Last week’s election was a blue wave all the way down the ballot: Democrats took the House and Senate, went from 16 state trifectas to as many as 22, flipped utility commissions, and rejected data centers almost everywhere. Caroline Spears of Climate Cabinet, which won more than 100 of its 120-plus races, joins me to sort through the statehouses, PSCs, and ballot measures. Then we ask the harder questions of whether these new majorities can actually bring down costs and what it all means for climate and energy policy.

If you keep a sharp eye on the news, you may have noticed that there were some elections last Tuesday.

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They were, to use the newly coined term, a bluenami. Democrats took the House by a more than 30-seat margin. Depending on how the Alaska and Mississippi races turn out, they could end up with 56 seats in the Senate, something nobody, and I mean absolutely no one, predicted. Dems are probably going to end up with 30 governorships, including in every swing state, representing more than 75% of the US population. They went from 16 state trifectas — governor, state house, and state senate — to, if Arizona goes their way, 22. And those are just the top-line changes — there’s plenty to discuss further down the ballot as well.

It is a seismic result, the biggest and most dramatic political reversal of my lifetime.

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To explore all of it, I’m happy to welcome Caroline Spears of Climate Cabinet back to the podcast. Caroline’s post-election visits — this is her third — have become one of my favorite Volts traditions, and boy have we seen some shit over the years.

We’re going to discuss the scale of the bluenami, some of the lesser-know state and local races swept up in it, how it might translate to climate and energy policy, what it all portends for 2028, and much more. Let’s jump in!

Chapters

• 00:00 – Introduction

• 02:20 – How Climate Cabinet’s races went

• 04:31 – The national results and historic firsts

• 07:21 – Trifectas 1: which states flipped

• 12:25 – Trifectas 2: Pennsylvania and going big

• 18:21 – Trifectas 3: North Carolina, redistricting

• 22:47 – Regulators 1: Georgia’s new majority

• 26:09 – Regulators 2: Arizona and Louisiana

• 28:32 – Regulators 3: Texas Railroad Commission

• 32:22 – Undervoting and other down-ballot wins

• 38:05 – Data centers 1: the ballot-box backlash

• 40:27 – Data centers 2: is clean energy next?

• 45:09 – Ballot measures 1: Michigan and Colorado

• 49:13 – Ballot measures 2: Ann Arbor, Eugene, AZ

• 55:56 – Housing and transit

• 1:01:44 – How states can cut energy bills

• 1:08:46 – Quick fixes, lasting fixes, and EVs

• 1:13:11 – Looking ahead to 2028

• 1:20:14 – Final thoughts

Resources

People & Organizations

• David Roberts (Substack - Bluesky - Twitter)

  • Volts (Apple Podcasts - Spotify - YouTube - LinkedIn - Instagram)

• Caroline Spears (LinkedIn)

  • Climate Cabinet (Website - LinkedIn)

Company & Industry News

• Democrats’ Big Statehouse Wins Could Transform Climate and Energy Policy

• Democrats Win Control of Georgia’s Energy Regulator

• Rosenthal Wins Texas Oil and Gas Regulator Seat

• Voters Reject Data Centers in Local Ballot Initiatives

Books & Articles Discussed

• This One Weird Trick Can Help Any State or City Pass Clean Energy Policy

• Lawsuit Filed Against Money Out of Politics Proposal After Michigan Voters Pass Initiative

• Colorado Right to Buy Natural Gas Measure Fails

• Ann Arbor Rejects Public Utility Proposal

• Will a Second US City Tax Billion-Dollar Firms to Fund Clean Energy?

• Early Results Show Arizona Voters Split on Prop 141 Vehicle Mileage Tax Ban

• Transit Sees Big Wins Across U.S. in 2026 General Election

• California Appears to Reject Prop. 45

• Ohio Supreme Court Allows Ashville Referendum Against Data Center Project to Move Forward

Related Volts Episodes

• So, there were some elections. How’d they go?

• Pay attention to the most important political race of 2025

• A key Arizona race will test clean energy’s electoral power

• What’s the deal with the Texas Railroad Commission?

• Ann Arbor’s experiment with a new kind of utility

• Why is NERC so worried about data centers?

• What YIMBYs are learning from their victories across the country

Transcript

David Roberts: So let’s jump in. With no further ado, Caroline Spears, welcome back to Volts.

Caroline Spears: Thanks for having me, Dave. Happy to be here.

David Roberts: What a day, what a week, what a time to be alive, Caroline. Let’s start here. I think the audience knows at this point what Climate Cabinet does. You, early in election cycles, do some analysis, pick some state and lower-level races that you think matter for climate, and then get involved in those races, support those candidates, support those campaigns. So let’s just start here. How many total races were you involved in this cycle, and how many went your way?

Caroline Spears: Well, I have good news for you and bad news for you, Dave, which is that we were involved in over 120 races across more than 10 states on Tuesday. We won over 100 of them. We lost 10 of them, and we have 10 still too close to call. And the good news is that’s a win rate of over 90%.

David Roberts: That seems like pretty good news.

Caroline Spears: That seems like good news. The bad news is that a year ago, I went on this pod after 2025 when we also had a great win rate, and I said, “Dave, we’re gonna go further. I promise you that we try to pick even more challenging races this year so we could keep expanding the map.”

David Roberts: Yes, ’cause too high of a win rate would suggest that you’re not taking enough chances. We discussed this last time, and you said, “All right, next time we’re gonna push, we’re gonna take even bigger chances. We’re gonna push even harder.” Apparently, you just can’t push hard enough to get ahead of the blue nami.

Caroline Spears: It was wild. Last year, races flipped that were R+10 districts. Historically, that means in the average of the last 10 elections, people voted R+10, and we went further. We went R+16. We also tried a nonpartisan bipartisan strategy where we supported a bunch of independents. Dave, we took risks that in January, I was looking at our political director saying, “I think we’re crazy, but let’s do it.” Almost all of those candidates won on Tuesday.

David Roberts: Crazy, crazy times. So I know that Climate Cabinet focuses on state-level races and below, not federal politics per se. But just quickly here at the top, let’s just check in. Democrats now have more than 250 seats in the House. That was about 25 flips from Republican to Democrat. I think that is the biggest gain in the House since 1990, 36 years ago. Dems are closing in on, they have 54 certain seats in the Senate. There are two outstanding races, Alaska and Mississippi. Mississippi looks like it’s going Dems’ way. Alaska, I think, is still a little more uncertain, but I think we can agree no one thought 55, 56 senators. No one was saying that. That is not filibuster-proof, but flirting with it. Texas elected a Democrat in a statewide race for the first time since 1994.

Caroline Spears: And they elected Democrats in statewide offices in every statewide office.

David Roberts: Yes, every statewide office in Texas went blue. Every one that was up went blue, after no statewide Dems since 1994.

Caroline Spears: Yes. As someone born and raised in Texas, I will say that was my personal biggest shock of the night.

David Roberts: I mean, my personal crack rock is watching these reaction videos of groups of people finding out that Talarico won, and then shortly thereafter, in the following seconds, finding out that Hinojosa won. A lot of joy. A lot of joy there in Texas. And finally, I’m not gonna spend a lot of time dwelling on this, but Keisha Lance Bottoms, the very first Black woman ever elected governor in the United States. Gina Hinojosa, Texas’s first Latina governor. Becerra in California, California’s first Latino governor. Deb Haaland in New Mexico, the first Native American woman governor. Chris Pappas in New Hampshire, the first openly gay man elected to the Senate. Abdul El-Sayed, the first Muslim senator. Juliana Stratton now joins Lisa Blunt Rochester and Angela Alsobrooks, making three Black women in the Senate at once, a historic first. And Hakeem Jeffries is in line to be the very first Black speaker of the House. So on top of everything else going on, an extraordinary win for diversity. DEI’s back.

Caroline Spears: Oh my God.

David Roberts: Okay, let’s talk trifectas. As I said, previous to this election, Dems had 16, where they controlled the governorship in both houses. We are now flirting with 22. Which of those new trifectas did you anticipate, and which one are you most surprised by?

Caroline Spears: Well, Dave, back in January when we looked at the map for this year, we said we think there’s five opportunities at trifectas in November with big clean energy and climate stakes. So we thought about Minnesota and Michigan, and those were our two kind of easiest trifecta states on the map. The reason we put them on our map is they passed 100% clean, they passed transportation, electrification legislation back when they had a trifecta. When they lost it, we had to do two years of defense as people tried to roll back every single one of those bills. So we were looking at...

David Roberts: In Minnesota mainly you’re talking about, or is that...

Caroline Spears: Minnesota and Michigan. It was rollback bill, rollback bill, rollback bill. That’s been the last two years. We were really hoping to get those back and be able to make progress in building the clean energy economy instead of dealing with all these attacks on the other side. We also looked at Pennsylvania, Wisconsin, and Arizona, and we said, “Wow, all three of these look very challenging, but we think they’re winnable this year. Let’s go ahead and get in early.” I would say that Wisconsin was sort of in the water. A lot of other people were also thinking about that.

I had a lot of people tell me in January, “Arizona and Pennsylvania, you’re crazy.” As I promised on last year’s episode, we said this is the year to take... We have to push. Let’s take some risks.

David Roberts: Big swings. Big swings.

Caroline Spears: Yeah. Let’s take some big swings, and I was hoping to kind of flip one out of three of those states. That was my goal. And then all three went. Historic. First Dem trifecta in Arizona since 1966. That’s what happened on Tuesday.

David Roberts: Wild, wild. And Wisconsin, I mean, all of these individually are amazing stories, but just shout-out to Ben Wikler in Wisconsin. This long, lonely fight to drag Wisconsin back from the wilderness has been going on for over 10 years now, and just to see it culminate like this is really special.

Caroline Spears: I remember I read an article back in 2018 about Wisconsin from a wind energy developer who said, “We are in a state where we’re manufacturing wind turbines in this state, and we’re exporting them to other states because our state government doesn’t want us to build those jobs here.” That’s where we were from a clean energy perspective in Wisconsin.

Arizona, very same way. Arizona’s how I decided to start Climate Cabinet, because at the solar company, we were building more projects in Massachusetts than we were in Arizona. It’s the sunniest state in the country, and that’s just shows you how kind of this negative leadership was stifling clean energy and climate ambition in those states.

So that’s why they were all on the map. I just can’t believe that all three of them flipped, to be honest with you. But I’m glad we were there.

David Roberts: And Nevada, what? Did you see that one coming?

Caroline Spears: I mean, Nevada was interesting because the legislature was already blue. If you had told me one of these four is gonna flip, I would’ve been like, “Yeah, that’s reasonable.” Well, two out of four, I’d be like, “Well, maybe.” Four out of four, glad we got involved in them, not on my bingo card.

David Roberts: Wild, wild. Longtime Volts listeners and Vox readers will know one of my favorite things I ever wrote for Vox was “Here’s one weird trick to get some good energy policy in your state,” and that weird trick is giving Democrats power. So now we have six new trifectas, which, if you were sort of ranking them by their climate and energy policy potential, which one of these do you think is going to really distinguish itself on climate and energy?

