dave, we've known each other a long time. People may make some money with some products. What they're not going to do is scale up to create a solution for climate change that you and I need to spend a lot of time talking about.

David Roberts

Okay, well, let's go back to e-fuels then, because I want people to come out of this with some sense of how they are supposed to think about this. How are they supposed to think about aviation and shipping? In your framework here, we just deploy, deploy, deploy the stuff we know how to do, which are the big buckets, cars, heating, etc. Do R&D on aviation and shipping and just be content that we'll solve them later. Is that basically your idea? And what is that later, like the physics of hydrogen aren't going to change? Do you think batteries dense enough to do this are going to come along?

Joe Romm

I now believe it was in the realm of possibility that the vast majority of the air travel problem, yes, is solvable in the following sense: that clearly the energy density of batteries is getting better and better, and the upper bound is pretty large. You can google something called "structural batteries," right? And I'm not saying — they're not commercial now, but we're now talking about what could be available in the 2040s, right? So, if you would tell me now, "I know that we're not going to have vastly better batteries that could actually be put into the structure of a plane," I would say, "Well, you might be right, but you might be wrong."

And what's more, along the way, we are going to hybridize our airplanes anyway, right? We're going to, as the batteries get better, we don't have to fly the whole trip on batteries. We can just use it as, you know, let's say, take power assist in the most important places. And so, I think you can imagine vehicles that, let's say, reduce 50% of the long-distance air travel. So what I'm saying is that we're talking about a problem that in the year 2040 might still be just 2 or 3% of global emissions. So, I think until we get to 80% reductions from current levels, I wouldn't obsess about these things that are in the 2 or 3% level, which includes intercontinental shipping, because as you may know, the Chinese are deploying electric shipping along some of their longer rivers and they're doing battery swapping.

You put the batteries in a container ship. This is an important conceptual point that dawned on me over the last year, which is, yes, we haven't solved all the electrification problems, but that's because no one's been thinking about electrifying a lot of stuff because we had these fuels that were sitting right there below the ground you could just burn.

David Roberts

Yes, this is. Thank you for making this point. I make this point all the time. I make this point every time I talk to a young audience of students or whatever. It's just like, it's not like finance where there's been like millions of people come before you and there are just tiny marginal scraps left. There are like major discoveries to be had. Like no one's been thinking about this stuff for centuries and all of a sudden everyone's thinking about it. So, like, you can enter this field and make substantial contributions. Do you know what I mean?

Like, there are still low-hanging fruits around electrification. We're nowhere near where we're going to get with electrification.

Joe Romm

Yeah, there's been no incentive for our great entrepreneurs and our great scientists, innovators. And as we've seen, you've reported on as much as anybody, the amazing companies, and we both know not all those companies will succeed. But there are some very smart, serious people. And then you have things like geothermal. So, it's a very exciting time in the solution space. As long as we don't get sidetracked by the things that are considerably less plausible.

David Roberts

Well, let's talk about then the other big one, which is steel. Here again, you can do what's called "hydrogen direct reduction," which just uses hydrogen instead of a fossil fuel for that stage of production, that exists now. It's quite expensive. There's also electrochemical — you know, I've had a couple of companies on. This is like my personal dark horse thing that I'm super geeked about. I'm super geeked about electrochemistry, but that is like you can make steel with renewable energy through electrochemistry if you have abundant, cheap, renewable energy. Again, like decarbonizing steel without hydrogen is going to require abundant, cheap, renewable energy.

Joe Romm

Right. But let me make the following point. So does decarbonizing steel with hydrogen.

David Roberts

Right.

Joe Romm

There's only one way to make carbon-free hydrogen, and that is with carbon-free power. Right. And so, you know, I've been saying this for 20 years. Yes. One of the reasons people are excited about hydrogen now is because the cost of green hydrogen has come down sharply. But that's because its principal competitor has come down in price sharply. So that's the flaw there. Yes, you're right: Green hydrogen is now whatever, five to ten dollars a ton or, you know, a kilogram. Okay, that's great.

Unfortunately, that's because the green electricity, which you can use directly, got a lot cheaper. So, yeah, anybody who thinks you can make low-carbon hydrogen from natural gas and capture the CO2, that, I'm afraid to say, is a fossil fuel hype, but it's just not the real world. If you want the green hydrogen to power your thing, and if it's a steel mill, yes, you need a lot of it, then you're talking about using those same renewables you need in abundance, except you're now going to need two or three times as much.

David Roberts

Right. So, replacing existing hydrogen would take as much renewable energy as the total US grid. Replacing steel mills with hydrogen direct reduction, that's probably like another grid or two worth of renewable energy. So, do you then think of steel the same way you think about aviation and shipping, which is, let's do the things we know how to do, let's do R&D on this, let's basically work out electrification on this and not spend a bunch of proximate money on a solution that is not going to be the long-term solution?

Joe Romm

Look, the reason they went to sustainable aviation fuel is because it's a liquid fuel. I think that, you know, I know you've had guests who've had a different opinion, but I think the notion that you're actually going to use the hydrogen in a jet is implausible. Particularly if you're saying, "I'm going to liquefy it."

David Roberts

It's a fuel cell. He's going to use a fuel cell. I wanted to ask you about that. Like, what do you think about hydrogen fuel cells to get some of the density you can't yet get with batteries?

Joe Romm

Well, I will say, you know, as I did in the book and as I said 20 years ago, you know, but it's even more clear now: There has never been a profitable hydrogen fuel cell company. And there was one that turned a yearly profit, you know, a couple of years ago. And I haven't kept track of it, but they're all, I mean, you know, Plug Power.

David Roberts

What about Bloom, the Bloom box? Am I making that up? That's a thing, right?

Joe Romm

Right. But Bloom has never made — it's funded by venture funds. And I often ask people, when I'm speaking, "When do you think the first fuel cell was invented, discovered?"

David Roberts

I have no idea. I'm so ignorant about fuel cells.

Joe Romm

They'll say, "I don't know, the 40s maybe." And I say, "Well, close but wrong century. 1839." It was a reverse battery, a guy was working on basically reversing a battery. So it's been 180 years. Normally, things that are plausible get commercialized relatively soon. It could be decades. But I can tell, you know, it's not for lack of trying.

David Roberts

But as you say, we're in a new world. Fossil fuels are being taken off the table. That is going to change the relative economics of a lot of things. Why wouldn't it do that for fuel cells?

Joe Romm

Because fuel cells aren't an energy-using device, they're an energy-transforming device. So yeah, could someone build a fuel cell that makes economic sense? Perhaps the problem is the fuel cells aren't even that efficient. I mean, maybe in a high-temperature fuel cell, which people haven't cared about so much because you can't run a car on a fuel cell that takes hours to warm up. The cars use the proton exchange membrane fuel cells, which are low-temperature fuel cells and have an efficiency in the 40s. There are fuel cells at a high temperature that might be in the 50s.

But again, if someone is saying, "I'm going to build an airplane and it's going to have a fuel cell, not yet a commercial product, running on green hydrogen, not yet a commercial product, and I'm going to liquefy it and somehow get it to the airplane in every major airport in the world."

David Roberts

Well, part of this vision is that all these little mid-sized airports would basically be running their own little electrolyzers and storing their own liquid hydrogen stores, basically. There'd be little electrolyzers all over the place, I think, is part of the idea.

Joe Romm

And of course, the reason that makes no sense is because those electrolyzers would all have to run on 100% new renewables that are hourly matched. And that's the whole problem with both hydrogen and direct air capture: wherever you site it, you gotta have a lot of "excess" or low-cost renewables that nobody else wants. Right? That's why in any medium-sized city, if you have low-cost renewables, you're gonna use it directly because you're going to use them to power the cars and the power stations and the electric heat pumps and industrial heat and all the other uses we're going to come up with.

And then you're going to tell me, "I'm going to plop this electrolyzer down and it's going to be small scale," so the unit cost is going to be high, so the unit cost coming out is going to be high. So, I can't say, "Oh, this is going to be cheap green hydrogen." If I'm doing it with a small electrolyzer and I'm using some local excess. I mean, it's not going to be excess renewables. I'm going to have to build new renewables. So again, it's just as you say, there's a lot of business plans out there that assume everyone else doesn't succeed in their business plans, but they succeed in theirs.

And I'll just tell you, "Good luck." It's fine for a venture capitalist to pursue that, but if you tell me we should have massive tax credits or we should start building this out, I'll say to you, "This is ridiculous." And this is where I'll cut to the chase: We're coming up on COP 30. For 30 years, every year, the nations of the world get together to address the climate problem and guess what? Coal, oil, gas use have continually risen. So, we can't keep dawdling when we know how to get 80% of the reductions now, right?

That's the top priority. Because if we don't get those 80% now, it doesn't matter if somebody comes up with a brilliant idea to solve 2% of the problem in the 2040s.

David Roberts

Yeah, it's hard to avoid the sort of, when you, when you hear people talk about hydrogen, it's never quite stated explicitly, but part of the rationale seems to be, "Well, we need to find a way for these giant oil and gas companies to be partners in this effort and this is a way for them to be a partner in the effort. So let's do it." And I guess my alternative is, "No, they don't. Let's destroy them and burn them and urinate on the ashes." You know, that's not everyone's position, but it seems like a bad justification for spending hundreds of billions of dollars.

Joe Romm

Well, it still assumes that when you're done, you have the answer. And it's entirely possible when you're done, you just have tens of billions of dollars in stranded assets because electricity has solved the problem. Or maybe the former oil drillers who are now working for geothermal plants are making a living providing their green electricity that's actually dispatchable and near baseload. So look, the point is certain things we know now and we should bet big on them. Other things deserve some longer-term R&D and maybe toning down some of this hype about hydrogen and direct air capture and small modular reactors, all these other things I talk about in the book.

David Roberts

Oh, one other thing. There was one of the uses I wanted to ask about. One of the promising ideas around hydrogen is people have this idea, which I have mixed feelings about, that we need storage, long-term storage. Not just diurnal, not even like 50 hour, not even weekly. We need like seasonal, massive, seasonal storage. And so, you're not going to get massive quantities of storage that will sit there indefinitely with electrochemistry, I don't think. What's your take on that? You think that problem's going to be solved some other way? It's not actually going to be a problem?

Joe Romm

I think that as you know — because I've listened to, one of the reasons I know these things is I've listened to your interviews — there's not a market for long term storage. That is the problem.

David Roberts

Right. Not yet.

Joe Romm

Right. So, it's all hypothetical. If there were an actual market, then the marketplace would come up with the answers. You and I wouldn't have to speculate. You have certainly talked to people who believe they have a technology that can go months. They can't sell that, so they have to figure out the benefit that's shorter. Now, there is a staggering amount of money going into batteries, right? Because there's actually a financial incentive to get 5% better out of a battery or a new chemistry that could be longer duration. So, I think that, and I will agree with Jesse Jenkins and others who would say, I think that as things become economically viable, longer and longer storage, we will find solutions for them.

And clearly, we now have. What is it in the Middle East? Someone's got their gigawatt-scale solar. It's got a huge amount of solar and it's got 24-hour storage. As you know, I don't think we're anywhere near that point. I am bullish on enhanced geothermal, as is the Department of Energy and Jigar Shah and people who have analyzed that. It's not a done deal. I think it's far more plausible than, let's say, small modular reactors. But the point is, it doesn't make a lot of sense to place a large bet on solving a problem that you can't even make money on today.

Let's do long-term R&D. As we said, no one's had to look at long-term storage until people woke up and realized we have to go to zero emissions. It wasn't until we all had to go to zero that you had to solve every single problem. So that was the Paris Agreement, right? That was really December 2015. Followed on with the Intergovernmental Panel on Climate Change report on 1.5 degrees C. Those were the things that led the world to say, "We need to go to zero" or net zero. But let's... I don't know about the net.

Let's just say you have to get really, really close to zero. In the world where you have to get really, really close to zero, you have to solve all of these niche problems too. These niche problems force you to really contort yourself. In the introduction of the book and also later in the conclusion, I talked to the guy at the International Energy Agency who co-wrote their 2019 hydrogen report and still does a lot of that work. He basically said to me, "If we didn't have to go to zero in every sector in 2050, we would probably have a lot less hydrogen in this equation."

And in fact, as he also said, and you could read the quote in the book, every advance that we've seen in the past decade has led us towards electrification and away from things like hydrogen and carbon capture and storage. So, I would say I expect very big things to appear that are near commercial now or will be commercial in five to 10 years.

David Roberts

Yeah, I sort of think of hydrogen a little bit in the same bucket. I think of direct air capture and carbon dioxide removal, which is their enormous presence in models in 2050 net zero models, is more a placeholder than it is a serious plan to do those things. It's more like, "We don't yet know how to do this electrically."

Joe Romm

And look, they were invented, the direct air capture and the bioenergy carbon capture and storage — which I've written a couple of reports for at UPenn, the Penn Center for Science, Sustainability, and Media, a couple of long reports — and it's basically the same thing: these were kind of invented by the modelers, not by the technology. This was not a bottom-up thing where you said, "Oh, we could use an LED light bulb and save this much." This was the top-down modeler saying this is the "then a miracle occurs" part of the blackboard equation from the Gary Larson cartoon.

So yes, I agree, and I think the "then a miracle occurs" stuff, whatever you want to say, it is 10 to 20%, it's going to shrink. That number is going to shrink every year. And it is just a mistake to say, "Let's scale up stuff now to solve this final 10% when we have 80% that we need to spend that money on today."

David Roberts

We're over time, but I just very briefly wanted to touch on the ways of making hydrogen. So, you have a whole long section on the idea of using nuclear power plants to make hydrogen. I think that all the reasons you think that is dumb derive from your general feeling that nuclear is dumb and big, expensive, and thus it's dumb for this, just like it's dumb for everything else. We don't need to go over all that.

Joe Romm

No. Well, let me just say no one has solved the cost problem on nuclear. I don't call nuclear dumb, I just call it expensive. And so, if you can't make green hydrogen from cheap solar and wind, how exactly are you going to make affordable green hydrogen from a nuclear plant? And the answer is, well, we're going to do it thermochemically. We're going to use high-temperature waste heat from the plant. Right. But that requires you to build the hydrogen production facility right next to the nuclear reactor.

David Roberts

Even like partially integrated. And like, of all the ways to, you know, they joke about all the ways to like make steam, like of all the ways to create a little heat. It seems like you could do it in a simpler way than building a giant nuclear power plant.

Joe Romm

Well, the other point is, hydrogen production is a problem in nuclear accidents. This has been studied to death by the International Atomic Energy Agency and others. Huge volumes. The Three Mile Island accident had a hydrogen bubble inside. So, you don't ever want to put — the fact that hydrogen is invisible and burns invisibly and it's very leaky and hard to detect the leak is that there's like a hundred-foot setback between a hydrogen production facility and any place where you're worried about safety or explosions. Right.

So, when the French tried to do this, they found that they had to move the hydrogen production facility a few hundred feet away from the nuclear plant, by which point the heat isn't so hot and the size of the amount of hydrogen that could be produced shrunk immensely. And so, I'm just saying that, from a safety perspective, you wouldn't want to introduce something as dangerous as a hydrogen production, massive hydrogen production facility near a nuclear plant, even if it were affordable, which it isn't.

David Roberts

Right. The other big idea is, well, a couple of other big areas. One of the other big ideas is blue hydrogen. There's a million colors. I'm not going to go through all of them. But basically, blue is the idea that you continue to make hydrogen with natural gas. Except then you attach carbon capture and storage onto your natural gas plants. This, to me, is dumb on its face, to the point that it is amazing to me that it is happening at all. And yet, there it is happening indeed. I don't know if you've caught the latest news, but you remember all the hydrogen hubs that were going to spend hundreds of billions of dollars on and the Inflation Reduction Act.

Trump is going to — his plan is to cancel the ones that are located in blue states that were going to run on renewable energy, but to keep the ones in red states that are going to run on natural gas. Even good faith hydrogen supporters have to look at that, I think, and think that it shows a little what the real game is. But like, I don't know that we need to spend a lot of time on this.

Joe Romm

Just make a couple of comments. As we know, the natural gas system has leakage of methane. And as we also know, we've tried carbon capture. By the way, no one has ever built a commercial natural gas plant with carbon capture and storage, which is quite a statement.

David Roberts

So, I know it's crazy. We've been talking and talking and talking about them.

Joe Romm

So, the notion that you're going to put a carbon capture and storage system on a, let's say, steam methane reformer — and remember, you're gonna have a parasitic loss, so you gotta burn more natural gas and therefore you're gonna have more of the leakage — you're not gonna capture 95% of the CO2, because the CO2 from the steam methane reformer, if that's the way you go, some of it comes out pure, maybe 60% or so, but some of it comes out in the flue gas. And that's the hard part, right? Because that's very diffuse and expensive.

So, the point is this: it's not likely to capture anywhere near 90%. None of those plants out there that promise 90 to 95% on average, they do like in the 70s. So, what you're going to end up with is methane leakage in the system. Excess methane burned to power the carbon capture and storage system and the leakage associated with that. Then, you're going to have the CO2 that isn't captured. And of course, you're still going to have to worry about any methane of any natural gas that leaks out. And when you do the calculation, you find it's not very green, it's certainly not carbon-free, and it's again, since hydrogen is barely worth the trouble in the first place, if it is carbon-free, it's definitely not worth the trouble if it's putting out all these greenhouse gas emissions that you were trying to prevent in the first place.

David Roberts

However, the subsidy regime that has been set up for it and the Inflation Reduction Act is so florid that they can make a lot of money doing this.

Joe Romm

They can potentially. The Inflation Reduction Act has a flaw. It has been discussed by people, and the people who worked on getting it passed tried to prevent, which is that it is a supply-side subsidy. It's a subsidy for producing it. It should have been a subsidy for, let's say, methane ammonia producers to use green hydrogen, not a subsidy for people to just randomly produce it. And as a result, it is open to exploitation. And yeah, I think the fossil fuel companies would love... And by the way, the other thing, as you may know, because it was in the paper, also the Occidental people who bought the direct air capture company, Carbon Engineering, the oil company, they've been trying to persuade the Trump administration to have an equal subsidy for using the captured CO2 for enhanced oil recovery.

David Roberts

Oh, to just layer one more subsidy on top of the multi-layer subsidy cake that's already been cooked for them.

Joe Romm

The Inflation Reduction Act does subsidize captured CO2 in the utilization case of enhanced oil recovery. It just gives you a bigger subsidy if you actually permanently bury it. But just so your listeners know, enhanced oil recovery is a profitable thing. And studies have indicated that subsidizing CO2 use for direct oil enhanced oil recovery is going to tilt the usage, as you can imagine, the first usage for just getting more oil out of the ground. Because again, what enhanced oil recovery is, we're going to use CO2 to squeeze — the inherent pressure of the oil well doesn't get all the oil out, but if you squeeze in another compressed gas, you can get a lot more oil out.

And people have been doing that for decades, but now they want to capture the CO2. So, imagine using methane, natural gas to make the hydrogen. You have all the leaks, you don't capture all the CO2. The CO2 you do capture, you use to squeeze more oil out of the ground to burn. And that's all subsidized both on the green hydrogen and maybe also on the CO2 burial end.

David Roberts

Ugh, fun stuff. I assume all of that is going to... I mean, it was like under Biden, it was a real open question how sort of grotesque and ridiculous those subsidies were going to get. I feel like now it's no longer an open question. They're going to get ridiculous, grosser, and more corrupt, more useless in climate terms.

Joe Romm

That's why my main message to anybody who works at a Natural Resource Defense Council or Environmental Defense Fund or other people who do file lawsuits — besides to read my book, Hype about Hydrogen — please, you need to launch lawsuits against this. Because if you look at the Inflation Reduction Act, it's actually supposed to go through a life cycle analysis.

David Roberts

Yes, it says in the statute, "It must lower greenhouse gases," does it not? It says that in the law. So, this is like, it's boggling to me that this is a debate. It says it in the text of the law. You have to really contort to get around that.

Joe Romm

Well, unfortunately, you can. It doesn't necessarily say that you can't hire somebody to give you the — as you know, you can twist the life cycle analysis almost any way you want, depending on who you are, who's funding it.

David Roberts

The final topic that I know a lot of people were curious about, that I want to touch on before we're done, is geologic hydrogen. This is the new hype. The idea that we've discovered, basically underground in these sort of caverns, giant quantities of gaseous hydrogen, which then we don't have to produce at all and thus could be cheap and finally bring the hydrogen energy system into reality, etcetera, etcetera. What's the deal with geologic hydrogen?

Joe Romm

Well, I do have a chapter on that discussion, a lengthy discussion of that. So, the problem is that the hydrogen doesn't — there isn't a lot, no one has discovered a lot. And what they've discovered is not very high percentage hydrogen. And typically, it's got a lot of natural gas and CO2 in it. And what's more, it can change over time. There was one place that had a high percentage of hydrogen in the beginning, and then over time it turned into a high percentage of CO2. But many of these things, the large quantities might only have 1%, 2% hydrogen, you know, and so you have two basic problems.

One, you're going to have to figure out how to capture all the other stuff or separate out the hydrogen, and it's probably going to be an intractable problem. The second is, it's not near where you use it. So, unless you discovered a massive amount of very pure underground hydrogen that you knew how long it would last, because remember, you want to build a pipeline, someone's got to say, "Oh, I understand the geology well enough to say there's going to be this pure hydrogen coming out for 10 years," right? Otherwise, guess what? No one's going to build your pipeline for you and you're going to have to use tube trucks.

And so, the other thing is, hydrogen still got all these other problems. If someone just gave you cheap green hydrogen, you could make use of it locally, but the notion that you're going to be shipping it around thousands of miles, let's say this were in a non-industrial place. So, I have a long discussion of this. I think it's safe to say that this is not — right now, this is how I phrase things, right now there is no reason whatsoever to believe that so-called geologic hydrogen is going to be a game changer or even a substantial provider of carbon-free hydrogen for the foreseeable future.

That being what matters in timescales that you and I care about.

David Roberts

Right. In the book, you wrap up the whole thesis of your book into a tidy lesson, which is roughly like: There's a good reason to research green hydrogen because we need it to replace existing uses of hydrogen, but there's just no reason to expect it's going to ever be a substantial contributor to the energy system. Is that fair? Is that a fair summary?

Joe Romm

And therefore, not a substantial contributor to the solution to climate change.

David Roberts

Right, yeah. And therefore, while we should continue researching, it's crazy to be pouring tens and hundreds of billions of dollars into trying to scale up something prematurely, basically.

Joe Romm

Exactly. There are many technologies that are very worth continuing R&D, and that's the government's job because, of course, venture capitals don't like long-term R&D. That's highly speculative. That's why their business plans, all these business plans that we talk about, all have to say, "In year five, I start making a lot of money. So, I'm going to have access to all the free green power that I need. And everything's coming down a learning curve. And by the way, all my competitors are failing at their business plans." But that's what they have to do to get the VC money.

And so, yes, that's what I'm saying, that this is suitable for the Department of Energy's long-term R&D effort. And along the way, there might be worth doing some medium-scale demonstration plants if something seems very promising. But it's not clear that there are very many things that are very promising and what's more, in the hydrogen pipeline, whereas you and I both know there are a lot of near-commercial companies, near-commercial technologies that have, I would say, a very decent chance that a substantial fraction are going to pan out by 2030 and so we can recalibrate everything. When I was blogging, I wrote a piece like 10 years ago saying, "Any technology that's commercial or near-commercial in 2020 is going to have a big advantage." Right, because I thought we were going to be scaling up like wild this decade.

David Roberts

Would have been nice.

Joe Romm

Naive optimists that we both are, but the point is still true. Anything that's on a learning curve today is going to be very hard to catch up to. Batteries have been coming down a learning curve in cost and improving in the energy density for two decades, and most people think, and the literature suggests it's going to continue for another two decades. So, good luck with your new technology that hopes to come in at a high cost and then come down a learning curve even faster to catch up. If someone wants to throw money, some venture capitalist wants to throw money at that idea, God bless them.

But those of us who want to solve climate problems, we know where we put our money.

David Roberts

Yes, generally, on electrons over molecules, I think, is the simplest way to put it. Team Electron. I'm going to get T-shirts.

Joe Romm

Team Electron.

David Roberts

All right, Joe, this has been fascinating as always. I've been wanting to sort of try to wrap my head around hydrogen, and this is a bracing opportunity to do so. So, thanks for coming on.

Joe Romm

Oh, thanks for having me, Dave. It's always great talking with you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

David’s Notes

1. 🎤 We’ve got two excellent live events coming up! As always, we’ve set aside a handful of free tickets for paid subscribers. Register your interest via this form; you’ll hear from Sam in the next few days if you’ve won tickets!

The first is here in Seattle. On May 20, at the 9Zero Climate Innovation Hub (the same place I did the Climate Papa podcast), I’ll interview Jigar Shah on stage about the difficulties Washington state is facing in financing its ambitious climate policies. Volts listeners know that Jigar — formerly of DOE’s Loan Programs Office — is always entertaining and provocative. Come down and join us!

The second is a big Canary Media event in Washington DC on June 4. There will be all kinds of interesting interviews and panels (click the link), culminating with me interviewing … a guest who has not yet confirmed. (Stay tuned!)

I’ll be in DC that whole first week of June, so even if you can’t come to the event, hit me up and we’ll get coffee.

2. 📬 It’s a mailbag month — leave your questions below! 📬

📌 A reminder that paid subs can listen to full episodes of bonus content via the Substack website/app or by sending them to their preferred podcast player using these instructions.

3. 🏠 Subscriber Jeff dug up a decade-old piece I wrote for Vox:

I love that piece — it’s one of my favorite things I ever wrote, not so much because it’s brilliant prose or anything, but because it’s an important and overlooked issue. It was especially overlooked in 2015, but even in the decade since, as housing and loneliness have both become big topics in mainstream discourse, the overlap of the two remains under-explored.

4. 🔫 I feel quite confident that subscribers do not come to Volts for my thoughts on Star Wars. Indeed, it could be argued that the last thing the internet needs is more opinions on Star Wars! Nonetheless, I have some of those opinions, and since SW has been much in the discourse lately (Andor is just as good as people say), I decided to put them down in a thread, once and for all. It’s mostly about SW but also applies, I think, to a great deal of what currently passes as popular entertainment, and to modernity generally. It has kicked up all kinds of interesting feedback & discussion, so if you’re into that kind thing, follow along:

5. ✅ Community comment of the month: An aside from Roy that he knew I couldn’t resist. Small modular nuclear reactors remain, to date, neither small, nor modular, nor affordable.

Monthly Thread — How It Works

This is your monthly opportunity to share! Use the comments section in this community thread to:

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In this episode, I chat with Kathy Hannun of Dandelion Energy about ground-source heat pumps, which are twice as efficient as air-source units but still more expensive up front. Dandelion has designed its own drills and heat pumps, and with a new 1,500-home partnership with a developer in Colorado, it’s looking to scale up and bring costs down.

(PDF transcript)
(Active transcript)

Text transcript:

David Roberts

Hello everyone, this is Volts for May 9, 2025, "Trying to bring geothermal heat pumps to scale." I'm your host, David Roberts. As Volts listeners undoubtedly know by now, the most efficient way to heat a building is with a heat pump, for the simple reason that it takes much less energy to harvest heat, as a heat pump does, than it does to generate heat, as a combustion furnace does. A heat pump that harvests its heat from the air, AKA an air-source heat pump (ASHP), is about twice as efficient as a gas furnace. A heat pump that harvests its heat from the ground, AKA a ground-source heat pump (GSHP), is twice as efficient as that.

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Indeed, ground source heat pumps, sometimes called geothermal heat pumps, are the most efficient available way to heat and cool a building — to get any more efficient, you have to start heating and cooling multiple buildings at once, as with ageoexchange system. So then, why don't you see more of them? The simple answer is that, while they save money over time, they are extremely expensive up front to install.

Dandelion Energy is a company that spun out of Google's X shop back in 2017 to try to address that problem and increase geothermal heat pump deployment. It has installed tens of thousands of its systems, developed its own drills and heat pump, and recently announced a partnership with a builder called Lennar that will see geothermal heat pumps installed in some 1,500 new homes in Colorado in the coming two years.

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I've been meaning to talk with the Dandelion folks for years, and the Lennar announcement seemed like a good excuse, so I'm delighted to welcome Dandelion's president and co-founder, Kathy Hannun, to the pod today. We're going to discuss how geothermal heat pumps work, their advantages, and the way their costs can be brought down.

With no further ado, Kathy Hannun. Welcome to Volts. Thank you so much for coming.

Kathy Hannun

Thank you. I'm delighted to be here.

David Roberts

It's been a long time coming. I swear we talked years ago about something, but I searched on Volts and I can find no sign of it. So, it must have been pre-Volts.

Kathy Hannun

But it was. You wrote a really helpful overview of the different types of geothermal.

David Roberts

Oh, right.

Kathy Hannun

And you were thoughtful enough to actually include geothermal heat pumps, and we use that pretty often to help explain what the technology is to people. So, it's great to speak with you again.

David Roberts

Yeah, that was my own crash course, learning about geothermal. I guess that was back in 2018. Good grief. Well, anyway, good to have you here. So, I'm going to ask you a bunch of questions that I'm sure you've answered a gajillion times. But just as a treat for you to do a nice thing, let's start by talking about the news that I'm sure you are actually excited to talk about, which is this Lennar deal. Tell us a little bit about how that deal came about. And, are you aware of anyone else in the US installing geothermal heat pumps in numbers like this?

Kathy Hannun

I'm not aware of any other project to install a similar scale of residential geothermal heat pumps. So, it's a special opportunity for Dandelion and the industry. I thought your introduction was great. And it is true that the main thing holding geothermal back is the upfront cost. And when you have a chance to install 1,500 of something at once, that alone can go such a long way to bringing down the cost. But the deal came together because Lennar has a reputation among home builders for always looking at new technologies and new products they can offer their homeowners.

And they're also, like many builders, facing some pressure to electrify in various states where they make new homes.

David Roberts

Worth noting, this is taking place in Colorado, which has all kinds of building code things, building laws, and laws about decarbonization of various sectors. There's a lot pushing in Colorado.

Kathy Hannun

That's right. And one thing in Colorado — I mean, there are many factors which we can get into later — but now, builders have to pay, for example, to extend gas if they want gas to a new development. It's no longer a socialized cost. So, the state is taking real steps to level the playing field and even boost the chances for electrification through some nice incentives there. But yeah, so anyway, they were interested in finding alternatives to air source. And we explained, "Yes, there is the upfront cost and sort of need to put in a ground loop, but when you do it 1,500 times in a row on a brownfield construction site, it's actually not that expensive."

And then, you know, the homeowner can benefit from this really premium, high-performance, low-cost system forever. And Lennar benefits as well in a lot of ways. Specifically in Colorado, because the incentives are so favorable for geothermal, it's actually more cost-effective for them upfront as well. So everyone's incentives were aligned to make this happen.

David Roberts

Obviously, doing this 1,500 times at a single site will mean that each one of those individual installations is cheaper than the average, you know, sort of standalone installation for obvious reasons. You can share drills and share labor, etc. But the second part of that question is, do you expect doing this at scale at 1,500 homes, do you expect that to lower costs going forward? In other words, is the 1,501st installation going to be cheaper because of learning through doing, or I don't know, like buying equipment in bulk? How do you expect costs to come down and if so, how?

Kathy Hannun

Yes, well, you know, first to clarify, the 1,500 homes will be across 14 different communities in the suburbs of Denver. But your point is still absolutely correct. Nonetheless, you do have the ability to just stand up drilling resources in that area and the overhead is very low when you're doing so much volume, which is why commercial drilling tends to be cheaper than residential drilling in general, one-off residential. It's so much cheaper because a lot of the cost of drilling is getting the rig there, setting it up, figuring out what you're drilling into, taking it down, transporting it to the next site, and you're able to amortize all of those costs.

But to your question, you know, it already has lowered the cost of geothermal for the 1,501st home. Our manufacturing partner is able to invest in more automation and sort of a higher scale line.

David Roberts

You mean the company manufacturing the heat pumps that you install?

Kathy Hannun

Thank you for clarifying. Yes, exactly. That's just one example. And also, another supplier, just for another example, who's supplying the parts used to connect the heat pump to the ground loop, has also invested in new equipment that allows him to make these parts much more cheaply than he was doing before. I mean, one takeaway is just the geothermal industry, the geothermal heat pump industry, has been operating at a relatively small scale to date.

David Roberts

Yes, it's all very bespoke. It's all very sort of one-off. It's not set up currently for modularity and cost reductions.

Kathy Hannun

That's correct. So, even at a 1,500 home scale — which is really small compared to every other HVAC product that's used mainstream in the United States — even at that scale, we're seeing significant cost decrease. And to me, it's very exciting because it's like, "Okay, there's so much low hanging fruit here." When we get to 15,000 homes, imagine.

David Roberts

Right. Well, I was going to ask about that. I mean, this is 1,500, which is big, as you say, relative to the previous geothermal heat pump industry, but relatively small in the HVAC game. Does Lennar have plans beyond that? I mean, if Lennar did this and they're like, "Wow, this is awesome. We're going to do this on all new homes." Like, what kind of scale is that? I have no idea what the numbers are. You know, like, how many homes is Lennar building a year-ish?

Kathy Hannun

Lennar builds tens of thousands of homes each year, I think north of 70,000. They're operating at a very large scale. And everyone wants this to not just be the only time. Like, Lennar would not be doing this if they intended to just stop at 1,500 because it would not be worth it for them to learn and put in the work to make this happen. And of course, Dandelion, we exist to try to make this geothermal heating and cooling a mainstream way that Americans heat and cool their homes. So, this is exactly what we exist to do.

And so, we talk regularly with Lennar about how we can, and other home builders, how we can work together to continue to bring the cost down and continue to make it scalable in different markets. Like in Colorado today, the costs are such that Lennar is actually not paying a premium upfront to put geothermal in, which is amazing. But that's not the case in all the states.

David Roberts

My next question was sort of like, how crucial are Colorado's incentives in this? Like, in the absence of these incentives in Colorado, would Lennar be doing this?

Kathy Hannun

The incentives that exist, just to be specific, the incentives that exist right now that are supporting this project include an Xcel Energy incentive. They have both an all-electric homes incentive and clean heat incentive. There are two different incentives; you can't take both, but some of our homes are taking one, some are taking the other. Both are quite helpful. And we can talk more about why utilities are motivated to make geothermal work. And then there's also a $3,000 Colorado state tax incentive. And there are code requirements that really incentivize geothermal because it's such an efficient technology.

And there's the fact that I gave earlier about how in Colorado, the developer would have to pay to extend gas. So, it's a savings if you don't have to do that, which always helps to be competing against something that's free.

David Roberts

Are you getting federal tax incentives, too?

Kathy Hannun

It's an interesting one because there is a federal tax credit, but it goes to somebody who owns the home for five years or more. And because Lennar's model is that they build the home and then they sell it, or often it's sold even before it's built, the homeowner is actually getting that tax incentive, not Lennar. So there's a bit of a split incentive problem there where Lennar doesn't value that tax credit as much because it's going to the homeowner. And often, the homeowner, you know, isn't making the decision about whether to buy the home...

You know, it's a little complicated for them. They might be surprised in a very positive way to be receiving —

David Roberts

It would be great to buy a home and just discover a $5,000 tax credit lying between your couch cushions.

Kathy Hannun

Totally. So, it's great, don't get me wrong, but it's not as integral to the sale as the other ones today.

David Roberts

Okay, well, let's back up just for listeners maybe who aren't familiar with the general idea of what's going on here. Let's just talk a little bit about ground source heat pumps in general. So, air source heat pumps, they pull heat out of the air, they dump heat into the air. Pretty straightforward. Ground source heat pumps, they do it with the ground. And the way they do that is with a network of pipes. And this is, I guess, the main reason that it's more expensive than alternatives is you have to do this digging and laying of pipes.

So, just to start with, are you mostly doing this in suburbs? Like, how urban of an environment can you do this in? Because I'm just guessing that urban environments, even underground, have more stuff in your way, more existing infrastructure and other kinds of pipes and things. Whereas, like a suburban yard, I'm guessing, is an easier target. Is it mostly suburban single-family homes that are getting these?

Kathy Hannun

What you're saying is correct, that it is more challenging in many ways to drill and install ground loops in an urban environment. And yet, I don't know that it's more common today to see geothermal in the suburbs than in urban environments. There's a lot of geothermal being installed in colleges and university settings, commercial buildings, that type of thing. There's also quite a bit going on in more urban communities. Multifamily buildings. There's some utilities experimenting with thermal energy networks.

David Roberts

Yes, we're very familiar with those over here.

Kathy Hannun

Yes. Okay, great. And then Dandelion has been mostly focused on suburban residential, but I don't think it's the focus of many others in our industry. For new construction, you have the advantage of sort of the easiest drilling conditions that you can imagine, because it's just a blank slate with nothing. So that's helpful to make it very cost-effective in that scenario.

David Roberts

How do you, if you're just going to a house in the suburbs, Dandelion, how do you know if there's stuff buried under there? Like, are there city records? Do you have to dig and look like, how big of a problem is that?

Kathy Hannun

Yeah, you have to file a sort of request for information from the utility. There's a standard process for doing that. Then they come out and mark where the underground utilities are. And then, some utilities are private, like septic systems, that type of thing. So, you have to work with the homeowner to understand what the private utilities that are under your yard are and where they are. And then, of course, it's tricky because sometimes people don't know exactly what's under there, you know, so that is a challenge, but you can kind of look like, where do the pipes look like they're exiting the home in the basement.

And then, like, where would they likely be going to the street? And so, let's just avoid that general area. You do a lot of stuff like that as well.

David Roberts

So, how much yard or just open space do you need? I mean, I know there are variations. Like, you can go horizontal with sort of shallowly buried pipes, in which case you need a lot of sort of area, yard area. Or you can go deeper, which you can use less yard area and go deeper. But, like, what's the minimum amount of space I need if I want one of these systems? Like, I need a patch of ground X big minimum to make it work.

Kathy Hannun

Well, as you said, there are many different types of geothermal systems. Dandelion's whole mantra is "simplify and standardize." If we can just, like, do the same thing over and over, it will be cheaper. And that has led us to embrace the vertical closed-loop system. It's a vertical hole, so we're just going straight down. It tends to be 300 to 500 ft for a typical house. And then you put what's called a ground loop in the hole. The ground loop is an inch and a quarter plastic pipe. You can imagine it goes straight down, then it makes a hairpin turn at the bottom and comes straight back up.

So, it's actually kind of like two pipes next to each other, connected at the bottom.

David Roberts

And it's just a single loop, it's just one of those?

Kathy Hannun

Typically, I mean, if you have a very large home, you would have two or three or four, it scales. But typically for a home, you can get away with one. And to answer your question, one of the things that was a real bottleneck for the company when we first started back in 2017 was that the drilling rigs that were being used to install vertical geothermal boreholes were just water well rigs. So, you would just call somebody who was usually installing water wells and ask them to install a geothermal well instead. But these water well rigs, you know, they typically serve more rural customers by their nature, the people who tend to need water wells.

And they tend to be very large; they're truck-mounted. So the rig is mounted on a big truck. And they're very messy. They create a lot of mud and debris. So, about half the homeowners who were interested in getting our product in those early years, we had to disqualify because the rig would not fit in their yard.

David Roberts

Oh, interesting.

Kathy Hannun

And we ended up going to Sweden because Sweden has a very high penetration of geothermal heating and cooling systems. About a fifth of buildings in Sweden are heated and cooled with geo, and it's like 70% of new construction. So, it's really a mainstream product over there. And so, we just went to learn. And it was a transformative trip. The rigs they were using were tiny. They were simple. They were more lightweight. A single man could operate the rig and did so in Sweden. He could carry the pipe; it wasn't too heavy. They had sort of ancillary products that they used that were simple, that would keep the site clean.

David Roberts

Like a bulldozer?

Kathy Hannun

Yes, like a bulldozer, exactly.

David Roberts

Not what you want to call to mind.

Kathy Hannun

No, it's a good example. That's exactly right. So, when you have a piece of equipment mounted on tracks, it has a very tight turning radius and it also doesn't disturb the ground as much because the weight is more evenly distributed. So anyway, the Swedes basically took us under their wing. Not kidding, they really did, they taught us their ways. And we couldn't copy exactly what they were doing because Sweden has different laws and highway rules, and they use different trucks. Everything's slightly different than in the US. So, we had to Americanize it.

But we basically took the concepts that they were using in Sweden and built them over here in the US, and created a very residentially friendly, much less expensive, much cleaner approach to installing those ground loops. So, this is a very long-winded way of answering your question: So today, in a retrofit, you really don't need much patch of ground at all. Like, we very, very rarely disqualify somebody today for not having enough land. I can't think of the last time that happened. If you lived on a very steep slope or something like that, that might be a problem.

David Roberts

So, you just need a pretty small patch because you're going straight down.

Kathy Hannun

That's right.

David Roberts

I don't know that I had put that together. And so, one of the big advantages of ground source heat pumps is they're more efficient than air source. What are the numbers on that? I said 2x in my introduction, but I think that's very rough.

Kathy Hannun

That is right.

David Roberts

What are the actual numbers?

Kathy Hannun

I mean, of course, it depends on the weather, right? The colder the winters, the warmer the summers, the more geo will excel.

David Roberts

This is the question I was going to ask. So, this is kind of what I thought. The more extreme your weather on either end, hotter and colder, the more geothermal is going to be advantageous over air source, basically.

Kathy Hannun

Yep, that's right. And it is about twice as efficient. Like in our Lennar project, for example, homeowners will pay about half on their utility bills of what they would be paying if they had adopted air source. So that's about right.

David Roberts

That's interesting. And back on the drills, briefly, it occurred to me, since you're only doing one loop, I guess maybe this doesn't apply. But I just wonder, like, anytime you talk to anybody, geothermal, it's always sort of better to go deeper. It's always hotter, deeper, and you can always get more energy the deeper you go. So, is there talk or innovation around that side of the drilling? Like, would it be meaningful for you to be able to drill much deeper, or do you feel like you're going the right depth?

Kathy Hannun

The idea that you get exponentially more energy as you get hotter for geothermal electricity, it's not as applicable to heat pumps. Going deeper isn't necessarily better. If we hit a geology that has a lot of water production, for example, we might decide to put in multiple shallower holes because it's just easier. It kind of depends on the conditions at a given site, whether it makes sense to do a greater number of shallower holes or fewer deeper holes. But the impact of the change in temperature, we're only going 300 to 500 ft, so it's not a gradient that makes a big difference.

And the deeper you go, the more pumping energy you actually need, the greater your head loss; these factors are more significant for us.

David Roberts

Well, speaking of pumping, these systems mostly use water, or as I understand it, in very cold climates, there's a little bit of antifreeze in the water. Is there any innovation around that? Is there any thought that like some other kind of fluid might carry heat more efficiently? Is there any looking into that or is water, you know, good enough here?

Kathy Hannun

There is looking into that and thought about that. Absolutely. Water's pretty good. But the type of antifreeze you use can matter. So, what's standard in the industry today is propylene glycol, which has some nice properties. It's not toxic, it's pretty inexpensive. But the viscosity of the fluid increases as the fluid gets colder. So, as you reach your sort of highest heat loads, like the end of January, your loop is the coldest it will get. You need to make sure your viscosity doesn't increase too much to get in the way of your pumping requirements. And there are other non-toxic antifreezes that have better properties than propylene glycol.

They're cheaper, they have lower viscosity when it's cold. In every way, they would be better, but they're not allowed in many of the places we operate. Again, another element of us being a relatively young and unscaled so far industry is that a lot of the regulations just chose "You must use propylene glycol." I wish the law was something like "You must use a non-toxic antifreeze that has these properties that are good for customers." Like, it's not about not having the regulation. It's just sometimes they're written in a way that doesn't leave a lot of room for innovation. And so, it's something that we're working on. I think that particular lever isn't the most high potential of all the levers for reducing costs, but like, why not use an antifreeze that's better in every way? And so, that is the type of thing that we're thinking about all the time at Dandelion.

David Roberts

And are you committed to just doing houses or are you, do you want to do commercial and multifamily buildings?

Kathy Hannun

We absolutely do multifamily. So, we do residential, both single-family and multifamily today. And then, we also have a commercial drilling business. So, the boreholes that you install, they look the same sort of regardless of what the building is that they're serving. So, we will drill boreholes for any type of building. We're open for business on that.

David Roberts

Oh, interesting. Just like a "drilling as a service" type of thing.

Kathy Hannun

Yeah, exactly. So, we do that. But in terms of the actual sales that we make that include the interior as well as the exterior, we really do stick to residential, but we're open to all sorts of residential models, multifamily included.

David Roberts

And for a multifamily building, it's just one big unit and ducts to the different apartments. Right. There's no separate wall units. How does it work when it's a multifamily building?

Kathy Hannun

I mean, there can be different designs, but what's typical is you might have small units in utility closets. So, actually, units in each apartment and then water going to each of those units. That would be sort of a typical design you might see for multifamily.

David Roberts

And so, another thing you ran into and decided, "screw it, we're going to make our own" is the heat pump itself. You have developed your own heat pump called Dandelion Geo. I have wondered about this a lot over the years as I've been talking about heat pumps with people, just whether there's much innovation in the heat pump itself. The actual heat pump unit itself. I hear weirdly little about, relative to like, batteries, where you're hearing about fundamentally new chemistries every five minutes. Just weirdly little talk around innovation in the heat pump space.

You made your own heat pump? Why and what are its advantages?

Kathy Hannun

My impression when I started the company was that there was no need to make a heat pump because it's such a mature and large category. It was like, what could a startup offer? What we ran into is the US geothermal market is quite isolated from the rest of the world. One reason for that is that it's a niche industry, low volume, but also Americans tend to use ducts for heating and cooling and that's very unusual in the world. The Europeans use geothermal, but it's all water to water heat pumps.

David Roberts

Like water radiators, type of deal.

Kathy Hannun

Yes.

David Roberts

And you don't have those, you couldn't if I had an apartment building running that had radiators in it, you don't have a water to water heat pump that you could use in that case?

Kathy Hannun

So, the heat pump we developed is specifically for our retrofit market. There are a lot of homes with radiators in the Northeast US, but those radiators tend to have a much smaller surface area than the radiators you find in Europe. That matters because the temperature of the water that goes through the radiators in the Northeast is very high.

We ran an analysis that was like, "What would the efficiency be of a geothermal heat pump that would serve radiators at that temperature?" And how does that compare to just installing mini splits, air source mini splits in the home? And it's like the same or low. You know, there's like no advantage once you have to make water that hot. First of all, it's hard to do with the equipment available on the market.

David Roberts

That's just your compressor doing that. It's whatever is pulling the heat out of the water and concentrating it. Would it have to just work much harder?

Kathy Hannun

We would have to get it to such a high temperature that your efficiency falls off. And it's kind of like, why are we even doing geo anymore? And you don't get air conditioning. So, the other thing about mini splits is you would get air conditioning. So, probably a better product would be sort of like a geothermal mini split, which doesn't exist yet.

David Roberts

Yeah, that literally doesn't exist, or they just don't have them here?

Kathy Hannun

There's a geothermal VRF (Variable Refrigerant Flow) system that you can buy from Samsung. And we did experiment with that a little bit a few years ago, offering it because we do have customers with radiators that want geo. But it was very complex, very expensive. It wasn't a scalable product. So, we discontinued offering it. So, I'm sorry this is so circuitous.

David Roberts

No, I love it.

Kathy Hannun

So anyway, the US market's a little bit on its own because there's not a lot of manufacturers around the world making water-to-air geothermal heat pumps. The market that does exist here, which is very small, has optimized its geothermal heat pumps pretty much for new construction in the Southeast or in warmer climates. I think that is just an artifact of historically heat pumps having been most common in the Southeast. So, what that's resulted in is the geothermal heat pumps on the market today in the US are optimized for cooling, not for heating.

They do both, but they're designed to be better at cooling than at heating. And they just didn't have some features that we thought would be really useful. So, those features include: We developed a heat pump that is optimized for heating. First of all, since we really target customers in colder climates, that allows it to operate more efficiently in heating. It can also produce more heating capacity for a given compressor size. Meaning, like if you get a nominal 5-ton heat pump, the Dandelion Geo will just produce significantly more heat than a competitor. Which is useful because a lot of retrofit homes need a lot of heat because they're not necessarily that well insulated.

We also designed it to tolerate lower entering water temperatures. So, when you design a geothermal system, you size the ground loop by answering the question with a model: How long does this ground loop need to be so that it never goes below 30 degrees Fahrenheit? And 30 degrees is just the industry norm. It's what a lot of heat pumps are designed for as a minimum. And so, we thought, you know, what if you designed a heat pump to be totally fine and produce enough heat at 25 degrees Fahrenheit or 23 degrees Fahrenheit, you know, like that allows you to significantly reduce the length of the ground loop you need.

So, we are able to install, I don't know, 20% less ground loop and still deliver the same amount of heat as a different heat pump. So, it's like this small change you can make to the heat pump to actually save a lot of money on the ground loop. So, we did that. The heat pump also is designed to need a lot less electrical capacity. And the reason for that is in the air source heat pump paradigm, you often have an air source heat pump that needs to be supplemented by electric resistance sort of auxiliary heat.

Because the air source heat pump's capacity, its ability to heat will drop when it gets very cold out. So, it has an electric element to supplement.

David Roberts

Which is very intensive, electrically speaking, it uses a lot of electricity.

Kathy Hannun

It is. The geo industry had just adopted that same template to geo heat pumps. But there's no need to adopt it in exactly that way because the key advantage of geo is that even when the outdoor temperature drops significantly, the geo heat pump does not lose its capacity that much. And so, what we did, our heat pump still has an auxiliary heating element just in case something goes wrong with the heat pump. It's like a safety mechanism. But we've designed it so that only a small amount of that auxiliary heat is able to come on at the same time as the main compressor because you're never going to need more than a very small amount.

And so, that allows us to sort of share the electrical capacity between the compressor and the auxiliary heat because they'll never both be on at the same time. The reason that was useful to do is that a lot of homes that switch to heat pumps of any type run into the issue of not having enough capacity on the main panel and then they need to go through a main panel upgrade. It's very expensive and you have to work with the utility. It can be like $5,000 to $9,000 or more if you have buried lines. And it's just a big fiasco. So, we want to avoid that wherever we can.

David Roberts

Oh, right. And you do that by keeping electricity demand tamed?

Kathy Hannun

Right. So, our 6-ton heat pump, which is the largest size, needs about 60 amps of main panel capacity, whereas a competitor unit would probably need 120 or more. So, it halves the amount. And then the last feature, and then I'll give it back to you, but a lot of our retrofit homes were designed to work for furnaces, of course, and furnaces heat air to a higher temperature than a heat pump does. And so, as a result, you don't need your ducts to be as large because if your air is hotter, you don't need as much of it to carry heat.

So, that's a huge friction point for retrofitting ducted homes.

David Roberts

Do you find yourself having to replace ducts a lot or enlarge ducts a lot?

Kathy Hannun

We did all the time before we made this heat pump, but then we designed the heat pump to produce hotter air than is typical for heat pumps. So, that really reduced the need to fiddle with the ductwork, which saved everyone a lot of cost and complexity. So anyway, you're getting a sense it was just like the product that we wanted to exist that was really tailored to the retrofit case, just didn't really exist. And so, we decided it was worth it for us to create the product we wanted to exist.

David Roberts

Are you selling those independently? Like, are you selling them to other installers or other people?

Kathy Hannun

We aren't currently focused on that. We use them mainly for our own customers. The decision was now that we're so focused on the opportunity with new build, so we've really shifted our focus as a company in recent years from the retrofit market to the new construction market.

David Roberts

Can we talk about that for a second? I was going to ask you about that. I mean, I guess the reasons are sort of obvious. Economically, the proposition is more attractive to someone building up front; it's just cheaper when you're building up front. There's probably more standardization and scale available in new builds than in retrofits.

Kathy Hannun

100%.

David Roberts

But there are more built homes than unbuilt homes. Do you know what I mean? Like, you are sort of tackling the smaller side of the problem. Is the long-term vision to sort of scale up and then go back into retrofits with sort of lower costs and more learning by doing in hand?

Kathy Hannun

Yes, that is exactly right. Yes, I think it would have been hard to start the company in 2017 going after new build because we had no track record. The policy landscape was very different. You know, there weren't as many parts of the country where the value proposition made so much sense as it does today for those new build customers. And it's just a much easier and faster sales cycle and feedback loop to sell to homeowners.

David Roberts

Nice to make one deal with Lennar rather than 1,500 separate deals with homeowners.

Kathy Hannun

Exactly. So, we almost needed to get to a place of maturity as a company where we could go after the new construction market. And the policy landscape had evolved to make that opportunity very attractive. So, it is the better opportunity for us right now. And I think it is the better opportunity not just for Dandelion, but also to scale geothermal and to bring it into the mainstream because you have those advantages of standardization and scale. But then, yes, we absolutely want to use the cost reductions and the simplifications and sort of the improvements that come from installing so much geothermal at scale to then go back to the retrofit market and continue to chip away at the existing home problem.

David Roberts

That's the big one. So, I have some nerdy grid questions. Everybody wants to electrify. We all want to get off fossil fuels; we want to get off gas. But one of the big fears, worries, concerns is that in cold climates, if you move everything over to air source heat pumps, you're going to get massive winter spikes in electricity demand in places where often the grid was built around summer spikes, not built for winter spikes. And this, of course, has everybody worried about grid capacity, etc. So, one of the advantages geothermal heat pumps have over air source heat pumps is, as you say, they use about half as much electricity, which is when you're talking about scale, when you're talking about doing HVAC at scale, really adds up and could make the difference in places' ability to electrify.

So then, my question is: That's a grid benefit. That's a grid stability and capacity benefit. Do you have any way of getting compensated for that benefit?

Like utilities — let's talk about the utilities. D oing this, a utility in a cold weather area has a lot of incentive, you know, to do it with as little electricity as possible. Are they coming to you? Are you working out deals with utilities? Are they giving you some value? Are there ways of making that value manifest in the price, I guess?

Kathy Hannun

This is a question and a project that we are focused on, and I would say today those mechanisms for internalizing that positive externality to the grid are not well established, but I do think there's increasing recognition that that benefit really exists for geo. There was recently a DOE report that analyzed the difference between electrifying with air source versus air source and geo. And you would, you'll save like I think the stat was something like 24,500 miles of transmission lines.

David Roberts

Really eye-popping numbers when you add it all up.

Kathy Hannun

Can be avoided if we do geo. Yeah, that's what I love. I'm so compelled by geo because it's like relatively easy to put a ground loop under a home when it's being built. And you do it one time, and that ground loop will be there, and then you get benefits for the lifetime of the structure. Including, as you say, like, you need less generation capacity, you need less transmission and distribution capacity.

David Roberts

Less T&D and T&D is the expensive thing now.

Kathy Hannun

It is so hard to permit, so hard to do. Why not just put in a ground loop? You know, it's just like putting in the infrastructure underground so you can avoid the infrastructure above ground, and then the homeowner benefits because they pay half as much. But anyway, to your question about, like, is there a way to monetize this? That is exactly the type of problem that we exist as a company to try and solve.

David Roberts

I mean, you would think utilities would be joining you in this effort somehow. Like, are you finding them cooperative? You think they would be coming knocking on your door?

Kathy Hannun

I think that utilities are starting to see the problem and understand it more. They see the challenges with electrification using air source and then start to learn that geothermal heat pumps are even a thing. I think, like a lot of people, they don't think of geo at all. And those who know about it, they think, "This is not scalable, this is niche, this is luxury." Because that's historically what it's been. So, I get that. But what I'm hoping that we can show with this Lennar project and with other projects we're doing is: actually, it is quite scalable.

And if it wasn't, Lennar certainly wouldn't be doing it. They're a very pragmatic, very mainstream home builder. And I think once people start to see this as a real option, hopefully, we will succeed in getting the value that these systems will deliver to the grid translated into an upfront incentive because that will allow it to be adopted in many more places.

David Roberts

Right. Like, if I'm a utility and there's a builder like Lennar in my service area, and it is debating whether to go air source or ground source, and I'm resource constrained, I have every incentive to go to that builder and nudge them. It seems like utilities ought to be more active in this. My second nerdy question is one of the things I noticed that you built into your heat pump that you built yourself is some intelligence. Some digital controls, some online-ness.

Which is raising the question, everybody's favorite subject, you are now installing a bunch of devices that you can communicate with and control centrally. So, have you thought about VPPing your GSHPs? By which I mean, coordinating your geothermal heat pumps in a way that is helpful to the grid from a central location. Like, is that on your radar?

Kathy Hannun

It's something we've talked about. But, you know, it's kind of funny. One of the implications of the fact that geothermal heat pumps are so efficient, even when it's very cold or very hot out, is it's actually less valuable to control them in that way than it would be if you had a much less efficient piece of equipment.

David Roberts

Because you're not actually moving that much electricity around, because they're not using that much electricity in the first place.

Kathy Hannun

That's right. So, whenever we've run the analysis, the value we could earn by doing that was just not worth it to actually go through the effort. But that could change. I mean, certainly if that changes and the incentives are there and it feels like something that would be good for our homeowners, we would absolutely be excited to try something like that.

David Roberts

That's funny. Like, we use so little electricity, it's not worth it. That's a good problem to have, though.

Kathy Hannun

It is, it is. It's like you just put a ground loop in and then that's all you need to do. Set it and forget it.

David Roberts

Well, here's something I really want to press you on, and it's something that has bugged me since I first found out about you all and found out about ground source heat pumps in general. It really comes up with, like this Lennar thing, which is the only way to make heating those Lennar homes more efficient than putting ground source heat pumps is all those houses having heat pumps inside them, but sharing a field of pipes, sharing pipes, basically, rather than having each their own individual installation of pipes in their yard. It seems to me just sort of like mathematical that you're going to save if you have multiple homes sharing the same field of pipes.

And I can see why that's super difficult to engineer in the retrofit market, because you would need multiple homes right next to each other, all wanting to do it at the same time, etc. But in new construction, why on earth not just build a big shared field of pipes?

Kathy Hannun

Well, I'm glad you asked, but I am a little more skeptical that you would save a lot of energy by connecting all the homes. I mean, let me start by saying the reason that we are doing individual loops is that again, we're just focused on scalability, simplicity, cost effectiveness, and one loop, one home. It's just very simple, very scalable. You know, it's very resilient. If something goes wrong with one home's loop, none of the other homes care or notice. Just like you don't need any fancy operations or maintenance on the system. It's just super simple. So that is appealing.

But let's just go to the other part of your question, which was an assumption that connecting them would lead to a more efficient system. So, I see the argument that you're diversifying the users of heating and cooling. And through that diversification, you might have more variability in your usage, which might allow you to get away with slightly less loop than if each home only has one loop. But I will say, like, all the homes are homes. And so, they're all going to have the same assumptions around.

David Roberts

Yeah, this is not a mixed-use. It would be different if it was a mixed-use development, sharing a network. If it's all homes, they're going to have probably like roughly synchronous demand curves.

Kathy Hannun

And certainly, the loop would have to be designed assuming that they have identical demand. It's like no one is going to be cooling, while some — you can't assume some of the homes will be cooling while others are heating. They're all going to be heating at the same time. They're all going to be cooling at the same time. And then if you connect the loops, all of a sudden your underground infrastructure becomes way more expensive and you have way more pumping energy you need to pump the water everywhere between all the homes. You have to do a lot more excavation to connect all the loops.

You have a lot more maintenance. You might need to actually create a separate pumping station to manage all of it. It's going to be a lot more. You might actually use more energy just because you're going to be using a lot more pumping energy than you will be using with individual. So, I think in the case of like an urban center where you have commercial buildings next to residential buildings and some are heating and some are cooling, then it makes a lot of sense.

David Roberts

And some buildings have a lot of waste heat, like your data center, your factory, or whatever has a lot of heat that can dump into the network.

Kathy Hannun

Yeah, if you had a data center in South Dakota next to a neighborhood, that would be a great option. But if you just have a bunch of homes in Denver, Colorado, a single loop is the way to go.

David Roberts

Interesting. I hadn't really thought about that. We're getting near to the end. I did want to press a little bit more on how vulnerable you are to Trump, basically. So, I mean, you're a young, as you say, sort of nascent industry, kind of scattered, a little bit low scale, a little bit niche, still trying to sort of consolidate, grow, standardize, bring down costs, et cetera. But right now, at least a lot of what you do depends on incentives, Colorado incentives, federal incentives, et cetera. Trump is, you know, I don't have to tell you what he's doing.

Like, are you, are there things he could destroy that would meaningfully hurt your business?

Kathy Hannun

It's a question that we've thought about, as you can imagine.

David Roberts

I imagine quite a few people are thinking about it.

Kathy Hannun

If I could make my pitch to the Trump administration, what I would say would be, there is no HVAC system that is more aligned with what appear to be the Trump administration's goals as geothermal heating and cooling. Because all of our heat pumps are made in the United States. They're manufactured here. What other piece of HVAC equipment can you say that about?

David Roberts

Yeah, so maybe, like, tariffs won't hurt you. You specifically are not going to come in for a lot of pain from the tariffs.

Kathy Hannun

We hire local drillers and HVAC installers to install them, and then they're harvesting American energy from the ground.

David Roberts

Couldn't be more domestic.

Kathy Hannun

It's like the most domestic possible way of heating and cooling. As we talked about in this conversation, you make the grid way more efficient, so you're able to accommodate all that AI data center demand. And, you know, all of the constraints that are coming. Like this is actually such a cheap, efficient way to accommodate a more efficient and resilient grid. But yes, to answer your question, it would be much better for us if the geothermal tax credits were preserved.

David Roberts

All the clean energy tax credits were going to be, or maybe are still going to be, merged into this sort of tech-neutral tax credit. Is there right now a specifically geothermal tax credit that you're making use of?

Kathy Hannun

It's not specific to geothermal, but there are two different primary tax credits that the industry benefits from. There's 48A, which is a commercial tax credit. It's the same one that's used for batteries and other types of geothermal and solar. And then there's 25D, which is a residential tax credit. So that one goes to the homeowner. And I would say that it will be much better for the industry if the tax credits remain because, as you said, it's like we are at the threshold. And if they do go away because of that split incentive issue I told you about, where the builder does not today benefit from the federal tax credit as it goes to the homeowner.

This is true for a single family. In the case of a multi-family owner that retains ownership of the building for five years, they would actually benefit from the tax credit today. So, it would really affect that use case. But in the case you're seeing, like with the Lennar project, for example, it's the homeowner that gets the tax credit. And so, if that tax credit goes away, that part of our business should be resilient because, you know, Lennar doesn't really make their decision based on that tax credit anyway. But I would say, while I think Dandelion will weather that storm, should it happen, of course, it will be so much better for the industry if the tax credits remain in place.

David Roberts

Yeah, yeah. And supposedly, Chris Wright, our new DOE Secretary, loves geothermal. That's what they say. That's what they say about him. Who knows how much he really knows about it or if he's familiar with all the varieties.

Kathy Hannun

Well, I certainly appreciate that about him.

David Roberts

All right, so wrapping up, let's talk a little bit about your plans or your sort of vision for the future. Because one of the questions I get a lot about this whenever I bring up this subject is, it sort of seems like a nice thing where it works for all the reasons we've discussed. But if it's going to be meaningful on a climate level, you need scale. You know what I mean? It needs to be going beyond thousands a year to tens of thousands, 50,000, 100,000 a year. What is the pathway to that scale? Maybe let's just start proximately, like right now you're still, as I understand it, available in the Northeast, a set of Northeast states.

Like let's start with where are you currently available and where do you plan to sort of expand next?

Kathy Hannun

Dandelion serves home builders and multifamily developers anywhere in the United States. But, we do tend to see our greatest uptake is in the Northeast, the Mid-Atlantic, and Colorado, though we do have projects outside of those places.

David Roberts

So, like, if I up here in Seattle got a Dandelion system, would it be a Dandelion approved contractor installing a Dandelion manufactured heat pump in my home, yes, that's how it would work?

Kathy Hannun

I should clarify that while we serve home builders everywhere, we only go direct to homeowners in New York and Massachusetts today. So, as a Seattle homeowner, unfortunately, today we could not help you.

David Roberts

So, if I was a Seattle developer, a builder of subdivisions, I could get your product. But for individual existing homeowners, it's just New York and Massachusetts?

Kathy Hannun

And a little bit of Connecticut. Yes, that's right.

David Roberts

Are you sort of like putting that side of the expansion on hold a little bit while you push on the developer side? Is that your main focus right now?

Kathy Hannun

That is what is happening. We're trying to really focus on pushing the developer side of the business just because it's so promising and just we have enough projects going on now that it really is taking our team's focus just to, we want to fulfill those projects with a very high level of excellence, of course, and we're growing as quickly as we can to meet the demand. So while that's going on, we're continuing to serve our traditional New York, Connecticut, Massachusetts homeowners, but not planning to expand our direct to consumer offering too much at this moment, but we do want to do it in the future.

David Roberts

So, then back to the previous question, do you see a path to meaningful scale here? It's such that it could make a difference in the macro numbers.

Kathy Hannun

Yeah, and of course they do, because if I didn't, then I wouldn't be doing this. But let me tell you why. I guess, one thing I would just point out is that again, using the Lennar example, just because it's recent, Lennar is a very pragmatic home builder and they want the best product at the best cost for their homeowner. And they decided to go with geo in Colorado. Now, the air source companies that we were competing with for that business are multinational, huge scale, probably making like a million products a year.

We're the tiny, subscale geothermal industry, thrilled for the chance to make 1,500 of these in two years. And yet, we won the deal. You know, we were able to make a better value proposition to a very discerning customer. Part of the way we were able to do that is by partnering with the utility, Xcel Energy, and having them recognize the value of geo to them. And I think that model can be copied. You know, I think, as to our earlier conversation, as utilities start to translate the benefits over time, of geo into incentives that can be used to nudge these transactions towards geo.

I think the fact that we are competitive today at our scale with other HVAC types that are so scaled just suggests there's so much potential for us to become much more competitive over time. And I would say as a whole, Dandelion, as a company, it's like a two-part project. Part one, make the geothermal systems cost less. You know, to our conversation: Is this the right antifreeze to be using all the way to like how do we install these ground loops more cost-effectively? Can we get more heat out of less loop?

Can we make these products manufactured in such a way that they're less expensive? You know, like there's a million projects there. And then, separately, part two is, can we start to internalize these positive externalities so that the market values geo correctly? And those are the two efforts and what they come together to do is just to make geo the most economically attractive option for customers, which it is already in several markets in the US, but we just need to make that the case in more. And importantly, we need people to realize that that's the case. Because even though geo is less expensive than anything else right now in many parts of the Northeast, in Colorado, and in the Mid-Atlantic, I think very few people actually know that.

So, we have to make that the case in more markets, spread the word. But then, I don't see why it won't become the mainstream option. Because it is the best product. So, if it's also the less expensive.

David Roberts

When your eyes get wide and you get dreamy, like do you imagine this becoming the default for all new home builders? Or do you think it's going to be regional even once it's scaled up? Do you know what I mean? Or could it be universal?

Kathy Hannun

In Sweden, it's 70% of new homes, right? So, in Sweden, it is the default, which I think is an interesting proof point. Right? I do think it will be regional because the relative benefits of geo are regionally different. Like, you're going to see it do much more good compared to air source in, like, Minnesota than in, I don't know, San Francisco. So, I do think it will be somewhat regional.

David Roberts

But, let's just say, for those regions, for those super cold regions, an electric heating and cooling option that does not break the grid is a really key piece of decarbonization. Like, it's not necessarily huge, but it's very important. You can't work your way around it.

Kathy Hannun

It will be necessary. Like, I don't think there's a solution right now to electrifying cold places with air source and how exactly that will work in practice. And I think this will be part of the solution. And then I think we should start with new homes. I know it's not the full problem, like you and I totally agree on that, but the geothermal industry needs to achieve greater scale because with any HVAC, it's like, with scale, that's the main lever for cost reduction.

So, we need to achieve scale. This is the easiest way to do it. And then, we use that scale to tackle the harder buildings to retrofit.

David Roberts

Yeah, that makes sense. Like, retrofit is such a fussy — so fussy, so bespoke. So, it's difficult for a million reasons, but that's the main one. Well, this has been fascinating, Kathy. So much fun. Do you have other builders on the line?

Kathy Hannun

We do. We have other customers, actually. We have quite a few projects going on right now. Not all of our builders want to be named publicly, but we do have other top 10 home builders that are committed to doing this. So, I think in not too far from now, we'll be able to talk more about the momentum we're seeing. And again, they're doing it because it's cost-effective and it's just a better product for their homeowners.

David Roberts

All right, awesome. Well, thank you so much, Kathy. I really appreciate this. Have a great weekend.

Kathy Hannun

I really enjoyed that. Thank you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I’m joined by consultant Jarrett Walker to take the pulse of US transit in a world of empty downtown office towers, surging weekend ridership, and the tech elite’s dream of transit without strangers. We unpack the myths that plague buses, reveal why Canada’s transit abundance should be our model, and map the policy battles that will determine whether US transit systems shrink or soar.

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Text transcript:

David Roberts

Hello everyone, greetings, this is Volts for May 7, 2025, "How is transit doing in the US?" I'm your host, David Roberts. The Covid crisis was, among many other things, a gut punch for US public transit. Many transit systems were built around facilitating commutes to downtowns, and downtowns emptied out overnight. Many took years to return to their pre-Covid health, and many still haven't.

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The federal aid that helped local transit systems survive Covid and its aftermath is coming to an end, and many systems face a “fiscal cliff” after which their funding will plunge.

Some transit systems have coped with these changes better than others. To get a sense of how US Transit is doing in general, I'm talking today with Jarrett Walker, who has been planning and advising on transit systems since 1991. He's the author of the noted book Human Transit, which just got a new, revised edition last year, and the founder and president of Jarrett Walker + Associates, his transit consulting firm.

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We are going to discuss where transit stands in the US, which systems are doing it well, what myths and misunderstandings still plague it, and the best policies to move it forward.

With no further ado, Jarrett Walker, welcome to Volts. Thank you so much for coming.

Jarrett Walker

Thank you very much, David. It's really great to be here.

David Roberts

This is a big topic to chew off. Obviously, you think about transit systems all day, every day. It's probably difficult to summarize what you've learned in one hour. But I do just want to try to, as best we can, get a snapshot of how the US is doing. And I thought maybe the place to start would be, let's just take ourselves back pre-Covid, before Covid. How's US transit doing? Like, I think, sort of like the conventional wisdom among people like me is basically that the US is a laggard on transit relative to Europe, relative to China, relative to growing Asian countries, relative to almost everyone.

But maybe you can give us a little bit more than "it's lame." How was US transit relative to other countries in the pre-Covid era?

Jarrett Walker

Well, I think you would say it was dramatically under-resourced, as it still is — has been from the beginning. And you know, I keep encountering these interesting statistics. I'm just now doing a project in Des Moines, Iowa, and one of the interesting statistics that sticks in my mind is that since 2009, the region has grown over 20% and the resources for public transit have grown by 1%. So, we have a lot of transit agencies in the US that are not resourced to keep up with growth. And that's actually a very old problem. Another dramatic example from a current client is the Chicago suburbs transit agency, Pace, which serves virtually all the suburbs of Chicago, 200 and some cities.

It has never really been resourced to grow as its service area has grown. And so, you look at its network map now, and it's still predominantly focused on the areas that were already built out 70 years ago. They've never had the resources to really keep up with all the development that has happened since then. So, the neglect of public transit in the US, the failure to grow it, even with population, has been a constant throughout much of my career. But you asked particularly about the late teens. In the late teens, we were seeing a very slow deterioration in transit ridership in a lot of cities, attributable, I think, mostly to the fact that driving was unusually cheap.

It was extremely easy to get car loans, and so lots of people who had been using public transit went and got cars. But I think that fundamentally, the most important thing to keep in mind, and this will probably come up in various ways, is that we just have very little public transit in the US.

David Roberts

Yeah, that's kind of what I was getting at. Well, I saw a statistic once — maybe you can confirm. I repeat this all the time, I've never actually looked it up to confirm whether I'm remembering it correctly — but I feel like I read somewhere that the New York City metro area represents something like 75 to 80% of total transit ridership in the US. Like, if you took New York out, it would really reveal that there's very, very little robust transit in the US.

Jarrett Walker

And so, I deal with that every day, of course, because most of the work of our consulting firm is helping transit agencies figure out how to do the best they can with the resources they have. And so, I'm constantly making, having to advise on these sort of "Do we keep the heart or do we keep the lungs" kinds of trade-offs.

David Roberts

Yes, yeah, well, we'll get to that. So, let's talk then about what Covid did to transit. I think that the sort of headline story is simple, which is just people were commuting to jobs and they stopped doing so for a year, which left transit sort of stranded. There was a ton of federal help for everyone early on. So, where do we stand with all that? What are these fiscal cliffs and like, who's facing them? What did Covid do? And have systems recovered from it?

Jarrett Walker

So, in terms of ridership — and we'll come back to the fiscal side of it — but just in terms of ridership, transit ridership has continued rising gradually ever since the bottom in late 2020. And there are many services I can point to that are above pre-Covid. Those are mostly, though not services devoted to taking people into downtown because that's the market that's disappeared. Where transit is doing well is all day, all weekend, moving people around in relatively dense places. And we have lots of routes around the country now that are above their pre-Covid ridership, especially on weekends, of course, where the pre-Covid data didn't have commuting in it.

So, we can see the growth more clearly. But I want to say a couple of things about the commute because so many journalists start with the assumption that transit is about commuting and it's never been as dominant a part of the market as you would think from the media coverage. It just has to do with who's doing the media coverage. But we have always had an important role in moving all kinds of people for all kinds of purposes at all times of day. But we have always inevitably been expected to handle, in addition, this enormous concentrated one-way commute into a downtown.

And that one-way commute, although, you know, sometimes the buses and trains were pretty full, it was really expensive and inefficient to serve because we had to own a whole bunch of vehicles that we didn't use very much. We had to pay drivers to come to work for just three or four hours.

David Roberts

Well, it's just like all these other systems I discuss on this pod. It's built around the peak. And thus, you have a bunch of unused capacity sitting around most of the time.

Jarrett Walker

Bunch of unused capacity. All those trains that go in full come out empty the other direction. There's just a whole lot of inefficiency to that huge one-way peak. So, I think that the future of American cities as they're evolving with now, you know, downtown office buildings starting to turn into housing and developing more of a jobs-housing balance, is fantastic. It's ultimately going to lead to healthier cities and better environmental outcomes. But, if you're just measuring transit ridership, of course, there's one big source of transit ridership that's gone away and that's probably never going to come back to the same degree.

But everything else is doing well. Now, the other issue is financial. So, the other thing that has happened to transit agencies in a big way is that it's become harder and harder to hire staff.

David Roberts

Oh, interesting.

Jarrett Walker

Yeah. Transit agencies in the US have had real difficulties ever since the pandemic with hiring, particularly bus drivers, but also mechanics, train drivers. There are a bunch of reasons for this. Driving a city bus is a very difficult job.

David Roberts

Yeah, it's always seemed like it's miserable for the amount of money you get for it. You have to deal with the grumpiest people.

Jarrett Walker

I know. And so, we're having to pay people more to fill those positions. And so, unit operating costs are going up for transit because we have to pay drivers more in order to retain them. And I'm fine with paying drivers more, but that's an adjustment that we have to somehow pay for. And so, that combined with the problem that especially the larger agencies had of the big loss of rush hour fare revenue, has created the fiscal cliff. The fiscal cliff tends to be worst in the largest agencies that were most dependent on commuting agencies like BART in the Bay Area.

David Roberts

And the cliff is because all this federal revenue is running out, basically.

Jarrett Walker

Right. So, what the federal revenue did was basically fill the hole of the vanished fare revenue. But now, that is running out. And so, transit agencies either need to find a new funding source, which many are trying to do, or downsize. And I'm working on both kinds of projects. Louisville, without any particular funding source, is looking at downsizing the system by 50%.

David Roberts

Oh, that is tragic.

Jarrett Walker

You know, on the other extreme, you know, in Portland, we're growing. The Bay Area is working on figuring out its fiscal cliff problem, and some sort of giant funding measure is probably going to go before the voters in '26. I think we'll see a lot of measures on the November '26 ballot because that's really the drop-dead date for a lot of these agencies. And that's when voters in a lot of communities are going to decide whether they want their transit systems to collapse or whether they want them to keep improving.

David Roberts

I'm curious. When you talk to the big cities where commuting was the large chunk, you say that it's probably not coming back completely. I'm sort of curious. When you're planning these big systems, you need some sense of what the future holds. And as far as I can tell, nobody really knows what's going to happen. Like, downtowns have not recovered completely. Are they ever going to? Is some of this working from home going to be permanent? There seems like a little bit of a backlash against it. They're trying to drag people back now, but I'm just wondering what these towns are they sort of like acclimated to the notion that downtown is never going to be what it was, and they're just working around that now?

Jarrett Walker

I don't think downtown is ever going to be what it was in 2019, but I think it can be better. I think that the direction we're going clearly is that the market is telling us that what we need to have right now is housing rather than offices. And that, to the extent that we add housing to downtowns, they become more vibrant 24-hour places where transit has a larger role to move people back and forth for all kinds of purposes, not just haul all the briefcases in at 9 am and haul them out at 5. And that's really where transit can sing in an environment where there are lots of people moving around for all kinds of purposes all the time. And that's where we're seeing the best performance in transit systems right now, generally.

David Roberts

And when we talk in the US when we talk transit, are we mostly talking about buses? Like just on a per capita basis, is it mostly buses carrying people?

Jarrett Walker

Yes, and I encourage people to care less about whether they're on rails or tires. We're really trying to offer the greatest possible access to opportunity, and that requires using the right tool in each situation. I think that one of the big challenges we have in the US is an elite prejudice against, not just an elite prejudice against public transit, but an elite prejudice specifically about buses.

David Roberts

Oh, for sure.

Jarrett Walker

Which I am always working to push back on because I've spent plenty of time in other countries where the buses are every bit as nice as the trains and you can barely tell the difference from the inside. So, that all has to be worked on. Because, look, the bottom line is that we need lots of public transit quickly. We need it in lots of places.

David Roberts

Let me pause you there, because if you're trying to make the case — like to me, you know, this is one of those things where it's hard for me to project myself into someone who doesn't recognize the need for public transit. To me, the fact that we've underinvested in public transit seems just, I don't know, manifestly obvious. But if you're trying to make that case to a particular city, what do you point to? What metrics do you point to? What sort of evidence that we're underinvesting in transit in a particular place?

Jarrett Walker

So, one thing I point to is Canada. Most American cities can find a Canadian doppelganger. They can find a city north of the border that's sort of like them. So, you know, I tell Seattle to go to Vancouver, I tell Denver to go to Calgary, I tell Des Moines to go to Winnipeg, I tell Portland, Maine to go to Halifax, and so on. Chicago, look at Toronto. There's usually a Canadian doppelganger that's sort of comparable. Calgary, Winnipeg, these are sprawling car-oriented cities. These are not urbanist paradises. But the one thing that's different is that there are just a whole bunch more buses running around.

There's just a whole bunch more service per capita and you get a whole bunch of other benefits from that that you can go up there and measure and you can talk to people about it. So, you know, my line to US transit advocates is, "For God's sake, stop envying Europe and start envying Canada." Because Canada is the thing we can do in the landscape that we have. And Canada's doing it. You know, and of course you go up there and you meet the local advocates and they'll be the first to tell you about everything that's inadequate, which is true enough. But compared to the U.S., it's just a really nice comparison because the Canadian transit is not sexier, it's not cuter, there's just more of it.

David Roberts

Right, right. Is there a tidy cultural or political explanation for that other than just the general US aversion to public spending?

Jarrett Walker

Oh, I think there are elements to all of that. I think there's also the fact that car dependence was very intentionally constructed as a matter of government policy in this country in a way that I don't think it was ever quite as authoritative in Canada. Canada more muddled along. But you know, if anyone is interested in this, I would recommend Peter Norton's book, Fighting Traffic, who is really an excellent historian who tells the whole story about how car dependence happened and why it is not something we freely chose in the free market. So, I think that yes, there are some historical reasons more than anything for why Canada has more transit.

But now, I just want to point American cities to their Canadian doppelgangers and say, "Look, why can't you be like that? That city isn't that different from you."

David Roberts

Well, I'll tell you — this is a good segue — if I'm an American, my personal response is, "Well, for one thing, I know that if I get on a bus in Canada, I'm probably not going to get shot. You know, like there's not guns everywhere, all over Canada, like Canada is not a scary, violent place like the US seems to be." So let's talk a little bit about security. I mean, I'm sure you run into this every day. The US elite, as you say, I think obviously on the right, but really on the left too, if you scratch a little bit below the surface, just this idea that like, transit is for poor people and transit is unsafe.

And there's this idea, I think, that people have, that it's gotten more unsafe since Covid. And I know that there's certainly like — and this is true on the roads among drivers too, right? Just like, there just seems to be a rise in jerks, jerk behavior, like weird antisocial behavior since Covid. I don't know if anybody's really wrapped their heads around why exactly this is happening, but it seems to be happening on transit too. So number one, like, do the statistics support the idea that transit is notably unsafe? And number two, how do you talk people down from that?

Jarrett Walker

Well, obviously, you don't do it all with the facts. But for those people to whom the facts matter, public transit is incredibly safe. It is far, far safer. You're far, far safer on the bus than outside of the bus, and certainly, you're far, far safer than you are in a car. But what's really going on here, of course, is that using transit involves developing a level of comfort with the presence of strangers that not every American has and that car dependence allows you to just not develop. And so this is why transit is inevitably something that, although it has a role in rural areas, really co-evolves with cities.

Because the basic conjecture of transit is, "It's okay to be around strangers."

David Roberts

The basic conjecture of cities.

Jarrett Walker

Which is exactly the basic conjecture of cities. So, you listen to the right-wing hysteria around transit and it's not hard to scratch the surface and realize this is right-wing hysteria about cities being produced by and for people who live out in the suburbs or in rural areas and who want an excuse to disinvest in cities and a reason not to care about cities. So, I think the important point is that notwithstanding all of these scare campaigns and notwithstanding the fact that there is some crime on transit, and it has been an issue, and it is something that's being worked on and that there are nuisance issues on transit as there are on the sidewalk.

David Roberts

Are those on the rise though, like, I'm not crazy that there's like more of that stuff?

Jarrett Walker

Those are going down now.

David Roberts

Oh, really?

Jarrett Walker

By and large, yeah. I think we've turned the corner on a lot of that and a lot of those things are getting better. Now, crime, the latest I've seen, crime on transit is generally trending down, reported crime. Obviously, that doesn't capture all the nuisance experiences people have. But yes, there are certain risks associated with going out your front door, but once you have taken upon yourself the risk of going out the front door, you're much better off catching the bus than getting in your car.

David Roberts

Yeah, you know what you said about Americans and strangers, I think part of that is like our land use patterns, just sending people out into suburbs where they're sort of alone in their castles, but also just like the general move of everyone online. Just like something about online consumerism is every space you're in is perfectly curated for you. And like, the whole premise is like, nothing's gonna bug you or bother you or make you uncomfortable. And like, anything that does bug or bother you or poses any friction must be eliminated. People just get in that mindset. And then like, when you're in a physical space with other physical people who you don't know, you have to make certain accommodations.

Like, you have to adjust to the world rather than the world adjusting to you. And I feel like Americans are just losing that ability in general just to, like, be out in the world and cope with things that they can't just click away.

Jarrett Walker

I think over my lifetime, though, this has gotten better as much as it's gotten worse. You know, I've been doing this work for 33 years now, 34 years, and the kind of apathy and hostility toward urban life that you expected as the norm in the 1980s, when frankly, it was in many cases a coded conversation about race because everyone else had left the inner city, we're in a very different place now. You know, I can stand in front of a group of, you know, and I do, when I stand in front of a group of fairly conservative people, I always have to say, "Look, I know you hate San Francisco, but if it were such a terrible place, it wouldn't be so expensive to live there."

We have a market that is telling us to build more of the kinds of places that will only function if we have good public transit.

David Roberts

Speaking of crowds in San Francisco, there is, I know you've noticed over the last few years, the sort of rise of tech and the rise of tech bros, for lack of a better term, the rise of tech execs, the sort of tech mentality. And out of that world have come several sort of something that's not a personal vehicle but stops short of transit. You know what I mean? Sort of like, here's how to get around without exposing yourself to those icky strangers. Like, that seems to be a lot of — like, the tunnel under Las Vegas, which to this day I cannot believe is real life.

Like, instead of a subway, they dug a tunnel and are running cars through it. It's just... I don't know. It blows my mind. But what is that trend? And is that on the wane, too? Like, how do you get past this idea that, like, the point of tech, the point of progress, is to free you from those situations where you have to deal with other people?

Jarrett Walker

We've been dealing with this now for over a decade, since we first started getting the driverless car chatter. And, you know, Elon Musk made his famous comment back in 2017, you know, that public transit is painful because there's a bunch of random strangers, one of whom might be a serial killer.

David Roberts

One of whom might be Elon Musk. I mean, that's much scarier to me.

Jarrett Walker

And so, that's always out there. And so, it's interesting because I listen to a lot of tech pitches, and I've been noticing recently that there's this commonality of several different inventions have all defined the problem as, "How do we make something that feels virtuous, that we can call public transit, but that will not expose anyone to the presence of strangers?" So, you know, you have Glydways, which are these little automated vehicles moving along tracks.

David Roberts

Oh, yeah. Up in the sky. Right. The little...

Jarrett Walker

Well, no, you have Glydways, which is moving along a special roadway. Then, you also have the idea of various kinds of gondola, hanging from wire solutions. But they're all about trying to. You look at the publicity materials for these things, and everyone in the car is of the same class and seems to know each other and seems to be traveling together intentionally.

David Roberts

And usually the same color.

Jarrett Walker

No, usually there's some racial diversity now because they're sensitive to that, but there's no class diversity. So, you know, it's... Why did that get defined as the problem? Why did we define the problem with transit as being that there are other people? I would say the presence of other people is the essence of how transit succeeds. And therefore, if you try to take that out, you should stop calling it transit because it's not working the way transit works, and it's not doing what transit does. But it's interesting that at the same time that we have this constant pressure from the tech elite, the tech elite is talking to a larger elite about what the future of cities is supposed to be from their point of view.

We have people out there, you know, ordinary people out there navigating our cities using public transit when it's useful and not using it when it isn't. So, that's the clearest signal that all of this is something of a distraction and that the thing to focus on is that if we have more useful transit service, more people will use it and all of the benefits of people using transit will increase.

David Roberts

Yeah, maybe the right way to think about it is just that the tech world attracts a bunch of these very similar dudes who are, say, extremely symbolically intelligent, but perhaps not super emotionally intelligent. And the public dialogue has been shaped by their particular neuroses. But like, as you say, the evidence does not support that other people share those likes.

Jarrett Walker

Exactly.

David Roberts

Other people are willing to ride transit just fine when it works for them.

Jarrett Walker

So, when I'm talking to groups of relatively fortunate people, I always caution them against elite projection. Elite projection is the very common habit among very fortunate people to refer to their own tastes as a good guide to what would work for everyone. It's just the process of constantly reminding elites that, "Congratulations, I'm sure you worked hard for this, congratulations you're an elite. But that makes you a tiny minority. And that means your tastes are not a very good guide to what is going to work in a transit system that lots and lots of people will use."

David Roberts

Yes, and if you're thinking about transit systems, like, "How can I make it nice and pipe in just the right music and some cool screens?" Other people are thinking about transit like, "How do I get to work? How do I reliably get to work on time?" Which is not something that these people have to think about a lot.

Jarrett Walker

Yeah. How do we make this functional?

David Roberts

Yeah. So, on that note, the biggest dilemma in all this, like, in some sense, transit for dense urban areas is — I don't want to say a solved problem because it's such a challenge everywhere — but like, I feel like we have a good sense of how to do that. But then one thing everybody asks, like when I threw this out on Bluesky, one question everybody has about transit is we've built all these suburbs now we've built all these low-density areas and they're not all the same. There's like, you got your dense urban core and then you got your sort of like inner ring suburbs, semi-dense quasi-dense suburbs, and then they get sort of less dense as they go out.

And I think part of what we want to do with transit is to push it out a little bit into some of those areas, some of those less dense areas. And that just gets you into a whole nest of problems, sort of like legendarily, if people are sparse, you need a lot of transit to get to them, and you get this sort of low per capita numbers that are difficult to justify economically. So, how do you wrestle with taking an inner ring — let's just start there — sort of like inner ring suburbs. What's the best way to bring them into the transit fold?

Jarrett Walker

Well, I think you're right that once we get out into the suburbs, we're presented usually with a development pattern that is just geometrically less suited to public transit. Public transit thrives on a few geometric features of development pattern. It thrives on density, walkability, which is to say the absence of barriers to walking in a reasonably straight line relies on linearity, the availability of reasonably direct paths that transit can follow. And I am always careful when I'm working with communities to describe these things purely geometrically because people obviously are primed to hear that I'm insulting their neighborhood. And that's not what I'm doing. What I'm saying is that there are facts —

David Roberts

But those are unquestionable geometric features of suburbia. That's nonlinear. You can't argue with that. There's no value judgment in it. It just simply is not linear. It's not dense.

Jarrett Walker

So, the question becomes, "No, it's not in general, but bits and pieces of it are, and you can always find promising parts of it." So, the next step really is to have the conversation about what you're trying to do with the transit system and what your measure of success is. And this is a fundamental conversation that decision makers have to have, and that I've been specializing in for a long time now, helping them have, which is they have to think about whether they're going to treat ridership as their primary goal.

David Roberts

Yeah, yeah. What I'm so curious about is this discussion. Like, what is the point of public transit? To me, it's to get people out of cars. Duh. Like, to me, that's the first, second, and third reason. But I'm assuming, like, you know, city planners do not have, let's say, my same hostility toward cars. They have not joined the war on cars. They probably drive cars, most of them. So, what do they view as the point of public transit? Like, what are the other options?

Jarrett Walker

Well, what matters is not what the staff thinks. What matters is what the politicians and the elected officials think.

David Roberts

Right, of course.

Jarrett Walker

And so, in most urban areas in North America, there is an unavoidable tension between the interests of the core city, the area largely built before World War II, which tends to be more suited to public transit, and newer cities that were built in ways that are not as suited to public transit. And I like to talk about it in terms of the trade-off between ridership and coverage goals. So, if the only goal of a transit system were ridership, and let's say it's a regional transit agency that covers the whole metro area, but if the only goal were ridership, it just wouldn't go to a lot of places. There just wouldn't be any service there.

So, the point is to recognize that and to recognize that every time you complain about the ridership of a transit system, well, one of the things they could do is cut the low ridership service.

David Roberts

Yes, just go from busy place to busy place, back and forth.

Jarrett Walker

So, what happens, of course, is that those low ridership places have their own members on the board, they have their own advocacy. And so, instead of just having a fruitless shouting match between urban and suburban, what I try to do is have a conversation about how you're going to define success for the transit system. Is it ridership or is it coverage? In other words, should a certain amount of service be set aside just to be spread out a little bit everywhere so that everyone has a little something?

David Roberts

And it's interesting when we set up our electricity system, we very deliberately chose coverage, even at considerable expense, because we viewed access to electricity as a core, something required for modern life. And clearly, we do not view transit that way, right?

Jarrett Walker

No, and I don't know that you should. We should view access to transportation as a requirement of modern life. But transit isn't the right solution everywhere. And this has, I think, been part of the problem that there's been an entitlement, you know, if you're going to think in terms of there being an entitlement to transit on the part of everyone who pays taxes into a transit agency, well, you're going to spread the resources so thin across all that suburbia that people are going to get a bus once an hour or once every two hours. And this is what happens. This is really what happens when you take the typical resources of an American transit agency, which are already very low, and then you divide it across all those square miles of sprawl. You get a bus once an hour and then that turns out not to be very useful and so not many people use it.

David Roberts

Interesting. So, do you think a lot of agencies are overweighting coverage relative to ridership?

Jarrett Walker

"It's not my job to say that. It's my job to help each agency get to its own decision. And so, for example, VTA in San Jose decided that they wanted to devote 85% of their resources to ridership, 15% to coverage. The network reflects that. We had the experience there of a San Jose city councilman who was on the board, who represented the Almaden Valley, which was going to have no service under the plan, voting for the plan and saying, "Yes, I understand what the Almaden Valley is and you shouldn't be serving us if the goal is ridership."

But that's rare, obviously. And lots of other people in those positions will be saying, "You know, well, where's ours? I can't vote for this. There's nothing for me." So that's the conversation you have to have. And the point is, this is what elected officials are for. This is what boards are for. I try to encourage staff to stay out of the way and let the electeds wrestle with this because this is just a question about what your definition of success is, and that's what the elected officials are for. I think it's important then to notice how much journalism in the United States about transit is just unconsciously assuming that ridership is the measure of success.

And whenever I get a call from a journalist and they want me to comment on the latest ridership figures, I have to back up and say, "Excuse me, why are you assuming that ridership is the goal? It's not the only goal. It's one of the primary goals. But it is not what transit managers are being told to focus on every day. They're being told to focus on multiple things."