Caroline Spears: So if we’re just going to start with trifectas... Although, you know what? I really wanna include Texas in this conversation. Texas, the governor and the state House flipped. State Senate, there was 30 minutes on election night when I was like, “I can’t believe my eyes.” The state Senate was too close to call. The Senate’s gonna stay Republican, where it is. But adding all of these states, they all have incredible opportunity right now. I would say the biggest kind of improvement from baseline, the biggest opportunity that I’m thinking about is really in Arizona. Again, it should be a solar powerhouse, a battery powerhouse. It’s starting to build those, but they are so far behind their potential in terms of the clean energy economy. Arizona is really on my mind right now. Texas has built a lot of clean energy, but you’ve started to see increasing kind of political culture war motivated pushback against that clean energy in the last few years. With Hinojosa as governor and the House, we’re in a much better spot in Texas as well for the future and how they continue to build. So those are top of my mind right now.

David Roberts: And what about, I’m curious about Pennsylvania because it is an extremely gas-heavy state, and Shapiro is sort of theatrically moderate. He’s one of these guys that wears a big M on his shirt all the time just to make sure you don’t miss it. What size, what scale of action can we anticipate in Pennsylvania? Do you think anything big will come out of there, or is this mostly a defensive play?

Caroline Spears: So Pennsylvania, for that reason, is the state that I got easily the most pushback on this year. The Pennsylvania Senate really early this year, I’m talking in the spring, we were talking to candidates, looking through who was gonna run a competitive race there and supporting... We started supporting candidates so early this year.

David Roberts: And you say pushback, you mean people saying, “This is pointless. There’s no way the Pennsylvania Senate is swinging.”

Caroline Spears: Pushback from the political side, there’s no way it’s swinging. I think a Senate seat hadn’t flipped. We had two flips, but they canceled each other out in ’24. The Senate hasn’t flipped chamber control in 30 years. So the political side, I also got what you said, pushback on the climate side, but here’s my affirmative case for why Pennsylvania’s exciting and there’s opportunity there this year. I think the first is you have to start with where Pennsylvania is right now. They’re a bottom five state in the country for renewables. So you look at all of the surrounding states, you have New York, you have Massachusetts, all of these states that are in kind of that northeast area, they produce more of their electricity from renewables than Pennsylvania does. It only gets 3%. And they also have enormous opportunities with batteries that they’re just not taking advantage of. Because the state Senate has been where clean energy bills go to die for 40 years. Yeah. We already had... And then you talk a lot about housing and transportation and how we need to think about those things. It was either yesterday or the day before, this week has felt like a year. Governor Shapiro’s already announced that funding for their zero-carbon transit and transportation system is on the table, and he’s going to pass it. It’s a top priority for him...

David Roberts: Amazing...

Caroline Spears: ...in the next couple months. So I can keep going to say there’s this other thing, there’s this other thing. There’s a great quote from Senator Lindsey Williams, the transportation chair and a really key caucus leader in the Pennsylvania State Senate. She said, “We need to be brave and lead. There are low-hanging fruits, but what are the ambitious and big things we can get done this session?” That’s her quote about the opportunity next year.

David Roberts: Yeah, I mean, to me, this is the big question. You remember when Minnesota first got its trifecta. They went nuts. They went for it. They were explicit within that caucus, telling one another, “We have power. We don’t know how long we’ll have it. Power is for using. Let’s do it. Let’s go for it. Let’s get big things done.” That is the spirit. That’s what I want to hear. That is the spirit I want. Do you feel like that is the vibe among these state lawmakers in these new trifectas? Life is short. Who knows how long this will last? Let’s freaking go for it.

Caroline Spears: Minnesota’s a great example because before the trifecta in 2022, they had another trifecta about a decade earlier where they went into that trifecta and said, “Well, we can’t overstep. I don’t know how much we’re gonna pass stuff.” They didn’t really pass that much, and you know what? They all lost re-election the next cycle.

David Roberts: Yes, and learned from it.

Caroline Spears: Yeah. I think when voters sent extremely clear message on cost and affordability and how people can show up and deliver for their lives on Tuesday, this is the time for state lawmakers to respond. Voters sent a very intense wake-up call to the entire country on Tuesday. They want big change. Lawmakers who I think respond to that with ambition and with... I think are gonna see good results from voters, good results electorally.

So that’s really what we’re looking for. People want their costs to come down. You can’t bring your costs down that quickly without saying, “Let’s do everything we can to bring costs down.” You and I know that clean energy is the best way to do that. You and I know that clean transportation is the best way to do that, so that’s the opportunity.

I would say the ambition is a little bit different in every state. The dust is still settling, though, as well. A lot of lawmakers, I think there was a quote, I’m gonna lose who said this quote the other day, but he said, “I asked a bunch of my friends to run in districts that we thought were unwinnable as sacrificial lambs, and one of them called me yesterday and said, ‘So do I still have to go through with this?’” And he was like, “Hell yeah, you do. Let’s go.” The dust is still settling, but this is the time when I think you have Senator Williams in Pennsylvania, you have Senator Lauren Kuby in Arizona saying this is the time to get big things done for people.

So you do have individual lawmakers in each of these states who are pushing for ambition and shaping the conversation, and I think that’s really exciting.

David Roberts: I mean, you could say going big will be good for you electorally, but I wouldn’t even go that far. I would just say: look around you at American politics. Nobody knows what’s happening. Nobody knows what’s gonna happen next. Nobody knows anything anymore, so you have no idea what might work or not work. Nobody has any idea about anything anymore, but you’re in office, so YOLO, for Christ’s sake. So 54% of Americans now live in a state with a Democratic trifecta. That is just an absolutely mind-boggling stat that not a single human being several weeks ago would have dared to predict. Oh, and one other little tidbit about the trifecta before we move on, especially gratifying that in Michigan, the guy in the Michigan House who authored the repeal bill that you were just talking about, the effort to roll back their clean energy law, lost. He’s gone. A beautiful thing. Oh, and the North Carolina House flipped. What? For the first time since 2010.

Caroline Spears: And the Senate’s still too close to call. There’s 300 votes, provisional ballots remaining for the state Senate of North Carolina as well.

David Roberts: No kidding. And who’s their governor right now?

Caroline Spears: We have Governor Stein there, Democratic governor as well.

David Roberts: So North Carolina could still theoretically join the trifecta?

Caroline Spears: Yes. We don’t know. We think the provisionals don’t look good enough for that, but we’ll see. Everyone listening to this, pay attention. It’s getting called this week.

David Roberts: Wild. Wild. So theoretically it could have seven new trifectas. Unbelievable.

Caroline Spears: Unbelievable. And in North Carolina, the legislature controls redistricting. It’s been one of the most gerrymandered... North Carolina has been ground zero for some of the worst gerrymandering in any state. What’s supposed to happen is you have a census every decade, and after the census, you redraw the maps to be proportional.

David Roberts: And then you leave it alone for 10 years. That was the way things went.

Caroline Spears: No, this North Carolina legislature loves a mid-district. They try to redistrict every time they can get an opportunity. They’ve redistricted, someone’s gonna know who’s listening, knows the specific answer. I think twice since the 2020 census, at least, redistrict after the census, and then they redistricted again. It’s been multiple times. So they intentionally have tried to avoid accountability to voters over and over again. So the Senate, we’ll see what the Senate lands with.

David Roberts: Yeah, amazing. I think one of the sort of unheralded kind of background stories here, like you say, the dust is still settling, everybody’s still picking apart the implications of all this, but I think one of the things going on in the background is a lot of Democratic worries about election shenanigans, especially in 2028. This sort of worry that Trump wouldn’t leave office, worry that they’re gonna steal elections, worry that they’re gonna do this and that. We now have Democratic governors in every swing state. So there is a real wall for election integrity, basically, against these efforts to pull election shenanigans.

Caroline Spears: Yes. And remember last year when Trump called a bunch of states and he was like, “Hey, for the midterms, can you draw me some new congressional districts so I can win a House majority?” I was in the Texas State Senate committee when they passed that bill out of committee, and the chair of that committee looked directly into the camera and said, “The reason we’re passing this redistricting bill is because we are fans of Donald Trump’s agenda, and we are redrawing these districts in order to give him a House majority next year.” And I think regardless of the party, it’s no way to run a country. And just to say, these state legislatures are incredibly important for drawing the lines for Congress as well.

David Roberts: And I know we’re not mainly here to discuss federal policy, but I do think that a federal bill on gerrymandering reform, basically something along the lines of every state will be divided based on some objective formula overseen by some objective third party council or group. That’s a real possibility now to just taking gerrymanders off the table for good.

Caroline Spears: You’re gonna have to get a constitutional law person on this podcast. I’m gonna be honest with you, I state, think about climate and clean energy a lot. I kind of live in this lane. Because I track states so much and I think about how states try to do states and federal and local, there’s this constant jockeying and who has power over what. And we’ve seen some of these states especially intentionally kind of try to strip power away from cities that try to pass clean energy or climate laws. So I’m really thinking about how states...

David Roberts: Yeah. I mean, you saw it in Tennessee, you saw it in Texas, and it just blew up in their face now. And now they don’t have control of Texas anymore, so I think they might be willing, they’re like, “Well, Democrats are controlling 30 states. Do we really wanna continue with this gerrymandering free-for-all? It might not work out for us in the long term if we continue down this road.” So anyway, that would be truly seismic.

But the idea of just gerrymanders being taken off the table entirely is interesting. So let’s talk a little further down the ballot. One of the things you are tracking was several utility regulator races. Let’s discuss those. But first, I wonder, it’s been two years now of a bunch of nonprofits, groups, advocates kind of pounding the table about PUC elections, about public utility commission elections. We got Hank Green involved last time. Those races actually got covered on the news. Normies, I guess kind of sort of found out about them for the first time. Do you think that people are paying attention now, or are these gonna recede back into obscurity?

Caroline Spears: Yeah. People are paying much more attention to these public service commission, public utility commission elections than they used to. I would say I’d still like that number to go up a little bit. What’s definitely true is I was knocking doors in Bucks County, Pennsylvania, one of the swing counties, just a few weeks ago. And on the doors, people were independently bringing up their utility bills as a concern. Now, Pennsylvania does not directly elect a utility commission. But utility bills and electricity bills have been on voters’ minds. We saw that in Georgia. Peter Hubbard was on the pod. He ran for the Georgia PSC. Peter Hubbard looks like he’ll be part of a governing majority on the Georgia PUC as of Tuesday.

David Roberts: Yes. So last round, Democrats got two out of the five seats on the Georgia PSC. Now, they have three seats, a 3-2 Democratic majority on the Georgia PSC now. And as you and I know, because we’ve seen Peter, Peter’s been on the pod, and we’ve seen him talk publicly, that guy’s got big plans. That guy knows where the bodies are buried, and he’s got big plans. So that’s gonna be fascinating to watch. Again, also, what they can do with alongside a Democratic governor who’s not fighting them, right? Man, Georgia’s in for some big stuff in coming years.