David Roberts

You could make reasonable decisions that increase coverage but reduce ridership averages, let's say, per mile.

Jarrett Walker

So, the point is, I want a board to tell me, "Do you want more coverage? Do you want more riders?" So, in the Chicago suburbs, we just did this exercise. The board told us, "We want more coverage." And I said, "Okay, we're going to get a lower ridership network." And they nodded. Okay, so great. It's not my place to make that judgment. What I want is for board members, for people governing transit agencies to make this decision consciously and not be surprised by the consequences.

David Roberts

Right. Do you find that they're often not making it or not facing the trade-offs?

Jarrett Walker

Oh, yeah. There are all kinds of ways to fake your way through this. You know, I have encountered transit agencies adopting statements such as "compete effectively with the automobile by providing access for all." Which is a great example of... Which is just like you're telling your taxi driver to turn left and right at the same time and you can't. He's not going to be able to do that. And your staff is not able to do that. And you know, what I want for transit agency staffs is to not be that taxi driver. I want them to have clear directions so they're not being yelled at for no matter what they do.

David Roberts

Is there any sort of difference in kind when you're advising a big city, like million plus versus like a mid-sized city or like a 250k city, something like that? Like, are there different considerations for sort of your smaller and mid-sized cities?

Jarrett Walker

I don't think they're different in kind. I think the politics are always different from one place to the next. There are interesting red state, blue state differences. So, for example, one of the things that's common in red states is for cities to have the power to secede from transit agencies, which can be very disruptive because it gives them the leverage to demand all kinds of things. There's a crisis going on right now at the Dallas Transit Agency where the state legislature is trying to change some rules to allow some wealthy cities to secede from DART in a way that would just destroy the finances of the agency.

And, you know, I'm working in Des Moines right now where each one of the cities in the metro area has a right to secede, and that's defining some of the dynamics among them. But overall, no, I don't think so. I think it's much more of a continuum.

David Roberts

I mean, this is to get at one of the sort of primordial conflicts in this area. How do you weigh frequency versus coverage? That's a bit of a trade-off too, right? Because I remember going to Barcelona back in 2015 and talking with Salvador Rueda, who redid their bus system, redesigned their bus system, and his whole goal was, "There is no bus stop where you have to wait more than five minutes in the city." Which to me is like, in terms of the subjective experience of transit, that is like number one; is it there when I want it, or am I standing around awkwardly? How do transit planners weigh frequency relative to other goals?

Jarrett Walker

So, this is huge. Frequency has a nonlinear payoff. And if you stop and think for a minute, you can understand why that would be. Frequency means less waiting, but it also means easier connections from one service to the next.

David Roberts

Right.

Jarrett Walker

And it also means if a bus breaks down, the next one will be along soon. And that's sort of my kind of back-of-the-envelope way of explaining why when we get up to frequencies of 15 or better yet, 10 minutes, we start seeing a nonlinear ridership payoff. We start seeing it paying off above the level of investment. And so generally speaking, when somebody asks me to design a high ridership network, I will generally identify the high demand corridors and put frequent service there and take frequency up to usually about 10. In the US, we usually can't get much better than that.

But obviously, if you have the resources, then it's great to go up to about seven or six. And then beyond that, you're just adding capacity. Beyond that, it doesn't make much difference. But we can measure, you know, when we do analyses of access to opportunity. When we calculate how a transit agency, how effective a transit agency is at connecting people to opportunity, we're always counting all three parts of the trip: the walk, the wait, and the ride. And the wait is very often a dominant part.

David Roberts

People hate waiting in a way that is beyond rational, let's say.

Jarrett Walker

I think you don't need a psychological explanation. It's just that in the US, the wait is a big part of the travel time and it's often the most effective part to reduce. And so, you don't need the psychology of it. I mean, obviously, it was much worse in the old days when we didn't have real-time information and you stood out there in the rain wondering when the bus would come. But the point is that even now that we mostly do have real-time information, you sit in the cafe and go out there two minutes before the bus comes.

Still, a low frequency represents time you are spending, not where you want to be. And we count that against access to opportunity in terms of calculating the effectiveness of what we're doing. That reflects the fact, I think, it sort of explains why frequency is such a strong ridership predictor. But the challenge of frequency is it's hard to explain to a motorist. Motorists do not have this experience apart from a traffic signal. They don't have the experience of just being stuck somewhere until something happens. So, you know, I have to use images like "Imagine there were a gate in front of your driveway that only opened once an hour," in order to make that clear.

Because it is the invisibility of frequency. You know, it is not the thing most journalists think to ask me about right away. I usually have to explain it to them.

David Roberts

Even though, to a transit user, it's the first thing they notice.

Jarrett Walker

Exactly.

David Roberts

The main thing they notice. But I'm not wrong, though, that if you are like all things being equal from a set level of resources, if you turn up the frequency dial, you have to turn down the coverage dial, do you not?

Jarrett Walker

That tends to be what happens. Those things are in tension if we have a fixed budget. If we have more money, we don't have to make such painful choices. But in fact, you know, those tend to be the choices again, you know, "Do you want your heart or do you want your lungs?"

David Roberts

Right, let me ask a big question that I was very eager to ask you because this is very much a subject of discussion these days in politics. So, you're probably familiar with this whole abundance movement/push/idea. Just the idea that, like the US, especially in blue areas, especially in blue-run areas, the sort of liberal governance has become sclerotic, slow, and expensive. And nowhere is that more evident than in transit. You know, there's all these examples, like you're trying to build one subway station in New York City, it's $30 billion or whatever, and then you go over to France and they, you know, have transformed half their city for that much money.

Why does it cost so much to build transit in the US and how, like, for someone like you, like, that's got to be so constraining, isn't it?

Jarrett Walker

It is very constraining to the point that I spend most of my time trying to help communities solve problems without major infrastructure. And I often wish that a few more of the table scraps that are rounding errors of major infrastructure projects could fall off the table where we could grab them and provide actual service with them.

David Roberts

Because you mean just like boosting frequency of existing buses or something like that?

Jarrett Walker

Exactly. You know, you look at the billions of dollars that have been spent and some of it clearly misspent, as we all know. And you know, imagine what could have been done with that in terms of actually just providing service with the infrastructure we have or also doing the inexpensive infrastructure. You know, in San Francisco, you can go there and you can compare the very nice bus lane down the middle of Van Ness Avenue, which has nice little stations and which is officially a federally funded BRT project (Bus Rapid Transit project), and just the red bus lanes on the streets which the city just went out and painted. And you know, the latter, what we call tactical infrastructure, is the kind of thing that gets done.

I mean, the Van Ness BRT took decades.

David Roberts

Whereas painting a lane, you can do that in a weekend.

Jarrett Walker

So, I'm very much a "paint a lane" guy at this point, and I'm very much a, you know, "what can we do with buses?" And so, I'm also very frustrated as I work in blue states with some of the regulatory contexts which are coming down on transit agencies and again, demanding they spend a lot of money on something other than serving people. And David, I don't know if you were going to get to this, but I'm going to go ahead and poke the California Air Resources Board here because, I think what we've seen in California with the mandate that transit agencies acquire zero-emission vehicles, and what we're seeing in mandates in other blue states, is exactly an illustration of the anti-abundance sentiment.

David Roberts

This is so funny. The same structure of conversation I have with practitioners in so many areas where they're like, "We know what we're doing, just give us the broad goal —"

Jarrett Walker

Yes, exactly.

David Roberts

"And let us figure out how to do it. Quit nickel and diming us. Quit telling us, 'You have to buy five of these and five of those.' You know, this kind of work contract and this kind of —" it's everything bagel liberalism. Very familiar. So, you've experienced that firsthand then.

Jarrett Walker

Oh, yes. And there's so much frustration right at the time of the fiscal cliff, right at the time that transit agencies are trying to figure out how they're going to just hold themselves together existentially and create a new financial basis for them to be able to keep growing as their communities grow and to be able to meet all of these unserved needs that are going unmet. What do they get? They get another giant mandate to spend money and staff time and attention on something else. And I want to share an interesting statistic that came out of TransLink in Vancouver, Canada.

They did an analysis about how many people need to be on an internal combustion bus instead of driving in order for that internal combustion bus to be better for the environment than an electric bus. And the answer is less than 5. So, you think about that and you think about just how much is being achieved by just providing services that enable people not to drive. And so, what is California achieving by telling the transit agencies to not do that, to not expand service, but instead to mandate what kinds of vehicles they can buy?

David Roberts

So, they mandated that these California agencies buy electric buses, but did not provide commensurately more funding. They did that out of their existing —

Jarrett Walker

It's interesting, the regulation actually says, "It is not the intention of this regulation to cause reductions in service," which is interesting in itself because —

David Roberts

Well, I mean, you could say that.

Jarrett Walker

You can say that. And what's actually happening, by the way, is that CARB sometimes just gives exemptions. I mean, the policy is sitting there, it's not functioning, it's clearly not realistic. And people are going to CARB for exemptions. But I think there's just this larger craziness of saying that your intention is not to cause service cuts. Well, that's nice, but actually transit agencies need to be growing. And everything that you tell them to do instead of that, you're telling them to not grow, you're telling them to not serve more people. And so, I think that this is especially frustrating when anyone ever comes at me and talks about transit ridership as though it were the outcome of a business.

And I have to say, "Transit is not a business. It is not regulated like a business. It is far, far, far more regulated than that." Transit agencies have enormous amounts of staff time going into compliance with all of the requirements.

David Roberts

Do you think that mostly explains the higher costs in the US is just political? I mean is that mostly a political source of that?

Jarrett Walker

I think that's one of the causes. I also just think that the lack of a sufficient scale here, "Buy America" requirements, the things that cut us off from European and Asian innovation, are all part of the picture.

David Roberts

Yeah. Of all the areas or industries where a Buy America regulation makes sense, how about the one area where literally everyone else in the world is doing it better than us? Let's cut off our access to all other countries and just buy our own crappy — like of all the places where you'd want to go buy something right from Europe or something or from France, you know.

Jarrett Walker

And so, this is partly why the electric bus thing is not going well. There are only a couple of manufacturers. One of them just went bankrupt and stopped returning calls. There are lemons sitting around, early useless bricked electric buses sitting around in the yards of various transit agencies from this company that went under. You know, I am always frustrating my tech bro friends by saying that I always advise transit agencies not to buy version one of anything because, understandably, you know, inventors need to have their demonstration projects and transit agencies are often easy to influence because they're governed by politicians.

But it puts an enormous burden on them to expect them to take all of these risks with the same limited funding.

David Roberts

And if it were run like a business, they would not be making those decisions. Has anyone done the math on specifically the pollution savings of greater frequency versus electric buses? Like, is it possible to do that math in any sort of precise way to just help make the case to agencies? Even if you're just wanting to reduce emissions, often better service is better.

Jarrett Walker

Right. And the calculation I just shared with you that TransLink did was of that kind. It was specifically addressing the emissions consequences of all these people driving instead of having this bus so that people are doing that kind of work. I would also call out the work of Todd Litman, Victoria Transport Policy Institute, who does lots of good work in this area. Everyone should be following him.

David Roberts

As you said, it's not your place to tell politicians what to do. They're sort of telling you what to do. But if you were advising politicians just on general principles of how to manage a transit agency in a transit service, is the advice just to "Set goals and let the professionals do what they do?" Like, is that what you basically tell them?

Jarrett Walker

You know, I like to say that I'm like a plumber. In that, say you hire a man to fix your plumbing and he goes to work under your sink. He comes back and he says, "Look, I could just do this like this, I could tape this together and it would last for another year or two. Or, I could rip out the whole assembly and it would be just like new, but it would cost a lot more." And that's the sort of moment where you recognize that you have to make a decision between two different things you want?

And the plumber, you don't want the plumber's opinion. The plumber just stands there with his wrench and waits for you. And, you know, you can go pick up a design magazine and start talking in vague, flowery terms about how you'd like your kitchen to look, and the plumber will just stand there with his wrench until you answer his question exactly the way he framed it. And I use that analogy to explain why I need your board to answer the ridership coverage question exactly the way I framed it. Because that is the actual question that arises from the work.

That is the actual question that arises about goals from the work. And you can adopt all the policy statements you want and all the flowery language you want, and it won't affect reality at all until you answer that question.

David Roberts

Well, then, what if I asked it in an anthropological way, having had interactions now with many, many different transit systems across the country, what do the ones that are doing well have in common?

Jarrett Walker

I think the ones that are doing well have, first of all, clear direction in some form or another, but a clear direction about what they're trying to do that they can explain.

David Roberts

Like clear political leadership.

Jarrett Walker

Clear political leadership that has established clear goals and that has empowered staff to pursue those goals. I think that's one thing. A lot depends then on the degree to which the elected leaders in charge of the agency — and there are many different forms that can take — the elected leaders are supportive of and not interfering with the agency doing its work.

David Roberts

A low bar there. Non-hostile politicians.

Jarrett Walker

Well, I mean, if you're on the board of a private company, you've signed an oath that you're going to act in the company's financial interest. But you don't really have to do that to be on the board of a transit agency. You know, I've seen lobbyists for Uber be assigned to be appointed to transit agency boards. You know, there are lots of people on transit agency boards with goals other than the good of the transit agency. And you know, that's how the system evolves.

You've got to have local political representation and if not many people care in the community, then the board's going to reflect that. But you know, the US has a lot of great transit agencies where there is good political support, where good things are happening. I would say the other thing that the great transit agencies have in common is really intimate, good working relationships with their city governments. And I would really hold out your city, Seattle, as one of the leading examples of that. And I was involved in this effort something like 20 years ago when the first Seattle transit plan was done.

Because it's so easy for a city government to take the view that, "Oh, our regional transit agency does transit, we don't have to think about that." And Seattle took it upon itself in the early 2000s to say, "No, wait a minute. Everything we want to be, all of our vision for ourselves is about having a great transit system. So we have to have our own municipal transit policy that gives direction to our staff about how to work with King County Metro and Sound Transit to make a great transit system." And you can really see the results around Seattle today.

David Roberts

Well, now, Jarrett, here you're talking to a native — nothing but the gripes. Let me just ask you one question about Seattle because I did want to ask this and this is something that drives me insane and I've never really gotten a good answer about it. And maybe this is a little bit too specific, but I'm curious. So in Seattle, we voted to build a light rail system. I say that in one sentence. Decades, decades were spent voting and revoting on various things. We finally voted for a light rail system. And to me, the central decision that was made about the light rail system which has colored all future decisions, is they decided it will save money if we just run it along the interstate and just put the stops along the interstate.

Which means that the multi-billion-dollar light rail system is basically a commuter rail. It is a substitute for getting along the interstate route, not on the interstate, sacrificing all the potential benefits of moving those stops out into neighborhoods where they could serve as anchors for density and transit-oriented development, et cetera, et cetera. We sacrificed all of that and put our stops on the interstate to save a few bucks. But like, to me, that's just so shortsighted. Tell me why that happened. Why was that decision made? And it's not only Seattle who's done that, right? Why do that? And can you explain to me how that happened?

Jarrett Walker

You're talking about the line going north out of Seattle. The line going south out of Seattle is mostly not by the freeway. It's mostly either underground or in a street median on MLK. But the line going north out of Seattle, yes, there's a long, long stretch right next to the freeway.

David Roberts

I live on that stretch, which is why it's so...

Jarrett Walker

You'll see the same thing in many other cities. Look, when this system was being conceived, they had to bring together everyone from Everett to Tacoma, right? All of these huge, vast suburban areas. And they had to have something that would credibly get all the way to Everett and Tacoma someday. And if you don't know the geography of the region, these are two small old cities that are both, oh, I'm going to guess about 30 miles out of Seattle in each direction.

David Roberts

Yeah, yeah. Everett's like 30 minutes north. Tacoma is like 30 minutes south-ish.

Jarrett Walker

So, those were always going to be kind of the ultimate anchors. They had to begin with this vision of ultimately a very long line. A line that long had to be fast. So, you wouldn't have the patience to ride all the way from Seattle to Everett on Aurora Avenue. On an arterial light rail, you wouldn't be able to go fast enough there. And, you know, there would be so many stations. It wouldn't work for Seattle to Everett if you're trying to do that. It's really a different thing. So, they made the decision to go fast along the freeway with very widely spaced stations.

Given that the ultimate goal is to get to Everett, I think that probably makes sense. But it's definitely not everything that you could have gotten out of a more locally oriented service that was not trying to be as long. It's really just the way that the regional geography was just pulling everything apart and creating these expectations for these extremely long trips. So, that's kind of what happened then. The other thing, of course, is the availability of right-of-way.

David Roberts

Yes. Well, every one of those neighborhoods obviously will fight tooth and nail, to the death, to avoid the curse of a subway stop. Despite this, every neighborhood around an existing subway stop in the friggin' world loves it and would never give up their subway stop.

Jarrett Walker

Absolutely.

David Roberts

You can't talk a new neighborhood into accepting one, right?

Jarrett Walker

I still remember back in the early '80s when I was getting started. TriMet here in Portland, the transit agency here in Portland, had produced a video imagining going along outer Burnside Street where the very first light rail line was going to run. The purpose of this video was to show that the light rail was going down the street and none of the single-family homes had turned into apartments. This was supposed to make everyone in that neighborhood comfortable that, you know, we could build this light rail line and it wouldn't cause any change, of course.

David Roberts

Yes, but why would we do that? Why would we do that? It's funny. I mean, I know you probably deal with the political class and boards more than just with citizens, but just the whole NIMBY thing, I don't know. It is very mysterious to me that it seems specifically on city stuff and land use stuff, people always enjoy it once they've got it. Always people fight it. And neither of those two ever changes. Like, nobody learns. Nobody learns from all the previous people that got it and liked it, right? Everybody thinks, "We're gonna hate it." It's like, how has this been going on so long? And those dynamics never seem to change. I don't know. There's no answer to this. But like, I don't know if you have any insight...

Jarrett Walker

More people need to listen to your podcast.

David Roberts

That's the answer to all my questions, Jarrett. Okay, a final question, because this comes up a gajillion times when you talk about transit. There is endless warfare over fares. The right way to structure fares, the right way to structure gates, like fare gates, the right way to enforce fare collection. There's a school of thought that wants to make transit free. There's another school of thought that says, "That's a dumb idea and it won't work." So, like, what kind of revenue models do you find work best just on a purely pragmatic basis?

Jarrett Walker

Oh, this is a very difficult issue, and I'm glad I don't work in fare policy all the time because there's a chapter in my book on it. But I found it very difficult to write, and I found it very difficult to arrive at a strong opinion about it. Look, we need some revenue from fares. The reality is that if you eliminated fares from most big city transit systems, you would eliminate a huge chunk of the service immediately.

David Roberts

Right. Because the rest of it is just taxes.

Jarrett Walker

And nobody knows how to get over that hump. The agencies that have eliminated fares, mostly temporarily, places like Albuquerque and Kansas City, have done so in the context of very low ridership transit systems where there wasn't much money in it anyway. But even so, that's also been associated with a whole bunch of other behavior problems and so on getting worse on transit. The other problem is that we don't really have a good way to force everyone to pay their fare. And so, you know, fare evasion is always going to happen to a degree and you can spend a fortune on gates and so on.

And that may be necessary in New York, where enormous amounts of money are at stake. But I also, frankly, counsel just not getting too obsessed about fare evasion because making sure you collect every last fare is extremely expensive and not really that cost-effective.

David Roberts

Yeah, I saw some numbers out of New York City. They did a big push on this and like spent $8 billion or whatever on fare enforcement and recovered like a buck fifty of fares for their efforts.

Jarrett Walker

Yeah. And so, it's something that a lot of people fixate on as something that they see as a measure of why everything's going to hell. But there's just not that much in it. And you know, we need to make a reasonable effort to get people to pay their fares. We need, you know, honest people are going to pay their fares and we need to move on with providing good service.

David Roberts

Yeah. So, I mean, it would be best, it seems to me, if most funding came from taxes. But, like my sense, maybe this comes from living in Seattle where when we want to fund or do anything, we have to have a ballot measure for some special revenue-raising mechanism because we have no friggin' income tax, have no stable sources of government revenue. So, every new thing we want to do, we have to come and shake the cup and raise money specifically for it. And that's been transit over the years in Seattle. It's just like, "We're back, we need a little bit more."

There's no stable — so who's got the most stable...? Because I just imagine as a planner, just knowing how much funding you have and that it is safe and stable is a huge thing in planning.

Jarrett Walker

So, in many other countries where I work, including Australia and Ireland, transit is sitting in a central government budget just along with everything else. And the parliament figures out how much it's going to spend on it and things are very stable.

David Roberts

Federal funding?

Jarrett Walker

Yeah, federal or state or whatever, or a provincial government in Canada. And there's a relatively high level of stability. On the other hand, one value of having to go to the voters is that the voters are, in fact, engaged and thinking about it and not taking it for granted. And that has some benefit, too.

You know, in Illinois, where I'm working right now in the Chicago suburbs, they don't have a mechanism for going to their voters. They have to go to their legislature. And so, they're having the conversation that you might wish you could have about just setting up a stable funding source in the legislature. But, I actually think in many ways it's good that we have to vote on this, because first of all, as long as we don't need two-thirds like you do in California, as long as you have a reasonable 50% threshold and you're working on the right geography, we can usually win these things.

And, you know, transit ballot measures do pretty well. That's an important thing to remember, by the way. Just a message I want to leave people with. If anybody has led you to believe that America is a car culture, pay attention to how many people vote for transit in places like Los Angeles, even though they're mostly in cars, and you really get a clear message of how much enthusiasm there is for transit, if only we could fund it enough to provide it in enough abundance.

David Roberts

Yeah, you have a graph on your site somewhere. I forget where I saw it. But there's the negative cycle of ridership falls, fares fall, resources fall, service declines.

Jarrett Walker

The death spiral.

David Roberts

The death spiral. But there's also, hopefully, a life spiral where you invest, service gets better, more people ride, more money. Getting on that positive feedback loop, it seems to me, is like the main trick.

Jarrett Walker

Right, and the feedback loop, of course, is never going to be that fares pay for everything, but the feedback loop is going to be that you're part of building a great city that people want to be in and want to invest in.

David Roberts

Yeah. All right. Well, that's a good note to end on. This has been fascinating. Thank you so much, Jarrett, for walking us through this. I've been so curious about this for a long time. It's great to get a little snapshot.

Jarrett Walker

Well, thanks very much, David. Really enjoyed it.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

I catch up with Span CEO Arch Rao to discuss the company's expansion from consumer panels to the utility-focused Span Edge which can be used to create a true distributed power plant. We discuss why this is key to accelerating electrification and examine how the system works to respect consumer choices while managing grid constraints.

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Text transcript:

David Roberts

Hello everyone, this is Volts for May 2, 2025, "The coolest new home electrification widget." I'm your host, David Roberts. Way back in June of 2021, I talked with Arch Rao, the CEO of a company called Span that makes smart electrical panels. The panels can balance a home's loads — its EV chargers, heat pumps, water heaters, ovens, what have you — to keep total draw beneath a set amperage level, thus enabling homeowners to add electrical appliances without requiring expensive upgrades to their electrical service. Through an app, homeowners can program or prioritize various loads based on price or preference.

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In March, Span announced a new product that immediately caught my eye. It's called the Span Edge, and the intended customer is not a homeowner, but a utility. Basically, it's a Span panel, but rather than being installed behind the meter on the customer side, it is installed at the meter, effectively integrated with the meter. The company calls it an "intelligent service point."

Among other things, this gives utilities direct, hardwired access to it, which could enable them, if enough of these things are installed in their service territories, to coordinate multiple homes, whole neighborhoods, based on changing grid conditions. It could create a true and reliable distributed power plant.

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It usually takes more than a cool new gadget to warrant an episode of Volts, but this one effectively creates a whole new product category and overlaps with several trends and discussions we've heard here on Volts recently. So, I'm very excited to have Arch Rao back on to tell us what prompted this pivot and what it will enable.

With no further ado, Arch Rao, welcome back to Volts. Thanks for coming.

Arch Rao

It's great to be back, David. Thanks for having me.

David Roberts

So, listeners should go back and listen to that original pod, but you've been making these smart electrical panels. You're still making them. You just, as far as I just saw a couple of months ago, I think maybe a month ago, just came out with some new ones, bigger ones. So, you're still in that business. So, explain then, what is the business logic to pivot to this new category? Talk us through the sort of steps of your thinking why you felt like this was needed.

Arch Rao

Yeah, absolutely. First, I'll start by saying it's less of a pivot, it's more of an expansion of our product strategy and it's one that we've been working on for several years now. Back in 2018, when I founded the company, I'd like to think we created a new product category with smart panels. And over the course of time, we've successfully built a number of really capable features in the smart panel that we've now deployed across all 50 states here in the US and we're continuing to deliver exceptional customer value. But as we think about how to really drive adoption of electric appliances in home, how to really increase the utilization of the existing electrical grid, it has been obvious to us for a while that solutions like Span should be deployed at scale by utilities as part of utility distribution infrastructure.

David Roberts

I mean, you have a program with some utilities, like you have a program with PG&E, for instance, through which homeowners who have this smart electrical panel already installed give PG&E access to it. So, PG&E can basically use those smart panels as part of a VPP. What's wrong with that strategy? Why isn't that enough?

Arch Rao

Yeah, I think that is a strategy. And I think we're trying to find more ways to reduce the cost burden for customers to electrify, find new ways for adoption to happen at a much more rapid scale, while leveraging all of the core capabilities and functionalities that our product provides. At its core, the Span panel is a sensing device, a control device, and an intelligent local gateway. It can do that in one of many form factors. It can be installed as part of a new home that's being constructed, be it a community of homes being built by a home builder, or be it homes that, as we speak today, are being rebuilt in areas that have been impacted by wildfires.

And in a new home context, the version of our panel that makes the most sense is a panel that has 40 circuits or more, typically, just given how circuits are distributed in a home. Let's say it's one of our existing homes and you're looking to add just an EV charger today and maybe plan to add a heat pump, you know, a couple of years down the road and want to replace a gas water heater with an electric water heater, then perhaps you only need 16 or 24 circuits. And now we've built a version of the product that can accommodate that as well at a lower cost entry point. But those are still solutions that are consumer-led adoption, or installer-led adoption, or in some cases home builder-led adoption.

And that has been growing for us, and that's great. But I think there's a real opportunity for us to say, "What if I can save money not just for an individual customer, but we can actually reduce the cost of capital expenditures that go into overbuilding the distribution grid?" And let me share some metrics there that I think you and your listeners might appreciate: the average utilization rate of the US distribution system is around 42%. What I mean by that is the loading factor. On any given day, the average utilization of the available capacity on the distribution grid is only about 42%.

David Roberts

That's actually higher than I would have thought. You know, like, I think maybe Volts listeners know, maybe. But it's worth emphasizing, you know, like electrical systems are generally built for peaks.

Arch Rao

Exactly.

David Roberts

Peaks are, by definition, the exception. So, when you're not peaking, you've got a lot of spare capacity lying around. I t's just like cars; cars are sitting around 95% of the time. People don't really think about it. And this is really interesting right now since, as you I'm sure are very well aware, there's this huge stampede on to find more electrical capacity. So, it's a little crazy that everybody needs new capacity and simultaneously more than 50% of our existing capacity basically goes unused. Like, that's kind of the background fact here.

Arch Rao

Yeah, I couldn't have said it better. That's exactly right. But ironically, as you rightly pointed out, there is a perception that we need more capacity and that stems from customers being told by the electrical contractors or customers intuiting that, "Hey, I only have a 100 amp panel in my home and 100 amp service, if I want to add a 60 amp EV charger, I'm going to require more capacity." But let's think about the actual usage pattern from our fleet. Now that's thousands of homes, tens of thousands of homes across the US. 92% of homes across our fleet have 40 amps. That's about 10 kilowatts of unused capacity in their homes all of the time.

David Roberts

Wait, these are people with 100 amperage services?

Arch Rao

That's correct. Across our fleet. Right.

David Roberts

So they're not even reaching 100?

Arch Rao

That's right. Because your base load consumption is much less than 100 amps.

David Roberts

Right. So, I think the way to put this is just like there's a bunch of spare capacity on grids. It's fractal, even if you look at the individual house, it's basically the same situation. Right. There's a bunch of unused capacity at any given time because it's built for the peak.

Arch Rao

That's exactly right. And 100 amps, for what it's worth at a 240-volt 2-phase grid, is 24 kilowatts of instantaneous power to your home. Right. The largest appliance we have in our home right now is an EV charger that draws about 9.6 kilowatts instantaneously.

David Roberts

Right.

Arch Rao

So, you have to imagine a corner case when your EV is charging at the same time, your water heater is running at the same time, your HVAC air conditioning system is running at the same time, perhaps your induction cooktop is on before you're at that peak demand. And what Span has, I think, very elegantly done is to say, "Look, if and when that situation arises, I have a control system built into your panel that can regulate just a handful of loads. I just have to throttle your EV charger back for 10 minutes, I just have to slow down your compressor speed for 15 minutes, I just have to pause your water heater for 30 minutes." And that's plenty.

David Roberts

These are always brief peaks, so it's not like Span's going to turn off your EV charger for hours or anything, it just dials things back a little bit. Generally, I think, and I've been meaning to ask you this, I wanted to ask you the first time actually: My sense is probably that the vast majority of events in which the Span panel has to actually intervene to avoid, you know, crossing that peak — do homeowners notice? Most of them are, most of them sort of like background enough that the homeowner would never know unless they were told that it had happened.

Arch Rao

It's the latter, and that's a very intuitive question because the perception usually is, "What is the customer experience or what is the sacrifice I need to make to electrify?" And I'll tell you again empirically, because we know this from our actual fleet data, empirical evidence, the average duration of what we call a "power up" event, that is where I have to enact control, is about eight minutes long and the frequency of it over the course of an entire year, the number of events you're likely to encounter, even in a home that already has an EV charger and potentially an electric water heater and air conditioning system, is on the order of a dozen to 15 times. And in none of those times do I actually have to turn off a load completely.

Especially because the probability of you approaching your peak is going to happen — like I said, when your EV is charging at the same time as your air conditioning is running — and we focused on being able to do software-driven throttling of the EV charger or the compressor speed, if you will, or the water heater set point. But what we've also built, and this is where I think the core science of our product really is compelling to the utility or a home builder or a UL certification agency, is that in the unlikely event that the software fails, we have built the functional safety backstop into our panel. That is, if push comes to shove, we're able to isolate just that one circuit very safely through hardware controls.

But in virtually any scenario, we don't have to use that hardware control. We can enact the throttling that we need to do, which are software controls.

David Roberts

I return to my question then, which is that houses with these Span panels installed have this ability to throttle various circuits. And theoretically, if a utility could access a bunch of those panels in a bunch of those homes, the utility could throttle loads based on not just the individual home's need, but the grid's needs. So that seems to give the utility access. So then, why do we need this devoted product if the utilities can already, in some sense, access the existing Span boxes? Why do we need a utility-focused Span box?

Arch Rao

It's about scale. So, let's come back to your original question right now. Take the same use case and imagine if the utility can, instead of augmenting or replacing your meter with a new smart meter that only has measurement capabilities, not control capabilities, either augment it or supplant it with a grid edge device, hence the name Span Edge, that can give them visibility into all new sources and loads that are likely to be added to your home. And the ability to avoid distribution CapEx investments and the ability — by the way, this is just the cherry on top of the cake — to orchestrate them in the few hours in a year when they need to manage not just your peak, but a system level peak.

That's the problem we've solved by building a smaller version of our product that can be deployed in less than 15 minutes in any customer's home in the US by sitting at the meter. It does not require an electrician to come and rewire your electrical system, but it's a proactive installation by the utility at the meter. And obviously, there's an advantage now where the utility can target which parts of the network they deploy this into, as opposed to waiting for customers to electrify and find Span and adopt it.

David Roberts

So, it seems like the main sort of advantage here is not so much a particular functionality. This is not a new functionality; it's just more about giving utilities control over where they're deployed, more or less allowing the utilities to be intentional about where they're deployed rather than this being a consumer-led "we're just waiting to find out which consumers buy them," basically.

Arch Rao

That's right. So, both will continue to happen in our business supports both. Right. We're going to continue to enable customers to buy our products or home builders to buy our products, or contractors to buy our products. But we see a clear opportunity and in fact, a present need for utilities to be at the forefront of innovation and say, "Look, this technology exists, I can address my advanced metering needs, I can address my distribution grid investment needs, and I can give the customers a solution that allows them to accelerate their electrification journey."

David Roberts

I just wanted to clarify one thing before we move past it, because a lot of people are going to hear this and think about smart meters. So, just the distinction here is a smart meter is a sensing reading device, basically, that will tell you what is happening. This is that plus controls, you can actually control and throttle the loads. So, that's how this is distinct from a smart meter.

Arch Rao

Yeah, and let's draw, maybe, perhaps, a bit more of a technical distinction. Meters have also evolved in the last 20 years and many went from being very simple 15-minute interval readers, now having more compute and communication capabilities, if you will. But they're still ultimately a sensing device for billing purposes. You can envision a world where a meter can talk to a local appliance over Matter or Bluetooth or Wi-Fi, independent of the transport layer of the comms protocol. But what it cannot do is provide that functional safety guarantee, if you will, that I can isolate a particular load that's a violating load that keeps my grid safe.

David Roberts

Right. For that, you need controls; you need the panel.

Arch Rao

You need more granular controls. Right. And the design of Span Edge, we've designed it so the cost to the utility is very marginal. Right. We're saying, "Let's build an eight-circuit version of it that the utility can deploy where the customer can expand over time." But by doing so, eight circuits is, say, four dipoles. You can conceivably add a solar battery system, an EV charger, a heat pump, a water heater, induction cooktop as the case may be, and 95% of households across the US are yet to adopt those appliances.

David Roberts

So, when you say a customer can expand it, would that mean like... well, let's just talk about the physical thing itself for a second. So, like, who needs to give permission to install this? Is it the homeowner that needs the utility's permission, or the utility that needs the homeowner's permission? Who is installing it?

Arch Rao

Yeah, this is an evolving conversation. So, I'll tell you what we're seeing in terms of the scatter pattern. Right. Most utilities would prefer to install it themselves using their meter technician network that they have.

David Roberts

And would they have to ask, like, would you have to ask the homeowner, presumably, like, can we install this? Like, does the homeowner control that?

Arch Rao

I think there's two prongs to that. One could be: "Look, we've been owning and installing meters in your premises now for decades," right?

David Roberts

Just a fancier meter in some sense, right?

Arch Rao

That's right. You can think of this as sort of the natural evolution of the meter itself. And by design, we mean for this device to sit outside the home, just where the meter already is or adjacent to the meter. The other version of this is to say, "Hey, customer, if you really don't want to, we can avoid installing this. But when you do come around to needing a service upgrade, you're going to have to pay for that. You're going to have to pay for us to come in and re-conductorize your home and retrench outside your home and put that cable in."

That's just a cost somebody has to bear. Right? And typically, it's the customer that has to bear that. I think there's a slightly different side of the prism to look at this too. From a customer's perspective, the benefit here is they're essentially getting a free electrical sub-panel that is smart.

David Roberts

I mean, they're getting one of your Span panels for free, right?

Arch Rao

I was going to go there. It's not just any sub-panel, it's a smart panel that allows them to eliminate the cost of having to potentially, in the future, reconductorize the service to their home, if you will. But much more importantly, when they want to electrify, there's a two-prong benefit to the customer and the utility here. If my water heater breaks, that's a gas-powered water heater and I do want to switch to electric. If I didn't have the solution, I probably would have to wait several months for the utility to come and upgrade the power line to my home.

That's not happening. Whereas now, I have a ready solution that I can just drop an appliance into that any electrician, any contractor can plug into, because it's designed to be a standard panel interface. And from the utility's perspective, that's also a net benefit because now they're able to accelerate the kilowatt-hour revenue growth that happens from the electrification adoption that they've now enabled.

David Roberts

Right. And so, just the physical box itself, it's bigger than a meter. It's not, you know, people are familiar with the sort of little glass-covered orb, meter, whatever, sitting on the outside of their house. This would effectively attach a big box next to it. It kind of looks like an electrical panel-shaped box.

Arch Rao

Yeah.

David Roberts

So, it's not nothing. But, you say the installation itself is relatively easy and straightforward, and you don't need an electrician. That's a little mind-blowing to me.

Arch Rao

Yeah, look, it's bigger than your meter, obviously, but it also is functionally a lot more than a device that can only measure the consumption of your entire home. What we've designed is we've leveraged sort of existing science around meter collar adapters that have existed for a few decades now and said, we will intercept the meter or we will sit at the meter and allow for power to flow into our Span Edge device, which is arguably a distribution panel, a small sub panel, if you will. But where the innovation has come here is to say we have a modular solution. So we've been able to minimize the size of the product to be not that much bigger than let's say, a box that Comcast would install outside your home.

But solve for simplicity of install. We don't want it to disrupt the customer experience. We don't want it to be something that requires us to go into a customer's home and rip out the existing panel, do sheetrock work, or any carpentry work to get it in. We've designed it to be wall hung using a simple bracket and to be affixed very easily into an existing meter by building this adapter that is a common interface to all standard smart meters in the US. So that's what's allowed us to speed up, if you will, the delivery model. But until you add a load to it, its value is mostly around sensing. Right. Sensing the whole home. It can sort of give the customer the ability to accept new loads. And that's where I think this targeted model helps with the utility.

Or, in some cases with some of our California utility partners, one of the other models they're exploring is if a homeowner calls me and says that they need an interconnection study done because they want to add a new electric load because their contractor told them they need a new service, I'm going to give them this alternate option, which is a cheaper, better, faster option to say, "Here's a Span device instead."

David Roberts

So when you say "before a load is hooked up to it," so like if I just hooked it up outside my house today and I have an electrical hot water heater, would it automatically be able to control my electrical water heater? Or is there some special connection between the water heater and the box that I need? Like, does it have to be wired to each appliance?

Arch Rao

Yeah, that's a good question. So, things like electric water heaters that have a standard CTA-2045 comm support, we would be able to talk to through our gateway without it being rewired to our panel.

And that's wireless, that's what Wi-Fi is...? That's wireless. We can use the homeowner's Wi-Fi or Span actually has an integrated access point module in it. So even if you did not have homeowner Wi-Fi or for that matter, ISP connectivity, the communication can still be intact. And sometimes we use Bluetooth and Matter as well. So we have some multimodal communication options. But the intended use here is that either the next EV appliance or your water heater itself can be rewired to this device electrically. I mean, not just from a comms perspective, because then that gives the utility the additional functional safety backstop, if you will.

If the comms protocol, for whatever reason, fails, then the relay inside our panel can isolate just that circuit.

David Roberts

Yes. So, this was my next question. Like, do utilities view a hardwired connection to the appliance as substantially more reliable than a wireless connection to the appliance? Do utilities have reasons to prefer hardwiring in this case?

Arch Rao

Absolutely, and it's not just the utilities. First, from the utility perspective, a distribution engineer understands the value of hardware communication into an asset that they need to see and control. But also from a certification standpoint — and at the risk of getting a little too technically nuanced here — we are the only panel product that has a UL 1741 PCS (power control system) rating today, which is different than an energy management system rating. And the distinction really is in the terms that I'm using there. Energy management is good for things like load shifting energy, if you will, energy consumption.

Power controls require the ability to do instantaneous import and export limit controls, because that has a physics impact on it. If I fail to limit the import rate, as in, I let an appliance run without letting it be controlled or throttled, then I'm going to not just potentially trip the customer's breaker, I might have some adverse effects upstream on the distribution grid as well. That's where the hardwired controls become not just necessary, but in fact critical.

David Roberts

Interesting. Part of what you sort of boast about the product on the website is that it's got hardened communications. So, maybe explain how a utility communicating with a panel inside your home is different than the utility communicating with this panel. Why is this panel more reliable in terms of utility communications?

Arch Rao

Yeah. So, I think the functional safety piece of it and the customer experience piece of it are the two buckets to look at it through. Right. The two buckets that have been the capabilities within. The functional safety piece of it has no reliance on external communication. It's a physics-based limit. So, for example, if the conductor rating or the service limit to your home is 100 amps, that is what is hard coded into the device. Right. And the expectation is that the Span panel has sufficient local sensing controls and logic capabilities to ensure that you never violate that from an export or import perspective.

And it's important for us, and we do this through testing and UL certification, to demonstrate that even with no external comms or no connectivity to the internet, no connectivity to the cloud, that limit will not be violated.

David Roberts

I see.

Arch Rao

Then, we talk about communication, and that's driven by utility experience or customer experience. And we kind of think about that communication stack in two categories, looking out and looking in. Looking out is our communication back to the utility, whatever control system you want to call it, ADMS, DERMS layer, just our platform, if you will, and that goes over cellular or the customer Wi-Fi or Ethernet, whatever the case might be, out to the cloud. And it's a set of APIs. But then we spend a lot more time thinking about looking in, which is "What does my customer experience need to be like for them to not experience as hard on-off control?"

Because that's not a good experience. So, the last couple of years, what we built is interoperability with EV charging, with HVAC systems, with water heating, with a slew of batteries that we communicate with. And that can come in one of many forms. Right. It can be wired comms or Modbus, it can be wireless comms using CTA-2045, which is a standard protocol for water heater controls or Wi-Fi with Matter. When we talk to thermostats like Nest or Residio, and that ecosystem has gotten rich in the last couple of years with the Span device.

David Roberts

Can I ask about the ecosystem? Because I had a, you know, I had a guest a few weeks ago talking about the sort of efforts underway to standardize these things. You've got a bunch of different kinds of appliances talking to a bunch of different kinds of boxes, and the danger is just having ten different standards and ten different ways of doing this. Then, it becomes difficult to integrate. Are you finding that there's enough standardization in these communication protocols that your box can talk with more or less any device?

Arch Rao

Yeah, I think for the major devices, there are some established communication standards that have become fairly standardized. Water heaters now in the US, for a few years now, have been required to have what's called an eco port or a CTA-2045 compatible port. And we are able to communicate with virtually every new water heater that's being manufactured in the US today, agnostic of the manufacturer, using a generic module, a CTA-2045 adapter. And that's like a $50 adapter or $60 adapter, if you will. So, I think on the water heater segment, that's been fairly standardized. HVAC, depending on whether it's a single stage, dual stage, multi-stage, variable stage, whatever the case might be system, we can either talk directly to the appliance and that space is not yet standardized.

So, for example, we have a partnership with Mitsubishi where we're using custom APIs to be able to do throttling of their compressor. But increasingly, there is a push towards standardizing communication over Matter for HVAC, at least from what we can see.

David Roberts

Let's pause for a minute because people may not be familiar with this. Matter is a protocol, a shared protocol that people are sort of converging on.

Arch Rao

Correct. So again, you can think about it as you can have any transport layer. The transport layer could be wireless Wi-Fi or Bluetooth, as the case may be. And the protocol is Matter that allows you to have a standard translation library, if you will. And we've seen that adopted by thermostat manufacturers now. So for example, our product today, once deployed, whether you have, let's say, a traditional HVAC system with a Nest thermostat that we can talk to via Matter, or a newer split air conditioning system with Mitsubishi where we have direct integration. Both of those are controllable by our Span.

David Roberts

And presumably, home batteries, I'm guessing, already come with a standardized communication layer.

Arch Rao

Yeah, unfortunately not. But for better or for worse, over the last several years, when the adoption rate of batteries has scaled up rapidly, if you recall, our genesis was a product that could do better backup or software control backup. So, we have good relationships with and integrations with all the leading battery solutions in the US market. So, Tesla Powerwall, the Franklin battery, the Enphase battery, the SolarEdge battery system, if you will, that we have direct wired communication today.

David Roberts

You're pretty confident you can communicate with most HVAC systems, most hot water heaters, most EV chargers, most home batteries. Those are the big buckets, right? Is it worth chasing after, like talking to a stove, or... You know what I mean, is it worth hooking up those other appliances?

Arch Rao

It's not worth it, really, from a controls perspective, right? You hit the nail on the head. EV charging, electric air conditioning, where customers are either adding air conditioning for the first time or they're doing a fuel switch, and water heating are the three most likely new loads in a home outside of potentially induction cooktops. And those are the three loads that have the least perceptible impact to the customer when you control them through, let's say, throttling. If I ramped on your EV charger for 15 minutes and you're already charging it for six hours, seven hours, whatever the case might be, there's no impact to you.

Right. And when I control the speed of your compressor, your HVAC is still blowing warm or cold air, as the case may be. You can't tell that it's blowing slightly slower. But I've just halved the power consumption on your panel.

David Roberts

And water, of course, has thermal mass. Once heated, it stays heated for many hours. So, the timing there is not that important.

Arch Rao

That's right. So, our focus has been, let's focus on the three most important loads and the most likely loads to be electrified and therefore be the trigger for a service upgrade or by extension a distribution system upgrade at scale. And if you can control those — and the battery then becomes another reservoir. I mean, if you happen to have a battery, which again, for most customers there isn't an obvious economic argument to have a battery yet. If you happen to have a battery, then fantastic. We can use that to never have to throttle your loads either, because we can just have that inject power into a bus bar.

David Roberts

Yeah, that's true. I guess if you've got a battery, then that does all your throttling, basically. Right. I mean, that basically is what a battery is.

Arch Rao

That's right. But again, there's a cost to the fixed cost of the battery. If I'm able to throttle it appropriately, then it's great.

David Roberts

Unless homeowners really, really, really value backup during a blackout.

Arch Rao

That's right. Think of those as being the four key appliances, if you will, the devices, if you will, that we have prioritized and by design have done integrations with and expanded that interoperable ecosystem around.

David Roberts

So, talk about the pitch to utilities here. So, you know, I mean, we know that demand is rising. We know that lots more demand is on the way. So almost, I think pretty much every utility in the country, more or less, is thinking about "How do I accommodate this?" As you say, one way to go is to build more transmission and distribution infrastructure, build more wires, build more transformers, etc. That's very expensive and slow. So they're looking, they're all out there looking for ways, what they call "non-wires alternatives." Ways of doing this that doesn't involve building that infrastructure.

So why is this, if you're talking to a utility executive, why is this superior to other non-wires alternatives?

Arch Rao

Yep. I'll start with some statistics and I'll go into the technical details here. In the last year, in fact, in the last five years, the category of capital expenditure for utilities across the US that has been the largest and has been growing at the fastest rate is distribution CapEx.

David Roberts

Yeah, that's why electrical rates are going up, by and large. It's not the generation; it's mostly T&D.

Arch Rao

It's actually even less transmission. It's mainly distribution because you start there and then you go up. And again, we talked about the utilization rate or the loading factor on the distribution grid right now and increasingly, and rightly so, regulators and customers are saying, "Hey, utilities, the rate of rise of energy costs is unsustainable. Can we not see that rate rise not happen quite so fast and quite so frequently?" Hence, the utilities are looking for non-wires alternatives, as you rightly put. Span is today both a proven technology that has been deployed at scale and as I mentioned — again coming back to your very first point — we've proven it intentionally through a consumer-led adoption or installer adoption model and now we're coming around to saying, "What if this was part of the infrastructure?"

And we have both the empirical proof points and the validation from some third-party cost per evaluation that we're bringing to utilities. For example, we did an analysis that said if the cost of a Span system installed and the cost of the communication and compute control service over the course of 15 years is X to the utility per endpoint, what is the benefit to the customer and then the benefit to the utility as well?

And this is based on their own published numbers around the cost of transformer upgrades, distribution system upgrades, et cetera. The avoided cost benefit alone is roughly 3x that of the cost of our solution to the customer today, to the utility today. So that's where we're seeing very meaningful and positive conversations happening. So it's no longer a question of "Will this technology work?" It's no longer a question of "Is this technology cost-effective?" It's now a question of "What is the business model that allows us to scale it?" Do we own and deploy it like meters?

Do we do it primarily as a rebated solution for new home construction, or customers that have this service upgrade problem? Or do we find a way to leverage the demand response capabilities that the product inherently offers, or virtual power plant capabilities that also continue to pay for the solution over time? Right. So, I think that's the phase of the conversation we're in. Some utilities and some of our partners have already started to lean in and place commitments to deploy this product, even if it's not at millions of home scale, but tens of thousands of home scale.

David Roberts

So, their main thing is just avoiding building distribution infrastructure. That's the primary value bucket here for utilities.

Arch Rao

I'm saying that's the one that is large and concrete out of the gate today. What we haven't talked about, quite frankly, is some of the software capabilities. Well, first, if I can give you meter quality data, and by the way, we are an ANSI grade meter in the sense that we're listed to ANSI C12 accuracy for billing purposes. If I can give you that meter data at the premise level and now down to an appliance level, that is hugely valuable to a utility that otherwise pays for that with advanced metering infrastructure. And now I can give you meter and sub-meter data with which you can do, if you wanted to, very clever things like not just time of use, but type of use tariffs.

Right, but that's one element, that's another sort of, say, cream on top of the cake. But we've gone one step further, actually, David. What we've done is to say, "If I can keep your home below 100 amps, and I actually am seeing that more often than not you have 30, 40 amps of unused capacity anyway. What if I was able to virtually or dynamically change your service rating using software to be lower for short periods of time?"

David Roberts

Let's tell people what service rating means.

Arch Rao

Sure.

David Roberts

So, a 100 amperage service rating on your home means your home can draw in 100 amps, no more or you're going to fry things. That's the service rating of the home. And so, you're talking about having a dynamic service rating where the utility can see your level, your average level of use, can see your minute by minute use, really, and can keep the service level lower than 100 but above what you're actually using. And that frees a little bit of space, basically, like that little sliver of capacity. You free up that, whatever, 40 amps remaining in each home, in a million homes, that's a lot of capacity.

Arch Rao

You could build data centers with that, potentially.

David Roberts

Yes, I was wondering when those words were going to be spoken. I can't remember the last pod I did where that did not come up.

Arch Rao

I have a love-hate relationship with the, let's call it, fascination with building large data centers at the massive scale we're building it and the capacity required to meet that need. But setting that aside, we can come back to it if you're really interested in my points of view on that. The dynamic service rating capability can now be applied not just to your home, but what if it can apply that to all the homes downstream of a substation that is currently congested because of some other reason? And we've built that software capability.

David Roberts

Right. And this, I think, is really to me, was the cool bit and the eye-opening bit, which is that if you've got these things installed on whatever thousands of homes, millions, whatever, and the utility can see them and control them, then it gives utilities the ability to sort of coordinate things on just a way, way, way, way more fine-grained level than they are able to now, basically.

Arch Rao

Actually, our thinking is more than the ability to fine-grain control. It dramatically simplifies how we think about grid utilization. I'll expand on that. What does the distribution engineer care most about? What does a utility get scrutinized over? Reliability of energy delivery. If I'm able to ensure that the sum of all my sources and demands, and as you know well now, the grid is bi-directional in a lot of ways, etc. If I'm able to ensure that this subset of my distribution network can operate within a, and using technical jargon, a "dynamic operating envelope" that I can define and I might need to change it at different points in time because I might have an aging transformer that can't be loaded more than 80% of its rating. I might have a particularly hot day when I have too much load coming on at the wrong time or at the same time.

So, from the utility perspective, they actually, if you really get to the bottom of it, care less about being able to control individual thermostats, water heaters, and EV chargers. What they care more about is, "Is my reliability rating high because I have a stable distribution grid where I'm not overloading or underloading it in the wrong way or like partially loading it in some areas?" On the other side, what Span has enabled with the software that we have facing the customer is to give customers agency. You may be better off allowing Span to locally throttle your EV charger, but I might have somewhere to be in an hour and I might say, "Actually, Span, change my priority. I would rather in real time now you pause my water heater because I'm not planning to have a shower. I don't care about air conditioning. I'm out the door in a few hours."

So, I'm able to change that much like we used to do for what we call software-defined backup in the day. You're now able to offer a stack rank through your app of "How do I plan to stay within 100 amps?" Or by extension, "How do I stay within, let's say, a temporary limit of 70 amps, but actually get compensated for it by the utility?" And that's unprecedented.

David Roberts

Yeah, and it brings up a question. So, from the customer's point of view, from the ratepayer's point of view, they're mostly interacting with Span through the app. They're looking at all their loads and you know what's using what. From their perspective, it makes functionally no difference whether the panel is sitting behind the meter in their garage or at the meter outside. From the customer's point of view, the interface, the functionality, it's all the same.

Arch Rao

So, that means the customer is in control. Meaning, as you say, the utility wants to dial back your EV charger, you can say, "No, I don't want you to do that, because I need to be somewhere." And I wonder, does the fact that the consumer has the final say, does that do anything to sort of diminish the kind of global reliability of all this? Do you know what I mean? Does that introduce any kind of X factor? Does that reduce the confidence we should have in all this? I mean, how does that all average out?

If anything, that is the win-win with this, so to speak, right? Because I'm not saying, "Hey, David, you got to throttle your EV charger." I'm just saying, "Here's your updated budget for the next couple of hours," right?

David Roberts

You've got to stay under 100 amps.

Arch Rao

That's all.

David Roberts

But theoretically, so could I as a customer say, "No, I don't want to do that." Do you know what I mean?

Arch Rao

So, that's where it becomes a little bit more of, is there an economic incentive to it or not, versus, is there a need to do it? If you're automatically enrolled in a program, a utility might say, "I'm giving you these free services and a free device because I'm opting you in by default, but the likelihood of me calling on you is very low." But much more importantly, with Span, what's different is, unlike traditional demand response programs, where it's a call and response model with, again, traditionally very unpredictable levels of participation.

David Roberts

I mean, right now, they're incredibly, as I keep saying, they're incredibly analog right now. Like, right now, they literally involve a lot of, like, phone calls and stuff.

Arch Rao

Yeah. Again, I'll offer a somewhat, perhaps a striking point of view on this. Demand response programs aren't very effective. What I mean by that is the components of demand response programs that are most effective are the utility calling like a 5-megawatt steel manufacturing plant and saying, "Please turn off your smelters."

David Roberts

If you're going to make a phone call, you want to get a big chunk, right? Like, that's a lot of soft costs. That's like a lot of labor costs or time or whatever. And if you're calling, you're never going to call 10,000 individual customers or, I mean, you can text them, but you have no idea who will respond or with what.

Arch Rao

Yeah, so I think the point I'm trying to make is, even if we have irregular participation, there are a couple of levels of controls here, right? One is the way the service rating or the dynamic service rating works is it still honors your personal preferences in terms of your stack rank and Span works hard locally using local controls to keep you below that new dynamic rating, if you will, for a temporary amount of time. But also, I'm able to see the entire fleet now and say, "Actually, I have available capacity here." And it goes one step further.

I'm able to see what types of loads are being controlled and throttled and being consumed in real time because we have circuit by circuit visibility. That's what allows us to be highly potent in terms of the utility being able to call on what has historically been demand response to now what I like to think of as dynamic service rating or dynamic operating limit for the network.

David Roberts

Right. So, even if an individual household goes rogue for whatever reason, turns on all its devices, or refuses to stay under its limit, the utility is balancing a pool of houses. It's a group of houses, a group of buildings. So, you can still balance that out. So, I guess, like, you can have customer control and reliability both if you have enough, like a big enough pool, basically.

Arch Rao

That's right. And what that translates into is, I think, the theme of the day across the board, across American utilities, is affordability. And you can't sacrifice reliability for affordability. You also can't sacrifice customer experience in pursuit of affordability or reliability, for that matter.

David Roberts

Well, speaking of sacrifices, I did want to ask about privacy. I guess this is everybody's — you know, I find just talking to the public, talking to people who are not following all this furious development in this space, which is like week by week at this point, you know, the very first thing they think is, "The utility turning down my water heater. Yikes!" Like, or the utility knowing when I'm turning on my hot tub, or... you know what I mean? Like when I'm taking a shower or whatever. People, I think, are naturally a little freaked out at the idea that instead of their home just appearing to the utility as a single sort of like level of demand, it's suddenly the utility can see inside to your things.

Arch Rao

I think I understand the logic.

David Roberts

Yeah, like what do you tell people? What are the privacy protections here? What do you tell people about privacy concerns generally?

Arch Rao

Well, first, I think before we talk about Span's specific capabilities and how we address privacy and security, it's understandable but it baffles me how we vilify utilities. You know, they've had our energy consumption data and water consumption data for decades now. Right. They can see a water meter going up and down and they can correlate that to time.

David Roberts

I guess that's what smart meters have been doing for years anyway.

Arch Rao

Right, exactly. So, I think the utilities care more about ensuring that energy delivery is cost-effective and the system is stable than they care about knowing when you're taking a shower. But that's just my point of view. On privacy, I think we take this seriously. I think your data is your data, your information, like what amount of information you want to share with the utility and how should be obvious to you and explained to you, and you should be able to control that. And thankfully, there is this wonderful device that we all have in our pockets that allows us to give that agency to customers.

And that's what we're focused on. Right. When we think about our consumer app, for example, we go to extreme lengths to make sure that we notify customers of their information and what part of that information can be used or can be shared. I don't think the utilities, even if they could have circuit by circuit level energy consumption information, are really looking to utilize that in any way, good or for bad. You get what I'm saying?

David Roberts

Yeah, I mean, I do try to represent these privacy concerns fairly, but I do sort of wonder like, "Why would a utility care when you are taking a shower?" I guess, you know, like if you have a grow operation, you might worry about a utility having your information. But yeah, I do sort of wonder like, how much information is there in this really? Like, you know, "Dave runs his stove every night at 8."

Arch Rao

I think they care about, at least from my point of view, from a data science perspective, the conversations we have with utilities are more about "What are usage patterns in aggregate?" Or "What are distributed generation patterns in aggregate? How does that correlate to a five-year horizon of investment planning that I'm doing on generation or transmission or distribution? And are we solving for the right things over there?" I think those derivative information or analyses are a lot more valuable in general, I think, to a utility than specific information of consumption.

David Roberts

Well, a related concern, and you know, if listeners listen to my pod with Cory Doctorow, he's big on "enshittification," he calls it, but basically, we live in a tech world of platforms now and we're all very familiar with the dynamic whereby a platform begins very customer-friendly to lure you in and then sort of once you're in, it tries to sort of make it difficult to get out. And then once you're in and it's difficult to get out, then all of a sudden it starts exploiting you and gets crappier and crappier, draining more and more value out of it and shoving more and more ads at you, etc. This is the sort of worry about platforms.

And so, I guess if I'm, you know, Cory Doctorow and I'm looking at this, I'm worried like what happens if I get — you know, right now all this looks very pro homeowner. It's all upside for me. It looks great. But like once I'm all signed up and Span sees and controls all my appliances and then I get stuck on Span and then Span is less customer friendly once I'm stuck. Do you know what I mean? This concern about platform capture, how do you talk to people about that?

Arch Rao

That's a very good question. I think one of the things that's probably worth drawing a distinction around is that we are not pretending to be the voice agent in your home or the gateway that is trying to connect all the appliances in your home with your email account, with your calendar, and so on and so forth. Right? Our primary purpose is to be a control system for power and energy, hence where our product is located too. We're not trying to be inside the walls of your home, we're typically outside the walls of your home. So, for what it's worth, that's our operating hypothesis.

And at the risk of trying to defend our benevolence here, we also don't try to charge customers for functionality that is the core premise behind why you would buy the product. Right? Like, we have carrying costs in terms of communication to the product even after we've sold the product today. We don't try to saddle the customer with a "Here's a $5 a month fee. You got to pay just to be able to see your data."

And I think I can say this as the founder of the company, and it's something that I've believed for a long time: We are not planning to get to a level of penetration and say, "Oh, by the way, now, David, you have a product, you got to pay me money for it." And I say that because I think we are confident in other software services that actually are valuable to you and to perhaps the grid operator or the utility, if you will, that are monetizable not at 100% subscription, but even at partial subscription. I'll give you two examples of that maybe.

One example is what we already talked about. The utility highly values reliability, and they are interested in saying, "Look, we are willing to pay for the cost of connectivity and the cost of dispatching API-based controls to communicate to devices at the edge of the grid that can help us regulate power on the grid in real time. That is a valuable service, and we're willing to pay for it because it allows us to keep the cost of energy delivery down lower for our customers." So, there's a societal good and there is a technical good, if you will, that has actual economic value that we can quantify and charge the utility for and not you for.

I do think there are more interesting things we have started to do now with our data. We actually generate close to 15 billion, 20 billion data points a day, even with a somewhat nominal penetration we have across the US, a very humble fleet of homes that we enable with Span today. But we've started to be able to understand the data in a way that I think could be a layer of added protection for the customer.

David Roberts

Have you unleashed AI on it yet? This is what I'm assuming: that you've got all this data, you're going to anonymize it, then you've got a massive data pool that you're going to send AI digging through, looking for insights.

Arch Rao

Yeah, AI or machine learning, the nomenclature aside, I think yes, we have, but I think keep in mind our data is not capturing conversations you're having in your kitchen. Our data is time series energy consumption data. So, it's a lot easier to parse through in some ways. It's a lot of it and it's actually fairly boring data for the most part. And what we focus on is the parts of the data that aren't boring. If I start to see that your voltage surges or sags often, would you see value in me letting you know that, "Hey David, I think you may have an electrical issue that's causing your voltage to surge every once in a while."

David Roberts

Right, and you can spot those before they become a real problem. This is a thing with these sorts of electrical problems. Like, if you can spot that early.

Arch Rao

You're a smart man. You got there before I did. But that's exactly right. We can see line one and line two being out of phase and potentially causing your air conditioning compressor to fail. Not today, but if you keep using it like this, it's going to fail. By the way, we can start to identify what might be earlier symptoms of ground faults and arc faults in a home circuit. So, let me put this to you: not just to be able to see your energy consumption in an app, and maybe this is a survey that we can run through your audience. Would you be willing to pay $5 a month to potentially avoid an air conditioning system or a water heater from failing in your home, which arguably ends up costing people more to fix after the fact than before the fact?

David Roberts

And that would just be like a monitoring service, basically like a...?

Arch Rao

Again, this is not me announcing a product capability on your podcast yet.

David Roberts

You can't put those two lines back in phase remotely. It would just be to notify people.

Arch Rao

Think of it as Span Protect. Right. We are looking at data that you otherwise have no way to see or read, really no way to assimilate and make sense of. And we're building capabilities to say, "Look, we're actually looking at it all the time. Most of the time it's benign and it's useless, but some of the time it actually is very telling of something. And what if I could tell you ahead of time that there is an opportunity for us to prevent some other catastrophic failure that is going to happen?"

David Roberts

Yeah, if you could help to prevent electrical breakdowns, disasters, faults, and things like that, I mean, that is value.

Arch Rao

And I'll tell you, there's actually a monetized quantitative value there. Right. We have on our cap table, for example, investors that are insurance companies. And what if I can reduce the cost of your home insurance because you have a solution like Span? Would you then pay X dollars for it? You can kind of do the math there. It starts to make sense.

David Roberts

Yeah, interesting. Time has flown by. I have one final question, or kind of questions. So again, I did a pod — I've become the guy who starts half his sentences with that phrase — I did a pod with Pier LaFarge, who is working with utilities. His whole idea is that rather than utilities fighting with distributed energy and fighting with distributed energy providers and that whole supply chain, why don't utilities just do distributed energy? In other words, they're more likely to know where distributed energy is needed, where it would be helpful to the grid, etc. And it occurs to me that a utility with this kind of visibility into its residential fleet is really going to have a good idea of like, "Where would a battery help? Where would a little additional local generation be helpful to the grid?" It's going to be very good at targeting distributed energy.

And doing what's called, you know, what Pier calls a distributed — crap, I can't remember the name — DCP, basically like a giant RFP for a bunch of distributed energy in a particular area. I don't know if you would be integrated in that effort at all or if that would be a purely utility thing, but they would definitely like it seems like your product would be useful for them in that. Have you thought about that side of things?

Arch Rao

Yeah, Pier and I have connected in the past. SparkFund, I think, is an interesting enterprise. Let me maybe answer that a little less specifically and abstractly and say: One of the historical friction points has been the growth and adoption of distributed solar, let's say, in customer homes. And we've seen how that fight has played out here in California with the NEM-2, NEM-3 transition, but also more broadly with the decline of feed-in tariffs. Which was expected in many ways, but nonetheless could have been transitioned better. But that kind of is a good example or perhaps the most useful example we have looking back at customer-owned distributed energy or asset-financed distributed energy resources.

Specific to solar, I've long held a point of view that solar is not the right anchor product. And what I mean by that is, if you as a consumer say, "Look, I value self-reliance, I value self-sufficiency," and therefore I want to put solar on your roof, that's fantastic. But I think it's conflating that to being an economic argument is a little bit rich because even if you manage to put solar on every roof, which is not possible on most roofs or which is not possible on most homes with limited interconnection, it doesn't change the fact that the appliances that fuel your life are actually powered by natural gas.

And there's no magic way to supplant those gas molecules with electrons, even if they were free. So, if you look at it through the lens of, let's say again, societal good, what we really want to do is decarbonize end consumption.

David Roberts

Electrify everything, in other words.

Arch Rao

Electrify everything. Which goes back to our 2021 conversation with Saul Griffith. That is the goal. That should be the goal. And then you can have an objective conversation about "Where is the best place to put solar?" It might not even be in a distributed manner. It might be community solar. It might be in the middle of nowhere where it's more abundantly available and you can build transmission faster or whatever the case might be. And it's most cost-effective. There are pockets in the network, but it might make sense for the utility to own some solutions. I know folks that are working on substation connected energy storage, for example, in fact.

David Roberts

Yes! I'm so interested in that. To me, like the lowest lift, obvious benefit grid-wide is just putting a giant battery attached to every substation. Like boom. You've solved like 80% of grid problems with that alone.

Arch Rao

Potentially, yeah. Especially if the power electronics and the battery can do very useful power quality management. Right. So, I think, again, there is a valid conversation that we should have as an industry. I think the opponents of that point, if you just to play out the — I'm borrowing from the recent podcasts of Lex Friedman and Ezra Klein here on presenting the Steel man and the Anti Steel man — the historical formation of the utility and sort of the oligopolistic nature of utilities in the US creates sort of a purpose, incentive for utilities to own large amounts of CapEx investments, et cetera, et cetera.

Isn't there a more egalitarian, democratic model over there? I don't think we have time to solve that. I think we haven't —

David Roberts

That's a little bit Pier's point of view. He's just like, "We need to do this very fast. We need some kind of giant, big coordinating institutions to do it. And look, we've got some. Here they are. They're not perfect, they're not great, but they're built. It would be crazy to throw them away and try to start from scratch when we're under this time constraint."

Arch Rao

And I'll bring that back to the very first topic of your conversation, like why our expansion/pivot, if you will, to utilities. I think the utilities are positioned to be the single most influential, impactful channel to help us decarbonize, to give customers agency. And so, our solutions have just evolved to graft, to host.

David Roberts

Yeah, yeah. This is the way Pier puts it: the transition from sort of phase two of the renewable revolution to phase three. Phase two is the consumer-led phase, which is what we've been in, which is like persuading consumers to voluntarily adopt these things. And he says we need to make the switch to phase three, which is an infrastructure perspective. We need to think of this as infrastructure. And this is why your product grabbed me. I was like, "Here's an actual individual company doing that very switch. From customer-led to infrastructure-led."

Arch Rao

Yeah, and I will leave you with something that is taking that one step further. Let's just say you and everybody listening to this is bound by some mutual trust and confidentiality here because we are not ready to talk about this. But I'm excited by this conversation, and I think it's useful to point out. Right, I think it's inarguable that we're going to be investing a ton of money in infrastructure. Also, it's going to be driven by the vast amount of compute demand. But if you strip it down, compute demand is really electric demand.

It's just another form of load. We just talked about how the distribution network has a lot of underutilized capacity. Specifically, I just told you how 92% of the homes that we serve today have 40 amps or 10 kilowatts of unused capacity. What if I can distribute compute and that's also a utility service?

David Roberts

Wait, hold on, I think I missed that. The actual computing is distributed. Wait, where? How? What? Say again?

Arch Rao

We're going to have to find another hour at some point in the next few quarters to talk about this. I think I'm just leaving to you that there's a way to solve a lot of what we see today as being a heavily constrained optimization problem, which in some ways it is under the set of parameters or constraints we've established for ourselves. What if we can think of it slightly differently? What if we can use existing infrastructure better, not just for the electrification of our homes and our everyday appliances, but also potentially think about utilizing that excess capacity for micro data centers?

David Roberts

Interesting. Yeah, distributed data centers. That's a thought. Well, I mean, even shy of that, I mean, I've been saying on every pod, people are probably sick of hearing it by now. But like, we need all this new power, for some reason their first instinct is like, "Let's go find a nuclear plant." But like, of course, you're going to run dry of those pretty quick. And then like, "Okay, well, gas." Well, gas, the supply chain is choked. It's impossible to build a gas plant before 2030, no matter how much money you have. Just because you can't get the parts.

So then, well, wind and solar is faster than that. But what's the only power source faster than solar? And that is existing power capacity in residential homes. Coordinating existing residential capacity. There is no faster way to access new capacity than that. And I just feel like the logic of that is inexorable. And eventually, all these hyperscalers are going to realize that, like, "If you want it fast, that's how you got to do it."

Arch Rao

That's right. And today, I'd like to announce that we've solved that problem. In some ways, we have, and we should talk about it. And there's a lot to talk about there. But I think this reminds me actually of a pearl of wisdom or a point of logic that I've heard many times. I've now shamelessly adopted for myself from Patti Poppe, who's one of my favorite utility CEOs. If you think about the concern of rising energy costs, it's a pretty simple equation. I have to reduce the amount of dollars I'm investing into CapEx, OpEx, etc. That's a numerator. And I have to increase the kilowatt hours consumed, that is the denominator. Solutions like Span can unlock both.

David Roberts

Yeah, I mean, it's just all about making use of the grid we already built. I mean, it seems like just the obvious place to start. Arch, this has been fascinating. I love tracing this stuff. I can't wait to see what utilities do with your widget. It's going to be cool to watch. So, maybe we'll reconnect in a few quarters and see what else is happening.

Arch Rao

Sounds great. David, always a pleasure speaking with you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, I speak with Illinois Governor JB Pritzker, one of the depressingly few Democratic leaders showing real fight in the face of Trumpism. We get into the weeds on how Illinois is defending its climate laws, advancing clean energy and manufacturing, and tackling thorny challenges like the housing crisis, the transition away from natural gas, and the looming “fiscal cliff” facing transit agencies. Oh, and the governor explains what quantum computing is.

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Text transcript:

David Roberts

Greetings and salutations, everyone. This is Volts for April 30, 2025, "The Governor of Illinois discusses decarbonization in the era of Trump." I'm your host, David Roberts. One of the more disheartening aspects of Trump's reign of terror is not just the damage it is doing to the country, but how little resistance it has faced from US elites in politics, media, and civil society. Figure after figure, institution after institution, has bent the knee to Trump, throwing their values overboard for expediency.

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One exception to this rule has been Illinois Governor JB Pritzker, who has lately been touring the country giving barn-burning speeches, trying to shake Democrats out of their torpor and push them to fight back.

Pritzker has plenty to be proud of — Illinois is one of the better-managed, blue-run states in the country. In the last five years, its Democratic majority has passed seminal legislation on numerous subjects, including climate and clean energy. Today, the state legislature is contemplating powerful follow-up bills on transportation and renewable energy.

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I'm eager to talk to the governor about how to maintain progress and morale in the face of a two-bit tyrant, what's next in Illinois for transportation and industrial decarbonization, how states can cooperate to prove a counter-balance to Trump, and what the heck quantum computing is.

Governor JB Pritzker, welcome to Volts. Thank you so much for coming.

Governor JB Pritzker

Thanks, David. Great to be here.

David Roberts

Let's start, unfortunately, with a couple of Trump questions. You can be forgiven for perhaps having lost track of the executive orders that are coming out at a furious pace. But one of them last week was basically an order to the effect that Trump is going to have his attorney general look at state climate laws with an eye to suing them as unconstitutional. It's unclear exactly how they're going to go after them, but the intent is clear enough. Trump's AG is going to go after state climate laws.

I just wonder how are you thinking about that threat and are you talking with other — you know, because Illinois is pretty far out ahead on climate laws, so I'm sure you're in the target zone — I wonder if you're talking to other sort of climate forward states about how to think about this threat and how to respond to it?

Governor JB Pritzker

Let me start with the fact that they make a lot of threats, hoping that we'll capitulate just based on the threats. We're not, I'm not afraid, we will take them to court. There is a supremacy clause in the Constitution that, you know, if there's a federal law that prohibits something, states can't authorize it. But that's not the case here. We have laws on the books in the state that protect the climate, that are focused on advancing our electrification goals. None of what's on the books at the federal level is in conflict with that. So they can investigate all they want; they're not going to succeed.

David Roberts

You know, I know you're part of the US Climate Alliance now. Are you the co-chair currently, or am I making that up?

Governor JB Pritzker

No, I co-chair a number of groups that are focused on climate, but not the US Climate Alliance. I will say I joined the US Climate Alliance, or at least I did on behalf of Illinois, right when I became governor. I think it was maybe my fifth or sixth day in office. Remember that Donald Trump was governor, I mean, was president rather, and I was governor and it was 2019. And you know, I am committed to a focus on electrification, a focus on our environment, and importantly on fighting climate change. So, we've made a lot of progress in that regard, even during Trump's first term.

We're continuing to make progress even now, even with the headwinds that the federal government is putting in our way. And let's face it, all of what they're doing is irrational. It truly makes no sense. We're creating jobs, we're growing our economy, in part, based on our focus on climate. We passed a bill here in 2021, something that I worked on for a year and a half, you know, to bring all the parties together called the Climate and Equitable Jobs Act. And it is focused on us reaching a carbon-free energy environment in the state by 2050.

David Roberts

And you're confident that's going to stand up to any legal challenge from the President?

Governor JB Pritzker

Oh, yeah, there's no doubt about it. Again, you know, federal law is in conflict with state laws; federal laws override the state law. But in this regard, you know, we passed a law that is absolutely constitutional. And we've made a ton of progress, we've tripled the amount of renewable energy that we're producing in the state and that continues to grow. And we just removed our moratorium on small modular nuclear reactors and we're considering doing that —

David Roberts

I saw that was up for a vote. I didn't know if that had gone through.

Governor JB Pritzker

Well, that happened last year. And then this year — and I think that's what you're probably thinking of — we have a bill that's moving through the legislature that would remove the moratorium on large-scale nuclear reactors.

David Roberts

Are you supportive of that one?

Governor JB Pritzker

Yes, I am. We're still negotiating the final version of the bill. So, when I say I'm in favor of it, I'm in favor of it with the focus on safety. That's really the most important thing. And, I don't frankly trust a Trump administration to provide the kind of safety and backup that we need from the federal government. So, we're making sure we've got that ready at the state level. But, we are the state that has the most; we produce the most nuclear power. We have the greatest number of nuclear reactors. It's one of the reasons why many years ago there was a moratorium put on it.

People were just, you know, it's like, "Hey, we've got enough." But the reality is, and even though it's about 52% of all the electricity that we produce, the reality is that these days, as you know, there's greater and greater demand. And even though we continue to produce more electricity than we use in our state, we believe that will dry up, you know, over the next six, seven years. So, we want to be prepared.

David Roberts

One of the things that you've been pushing for Illinois is to be sort of a manufacturing hub, kind of a clean manufacturing hub. There were some big grants headed to industrial demonstration projects in Illinois from the Office of Clean Energy Demonstration at the DOE. And I have been hearing, maybe you've been hearing, that the DOE is going to yank a lot of those back, cancel a lot of those grants insofar as they can. So I just wonder, does a state — I know state budgets are not nearly as flexible as the federal budget — do you have the resources to step in and fund that kind of innovation and sort of first-of-a-kind plants and these early start things? Can you step up and do on R&D what the feds are now bailing on?

Governor JB Pritzker

You know, across the board, David, they have been pulling back on grants, and it's damaging work that's been done at the state level all across the country. But here in Illinois, we have $1.8 billion that's owed to the state that we expect that we should get from the federal government. Not all of it is climate-brain related.

David Roberts

Those were already signed, already agreed upon?

Governor JB Pritzker

We count on that. And this is part of our budgets. And if you go state by state, it's usually 30-40% of all the money that states have available to them comes from the federal government. And now, you know, there are a number of instances in which they've pulled back. We're obviously involved in lawsuits that are designed to make sure that they do what the Congress has required by law that they do. But they're unconstitutionally withholding those grants. So we're working on that. But you know, we're talking about, for example, NEVI funding so that we can fund our charging infrastructure for electric vehicles, for example, that is something they've stopped funding.

We continue, nevertheless, to build out our charging infrastructure and we're going to continue to make those investments. We are expanding the number of people that are involved in the clean energy industry. You know, the Climate Equitable Jobs Act, the important word being equitable, requires us to train people for this relatively new industry. And we've been doing that. I just was at an opening of one of our new climate innovation hubs where we're going to have hundreds of people going through and getting trained. This is in Decatur, Illinois, central Illinois, and that's happening all across the state.

David Roberts

That's a great example, like a climate innovation hub that's training Illinoisans to work in this industry. It's a great thing. Can that survive without federal funding?

Governor JB Pritzker

Absolutely. That is something that was part of our Climate and Equitable Jobs Act and not reliant upon the Inflation Reduction Act or any other federal law. Meanwhile, that doesn't mean that we don't need the federal government to step up and do what it has promised to do. But as it regards training people for those jobs, you know, we have created a ton of jobs in the clean energy industry and we just have to have the workforce for it. And Illinois is the number one state in the Midwest for workforce development. So we're proud of that. We're going to continue to invest in that with or without the federal government.

Meanwhile, again, we're going to make sure that they do what they're supposed to do, and we're going to do that by taking them to court.

David Roberts

Let's talk about transportation. Transportation is the number one source of greenhouse gases in Illinois. I think that's true in many states, especially with the progress that's been made on electricity lately. So, let's talk a little bit about how you view transportation decarbonization. There's a bill in the legislature called the Climate and Equitable Transportation Act that sort of gathers together several transportation reforms. I'm curious if you have thoughts on that bill or the constituent parts of it. Mainly, I'd like to hear about the sort of funding cliff that the state transit systems face.

Governor JB Pritzker

Yep. So, I think this has happened in a number of states with large urban areas where transit systems, enormously burdened by COVID-19, suffered a downturn in ridership and were badly in need of funding. There was federal funding that was coming that has now subsided. So, when you talk about a funding cliff, I would just say, look, we need to restore our transit system. It's hugely important in the future of job creation and the future of our economy. I'm a big believer in transit and I would point out that transit isn't just a subway in an urban environment.

We have transit systems, you know, all over the state of Illinois: Carbondale, Decatur, Peoria, and Aurora. These are places that don't necessarily have a subway system or trains, or at least, you know, they don't have a commuter rail system. And we need to fund those properly as well. So, we've been working on that at the legislature, and the legislative session ends May 31st. That work continues. One very important thing is we need reform. We have multiple significant transit systems. Right. We have a Pace suburban bus system.

David Roberts

Yeah, there's four just in the Chicago area, as I understand it.

Governor JB Pritzker

It's a lot. Right. And then, you know, as I mentioned, in all the other areas of the state, but in the Chicagoland region, there has not been a lot of coordination between the different systems. And so we're demanding that, you know, if we're going to provide funding both at the state level and to coordinate funding from the city of Chicago and the counties that surround Chicago, that we need to have a better governance system and more coordination between those. We think we can save money doing it as well as provide better service. So that's all happening right now.

It's quite complex, as you can imagine, but it's been worked on for more than a year and there's a lot that is already ready to come forward. It's really just a question of bringing all the pieces together. And then finally, as you're pointing out, we need more funding. Who's going to provide that funding is another part of the question. The state should provide some. But again, the city of Chicago, the counties surrounding Cook County, and the county surrounding Cook County, not to mention, we're probably going to have to look at the farebox as another source of revenue. But importantly, we're going to have a world-class transit system. We have to.

David Roberts

So you're committed to getting past this fiscal cliff then?

Governor JB Pritzker

Absolutely. And I would stop calling it a cliff, to be honest, because we understand that we're going to have to continue to fund this system and it's got to be run better. So, this is really more reform than it is hitting a cliff.

David Roberts

Something you hear from transportation reformers in lots of states is that even when you have a governor and a legislature saying the right things about transportation decarbonization, you often have state departments of transportation that sort of seem to lag behind the rest of the government, seem overly focused on highways, seem under-committed to alternatives. How do you think about your state department of transportation and getting it aligned with these goals?

Governor JB Pritzker

You know, it's funny you say that. You know, I was in business before I became governor, and things move a lot faster in the private sector than they do in the public sector.

David Roberts

So, I hear.

Governor JB Pritzker

When you talk about state departments or city departments of transportation, you know, there's a reason, sometimes a good reason, why they move a little bit slower, and that is that, you know, you want to build consensus, you want to make sure that you're getting it right along the way, that it meets the needs of a lot of different constituencies and so on. That's not always the case in a business. And so that's one reason why it might move slower. But there are other reasons that don't make any sense at all. Right. They're just from history, bureaucracy, and lots of other things.

And just some people who've held a position for a long time and have had a certain idea about how to carry out their position, and then times change, policies change, and those certain people maybe need to be changed out or need to change their views. So that is another reason. It's not a good reason. It's just I'm explaining why I think there's sometimes a slower reaction in government than there is in the private sector. So here's the thing. We don't get it right all the time, I have to say, at state government, when we're trying to move fast and as you're saying, you know, maybe less focus on highways, more focus on transit. But we have made a lot of change.

And importantly, we're being more efficient about what kinds of roads we're putting in, how we're focused on electrification, which I think makes a big difference, how we're paying for it. Those are all things that have changed over the years in a positive way, and I'm proud of that about the state of Illinois. It wasn't like that — when I came into office, we had enormous deficits in the state. We had a terrible credit rating. We had a lot of challenges coming up with the funding for the things that we needed to do.

And over the last six years, that's all improved markedly. And we passed in Illinois before the federal government got around to it, the largest infrastructure package in the nation. And I'm very proud of that. And that's helped us do both more rail, more transit, and highways, and bridges, and airports, and so on.

David Roberts

And I hear good things about your new Secretary of Transportation.

Governor JB Pritzker

I'm so glad you raised that, because she is somebody who was at the city of Chicago. She's somebody that people who are cyclists and pedestrians and who understand the need for public transit and how important it is when we think about climate change, love her. Because she really gets it. So when we brought her, you know, she had left the city, but she basically had done a terrific job at the city of Chicago. We brought her at the state level. Already, I can feel the change, and I'm hearing it from people all across Illinois.

So, I'm very excited about the work that she's already doing. And she and I just met the other day to talk about the kind of big projects that we're going to be working on over the next couple of years.

David Roberts

Awesome. Let's talk a little bit about electricity. Here's a little bit of a tricky question, but I wonder if you have sort of a perspective on it. So, Illinois has restructured utilities, as I understand it, meaning a market, more or less a market, something like a market and a lot of different utilities and generation companies competing, which has its merits. But I think there is, these days, some counter thinking to the effect that the electricity system is becoming so complex, with all the resources now at the edge of the grid and people's houses and buildings, EVs and EV chargers, all of it is becoming extremely complex.

And there's an idea that with the restructuring of utilities, you sort of lost any central planning, any central grid planning. And I think this might even be in one of the energy bills that's up in Illinois this session. The idea of creating some sort of state agency just to do kind of central coordination of grid planning. Is that on your radar at all?

Governor JB Pritzker

Well, you know, I believe in having markets that help us bring down prices, electric prices for people across the state. But I also understand the point you're making. I want to point out we have the Illinois Commerce Commission is really tasked with doing exactly that — this kind of planning. And what they're designed to do is when the companies come to get their rates approved, the ICC — now, I want to be clear, this was not always the case, but it is now — that the ICC is really focused on exactly this issue of "How are we going to carry ourselves forward, get the amount of electricity that we need produced in the state and also delivered in the right ways?" And with the variety of ways in which electricity is being produced, we need to have that kind of planning.

And that's happening because we've invested in the Illinois Commerce Commission in a staff and new commissioners since I took office who exactly understand that. In fact, the person who was one of my kind of three amigos that helped us put together the Climate and Equitable Jobs Act from the governor's office, who is a former mayor of the city of Rockford and an expert on clean energy, is now the chair of the Illinois Commerce Commission. So, I've seen an enormous change since he took office, since I took office as well, you know, and I appointed him. So, I understand your point and it's true that in some other states where it's, you know, less of a free market, they have more kind of central planning capability.

But, we've redesigned the way we do things in Illinois, and I think the Illinois Commerce Commission has done just a bang-up job in this kind of new world.

David Roberts

Well, I love to hear from anyone who appreciates the importance of public utility commissions. Hail, hail.

Governor JB Pritzker

Now, that means you're a real nerd when you say something like that.

David Roberts

This is a niche podcast.

Governor JB Pritzker

No, but I love it. Look, this is sometimes where the most important work gets done, at the commissions that maybe everybody isn't paying attention to.

David Roberts

True.

Governor JB Pritzker

And so, that's why putting great people, appointing great people into those positions, is hyper-important. And that's why, you know, electing a governor that you agree with, that the voters agree with and what should happen in terms of our future electrification, is so important.

David Roberts

Well, speaking of electrification, you know, everybody is looking down the barrel of electricity forecasts which say, "Lines going up fast." You know, there's disagreement about how steep it is, but almost everyone agrees lines are going up. So, I wonder, different people have different feelings about this, the sort of flood of data centers into. Are you just sort of all in? Like, do you want the data centers? Are you worried at all about the impact of sort of giant single load customers like that? It's sort of a new thing for the electricity system, really. Like, are you just all in on trying to attract them? And do you have any worries about keeping up?

Governor JB Pritzker

Well, David, I'm the governor of a very large state, so I worry all the time. But I gotta say this, the key is, remember, we produce about 20% more electricity in the state of Illinois than we consume. Now, we've got MISO, we've got PJM. We're all sharing electricity across borders. But I just want to point out that at least for the state of Illinois, we theoretically could keep growing the number of data centers and perhaps open a bunch of AI data centers and not need new sources of electricity for some time.

Having said that, there are a lot of other things that eat up electricity, including advanced manufacturing, just to give another industry that we all ought to focus on that uses a lot of electricity. So, the key is to keep up with the demand and to make sure that we're doing everything we can on the conservation front.

David Roberts

Yeah, and what about this worry that I see popping up more and more about special deals data centers are getting, lower rates? You know, just making sure they pay. Because lots of times when you put a big data center on your system, you need a lot of infrastructure upgrades just to keep up with it. And like, who pays for those infrastructure upgrades? Are you worried about ensuring that data centers sort of pay for their own infrastructure? Do you know what I mean?

Governor JB Pritzker

You know, it. I mean, let's start with — look, the focus of virtually everything I do is working families. And if they can't afford to pay their electricity bill, that's an enormous problem. And I'm not going to let that happen in a world where, yes, we'd love to have AI data centers, we'd love to have more data centers that are paying taxes and hiring people and so on. That's all great. But if it's going to affect, in a negative way, working families across the state, then, you know, we got to do something else. Here's the trick.

If we do data centers, what we have to make sure is that they're paying appropriately into the system so that the rates that average folks out there are paying aren't going to go through the roof. And infrastructure, we all have to pay for infrastructure, but if it's caused by one of these large tech companies that wants to come in and build an AI data center, which, by the way, we have nothing against an AI data center, but you raised the real question, which is, "How is it going to affect the rest of your electricity grid and your distribution and, most importantly, people's bills?" And so, yes, of course, the goal here is to make sure that the folks who are taking up our existing infrastructure are paying for new infrastructure, that if they're going to come in and take a large piece of the infrastructure and the production that we've got, they've got to pay up for it.

So, that's part of the deal. Now, I want to say one other thing, which is data centers, by themselves, there's nothing evil about data centers. It's just that, yes, they use a lot of electricity. So, we changed our trajectory on data centers. When I came into office, we were not attracting any data centers.

David Roberts

Why was it? Was there a particular policy?

Governor JB Pritzker

Yeah, because other states had certain kinds of tax incentives that we didn't have. Right. We weren't even keeping up with the average state out there. And that was before I came into office. The first year I was in office, we passed a bill to attract data centers to the state. And guess what? So, huge advantage our location, center of the country. Here's the other big advantage we have: 20% of the world's fresh water is right on our shores.

David Roberts

Oh yeah, true.

Governor JB Pritzker

Also, underneath the state, we've got aquifers and we've got rivers that run up and down the state of Illinois. All fresh water. We've got more than 80% of the US fresh water.

David Roberts

Oh, wow.

Governor JB Pritzker

Think about that.

David Roberts

That's crazy.

Governor JB Pritzker

20% of the world's fresh water. So, if you're gonna build a data center, you wanna be in a place like ours because you need water and you need electricity. And we've got an enormous amount of baseload because 52% of our electricity is nuclear.

David Roberts

Right.

Governor JB Pritzker

So, it's great. But, to the point you raised earlier, we want to make sure that we're keeping up on electricity production with the demand that we know is coming. And once again, we got to keep our electricity rates low for businesses as well as for individuals and working families.

David Roberts

Here's another question that's related to that. So, speaking of things that are going to drive electrification, we've talked about clean manufacturing. That's one of them. We've talked about clean electric transportation — that's another one of them — EVs coming online. But the big third bucket of electrification is building heating and cooling. And so, right now, Illinois, I think, has one of the biggest gas networks in the country. I know the Commerce Commission, speaking of which, the Illinois Commerce Commission is currently running a Future of Gas Proceeding. Massachusetts, I believe, had the nation's first Future of Gas Proceeding, just concluded maybe last year.

I'm very curious how you think about gas and the future of gas in Illinois.

Governor JB Pritzker

Well, the Climate and Equitable Jobs Act, not to repeat myself, but CEJA really did a lot for us to set policy going forward with regard to natural gas. And it really is designed, remember, everything here is designed to move entirely toward clean energy. And filling the gap here with the reduction in coal, for example, and the reduction in natural gas with renewables. But natural gas has its place. And we've not done away with natural gas. And we're not telling people they can't have a gas stove. But we are aware that, you know, when we think about things like, "How much should the ratepayers pay for the replacement of gas lines?"

When you know that over time there's going to be a reduction in need and at some point that reduction is going to go down to a point where we don't need to be replacing every gas line. So the question is, what does that look like? And that's a real challenge, I'll be frank with you. And we have debated this, we've come up with some solutions for it. But it's not a debate that has ended now because there's an evolution that'll take place and we don't exactly know the speed of that evolution. So we're working on it hard. I don't want to tell you we have all the right answers yet, but I do know that we can't continue to say that we're going to replace every gas pipeline that we used to replace all the time for a world in which natural gas, you know, will be reduced in the state.

David Roberts

But would you agree to the notion that on some time horizon the goal is to electrify home heating and cooling?

Governor JB Pritzker

Of course, that will eventually happen. I mean, I, again, it's going to be long after I'm governor and maybe even after I'm dead and gone. And I'm 60 years old, so you can maybe, you know, make some calculation, but you know, it's going to take a while. Right? I mean, that's why we've set a goal, you know, and we are actually going to get to carbon-free electricity and carbon-free energy in the state by 2050. So I can't tell you exactly what the timeline for all this is, but 100% we're focused on electrification. There's so many ways. Heat pumps is one example of it.

David Roberts

One of the reasons I asked this is, I just looked at a map and heat pumps are lagging in the Midwest. They are, I think, at 20% in the Midwest, where you are, way behind some other areas. So, they're nascent, I guess, in your area.

Governor JB Pritzker

That's fair to say. And you know, I haven't ever argued that the Midwest is ahead on this subject. But I do want you to recognize, I mean, we've got some pretty cold climates here in the Midwest. You know, we've got a lot of rural areas. I think there's probably an argument, a greater argument in a way, for electrification in rural climates than there is in some of the urban climates. But we're all focused on this. I don't think we're going to move forward on our energy portfolio as we head toward carbon-free energy without addressing this subject.

David Roberts

Another subject that comes up in this regard a lot, and in a lot of other regards, is the housing crisis. I feel like just in the last few years, it has sort of really quickly become conventional wisdom, now agreed upon more or less across the board among Democrats at least, that the nation is in a housing crisis. The housing crisis is worst in some ways in blue areas, in blue states — some connection to blue governance, people are talking about. And of course, there's an energy and climate connection too, because the more people sprawl, the more they sprawl out into the countryside, the more resources they consume, the more carbon intensive their lives are.

So, there's a climate angle on this, too. So, I just wonder how you are thinking about the housing crisis in the state and what sorts of mechanisms you see for beginning to address it.

Governor JB Pritzker

Housing is an enormous issue, but it's not a blue governance problem. The issue is that you associate those two because we have the largest urban environments, typically.

David Roberts

Well, it's because all the cities are blue. Right?

Governor JB Pritzker

Well, that's true. That's true. And so, you know, the blue states, right, have large blue urban environments, and it's in the urban environments in which there's the biggest housing crisis. So we have, in our state, tried to address this by creating, first of all, a Director of Housing Solutions and a set of policies that we pursued during this General Assembly that we think is going to help a lot. Look, we've got a lot of housing that we need to create. I mean, that's great news in one way. You know, it's also challenging, great news because, you know, we want people to have the ability to own a home or to rent a home, and we have population growth in areas where there aren't enough homes.