Caroline Spears: Yeah, and we’ve seen so many of these PUCs jack up rates for people, and especially one type of bill that I was really tracking over the past couple of years was construction work in progress financing. So if you’ll excuse me to get a little bit wonky on this for a second, here’s how I think your utility bill should work. When I turn on the light, you charge me for the electricity that I use.

And there’s a lot of stuff in how I get charged, a lot of details, transmission, distribution, et cetera, but you should charge me for the cost that it took to deliver to my house. We have seen some of these utility commissions do, and state legislatures pass, is they can charge you while they are building the gas plant.

David Roberts: They did that with Vogtle, didn’t they, in Georgia, while they were building the Vogtle plant.

Caroline Spears: Exactly, and it jacks up people’s rates.

David Roberts: Ratepayers were paying for it.

Caroline Spears: Yeah, that’s right. And there was a piece of legislation where sometimes they only allow that financing for gas plants. It’s not actually available to solar and batteries. So that type of shenanigans, I’m excited to have elected PUC leaders who don’t do those types of kind of financing shenanigans.

David Roberts: Is there a particular thing in Georgia, a particular thing out of the Georgia PSC that you’re looking forward to or that you think they’re gonna do, or is this just gonna be a lot of nerdy behind the scenes stuff?

Caroline Spears: It’s gonna be a lot of nerdy behind the scenes. So if you should have Peter, I wonder what it would be interesting to have Peter Hubbard on the pod again. And it’s not just Georgia. We have to talk about Arizona.

David Roberts: Yes, of course.

Caroline Spears: It looks like we’re gonna flip two seats on the Arizona Corporation Commission, which is the same thing in Arizona. You had Charlie Fisher on the pod a couple months ago.

David Roberts: Yeah, we had a pod about this too. So now... It was 5-0 Republicans, and now it’s 3-2 Republicans, correct?

Caroline Spears: That’s right. Only two seats were up this year, so in 2028 we have the opportunity to have a majority on that board as well. This is a race that Turning Point USA got involved in, and they lost Salt River Project, and they lost Arizona Corporation Commission.

David Roberts: They were involved again this round, right? They were. Were they not? Yeah.

Caroline Spears: They primaried one of the Republicans to put their own person in.

David Roberts: Right, I forgot about that. That did not go well for them. So Arizona now, blue trifecta and spitting distance from Democratic control over the Arizona Corporation Commission, the ACC.

Caroline Spears: Yep, one seat away.

David Roberts: Very big deal.

Caroline Spears: Very big deal.

David Roberts: Louisiana is kind of the one that didn’t go the way we might like. They went from 3-2 Republican to 4-1 Republican. I’m very curious, there’s a lot of data center stuff going on down there. There’s a lot of interesting stuff going on in New Orleans specifically. I might do a pod on this later. I’m wondering why, what’s your diagnosis? What happened in Louisiana? Is it just too red?

Caroline Spears: I think Louisiana’s red. Even over the past few years in Louisiana, I’ve had some Republicans cross party lines on clean energy. There’s new people on there. I’m interested to see where people go with that. I will say that Commissioner Davante Lewis on the board has been extremely effective, and he’s been pretty good at trying to create kind of bipartisan solutions and transparency on the Public Service Commission. Voters have sent a clear message two years in a row on electricity bills. This year they sent an enormously clear message on data centers, and I wanna see what Commissioner Lewis and some of his colleagues can... It hasn’t always been voting on party lines in Louisiana. And I’m interested to see how these new commissioners react to the voters and react to some of the voter anger, and maybe that gives us more opportunity.

David Roberts: Yeah. And then relatedly, also did a pod on this earlier this year, Republicans have controlled all three seats of the Texas Railroad Commission since 1994, and they got a seat this year, which was among all the other stunning stuff in Texas, quite stunning. People who listen to the pod know the Texas Railroad Commission, very misleadingly named, regulates the oil and gas industry in Texas, and has been just an absolute dark-red holdout from modernity for decades now. Nobody’s paying attention to this race, but it’s a very big deal to crack that open.

Caroline Spears: You’ve had everyone on the pod. How did you predict all of these Tuesday results? What’s going on?

David Roberts: I know. I’m immune to optimism, so I didn’t actually think all these people would win their races after I talked to them. It must be going on Volts. I’m seeing a correlation here.

Caroline Spears: Clear trend. I was thinking about before we got on today, I was like, what is recording this podcast gonna be when Dave Roberts is in an optimistic mood on the state of American politics? What are we gonna talk about?

David Roberts: I’m so confused. I don’t know how to act. I don’t know. So this Texas Railroad Commission, though, is anything substantive gonna come out of that, or is that mostly just kind of a symbolic victory? ’Cause they still have a 2-1 Republican...

Caroline Spears: They do, but Democrats elected an expert to that seat. Jon Rosenthal is a mechanical engineer. He’s from Houston. He’s worked in the industry. He’s very balanced, and he’s also an expert-level person who I think is gonna be able to do a lot of good on the Texas Railroad Commission. I think he’s outnumbered on things, and as you said, unprecedented for the Texas Railroad Commission. But I think given Jon’s level of expertise and the knowledge he brings into that seat, it’s not like he’s starting from square one on the oil and gas industry. He’s been in the legislature. He’s voted on a bunch of bills about energy and electricity, so he’s an expert, and I look forward to what he’s going to do. Bo French is not a good person.

David Roberts: Yes. We should say that Bo French did not necessarily lose because of decisions he made on the Texas Railroad Commission. He mostly lost ’cause he’s a racist scumbag.

Caroline Spears: So this was his first time running for the seat. He announced that he was running to stop Sharia law. The Texas Railroad Commission is an oil and gas regulatory body.

David Roberts: One of the lesser-known powers of the Texas Railroad Commission.

Caroline Spears: Yeah. In addition to kind of the candidate quality and just the moral fiber of the two different candidates running, there was only one person on that race with any expertise or vision or interest in the industry and any sort of knowledge, so.

David Roberts: And honestly, there’s a lot of schadenfreude to go around, a lot of ways to point your schadenfreude these days, but Bo French losing, I mean, if anybody in the nation deserved to be very publicly crushed, it was him.

Caroline Spears: Yeah. I’m still looking. We’re gonna know a lot more about who voted for who and who split their ticket and who didn’t. I saw some initial numbers, and again, I will just say we won’t know final numbers for a couple of weeks to a couple months depending on the state. Some initial numbers show, I grew up in Houston. Bo French really lost a lot of voters in the Houston area. There’s places in Houston where a lot of Indian Americans live. And I’ve already seen some initial data that shows that just people knew about that race, normally people don’t follow the Texas Railroad Commission race. That sent waves through Texas.

David Roberts: He drew attention to it.

Caroline Spears: He drew attention to it, and you can see the direct...

David Roberts: By being a scumbag.

Caroline Spears: Right. You can see the direct electoral outcome of that, and yeah.

David Roberts: I mean, I think one of the really interesting questions that we won’t have really clarity on for a while, as you say, we don’t... It’ll be weeks before we know who voted for what and on what, and how the split ticket. I mean, I think one of the big questions here, and I’m curious for your thoughts on this, is all these lower races that we care about, the PUCs, railroad commissioner, various ballot initiatives, did everybody just get caught up in a blue wave? Do you know what I mean?

Did a bunch of people just tick the blue box all the way down their ballot, or were there splits? These lower ballot races, were they just bandwagoning or were there areas where people actually thought about them and voted differently?

Caroline Spears: Yeah. We’re gonna get a lot more information over the next couple weeks to a couple of months. One thing that I am looking at, right, because I’m thinking about 2028 and 2030 and what this means for what we pass and how we build going forward, I am still seeing a little bit of undervoting on our public service commission, public utility commission elections. We have to... we’re relying...

David Roberts: You mean fall off, people who vote high on the ballot and then just don’t mark those at all?

Caroline Spears: Exactly. So there is still that problem. I think we should celebrate the kind of consumer-focused and clean energy folks won on Tuesday, but just tracking forward, like you said in the intro, people are saying it’s the biggest electoral result since Watergate, biggest electoral result in our lifetime. This was such a shocking election. If we are serious about winning these public service commission races in the future, we have to figure out the undervoting, and that’s just one thing I’m seeing in the data now that I really wanna keep focusing on and working on...

David Roberts: Yeah, yeah...

Caroline Spears: ...fixing in ’28 and ’30.

David Roberts: One other little small race that you were tracking, New Mexico land commissioner. Not a wildly popular race or subject of a lot of public attention. But the New Mexico land commissioner is, controls a lot of public land, is the significance of it. Your candidate won?

Caroline Spears: Yep. Happy that that was a less competitive race in the general than I was a little concerned about that, I would say a year and a half ago. We endorsed Juan Sanchez for that race about 16 months ago. Feels like an eternity. Really before we knew what this year would be like, et cetera, at the time. So I’m really excited about that. He’s made a commitment to open land and open land access for that land commissioner. That’s super important. And then also really thinking about New Mexico’s public lands generate a lot of revenue for the state because there’s a lot of energy leasing that goes on.

David Roberts: Yeah, right.

Caroline Spears: Yeah. And it funds the public school system, et cetera, and so how we can use solar batteries. There’s kind of all of these clean energy technologies can start.

David Roberts: Interesting.

Caroline Spears: That’s something that he’s talked about and is gonna work on, and I’m really interested and really looking forward to seeing where that goes.

David Roberts: Awesome. Okay. So, Georgia PSC Democratic majority. Arizona Corporation Commission now two out of five, won both those races, two out of five Ds, possible majority in 2028 depending on how things go. Texas Railroad Commission is now 2-1 Republican, but a really good, smart, substantive Democrat in there, and New Mexico land commissioner. All happy results in your down-ballot choices. Were there any other sort of candidates down-ballot that you wanted to call out? We’re gonna get onto some ballot initiatives and things like that. Were there any other obscure candidates that you were particularly pleased about?

Caroline Spears: I wanna call out two people. I wanna call out Trevor Jung, who just won his election to the Wisconsin State Senate. Trevor Jung, Senator-elect Trevor Jung, very exciting to say, from City of Racine’s transportation director. He oversaw the largest fleet of electric buses. He got those deployed in Wisconsin. Now he is in the Wisconsin Senate overseeing the state’s transportation goals. Incredible. It’s people like that that I get so excited about. It’s Jon Rosenthal, who has actual energy and electricity expertise sitting on that Railroad Commission board. It’s Trevor Jung in the Wisconsin State Senate. You have some candidates who have this incredible track record before they get into office. You also have a lot of candidates who have expertise on other things, but are gonna show up to energy and electricity for the first time and say, “What is PJM? What is ERCOT? How can I get on board?” And so the other thing that I’m really excited about this year is that two years ago we put someone full-time in many of these state capitals, and we have people on the ground in all of these trifecta states that I talked about, who will be there on day one working with lawmakers to pass bills that lower costs and cut pollution every single day.

David Roberts: We’re gonna get back to what those might look like at the end, but that is obviously the real win here would be something coming out of this.

Caroline Spears: So Trevor, and then JKT winning in Alaska I think is really exciting on the governor’s side. That’s a state in an energy crisis. What he can do for distributed energy resources there, for wind energy resources there to bring costs down, I think that’s a generational change in Alaska as well. So I would just wanna call out Trevor Jung in Wisconsin and JKT, incoming governor of Alaska there.

David Roberts: And they called the Alaska governor race, that’s a done deal now?

Caroline Spears: AP has not called this race, so okay, maybe I’m a little too fast on it. I would say I feel good about this race right now. We’ll see.

David Roberts: Yeah. Again, not something a lot of people would’ve predicted. Okay, let’s talk about data centers. I think there were something like 40 ballot initiatives or measures or various things that people voted on that were banning or putting a moratorium on, or in various other ways punishing or cracking down on data centers. I think almost all of them won, like all but I think one or two passed. It was the message about data centers from the public was, let’s say, unequivocal.

Caroline Spears: Loud and clear.

David Roberts: Were you involved in any of those? Are you just candidates, or do you also get involved in ballot initiatives and things like that?

Caroline Spears: So we were not involved. We were tracking those data center ballot initiatives. We were not involved in ballot initiatives this year. But I will say that knock on the door, all 120 plus candidates we supported this year, we talked to them all, saying kind of, “Here are ways that climate can lower costs. What really stands out to you?” And almost all of them said data centers. It was the most unanimous response I’ve ever seen from doing this work over five years.

David Roberts: Yeah, and these were not ambiguous results either. In Ashville, Ohio, there’s a data center already under construction, 80% of people voted to stop construction. In Joliet, Illinois, same thing, about 80% voted to restrict data centers. So that’s not partisan. That is not a one side or the other thing.

Caroline Spears: Extremely bipartisan issue.

David Roberts: The one other statistic is 20 of 36 governors race candidates, 20 out of 36 promised some kind of moratorium when they are elected. The other thing is Elon Musk spent about half a billion dollars backing pro-AI and pro-data-center candidates, and did not have a good night.

Caroline Spears: Do you have the numbers on how many he lost?

David Roberts: That specifically, I would like someone to assign a full-time researcher to just charting the scale of Elon Musk’s absolute farcical face plant, this election cycle. There are so many aspects of it. That’s one of my favorite areas of schadenfreude.

Just on data centers, we’ll get back to this when we talk about policy, but this is just a worry I raise, and I’m curious if you saw anything out there, or if you share this worry. This is something I’ve raised a bunch of times, but the sort of stampede of hatred against data centers and against AI, do you worry at all that clean energy projects, that transmission projects, solar fields, et cetera, are starting to be viewed as adjuncts to data centers? That they are getting lumped in, and people are gonna start hating all of it and fighting against all of it. Are you worried at all about that effect?

Caroline Spears: Well, we already saw some of that start in earlier this year. We had some opposition against battery projects. They happen to look kind of like data centers. Some of that is already in the water. I remember when I was in the solar industry, we had someone show up to a town council meeting and say, “I don’t want solar here.” This was a science... someone who was a science teacher in the area, who said, “I don’t want solar here ’cause it’s gonna suck up all the sun.” So we do have... yeah.

David Roberts: A science teacher, you say?

Caroline Spears: A science teacher.

David Roberts: Yeah, I mean, you’re talking about having someone in the state capital of all these new trifectas to do education. I surely would hope that that’s on your agenda, just helping lawmakers pick these things apart, helping lawmakers distinguish, and not just have this turn into an anti-electrification sort of mob sentiment.

Caroline Spears: Yeah. Well, the only thing I’ll say that, against that a little bit, is that data centers... we’ve seen NIMBY fights against clean energy.

David Roberts: Sure. Yeah, those are not new.

Caroline Spears: Right, those aren’t new. That’s not going 80/20. Right. I mean, data centers are unpopular 75/25. Data centers are next level. There’s been some interesting coverage on this. It’s not just that it’s unsightly, even though it is, and it’s not just about the noise, even though that’s part of it. Data centers are a physical manifestation of economic anxiety that people have around AI, and you have leaders, many of these companies going on a podcast and saying, “We think this is gonna take a bunch of people’s jobs, and it, also some people might die.”

David Roberts: Yes, it might also drive us to extinction, PS.

Caroline Spears: Right. So I will say that that’s a big difference in driving some of the opposition. And then people see, “Oh, there’s a physical manifestation of that happening near me?” I don’t think that’s something... that’s a PR problem that...

David Roberts: Yeah, you could say...

Caroline Spears: I’m not in charge of.

David Roberts: Yeah, I do think data centers have become a stand-in for basically modernity. Everything people are uncomfortable with that’s going on in the world today, income inequality and this sense that there’s a tiny cabal of dudes in one neighborhood in California that are determining the fate for the rest of us, and we have no control over it, and we have no feedback mechanisms. So this is the only thing that people can grab onto and say, “Hold on now.” You know what I mean? And yes, thankfully we don’t have to solve that.

Caroline Spears: But just being aware of consumer sentiment and popular sentiment, always good to do. I do think differentiating the two industries, I think the clean energy industry has been on this for a while. We have work to do.

Some of the battery stuff is a problem. Whoever is on that PR team, thoughts and prayers. That’s a challenging job right now. But I think the opportunity is we live in a democracy. People have power and the ability to send a message on things.

What creative opportunity does this open up for people to say, “Hey, here’s what we can actually provide to communities. Here’s how we’re gonna show up differently,” because the way people have been showing up so far, and the having elected officials sign NDAs... that’s crazy. So there just needs to be a complete rethink of how to approach community engagement, and I think that’s an opportunity here.

David Roberts: Surely this will... I mean, if anything can get through to these guys, I know they live in a bubble, but this is so unequivocal. The message here is so unequivocal. Surely this will spur some thinking in those circles.

Caroline Spears: I just think there’s a way to build data centers in a way that actually makes people’s lives better, and I would like to see more of how that can happen in the future.

David Roberts: Okay, let’s talk energy ballot measures. There’s some interesting ballot measures under the surface. Didn’t get a lot of attention, but very interesting. In Michigan... Prop 2, talk about that a little bit.

Caroline Spears: Prop 2, fascinating example of this kind of two-year anger over costs and utility bills increasing. Prop 2 in Michigan bans Michigan utilities from putting money in politics. And it passed with, I think the last number I saw, 84% of the vote. Talk about a bipartisan issue, I mean.

David Roberts: Riding the anti-corruption wave, I think, tapping into that.

Caroline Spears: Yes, totally, and it’s a great anti-corruption bill. It looks like it’s already under a legal fight. I think the utilities are gonna put it in... So the work does not stop here, but just to say that Prop 2 passed with over 80% of the vote, that almost never happens. It’s a very clear message.

David Roberts: Yes, and this is one thing where I hope other states are paying attention. I hope this is a policy I would love to see spread. It’s already a little crazy how we run utilities. I don’t have to get into that again. But the fact that they’re publicly guaranteed profits, but we still allow them to lobby and bribe lawmakers for their own private interests is insane on its face. It’s crazy that we allow them to do that. So the public in Michigan has spoken very clearly. They’re not into that, and there’s no reason other states can’t follow suit on that.

Caroline Spears: Yes, and there are... Some states can pass it through ballot measure. Some states have already put this bill up in the legislature. It’s gotten killed in a lot of places. I’m very interested in the legislatures, who carries this bill next year, because that’s a big, it’s a big opportunity for the same reason...

David Roberts: A lot of big changes in state legislatures, so.

Caroline Spears: Yeah, when I turn on the light switch, I shouldn’t pay for somebody else’s political contributions. The same reason as every... That’s ridiculous.

David Roberts: Yes, and the fact that it fails in legislatures, to me, is just evidence of the need for it, right? Utilities can exercise their influence in legislatures sufficient to fight off bills that have 80% public support is sort of evidence that they have too much political power right there. So good job, Michigan. Colorado.

Caroline Spears: Colorado.

David Roberts: Colorado. This was, I think, what was intended to be by the gas industry the first of many. They put a ballot initiative on the ballot, very short, just says Coloradans have a constitutional right to natural gas, basically. A constitutional right to be able to choose natural gas. Basically taking the idea of a gas ban or even anti-gas policies off the table. It failed. Do you have the numbers on that one?

Caroline Spears: Yep. Numbers on that one, it failed about 55 to 45.

David Roberts: Oh, interesting. Interesting. That’s reasonably good. Not quite as decisive as data centers, but reasonably good.

Caroline Spears: Nothing is as decisive as money out of politics, anti-corruption and data centers.

David Roberts: Yes, yes.

Caroline Spears: I mean, on Tuesday that was clear. Yeah.

David Roberts: Obviously, the gas industry is not gonna go quiet into that good night, but do you think this takes that particular tool off the table, or you think they’re gonna keep trying that?

Caroline Spears: We’ll see. I’d be interested to see if this ballot measure pops up in other places. This is certainly something that’s introduced legislatively as well, as we think about state power and what states, legislatures, and governors can do as well. So I’m interested to see kind of where this goes broadly. But listen, we have a lot of rights in this country. We have a right to vote. We have a right to free speech. I don’t know if the founders intended that particular right.

David Roberts: Yeah, is that originalism? Was that...

Caroline Spears: I don’t know. I can’t tell...

David Roberts: ...something the founders had on their mind, natural gas?

Caroline Spears: I don’t think so.

David Roberts: Thou shalt get thine methane. Okay, the only other one that I have on my list here is Ann Arbor, which was interesting. So once again, had on the pod the woman from Ann Arbor talking about their clean energy utility that they’ve created in Ann Arbor. Very interesting thing, unique in the nation as far as I know, sort of like a second utility alongside the main utility, the entire purpose of which is to fund and build clean energy. The ballot initiative was to fully municipalize the main utility, which I guess would then involve getting rid of the second utility. Unclear. That didn’t go through. Do you have any thoughts on that, or thoughts on utility municipalization or making utilities public in general?

Caroline Spears: Yeah. So the Ann Arbor ballot measure failed by about 3%, so very split results.

David Roberts: Close one.

Caroline Spears: Very interesting. Generally, I’m gonna give perhaps a wonky answer to this, which is that when you think about public power, private power, munis, co-ops, all of these different pieces, we’ve been involved... We track a lot of these ’cause we think a lot about utility boards, you have Salt River Project, things like that. Really, here’s my wonky answer. It all matters on government capacity. We have a lot of kind of cities in the country that have public power on paper, but they’re so small that they don’t have the technical capacity...

David Roberts: Yeah, right.