To my mind, anyway, this challenge with regard to housing is one that we're going to be addressing for several years to come. One of the problems, let me be clear, is financing. What I mean is, interest rates are too high. One of the challenges when you go talk to a developer is they can't borrow money at these kinds of rates and get a return. So, the question is, what are we going to do now? Donald Trump's solution to that is to destroy the economy so you'll have to lower interest rates. But then, nobody can afford a home.

Yeah, clever. Then nobody can afford a home. You know, that's not the way to do it. Right. We were actually on a decent trajectory. As, you know, interest rates were coming down as inflation was coming down, coming into this new administration. And now everything's been upended because of the economy, because of tariffs, because of Donald Trump's policies. We're going to face a greater challenge than we have even over the last number of years. So, we are addressing it in the state because we put together a task force. You know, I'm a big believer in not reinventing the wheel.

If there are good ideas around the country that we ought to implement in the state, let's make sure we're doing that. And then importantly, we'll adopt those policies, and that's what we're attempting to do now. Some of them we came up with that are unique to Illinois, but many have been effectuated across the country.

David Roberts

Can I ask you about one in specific? Because one of the sort of areas where Illinois has pioneered and drawn a lot of praise from people in my world is they put a moratorium on local bans of renewable energy, basically. I'm sure you remember this whole thing. There are all these sort of right-wing groups that are going around stirring up opposition to renewables at the local level. You have local towns banning renewable development. Basically, the Illinois legislature said, "No, you can't do that." I wonder if you would think about taking a similar tack on housing, because housing is another area where it's very often a handful of not particularly representative locals who are holding things up.

Governor JB Pritzker

No doubt about it. And indeed, that's part of the package that we're addressing in the General Assembly now. So, you've got it. Think about carriage houses, and we've got neighborhoods where people are not allowed to have those as separate dwellings. Or just the idea that we can, if we make a few tweaks here and there, we can significantly increase the amount of housing with the existing housing stock. What we really want is we need to build more dwellings, we need to build more multifamily housing. And again, part of that is a financing problem in the private sector. It's also like, what can we do in an environment where interest rates are high?

Can the state step in? They did this in Utah, where the state provided from their state treasury the ability for first-time home buyers to get a lower interest loan.

David Roberts

Interesting.

Governor JB Pritzker

For certain size dwellings. Right. So again, like a first-time home, I think it's less than 2,000 square feet. But the point is that you're trying to encourage, with lower interest rates, developers to come in and develop new homes and people to build new homes and for buyers to be able to afford those new homes. So those are things that we've looked at for the state. It obviously costs money to offer a lower interest rate from state money if we can invest it at a higher interest rate than we can loan the money at a lower interest rate. Then that costs us money.

But that's, you know, in some instances, worthwhile doing, even though, you know, it may be an expensive endeavor. But we're looking at all of it. Again, as you're pointing out, changing the zoning rules is just one of many possible solutions.

David Roberts

One of your staffers happened to mention that you were excited to make Illinois a hub for quantum computing. And I thought to myself, "What on earth is quantum computing?" So, I thought I would just give you a nice lob here. You can just tell us what quantum computing is and why you're excited about it.

Governor JB Pritzker

You know, I like to describe it in two ways, right? One is the effect at the end. I'll describe what quantum computing is in a second. But, you know, the impact of quantum computing is sort of imagine what could happen if we had the ability, if you could analyze the weather — just to give you an example — analyze the weather to the point where you knew exactly where a tornado was going to hit. Not just generally it's in this city, but exactly where it was going to hit. Quantum computing allows you to take all the existing data and crunch it with such speed and accuracy that you could determine that.

Imagine if you could understand the currents of the ocean such that you would never have to worry about where a tsunami was going to arise, or that you might be surprised by where a hurricane is going to hit, because you are so accurately able to predict, because of the ability to crunch the data as fast as a quantum computer.

David Roberts

All kinds of climate resilience implications.

Governor JB Pritzker

A 100%. And then, you know, and then development of pharmaceuticals, which often take five or seven years to develop because of all the work that needs to be done.

David Roberts

Or new materials to substitute for hydrocarbons in plastic, for instance.

Governor JB Pritzker

Exactly. And we talk about this when we talk about AI, but think of AI like hypercharged in a way that produces the results we just talked about. Now let's go back to what is quantum computing? So, I like to describe it in this way because I'm not a quantum scientist, but I think this is the easiest way for people to understand it. You understand what a transistor is? I think most people know what a transistor is. They knew what a transistor radio was, you know, many years ago, right? A simple device that required a transistor. People put transistors side by side by side to develop, like the first computers.

And you had many transistors that were hooked together. Then came the ability to essentially print transistors on silicon. So, you know, when you could do that, Silicon Valley, that's when you came up with your first personal computers and not those big IBM ones, with the data cards that they would put in, right? So, you could see everything getting miniaturized. Well, imagine if you could develop transistors on a molecule and imagine how many transistors you could put together on a molecule when today a chip can have billions of transistors.

Imagine how many you could have if you could do it on molecules. So, that's essentially the ability to put all those molecules together, which together, you know, is something you can't even see, but be able to compute at a multiple of what you can do today. I'm talking about a multiple of a million times. So, that's kind of the way I like for people to think about quantum: the ability for us to crunch data at a rate that it's hard to even imagine. But the scientists in the labs at the University of Chicago, at Northwestern, at the University of Illinois, and other places across Illinois, not to mention in other places across the United States and in China and other places.

Right. But this is all being worked on, and here's why this is important. Let's start with the importance from a national security perspective. If we don't win the race to develop the first really usable quantum computer, which is coming in the next five to seven years, if we don't win that race, someone else wins it. They will be able to break every code on Earth because of, again, the ability to crunch numbers and crunch data at a million times what you can now. So every kind of encryption can be broken. The reverse of that, by the way, is if you have quantum encryption, you can protect anything from attack.

And we talked about quantum sensing, quantum communication. These are all things that are the outgrowth of our ability to develop the first quantum computers. In Illinois, the first quantum computer is being built.

David Roberts

Ah, interesting.

Governor JB Pritzker

And it's being built by a company that's going onto our Quantum Park that we launched last year in Chicago on the south side. And IBM has moved in there. DARPA, the Defense Advanced Research Projects Agency, is running a quantum benchmarking program there so they can evaluate all of the companies that are developing new products in the quantum space. And other companies that are startup companies that want to be on this campus and having all of that around the University of Chicago, run by the University of Illinois, with the input of Northwestern University, not to mention the other Midwestern greats like the University of Wisconsin, Madison, Purdue, et cetera. Bringing all that together means we'll beat China at this, but we've got to make the investments to make that happen.

The federal government's role is very important in this. I'm afraid of what Donald Trump is doing at the federal level. And whether, you know, DOGE or just by mistake, they'll stop it, because that seems to be a lot of the way this government is running.

David Roberts

Wouldn't that just be the most 2025 thing to ever happen?

Governor JB Pritzker

Yeah, the most Project 2025 thing. Anyway, that's what we're doing here with quantum.

David Roberts

Awesome. Okay, Governor, one final question, and this one I know is something that's on a lot of people's minds. It's just a general political question, which is I know that I'm not alone in having been incredibly disheartened over the last few years, not just to see the rise of Trump and all that he sort of represents, but just the utter lack of resistance, just how easy it was for him and how few people and institutions are standing up. And I get it: It's scary, he's a tyrant, whatever, he can set his mobs on you.

I get all that. But, like, no one? I'm not even just talking about Democrats either. Just civic leaders, business leaders, you know what I mean? Nonprofit leaders. Where is our spine? Where is the US's spine? Why is no one — why is there so little fight, I guess, on a lot of people's minds? And as one of the few people who seem to be fighting, maybe you have some insight into that. You move in these circles. What's wrong with these people?

Governor JB Pritzker

We could have just started the podcast. What's wrong with these people? Like I said, I was elected governor during Trump's first term. I know who he is. I do. And I knew that — "Danger, Will Robinson!" as we like to say, those of us who watched Lost in Space years ago — that we have somebody that is, frankly, not very bright. He is a bombast, and he's somebody who loves to be in control and is a massive narcissist. So, all of that should have led people to be concerned, deeply concerned. And I was calling it out back then.

I think a lot of people just didn't believe that it could be worse than it was during his first term, or that he could get re-elected.

David Roberts

Even though he promised, he said it out loud numerous times, "It will be worse."

Governor JB Pritzker

Yeah, but so what? He lies half the time, so you don't know which half are the lies. And honestly, I think there were a lot of people just taken by surprise, not believing that Project 2025 could, in fact, be implemented. I'm talking about just average folks out there, right? Voters who were like, "Yeah, what does it mean?" You know, when some of us would say "Democracy is at risk!" If you go knock on 100 doors and say, "The democracy is at stake," people are like, "What are you talking about?" Like, " I need to pay the bills, I need a good job, I need better pay. I need to be able to go to the grocery store and afford things."

And nobody's experienced democracy going away. Nobody really knows what that means in the United States. But here we are, right? Project 2025 is effectuating that when you're taking away people's voting rights, you know, when you're attacking people's due process rights, when people are literally being disappeared on the streets of our country, it's something nobody could have imagined before. And yet here we are. So here's the good news, after all that, I'll give you something to think about, which is people are taking up the fight.

I see it every day, more and more people coming out to protest. And in fact, I just, you know, was reading a really great story about a woman who, you know, was so outraged back in early February about what was going on that she went out by herself with a sign in Edwardsville, Illinois, and just held up a sign, right, protesting, you know, at the intersection of two big highways in southern Illinois. And she thought, "Maybe I'm crazy, but I just need to do something." And you know what happened? Somebody walked up to her, they were walking their dog, and asked, "What are you doing?"

And then, instead of walking away, the person joined her. And then the next day, a couple of days later, four of her friends showed up. That was February. Now here in April, every Friday at 1:00, 300 people show up and protest. And that is what's happening all across the country. And you see it sometimes with these big rallies in big cities, but you also see it in small towns. Edwardsville is a city of 28,000 people. And here you've got hundreds of people showing up every week to make their point heard. And you've got, I see it everywhere, people outraged that their Social Security office is being closed, that veterans can't get the services that they need, that Elon Musk, an unelected techno bro, has essentially taken over the government and doesn't give a wit about working families who are suffering as a result of what Donald Trump is doing.

So, I see it every day. There is outrage building. And it's not just Democrats, it's not just independents, it's Republicans showing up. And you can see it in the polling data of the President. I just saw it today, right? His polling is down, down, down. He's underwater by 10 points now, you know, in terms of approval rating. And it's getting worse. And that's because people are realizing this is a real threat to their livelihoods.

David Roberts

All right, that seems like a good place to wrap it up. Governor, thank you so much for taking the time. And thanks for getting out there and fighting.

Governor JB Pritzker

Thanks, David. Appreciate you.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

In this episode, the tables are turned: I'm the guest of the Climate Papa podcast, interviewed by host Ben Eidelson. We discuss the nested fractal puzzle of decarbonization, the critical importance of the grid and urban land use, and why now is the most exciting time to jump into climate work. Plus, I share some thoughts on parenting and avoiding tech-bro culture as the climate space evolves.

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Text transcript:

David Roberts

Greetings and salutations, this is Volts for April 25, 2025, "Me, on the Climate Papa podcast." I'm your host, David Roberts. Have you ever listened to Volts and thought, "But Dave, what about you? When are you going to talk all about yourself, your own precious history, and opinions for an hour?" Well, friends, do I have good news for you. A couple of weeks ago, Ben Eidelson, host of the Climate Papa podcast, invited me down to record a live episode in Seattle's newish 9Zero Climate Hub. It's a cool work and collaboration space downtown. Definitely worth checking out if you want to hook into Seattle's climate community.

Anyway, about 100 people showed up and we had some audience Q&A at the end with a ton of really sharp questions. It was a super fun time, so I thought I would share it with y'all. Enjoy.

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Ben Eidelson

Welcome to Climate Papa and Volts. Climate Papa is a show where I talk to folks like David about the intersection of climate change, technology, and parenthood. I'm Ben Shwab Eidelson — I'll be hosting the conversation this afternoon with David Roberts of Volts. When I'm not making fun podcasts like this, I invest in early-stage software-based climate startups with a fund called Stepchange and along with David, I'm based in Seattle. I live in Madison Valley with my wife who's back there and our three kiddos, our seven-year-old daughter, four-year-old son, and a ten-month-old. The seven-year-old and four-year-old are not here, but the ten-month-old is back there.

I'm also a member here at this lovely 9Zero Climate Hub. David, it's an honor and privilege to have you here for the conversation. Before we dive into your career in climate and all of the things that you've done over the last 20 years professionally and on the Internet, I would like to hear a little bit about the human behind the keyboard. Could you tell us a little bit about your life outside of Volts, your family, your kids, and maybe even more about your dogs?

David Roberts

Sure. Volts is definitely the most interesting part of me. My life outside of Volts is very boring.

Ben Eidelson

Your dogs might listen to this.

David Roberts

Oh well, my dogs are exciting. I guess the short story is, I went to college, didn't want to leave college. So then I went to grad school, didn't want to leave grad school. So, I started on a PhD in philosophy in 1998. This was in Edmonton. Then I tried to transfer to a better school. I didn't get in. I didn't want to stay in Edmonton, which at the time was extremely bleak and awful. And so, I dropped out, moved to Seattle with no job skills or job experience or anything to recommend me at all, really, and, like, started working low-level tech jobs.

I worked in customer service for Amazon for a while. I worked for IMDb back when they first started putting ads on their site. If you remember the old ad-less IMDb, I am — I was a key figure in ruining that and putting ads all over it. I worked for Microsoft for a while. I moved to Seattle for a girl; that exploded quickly. And then, less than six months later, I met my wife, who I married in 2001. And we have two kids, one of whom is a junior in college this year — my God. The other one is leaving for college in September — my God. That's very sad.

And then, we have two dogs and a cat. My older dog, Forest, who we've had for 15 years, passed away earlier this year. But we have two. Mabel and Abner are two pit mixes. Abner is a psycho. Subscribers of Volts will know.

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Ben Eidelson

We'll know their faces.

David Roberts

He's an absolute psychotic, but very sweet and endearing. And yeah, he's young. He's a little over one. Mabel's five. Annie, Anakin, the cat, is 15 now. We bought Anakin and Obi Wan. My wife got them when I was in D.C. at Barack Obama's 2008 inauguration.

Ben Eidelson

Hopeful times.

David Roberts

Yeah. And Annie's still around. Yeah, that's it. Walk the dogs, do yoga, podcast — that's pretty much it.

Ben Eidelson

Ready for empty nesting, or is that...?

David Roberts

No, you know, I was waiting. I always read these things like, "Oh, by the time they moved out, we were sick of them. Everybody was ready for them to go, blah, blah, blah." I kept waiting to, like, get sick of my kids. I'm still not sick of them. So, I miss them. I miss them dearly. Yeah. So, no, I'm not prepared for that at all, nor do I have any wisdom to impart on that. I don't feel like I'm dealing with it gracefully at all.

Ben Eidelson

Yeah. Well, before we get into climate, I mean, your PhD in philosophy —

David Roberts

Doesn't exist.

Ben Eidelson

Doesn't exist. But your master's exists and your master's thesis exists.

David Roberts

Holy. No! This is an ambush. This is like Jerry Springer.

Ben Eidelson

And the Internet exists that contains your master's thesis, "In Defense of Ethical Naturalism."

David Roberts

Oh, my.

Ben Eidelson

1998. I only printed the first three pages as a prompt, but I did skim the 153 pages and a conclusion, and used LLMs to help me understand a little bit.

David Roberts

This is all very disorienting.

Ben Eidelson

That was the hope.

David Roberts

AI reading my thesis, my God.

Ben Eidelson

Are there any philosophy folks here? Does ethical naturalism mean anything? Okay, good, I wasn't alone. I am curious because, first of all, skimming, reading the thesis and conclusion, I'm like, "Oh, you've been a good writer for a very long time." First of all, it is very well written. The conclusion had some beautiful twists of words in there. So it goes through. Curious, when you look back at that time, did that set in motion some of the foundations and principles through which you look at the world over the following 20 years? And if so, how do you think about that?

David Roberts

Well, yeah, I guess there are two ways to go. One is like the things that attracted me to philosophy. I am, in a sense, doing much more now than I would have had I become a professional academic philosopher. Because if you become a professional academic philosopher, you're writing a paper on this guy's interpretation of chapter three of that guy's interpretation of this other — you know, it's just all. There are too many students, too few jobs. You know, people can't just sort of have brilliant new ideas on command. So it's all just, you know, very, very hyper-specialized and technical at this point.

So now, what I wanted to do is like, I like thinking about systems. I like thinking about how systems hang together and, you know, I like thinking in big picture terms and then sort of connecting it to the day-to-day. I'm doing that much more via a blog than I could have as a philosopher. But the skills, not necessarily the content of philosophy, but just the skills you learn in a philosophy program, which is just like how to argue, you know, like what is an argument?

Premises, conclusions, just the skill of, like, you know, how they taught you to diagram a sentence in middle school. It's a little similar to that. It's just like diagramming an argument. Just like, what are the pieces, you know, and like, where are the weaknesses and what are the junctions? It's just good training and especially, I don't think I appreciated how rare those skills and habits are outside in the regular world. So, there's a reason that there's a bunch of journalists who are philosophy refugees. I mean, it's a weirdly common thing. As for the content, like ethical naturalism, the whole thing is just like, "How do you create an ethics without God or the supernatural or souls or foundations of being or any of these?"

Any of this sort of imported quasi-religious metaphysics. Like, if we're just biological creatures on a planet, what does it mean to be good? Why be good? You know, all that. All that kind of thing. And that's obviously still quite relevant. The other part of philosophy I was into is cognitive science, you know, Daniel Dennett and all this sort of like embodied cognition. I don't know if anybody follows all that stuff, but that also, I think, is always. It's helped me remember that when you think about reason and thinking, take it out of the abstract, think about embedded embodied creatures doing it.

And in a sense, I think that transfers quite neatly to politics. Like, the more you're in politics, the more you realize that, like, you don't start with some abstract perfect system and then try to cram flawed individuals into it.

You have to start with the flawed individuals and do the best you can with individuals as they exist in the world. So, yeah, I mean, there are connections, but more it's just like I like thinking and talking about ideas and I don't think there's enough of that in the public realm. And public response has been such that I think a lot of people desire that.

Ben Eidelson

Yeah, to the point about that public thinking. And I imagine most people here know David from Volts, but before Volts, there was Vox. Before Vox, there was Grist. And you were at Grist for over a decade. I went to the website — this is all last night. I just went down my rabbit hole.

Still going, crazily, one of the oldest —

It's amazing.

David Roberts

It was born in like 1999. And like, what other independent media operation is still going? It's bizarre, that thing's longevity.

Ben Eidelson

It's amazing. But, if you go to David Roberts on Grist and you go to the author page as they did, and you look at the bottom, each page shows four to five articles. It shows like 1, 2, 3 ... 1601 pages of articles, meaning you published, I think, around 7200 articles there.

David Roberts

Yeah, a lot of these were blog posts. I started our blog, Gristmill, back when blogs were the sexy new thing.

Ben Eidelson

Then, you went on to Vox. Looks like those are slightly longer form, over 650 articles. And then, you've been at Volts, I think, since late 2020 and have done a number of pieces and over 300 episodes of the podcast. So, how did you go from this 150-page beautiful thesis on ethical naturalism to a prolific blog? And I didn't go into your Twitter account in Bluesky and add that up. That's a whole — probably as many words.

David Roberts

We'll stop talking about the number of tweets; that's where it gets depressing. I had what is, in retrospect, an incredibly fortunate and increasingly rare experience in journalism, which is like, you know, everybody who's in or around journalism knows all the lamentations. All the daily newspapers are vanishing. You know, it's just all the jobs are vanishing. Like there used to be kind of a ladder. You sort of like learn the ropes, cover your city council meetings, you know, like work your way up before you become prominent. But now there are so few rungs on that ladder that like, you know, you get these like 22-year-old college grads who are immediately on Buzzfeed.

And like, what does a 22-year-old college grad have to write about but "What it's like to be me," you know, "My personal experience," just like whatever, like live a little, you know, but like people don't have a chance to work their way up. So, I was lucky in that I sort of snuck into Grist. I think I was like the fourth or fifth employee, something like that. I'll never forget when I was first hired, we had a woman named Sherry who, one of her jobs was, every morning she would come in at like 7 and take the static HTML homepage down and upload a new static HTML homepage.

So, I started just as an editorial assistant. Like we had — again, like before it was cool — way back when we had a daily news email. And that was sort of our signature thing. It's very funny. The headlines are funny and filled with puns and sort of like the writing was very funny. And so that was a joy for me because I like, you know, I like fun and funny and like puns. Like we used to like, we'd write the five blurbs. I would send the five blurbs to an editor and then to a fact checker and then rewrite them and then we would come up with funny headlines and then we would have like a meeting.

There were like three of us. Every day we would meet to figure out the funniest possible headlines for these news blurbs. It was all so luxuriously slow. Now, in retrospect, it all looks so... Imagine having all that time to, you know. So anyway, I started on a news update email, which meant I was sort of like, had an excuse to read all the news every day because I knew nothing going in. Like, I had no environmental anything history.

Ben Eidelson

Did something drive you to it because it was environmental or just so happened to be a job that was available and you could have become like a financial reporter sitting here 20 years later?

David Roberts

Desperation, purely desperation for a job. Like, I was stuck in these crappy tech jobs. I was going to be a graphic designer. It was such a joke in retrospect. So, I saw this, it was literally the first time I ever went to Craigslist. First time I ever found out about Craigslist, literally the first time I went to that site, it was just an ad and it just said, "Editorial assistant at a publication. Journalistic publication." I was like, "I'll do whatever, I'll do whatever." I wrote this long, overwrought, two-page cover letter to Lisa, who was working there, who hired me, who worked with me there for 10 years and now works for Canary and still edits me to this day, bless her.

She read my cover letter and she's like, "Oh, there's no grammatical errors in the cover letter." Which turns out to be incredibly, incredibly rare, even for journalism applications. I can attest, having seen a bunch of them now. So, I knew nothing. I got to read the news, I got to just write blurbs. And then I got to start with the — you know, we started our blog and Grist was small and obscure. So, I just sort of like, you know, I was raised by wolves. I didn't really have any mentorship or any help.

So, I was completely self-taught in everything. But I got to do that in obscurity, you know, like over time I got to sort of develop my skills and learn without being kind of in a big spotlight, which is rare now to be able to make a living in journalism... Yeah. So, I slowly built up my knowledge over time and what I discovered to get back to the philosophy thing is like, because Grist was just environmental at first and it was sort of climate change that I honed in on. Because climate change, especially at the time, especially in the mid-2000s, climate change was not just a sort of environmental problem, it was a conceptual, still is kind of a conceptual problem.

Like, people just don't know how to think about it. What kind of thing is it? What kind of problem is it? It's what they call a hyper-object, you know what I mean? It's so big that it's literally — you don't know how to squeeze it in your brain. So, there was a role for someone just doing sort of like conceptual intellectual spade work. Just sort of like talking through, "How do we think about this thing, how do these pieces fit together, what kind of thing is it?"

So, like philosophy, actually ended up being incredibly helpful, and there weren't a lot of people sort of approaching it. Just the final thing I'd say is what I think has been an incredible asset for me is that I didn't come to all this from the environmental movement. I did not come up through that. I did not imbibe and absorb all those —

Ben Eidelson

What was that like at the time, if you could go back?

David Roberts

Well, there's a lot to say about the environmental movement now and then, but I didn't come in through a "love of nature" or anything like that. And I didn't come in through this long history with sort of point source pollution problems as kind of the model in my head for what I'm doing. Like, I was able to approach it very much from the outside with no baggage, which I think was relatively rare at the time because there were climate obsessives who talked to one another.

And then, at the time, like mainstream media, the rest of the world didn't pay any attention at all. So, always one of my goals in my career has been to build a bridge from these people to these people to explain to the larger world why this is not some unique environmental thing. It is economic, it's national security. It implicates your concerns. Like, you don't have to put on Birkenstocks to care about this. Like, it already affects —

Ben Eidelson

They are very comfortable, though.

David Roberts

It already affects the things you care about. And trying to convince the people in the climate bubble, "Look outside your bubble. Like, learn how politics works. Like, learn what else other people care about." Like, learn where climate — you know what I mean? Expand. So, trying to build a bridge between these and like, I don't know how much of it was me, but like, I feel like now there's much more, you know what I mean? Climate's a little — not as much as one might like, but like more integrated into the larger political picture.

Ben Eidelson

I mean, in a way, what it sounds like those first couple years at Grist, I mean, both of all, they set you on this path, but they also set the way in which you engage in the path that I feel like resonates to — you know, the last Volts episode you did. One thing that at least I find unique is the fact that your writing style and also your conversational style is not that stilted, journalistic, objective. "Oh, this thing happened as though there were no human actors." I mean, that feels like maybe a gift and a reason for success or how do you think about that?

Because by default, if you were doing the climate beat at The New York Times, you wouldn't have been able to write like that.

David Roberts

Yeah, not having any training at all was a blessing and a curse. It's a blessing in that I think that formal journalism training ill-equips one to be in the actual world of journalism as it exists today, which I think is widely acknowledged now. But at the time, like, again, journalism was very set and old-fashioned. And so, you know, I never learned like the inverted pyramid. I never learned this sort of voice of God, third party. I never learned this sort of like strained affectation of judge — like, lack of judgment, you know what I mean?

Like, "Who am I to say whether things are good or bad?" You know, like, "It's like a pile of poop with broken glass in it, some say, others say..." You know, like, I never, I never got trained in that. And it never occurred to me, like, "Why would you talk like that?" Like, who would spontaneously come to that weird... You know, always my approach — and this again is just like, it's just the way I wrote, nobody told me otherwise. I always just try to write like I talk and like I wrote an article about Grist, actually about my approach to writing.

And the sort of analogy was like: I'm sitting in a bar with a friend, and it's like an intelligent, educated friend, but a friend who doesn't know about my things. And I'm telling my friend about my things. And like, if you're telling your friend about your things in a bar, the number one guiding rule is don't be boring, right? Because your friend doesn't have to listen to you, right? There's no obligation for them to learn about your thing. There's no reason, you know what I mean? So, immediately vary your rhythm, throw some jokes in, whatever. Just like, throw a picture of a cute animal in.

Like, it's just whatever to break up the monotony of that journalistic, like a fact, fact, fact thing, you know. So, like, if you're talking to a friend, be entertaining, make jokes, be a human being. Show that you care and why you care and what parts you care about and why you care about them. Don't pretend like you're some robot. What draws people to a subject is not the sort of objective subject itself. It's like, is the person telling me about this engaged? Do they care? Are they fired up by it? And if you are fired up by it, you can talk about it in a way that's engaging, even if it's very technical, very wonky stuff, you know, like every editor I've ever had tried to rein it in, like make it shorter, less wonky.

But every bit of feedback I've ever gotten from the audience is, "Thank you for doing it fully. Thank you for laying it all out." You know, like my goal is always like if I'm going to cover X, I want you to be able to read my article and feel like, "I get it." Like, "I get X, where it fits in, how it works. You know, I'm not an expert, but like, I get it." And so many news articles still today are just like — there's nothing false in them. That's sort of like how you make a good news story.

Like, you don't say anything false, but it's just like: factoid, factoid, factoid. How do these things relate to one another? What's the connection to one another? How do they connect to the other? You know, it's just like they're not telling you a narrative to situate all the facts because that feels, I guess to journalists, like editorializing or whatever, but people need narratives to make any sense of facts. So, I just wrote how it felt instinctive and nobody ever stopped me.

Ben Eidelson

People seem to like it. People seem to like it.

David Roberts

Especially at the time, climate journalism has gotten a lot better and a lot more fulsome. There's a lot more of it, a lot more people doing a lot of different things. But at the time, it was science journalists writing science pieces in a science journalism tone, which always bored the pants off me. I never cared about it, not really a science guy. Still to this day, I don't care that much about the science of climate change. I don't write that much about climate change itself. Just, like, it's getting hotter, fossil fuels are doing it.

I know what I need to know. Let's get on with it. Like, let's do this. You know what I mean? So, like, if you're interested in science, sure, go dig in all you want, but what's relevant for public policy and for being an engaged human is just like: it's getting hotter, we know why, we gotta switch that stuff off.

Ben Eidelson

What drives you to kind of consistently stay on it? Because a lot of people might be like, "Okay, I did my 10 years of the problem and like, now I'm tired, I'm ready to move on." What keeps you going, intellectually looking at this?

David Roberts

Yeah, it's funny, if you'd asked me in 2005, "Would you like to still be writing about climate change 20 years later?" I would have said, "No, I'll go insane." But like, it has evolved. The nature of the problem, the nature of what's going on, lots has evolved and changed. So — I've told this story a bunch of times — but, like, I feel like for the first, call it 10 years, I was covering climate 2005-15, something like that, solutions were just theoretical, mostly. There weren't solutions. You know, like, solar and wind were wildly expensive.

Ben Eidelson

You couldn't turn off the coal plant.

David Roberts

Far out. You couldn't turn off the coal plant. Biofuels, people kept going on and on about biofuels, but they never were amounting to anything. So really, like, it was like, you scream about the danger of climate change, and if you want to do something about it, you pick up a placard and march, right? Like, you're an activist. But, like, and that was pretty much it. And that's like a boring dynamic. Like, God bless the people who pick up placards and march. But, like, they're not that interesting to me. That side of things is not that interesting to me intellectually.

And like, yes, the problem's bad, we get it, we've said it. You know, say it again. Like, it's the thing about climate change. If you're just going to write about climate change itself, like, you know, you write about it, you're like: "It's bad. Things are getting hotter, it's going to cause a bunch of ill effects." And like, the next day you're like, "Still bad, still going to cause a lot of..." You know, "It's like 0.001 degrees hotter today." Same basic situation as yesterday, you know, and like, again, again, again, again. Like, quickly you get sick of that and want to move on.

But what's happened is, like, starting with sort of like Obama's era and then really ramping up, you know, like 2015 and then especially like around 2020. And now we're like, we're fully in the S curve. But now it's like, solutions are within reach. They're tangible, they're economic. People are doing it. And so now my topic is no longer climate change. My topic is, here's a big, wealthy, developed, complicated economy. Every bit of that economy runs on fossil fuels. So it's a big puzzle. How do you take all those fossil fuels out and achieve all those services without fossil fuels?

And so, it's a big puzzle. And you squint at it, any little bit of it, and it's a little puzzle and you squint further at it, and there's a bunch of little puzzles in that puzzle, like nested fractal puzzles to solve. So, like, intellectually it's bottomless. There's no end to the complexity and the extent of what it's going to take to find every bit of fossil fuels and do it without fossil fuels. Like, there's just no end to the technical challenges, scientific challenges, political challenges, economic challenges, financing challenges, business models. Like, just name it. Every area of it encompasses every area of human activity.

How could you ever get sick of it? Like, there's no end to it. You know what I mean? So, like, every day now is like, every little bit that solar power gets cheaper opens up a new area of things that you can do with cheap electricity. Like, the cheaper it gets, the more things you can do with it. And so literally, it's getting cheaper, like day to day. And so every day there's new things you can do with clean electricity that you couldn't do before.

And so it's been so fun. Like, you know, like five years ago, I was like, "Electrify everything!" And it was like, "Actually not everything." You know, "Airplanes, industrial..." Five years go by and I'm like, "It just did that, that you said it couldn't do. It just did that, that you said it couldn't do." Like, the bowling pins are falling. And it's like, what a fun thing to...

Ben Eidelson

To that point, how do you choose what piece of the puzzle to spend some time on in a given week or twice in the week, as your recent rates have been busy?

David Roberts

Some of it is just like personal preference stuff. I'm personally interested and then I have my thoughts about which direction broadly we're going to go. And so, you know, like I would say broadly, in the war of electrons versus molecules, I think electrons are going to mostly win. So anybody who's figuring out new things to do with electrons, I'm interested. Like, tell me. And if somebody is like, "I've figured out yet another baroque way to dig something up and turn it into sustainable aviation fuel," I'm like, "feels like it's gonna die in a few years."

I'm not going to get too into it. So, you know, I might be wrong about those things. But basically, the broad theme is sort of electrification, right? That like encompasses a bunch of different things. But like that's sort of what I'm interested in on the one hand. And then, that's the sort of technical side and then there's the political side — what to cover politically. It changed vertiginously several times throughout my career. But like the reason, you know, if you heard my sort of mailbag on this, but like these days with the federal government off the board, basically, except as a malign force of destruction, like I don't want to become a chronicler of degradation and destruction.

There's plenty of other people out there who can do that on a day-to-day basis. I have my sanity to worry about. So, my two big things right now are — these, I think, are both the two most substantively important things in climate and, helpfully, two things where most of the action is not on the federal level, most of the action is at the state and local level. One of that is the grid. We can talk about this more later if you want. Happy to go off on a rant about the grid.

But, like in my mind, it's insane that the grid is not at the heart of US industrial policy, economic policy, national security policy, foreign policy, like, name it. Like, the grid is the lodestone. It's everything. Everything goes through the grid. Everything depends on the grid. Everything. And it's handy now that, like, a bunch of companies, hauling giant sacks of money behind them, suddenly want a lot of electricity really quick. It's definitely like, you know, giving that whole area a lot more impetus. So, grid on one hand. On the other hand, housing, urban land use, cities, YIMBY, that whole nest of things. Both on a climate basis but, like, to me, housing and urban land use is a nexus of, like, climate and particulate pollution justice.

And just like — trying to think about how to summarize this without going off on yet another rant. But like, if I was going to start, I say this a lot, I was going to start a political party in the US today, the slogan would be "We can have nice things." Like, we have been sold scarcity by jerk-offs who are hoarding resources. We have plenty of resources. We could live nice lives. We could be happy. We could have nice things. We could have healthcare. We could have daycare. We could have tons of housing. We could have an abundance of clean energy.

Ben Eidelson

I was waiting for you to say it.

David Roberts

Yes, we could have nice things. And one of the nice things we could have — I think one of the reasons people are in this scarcity mode is that land use in the United States, 95% of it, call it, is just unpleasant. It's just unpleasant to be in it. You know, like you're, you're — it's just big, loud cars everywhere and people scuttling along the margins, hoping not to get hit and crushed, which they do constantly, all the time. More than in any other country in the world. It is possible to create human settlements that are nice, where people are walking around and they're seeing each other, they're seeing their neighbors, they're walking their kids to school.

Like, you know, I went to Barcelona in 2015 and became one of those — this is what my kids always say, I'm like one of those exchange students that goes abroad and they will never stop talking about it — I'm not allowed to say the word Barcelona in my home anymore. But one of the things I saw in Barcelona is these little kid trains of a teacher walking kids to school. Like 20 kids laughing, frolicking, and playing, just walking through the city to school.

And I was like, imagine allowing a child out of your literal physical hold in any part of any American city, you know what I mean? So, like, just the sense of everyone competing with everyone else for parking, for road space, it just puts people in the mindset of scarcity. So, I really think that just showing people that it's possible to construct a nice place to live where things can be pleasant is a big part of changing the American psyche and politics. So, to me, the land use, the urban land use — plus, I don't have to probably tell anybody in this room or you or anybody else that the housing crisis is screwing up everything.

It's screwing up everything, including politics. Like, I don't think the Democratic Party has fully absorbed the fact that by refusing to build new housing in its centers of power, it is sending people away to red states. So, we're literally losing seats in Congress. You know, this is like Ezra Klein discusses this on his podcast all the time. If we ran the election again, got the same votes in 2024 just because of population shifts, we would lose. Kamala would lose, and she would lose even if she won most of the swing states.

So, blue areas are repelling people. And one of the strongest, most crazy correlations you find in social science, which blows my mind how tight the correlation is, is that the denser an area is, the bluer it is. It is almost mechanical. It holds at the national level. It holds at the state level. It even holds within cities. The denser parts of cities are bluer than the less dense parts. It's almost like it's a bizarre natural law we've found. Like, no one quite knows exactly why or which way the causation runs.

But, to me, if I'm a Democrat and I'm wondering, "How do I make new Democrats?" Make more dense areas and you make more blue people. The tool is right there. Use it. You're doing the opposite. Blue Democrats are doing the opposite of that. They are uncreating Democrats.

Ben Eidelson

So, this gets on — you've kind of said the words, but I want to yank them out explicitly. Yesterday, the book "Abundance" by Ezra Klein came out. For those of us that might be a fan or have feelings about it, I'm curious what yours are. And it came out yesterday. I don't know if you had a chance to look at it. You've been around the —

David Roberts

I know those guys. I know the history.

Ben Eidelson

To what extent — I mean, it's not just abundance in isolation, but as we think about the conversations we've had about growth versus degrowth, abundance versus scarcity, conservation versus permitting reform. Just like, what is your kind of threading of this as you've built in that part of the puzzle?

David Roberts

Yeah, I mean, one thing I would say right off the bat is that, like, I read who was — might even have been a review of that book — somebody in The Atlantic the other day was talking about the history of the abundance movement and talked about how the abundance movement has sparked this YIMBY movement. Of course, let's — YIMBYs coming out of the woodwork like, "Excuse me. Like I was doing this shit when Ezra Klein was in diapers," which you know, was not that long ago. The notion of abundant housing has been around for a while now.

But I would just say that the broad philosophical thrust of it, I totally agree with. Growth promise. Looking forward, getting rid of that scarcity mindset upon which I think a lot of the environmental movement is based and still clings to that culture. Still clings. I'll say the good things about it first. I think philosophically it's right. I mean, factually, just mathematically they're right. We got to build a lot of things very quickly if we want to decarbonize. Like, I think it was unfortunate in retrospect that climate came into public consciousness via the environmental movement which has a very specific model of scarcity and the way to stop point source pollution is to find the polluter and stop it.

Yeah, so, but, this is not like that. Like, you can stop every fossil fuel emitting source in the world and then you're just in darkness. You have to transition, substitute these things, you have to build substitutes. That's the problem. So, and as a political matter, like this has been beaten into me through rough experience. Like, people don't like paying more for stuff, in fact, they hate it and they like paying less for stuff. So in retrospect, you know, like, you're an average citizen, you know nothing about climate, the environmental movement shows up at your door and says, "Hey, we've got a brand new problem and the cure is to make everything you do and buy more expensive. Let's do this. Hop on board. Grab a placard." You know, so that's disastrous. Like just as a, like in a perfect world, obviously a balance of carrots and sticks are the ideal sort of mix of policy. Right. Like, you would, it would be great to have some kind of climate carbon tax somewhere in the system. But just as a political economy matter, it's just true that like if you want to build support and momentum and a broad coalition, you need forward-looking optimism, promise of wealth and growth and you know, something to reach for.

So, I think it's on the right track. I have worries about how it's going to evolve, like, the specific people involved, some of their proclivities, some of their, you know, like, it's real easy to see how this could just become another excuse for Atlantic writers to bash the left. Which, like, is their bread and butter. And they love it. And I'm sure there will be some of that. It'll just sort of curdle into like, "Environmentalists are stupid and they're in the way and they're NIMBYs. And we should crush all environmental laws."

You know, you can see a lot of ways that, like, it could be absorbed by the status quo and subverted, misused, and screwed up. But politically, as a way of waving the flag of sustainability and decarbonization, I think it is necessary and in some ways obvious and in some ways would have been nice to come sooner. But as I said, this is one of the things that has been enabled by renewable energy getting cheaper. It enables new politics, too.

Ben Eidelson

We saw this with — I've gone off a little bit with you on the history of coal and what we saw from going from wood to coal. It was purely economics driven or scarcity driven of wood as a fuel source. While Trump in every term says, "We're going to bring back coal," more coal power plants closed in Trump's first administration than in Obama's second because of the economics of coal versus, at that time, primarily methane gas. The same thing's going to happen here with solar. Now, carrots and sticks can nudge things faster, make things harder, but at the end of the day, I think it's like I'm heartened by where we are with solar and batteries and these technologies to say, "Hey, you can try and hold back the physics for a few years with some policy, but you can't hold it back indefinitely" because it's going to burst through whether. If it's not in the US, maybe it'll happen around the world or it is, right. Pakistan's whole story of grid defection and just putting solar on your house and just going right.

David Roberts

It feels good to be on the right side of history. It's nice, and history's moving in our direction, and like, there's an inevitability to it, and we're futzing around with speed. The speed and the equity of it are the dials we have our hands on. But it is happening regardless. And as you say, like in the way I try to describe it in general terms, I've found this helps people, I think, who don't follow this area sort of cognize why this is happening. So I'll give you the short version, my version of the short version.

So, for fossil fuels, there are two broad forces that determine the price of fossil fuels. On the one hand, you dig the easy stuff and then the next bit gets harder and the next bit gets harder. Intrinsically, the more you pursue fossil fuels, the more challenging it becomes to reach them. And all things being equal, the price rises. Then, you have this other force, technological change and development, which is pushing the price down, as technology always does. So, these two contrasting forces mean that fossil fuels cost on an inflation-adjusted basis, roughly today what they cost 100 years ago, 200 years ago.

It's weird. Like, these two forces basically balance out. And, like, if you remember peak oil and all that stuff about running out of fossil fuels, it was always people sort of over-indexing on this first force and under-indexing on this second force. Like, technological innovation always is miraculous. Like, we're really good at it and it always goes faster than people think. It achieves miracles people think they can't. So, blah, blah, blah. So then you turn your gaze to wind and solar. This first force does not exist. They never get any more difficult to find. They are abundant and effectively endless, and will be as long as we're on the planet.

So, there's no natural force pushing their price higher and higher. There's just this force, there's just technology, which is why they only go lower. They only go lower and lower and lower. That's all they've done since they were invented. Lower and lower and lower. That's all they're ever going to do is go lower. I mean, with fluctuations with — you know, we can talk about land use, we can talk about all this other, I mean there are, this is an approximation, but like roughly we're just going to get better and better and better at harvesting them, which means they're just going to get cheaper and cheaper, which means over time they're going to win.

Like, it's just built into the process that they're going to win and get cheaper and cheaper. And already, we're seeing it; like, already solar is cheaper than anybody thought. And if you just — this is another thing that I wish I could like convey to the general public. Like, you know, solar's on this learning curve. Listen to my pods on learning curves, we know that like learning curves for a given technology are weirdly steady. Like so, like for a doubling of solar deployment, you get a very reliable X percent drop in cost, right?

And that's true every time it doubles. And it has been true since the 70s. So, you get this line of cost going like this. And I'm sure everybody's seen the famous graph where coming off that line of costs are predictions about future costs from the EIA... They're all like, "It's going to level out, it's going to level out, it's going to level out." Like so on and on and on, like over decades, you know, which has led many people to say to modelers, "Stop, stop..." But if you just drop this obsession with the idea that they're going to level out and just follow the line on its current trajectory and project 10 years forward from today, you are in a world of energy abundance.

You are in a world of like, trivially cheap, endlessly available energy, which is a fundamentally new state for our species to be in. Like a fundamentally new state for any species to ever be in. A new, a new state for life itself to be in. Like, it's a big deal.

Ben Eidelson

To that point, I think it was. Was it 2013 or 2011 when you wrote, "Is humanity smarter than a protozoan?" I think 2013.

David Roberts

Yes, yes, I think about that all the time.

Ben Eidelson

It gets to this growth/degrowth, are we coming up against our petri dish of the planet? And we're not. How do you think about that now? I mean, when you wrote that piece, we were not so clearly at the solution.

David Roberts

Right. Well, just to frame it, this was based off an essay by Charles Mann, the great science writer Charles Mann. You know, and his point was, as far as we know, any biological species, if you remove their competitors, follow a very predictable arc. They grow and grow on an exponential curve, hit some sort of limit, and then fall apart, whether it's lions or protozoa. You know what I mean? So his point was this seems like a characteristic of life, right? A characteristic of what it is to be living.

And so, here we are. Human beings have removed all our competitors and are growing exponentially. So, if we are like all other life, there's a crash and a collapse coming. The whole premise of the article is, are we smarter than a protozoa? Can we consciously know that that's coming and act collectively with foresight to avert it?

That is the question of our life, that's the question of our species. And so, you know, like once solar panels, you know, like we're still digging up the materials, but once solar panel recycling gets really, really good, which is, it's happening fast enough, you can envision a closed loop and then you're somewhere close to energy that is almost impactless, you know what I mean?

That's very, very close to genuinely sustainable energy, which opens up not just desalination, it opens up a greening steel and industry, but it opens up geoengineering. It opens up developing or bringing back species or bringing back biomes that we've lost. Once you have effectively endless energy, all kinds of doors open to you and to the species. So, it's sort of like if any species is going to be smarter than a protozoa, we've got all the tools, you know, we've got what we need.

Ben Eidelson

It's interesting, his piece and yours, I think, framed it around, you know, do we kind of notice that we're 80% full — I forget the Japanese term for it. And kind of like self-regulate. But actually, what you're getting at is, I think, the way that history has tended to solve this kind of population cliff problem, which is, do we actually kind of innovate and invent our way out of that cliff? And, that seems to be actually the end of the story.

David Roberts

Elon Musk's whole thing is: Earth imposes a certain scarcity, which gives you that S curve. But if you just go to other planets, you just lift the ceiling and theoretically through cheaper and cheaper, more abundant energy, more abundant land, more abundant planets, like you just raise the ceiling and never hit it. I think that's sort of like the economist's — like you're just dematerializing, you're breaking the connection between growth and prosperity and human well-being and material throughput. If you can just break that, there's —

Ben Eidelson

More petri dishes to hop over to.

David Roberts

Yeah, break that almost completely. Then, in theory, you could have infinite growth. But, like, you can think of a lot of ways that could go wrong. Let's just say.

Ben Eidelson

If we zoom back on the kind of cycles that you've seen in climate tech and climate reporting, and you're here in this space in Seattle where we're trying to do climate innovation. We have a room full of people trying to work in this space. Some of them, myself included, have kind of come in over the last couple of years. What is your zoom out message about where we are and where, what do you hope that the room would take away?

David Roberts

Well, I mean, the great thing about how this whole area has evolved is like you have more choices than marching now, right? Like, if you want to be involved in this, you can do so as an accountant. You can do so as an engineer or an inventor, as business models. Like, there's so much business model innovation needed. And I think what I've seen is like, this is just like humanity, you know, like the older people who first got a hold of this are in a lot of senses trapped intellectually by the status quo. They're thinking, "How do we take this existing system and tweak it to make it cleaner?"

I mean, of course, like the young people coming in are like, "Who told us we had to have that system?" You know, like, "Why don't we just make it, make a new one?" So the curve of the ingenuity and brain power and creativity and public spirit that's being applied to this problem is also hitting that S curve. Like the cavalry is arriving at long last and we're headed up that curve. So, like, I just say to young people whenever I talk to students, whenever I talk to young people of any kind, like, "Do you really want to go into finance and figure out a way to shave 0.001 seconds off a trade or whatever?"