Caroline Spears: ...and staff to sign complex energy contracts with multinational companies. So it does create a power imbalance sometimes if the city is too small, or the city says they want this thing, but they don’t staff it appropriately. And some municipal utilities are doing great, and they’re going forward on electrification, all of these things. When I think about climate and clean energy, I don’t see a big difference between these different types of structures of electricity utilities. I do see a big difference when it comes to kind of oversight, transparency, and responsiveness to people’s rates and responsiveness to results. And so you can have a public utility, like TVA, that has high rates, is not responsive, and is jacking people’s rates up for... because they have a cultural reason to keep coal online even though other cheaper opportunities are there. And you also have private utilities. We just talked about some of these monopoly utilities, they’re investor owned, and they’re putting... They have this blank check to put money into politics, and that’s not acceptable either. So we need accountability and transparency on these utilities. Just because it’s a municipal utility doesn’t mean it’s accountable to people. So we talked about... Okay, should I go one more level of detail, or is it too wonky?

David Roberts: Sure, go. Please.

Caroline Spears: So we talked about some data centers having local officials sign NDAs, which is ridiculous. That sometimes happens with municipal utilities too, where the city council...

David Roberts: We should just say, in case anybody doesn’t know, an NDA is a non-disclosure agreement. It means legally you can’t talk about it.

Caroline Spears: Yeah. And I think when a publicly elected official makes an agreement on behalf of their constituents, they should be able to tell their constituents what that agreement is. But we have municipal...

David Roberts: Yes. One might think.

Caroline Spears: One might think. We have municipal utilities that have signed non-disclosure agreements on long-term power contracts that their voters have to pay for.

David Roberts: Wild.

Caroline Spears: Wild. And some of the worst examples of this are all of the municipal utilities signed up for Prairie State coal facility in Illinois. That has over 100 public power agencies are signed onto that. So it’s a few examples of public power kind of being captured. All I’m saying is transparency, accountability. Cheap, clean, that’s what voters are asking for, and getting too married to one structure or another, I’m not... That’s where we are.

David Roberts: Yeah. That’s probably for a separate pod. And I’ll just say, selfishly, I’m so curious about how this clean electricity utility in Ann Arbor is such an interesting experiment to me that just sort of selfishly, wonkily, I’m curious to see how that plays out, how it performs, how it goes. Whereas trying to municipalize, it’s very expensive, it takes a long time. I mean, I should do a separate pod on this, but...

Caroline Spears: That’d be fascinating. That’d be a really interesting, that’d be a really interesting pod.

David Roberts: Yeah. There’s lots of ins and out. Other ballot initiatives. Oh, I did wanna mention Eugene, Oregon voted for a clean energy fund. Paid for with a fee on companies with $1 billion or more in national gross profits. So I guess your Walmarts, your big-box stores, basically. Seems interesting, I guess. Any thoughts on that? I don’t know how significant it’ll be in Eugene, Oregon. I mean, it’s not like... It’s a small town.

Caroline Spears: Not when I was tracking on Tuesday.

David Roberts: Yeah. It’ll be interesting to see if that goes anywhere, or if there are any negative consequences. It’ll be interesting to track. Let’s see what else. Oh, Arizona has, there was an initiative that would implement a constitutional ban, a state constitutional ban on taxing miles driven.

Caroline Spears: Oh my God.

David Roberts: It’s so dumb. There’s this idea floating around, how do you replace the revenue from gas taxes as we electrify transportation? And there’s a lot of discussion of various ways of taxing miles driven rather than the type of car or the fuel. It raises privacy issues. There’s all kinds of ins and outs of that. But apparently I didn’t actually look into this much. I didn’t actually know who’s for that. Who’s trying to pass that? Did you track this one at all?

Caroline Spears: I did not track this one. This is interesting. I’m looking it up right now.

David Roberts: I wonder if it’s the automakers or the gas companies. Who’s after that? Anyway...

Caroline Spears: I know...

David Roberts: ...right now at 50.7% yes. I don’t think it’s been called yet, but it may well pass, which would just be so dumb. That’s probably also a separate pod, like how to fund transportation with gas tax...

Caroline Spears: Decreases, yep...

David Roberts: ...declining, or how to tax miles driven in a privacy-respecting way. They’re doing interesting stuff on that in Denmark, by the way. Okay. That’s the ballot measures that I had on my list. Any others? Or at least the energy-related ballot measures I had on my list. Any others?

Caroline Spears: You covered a lot of them. So there were some very interesting transit funding ballot measures kind of across the country.

David Roberts: We’re moving to housing and transit next.

Caroline Spears: Oh, fabulous. Okay, we’ll talk about housing and transit.

David Roberts: This is our next big bucket. As everyone knows, as I pound the table and say constantly, housing and transit are huge pieces of the climate puzzle. If you are a climate activist, if you’re interested in decarbonization, you need to get involved in housing and transit. I won’t go through all that again. Volts listeners have heard it 100 times now. So let’s briefly look at what happened to housing and transit in the election. I think the big story there is LA mayor. Were you involved in that race at all?

Caroline Spears: Oh my God. Better Streets PAC is who you should talk to. We did not get involved in that. Better Streets PAC did. Very exciting result for housing and transit there.

David Roberts: Amazing. Raman, hardcore YIMBY, left of center YIMBY, and Bass was classic left NIMBY. And this is a city where these fights are very top of mind. So that’s huge, I think. It’s huge for what it signals, and also I think Raman is already talking about amazing, doing amazing things. So that’s gonna be huge for transportation in LA. There were several ballot initiatives to raise taxes to fund transit. I think all of them passed.

Caroline Spears: It looks like almost... Yeah, I have... I’m reading Michael Podgers is our housing and transportation policy lead on the team, and I’m reading his overview right now. It looks like we passed almost all of the measures that we were tracking. There’s one or two that are still too close to call. I think the big things on housing and transit, I mentioned Trevor Jung in the Wisconsin State Senate. Yeah. Major trifectas will open up huge opportunities for us to go above and beyond without getting so, so, so wonky here. For example, in Wisconsin, there has been a statewide ban on innovating on how to build zero-carbon public transit in a way that serve people well. So we have huge opportunities at the legislative level, and city after city after city passed kind of dedicated revenue streams for housing and transit. Very good.

David Roberts: Including my own home city of Seattle. Passed Prop 1. It’s just gonna, I think they’re saying basically the biggest expansion of transit service in decades here in Seattle. Ton of money. That passed by 70%. In the Bay Area, there was a regional transit measure, about a billion dollars over the next 14 years. That passed easily. So it seems like when it comes to taxing themselves to pay for transit, people are into it.

Caroline Spears: Yeah. I think two things are happening. Tuesday was a cost-of-living election. And gas prices are so high that I think that really boosted interest in people need affordable ways to get around. Let’s put transportation choices on the table, cars, and let’s have transit that’s accessible to people so we’re yes and-ing our transportation options. The gas prices are just so high, so I think it really drove up the interest in a lot of these because people need options and people need choices. So that’s really good. I’m excited about the housing stuff. The other thing is the federal government...

David Roberts: Wait, one other thing I wanted to say on the housing, which is some of the measures that are not about transit, but are instead about zoning and related things, did not do as well. So for instance, in California, there’s Prop 45, which is trying to remove the burden of CEQA reviews, the California Environmental Quality Act. This is the state version of the NEPA fight. Removing CEQA reviews basically from big housing and transit projects. Not from fossil fuel projects explicitly, just from housing and transit projects. That is on track to lose, I think.

Caroline Spears: I will say that California legislatively already removed some CEQA burden on infill projects, which is good as well.

David Roberts: And then there was, in Massachusetts, one other one I wanted to call out, Question 7 in Massachusetts was basically by right ability of homeowners to build on small lots, because a lot of towns sort of mandate large lots as a way of keeping out density. That is, I think, still not been called. I think it’s a coin flip at this point, so very, very close. Those are the others on housing that I had. Any other notes on housing?

Caroline Spears: No, those are good notes. At the risk, Dave, of just going back and forth and agreeing with each other too much. I’m really excited about all of the housing reform.

David Roberts: I know.

Caroline Spears: Yeah. I’m like, I don’t even know what to say other than should we just all agree on the housing and transportation stuff?

David Roberts: We’ve lost the sense memory of good news. We don’t know what to do with it anymore. Literally, our bodies and brains are so unaccustomed to it, we don’t know how to handle it anymore.

Caroline Spears: Yeah. And housing also, thinking of kind of these new governments, housing also something that Governor Shapiro said was on his first list.

David Roberts: Yeah. It’s spreading through the states. The state trifectas are taking action, and everyone that does it, especially, I mean, I’ve done a couple of pods on this, bipartisan. There are some red states doing amazing stuff on housing, too. So this is, I think, an area that’s gaining momentum, and all these new trifectas, I think, are gonna do amazing stuff on housing. It’s gonna be fun to watch.

Caroline Spears: Yes. We’re all following in Montana and Oregon’s kind of leadership on some of those housing pieces.

David Roberts: Yes. So, let’s discuss, here’s a worry I have. All this good news and happiness, I gotta find something to worry about. So here’s what I’m gonna worry about. As you say, this was a cost-of-living election. I think everybody agrees on that. Most visibly, this dumbass war that drove up gas prices and diesel prices, which are prices that everyone sees every day. I think that explains a lot of the scale of what’s gone on. But electricity bills were a big part of that, too. And so now you’ve got this wave election. You’ve got Democrats moving into control over lots of states, lots of legislatures, lots of cities. Now they’re gonna be called upon to bring down costs. That is why they were elected. And my worry is that there are just lots of structural things going on pushing energy costs up, and states can take the edge off of it. States might be able to blunt the increases, but I’m just real worried that there’s just not really an obvious or easy way, there’s not a tool laying on the table that they can just pick up that’s gonna allow them to bring down costs. So what can states do to bring down energy costs? And can they do it in a visible and dramatic enough fashion to break through to the electorate? Because what I see is, here’s another worry, is just that the American people are just pissed. And so when you’re out of power, that works very well to your advantage ’cause they’re pissed at your opponents. But when you get in power, then they’re just pissed at you. They’re just pissed, and they’re pissed and they’re demanding big things, and I don’t know if there are things to give them big enough and obvious enough and effective enough to satisfy the sort of fury that’s out there. So anyway, what do you think states can do to bring down energy costs?

Caroline Spears: Yes. All of these people who’ve been elected on Tuesday have an enormous and a very urgent need to deliver. I think a great example of this is nowhere is this more urgent than Alaska. The cost increases in Alaska are some of the worst in the country, and there will be an immediate ask to bring those prices down. I’m seeing things like 22 cents a kilowatt hour. We have MMBTU prices in Alaska that have doubled, tripled in the last year. Doubling a price in a single year, tripling a price in a single year, it’s unsustainable. I think there’s a few places where states can act very fast. The first is making sure that people have abundant access to distributed energy resources. There’s a lot of ways that states have put controls and held that back. Some of that is to do with monopoly utility control. Big opportunity in the next year, I wanna see virtual power plant legislation in every state. That’s something that Senator Kuby in Arizona is already saying publicly. She’s putting that on the table next year. I wanna see community solar on the table. Just personally, I want a balcony solar mod. Get me a balcony solar mod. Every state should be passing that. Behind-the-meter batteries, distributed energy I think is having a moment, is gonna have a moment next year ’cause it’s something that can move out quick and people can get on that fast.

David Roberts: Can we get a shout-out for permitting? I know that there’s a certain quarter of the left that sort of recoils at the idea of removing regulations, at deregulating something, but there’s just the thicket, the federal permitting bill is one thing. We don’t have to get into that, but there are all these state permitting... state environmental laws, local permitting laws. States have their hands on a ton of that stuff. I would love to see some real attention on that.

Caroline Spears: So much of that is in state power and state authority. We’re thinking about how we can... I will say that we have plans on that in a few states for next year. I think this is a big place states can lead to get power online as fast as possible, especially with these electricity cost increases, we have to bring cheap power online very fast. This is also, you can think about grid utilization legislation, battery legislation, and what we have to do simultaneously is we have to do things like legalize infill housing. We all know that with interest rates at 7.5% or so, it’s gonna take a while for that to come online. So what we need to do is stack our medium term, our long term, and our short term because people are asking for lower costs today. So we have to do a little bit of everything. But keeping that long-term focus as we do a near-term kind of relief as well, I think it’s gonna be a challenging balancing act for a lot of these states, but one where if they lead on it, they can do good things. I mean, think about a public service commission. You can remove the cap on rooftop solar. You can change net metering so that people actually are paid back for the value they contribute to the grid. There’s all of these pieces that I think DERs...

David Roberts: Change the ways you accredit batteries. There’s a lot of wonky stuff that can be done. We already talked about data centers, but of course, data centers are rich. They’re in a hurry, as I’ve said a million times. Get them to pay for stuff. Amy Acton in Ohio, who just won the governorship, has said she wants to pass a moratorium at data centers unless they cover 100% of their utility costs. So deep pockets eager to get on the grid and willing to pay for grid upgrades. I won’t pound this table again. I’ll just say I think a lot of people think there’s a bubble. A lot of people think the bubble’s gonna pop at some point. What I keep saying over and over again is, let’s get useful policies passed and useful steel in the ground with their money before the bubble pops. ’Cause that stuff will last. That stuff will still be there after the bubble pops. So make data centers pay.

Caroline Spears: And I love that you brought up battery capacity rules. Batteries are undervalued, and a lot of how our states have written the regulation, we need to value batteries for what they’re doing with the grid right now. It’s incredible. Battery capacity rules, number one on any lawmaker’s list. In some states they can’t do that ’cause they’re part of PJM, they’re part of these larger markets. In other states, I’m looking at ERCOT, I’m looking at Alaska, that’s within a state’s control. It depends on the state you live in, but there are some governors who can really go full steam ahead.

David Roberts: And I think there’s enough good right-thinking governors in PJM now that they can team up and force some PJM reform, too. That ought to be on the docket. The other side of my worry on this is that the amount of pressure, there’s a ton of pressure on this, and there’s a lot of new legislators and new governors who don’t necessarily have deep knowledge of the tools available to them, and I think they’re gonna grope for whatever looks easiest and fastest and most visible, and that is gonna lead to a lot of slopulism, as they call it. A lot of just like, “We’re gonna freeze rates,” or, “We’re gonna suspend the gas tax for a year.” Stuff that does nothing for the long-term energy picture.

If anything, just increases the problems over time, but looks like you’re doing something. I worry about a wave of slopulism coming. I don’t know if you have any thoughts on that.

Caroline Spears: Just know that the short-term fixes are not gonna solve even the medium-term needs, looking out two years into the future, or the long term. That’ll be the challenge of every new lawmaker is people need short term, combine it with medium and long term, otherwise we’ll just end up right back here every time. How many times have people said, “I’m suspending the gas tax and this”? You put your entire transportation budget in a hole, people can’t fix potholes in a couple of years. If you need to do it short term, that’s fine. Combine it with a long-term fix. That’s the big challenge, and I would say, man, a lot of people got elected on an election night that we were not expecting. Dave, I had a lot of candidates. I will say, for example, there’s a candidate, Ebony Turner, in the Dallas area, R+16 district. I told you we would stretch harder this year, so we put a bunch of districts that were R+16, R+18 districts on the map. I thought maybe two out of 10 will win, and it’ll give us an indication of candidates who are really strong or maybe some interesting areas. All of them won. And all of those lawmakers, you bet.

David Roberts: R+16. Wild.

Caroline Spears: R+16.

David Roberts: There have to be a lot of new lawmakers now who are like, “Wait a minute. I didn’t... You know what I mean? I didn’t think I was actually gonna have to be a state rep.”

Caroline Spears: Well, and think about who texts them the day after they win election. They have a lot of new best friends. And kind of now until January, there’s a sprint now to...

David Roberts: Yeah, get in their ears. Interesting. Well, I was gonna ask, maybe you already answered this, but just what do you think is the single most important thing that all these new majorities need to get right next year? And it sounds like this blend of short-term relief with middle and long-term reform is kind of your answer to that, yeah?

Caroline Spears: Yes. Electricity short term, and also we need kind of utility regulatory reform to make sure that... The fact that we’ve ended up here with electricity rates is a sign that there’s a national problem. Electricity, and the second thing is really is transportation. With gas prices this high, big focus in transportation and housing, and how do we make that. Let’s make stuff that works for people.

David Roberts: We haven’t really talked about EVs. EVs are in a weird spot where the empirical circumstances are all lined up. There ought to be a stampede happening right now to EVs, but it’s basically been suppressed by policy, and automakers, and idiot US policymakers, and the polling’s not good. Weirdly, EV mandates poll very poorly for reasons I don’t fully understand. I wonder what, if you think there’s gonna be a turning the corner type of moment on EVs coming?

Caroline Spears: I think we will see that. I think that the long-term picture on EVs is very clear. The short, medium term is very messy. Right now we’re at kind of a local minimum of EV interest, but I think the state, federal policy landscape, I’m very interested to see what the new Senate and House do, especially with tariff policy with EVs. The state policy landscape, there’s some things we can do. I was talking with Governor Inslee on Wednesday, who talked about how states can pass EV leasing.

I think that’s really interesting: try it out. If you’re, don’t wanna pay that much at the pump, try out an EV. That’s an interesting idea. But state policy on EVs has been in a funk since the California waiver has been tied up in lawsuits.

So basically, states used to be able to pass more EV policy than before, and then Trump sued that ability, and we’re waiting for... That’s, we’re in court.

David Roberts: Yeah. It’ll be interesting to see how that plays out. Okay. We’re over time, predictably, but to wrap things up, I would like to take a little look at 2028.

Caroline Spears: How dare you?

David Roberts: Obvious...

Caroline Spears: David, it’s been just a few days. Okay.

David Roberts: I know. Obviously, 2028 looks a lot different now than it did six weeks ago. Let’s just say it’s been put in a new light. I guess the big question is, do we look at what just happened as a gathering wave, right, that will continue through 2028, or is this a short-term backlash to Iran and high gas prices that will subside when Iran, whenever they figure that out, whenever that resolves itself, and gas prices come back under control? Just what is your vibe check for 2028 at the moment?

Caroline Spears: Any pundit who tells you I know what’s gonna happen in American politics...

David Roberts: No, no kidding...

Caroline Spears: ...is full of shit.

David Roberts: Yes. True.

Caroline Spears: Yeah. So what I’m gonna say is...

David Roberts: Nonetheless, do so.

Caroline Spears: So let me opine on what I think is gonna exactly happen.

David Roberts: With that said, here’s my BS.

Caroline Spears: Let’s get into it. Oh my God. Let’s plan for both. We need to plan for both. It needs to be on paper. Let’s do it. So we have to plan for next wave, and we also have to plan for the whole mood switches, and both of those plans need to be on paper, and they need to be written, and we need to execute against those plans in the next two years.

Because one of those plans is the wave builds on itself. We take these state majorities and these governors who passed all this. Let’s do two roads diverged in a yellow wood. So we’ve got on one world of this is it’s the end of 2027. 16 governors have announced they’re running for president, and they say, “I brought down your electricity bill, and I got you a battery and a solar on your roof that you could have independence from the grid, and we lowered the cost of transportation, and we passed functional transit systems, and we passed housing.” And that’s one world, and there’s a race to the top in 2028 because they passed all this incredible legislation in ’27, and then they gain seats in all of these places.

That’s on the table. Let’s take that seriously instead of being so scared to take kind of optimism seriously. We have to take that seriously and plan for that. The other side is, okay, it all goes the other way.

Every seat that was gained is lost. We still have a plan for that. Let’s execute at that, and we have to write both down.

David Roberts: Or maybe not all of them lost, but some reversion to the mean, basically.

Caroline Spears: Some reversion.

David Roberts: Yes. I don’t think we can just assume that R+16 districts are blue from now on. I don’t know. Maybe I’m just immune to that level of optimism, but it seems like there’s gonna be some reversion. On the specifics, the Arizona Corporation Commission could get a Dem majority in 2028. There are fewer governor races than in 2026, but are there particular governor races in 2028 that you have your eye on?

Caroline Spears: 36 governors were up this year. This was the governor year.

David Roberts: I know, that’s wild. I know.

Caroline Spears: Isn’t that wild?

David Roberts: It’s super, it’s crazy.

Caroline Spears: 36 governors were up. I will tell you right now, I have not looked at the list of governors that are up for ’28. But what I have looked at is the list of... we have all of these staggered terms when it comes to a public service commission, public utility commission, and a state Senate, which are the ones that go four or six years. Yeah, yeah. I have looked at all of those maps, so we already know kind of which seats are in play on ’28, the PUCs, the weird statewides of the world, and in thinking about state power and state control.

So those are interesting. I would say, for example, the Pennsylvania Senate map, to get extremely detailed about this, the Pennsylvania Senate map looks even better in two years than it did this year. So that’s just one thing to keep in mind for two years from now.

David Roberts: It feels almost greedy to ask, but are there other states that could flip, other trifectas on the horizon? We sort of got every one I can imagine getting. Are there any other states you can imagine flipping? I mean... I can’t believe we’re sitting here talking about Mississippi. South Carolina, I saw this, just let’s throw this stat out. I saw that the average shift in pro-Trump South Carolina counties was 21 points. The average in South Carolina, just wild. So are there other states that might flip red to blue in 2028?

Caroline Spears: Here’s what I’m thinking... so I’m gonna tell you about a thing that happened on Tuesday. The North Carolina House flipped. The Senate, as of this recording, did I already say this? It’s been a long week. I can’t remember what I’ve said twice. Did we already talk about the North Carolina Senate?

David Roberts: It’s not called yet or it’s still close?

Caroline Spears: Here, let me say it like this. There are three states that I’m thinking about on the state legislature front that I think we talked about having two plans that are on the let’s keep going plan. We’ve got the Georgia Senate, the Texas Senate, and the North Carolina Senate, which as of this recording, is too close to call. There’s only 300 votes that will dictate whether Dems flip the Senate as well. So those are...

David Roberts: Voting matters, everybody. Voting matters.