You really want to go into a hedge fund? This is the challenge of our time. You can make a real — because we've used cheap fossil fuels for so long and developed habits around them for so long, there are just lots of low-hanging fruit around.

Ben Eidelson

That are major.

David Roberts

You can, like, come into this area and make a real, genuine contribution to the future of the species. Like, it's not like there are ideas all over the place. Like, you know what I mean? Like, you don't have to be a physicist to come up with the idea of, like, putting rocks in a box and heating them up. Like, it's just like nobody thought of it before because nobody needed to. We just didn't — that just wasn't a thing we needed to have. So, like, the ground is littered with low-hanging fruit. It's never been a more exciting time to, like — if I were a young, bright kid, this is, like, this is where I would go. And that's what I wish that, like, national leadership could say that a little bit more and more clearly.

Ben Eidelson

You know, I'll say Rondo's a great name, but I do like Rocks in a Box. I don't know if I'm like —

David Roberts

The problem is, there are like 12 rocks-in-a-box companies.

Ben Eidelson

Yeah, it's a category, the rocks in a box. Well, thank you. I think we have about a half hour for Q&A, so Vikram here has a mic for us, so please use that. You can line up here while folks are lining up. I'll kick off with one that I got on the service formerly known as Twitter. "Do you think utilities are capable of reacting and scaling over the next 20 years, or will we be increasingly relying on distributed and other commercial energy sources?"

David Roberts

That is a little bit of a false binary, as anyone who has listened to my recent episode with Pier LaFarge can attest. If you haven't heard the episode, Pier LaFarge, his whole thing is — everybody's vexed because given the current utility model, distributed energy, much like energy efficiency, et cetera, just means we require less utility infrastructure, which means they spend less, which means they make less money. So they hate it. They hate all that stuff.

Ben Eidelson

They decay and then —

David Roberts

And so, everybody's vexed. Like, how do we get utilities out of the way to build this stuff? But Pier LaFarge's idea is just like, "Well, why don't we just let them do it?" Like, let them rate base it. Like, let them find where it's needed and send out RFPs for bulk distributed energy and like, bulk this market up. Doing it on a hobbyist, individual consumer level in his mind is just like never going to work, never going to add up. You need big institutions that can see where it's needed and where it could be used in bulk.

And he's like, "We have those institutions and we have control over them. We have public utility commissions that can literally tell them to do it." He's like, "Look around. Do you see any other institutions in better shape? Like, do you see any other institutions that are more trusted?" Like, utilities are not in great shape, but, like, compared to what? So, like, TBD, I guess I would say on that question, is a very much alive and interesting question, the role of utilities.

First Audience Question

I'm Holly.

David Roberts

Hi, Holly.

First Audience Question

This question is also grid-related, and I'm still figuring out how to phrase it, but generally, you've touched on a handful of these things with the grid. The grid is very much a technological system, but it's also an economic and political system, and it's enormous. This is the foundation of our economy, as you have mentioned. So, it strikes me that it has the potential, if rebuilt and redesigned in a more distributive way, to also distribute not just energy, but like political power and wealth. And you opened this talking about this like hoarding being a problem.

We have the opportunity for this distribution of lots of things. So, I'm wondering, like, how you see, if you kind of agree with that framework, and like, how you see that manifesting, say, like wild success 10 or 15 years from now?

David Roberts

Fantastic question. And yes, distributed energy distributes political power, social power, and economic power and is on the side of the angels for that reason, among others. You know, like you can make a purely technical case for it, but it also, I think, is part of a larger effort to sort of redistribute power to a local level. So, you know, like anybody's listened to my episode with Lorenzo Kristov, he talks about a new kind of grid architecture, a bottom-up grid. So his thing is just like we have a transmission grid, regional operators, regional grid operators.

His whole thing is, we should do what they do in the UK now, which is have distribution level analogs, distribution system operators. Because his whole thing is like what you want at the local level is for energy planning to be integrated with transmission planning, housing planning, and economic planning at the local level so that all these things work together. You want as much energy generated, stored, and shared at the local level as you can. And so then, you know, there will be communities that cannot reach self-sufficiency and thus need electricity from the transmission grid.

But that should be the last resort, not the first resort, right? Like, you start with self-sufficiency and work up from there. And so, this will give every community the ability to design a grid that works for its community's priorities, needs, economic needs, and social needs, and gives self-sufficiency. Energy self-sufficiency is political self-sufficiency in a lot of ways or translates to a lot more physical power or physical autonomy. This is true not only for like, you know, developing countries getting off imported coal on to domestic solar and wind — you know, that's going to have huge geopolitical effects.

The same basic dynamic is true for any old area of the US, to the extent it can generate and manage its own energy. It is healthier, more self-sufficient, and more resilient against both physical weather and political weather, if you know what I mean. Like, more resilient against the rise and fall of politics. So yes, I think distributed energy and distributed power generally should be thought of as all kinds of power, and that's a good instinct. So yeah, like all these people who are working with models of local self-sufficiency, working to make local power work better, working to make local trading work better.

All this is on the side of the angels. I love all that work. Great question.

Second Audience Question

Thank you guys for an awesome discussion so far. It's been really cool to watch.

David Roberts

And it's out again. Let's use this irony that batteries are turning out to be the —

Second Audience Question

Yeah, interesting. Oh, wow. Now I've got the power. My name is Skyler, by the way. I have an unanswerable question that I would just love your thoughts on. You had a very lovely description of the climate crisis as this large puzzle with, as you look closer, a bunch of kind of interlacing fractals. And I think everybody in this room is interested in finding which part of that puzzle they fall into. And as I talk with people, I feel as though most people fall into generally one of two camps where they say, "I have these skills, how does that skill apply?"

Or, they take the high-level look of saying, "As I understand it, here is the kind of missing gap and so I'm going to try to somehow find a way to contribute to that." And I'm wondering your thoughts on either how you personally, and you talked about this through your story, have thought about your own contributions to climate but selfishly, and maybe also selfishly for other people in the room, how would you kind of advise someone else to think about navigating what could be an overwhelming or exciting or both collection of puzzles.

David Roberts

Yeah, that is unanswerable. I mean, you know, like every individual has to make their own judgments. You know, I imagine for any given individual, it'll be a balance of those. Like, it depends on how devoted they are to their training in their career to date, like how early they are in their career, all this kind of thing. I would say that the opportunities are so numerous that almost any skill set, you can find a productive use for almost any skill set, you know what I mean? Like, whatever it is you're trained to do, you can do it on the side of decarbonization, you know what I mean?

So, I'm not sure that it's that stark of a choice in a lot of ways. But, you know, if I were in school or early, I would be thinking, like, where's the puck going? You know, in the old Gretzky quote, like, where are things going? And as I said, I think they're going in the direction of electricity, software, the intelligent management of electricity at the local level and the integration of local electricity management with local land use, etc. Like, those are my passions. Those are, I think, the big growth areas.

But, like, that's a huge landscape. Like, that's an enormous landscape. You know what I mean? Like, you can — you need lots of planners, we need lots of software people. You know, we need people to keep the trains running on time. You know, like this really undervalued skill. Like, I interview lots of companies, and it's like the line between the ones that live and the ones that die are not the sort of brilliance of the founding conceit. It is the banal block and tackle of like executing a business plan. So just like, if you know how to manage a spreadsheet, just like, go find some genius inventor who, you know, can't find his shoes and like, manage the spreadsheet for him.

You know what I mean? So, like, there's endless ways to get involved. I would say, no matter your skill set.

Ben Eidelson

I also just want to add, there's this notion, I think, when — I'm only two and a half years into this, after 20 plus years of this — but I have a notion of like what I call studying the globe, or the almanac, or the map. And then there's a difference between that and traveling to go see cities. And so, there's a bunch of great books, Speed and Scale, Gates' Book, and others that give you a view of the whole puzzle at some altitude. And that can be an interesting way to study what's going on over there in France and in Paris.

But if you want to know what it's like to live there, you got to go stay in an Airbnb and walk the neighborhood. And I think there's value, especially early on, to kind of do this broad depth search thing, pop back up as you're kind of discovering what that is. And sometimes that leads to a scenario where you land in a position where you're always doing that. I think that's kind of what this is a version of — twice a week you get to go deep on something and pop back up.

David Roberts

Yeah, it's very fun. I don't get stuck in any of them. It's like I can learn and move on. It feels luxurious.

Ben Eidelson

But then, sometimes you get down there and you could have gotten or one could go then and get stuck in a great place for them. And so, I think letting yourself, giving time, especially, especially in those first couple years, to be exploratory.

I would add one other high-level thing which may or may not be particularly useful, but it's just been on my mind. So, like, one thing I've noticed is that lots of people have good ideas, lots of people have grand theories, lots of people have their article on the grand plan that could decarbonize everything in 10 years, et cetera. What the world lacks is people who can make things happen. And like, the longer I've been involved in politics, the less I value the cleverest boy in the room and his clever new plan, and the more I value the person who can just like get some people together in a room and make anything happen.

David Roberts

Anything, like making anything happen. It's like those people are rare. The doers, organizers, and actors rather than the thinkers are rare and prized to me. To me, that's what we need more of, just organizers. It's like if you can make one actual thing happen, that is more valuable to me than any number of tomes of genius political science or whatever. Whatever it is, even if you are daunted by the big picture, just find a little thing and make it happen. You're a frigging superstar.

Second Audience Question

Shockingly cogent answer to an unanswerable question.

Third Audience Question

This is really useful. Hi David, I'm Samantha Weaver. I work in the DER and community solar space. But my question is actually about parenting advice. Since we're here with Climate Papa, I thought some Dr. Volts words of wisdom would be nice. And my question is, could you just share a little bit about when you talk with your kids about the future, particularly in the current context of national politics, climate change threats, etc.? Can you share a little bit about how you talk to them about the future?

David Roberts

Yeah, I guess I could. I've gotten this question a lot over the years and I sort of think this is like a question that parents ask other parents, you know what I mean? And like, how many kids remember what their parents said to them about, you know, like, parents worry about this with one another but like the kids aren't listening. They don't give a shit, you know what I mean? They don't remember. So like, you know what I mean on the specifics, to me the goal is to make good people. That's what the world needs, good people.

So, like, make good people who are kind and generous and have some, you know, love, secure enough to feel safe and content within themselves and don't feel this need to go out and fuck up life for everybody else out of some sense of incompleteness, which we see all around us. Like, to me, the problems of masculinity and maleness, etc., are all around us right now. And the world desperately needs good men, kind men who care about others and who don't view washing the dishes as some sort of tyranny from the gatekeepers trying to suppress the founders. Yeah, like, you know, like "Mom!" That's what I hear when I hear tech founders, it's just like "Mom!" So, I am, I just like, if you create good — like "create," what am I talking about?

Hope, hope for the best. But, like, do what you can to make open-minded, curious, kind people. They'll absorb the world around them and they'll find good ways to engage with it. You know what I mean? Like, I'm not gonna be able to direct that process. I'm not gonna be able to tell them like if I start talking about climate change to them, that's just gonna like... you know what I mean? It's going to end up in Barcelona, it's going to end up in the Barcelona box.

Ben Eidelson

Didn't you have blah, blah blah on your wall?

David Roberts

Yes. If anybody's seen my Zoom background, there's a big poster that says "Blah, blah, blah," which was my kid's present to me on Christmas a few years ago. Yeah.

Ben Eidelson

My seven year old asked me, "So what is working on climate change? You just talk to people?"

David Roberts

Yes, someone asked my younger son what I did for a living and he's like, "Batteries, batteries, blah blah, blah." So, that, and I would just add on here there's a little thing I wanted to say and I have not had an opportunity to say yet and this seems like a good opportunity which is one of my big worries right now is climate world is moving into tech and software big in a big way for all the reasons that we all understand. And like, I look at the software world. I look at the tech world in the US and just like I don't want that in my — you know what I mean?

Like, there are lots of dysfunctions in that world that I would really, really, really prefer clean energy people avoid. And they are dysfunctions that I associate with, like, adolescent masculinity, basically with like poorly developed men, you know. Like, you know, I did this pod on enshittification and all this kind of stuff, like capturing people on platforms and extracting value from them the way tech did. And just like this sort of like dick swinging Mark Zuckerberg, like "Break things!" whatever, you know, like, shut up. You know, just like, just like I want people to be good and responsible.

And so, this gets back to a previous question too. Like, if you go into software and tech in the clean energy world, please try to make it a healthier, more productive, more pro-social environment than the larger tech world it comes from. That's part of what I try to do with my boys. You know, you can't ever lecture them, it's all bank shots, you know what I mean? But I try to talk to them about like, "This man in the news clearly has a gaping void inside him that he can't fill. He clearly was not loved enough and now is out trying to make you miserable because he's not happy. Like, don't be like that. What a pathetic, weak man."

Strength, strength is, strength is like being confident enough in yourself that you can be generous, that you can be outward-oriented, that you can listen and care about other people. That's what requires strength and courage. This sort of like tantrum on the floor, "I want all my toys and none of the responsibility." That's not manhood, that's not being a man, that's being a fucking baby. So this is all far afield. But just like, boy, the world needs better men.

Ben Eidelson

I want to add, not in defense of the software industry, but I think a layer of nuance.

David Roberts

Been a sweeping generalization, or two.

Ben Eidelson

I see it as, "Incentives drive, people do," and business models are the incentives around products. And so, I think for people building businesses and business models, and then products within those business models, thinking through what incentive alignment that ultimately creates. There's a big difference between a company that builds software to help people be more productive in their writing and building a nice Microsoft Word writing tool, versus a company that says, "Hey, I need your time and engagement and attention." They're going to lead to different product decisions to optimize, you know, the outcome of the company.

So, if you're building a new business, a new product, and you're thinking about the pricing of the product and how it's all going to work and what value it's going to provide, those are choices you get to make kind of at the founding of the thing that then set in motion, I believe, what will be, if it's successful, the downstream incentive structure around the system at play.

David Roberts

Leadership. I mean, leadership is so important. The final thing I'd say on this is, if you care about this particular thing, being a good person and productively engaging. Go back and listen to a pod I did with a guy — I can't remember his name, but he's making electric planes. I think his first name is Kyle. I don't remember his name, but all I remember is that he is deliberately not building his business in California or in Silicon Valley. I think he's up in, like, Maine or Vermont or somewhere. He's built this sort of complex.

He's hired a diverse group of people. He has free daycare on site. He's flying electric planes. And instead of just, like, breaking things and then asking forgiveness later, like a "cool dude" does, you know, he went to county officials and worked proactively to get their trust so that everybody could win and so everybody could gain something. You know what I mean? Just talking to the guy, I was like, "Please replicate yourself. Please go to Silicon Valley and replicate yourself." If you want a model of what, like, and this is literally one of the smartest human beings I've ever talked to.

He's one of these people, you talk to him for five minutes and you feel like you can, like, warm your hands on his brains. But, like, you can be smart and you can build things and you can be nice. There's no conflict between those things. So, that pod, I think, is a good illustration.

Fourth Audience Question

I'm Steve. Thanks so much in general for your work and, like, making complicated stuff interesting and meaningful and bringing some hope. Like, we could not do stupid stuff, we could do smart stuff and be better off. That's a good story. I've been working more than 25 years connecting smart growth and climate change. We did this book, Growing Cooler, almost 20 years ago, and your recent podcast appreciated you sort of just talking about how urban form is so critical for building energy, for transportation, for embodied carbon. And you talk about how your kids talk about your work.

My son? "Oh, dad? Oh, he does gentrification." Oh, thanks. But your point — a little bit. But your point about all right. If we don't bring the equity side, the sort of social equity side, we're in trouble. We know we need the financial capital, but we need the social capital to connect with stuff that people care about. So one thing I want to throw out there, I know the statistics for Ontario, I don't know it for Washington. There's like 4 million empty bedrooms in Ontario where I run a foundation right now. Like if we could fill some of those with people like home share to help ground reach the high shelf, put an ADU in the basement, add something on the property and we need sort of capacity to help folks sort of do that.

Plan it, construct it, finance it, manage it. Because there's all this underutilized property, we don't have to change how our urban form works. Worst case, we're giving homeowners some more income. Hopefully, that extra income is helping to do a deeper retrofit and maybe it's contributing to sort of solving housing. But this multi-solving is complicated. But if we don't, we kind of know what's going to happen.

David Roberts

Yeah, I mean, this is a complicated answer to how to solve the housing crisis. But, I think step one is to stop making the things you want illegal. So, there you go, like legalize the things you want. It seems easy enough as a first step. But, you know, there's that online meme of dense urbanism being illegal in most parts of America. That's true. Almost everything you want to happen is basically illegal almost everywhere. So, let's not outthink ourselves. Let's just start by legalizing what we want to happen and then see how much it happens and then we can accelerate it.

But, just begin. I feel like we need to understand that the scarcity of housing is a problem bigger in scale than any other problem in housing. So, I just think that there's nothing to be lost by just beating that drum over and over again. Solve a lot of problems just by building more. Look at Austin, they just built more. And so, all prices along the entire income scale of housing come down when you build more. It's supply and demand. You know what I mean?

So, that's not a brilliant answer to your question, but every locality and municipality should begin just by looking at its bylaws and standards. And looking at its building standards and its road standards, "Let's stop mandating crappy stuff." Step one.

Fifth Audience Question

Hi, I'm Tyler, a big fan of the podcast, David. Thank you. "Long time, first time," as they say. Volts is good at connecting people and ideas in the climate space, at least for me personally, that's how it's worked. I'm curious if you have any plans for growth and further impact as your subscriber base grows. Should you be leading group trips to Barcelona?

David Roberts

Once my deep-pocketed patron shows up, I've got all kinds of ideas about taking people to Barcelona. You know, this is an interesting point. There's a reason I work alone. I'll just say, every place I've ever worked, I've gotten the same performance review at the end of the year. At Grist, it became a running joke because it's the same thing every year. "The work's great. If you could just not be such a dick," you know. So, I don't know what reason of childhood trauma or whatever made me the way I am, but I'm just not a good employee and I'm not a good employer and I'm not a good colleague.

So, subtract all those and you end up with where I am, which is just me. Nobody has to be annoyed about my annoying habits but me. You know what I mean? I don't have to apologize for my procrastination or the irrational, weird way I do things. I don't have to explain it to anybody. I don't have to work with anybody else. You know what I mean? So, to me, that's just like Valhalla. People complain about working at home or working alone or working for themselves or whatever.

And it's like, I love it every day. I've never had a second's hesitation. So, this is the thing. Growth is one of these assumptions that in the business world it's like, I'll just say this, if I could lock in the number of paid subscribers that I have today and trust that that would be steady going forward, I'm fine where I am. I don't feel any need to grow. I don't have any grand growth plans. I don't want to build anything or hire anybody or do any more work. You know, I don't even like working.

I just like, to me, the stuff I do, the whole point of launching Volts is like, what if I could just do the stuff I like and just not do the stuff I don't like? Let's run a test, like, how long can I get away with just not doing any of the stuff I don't like? And it turns out, you can get away with not doing any of the stuff you don't like. So, I've created a work situation for myself where 95% of my work is the work I like doing.

And so, any bringing in of partners, funders, advertisers, patrons, colleagues, or employees, any of that just increases the proportion of stuff I don't like thinking about or doing. So, I'm just not going to. I'm just going to see if I can make this work.

Fifth Audience Question

You have an employee though, right?

David Roberts

I have a guy who works for me 10 hours a week, mainly to handle customer service complaints, which is one of those things I don't like doing.

Sixth Audience Question

James Gordy, Bayou Energy. Hi, Ben. Hi, Dave. To ask it quickly, it's great that energy markets are pretty local, but also, you've talked a lot about public utility commissions and the misaligned incentives of folks like utilities, right? Elephant in the room. You've talked to so many people. What's your short list of things you think we can do to accelerate the inevitability of techno-economics, of clean energy and solar winning?

David Roberts

Today, the best thing we can do in the US is just align utility incentives in the right direction. So, two big things I would propose for utilities, and this is not a complete answer, and each of these requires a lot more explanation, but one is rates of return. The whole premise of the investor-owned utility is to invest your money, you get a guaranteed rate of return that makes it safe, that attracts capital, right? The regulatory compact is you're supposed to get the minimum rate of return necessary to attract the capital, right? Only and no more.

And like, rates of return in the utility sector have been bloating, and bloating, and bloating for 30 some years now. And there's just lots of money being siphoned out of the system into shareholder pockets unnecessarily that could, if you cut that incentive, and that gives utilities even more incentive to spend, spend, spend to get money back. So, cut rates of return substantially, number one, and allow utilities to build distributed energy to determine where it's needed to put out an RFP for what kind they want. You know, people can still bring their own if they want, they can still buy their own if they want.

And this is still going to be a market for it. There's going to be private developers that build it. But, let the utility put its knowledge and perspective to use rather than fighting it, building it. And I think those two things alone would put the thrusters on.

Seventh Audience Question

I'm Aditya, and I work for a VPP. I was curious, along the lines of what James asked, to what extent does the deployment of clean energy rely on global trade, global resourcing? And then, also as someone who works in demand response, I don't get to work with EVs or solar. But I'm wondering, what makes you very confident that we will see that surplus of energy in the future? Because that's ideally what I want.

David Roberts

There's a couple of questions there. I'd say one of the most interesting things, literally tomorrow morning, I'm talking with a guy about global trade, about the relationship of global trade to clean energy. What this drive for reshoring means, like, which flows are going where, what effects tariffs are going to have on all that, you know, because sort of like the impetus, that's the fad now, the thing, the sort of weird bipartisan push is for onshoring things with the notion that other people dominating your supply chains is a national security threat. And I just, like, I find when people describe what the threat is, there's a lot of jazz hands and I just like trying to squint through. Like, if you're my top customer, I need you as much as you need me.

You know what I mean? Like, if I cut you off from my product, I'm just shooting myself in the foot. China could cut off our graphite. Yes. But like, would they? When? Why? Like, that would hurt them badly to do that. So, like maybe in a situation of literal war or like on the verge of war, but just like, I want more about that than like "China..." You know what I mean? That seems to be what's driving half of domestic policy these days is "China, brrr..." Like, "Okay, I'll do whatever you're asking!"

You know what I mean? I hate to be cynical, but in some senses, that's helped. Like, that's probably what got the IRA over the line. It wasn't that people got religion about climate, you know what I mean? It's like being scared of China. But on your other question, the VPP thing and like distributed energy, and I think we don't even know yet the extent of this story, but again, hyperscalers showing up, wanting lots and lots and lots of clean energy is like a giant push behind everything we're doing and want to do.

And it's very important that that force, which is huge and powerful, be managed and channeled in positive ways. Because again, you could see that going wrong. You could see like a bunch of gas plants popping up, which is what a lot of them want. But I think what they're going to find is if you want lots of electricity quick, nuclear is slow, gas is slow, solar is less slow. You know, what's the very fastest is the energy infrastructure that already is built, which is every residence and commercial building and industrial building in the country has capacity, spare capacity that it's not using.

Right? And that's all VPPs are, is just like, "Let's use that capacity if you want to get new electrons on the grid." There is no faster way to do that than by managing and coordinating distributed resources with software. And that is just the logic of the situation. Like, with so much money involved, there's going to be some clarity of vision. These people do not want to mess around, you know what I mean? So they're going to, they're going to see that obvious truth. They're going to come to that obvious truth. You can, you can see it happening in news releases.

Like, they're all like, "We're gonna build SMRs!" And then they call somebody from the energy world, you can see the faces like, "Oh..." So, they're going to get there, they're going to get there. But, VPP is basically just coordinating distributed energy is the energy infrastructure that is there waiting to be deployed. So that's just, in a sense, what I mean about being on the right side of history. That is just the logic of the situation. And they're going to come to it. They are not going to give a damn about carbon emissions.

They're just going to be, we need electricity now, stat. And there it is. Like, that's where you can get it fast. You can get it fastest from existing distributed infrastructure, next fastest from solar and wind, then gas, then, you know, on up the line. So, just the need for speed is on our side. It's working for us.

Ben Eidelson

Great place to end the conversation. Thank you, David. This was very fun.

My guest, Val Miftakhov of ZeroAvia, argues that hydrogen fuel cells paired with electric motors are the key to decarbonizing aviation. We discuss why he prefers his solution to sustainable aviation fuels or batteries, the challenges and misconceptions around supplying and refueling with hydrogen, and the tech roadmap from today's small retrofits to tomorrow's large jets.

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Text transcript:

David Roberts

Okay, hello, everyone. This is Volts for April 23, 2025, "What's up with hydrogen electric aviation?" I'm your host, David Roberts.

Aviation is one of the few remaining sectors that can fairly be characterized as "hard to decarbonize." At the very least, we're not entirely sure how we're going to do it yet, or if we can do it at all (which is one reason some people say the only solution is to fly less).

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Lots of people, inside and outside the industry, are betting on sustainable aviation fuels (SAF) made with some mix of electrolyzed hydrogen and captured carbon, though such fuels remain extremely expensive and comparatively rare.

But some people — my people, the Volts tribe — are betting on electricity. For instance, in June of last year, I spoke with Kyle Clark of BETA Technologies about his battery-electric planes and electric vertical takeoff and landing aircraft (EVTOLs).

Today's guest, Val Miftakhov, has a slightly different approach. His company, ZeroAvia, makes engines rather than planes. Except, they're not engines exactly, because there's no combustion. Instead, the powertrain consists of hydrogen fuel cells that generate electricity and electric motors that use it for propulsion.

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For now, ZeroAvia is swapping out engines in existing planes. Soon, it hopes to see new planes designed around electric aviation. And beyond that, it envisions redesigning the US flight system around more smaller airports, shorter hops, and ubiquitous hydrogen refueling. I am excited to talk with Miftakhov about all of that.

With no further ado, Val Miftakhov, welcome to Volts. Thank you so much for coming.

Val Miftakhov

Thank you for having me. Great to be here.

David Roberts

So, as I understand it, the "engine" — I'm using, for the purposes of this pod, all uses of the term engine should be heard in air quotes — so your engine consists of three parts, basically: you've got hydrogen storage of some kind, you've got hydrogen fuel cells that use the hydrogen to create electricity, and then you've got electric motors. So let's start with the fuel cell, because, you know, as I was thinking about this, I suspect most people, even a lot of energy-inclined people, don't really have a great sense of what fuel cells are.

So could you just explain quickly how a fuel cell creates electricity?

Val Miftakhov

Absolutely. And by the way, the confusion goes both from the general public, but also from the aviation folks sometimes as well, because in the standard aviation terminology, a fuel cell is where you put fuel in the aircraft. So we've got a lot of those as well. But overall, a fuel cell is an electrochemical device that takes some chemical, energetic chemical, like hydrogen, but there are other types of fuel cells out there, and oxygen typically from the air and converts that in an electrochemical device into electricity. Point of note, there is that there is no, as you said, combustion or there are no moving parts associated with it.

So, it's really looking more like a battery with a number of cells arranged in a stack, and then you get a fuel cell stack that produces a large amount of electricity at relatively high voltage. So, similar to a battery pack. But of course, you know, with the fuel cells and especially with hydrogen fuel cells at the system level, you get much, much higher energy density or specific energy in terms of the amount of energy per unit of weight of the system.

David Roberts

Well, I want to return to that in a second. So, just on a kind of first principles basis, why fuel cells instead of SAF? Why fuel cells instead of combusting synthetic fuels? What's the advantage?

Val Miftakhov

Yeah, very good question. And the advantage comes from two sides. One is on the impact of why we're doing this altogether. Why do we care about moving to sustainable fuels or moving to new aviation? We're talking about a couple of things there. One is pollution, of course, which has multiple elements, so carbon is one. But there is also non-carbon effects on climate and on health. There are a lot of studies that put, without any doubt, adverse health effects around the airports because of the particulate emissions, because of the high NOx output, nitrogen oxides from the combustion from those engines.

And, in order to get away from all of that, you really need to get away from combustion. So, as long as you're burning fuel, you're still having all of those negative effects. So, you can burn zero carbon fuel, you still have those effects.

David Roberts

You still have the particulates and the NOx and other kinds of air pollution.

Val Miftakhov

That's right. And you know, there are other negative self-combustion of course, because you have high temperatures and pressures, your materials are stressed and as a result, your maintenance costs are higher. But those are sort of softer effects. The hard reason, at least for us at ZeroAvia and similar pioneers out there and people who support us like Breakthrough Energy Ventures, you know, Amazon Climate Pledge funds, people who really try to force the transition of hard to abate sectors, these combustion effects are really, really important. So that's one aspect of things. The second aspect is that sustainable aviation fuels that are based on synthetic hydrogen production and carbon capture, as you mentioned in the beginning, those are fundamentally much more expensive than hydrogen fuel cell propulsion because you can use with hydrogen fuel cells, you can already use that green hydrogen that you produced without going through carbon capture without going through the chemical plants architecture that combines that hydrogen with carbon and produces liquid fuels.

You can use hydrogen directly in the fuel cell system, and you can use it more efficiently because the fuel cells, the current generation of fuel cells, already are 60% or so efficient. And the best combustion engine we have for aircraft, the largest engines that we have, are about 50% efficient. But the vast majority of the engines on the smaller aircraft, under 100 seats, are less than 30% efficient. So, you have double the efficiency. You don't need any of the carbon capture or any of the chemical process beyond it. So, economics becomes much, much better. So, these two factors, we think, undoubtedly, to us at least, point to hydrogen fuel cells as the eventual solution to this problem.

David Roberts

So, A) you're getting more energy out of the clean hydrogen you produce just because you're not sending it through elaborate chemical reactions and creating some new fuel out of it, you're just using it directly. And B) no pollution. And as far as we know, this is the only genuinely no pollution flight option that we have. Right. I mean, any combustion basically entails some of these particulates and NOx, etc., right?

Val Miftakhov

Yeah, that's right. And you know, hydrogen combustion is obviously cleaner than hydrocarbon combustion because you don't have carbon in the chain, so you might not have particulates. But hydrogen burns hotter. So anything that burns hotter produces more NOx. So there are disadvantages there. Electrification is really the only, what you call, true zero-emission option. Yeah. Now we've done the end-to-end sort of life cycle analysis as well. And there is, of course, you need to produce engines. So there is some emission in that potentially. So the total abatement is anywhere sort of around 95%.

David Roberts

Wow.

Val Miftakhov

Of the climate effects.

David Roberts

And all that remaining CO2 is in the embedded CO2 of the manufacturing process. There's no direct CO2 at all in the flight or the operation?

Val Miftakhov

Yeah, and theoretically, this is, you know, calculated using the current sort of energy intensity and energy composition of the manufacturing processes. If we eventually move to 100% renewable energy-based manufacturing and extraction of some of the minerals that are required for building the fuel cells, maybe we could get to 100% abatement. And that's the beauty of these technologies. Kind of similar to the electric cars. Our grid is not obviously 100% renewable right now, but it's getting more and more so. So, you put an installed base of these engines, of these motors out there, those cars, and it gets cleaner and cleaner and cleaner over time.

David Roberts

The second, fundamental engineering question is, then, why fuel cells instead of batteries? You sort of mentioned it just has a higher specific energy. But in specific energy, as I understand it, is just the amount of power you can get per weight. Is that right?

Val Miftakhov

Yeah, energy per weight. And maybe some history for myself. Before I started Zero, I was running a company called eMotorWerks, before ZeroAvia, for about seven years. And what we built there is the world's largest network of smart EV charging stations. So, I was involved with the electric car industry quite a bit. I had, in addition to the large network of charging stations, relationships with 10+ automakers controlling charging of the vehicle's energy flows, directly controlling the batteries and battery management systems in the cars. The point I'm making is that, you know, through that work, I got pretty exposed or our team got pretty exposed to all the challenges of the battery technologies and how quickly it can evolve.

And when I started at ZeroAvia, I think there were 60 projects out there of various novel aircraft ideas that are all based on batteries. And people were telling me that, "Hey, well you know, this hydrogen thing doesn't make sense because in five years we're all going to be flying on batteries hundreds of miles because they're going to become five times, ten times better."

David Roberts

Right? Everybody's betting on batteries continuing to go down this curve, right? Cheaper, cheaper, cheaper, more and more energy density.

Val Miftakhov

Yeah, and cheaper, cheaper, cheaper, I agree with. Right, because that's an easier thing to get, right? You go higher volume, you increase extraction, you optimize processes, you put robots everywhere. The cost can decrease quite dramatically. But the energy density, or specific energy to be precise in the terminology per unit of weight, is very hard to move. This is an electrochemical problem and there are a lot of trade-offs. There are theoretical limits. So in the beginning, when I started Zero, we did some modeling of what would an absolutely ideal battery do if there was such a thing?

Right? And the way you do it, or the way we did it, is we said, "Okay, what is a battery?" The battery is something that has an anode, a cathode, and there are charged ions moving between them. At least that's how we understand the battery for the last, you know, 100+ years. Okay, and what can be the lightest carrier of that charge? You need a metallic ion. The lightest metal is lithium. So that's the absolute lightest possible ion carrier. If you just take the mass of the lithium atom and calculate the energy, maximum specific energy, just based on that, you end up somewhere around just over 10,000 watt-hours per kilogram.

So, no battery can theoretically ever be close to that number. Okay. And that's before you think about anodes, cathodes, all the electrolyte, all the material around it.

David Roberts

It's just the weight of the lithium itself.

Val Miftakhov

Exactly, exactly. And you have to divide it at least by a factor of three to five, because you have an anode that has to, you know, accept all those ions. And a cathode, the same thing. Right. Because these things do move around and they need to be mechanically stored somewhere. So all those things. And then you look at hydrogen, for example, it starts. Chemical energy of hydrogen per kilogram basis is 33,000 watt-hours per kilo. Okay. So you already start at 3x relative to the maximum possible theoretical, which is actually not achievable. And then you say, "Okay, well, clearly these things will never meet, because they can't."

So, hydrogen going into fuel cells will always be better. And then you look at the current state. Even back in the day, I was looking at the hydrogen versus the then state of the battery. You look at the current state, and we're still — depending which generation of battery you use — you're anywhere between 30 and 50x delta on the specific energy output. And yes, batteries improve single digits per year in the specific energy. But 30 to 50x is a big gap to close, and we know that it cannot be closed fully because of the theoretical limitations.

David Roberts

Okay, so this is why hydrogen instead of batteries. A quick question just about form factor. So you're swapping, you're taking sort of existing small planes, as I understand it, you're starting small and just taking out the old engine and putting one of these in. So I'm a little curious about the form factor. Like, do you cram these parts together into something that is roughly the shape of an engine? Like, does it look like — if I was looking at it, would it look like an engine to me?

Val Miftakhov

Yes and no. Some parts would, especially the ones that connect to the propulsors. Propellers, for example, in small planes. So, we need to rotate those propellers. They're located in a certain place, either in the cells or the front of the aircraft. So, you know, the motors. The motors will look similar and they will be in a similar place. The rest of the system, we have the flexibility to place it elsewhere. And we do.

David Roberts

The fuel cells and the hydrogen storage are somewhere else in the plane?

Val Miftakhov

That's right. They could be. Typically, in the existing aircraft, it's hard to find a place for the fuel cells in the same place where there is an engine today, partially because, you know, fuel cells still take a little bit more space, but also for some of the vehicle weight optimizations, we're still heavier than the turbine engines. So, center of gravity issues, you know, weight and balance on the aircraft need to be taken into account. So, for the existing aircraft, we tend to have to separate the fuel cell system from the propulsion system.

David Roberts

So what is the current plane like, what do you have that can run a current plane and then sort of like, what's next? When we're talking about sizes and classes of planes, just talk about, like, what you can do now, what's next? And like, what's the target?

Val Miftakhov

Of course. So, the exciting part — I start from the end of your question — the exciting part of this technology and this approach is that it can, over time, be applied to any size of the aircraft that we have today.

David Roberts

I read the white paper, and I want to talk about some of those innovations that would be necessary here in a minute. But let's just talk about what we can do now.

Val Miftakhov

Yeah, so that's the exciting bit and that's what excites me, our team, our investors. Right. Because we don't want to be working on something that can only affect these small aircraft because that's a relatively small portion of the market. That said, we are very pragmatic. We start with the first application in the smallest aircraft that is commercially meaningful from the market perspective, market size perspective. And that tends to be aircraft 10 to 20 seats in size that's powered, generally speaking, by engines at around 1000 horsepower. Okay. And 10-seat aircraft tend to have one of those engines.

20-seat aircraft would have two of those engines on the wings. And that's our first product. So the first product is around 1,000 horsepower. We have flown a number of variants of it. It is now in final design, submitted for certification about 15 months ago. And we're in the middle of our certification work right now.

David Roberts

So, I can't quite yet bring my plane to you and have you swap it out. That's waiting on some final stamps of approval.

Val Miftakhov

Right. Well, you can, but you won't be able to fly it commercially. So, we of course have flown a number of these engines in different aircraft. They work. We know how they work. We have done the integration in several airframes, but in order to operate them commercially with passengers inside and paying cargo, we need to have the stamp. Yeah. So, we are working on getting that.

David Roberts

And so, for listeners' benefit, like a 10 to 20 seater plane, A) how big of a chunk of aviation is that? And B) what do those planes do? What are they used for?

Val Miftakhov

Yeah, so in terms of the size of the market, by dollar amount, this is probably less than 1%. By total number of aircraft in commercial service, this is between 5 and 7% of the total. Because there are fewer seats, you have more planes, but the revenue is lower on a per plane basis. So today, these do, for example, cargo, package delivery in less dense locations, or passenger transport at smaller airports. So, for example, some of the vibrant use cases for that include island networks. Like, one of the largest fleets of 20 seat aircraft, for example, is deployed in the Maldives.

David Roberts

Oh, interesting.

Val Miftakhov

Yeah, over 100 aircraft are flying there and nothing else can really fly there, at least to the smaller islands because there are no runways to take jets.

David Roberts

Yeah, I think we have some, if I'm not crazy. I'm pretty sure we have some of those in Seattle just doing short flights like up to Victoria B.C. and things like that.

Val Miftakhov

That's right. Absolutely right. And you know, in general, especially in B.C., the coastline beyond Vancouver is pretty rough to go around. So, there is a lot of aircraft, small aircraft activity going on. And you can go even more extreme, and if you've been to Alaska, for example. Right. Everybody's flying because the roads are not as easy to traverse. Hawaii is a big area as well for these types of planes, again for the same reason.

David Roberts

Yeah, so there's a market, in other words, for you to get running. Get running on. So then, what's the next class up?

Val Miftakhov

So, the next class is larger propeller planes. These are some examples. Two manufacturers really, mostly ATR, which is a 50% joint venture between Airbus, who everybody knows, and Leonardo, an Italian manufacturer, probably not as many people know, but ATR is the largest manufacturer of these large propeller planes. They have a 40 seat variety and 70.

David Roberts

40 to 70.

Val Miftakhov

Yeah, 40, 70. And then there is a De Havilland Canada Aircraft Corporation that makes today up to 80, I think up to 80 seat aircraft called Dash 8. And those aircraft are our next target. And that's the engine that generally produces about 3,000 to 5,000 horsepower. And we have demonstrated already ground operations of components of that engine on the systems that we took from one of these 80 seat planes. And that is a project together with De Havilland Canada and Alaska Airlines, who's one of our investors and partners as well. So, for the small engine, 10 to 20 seat, we finalized the design.

It's now in certification. We're hoping to put it in service in commercial service next year, 2026. The larger engine is now in development, prototyping. We go through iterations and if everything goes right, we'll submit it for certification in the next two years.

David Roberts

And that'll be the 40 to 80 seaters. And what are those used for? Are those passenger planes mostly or the larger cargo?

Val Miftakhov

A little bit of both. We have some exciting discussions actually with some of the cargo carriers to help them expand their cargo networks with these smaller planes. For them, it's smaller planes because they fly jets today, but they want to improve the fast delivery of goods and packages to smaller locations, smaller metro areas. And this is how you do it, again, because you know a lot of those locations cannot accept large jets. And similar on passenger. A lot of these aircraft are used today. So in terms of the markets, this next size propeller planes, in terms of the dollar amount, this is probably 3-5x the market of the small planes.

David Roberts

But still, both combined are relatively modest, compared to what I'm guessing is the next class up, which is the big ones. Right. Is there a middle class I'm missing?

Val Miftakhov

There is a middle class today, regional jets. So, those are the two manufacturers. There are Mitsubishi Heavy Industries regional jet, formerly Bombardier. So, this is the class or brand of the aircraft called the CRJ regional jets. There are about 1500 of those in operation worldwide. And then, Embraer is probably more familiar and they have well over a thousand as well. So, these are regional jets. These are generally under 100 seats in size. They fly faster than propeller planes and that's why operators like them. And that's the next segment. So, we started some work with some of those manufacturers already, but no hardware yet, but that will be the next segment.

And the segment after that is the segment that has the majority of the dollars right now in the market, and that's called single-aisle aircraft or narrow-body aircraft. The examples, classic examples, are Boeing 737 and Airbus A320 or A321.

David Roberts

Right. These are the ones people will be familiar with having flown on.

Val Miftakhov

Yeah, yeah. Well, you know, I think most people who are flying will have flown as well on a regional jet on one of the Embraers from time to time. But most of the time today, if you're boarding a plane, you're probably boarding a single-aisle aircraft.

David Roberts

Right. And so, those two upper classes, some pretty big engineering advances are going to be necessary to get there, which I want to discuss in just a minute. But I got a couple of questions first. A couple of things about these existing engines. One is, you know, I know from the EV space that electric motors require much, much less maintenance than combustion motors. Just because you're not trying to control a bunch of explosions and toxic gases. There are fewer parts, fewer moving parts, fewer rotating parts, etc. Does that extend to hydrogen fuel cells as well? Like, is this package much lower maintenance than an equivalent combustion engine?

Val Miftakhov

Absolutely. It's exactly transferable, that logic. So, we use electric motors. So there, it's directly transferable. And the fuel cells also have no moving parts. There are some moving parts, most notably a compressor, an air compressor, because the fuel cell is an air-breathing machine. So, it needs to have high-pressure air delivered to it. So, you have to have a compressor, which is rotating, but the compressor itself is an electric motor connected to a turbine. So, it is also quite reliable. As a result, you have maybe a couple of moving parts in the system like a motor and a compressor, and then everything else is non-moving parts.

David Roberts

And also, not hot.

Val Miftakhov

True. Yeah, great point. Which has some strong additional advantages. For example, because you don't have combustion, you generally don't have noise as well.

David Roberts

Right.

Val Miftakhov

Combustion is very noisy.

David Roberts

Same for EVs. And transferable from EVs.

Val Miftakhov

Absolutely right. You have the same advantages as you would have from the battery electric drivetrains, but you have more energy that you can carry with you. And by the way, I think the right tool for the right job and I think electric propulsion is perfect for cars for ground transportation, electric being battery-electric, for ground transportation, especially for smaller vehicles.

David Roberts

Right. So, you're not pushing hydrogen vehicles. A lot of people, a lot of people in my audience, love to hate hydrogen cars. It's purely an aviation thing for you, right? You think batteries can handle most of the other stuff.

Val Miftakhov

Exactly. In fact, it was quite annoying to have to, you know, unpack or undo that damage that the car industry, some of the car industry, did to hydrogen in general. Because they, as I called, they started from the absolutely wrong side of the hydrogen story. They went into light consumer vehicles, which is the worst place to apply this to. Right. Like, why would you do hydrogen? Because it is more complex than battery electric, okay.

David Roberts

We'll also, and we're going to get to this later, but like green, genuinely green hydrogen is still pretty expensive. What is the analogy someone said about when they talk about using hydrogen to heat homes? He's like, "That's like pouring champagne into your municipal water supply," you know what I mean?

Val Miftakhov

I like it.

David Roberts

Green hydrogen is rare and expensive still, so you want to use it wisely.

Val Miftakhov

Exactly, exactly. So, if you ask yourself, "Okay, I have a battery as an energy source and I have hydrogen fuel cells as an energy source, how do I think about the relative application of the two?" The way you would do it is you would say, "Okay, which types of, in this case transportation, require higher specific energy, like more energy on board the vehicle?"

David Roberts

Right.

Val Miftakhov

And you look at, you know, let's say cars, for example, personal cars, and you can approximate this variable by, in the standard fuel vehicles, what percent of the vehicle mass or weight you have in fuel, like fully loaded, fully fueled, you know, what is that percentage? If you look at personal vehicles, small cars, that's 2 to 3% of the vehicle mass goes into gasoline. Okay. If you look at a 737 Max, up to 40% of the vehicle can go into fuel. So this is a 20x difference already on that dimension. And then you say, "Okay, what else?"

Right. One other dimension you can use is, you say, "Okay, what percent of overall, let's say 24 hours in a day, that vehicle is moving or using that fuel." And again, personal car, 95% of the time it sits somewhere and it's not moving. A typical commercial aircraft, especially regional aircraft, they're used more than 50% of that 24-hour period. Then you say, "Okay, well the higher the energy utilization and the higher the vehicle utilization, the more hydrogen is applicable versus battery." Because you know, you need a lot more energy.

David Roberts

You just need more energy on board.

Val Miftakhov

That's right. You need more energy on board and you cycle through that energy quicker. Which means, you may need even more energy on board per unit of time per day, for example, and you need to recharge or refuel much faster. And you look at different types of transportation and you will clearly see that the consumer vehicle is absolutely the worst for hydrogen versus battery and the commercial aircraft is absolutely the best. Yeah, so that's why we were like, "Hey, the whole market started from the wrong place. And as a result, it got all this bad rep, because it's just not something that you should start with."

Eventually, maybe we'll get to that point when we have all the airports with hydrogen, all the heavy-duty long-distance trucks, maybe fueling in the same locations and the, you know, hydrogen network gets developed, everything is done and then maybe you can plug in also these types of uses like small cars, but not from the beginning.

David Roberts

Right. So, on the maintenance thing, give us a comparison. For example, if I have a combustion engine in my 20 to 40 seat plane, how long is that engine going to last versus how long one of these systems would last?

Val Miftakhov

Yeah, so I'll give you a comparison for the first segment, which we have studied quite a bit. And we already, you know, we are now in certification, so we haven't deployed any of these in commercial service, but we sold about 3,000 engines already to the operators pre-sold.

David Roberts

Oh, so people are ready to go with these once it gets the final approval.

Val Miftakhov

That's right. That's right. Because. And the biggest reason for this pipeline, if you will, of orders is because we can drive better economics. And most of the economical advantage comes from maintenance. Maintenance is a big, big source of operating costs for these operators. Part of this cost is direct, right? So you need to maintain, you need to replace parts and all that. But the big part of the cost is downtime, service downtime that you have to take — if there's anything wrong with the engine, you need to repair the engine. But also the airplane sits on the ground not doing revenue work and the operator loses money.