Caroline Spears: Yep. Yes. Even in a year like this, I mean, we have about 10 seats that are still too close to call right now. We have a seat in Pennsylvania that’s 45 votes between one and the other. Here we are.

David Roberts: Wild. Wild. So North Carolina Senate could flip?

Caroline Spears: We have to put that on the map. That’s absolutely on the map right now, and could flip this year, but I’d put that on as well. I would also put the Texas House back on that list. We are gonna see, I believe, some reversion from this.

David Roberts: Yeah, right.

Caroline Spears: We have to put the Texas House back on the map. All of these Wisconsin and Arizona seats, I would absolutely keep those under consideration for ’28 as well.

David Roberts: Are there particular PUC elections in ’28 other than the ACC that we need to keep in our head?

Caroline Spears: Well, we’ll come back on Georgia ’cause it’s staggered. ACC is really on the list, and we have to track Louisiana and Montana over the next few years. I think that’s really interesting to see what type of policy comes out of it.

David Roberts: I’m just so curious about Texas. They don’t wanna lose that one. If those electoral votes become reliably blue and Democrats reliably have Texas and California in presidential races, that’s gonna make it real hard for a Republican to win as president for a long time. So I think they’re really gonna go nuts trying to get Texas back, trying to get the House back, trying to make Hinojosa look as bad as possible. That’s gonna be so many fights in Texas in the coming two years.

Caroline Spears: Yeah, and so important for clean energy and the climate as well. So Texas on my mind.

David Roberts: All right. Well, I think we covered everything. What an amazing year. Nothing I’ve ever seen quite like it, and gosh, we’re gonna have a lot to discuss in the coming two years. There’s gonna be a lot of action, a lot of proposals, a lot of bills, a lot of stuff going on, and then the 2028 Democratic primary fight is gonna start in five minutes. I dread that. I know that’s not in your scope of work, so maybe you can try to ignore it, but it’s gonna be miserable.

Caroline Spears: I mean, unfortunately, because so many governors are going to run. What is the best set of state policies that they pass in ’28 that they run on? Unfortunately, I have to think about that more than I ever wanted to. I don’t wanna think about that.

David Roberts: I know, but this is a huge dynamic is given all these governors are gonna run...

Caroline Spears: I know...

David Roberts: ...they’re gonna wanna run on something, so they’re all gonna be very eager to do something that’s visible and that they think sets them up for a national run. So it’ll be interesting to hear what their consultants are telling them would look good for a presidential run. Things we have to think about. All right, any final thoughts?

Caroline Spears: Generational shift and change Tuesday night. This gives us an opportunity to right the ship on US climate and clean energy policy that has felt adrift in a bad way over the last two years. We have the opportunity to build a lot of things and put a lot of steel in the ground. That’s what an election does. It kicks open a window of possibility. Now that window is there, but that window doesn’t pass policy on its own. So everybody listening, if you have ideas on how any of these lawmakers can build clean, cut costs for people at the same time, now is the time to get in contact with your local state lawmaker, governor, et cetera.

David Roberts: Yes, they are listening right now.

Caroline Spears: They’re listening to this. Well, and Dave, if you could keep having winning public service commission candidates on the... I think that would be really helpful going forward.

David Roberts: I know, I know. This is the key to PSC elections is the Volts appearance. I think we need to spread that conventional wisdom. Do you care that no one talked much about climate in this particular wave election year? Do you care whether they talk much about climate in 2028? I’ll just say if they pass good energy policy, if they get clean energy going, if they get clean transportation going, if they get good housing going, I don’t give a shit what words they say, but lots of people seem extremely exercised about this question of whether they use the word or not.

Caroline Spears: I know.

David Roberts: Do you care?

Caroline Spears: I think a lot of people in DC care, and not a lot of people outside of it. Honest take on this conversation, the candidates who do well are the candidates who talk to their voters, and voters told them, “I care about cost, and I want cost to go down. I don’t like this war.” Very clear message from voters. So that’s what we’re here to do.

David Roberts: All right. Well, thank you as always for coming on. Geez, what a roller coaster it’s been. Just over the three times we’ve done this, it’s been a wild roller coaster. Who knows what will happen when we’re talking in November 2028. Geez.

Caroline Spears: God only knows.

David Roberts: All right. But thank you for all your work. Congratulations on your huge slate of victories, and good luck in coming years.

Caroline Spears: Thank you. You too. Thanks for having me on.

Volts published eight conversations in October, which is a lot for anyone to listen to. We’ve rounded up the highlights into less than an hour. Enjoy!

It’s the first week of the month, which means it’s time for Best of October. One clip from every conversation we had last month str…

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Power electronics have taken over almost everything in our lives, with the exception, oddly, of the power grid itself — it is still held together by tens of millions of analog, iron-and-copper transformers, the design of which has barely changed in a century. Solid-state transformers replace the dumb gray box with something that can monitor and steer power or convert it from AC to DC and vice versa. In this episode, Enphase co-founder Raghu Belur, who built his company by dividing big solar inverters into thousands of small ones, explains how he’s trying the same thing with transformers, why AI data centers and big solar and battery projects are the first markets, and what it would take to put a smarter transformer on every pole.

Electricity moves long distances at high voltage, which is efficient, and gets used at low voltage, which is safe. Transformers are what step the voltage up and down along the way; every bit of power you use has passed through several. The basic design of a transformer — copper coils wrapped around an iron core — has barely changed in a century. The vast bulk of the transformers on the grid today, including the grey boxes on the top of poles you see around your neighborhood, are cheap, sturdy, and dumb as a box of rocks. Right now the US can’t make them fast enough. It takes years to get one.

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Engineers have long talked about replacing conventional transformers with electronics. A solid-state transformer, mostly made of transistors, would be smaller, could handle DC as well as AC, and could actively monitor and manage the power flowing through it. The catch has always been cost — nobody needed a smart one badly enough to pay five to ten times the price of a dumb one.

That’s changing, and the two markets driving it make a somewhat awkward pair. One is solar farms and big batteries, which produce DC power. The other is AI data centers, which want more DC power inside their buildings and will pay almost anything for speed. The long-term prize, though, is not the big transformers at data centers, it’s the little ones in local communities, the gray boxes on poles where rooftop solar, EVs, and heat pumps are complicating matters.

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It’s all surprisingly fascinating! My guest today, Raghu Belur, co-founded Enphase, which broke up big solar inverters into tons of smaller ones, to be tucked under each rooftop solar panel. Now he’s trying something similar with transformers, creating small modules that can be lego’d into medium or large infrastructure. Let’s get into it.

Chapters

• 00:00 – Introduction

• 03:02 – What a transformer does

• 07:53 – What conventional transformers can’t do

• 11:43 – What makes a transformer solid state

• 15:27 – How much is software, how much is hardware

• 19:40 – Why power electronics hasn’t reached the grid

• 23:54 – Enphase’s distributed approach

• 31:23 – Building transformers from 5-kilowatt modules

• 34:58 – Copper, gallium nitride, and supply chains

• 43:44 – Cybersecurity

• 47:23 – Data centers and 800 volts DC

• 59:29 – Solar and battery storage

• 1:05:18 – The cost question

• 1:07:02 – Neighborhood transformers and the utilities

• 1:15:37 – Efficiency, lifespan, and heat

• 1:22:24 – Handling grid faults

• 1:25:27 – Standards, policy, and the next few years

Resources

People & Organizations

• David Roberts (Substack - Bluesky - Twitter)

  • Volts (Apple Podcasts - Spotify - YouTube - LinkedIn - Instagram)

• Raghu Belur (Enphase profile)

  • Enphase Energy (Website - LinkedIn)

Company & Industry News

• Enphase Energy Successfully Demonstrates IQ Solid-State Transformer Technology Converting 13.8 kV AC to 800 VDC

• Enphase announces distributed solid-state transformer for AI data centers, targets 2028 for volume deliveries

• Enphase co-founder says solid-state transformer can ease data centre power problems

• US transformer supply may fall sharply in 2025, says Wood Mackenzie

Books & Articles Discussed

• Enphase - IQ Solid-State Transformer White Paper

• NVIDIA - Why Scaling AI Compute Performance Requires a New Power Architecture

• William McMurray - Power Converter Circuits Having a High Frequency Link (US Patent 3,517,300)

• NFPA 70, National Electrical Code

• Treasury & IRS - Guidance on Prohibited Foreign Entities for Energy Tax Credits

Related Volts Episodes

• The digital circuit breaker and why it matters

• Why is NERC so worried about data centers?

• Can data centers be good grid citizens?

• Embedding intelligence at the edge of the grid

• Making the electricity grid work like the internet

Transcript

David Roberts: All right then. With no further ado, Raghu Belur, welcome to Volts. Thank you so much for coming.

Raghu Belur: Good morning, David. Thank you. Thank you for having me. I’m super excited to be here.

David Roberts: I am excited to get into all this. Let’s assume listeners are, also have liberal arts degrees like me and don’t necessarily know a lot about transformers to begin with. Let’s just start with the basics of what a transformer is. Why do we have transformers all over our grid, and what are they doing, and how are they doing it?

Raghu Belur: Got it. I think it goes back 100-plus years when the grid was kinda conceptualized. I think the US grid, I consider it to be a 20th century marvel.

David Roberts: Mm-hmm.

Raghu Belur: And I think it’s done amazing things for us, delivered power, energy, energy drives economies, and you see how the US has done. But I think we also have to be cognizant of the fact that nothing remains static in our lives, right? Everything changes, everything evolves, and that’s the one thing that I see that the grid hasn’t really done as well, is evolve with the times, especially in terms of the technology evolution. So when power was first generated, they were all done very locally.

David Roberts: Mm-hmm.

Raghu Belur: And they were all microgrids at the time. And then when people realized there is a lot of value in tying different generation and loads together, you can actually make the system much more available, much more reliable. And so they started connecting all of these microgrids together, and they used really sophisticated control structures like primary, secondary, and tertiary control to tie them all together. But one of the core elements, and you mentioned this, of tying these microgrids together, and as got farther and farther apart, as the power generation plants became bigger and bigger, and the loads became farther and farther away, you had to find a way to efficiently transmit these electrons from where the generation was and where the load was.

David Roberts: Mm-hmm.

Raghu Belur: And you saw as generation became bigger, and so they started to move them farther and farther away from city centers and where people were living. And so you needed to move those electrons efficiently, and the transformer was one way to do it, where you generate it at a lower voltage, then you boost up the voltage, and when you boost up the voltage, the amount of current to- for the same amount of power that the wires have to carry is very low, and the losses in wires goes as a square of current. So I-squared-R are the losses. So if I can reduce the current, I reduce the losses. And then when I get to the other end, where I consume my power, I can step the voltage back down to a lower level, and I consume it at the other end. So everything was great.

David Roberts: The analogy I always hear is that if you analogize it to water, current is the amount of water going through, and voltage is the water pressure. So at the beginning of the journey, you increase the pressure basically so that it will flow longer, but you can’t let it come into your house at that pressure ’cause it would blow up all your devices. So they have to lower the pressure before you put it into houses basically, and transformers are boosting the pressure and then lowering the pressure basically.