So, maintenance is a large part of the operating cost implication there. And we're able to reduce that maintenance cost and downtime by 2-3x for the operator. And that's a huge advantage. And that's one of the primary reasons why operators are putting these orders in. Because we're able to communicate and show, frankly, you know, based on already our engine operating records and the fuel cell and the electric motors operating records that will be much, much better. To give you some examples, on the 10 to 20 seat aircraft, the engines that are operating today, small turbine engines, have major maintenance intervals at around 2000 hours and complete engine overhaul, which means that, you know, you basically have to rebuild the engine or replace the engine at 4000 hours of operation.

David Roberts

Oh, that doesn't seem like that much.

Val Miftakhov

It's not a lot. It's not a lot for a regional aircraft that is in reasonably frequent operation. That's about a replacement of the engine every three years.

David Roberts

Oh, my gosh.

Val Miftakhov

Okay, so a typical aircraft, commercial aircraft, airframe itself lasts for 30 years. You know, that's kind of the average. So imagine you go through 10 sets of engines. You can go through 10 sets of engines on that aircraft. So, maintaining the engines is a big, big deal for the operators. With the fuel cell system, fuel cell electric, we can go up to 10,000 hours between the major overhauls, and major overhauls are not as dramatic because the electric motors will last for the duration of the airframe for 30,000 hours. And I'm sure Kyle told you all that already.

So, then we're back to sort of the automotive analogy where you don't expect to change the engine on your car, right?

David Roberts

So is it the, like when they do need maintenance or when they do break down, is it the fuel cells that are usually the source?

Val Miftakhov

Yeah, and it's not a breakdown, it's more of the degradation of the fuel cell. And we'll see what happens with batteries really in aircraft as well, because in cars, I think by now, especially Tesla has shown that the batteries can last the duration of the lifetime of a car as well. But in aircraft, they're utilized much more thoroughly, if you will. So we'll see how that goes. But you know, for fuel cells, this is degradation, gradual degradation of the fuel cells. And then at some point, you cannot produce maximum power anymore and there is a certain margin that you certify with and you eat into that margin.

And at 10,000 hours, you say, "Okay, well now you need to replace the stack."

David Roberts

I'm curious how sort of modular all this is. Like, can you pull an individual fuel cell out and replace it or what? How chunky is this?

Val Miftakhov

Yeah, very good question. So, it is modular. Giving you an example, for our 600 kilowatt engine or this 1000 horsepower engine for 10 to 20 seat aircraft, it has eight stacks in it arranged into four pairs. So, a pair is a module. So, we can replace on a module by module basis. And those are even the design of the integration of those modules into aircraft is done with maintenance in mind so that you don't have to, you know, take apart the whole thing in order to pull this out. Right. You can just unbolt a few things, undo a couple of connections, and you can swap it in the field, you know, so you don't need to have a huge downtime on the aircraft.

The strong benefits, additional benefit is that because you can make this system so modular, it's much more reliable because you have automatic redundancy. Right. Versus a typical single-engine aircraft, if something goes wrong with the engine, well, you now have a glider.

David Roberts

So, failure modes. Better failure modes than combustion engines. Interesting. I want to talk about, I mean, one of the most interesting aspects of all this. So, you know, as we've said, you've got the 10 to 20 seater engine almost ready to go. Almost in commercial use, probably later this year, maybe?

Val Miftakhov

No, next year, '26.

David Roberts

Next year. And then you get the 40 to 80 seater next. But then, as you say in this white paper that your company has put out, going to that next class, up to the regional jets and higher, is going to require some big engineering advances. And so there are three basic components here. There's the hydrogen storage, there's the hydrogen fuel cell, and there's the electric motor. All of whom are going to need to advance in fundamental ways. And there's a line of sight to pushing them forward. Very, very interesting. So let's start with the hydrogen. So right now, hydrogen has good, what they call gravimetric density. It's very light for the amount of power you get out of it. That's a real advantage in flight. But it has very poor volumetric density, which means it's very diffuse. So it's like it takes up a lot of space if it's a gas.

And that's what you're using now, gaseous hydrogen. So it says in the paper, if we want to get enough hydrogen on board and have a manageable space for it to occupy a manageable amount of space, you have to go to compressed liquid hydrogen. Is that accurate? Like, what is the leap there from gaseous to liquid? What's involved in that?

Val Miftakhov

Yes, you have to go to liquid hydrogen. You're exactly right. And the challenges with that — well, it is kind of rocket science. I was going to say it's not rocket science, but it is kind of rocket science. Because the largest use case right now for liquid hydrogen is in rocketry, rocket engines. But there is also significant use in the industry. In fact, even in ground-based vehicles. Most of the deliveries today from the production sites to the fueling stations on the ground are with liquid hydrogen because of the volume on the roads.

David Roberts

Just a quick question. If you get liquid hydrogen, do you then have volumetric density in the neighborhood of jet fuel? How close can you get to matching the volumetric density of jet fuel?

Val Miftakhov

Yeah, very good question. Not quite. You're still on the chemical energy basis, you're still about three, three and a half times more volume for liquid hydrogen.

David Roberts

Got it.

Val Miftakhov

Now, when you sort of account for the difference in the efficiency of the engines. Yeah. Because back to the beginning of our conversation, combustion efficiency is much lower than the fuel cells. So when you account for efficiency difference, you're about 2x more volume.

David Roberts

Ah, so that gets you a little of your volume back.

Val Miftakhov

That's right. But you're still twice as much. So, the other way to say it is, you can get half the range with the same volume.

David Roberts

Got it.

Val Miftakhov

Okay. And in order to kind of move away from that restriction, that's when you start talking about new types of aircraft design that have more volume for hydrogen. Good examples of that are, you know, I don't know if you're familiar with a company called JetZero down in Los Angeles, for example. They are designing and building a blended wing or wing body aircraft, large size, 200 seaters or similar cargo capacity that has those blended wing designs. They have a lot more volume just by the nature of it.

David Roberts

And even if you make it liquid, is it still pretty light? Like, is it still mostly a volume question and not a weight question?

Val Miftakhov

Yes, absolutely.

David Roberts

And one other question about liquid hydrogen. If you have a canister of highly compressed liquid hydrogen, don't you effectively have a bomb? I think what comes to a lot of people's minds when they think about this. Aren't you effectively flying on top of a couple of extremely potent bombs?

Val Miftakhov

So, definitely a frequently asked question on hydrogen. Actually, in fact, for the first year of ZeroAvia, my second slide in my presentations was Hindenburg. Because everybody would ask that question anyway. So, like, I better get it out of the way right in the beginning.

David Roberts

Well, gaseous, not so much, but liquid hydrogen, then you really are. That is a lot of energy crammed into a small space.

Val Miftakhov

Well, the amount of energy, the absolute amount of energy, is about the same, or half of the amount of energy that you have in the jet fuel in the same volume. Right. So, about the same if you want the same range, but about half if you put it in the same volume.

David Roberts

Right.

Val Miftakhov

So, from the total amount of energy, it's not that different. It's a matter of, you know, how you manage this chemical energy, how do you ensure safety?

David Roberts

You could just reply: "Existing planes, big fuel tanks, are bombs."

Val Miftakhov

Those are flying bombs.

David Roberts

Those are bombs, too.

Val Miftakhov

Exactly. So they carry the same amount of energy or more. And in the right conditions, that energy can be very quickly released, as you've, I'm sure, seen in some accidents. And for hydrogen, actually, there are a lot of safety factors that favor hydrogen, and NASA has done some work on it and some other people have done some work on it. To give a couple of examples, for instance, you know, a lot of accidents in a traditional aircraft, the sequence looks like this: pilots are able to get the aircraft on the ground, it's a hard landing or it overruns the runway, fuel tanks get ruptured, you have a fuel leak, it ignites, and, you know, there are tragic consequences.

With hydrogen, you cannot have a leak that pools on the ground. If you have a leak, if you have a tank compromise, let's say a crack in the tank, for instance, you have a leak that immediately dissipates up in the air.

David Roberts

Right. But we should say, spewing hydrogen directly into the air is a pollutant that is bad.

Val Miftakhov

That's right. Obviously, an emergency situation. You don't want to do it. But it doesn't kill everybody. So, you know, obviously nobody wants that to happen. And it will not happen with any kind of frequency. But if it happens, then the properties of the release of fuel are such that it's much less dangerous. And it has actually been shown, there are some interesting videos from, I think, the Department of Energy actually, tests of hydrogen car fires versus gasoline car fires and with temperature sensors in the cabin and all those things, and, you know, how things are affected.

And it's a pretty dramatic difference, in favor of hydrogen, in that case.

David Roberts

It is kind of funny how paranoid people are about it, given the fact that we're all always riding around with giant tanks of flammable fuels in close proximity.

Val Miftakhov

But this is how people are, right? So, remember when Tesla was putting its first cars out there? Every Tesla fire was like worldwide news.

David Roberts

I mean, still, really still, it is kind of a little bit like that.

Val Miftakhov

But it is super rare. It is super rare, relatively speaking. And on hydrogen, last thing, we have right now maybe around 100,000 hydrogen vehicles, ground vehicles, between cars, trucks, buses, forklifts, all that. And you don't hear about hydrogen vehicle fires, and you would hear about hydrogen vehicles if they were happening. Okay. And you don't, because they don't happen.

David Roberts

All right, so let's talk about then, innovation in fuel cells. So, fuel cells, the category fuel cells, is very broad. It can do a lot of different fuels, can go in a lot of different designs. I'm assuming for this very specific application, you're designing your own fuel cells and innovating on your own fuel cells. So, what is the sort of path for innovation on the fuel cell side? How do you get more out of that?

Val Miftakhov

Yeah, correct. So, specific designs, especially for larger aircraft, and larger is already, you know, these large propeller planes already require significant modifications and new designs. And then when you get to jets, it gets even harder. So, the direction of research there, research and design, is moving to higher temperature fuel cells, which require material change. So, it's not just, "Hey, let's crank up the temperature." You have to move from some of the materials that we are using today in fuel cells to new materials. And we have that design and development in house.

David Roberts

Is it just that the chemical reaction is more efficient in higher heats?

Val Miftakhov

Yeah, it is a little bit more efficient. Yes, you increase the temperature, generally, you know, chemistry likes temperature increase. Things happen faster, more efficiently in smaller volumes. And importantly, here is it's much easier to cool higher temperature systems than lower temperature systems. So let's say you have, you know, 50% or 60% efficient fuel cell. This means that 40% of the chemical energy that you feed from hydrogen transfers to heat. It is much better, much lower level of heat than in a combustion engine, but you still have a lot of heat, and you have to remove it. Now, if you are operating like traditional fuel cells in the cars, for example, and the type that we have in the first engines, if you're operating at about 90 degrees Celsius and you're sitting on the tarmac at Phoenix airport, for example, or even worse, Abu Dhabi, for instance, in the summer, your difference between the 90C temperature of the fuel cell and let's say 50C ambient temperature is quite small.

So, it's just a 40-degree difference that you have to move the heat out of your fuel cell. Now, if you increase the temperature of the fuel cell to about 200C, and this is our high-temperature fuel cells that we're developing in-house, then your Delta T or the difference in temperature goes from 40 degrees between 90 and 50 to 200 minus 40, minus 50 or 150 degrees, which is almost four times larger difference in temperature, your cooling becomes four times easier.

David Roberts

Okay, why is cooling easier when you get hotter waste heat?

Val Miftakhov

Yeah, because it's like when you boil water, right? If you have boiling water and you look at how quickly it cools from 100 degrees down, you will see that the first 10 degrees are much faster than the last 10 degrees. Because when it gets closer to ambient temperature, the heat flow rate slows down dramatically. And well, mathematically or physically, you never get to the ambient temperature because it's asymptotically slower and slower. So that hurts the lower temperature fuel cells. So, you need to increase the temperature.

David Roberts

And can you also increase efficiency and thereby just get less waste heat?

Val Miftakhov

Yeah, you get a little bit of increase in efficiency. And you get an increase in efficiency also from the system side. It's a little more esoteric, I guess, a nerdy discussion. But because you have now hotter exhaust, you can use that heat also. You can recover some of the energy from the exhaust heat as well through a turbine. So your compressor becomes sort of this compressor-turbine combination that it's almost like a turbocharger on your car.

David Roberts

You're using the waste heat to compress the air.

Val Miftakhov

That's right. That's right. You use part of that energy to add to your compressor. So, you need a smaller compressor drive and you save some energy there, and your system becomes more efficient as a result.

David Roberts

Do we have any sort of target efficiency, or would you say current ones are in the 60% efficient range? Is there a theoretical limit here, or is there a target efficiency?

Val Miftakhov

Yeah, the theoretical limit for a fuel cell is, I believe, around 94%. That's the theoretical limit. So it's quite high up there. Yeah. Now there are, you know, obviously several reasons why, you know, we're not at a theoretical level or nobody's at a theoretical level, but there are fuel cells out there that already operate in the 70s at relatively low power levels. So we are obviously cranking them up at quite high power levels. So there is some work to do. But it is a material challenge mostly in the conductivity of various coatings and membrane materials.

David Roberts

So, for the fuel cells, it's a materials science challenge mostly. Interesting. And you guys are doing all that in-house. Are you able to draft it all on a broader scientific push in fuel cells? Like, are a lot of other people working on fuel cells?

Val Miftakhov

Yeah, definitely there are. On the high-temperature side, there are probably three companies, including ourselves, on the top of the field. And then there are some sort of tier one partners that we're working with. Like BASF for example, is a big German chemical company and they're working on some membrane materials that we are utilizing. We have a joint venture or joint work development with them.

David Roberts

And do you lose any of the safety benefit when you introduce high heat back into the mix?

Val Miftakhov

Not really. Because high temperature is still, you know, very low temperature compared to combustion. Right. We're talking about 200 degrees versus almost 2,000 degrees of combustion temperature. So as a result, you know, we can use simpler materials still, like aluminum, for example, which is cheap, it's very formable, it's very heat conductive and electricity conductive versus, you know, turbine engines have to grow single crystal turbine discs out of Inconel.

David Roberts

So, the last piece here, so we got innovation in hydrogen, mainly compressing it into liquid is going to be necessary for the bigger planes. We got innovation on the fuel cell side, trying to increase the temperature of the fuel cell process, increase efficiency output there. And then the other piece is the electric motors and rotors. Now, this is the question I always have about electric motors. Like at this point in things, there just have to be like gazillions of people working on making electric motors better. I mean, these are everywhere. They're getting more and more ubiquitous.

They're doing more and more things. So, there just has to be like a ton of work happening here. Like, what is your piece of that? Are you personally trying to make electric motors better? Are you focusing on sort of the plane-specific parts of it like the rotor or the propeller, or what's the innovation on that side of things?

Val Miftakhov

Yeah, your intuition is absolutely right. This is, I would say, the least complicated part of the equation for us. We do have to design and build our own motors or aviation-specific motors. But that mostly is because the design process for aviation certification is different. And you kind of have to start from scratch to do it, but the principles are the same. If anything, at some point in the future, maybe when we get to the largest engines out there, let's say similar to what drives a 787, we're even beyond the single aisle. That's when people start talking about maybe cryogenically cooled electric motors with superconducting, you know, windings and things like that.

But really, it's not even required. If you think about the kind of challenges between the current state of technology and where you would need to go for these large aircraft, the biggest challenge is in the fuel cell. The second biggest challenge is in the fuel tanks, fuel storage, and fuel system. And the last, sort of the smallest challenge, is in the motors.

David Roberts

Interesting. Very interesting. All right, well, we're running out of time, but I have two big questions left. This is all just super fascinating to me. So let's talk a little bit about, right now, when I started reading about you, the company, when I found out that you're just swapping engines in existing planes, I thought, "That seems kind of crazy" because in, like the EV space, the reason EVs are working is that they're designing lighter bodies and stuff around these engines so you can just go farther. Like trying to take a big old heavy metal, you know, existing combustion car and lifting out the engine and putting in an electric engine is you're just setting a very high bar for the difficulty there.

So, it seems like you're doing difficult things trying to lift these heavy planes. And I just wonder, are people — I mean, I know people are out there designing new kinds of planes around electric propulsion systems, this is probably like a whole podcast in itself, I'm sure. But, like, what could you say briefly about just sort of like, what does that look like? And are you working with specific designers making specific planes around your specific propulsion system?

Val Miftakhov

Yeah, it's a very good question. And yes, we have some clean sheet projects as well. I think three or four at this point. A couple of them are public.

David Roberts

And these are like different, fundamentally different design ideas about it?

Val Miftakhov

Yeah, it's different, different materials, sometimes different materials. Mostly, you know, a lot of composite materials.

David Roberts

Carbon nanotubes or whatever.

Val Miftakhov

Yeah, mostly. There is a bit about structural integration of components. So, you can use, for example, the hydrogen, compressed hydrogen fuel tanks are likely the strongest components of any airframe you would integrate them into. Because these are basically, you know, almost 1cm thick carbon fiber shells to contain the high pressure.

David Roberts

So, you can make them like load-bearing. Oh, that's interesting.

Val Miftakhov

You should, you should. Right. Because again, this is the strongest part of your airplane. So, you can, for example, there are some concepts that say, "Well, why don't we build wing spars out of those things?" These are basically a structural element that keeps the wing in shape.

David Roberts

Yeah, right. So, you'd be kind of putting hydrogen into the wing then, rather than into a discrete tank.

Val Miftakhov

Yeah, yeah. So, there are a few projects like this, but those take a longer time, because you have to design the aircraft, you have to design the propulsion system, you have to integrate, then you have to certify the whole thing.

David Roberts

Yeah, I assume the FAA is — I assume there are lots of hoops to jump through when you're coming up with a brand new plane.

Val Miftakhov

Exactly. So, my big vision here is to transition the entirety of aviation to this new type of propulsion. But the first transition, however small the aircraft is commercially viable, commercially relevant aircraft, is going to be a huge step.

David Roberts

Yeah.

Val Miftakhov

So, what I wanted to focus the company on is to say, "All right, what's the smallest relevant scope that we need to take?" And it will already be a huge amount of work, but what's that scope that we need to take in order to jumpstart that transition? And it turns out to be engines, initially for existing aircraft, because then I don't have to prove to the regulator that the aircraft is good. That's already done. I just need to replace the engine. And by the way, replacement of the engines happens all the time in the industry because new engines become available and manufacturers say, "Okay, we're going to re-engine the aircraft. We're going to certify what's called the supplemental type certificate for the aircraft with a new engine."

That's being done in the industry. So, I'm riding the existing processes in the industry to do it. You know, you mentioned automotive as a comparison. As we talked, I think in the middle, a typical airframe outlasts several sets of engines. So, as a result, these markets are different, these very structured markets, very different.

David Roberts

The engine market and the plane body market?

Val Miftakhov

That's right. In automotive, there is no distinction because everything is monolithic. Here, you have, even if you look at the companies in the aviation space, aircraft manufacturers and they don't make engines. Okay. And you have engine manufacturers; they don't make aircraft. Okay. Because these two are different. And even if you go to operators like airlines like United, American, and all those people, they buy their aircraft from Airbus, for example, they buy their engines separately from Rolls Royce and the others. And yes, they come together at the factory, at the Airbus factory, but these are different contracts.

David Roberts

Interesting. So, you are not, you have no plans to become a plane body maker. You're just going to put these engines in. But you assume like, I guess the plan here is like you put these, a bunch of these in small planes, a bunch of small planes fly around with them, everything's fine, it shows people it can work and then sort of like that flywheel accelerates a little bit. And you expect other plane body makers to start sort of designing to this.

Val Miftakhov

Yes, absolutely. And we already have some projects like that, and we hope to become the largest manufacturer, designer, and manufacturer of this new generation of propulsion for aviation.

David Roberts

So then, in this bright future, you know, you're hitting, you talk about sort of like hitting kind of the limits once you get up to like a single aisle plane. But if you could design even larger jets, like if you could design the full size jets top to bottom around electric propulsion, just so they're lighter, maybe different shape, maybe wing body, whatever it is, theoretically you could get the biggest planes on hydrogen like in the future if you combine innovation in the engines and innovation in the bodies.

Val Miftakhov

Correct.

David Roberts

So, there's no remainder in your mind? There's no remainder. There's no part of aviation that's out of reach of this.

Val Miftakhov

That's right.

David Roberts

That's happy-making. We're sort of out of time. But I did want to ask you, this is again another huge topic. But just like we say just a few words on it, there is, you know, people who talk about electric aviation generally, these engines, "engines", today at least have less range. And so kind of the parallel conversation that goes along with electrifying aviation is restructuring how and where people fly. Because right now, like, there's a lot of — this is sort of one of the things I learned from Kyle.

It's a lot of like packages, go on a big jet and you take a very circuitous route to where you're going because you're flying to big airports, basically. So, if you had just smaller planes, you could have a lot more airports. They wouldn't have to be as big and they could be spread out more and you do a lot more short hops. But then, for your vision to work, you also have to throw in refueling, which is when it comes to highly compressed liquid hydrogen, not necessarily a small thing. So, maybe just say a few words about how you envision the air system, the airport system, the flying system evolving around this.

Val Miftakhov

Yeah, we definitely see a lot of this. Like Kyle mentioned, and I know Kyle — a very good company. Probably one of the most practical new aircraft companies out there.

David Roberts

Love that guy. One of my favorite pods I've ever done. I love talking to him.

Val Miftakhov

Exactly. So, I think I agree with him that we are going to move more to point-to-point. A lot of smaller locations. A lot of the connectivity improvements in the smaller communities through this, partially because of the much, much better economics of the small aircraft on electrified propulsion versus on fossil fuel propulsion.

David Roberts

Is that just like less wear and tear, less maintenance?

Val Miftakhov

Yeah. Right now, we're super early on the hydrogen journey. And if you look at the economics, fundamental economics of green hydrogen and renewable hydrogen, your marginal cost of the molecule wants to go to zero. Meaning that we already have this with renewable power. You put a solar farm in, and the incremental cost of any — after you put a solar farm in — incremental cost of a kilowatt hour coming out of those solar panels is pretty much zero. You need to clean them periodically. You don't use any fuel. For electrolytic hydrogen production, it's the same because again, it's almost like a fuel cell. You don't have any moving parts.

You put capital expense in, and then it just works for tens of thousands of hours.

David Roberts

And you're talking about electrolyzers. So, you envision these smaller regional airports having hydrogen electrolysis on site?

Val Miftakhov

It doesn't have to be on-site at every airport. So, we have this concept of airport clusters. And as I mentioned, right, we sold already thousands of these engines. Every time we go to the operator and make those deals, we actually study their networks and we build the fueling network as well or plan for the fueling network. So, we have this concept of clusters of the airports that tend to be sort of within, let's say, a couple of hundred miles radius. And there is an anchor production site within that cluster that we start with and then you produce there and you can deliver to the other airports and as the traffic grows, then you can put one more production site in that cluster and then you go from there.

Right. But you don't have to have production at every single one. So, you move to the network that is much more local, much more point to point, and generally smaller aircraft. And in fact, actually, we've seen that already in the current aviation market over the last 10, 20 years. We've seen that movement already.

David Roberts

Yeah, just for operational reasons, operational savings?

Val Miftakhov

Well, people like to not connect. It's shorter. It's less time. And as you grow the traffic density, you have more and more opportunity to go direct. And you see, you know, 20 years ago, A380, the biggest aircraft out there, was a big deal. 747, a large aircraft, was a big deal. And now those aircraft don't really fly. Well, we don't produce them anymore. And they're being phased out in favor of aircraft like 787, 737, which go direct to point to point. So we're already seeing that. And electrification will accelerate that move.

David Roberts

And I'm assuming, like, electrolyzing hydrogen is electrolyzing hydrogen, hydrogen, hydrogen. So, there's a lot of people out there who are thinking about electrolysis and working on electrolysis of hydrogen. Are you messing with that at all? I did see one press release where you are working on some kind of AI to improve electrolysis. Like, are you getting involved — that's a whole industry to itself — are you getting involved in that at all?

Val Miftakhov

Yeah, we're not getting involved in the electrolysis technology itself, but the way it gets integrated into these on-airport production assets, because it's connected to the aircraft and to the airport environment, we know a lot about it. We have actually already built three locations at airports, our own fuel production.

David Roberts

Oh, interesting. You are electrolyzing hydrogen for yourself now, already.

Val Miftakhov

That's right. Now, we, of course, buy electrolysis equipment and all that. We don't make any of that, but what we do is that we put it together at the airport with a little bit of battery capacity so that we buffer energy with a little bit of renewable capacity and connect it to the grid, and then we can manage the production of hydrogen so that hydrogen comes out at a lower cost. In that segment, we see ourselves as kind of building the blueprint of how this should be done and then offloading that blueprint to the energy folks, the utilities, the energy providers out there so that they can build more of these.

David Roberts

Are you banking at all, in terms of your business plans, et cetera, on substantial reduction in the cost of electrolysis, or is that just kind of a fixed quantity for you?

Val Miftakhov

We expect electrolysis cost to go down quite a bit, but already today, we have, I think, definitely more than 10 contracts. I think it's around 15 or so and growing worldwide on supply of green hydrogen from various producers at costs — that we can deliver to the or they deliver or we can deliver to the airports. It's not uneconomical. But the point is that the costs that we're able to contract are already getting to break even with jet fuel.

David Roberts

Oh, interesting.

Val Miftakhov

Yeah, and partially we are able to do this for aviation, especially for small aircraft, much sooner than for cars and definitely sooner than for heating because of much higher efficiency difference. Yeah, and aircraft fuel is not cheap. It's a relatively highly refined fuel and it goes through all kinds of controls and everything. So, it tends to be relatively expensive. So, it's easier to break even against that. Much, much easier than for example for a diesel truck that has a very efficient Cummins diesel engine. And diesel cost is relatively low. So, break-even situation is much harder for hydrogen over there compared to aviation small aircraft.

David Roberts

Goodness. This is a lot to chew on. Super fascinating. I hope maybe next year I can take a zero-carbon flight. When you envision the timeline of making it all the way up to Boeing 747, say the single-aisle jets, like when ideally in your plans, when is that? Is that in my lifetime? Am I going to be able to fly a zero-carbon passenger flight between two major cities before I die?

Val Miftakhov

Yes. So, I think from the technological perspective, we will have the technology to power a 737 size aircraft, which is a 200-250 seat aircraft, in around 10 years.

David Roberts

What a time to be alive. Okay, well, we could go on forever, but this has been super fascinating, tons to chew on. So, Val, thank you so much for coming on and walking us through it.

Val Miftakhov

Thank you, Dave. Appreciate it.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

I talk to Emily Pontecorvo (Heatmap) and Jeff St. John (Canary Media) to grapple with the latest Trump administration moves impacting climate and energy policy. We discuss the executive orders targeting state climate programs and propping up coal plants, the baffling new tariffs threatening energy supply chains, and the flurry of lawsuits challenging th…

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In this episode, I dive into the UK's decarbonization journey with Lucy Yu of the Centre for Net Zero. We discuss how the UK has become a world leader in offshore wind while lagging in heat pump adoption, why electricity market reform is essential to prevent gas from setting electricity prices, and how community ownership models overcome NIMBY resistance to wind projects.

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Text transcript:

David Roberts

Hello everyone, this is Volts for April 18, 2025, "How is decarbonization going in the UK?" I am your host, David Roberts. Since at least 1990, UK greenhouse gas emissions and GDP have moved in different directions — down and up, respectively. The divergence, what economists call "decoupling," particularly accelerated around the 2010s. The bulk of the emission reductions are due to the fact that the UK has effectively eliminated coal from its electricity mix, an extraordinary accomplishment for a country that mined and burned coal for almost 150 years.

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Nonetheless, the UK is, like most of the world's countries, not on track to meet its ambitious climate targets. To do so would require an immediate and sustained boost in action, but at this moment the consensus behind net zero is shakier than it has been for a while. The Labour Party, which took power last year, is committed to achieving net zero by 2050 and has some ambitious nearer-term goals, but has cut back on climate-related spending. The Conservative Party — long at least a nominal partner in the effort — is now calling the 2050 net-zero target impossible.

I thought it would be a good time to check in on what's going on over there: how decarbonization has proceeded thus far, which sectors are on track and which aren't, what the current government is doing, what kinds of technologies and strategies are needed to get to the country's targets, and how to keep it all affordable.

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This is way too much for one pod, obviously, but I'm going to make a valiant attempt with Lucy Yu, who runs the Centre for Net Zero, a UK nonprofit research center established by the Octopus Energy Group. Yu has 20 years of experience helping to scale up new companies and offering advice on technology policy and regulation to the UK government, the European Commission, and the UN. She's been in the game for a while in the UK and I can't wait to talk to her. With no further ado, Lucy Yu, welcome to Volts. Thank you so much for coming.

Lucy Yu

Thanks very much, David. It's a pleasure to be here.

David Roberts

Very excited for this. There's a lot going on.

Lucy Yu

There is.

David Roberts

Here's where I thought I would start. So, the UK government has these targets: 95% low carbon power, electricity by 2030, which is itself a huge goal, and then net zero by 2050. So, good Volts listeners know that decarbonizing a country this way involves two big buckets, basically. One is you take all the energy uses that are not on electricity and move them to electricity. And then the second big bucket is you fix the grid, which is a bunch of things in itself. So, I know most of your work is on the latter part, but I just want to touch on the former part, which is moving non-electric energy uses over to electricity.

Three big ones are buildings, transport, and industry. So, maybe let's walk through those and talk about how the UK is doing on pulling those into the electricity sector. We start with buildings where, as I understand it, the news is not great. So, maybe you could talk a little bit about the state of the UK buildings and what is underway, trying to electrify them.

Lucy Yu

Yeah, of course. So, maybe to just set some context here, and I will talk particularly about housing, but obviously, this isn't just a housing issue. So, we actually have some of the oldest housing stock in Europe in the UK. So, we have a real kind of diversity of housing and it has sort of different levels of efficiency. Most people will have gas boilers for their heating. So, we have currently very low rates of electrification for heating. Heating, obviously, because we are currently a cooler country, is more of a concern for us at the moment than cooling and air conditioning.

But of course, this could also change over time as the climate changes. In terms of use of adoption rates of heat pumps in UK housing, it's around about 1 to 2% of all UK housing stock.

David Roberts

Oh really?

Lucy Yu

It is at the moment. So, if you compare that with something like Norway, I think they have something like a 60% penetration. You mentioned you've been talking to other countries around the world. These rates are far higher in places like Scandinavia, so a very low baseline in the UK. I think there are a number of reasons for that that we can get into, but ultimately that needs to increase and it needs to increase very rapidly.

David Roberts

This is kind of one of the big public fights going on right now, isn't it? Like, heat pumps are sort of in the news in the UK in a way that they're really not here in the US.

Lucy Yu

You're right, they are. And if we look at what the Climate Change Committee has said, so this is an independent, non-departmental public body. It was formed under the Climate Change Act. This was a very key piece of legislation that was introduced back in 2008 in the UK, and they provide independent advice to the government. Now, they have said in order to meet our net zero targets, we need to be installing as many as 600,000 installations per year by 2028. So, this is a lot of housing stock that we need to be retrofitting, taking out gas boilers in particular and fitting with heat pumps.

So that's the kind of scale of what we're looking at. I think there are a few things to be aware of. One is that awareness of this technology is not as high as in other countries, in the UK. I think that's changed over the past few years. The government has certainly been making attempts to address this. There have been a number of different initiatives to just raise awareness amongst the public about low carbon heating solutions. The government has also introduced heat pump subsidies. These were introduced a few years ago now and they continue to apply.

David Roberts

Is this the Boiler Upgrade Scheme?

Lucy Yu

Correct, the Boiler Upgrade Scheme. So, the name is a little bit cryptic, but it is essentially a subsidy to help with the upfront costs of purchasing low carbon technologies. So, that has been effective. That has certainly increased adoption rates. We actually did some analysis of that scheme, so we did some welfare analysis and we calculated that that was generating £1.24 in benefits to society for every £1 the government was spending. So, if there are any economists listening, we looked at something called the marginal value of public funds. But we also estimated that that could go up to £1.90 if that subsidy also led to what we call "learning by doing", so effectively lowering costs of the entire industry, the supply chain, installation and all of those things.

So, as I said, awareness has historically been rather low in the UK. We have something of a relatively recent subsidy which is proving effective in the market. When it was first introduced, it had a number of conditions which have subsequently been relaxed. So, some of those conditions were around things like a house needing to meet certain insulation standards. Those have subsequently been relaxed.

David Roberts

Oh, interesting. Just in the name of speed? I mean, there's such, so much, so much to do. You can't get too fine-grained, I guess, in these things.

Lucy Yu

Yep. And I think the other thing I'd say is we have a relatively early supply chain in the UK, so we have a relatively small number of heat pump installers. We clearly need to train a lot more. We did some modeling, a piece of modeling a couple of years ago, and we estimated we might need another 25,000 to 30,000 heat pump installers by 2028.

David Roberts

Oh geez.

Lucy Yu

And that's nationally.

David Roberts

Yeah, well, it seems like, I mean, kind of a great opportunity for trades. I mean, guaranteed growth area. Is the adoption anywhere close to on pace to hit that target, or do you think much more is needed there?

Lucy Yu

It is increasing, whether it's close to hit that target. So, I certainly think we will need to train more installers so we don't hit a short-term crunch. When the modeling that we did — so we built an agent-based model — we did find that adoption was very sensitive to public awareness. So, I think increasing that awareness of heat pumps as a technology will make a lot of difference. And we also found that the upfront cost, so the initial cost of purchasing the heat pump, paying for the installation was a barrier to adoption. So, those subsidies should really be helping to accelerate that adoption.

The other thing, really, that would help would be to rebalance levies on fuel in the UK. So, there are levies that apply to electricity, every kilowatt-hour of electricity, that don't apply to gas. And what these effectively mean is that currently, the cost of operating a heat pump is more expensive than the cost of operating a gas boiler. So again, addressing these structural situations, making a heat pump as cost-effective or cheaper to operate than a gas boiler is also going to be one of those things that really helps to accelerate adoption.

David Roberts

And is the idea that most of heating and cooling electrification will be done with individual air source heat pumps, or is there a push to do some of this district heating and cooling, maybe the geo exchange? You know, these things are very trendy now. Is there a look outside the heat pump?

Lucy Yu

There are a number of district heating projects already throughout the UK, and certainly, we do expect more of those in the future. They're particularly suitable for certain types of developments, maybe larger blocks of apartments and those sorts of things. But of course, there's a lot of other housing stock in the UK for which that is less likely to be suitable. And for those, the sort of individual heat pump installations are more likely to be the appropriate solution.

David Roberts

There's probably, obviously, lots more to say about decarbonizing buildings, but let's move on; we've got other things to hit. So, transport, in terms of electrification of the vehicle fleet, where is the UK? Obviously, your Norways are kind of leading the way. There are some leaders and laggards. Where is the UK in that process?

Lucy Yu

At the moment, something like around 4% of all cars in the UK are electric vehicles, but that's the entire vehicle fleet. If you look at the number of new vehicle purchases, the percentage is much higher. I think it's around 20%, the most recent figures that I've seen. So, the UK public is certainly increasing its interest in electric vehicles and they are increasing in adoption. At the government level, we have what's called a "zero emission vehicle mandate" or ZEV mandate. And this places requirements on manufacturers for all their new vehicles sold to sell a certain percentage as electric vehicles.

And that percentage is effectively ratcheted up year on year. And so by 2030, that percentage is 80%. And by 2035, the intention is that 100% of new vehicles sold would be electric vehicles or zero-emission vehicles.

David Roberts

Yeah, what's the kind of public opinion valence on that? Is the public excited about electric cars? Just because in the US, it's proving an opportunity for our Conservative Party to make hay. So, I don't know what it's like over there.

Lucy Yu

Yeah, I think the public is excited about electric vehicles, particularly if you are able to charge your vehicle at home and you have access to a time of use tariff. Now, if those two things are true, one of the big benefits that you have is that you can fuel your vehicle, you can charge the battery to capacity much more cheaply than you could fuel it using petrol or diesel, for instance. So, for those people, this is a bit of a no-brainer in terms of if they can cover the upfront cost, then the ongoing costs of fueling the vehicle, operating the vehicle are extremely low. Where the adoption is maybe slightly lower at the moment is for people who don't have access to their own off-street parking.

So maybe they don't have their own driveway.

David Roberts

How are you doing on public charging?

Lucy Yu

Yeah, public charging infrastructure. So, this is certainly an area that the government is focused on, how to improve access to public charging infrastructure. And we at Centre for Net Zero have also been running a field trial to look at how we could vary pricing on the public charging infrastructure effectively to use the growing fleet of electric vehicles to actually support the grid. So, if there are times and places where there is, for instance, a kind of an excess of renewable generation that might otherwise have to be curtailed, could we actually use lower prices to encourage people to soak up that energy?

Therefore, they are able to charge their vehicle more cost-effectively. But there are also benefits to the wider system as well. So, these are certainly things that the government is exploring.

David Roberts

Are there supply side subsidies here too or is it all through the sort of stick on the manufacturer side?

Lucy Yu

There have previously been supply-side subsidies. I would say we are at a stage in the UK where, as I said, we've now got around 20% of new vehicle purchases are zero-emission vehicles. So they don't exist now, but they certainly, I think, did their job at the time. And that's probably where we're at with the heat pumps that I talked about, which is that the government is trying to stimulate a market, is trying to get a critical mass of early adopters and I think we sort of are past that point for electric vehicles.

David Roberts

Mm. And now, let's briefly talk about industry. This is, of course, the gristle in the decarbonization stake. Always, always the difficult bit. What is the state of UK industry? And is there — I mean, the last thing I looked at was a headline about maybe like a giant steel plant shutting down and leaving the UK. So, what is the state of industrial decarb in the UK? Is it anywhere at all?

Lucy Yu

It varies a little, industry by industry. There are lots of points we could unpack here. One of the things that is currently a sort of a hot debate in the UK is about the structure or how the electricity market is arranged. And just to give a very simple overview, we currently have a single national price for electricity in the UK. What that means is that there is no distinction between maybe parts of the UK where, for instance, renewable energy might be able to be produced and generated very inexpensively. That could be windy parts of Scotland, for instance. Any customer who might be using that energy will pay the same.

They won't see the benefit of that under the current pricing system. Now, a possible change to this market arrangement is currently being debated, and there are sort of two options on the table. Now, certainly for the sake of time, I'm not going to go into the finer-grained details of those two options, but what I will say is that both of them would provide effectively a sort of sharper price signals in the market. So we would move away from having a single national price. And what that may mean, particularly under one of those options, is that what you might start to see is industry then making decisions about where they locate, also being able to use more of their electricity demand from lower carbon sources.

So, something like that could be one of the things that really causes industries, particularly the energy-intensive industries, to be able to decarbonize the energy that they're using.

David Roberts

Gonna move industry to the coast then, right? Won't that effectively be the...

Lucy Yu

Yeah, I mean, I think it provides a great opportunity. And the thing is, we have some of the most expensive electricity certainly in Europe, if not maybe the world, in fact. And that is because there was a report published, I think, last September by Mario Draghi, and he found that in the UK, gas was setting the price of electricity as much as 97% of the time. So the issue is, unless there is some kind of market reform, we will continue to have a scenario in which if the price of gas is particularly high, then it is that that's setting the price of electricity.

So, there is an opportunity to move away from that kind of market arrangement and to have much lower-priced electricity that then could provide an opportunity for industry.

David Roberts

Oh, interesting. Well, this is, you're setting me up perfectly for my segue here. So, let's turn our attention to the electricity grid. A little bit of history might be helpful here. One of the features of the UK market is the liberalization of the electricity market. You were early to that and, as far as I know, kind of a leader in the liberalization of electricity markets. Maybe talk just a little bit about that history and kind of where it's settled now, sort of how the UK electricity market is structured.

Lucy Yu

Yeah, of course. So, I mean, I can maybe give you a blow-by-blow account of the previous few decades, really. So, as you said, in the kind of '80s to '90s was really the kind of period of market liberalization in the UK but also some of our kind of early emissions reductions. So, both the gas and electricity markets were privatized over those two decades. We also, during that time, the UK signed the Kyoto Protocol. So, that was signed in 1997. So, that was kind of an international treaty. And in that, we committed to certain emissions reductions.

So, you can almost think of that as the start of a long chain of activity and milestones that have followed.

David Roberts

So was some of the electricity market liberalization — one of the things I want to figure out is like what was the attitude toward coal then? Was that done in part to get rid of coal or was it done for other reasons?

Lucy Yu

I think that's probably a question maybe better directed to others, but I would certainly say it was the start of coal being sort of pushed out of the system.

David Roberts

Sure, right. Like cheap, cheap gas comes in. The same thing happened in the US.

Lucy Yu

Yeah, exactly. So, I would say, it's effectively caused, you know, something of a dash for gas. So that was the period at which we started to see CCGT, combined cycle gas turbines, that type of technology begin to replace coal. I would say if you wanted to kind of really dig into what are the things that actually came together and enacted to push coal out of the system, I would say there were things that happened in the follow-on decades that were as important. So, if we look at the 2000s, for instance, we introduced in the UK something called the "Renewables Obligation."

So, that was 2002, and that was a market-based mechanism. So, that mandated that utilities had to source an increasing share of their electricity from renewables. The EU, in 2005, when the UK was still part of the EU, introduced its emissions trading system. So, that imposed a carbon cost on power generators. And then, as I mentioned earlier, the Climate Change Act in 2008, so this is a UK act which was passed through Parliament and that established some legally binding carbon budget. And the target at the time was an 80% reduction in greenhouse gas emissions by 2050 compared to 1990 levels.

That's subsequently been increased to net zero by 2050, but it tracks back to 2008. Then, if we look in the 2010s, that's when we really started to see coal phase out. We introduced something called the " Carbon Price Floor" in 2013. And what that did was effectively underpin the price of carbon at a level that drove low carbon investments.

David Roberts

Right. Because at the time, just throwing in some history, at the time, the EU trading system prices were very low. Like, prices had the tendency to be very low. They're much higher now, but back then they weren't doing much.

Lucy Yu

Exactly. So, the carbon price floor, you're absolutely right, effectively managed to achieve something that the EU Emissions Trading Scheme has not been able to achieve. And I'd say the other thing that happened in that decade was new kind of subsidy mechanisms. So, that's when the UK introduced its contracts for difference and they really had the effect of accelerating offshore wind deployments. And these contracts for difference, or CFDs for short, what these do is they effectively guarantee a fixed price. It's called the strike price. And that's for every unit of electricity generated and that's regardless of the actual market price.

And they're typically a long duration. They might be for a duration of 15 years or so. So, they're providing some very long-term certainty for renewable energy projects and for developers, and then obviously the finance.

David Roberts

Akin to feed in tariffs, yes? Similar-ish?

Lucy Yu

Yeah, I guess, yeah, it's a similar concept. Exactly.

David Roberts

I just think our listeners might be a little bit more familiar with feed-in tariffs. But basically, it's like a guaranteed return if you invest in renewable energy. And then, if you look at the graph of coal use in the UK, it is like a very peaky mountain. Like, it went up really fast and peaked and then fell really fast. And I just sort of wonder, like, it's such a huge thing. Coal was such a huge thing in the UK for so long and then just vanished over the course of a decade. Like, politically, did that register? Did anybody fight that? Like, does anybody miss coal? Or was it just like, everybody was like, "Fine, you know, that's the past now."

Lucy Yu

I don't know that anyone misses it. I mean, you know, there are other transitions I could point to. We probably, you know, everybody in the UK had a landline phone line. And now, nobody has a landline phone. So, you know, other things have happened at the same kind of pace.

David Roberts

Yeah, such a central thing in culture and then for it to just sort of evaporate is kind of wild to me. So, one of the things I wanted to ask about is these key anti-coal measures you're talking about that ended up phasing coal out in the 2000s and 2010s. A lot of those were passed under Conservative governments.

Lucy Yu

Mm.

David Roberts

This is something that our American minds cannot wrap ourselves around. It's like from the outside, you're just like, "Well, that's how it's supposed to work." Like, there's a problem. Both parties agree it's a problem. They debate about the proper solutions. They come to a consensus, you know, and implement solutions. Like, it looks like how democracy is supposed to work. Is that misleading, that sanguine view from the outside? Like, how? I guess what I'm trying to ask is, like, Conservatives were sincerely involved in this. And now they seem to be not. So maybe talk a little bit about how the political valence of all this has changed over time.

Lucy Yu

I think that's a very astute observation that up until relatively recently, I think there was a lot of consensus between the main political parties. And it's probably worth saying as well that there is relatively high support for green policies in the UK. So even some of the more recent polls suggest that over three quarters of the UK public support green policies. So there is, in spite of maybe what some of the media might suggest, strong support for this. It's only relatively recently that you're right, the leader of the Conservative Party, the main opposition party to the Labour government, has made some statements about net zero and some of the associated policies and things. I think some of this is maybe being a little bit reactive to global geopolitics.

David Roberts

Yes. Inflation and...

Lucy Yu

Yeah, and you can kind of afford to change your position when you're in opposition than when you're in government. I'm sure that has had an influence too. I would say that Kemi Badenoch, who is the Conservative Party leader, recently, she's been kind of arguing that rolling out renewables will lead to higher costs and I think this is a kind of a flawed argument, if you like. So, she has been suggesting that this is the case because we would effectively have to build two systems of electricity. So, one that is based on renewables and one that's not.

David Roberts

This idea that you need like one-to-one backup if you're building renewables? Oh yeah, we know that one.

Lucy Yu

Exactly. And the kind of suggestion that you've got effectively having to run two systems. And of course, it might sound like an intuitive argument on the surface, but actually, of course, this is conflating the kind of the upfront CapEx with the total system costs. And so if you focus very narrowly on the installation expenses and you ignore the costs of purchasing fuel to run fossil power plants, then you're effectively, you're not comparing like for like. And so I do think, you know, there maybe is some discussion and debate that's out there at the moment that is not really reflecting the reality of the move towards renewables.

David Roberts

But probably, like recent inflation and electricity prices being so high, energy prices being so high are creating a kind of fertile ground for this kind of pushback. So, we'll return to the issue of affordability in a minute since that's obviously so politically crucial. Okay, so the UK is shooting for clean power by 2030. It has created this commission. You are one of the commissioners, have been appointed one of the commissioners. The idea, I think, is you go off and you make an action plan. The action plan has sectoral, you know, each sector has its own sort of action plan. Mostly, as far as I can tell, the action plan is focused mostly on renewables and flexibility.

Lucy Yu

Correct.

David Roberts

We'll talk a little bit about the other buckets in a second. But let's just talk about renewables. I mean, one of the sort of striking things when I look at the UK energy mix right now is wind is the hero here. Wind is the reason that renewables are kicking butt in the UK. There's very, very little solar. What's the deal there? Is it just that you're a gray, gray-skied country or is there something else going on there?

Lucy Yu

It's both of those things, I think so. We obviously are not the sunniest part of the world, but I think there is some relevance there to the kind of history of offshore wind in particular in the UK. I can give a very quick sort of headlines on the Clean Power Action Plan as it's called.

David Roberts

Please, please.

Lucy Yu

So, you're absolutely right that a large part of the plan focuses on expanding renewables and so to give some headline figures, going from around 17 gigawatts of installed capacity of solar today to around 47 by 2030, going from about 15 gigawatts of installed capacity of offshore wind today to around 50 by 2030. And then for onshore wind, that's going from around 14 to 28 gigawatts.

David Roberts

Can we pause right there for a minute? Because this is something that I think even has made it over to US audiences. There was a bunch of onshore wind being built in the UK, and then the public, I guess, got irritated about it. I don't know how spontaneous that was, but there was a lot of pushback and basically, the Conservative government put a moratorium on new onshore wind. So, onshore wind has been kind of frozen for a while. So, I wonder if we could just pause for a moment and talk about, what is the state of that?

Is the public still irritated? How are you going to double onshore wind capacity when everyone seems to hate it?

Lucy Yu

So, the moratorium has effectively been lifted, and that was kind of one of the first things that the new government, the Labour government, did when they came into power. In terms of what does the public think about it? I think maybe you have had a slightly kind of filtered view of things in the US. So, firstly, I would maybe actually talk about the role of onshore wind in particular, because this is something which the public sees, it's more visible to the public than offshore wind.

David Roberts

It's the onshore wind that they're mostly NIMBYing. Right. It's that they're mostly pushing back.

Lucy Yu

Well, we talk about NIMBYs and YIMBYs. And YIMBYs are "yes, in my backyard," because we can maybe talk about community energy, but one of the things the government has said is they have set a national ambition for at least 10 gigawatts of community and locally owned energy by 2030. And just to put that in context, we currently have about 0.9 gigawatts. So that's a significant increase. Now, they haven't specified exactly what that might be, so it doesn't have to be wind, you know, it could be solar or other projects, but I do think there is a lot of opportunity for wind.

To give you an example of why I think this is the case and what we mean by YIMBYs, or "yes, in my backyard", in the UK, Octopus Energy has something called the Octopus Fan Club. The pun in the name is certainly intended. This was launched in 2021. What this does is it gives customers who are living close, say, within a certain proximity of one of its onshore wind turbines, which are based in Yorkshire and in Wales, a discount when it's particularly windy. Since that scheme has launched, Octopus Energy has had something like over 20,000 individual requests for people asking for a local wind turbine in their community.

David Roberts

Yes, the NIMBYs are always talking about wind cancer and shadows, but then, like, money comes into the picture and they're like, "Oh, never mind."

Lucy Yu

Exactly.

David Roberts

Shadows seem fine.

Lucy Yu

So, you know, I think you're kind of getting to the heart of an issue here, though, which is that I think where there is going to be some kind of new infrastructure, the extent to which you can tie this to the local community and think about what are the benefits and things that you can return to the local community, then you can start to, I think, have a different conversation about this sort of thing.

David Roberts

So you think the community ownership will unlock a lot more support for wind?

Lucy Yu

I think it has the potential to. And if you look at some of the existing community energy projects in the UK, there are a lot of actually nice examples from Scotland, which I think has really sort of led the way in this space probably over the past decade or so. If you look at the Isle of Lewis in Scotland, they have a nice community-owned wind turbine scheme, so that's I think a 9-megawatt wind farm, so 3-megawatt turbines. And they're using the revenues from that scheme to fund local social projects and for fuel poverty relief as well.

So, there are examples out there. The key thing really will be how we can replicate and scale these kinds of things, because I think rather than having a handful of them, you know, we need to be seeing many thousands of these types of things across the country.

David Roberts

So, in this respect, what is Great British Energy? You know, I just actually did a pod on New York State, which has passed a law that is using its public utility to sort of fill in the gaps and directly develop renewables. To the extent that the state is falling short of its target. Is that kind of what's going on here? Is Great British Energy just kind of like, "If the private market is not building this fast enough, we're going to build some public clean energy?" Is that what's going on with that, what is GBE?

Lucy Yu

So, Great British Energy, or GBE, is a relatively new institution. It was announced by the Labour government and it's a publicly owned, operationally independent clean energy company. I think the government has conceived GBE not just to be a financial vehicle, but they've also said that it will own, manage, and operate clean energy projects. It's not just providing the finance and they have gone as far as to say that it will also engage in the production, distribution, storage, and supply of clean energy. So, it has quite a broad scope on paper.

David Roberts

Has it done much yet? Like, it's like a year old, right? Or a couple of years.

Lucy Yu

So, well, the Labour government itself is not quite a year old, so GBE, GBE is slightly younger than that. It has actually just announced its first, I guess, major investment just last week, in fact. So last week, GBE said that it would put aside £180 million and that would go towards putting solar panels onto schools and hospitals.

David Roberts

Oh, yes.

Lucy Yu

So, it's a relatively small scale to begin with. I think they said 200 schools and 200 hospitals, so that's less than 1% of all schools in the UK. Just to put this into context. But it's certainly a welcome first step. And they have said that the profits that come from that will be reinvested then into the National Health Service and into education. I think the first installations are due to be by the end of this summer, so we should start to see that happening.

David Roberts

I'm so curious what the public's — I mean, I don't know, does the public even know it exists yet? Insofar as it does, it seems like that kind of thing would be popular. It seems like.

Lucy Yu

And I think we will have a better sense of this when these first installations start happening, because these are facilities and institutions that the general public interact with on a regular basis. So, I think this could give an example of some of the first sort of projects or developments that start to make some of this stuff start to crystallize and make it a little bit more real for some people who may be, so far, when they hear about Net Zero or they hear about the energy transition or clean power targets and things in the media, they feel very abstract or they feel like, "What has this got to do with me or my community? Or how is this benefiting society?"

Hopefully, these installations will help to just bridge that gap a little bit for some of those people.

David Roberts

Yeah. Transmission, a big deal for decarbonization in the US, I assume for the UK also. I assume you, like us, do not have enough of it. I assume you, like us, have trouble building it fast enough. What's being done to push that along?

Lucy Yu

Firstly, so certainly in The Clean Power 2030 Action Plan, transmission projects and reform to grid connection are kind of a key part of that. So in the grid connection, the queue is effectively being reformed or restructured with the aim of halving grid connection timelines by 2030.

David Roberts

Interesting. Love to hear that, grid interconnection queue reform is big. It's hot here at Volts.

Lucy Yu

I mean, transmission is one part of the equation. Coming back to the kind of the headlines of the Clean Power 2030 Action Plan, the significant expansion of renewables. But as you said earlier, there's also a heavy kind of commitment towards having more flexibility.

David Roberts

We're going to get to that in a second. That's our finale here because we love that the very most.

Lucy Yu

And so, obviously, the more flexibility you can put into the system, potentially, then you can reduce the need for grid and for build, particularly at the distribution level.

David Roberts

Indeed. And just quickly: nuclear.

Lucy Yu

Yes. Can you do nuclear quickly?

David Roberts

Let's. Can we, please — I don't want to. You opened the plant, I think, last year. It was, I hope everyone's sitting down, over time, over budget. Is the Clean Power Plan the attitude toward nuclear? Basically, we've got these nuclear plants, we're going to keep them running and maybe we'll do some research on SMRs. That's, I guess, kind of where we are. Is that basically the attitude toward nuclear?

Lucy Yu

I don't think it's a million miles away from how you put it.

David Roberts

Is there any plan to build more of these big plants?

Lucy Yu

So, the government definitely sees nuclear energy as part of the future energy mix. And one of the things that's being looked at at the moment in relation to the Clean Power 2030 target is extending the life of some of the existing facilities, and that will need to be approved by what's called the Office for Nuclear Regulation in the UK. You're probably aware that there are a number of projects that are due to come on stream either before 2030 or soon after. So, a big one, and one that has been, again, the subject of a lot of controversy, is Hinkley Point C.

So, this would be a 3.2 gigawatt reactor, which is currently under construction in the Somerset region. It is meant to come online in 2029. You know, some of the latest stuff around this has been, what's known affectionately in the UK, I think, as the "fish disco row."

David Roberts

Well, say more.

Lucy Yu

This is a row which potentially could cause further delays to Hinkley Point C. So, to give the background to this, EDF, who are the developer for Hinkley Point C, in their original plan, they had an acoustic deterrent. This was designed to prevent fish from being sucked into the plant's cooling system. Obviously, massive amounts of water are needed to cool this reactor. This deterrent system, I'm probably underselling it by just sort of calling it a deterrent system because it was actually going to be 288 underwater speakers. These would produce underwater noise louder than a jumbo jet.

This would be all day, every day for six decades. So, this is what was in the original —

David Roberts

Don't know if that's really an improvement in the quality of life for the fish.

Lucy Yu

So, this was in there and this was designed to protect marine life. However, more recently, they have applied to the Environment Agency and they've said, "Could we have permission to drop these proposals?" And they've cited doubts over the effectiveness and also concerns about risks to divers having to maintain the speakers. Now, the Environment Agency has rejected that request. They've said, "No, you can't drop this proposal and you can't replace it with an alternative proposal." So, this is the kind of summary of the fish disco row.

David Roberts

Fish disco. Yeah, it sounds like nuclear. So, is anyone putting any particular money on actually completing this thing by 2029?

Lucy Yu

Well, I'm not personally, but I'm sure others might be. And just to round off, you talked about SMRs. Everybody's talking about SMRs at the moment, particularly in relation to data centres. I'm sure we don't sort of have time to go into the ins and outs of those. But I would say yes, the UK government is also interested in SMRs. They're currently in the final stage of a competition to select some SMR technology providers. They have four remaining contenders for that and that decision is expected to be announced in the next few months, in fact, by GB Energy.

David Roberts

Well, I can't wait for some actual physical operating SMRs to join the dialogue on SMRs. It'll be a fresh new chapter in that discourse.

Lucy Yu

Yes.

David Roberts

Okay, let's talk about, to me, the always under-appreciated, under-heralded superhero of the energy transition, which is demand side management. Flexibility — I don't know if there's a term for that whole family of things, but you know, as Volts listeners know, this transition to renewables is going to make supply somewhat less controllable and you have to compensate for that by making demand much more controllable. So that's going to involve a lot of things, I think some reforms in the electricity market, some technology reforms. Your center is all into that. What's going on in that space?

Are there big reforms happening? What's the idea?

Lucy Yu

So, as we sort of discussed earlier, this is probably one of the key energy debates in the UK at the moment around energy market arrangements. And so it's called REMA, the Review of Electricity Market Arrangements. And as I said, one of the things that a change to the market design will mitigate is the fact that we have this situation where we have more and more renewables producing more and more of our electricity and yet we still have a very high percentage of the time when gas is setting the price of the electricity.

David Roberts

Yes, several people on social media asked about that when I brought up that I was doing this. Like, "Why are we still setting our prices based on gas?" and gas is getting more expensive. I guess because of, is it partially because of the Russian mess?

Lucy Yu

That certainly had an impact. So, as I said, the two main kinds of options that are being discussed would both create sharper price signals in the market. So, we would no longer have a situation in which we effectively just have a single national price. And to really sort of simplify things — so this is probably an oversimplistic representation, but broadly speaking — one of those changes would be quite a fundamental market change. So, effectively zonal pricing. And this would divide the UK energy market into a number of geographical zones and it would adjust pricing in those zones based on regional demand and supply.

And then, the second option would be, I guess, more of a tweaking of the national pricing. So, I suppose not quite going as far as zonal pricing and I suppose the trade-off between the two. And again, I am representing this trade-off in a slightly simplistic way, it's not quite sort of one or the other. But really, a lot of the arguments or the debate is around creating optimal signals for investments. We talked about the 2030 targets. We're going to need to complete some very large, what we call allocation rounds, so auction rounds, to get more renewables onto the system.

So, it's a trade-off between the optimal signals for investment and the efficient operation of the system. These are, if you like, the two camps that exist.

David Roberts

I mean, from my perspective, the value of a produced electron varies geographically and temporally.

Lucy Yu

Yes.

David Roberts

Right. It matters where and when the electrons are coming online, which is not necessarily true in the sort of pre-renewables grid. So, geographically and temporally sensitive pricing seems like kind of like table stakes. Like, you kind of have to do that, don't you? Like, how else are you going to send these demand signals? How else are investors going to know where to build the new supply? You know what I mean? Where the supply will have the most — especially when you get to distributed renewables too. Like, where will those do the most good? You need to direct. I'm preaching to the choir here, obviously.

Lucy Yu

Yes, you are. I mean, we certainly, you know, our interest is in when you have the right market conditions to unlock a lot of this flexibility. And if we look at the targets in the Clean Power Action Plan, they see Britain going from, I think, around 3 gigawatts of capacity today to something around 10 to 12. This is what's called consumer-led flexibility. 10 to 12 gigawatts by 2030. So, some of this would be from households, some of this might be from industrial and commercial users. And certainly, we could expect, and a lot of the modeling expects, that smart charging of electric vehicles will provide a substantial proportion of that.

David Roberts

But again, that doesn't work if the price is not varying throughout the day.

Lucy Yu

And just on that point around, kind of using electric vehicles effectively as sort of floating assets by using dynamic pricing, we have actually — so one of the things that we do at the Centre for Net Zero is we run field trials with real-world customers and we try to run these field trials as far as possible as randomized control trials or the closest thing we can achieve in the real world with real customers. And we have just completed a trial to look at using dynamic pricing on the public charging network to see how we could use electric vehicle flexibility to support the energy system. Just to give you a few, I suppose, high-level findings, we will publish a full analysis of this.

We found very high price sensitivity. So, when we dropped the price by 40%, we saw a 100% increase in charging. We found that through these discounts, we were able to create demand during periods of excess renewable generation. And that's important because if you're actually not creating new demand during periods of excess renewable, and you're actually just displacing that demand between different charges, then maybe that has different implications for the system overall and how you operate the system.

David Roberts

When we say excess renewables, you're mostly talking about overnight wind. Is that mostly when you have excess?

Lucy Yu

Yeah. So, we see periods of excess wind in Scotland in particular. It's very windy in Scotland. It could be overnight, but could also be some periods sort of during the day as well.

David Roberts

So, it works basically, to the extent we can tell so far.

Lucy Yu

Exactly.

David Roberts

One other question, a hot topic here is data centers, obviously, you mentioned. You know, which look on the surface like giant unvarying loads, which are kind of a scramble to the electricity system. There's some talk about demanding some flexibility from them and just how much they're capable of.

Lucy Yu

Yes.

David Roberts

Is this a pressing problem in the UK? Are the hyperscalers knocking on your door too, trying to build a bunch of these things? And how are you thinking about them?

Lucy Yu

Yeah, the hyperscalers would love to be able to build more data centers in the UK.

David Roberts

Even though the electricity price is high?

Lucy Yu

So, under market reform, and depending on what that looks like, we could potentially go from having some of the highest electricity prices in Europe to maybe some of the lowest, particularly in areas like Scotland. So, some of this, you know, may be predicated on where this government decision lands. But I think you certainly raise an interesting point that, you know, to a certain extent at least, you can move your, compute your calculations around the world and you can maybe have some latency. Not everything needs to be computed instantly and near to real time. So, there may certainly be some scope for that.

The government recently announced a new AI Energy Council. One of a number of things that this group will do is to identify some zones within the UK in which they may try to speed up permitting for this type of infrastructure. But also, I think one of the ambitions for the government for that AI Energy Council is to think about how we can better forecast the future energy demand from AI and data centers. Because I think what's been very interesting in sort of following this debate is that we had a period, I think, in which a lot of people were almost kind of panicking and there was a bit of a frenzy about the amount of energy that large language models and newer AI models would consume.

So, we had a sort of a short phase in which there was a lot of hand-wringing and a lot of concern about that.

David Roberts

I think we're still in our hand-wringing phase here.

Lucy Yu

Yes, but I think what was very interesting about DeepSeek kind of breaking cover, if you like, was I think a number of people then took a bit of a pause and a step back and said, "Well, does this maybe expose the fact that there has been a degree of guesswork going on here?" You know, actually, DeepSeek used some software, some algorithmic efficiencies, and I think we certainly will see more of those in the future, but I think we'll also see hardware efficiencies as well. If you look at some of the new GPUs coming on the market, potential for sort of quantum and other technologies maybe to come on stream in sort of 15 to 20 year time frame, perhaps, perhaps sooner than that, who knows? So I think, I think it's very difficult for anybody to really confidently assert what the future energy demand from AI and data centers will be.

David Roberts

Yeah, isn't the conventional wisdom though that, I mean, this is just the rebound effect, right? Like all those efficiencies are just going to get eaten up with expanded use?

Lucy Yu

Yeah, I mean, I don't know. We're all about empirical data and empirical observation at the Centre for Net Zero. So, we would kind of want to look at that. But the only thing I would say to that is we have to be mindful that firstly, not everybody using AI is generating cat pictures. You know, some people, some people will be using this to find, you know, materials science-based innovations or just things in other downstream applications that have the potential to massively reduce emissions.

David Roberts

Or just managing a grid where there are, you know, hundreds of thousands of generators rather than dozens, is a good place for AI too. So, one of the overriding themes here, especially given the, let's say, somewhat tender politics of net zero right now, is just affordability. Like, affordability is, from the public's point of view, kind of the lever you pull where you get support or opposition. And it makes total sense to me that with inflation, high electricity prices, everything else, the ground is fertile right now for backlash to all this.

And especially in a time when you need to ramp up and double or triple your forward momentum, obviously, that's a big problem. So, I just wonder, is affordability the overriding — like, are clean energy people in the UK appropriately obsessed with affordability? And what are the main levers to try to do this without it hurting ordinary consumers? What can be done?

Lucy Yu

Yeah, I mean, this is a short question, but it's a long conversation. I think it's probably worth focusing a little bit on some of the things that are adding cost to the overall energy system in the UK because anything that adds cost to the overall operation of the system ultimately ends up being socialized, so it ends up on customers' bills. And those costs are coming from things like — so we talked earlier about excess renewable generation. We've done an incredible job of adding more clean generation to the UK energy system, but we are not always able to use that at times of excess generation.

And that might be, for instance, because you have a part of the country that is particularly windy, but that generation region is geographically separated from regions of high demand. So an example might be generation in Scotland, wind generation, and then high demand in places like London and the southeast. So every time we are curtailing renewables in that way, there are costs to the system.

David Roberts

Yeah. Is curtailment rising? Is it on its way up?

Lucy Yu

Curtailment is rising. And so, you know, that's one of the reasons why it's important that we look at market reform. But it's also another good reason to try to get more flexibility into the system. This is one of the things that I think can help provide a more direct feedback link to the general public. So, if we can help them to adopt technology. I talked earlier about the impact that our heat pump subsidies have had on just starting to grow what is still quite a nascent market. But if we can help people to adopt those types of technologies, then they can participate in flexibility type services.

So, that might be as simple as just moving to something like a time of use tariff. This is a tariff where the price varies throughout the day. And this type of tariff — and I guess one of the benefits of this type of thing is that if you couple it with effectively some intelligence in the technology. So, a good example here might be somebody who has an electric vehicle who charges that vehicle on a regular basis, maybe on a daily basis, some technology can provide a charging profile for that vehicle so that instead of plugging it in and it immediately starts charging until the battery is full, that it does that according to a different profile, which has been designed to align with the local grid and the local grid conditions.

David Roberts

And I think, maybe you agree, like, the response to time of use will be much greater, I think, in the eventual case that almost all of this is automated. Do you agree?

Lucy Yu

Yes, yeah. It may sound a bit jargony, but we sometimes refer to implicit and explicit flexibility. So, implicit flexibility being almost as you describe, it's kind of automated and sort of operating in the background, whereas explicit might be slightly more kind of ad hoc. It may be a little bit less automated in its nature. So, I think you're right, though, that ultimately this automation of a variety of different technologies — so, you know, I'm talking about electric vehicles, but the households of the future, under an electrified scenario, you know, they might have an electric vehicle, they might have rooftop solar, they might have a home battery —

David Roberts

And a smart panel that makes it all talk to each other.

Lucy Yu

Yes.

David Roberts

And it always has kind of struck me that because you have a kind of a single utility in a single market. You know, one of the things I wanted to touch on is VPPs where — we're out of time now, but maybe we could just touch on this quickly. You know, one of the weird things going on right now is that we have this sort of private market in VPPs. We have these private aggregators, and their relationship to utilities is somewhat odd.

My instinct has always been like, "This just seems like something utilities ought to be doing. Why is there a private market in this?" And so, you have a single utility in the whole country? Like, is there some future where sort of all of the UK is a big VPP?

Lucy Yu

When you say we have a single utility, what are you referring to?

David Roberts

Wait, maybe I'm just wrong about this. Isn't the National Grid the utility for the whole UK?

Lucy Yu

Okay, so I'm thinking of a retailer such as Octopus Energy as a utility.

David Roberts

Right. You have retail competition.

Lucy Yu

So, yeah, you're precisely right. We have retail competition. We did see a lot of retailers effectively kind of drop out of the market after Ukraine. This is because there were a number of retailers that maybe hadn't hedged effectively. They hadn't anticipated or kind of hadn't planned for the increase in energy prices that we saw. And effectively, when that happened, it meant that their businesses were no longer viable. So, a lot of retailers then dropped out of the market. I think it was sort of over 30 in a relatively short space of time.

And many of them were smaller retailers. But yeah, we have competition in the market.

David Roberts

So, do you have a VPP market starting up? Like, are people, are you that far along? I mean, you kind of need electrified homes to do that?

Lucy Yu

Yeah, I mean, there certainly are companies who are effectively sort of operating VPP type models in the UK. What I don't know is what the sort of growth figures for those sorts of businesses look like. But I think that anything that will create sharper signals in the market, so whether that is by place and time, we already are starting to have more sort of digitalization generally in the energy system, if you like. So we're getting more of the raw ingredients needed to be able to create these types of businesses and I suppose more importantly, to innovate on propositions to customers.

David Roberts

Right, okay. Well, we've gone over how we're trying to cover an entire country. Any final sort of, like, I guess, I wonder, just sort of by way of wrapping up. You know, like in the US, you know, it's at the very least up in the air, what the future, what the political future of decarbonization is. I mean, you know, you can find people who say, "The market marches on, there's no way they can stop this." But I think people underestimate how much damage a government can do if it really sets out to do damage. So I wonder, what's your take on UK decarbonization? Like, are you worried about the larger effort sort of fragmenting and becoming polarized and bogging down, or do you think that this is sort of like has a momentum of its own that's in some sense resistant to politics?

Lucy Yu

It's a very good question.

David Roberts

Impossible to answer, but good.

Lucy Yu

It's hard to answer. But, like I said earlier, we have to be mindful that what the polls tell us is perhaps different than what some of the media in the UK might present. So, the polls do tell us there is good support for this. Like I said, I think around 76% of the public is in support of green policies. I also think there is a real opportunity for the UK, and I would say Europe as well, actually. So, coming back to your comments about the situation in the US, and I won't talk too much about that, but I do think what that potentially does is open up more opportunity for the UK and Europe.

So, the UK and parts of Europe can certainly offer a home to those who maybe, at the moment, feel like they can't do their best work in the US.

David Roberts

Well, we're firing all our best scientists and engineers, so it's a real buyer's market for smart people right now.

Lucy Yu

So, I don't think we should be too pessimistic.

David Roberts

Part of what's happening is the UK and the EU are starting to think more seriously about their own defense just because the US has become unreliable. So, I sort of wonder what the manifestation of that will be in the decarb world if they try to sort of like cut ties a little bit and become a little bit more self-sufficient in that respect too.

Lucy Yu

Nobody has a crystal ball, right?

David Roberts

I sure would like one right now.

Lucy Yu

I mean, what you just said about defense, we have something called the National Wealth Fund in the UK, and I suppose it's our closest equivalent to a sovereign wealth fund. I would say it maybe doesn't quite share the characteristics of some sovereign wealth funds around the world because it is probably less about just investing for the highest returns. But I think one of the things that it might also do is perhaps invest in newer or more experimental kind of technologies and things in order to try to get them closer to commercialization. So it may do that sort of thing.

Traditionally, though, the remit of that fund — so it came about through, it used to be the UK Infrastructure Bank and it is now effectively the National Wealth Fund. And when it was the UK Infrastructure Bank, it had a mandate to invest in infrastructure in five sectors. So those were clean energy, digital transport, water and waste — from memory. And certainly, one of the more recent announcements by our most senior finance minister in the UK was that she wants to effectively amend the terms of the mandate or the terms of the National Wealth Fund so that it can also spend on defense, the defense sector.

And I think this is partly because, for the reasons that we're all very familiar with, countries are thinking about how they can increase their national spending on defense. And that has to come from somewhere. We are not awash with government money here in the UK, so certainly that does raise a question about what is the trade-off, if you like, almost, or what will that mean for some of those clean energy projects that might have been.

David Roberts

Maybe also a good time for clean energy proponents to be making the argument that defense and renewable energy are not entirely separate things. Energy self-supply is big and same with supply chains and all that stuff too. Thank you, Lucy. This was an impossible task I roped you into, but I think we did a credible job trying to do some of the high points and maybe we'll have you on again in the future.

Lucy Yu

So much more we could have covered.

David Roberts

Get a little bit more nitty-gritty about the demand-side stuff, which of course, I love.

Lucy Yu

Yes, that would be great.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.

I'm joined by “Texas Doug” Lewin to unpack the fascinating contradictions of a state that inadvertently became the nation's renewable energy powerhouse through a free market electricity system that its politicians now seem bent on strangling. Bills before the legislature would require solar and wind developers to also build gas plants, impose extreme setback requirements only on renewables, and potentially cripple the state's economy just as data centers drive unprecedented demand growth.

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Text transcript:

David Roberts

Hello, everyone, this is Volts for April 16, 2025, "What in tarnation is going on in Texas?" I'm your host, David Roberts. Texas is an endlessly fascinating energy transition story. Years ago, its conservative legislators put in place the closest thing to a free market in electricity in the US, which they have proudly shielded from federal interference. And it has worked to keep prices low and production booming.

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Lately, what that market is producing is gigawatts and gigawatts of clean energy. Together, wind, solar, and batteries constitute about 90% of the new electricity capacity installed in Texas over the last several years. Without any particular intention to do so, it has become America's renewable energy pacesetter.

But Texas conservative legislators, having created this miraculous market, are now souring on its results. For ideological reasons, they remain committed to fossil fuels — more so, it seems, than to the free markets they used to talk so much about. As we speak, they are debating several bills that would intervene in the market and have the effect of sharply curtailing clean energy development.

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Is Texas going to embrace its electrified future or cling to the fuels of the past and let all that economic growth go elsewhere? To discuss that, I am joined by Doug Lewin, widely known in the clean energy world as Texas Doug. He's been closely tracking energy trends in Texas for decades, including some work in the legislature and with several private companies. He is now a consultant and runs the excellent Texas Energy and Power Newsletter and the Energy Capital podcast, to which I have become an enthusiastic subscriber. Can't wait to talk to him.

All right then, with no further ado, Doug Lewin. Welcome to Volts. Thank you so much for coming, David.

Doug Lewin

Thanks so much for having me.

David Roberts

This is overdue, Doug. We've let Texas news build up.

Doug Lewin

There's a lot of Texas news.

David Roberts

And now, we've got a giant reservoir of Texas news to get through. I thought a good place to start for people who have not been — call it like the last five years post-2020, there's just been a lot of stuff happening in Texas in the Texas energy sector. And, you know, I'm not sure everybody's paying close attention or tracking it. So maybe I thought we could just start with some scene setting, just sort of tell us the story of the last five years.

What's been happening on the Texas grid in the last five years?

Doug Lewin

I mean, first of all, Dave, I'm exhausted. There's been a lot over the last five years. Too much. And again, thanks so much for having me. I am a big fan of Volts and a subscriber there and really appreciate your work. I've learned so much from listening to the podcast, listening to you on Grist, et cetera. Yeah, look, five years, the last five years, that's an interesting time period to pick. Like most of us who work on Texas things, we mark time by Winter Storm Uri, which was just about four years ago, a little over four years ago.

That happened within that five-year period you picked. And that really has changed quite a bit and what's happened here. But I think we could talk about Winter Storm Uri. I think we probably should at some point. But yeah, over the last five years, we have gone from effectively having no battery energy storage on the grid to having over 10,000, actually today right about 11,000 megawatts of storage. At the time of Winter Storm Uri, we were at 200, four years later at 11,000 megawatts. Yeah. Solar at the time of Winter Storm Uri. You know, five years, you're talking like — I'm doing this from memory — but like 3 or 4,000 megawatts, we're now up to 30,000. So a 10x increase in solar in the last five years.

Wind has grown, but not at nearly that kind of rate. Five years ago, we were already at somewhere around 30,000 megawatts.

David Roberts

Yeah, wind's been pretty healthy in Texas for a while, right?

Doug Lewin

Yeah, yeah, yeah. Big growth in like the mid-2010s, even early 2010s, but in the 2020s, much less growth of wind. So basically, where we are right now is an easy way to think about it while it lasts — it'll be different in a few months — but right now it's about 40, 30, 10. 40 gigawatts of wind, 30 gigawatts of solar, 10 gigawatts of storage, a little bit more. So like 80 or so combined, which is, you know, if you had said to me, Dave, five years ago, "Hey, in 2025, you're going to be at 80 gigawatts of combined renewables and storage," I would have said, "I love your optimism, but I think you're a little crazy." But here we are.

David Roberts

I mean, I guess what people would want to know though is like, did they do that on purpose?

Doug Lewin

No, I don't think so. Well, let me be clear. Actually, I think what was done on purpose is, you know, 25 years ago — and I think it's important to give credit where credit is due here — the legislature at the time, 1999, and Senate Bill 7 that opened the system to competition. Some will say deregulation, but there's actually quite a bit of regulation on the system. And we should talk about —

David Roberts

I prefer restructuring.

Doug Lewin

Restructuring is exactly where I was going to go. It's exactly right. There was a decision made that the lowest cost resources in Texas would win and that we would pay only for resources that actually generate. We weren't going to have a capacity market where we'd pay for a bunch of plants to sit around idle. So that was a policy choice. And I don't think anybody — the only policy choice for renewables was made in 1999 in that restructuring bill when a very modest renewable portfolio standard was established. I believe the original number was 2,000 megawatts.

David Roberts

Wasn't that under Governor Bush, as I recall?

Doug Lewin

It sure was.

David Roberts

Crazy.

Doug Lewin

Yep, yep, it absolutely was. And Governor Bush was a supporter of that at the time. Texas, at that time, was still a mixed government. There was a Democratic speaker of the House, Pete Laney.

David Roberts

Wild.

Doug Lewin

Yeah, and a Republican Lieutenant Governor at that time. It was Rick Perry who then ascended to the governorship when Bush was elected president. And so that's when that bill passed in 1999. And really, it was partly because there was a Democratic House and they really wanted to build as wide a coalition as possible for Senate Bill 7. So there was not only a renewable portfolio standard, but there were some really important consumer protections. There was an energy efficiency resource standard, which was one of the very first in the country. And so that was a policy choice.

But, Texas far exceeded that goal. In 2005, they increased the renewable portfolio standard up to about 5,000 megawatts, again with like a 10-year period to achieve it, just like with 1999. And then we raced past that as well.

David Roberts

Yeah, I think it's fair to say, looking back, that it was the market structure that encouraged the low-cost power rather than the RPS that did most of the work here. Right. You think that's fair?

Doug Lewin

I think that is fair. I think the RPS was kind of a first mover, but once that first movement happened, then yes, market dynamics and what is called in ERCOT economic dispatch. Right. There's no preference. Like in some states, you have environmental dispatch, you give a preference to a lower emitting source. We do not have that in Texas. It is only the lowest cost that is dispatched first and that as renewables — you asked about five years ago, what's changed in the last five years? The lines kind of cross. Right. Where renewables, particularly solar and storage, became cheaper, and they've really started to win out.

David Roberts

That explains, I think, the shift from building out a ton of gas to building out a ton of renewables. But what explains just the speed, the quantity? You've written that Texas has added over 44,000 megawatts of power in the last few years, which is like a 35% increase over its base. It's adding a gigawatt a month to the grid. What explains that speed? Is that just the market, too? Is that just market dynamics, too?

Doug Lewin

I think it's market dynamics coupled with the fact that it is Texas and load growth here — you know, the load growth story is everywhere, right?

We're going to get to that. But, like again, you asked about the last five years. You know, even before you get to data centers, and what is AI going to do to the grid? Texas has seen an increase in electricity relative to the United States, something like 15 to 20% more energy growth here than in the rest. In other words, if you take both of them at like zero, five years ago, Texas is like 15, 20% more electricity used now. The rest of the country is basically flat over the last five years with some small amount of growth.

David Roberts

What on earth, what explains that?

Doug Lewin

Well, I would explain it a couple of ways. Number one, and I think this is really the place to start, is industrial load growth, much of it from the electrification of industry.

David Roberts

Interesting.

Doug Lewin

So, yeah, as a matter of fact, the first podcast episode I did of the Energy Capital Podcast was with former Commissioner Will McAdams. He was a PUC commissioner, the first appointee by Governor Abbott after Winter Storm Uri. The other three commissioners had all resigned. He was the first one appointed. And I asked him on that first episode, "What was something that was surprising to you coming out of Winter Storm Uri?" And he said, and I'm paraphrasing here, you can go back and hear his exact words. But basically something like: We were surprised by the amount of industrial electrification that had already happened.

So, you're already starting to see industries that are looking at the grid and going, "Man, there's a lot of hours out of the year where prices are like zero or ten dollars a megawatt, right? Like basically a penny a kilowatt hour. Why do we want to keep burning gas on site if we could connect to the grid?"

David Roberts

Let's highlight this a little bit. Those industrials are directly comparing gas and electricity onsite combustion of gas versus grid electricity. And electricity is winning on price, purely on price.

Doug Lewin

Well, and I think what happens for a lot of these folks, it's kind of like you remember the early days of when Walmart started talking about sustainability. It's like at first it was kind of greenwashing, and then they get into it and they're like, "Wait a minute, oh my goodness. Like there's a lot of benefits to the bottom line here. This is incredible!" And I think that's a lot of what happened with industry. So we now have a steel mill in Texas that's grid-connected. We have, Dave, an LNG export plant that is entirely powered off of the grid.

It is a 700-megawatt load. It is roughly the load of Waco or Lubbock, you know, mid-sized cities in Texas. So yeah, I would say that that is one of the major ones. As a matter of fact, the utilities, you know, a lot of people will say here, well, there's so many people moving to the state, our population is growing. And that is true. We get about 1,000 people a day roughly net in migration over the last couple of years. But you know, what we have seen in the data, and the utilities do publish this data annually, what we're seeing is that the residential numbers as far as power demand are not actually going up that much.

And I attribute a lot of that to federal standards. Right. It's really hard to buy an incandescent light bulb anymore. HVAC 14.5 SEER or whatever the exact numbers, right. So, I think even though there's more people moving here, residential load is basically flat. But industrial load, of all that load growth I was talking about a little while ago, something like 80 to 90% of it is large commercial and industrial load.

David Roberts

Interesting. So, really, this is like meat and potatoes, economic development stuff. So briefly, we've got a lot of bills to discuss. But briefly, I want to discuss Uri. These freezes are not unknown in Texas, but they're, I guess, getting relatively more likely. And as listeners probably vaguely remember, this winter storm, Uri, caused a bunch of brownouts and blackouts in Texas. As I recall, the Texas grid was quite close to completely shutting down, which would have required like black start type stuff, which would have been like an exponentially larger economic blow, etc.

So, maybe just tell us, because if you listen to your sort of off-the-shelf Republican Texas legislator, he'll say, "Look, we're building out all these renewables and then the next thing you know we're having a crisis. Voila. What we need is more gas." I think that's what they're trying to do. So, what is the real story there? What is the right lesson from Uri? And, you know, haven't there even been like a subsequent cold snap since then? Or am I, am I making that up?

Doug Lewin

Let's start with what happened during Winter Storm Uri. Why did the lights go out? Every generating resource, except for solar, interestingly, was below its targeted output level in extreme weather conditions. And gas and coal were actually the worst performers at like 50% of where they thought they were going to be. Gas plants had several problems. One was they were freezing. A lot of them were offline for freezing, but many of them that didn't freeze and were able to operate could not get fuel.

David Roberts

The coal piles were freezing, as I understand it. Right.

Doug Lewin

And coal piles as well. Yeah, yeah. Coal's performance was also very problematic. And of course, there were problems with wind turbines. And while solar exceeded where they thought it was going to be, they thought it was going to be quite low. So it cleared a very low bar. The state has four nuclear units, one of those went down as well. So you lost 25% of your nuclear output. So literally, every —

David Roberts

Was that from freezing?

Doug Lewin

It was freezing.

David Roberts

And the turbines, just out of curiosity here, turbines going down, extreme cold. Is that them freezing up, or is it something... There's just not a lot of wind when it's that cold? What's the, what went wrong with wind?

Doug Lewin

Yeah, I mean, ice is the big problem.

David Roberts

Ice, right.

Doug Lewin

Yeah, icing is really — and they can do some de-icing and there's all sorts of things that can be done to wind turbines for that. Like if you're in North Dakota, you're going to do — I mean, this is, this is part of the problem, right? This is again, not just about wind, not just about any generating resource. The same with gas. If you're in a northern climate, you're generally going to have structures around a lot of the infrastructure. But in Texas, we don't. Because if you put structures around it, then you got to cool it when it's 105 degrees outside.

So, they leave it to the open air. And that, of course, causes problems in the winter. So, it's a system that was built for summer. I mean, it's always been a summer peaking system. That is now kind of in doubt. Right. As to whether or not we're an actual summer peaking system or winter peaking system. So, this is the other key thing during Winter Storm Uri that's not talked about enough: gas supply freezing was a major, major problem. And that problem really hasn't been fixed. And we can talk more about that if you want.

And then, you have power plant freezing. There have been major improvements made there because ERCOT now inspects every single power plant in the state every three years. We have seen in subsequent winter storms, none of which have been as powerful as Winter Storm Uri. Average like, you know, the worst ones were around like 13 to 15 degrees average statewide low temperature, Uri was 6. The average statewide low was 6. And then, the third main thing that caused Uri was excessively high demand caused by inefficient heat in poorly insulated homes. It's a problem in Texas, but it's a problem throughout the south is that you have resistance heat.

It's basically a toaster oven or hair dryer technology, sized to heat the entire home or apartment. This is really a problem in apartments where, generally, apartment developers will, just as a standard practice to this day, Dave, like even in 2025, we're still building apartments with resistance heat. This means that every little apartment, 600, 800 square feet, is a 5 kilowatt load. That means they're basically the same as a 3,000 square foot home up in the suburbs of Dallas on a 100-degree day, that they're using the same amount of power on a winter day. So, demand was another really, really big problem with Winter Storm Uri.

And that has also not been addressed.

David Roberts

What did they just, really briefly, like, what did they do? What came out of it tangibly? What changed?

Doug Lewin

Two major things, I'd say there's certainly more. Well, let's say three. One, the power plant winterization I was just talking about. I think that that is extremely significant. They did do this thing where they did this whole power supply chain mapping exercise because part of what happened was — so first the gas fields froze. This started happening on February 9th, 10th, 11th, like three, four, five days before the power went out. Steady, steady increase in gas going offline or I should say decrease in gas production and output. And then once the power started to go out, then you started to have gas infrastructure like compressors and things like that.

They started getting cut off when the power was cut off. So, we ended up in a downward spiral. Now, a lot of the oil and gas folks said that there was no gas problem until the power went out. That is empirically false. And that's in the NERC and FERC report, in the UT Energy Institute report. They show there were 40% reductions in gas output before the power went out. Then once the power went out, we got down to where at the depth of the problem, around February 16th, at the worst moment, we were down 85% of the gas output out of the Permian was reduced.

So, yeah, I mean, just like really, really extreme. And then I would say the other big thing that came out of there was the legislature decided in their infinite wisdom that they would subsidize heavily new natural gas plants.

David Roberts

And this is the fund that we're going to get back to later.

Doug Lewin

Exactly, exactly. So that's a pretty big change. And I will say there was one really good thing in the Texas Energy Fund, and it was a constitutional amendment. I did not vote for it. I voted against it. But like 65% of Texans voted for it. I actually had to think about it for a minute because there was $1.8 billion in there for microgrids, or what they call the Texas Backup Power Package at critical facilities. Yeah, it's $1.8 billion. Not a small amount of money for hospitals, water treatment facilities, nursing homes, police stations.

And unfortunately, two years later, that still has not been implemented.

David Roberts

But why, why did you vote against it?

Doug Lewin

What I voted against was, it was a $10 billion fund. $7.2 billion was for gas plants. And I'm not — look, I actually think we're going to build gas plants in the state. And if they're peaker plants, the emissions aren't that huge a deal. I'm not generally for building new gas infrastructure, but I think with this load growth story, we're going to get some. Whether we like it or not. The bigger issue is just, should the state act as a bank? You know, what happens to the energy-only market if now you have the state subsidizing gas to this degree?

And if you're a gas plant developer, are you ever going to build in Texas unless the legislature gives you more money? Like, probably not, right? So, I just thought it was too distortive. But that $1.8 billion in there was really attractive and I almost voted for it.

David Roberts

Interesting. So, okay, one more piece of scene setting which we've segued into quite well here, which is demand projections. They're crazy everywhere.

Doug Lewin

Yes.

David Roberts

Particularly crazy in Texas.

Doug Lewin

Yes.

David Roberts

So, tell us a little bit about what they expect. And is it mostly data centers?

Doug Lewin

So, the answer to the last question is yes, mostly data centers, but there's quite a lot of other loads in Texas that are looking to connect to the grid, including, by the way, oil and gas loads because the oil and gas drillers want to connect to the grid for the same reason we were talking about industrial electrification. Right. Just think of it as another industrial source. And right now, if you're out in the Permian putting a rig, you know, and drilling, you're going to be using generally diesel generation, one of the most expensive ways to produce power.

David Roberts

Yeah.

Doug Lewin

So, there's a real push to build transmission in Texas, and that push is mostly coming from the oil and gas industry.

David Roberts

Electrify oil and gas.

Doug Lewin

Electrify fracking operations, yeah. Look, I mean, look what's happening right now, right where you're just now we're recording obviously on April 7th, so like, you know, when this comes out in a week, this should generally be the same, but things change so fast. I just want to say that because I don't want to look totally stupid when it comes out. But right, like this week we're seeing projections of oil for 2026 in the $60 range. The Federal Reserve Bank of Dallas does this survey of oil and gas drillers and the break-even point in the Permian is right around 63, 64 bucks for a new rig.

So, if the price of oil globally goes down to $60, people in Texas are going to be hurting. Local government, state government, like that, is a big part of the economy. And if you can actually connect your oil and gas drilling to the grid, that lowers your cost, that might get you below that break-even. So, it's really, this is really like, I think, Dave, like the main story about Texas right now is that like the reality of renewables are starting slowly to catch up to the business class, the political class. People are starting to get their heads around like, "Oh, maybe this isn't a cage match of oil and gas versus renewables. Like maybe renewables actually are super important for economic growth."

Like you said earlier, we've added 44 gigawatts over the last four years, and 90% of that is from renewables. Where would our economy be if we didn't have solar storage? Where would we have been last summer, 2024, which was the sixth hottest summer in Texas history? Where would we have been in 2023, the second hottest summer in Texas history, without all that solar and storage on the grid?

David Roberts

Some people are making this leap. Some people, the business community, let's say, will discuss whether that revelation has reached the legislature yet.

Doug Lewin

Yeah, I think it's reached a lot of legislators. There are some that are laggards and are not quite there yet. But let's come back to the load growth question because I think it's really, really fascinating what's happening right now. So, in April of last year, ERCOT, in a sort of, it's super watched by stakeholders, but not by like the popular press or the general public. It's a group called the RPG (Regional Planning Group), and they put together these transmission plans and I got texts from a few different people that day like, "Hey, are you watching this?"

So, I tuned in and ERCOT is projecting their April last year. So, just about a year ago, that load in 2030 will reach 152 gigawatts. Now, our peak at that point was right at and it still is right at about 85 gigawatts. So, going to 152 in five years. At that point, it's six years. Just extraordinary, extraordinary.

David Roberts

Almost doubling.

Doug Lewin

Yeah, almost a doubling. Now, they have just almost literally today, the end of last week, and there's an ERCOT board meeting going on later today and they've started to revise those and now they're saying something like 137 by 2029. But here's the key to this, though, and how to put all these numbers in some context. There's some like, history in context behind these numbers. During the 2023 legislative session, the oil and gas industry pushed for a bill that was House Bill 5066 and this was the bill that started the planning around those transmission lines going out to the Permian Basin, which the commission is actively considering right now in May and hopefully will result in the first 765 kilovolt transmission lines ever built in the state of Texas.

That decision is coming, but not here yet. And again, the oil and gas industry kind of wanted that. So they put into law some requirements for ERCOT to start really considering new loads. This included this process they call officer letters. So if you're considering connecting to a utility's infrastructure, then you would tell the utility that. And then the utility, through an officer letter, an officer of that utility would sign something to ERCOT saying, we're getting this much load considered. Well, what they didn't know in the 2023 session was that this whole data center boom was about to happen.

Or maybe not the boom, but the speculative boom. Whether it happens or not, we don't know yet. I think for the record, it probably will. So then you get to the point where these officer letters are just pouring in and ERCOT is taking all of those and counting them in that number for 150. So what they put out today is if 50% of those officer letters come true, we would be somewhere around 121 gigawatts at the end of the decade. If 25% of them come true, we'd be at 113. So I think 113 to 121 is probably where we're going to be in five years.

David Roberts

Which is still crazy pants.

Doug Lewin

It would put us in the range of the kinds of growth we haven't seen in the state since the 1960s, when air conditioners were finally hitting the grid.

David Roberts

And the hyperscalers, are they particularly attracted to Texas for the market, the climate, the energy mix? Why do they love Texas so much?

Doug Lewin

All of the above. Right. I think first and foremost. Well, let's say 1A, 1B: I mean, availability of renewables is a huge draw to a lot of these folks. Right. I mean, it's just, it's cheap power. Now, does that mean they're gonna be 100% wind and solar? Of course not. They're going to have batteries. They'll probably have some gas. We've already seen, I mean, Project Stargate. Which President Trump talked about in his very first day in office. Like, what did he spend his first full day in office doing? Talking about Stargate, which is this, what, OpenAI and Oracle, SoftBank thing.

And where's the first site? Abilene, Texas. Right now, they're probably going to have some gas there. They're also going to have a lot of renewables because. And this is again, where I —

David Roberts