Raghu Belur: Lowering the pressure. That’s exactly what they do, and they do it extremely well, right? The transformer that has been there for 100-plus years take AC. And by the way, this was the other debate, DC versus AC.

And we all converge around AC and traditional transformers by definition are AC or alternating current that moves at 60 hertz, right? And so you boost up the voltage, you reduce the amount of current that you have to transmit, the power remains the same. When you get to the other end, you step the voltage down. In between section where the voltage is boosted up could be hundreds of thousands of volts.

So the amount of current that you have to push is very, very small, and then when you step it down, you have all that power available. And so here was something that’s been a workhorse for 100-plus years. It’s very reliable, it’s very efficient, and so the question is-

David Roberts: Well, yeah, I mean it’s worth saying, ’cause this kind of blew my mind as I was looking into it. It’s just a piece of iron, a rod of iron with two copper wires-

Raghu Belur: Right.

David Roberts: wrapped around it. One sort of takes the high voltage, does something with the magnetic field that is transferred to the other copper wire. We don’t have to get too far into it, but the point is it’s very analog and very simple and cheap and durable, which is why they’ve worked so well for 100 years.

Raghu Belur: Absolutely right. And they’ve been efficient, they’ve been cost-effective, and they’ve been reliable, so why change? Hey, there was nothing wrong with horses and buggies either. But we didn’t stay with them, we moved, because that’s part of the modernization of our lives.

David Roberts: Before we move on to what a solid-state transformer is, let’s just quickly say, like, what a conventional transformer can’t do, right?

Raghu Belur: Right.

David Roberts: It can lower the voltage, but what can it not do that you might want a transformer to do?

Raghu Belur: So another way to think about it is it does one thing, and it does it very, very well.

David Roberts: Right. Right.

Raghu Belur: So it takes AC in and puts AC out at different voltages and does it very, very well. The things that it doesn’t do is transform to different voltages. So for example, can I get AC in and generate DC out?

David Roberts: Right.

Raghu Belur: Can I take DC in and generate AC out? Can I take DC in and generate DC out at different voltages, different frequencies? The second thing it doesn’t do is, this is kinda the next level of detail, if there is noise in the system, for example. You know, we are now encountering different types of loads that we hadn’t encountered before.

David Roberts: Right.

Raghu Belur: Things like data center is a good one, right?

David Roberts: Mm-hmm.

Raghu Belur: Where the load fluctuates a lot and generates a lot of what are called harmonics. Can you, in a traditional transformer, all that is just passed through.

David Roberts: Right.

Raghu Belur: It is blind to it. So those are some of the limitations of the traditional transformer. However, let’s take a step back, right? Why, again, move away from horses and buggies? I think the big picture is- If you look at how lives have evolved, loads have changed, right? You know, historically, you know, it’s all been centralized, right?

David Roberts: Mm.

Raghu Belur: You have big generation plants. You have, then you have transmission, distribution, and your house is a load, and it’s a simple consumer of energy. But over time, what’s happened is we have evolved to where we have become prosumers of energy.

So we have started installing solar on our homes. We produce our own energy. We have batteries we store, and a lot of times we push energy back into the grid as well. So it’s no longer a unidirectional power flow.

Now, the power flow has become completely bidirectional, right? So now the demand on how the system operates needs to evolve. So bottom line is that the grid needs to modernize, and it needs to modernize by adding more intelligence into the grid.

One of the limitations of the traditional transformer is it is not very intelligent. So if we can add more intelligence... Remember, I’ve not talked about SST as yet. Let’s put that aside for a moment. I just need to increase the intelligence of the grid, which means can I control my power flow more efficiently?

David Roberts: Right.

Raghu Belur: Can I monitor my power flow more efficiently? Can I collect just significant amounts of data on how the system is behaving? Think about this as a complete system of centralized generation, consumption, as well as distributed production, right? If I can be very aware of everything that’s going on, every electron that’s being generated, consumed, and electron flow. If I can do all of that very effectively, I can make the grid far more efficient. You know, it’s dangerous to say, “Oh, I’m gonna increase the utilization of the grid because your grid is underutilized.” There’s a danger of averages there.

David Roberts: Hmm.

Raghu Belur: But nevertheless, there is something that can be done without adding. The brute force approach would be let’s add more and more and more generation.

David Roberts: Yes.

Raghu Belur: We should do that. We should do that, but we should also make the whole delivery and management of power flow far more efficient. There’s an opportunity to do that, and that’s where you start thinking about, “How do I do that?”

David Roberts: Right. So let’s talk then about what a solid-state transformer is, and as I understand it, there’s been a lot of this idea of making a more intelligent device goes back a ways, and the terminology has shifted somewhat over the years. I think people sort of converged on this term solid-state transformer. But just tell us, you know, if the old transformer is a piece of iron with two copper wires wrapped around it, what is a solid-state transformer? What makes one solid state?

Raghu Belur: You know, McMurray, I think in 1970, I believe, was the first patent they filed around what is truly the modern solid-state transformer.

David Roberts: Hmm.

Raghu Belur: Basically, it is an electronic transformer. Instead of relying on traditional copper and iron only, you do this through modern electronics, through semiconductors, through wide band gap devices like silicon carbide and gallium nitride. You operate the converters at much higher frequency. So I can go from any voltage to any voltage, any type of voltage to any type of voltage, and everything in between. And I get to monitor very carefully, I get to control very carefully how the power flows from input to output or output to input because all these devices can be made fully bidirectional. So I’m just adding that intelligence.

David Roberts: I don’t wanna get too deep into this, but let’s just dwell for a moment on what’s happening inside this thing. And again, loosely, I would say is how I understand it. But as I understand it, basically the transistors are chopping the power up into much higher frequency. And then once you have a much higher frequency, you need a much smaller transformer, basically. So there’s still a transformer in there, it’s just very, very small relative to conventional transformers because you don’t need as much sort of the iron amounts to storage. You don’t need as much storage if you have super high frequency. I don’t totally understand what that means, chopping up the power, but is that a roughly accurate... Okay.

Raghu Belur: That is exactly what it does. In the case of when, if you’re taking AC in and generating DC out, it’s actually a rectifier. I take AC and chop it up, and I make it into flat DC output, right? But what you explained is exactly what it is, because I’m running it at much, much higher frequency. And the traditional transformer is called a line frequency transformer. That’s a 60 hertz transformer.

David Roberts: Right.

Raghu Belur: That’s why it’s so large. If I can run the frequency much higher, say 10 kilohertz, and in the case of Enphase, hundreds of kilohertz, then my size of my transformer shrinks. So that’s one. The second thing that I can do is I don’t need to process the entire power of a transformer in one block.

David Roberts: Mm-hmm.

Raghu Belur: I can make small repeatable blocks, stack them intelligently, right? And then that way, each power piece of electronics is only processing a small amount of power. So, and there, you know, different people have different approaches. You can, for example, build a 5-megawatt transformer with, say, a 100-kilowatt power converter, or in other cases, Enphase is an example, where we may do it using 5-kilowatt building blocks. But it’s just a different approach. But what you do is those two things, where you run them at much higher frequencies. The transformer itself, the galvanic isolation, or the transformer itself shrinks, and I can also break it down into smaller chunks.

David Roberts: So these things are smaller and smarter. One of the questions I got kinda from the audience when I threw this out there is each of these modules, that we’ll get into later, has a chip in it. So they all have little tiny computers in them, so they’re programmable by software.

So one of the questions is, how much of this is software controlled, and how much is limited by physical materials? In other words, if you have a transformer that’s attached to, I don’t know, a solar field, could you pluck it out and go attach it to a data center and just program it differently?

Do you know what I mean? Like, how much of a range does the software get you versus you have to build different physical transformers for different physical tasks?

Raghu Belur: Yeah. So, you know, again, it depends on the approach that you take. I’ll give you the Enphase view of it, if you may. You know, any modern electronics today has microprocessors or microcontrollers built into it.

David Roberts: Mm-hmm.

Raghu Belur: Right? That’s what they rely on. And by definition, when you have a microcontroller, you can run more sophisticated control algorithms in there.

David Roberts: Mm-hmm.

Raghu Belur: And all of that is done in firmware, all of that is done in software. You’re monitoring a lot of inputs, outputs, as well as all the control parameters that are in there. You can look at what happened, you can do diagnostics on when, if a failure were to occur. This is the part that I was talking about, where you’re adding a lot of intelligence, you’re adding a lot of software. And when you make it, when you rely heavily on semiconductor and software, that’s exactly what Enphase has done over its last 20 years.

When you rely on, heavily on software and semiconductors, a few amazing things happen, right? Semiconductors and software, if you look at the technology history, if you look at smartphones, if you look at your laptops, et cetera, they continue to improve and increase in performance over time.

David Roberts: Mm-hmm.

Raghu Belur: And they don’t asymptote in cost. Unlike copper and iron, where they become incompressible, right? I mean, copper and iron is copper and iron. I mean, I buy them by weight. Whereas I can- But because of semiconductor integration, because of software, I never slow down my trajectory for cost reduction, increased reliability, and increased performance. This was the core premise of how Enphase started. Said even those big box inverters are a lot of copper and iron in them, instead of making power devices, let’s make power electronics, because power electronics doesn’t asymp- is better in cost, better in performance, better in reliability, and it doesn’t asymptote those functions.

David Roberts: I wrote a whole post about this once many years ago. I should dig it up. But this is sort of characteristic of the whole clean energy transition. A lot of what’s happening in the clean energy transition is substituting intelligence, substituting computing for materials, basically.

Raghu Belur: Mm-hmm.

David Roberts: And this gets you around the limitations of materials, the physical and the sort of supply chain limitations of materials. You’re just using intelligence instead. And intelligence you can increase-

Raghu Belur: Over time.

David Roberts: Forever.

Raghu Belur: Yeah. You know, transistors cost femto dollars, right? So you can add more and more compute in them. We have shown that. But there are some fundamental physics that you just cannot get around, like the thermals, right?

David Roberts: Right.

Raghu Belur: I mean, I’ll never be 100-plus percent efficient, but I can get to 98.5, 99 percent efficient. I still have a percentage of loss.

David Roberts: Yeah, sure.

Raghu Belur: I still have to manage that 1 percent loss or 1.5 percent loss is all in heat, and I still have to manage that heat. So there is some physical limitation that I won’t get over, but all of those are also workable problems, right?

David Roberts: Yeah, yeah.

Raghu Belur: Because I’m not stuck in this copper and iron world where I can’t do a whole lot. I can do significant amounts.

David Roberts: Well, let me ask on that front, like when you start thinking about it, it’s very striking that power electronics has sort of moved into everything around us. They’re in our cars, our phones. Power electronics has sort of taken over everything except the grid, which is striking, I think. What is your explanation for why power electronics rule everything around us except for the sort of foundational infrastructure that we use to distribute electricity? Why has the grid been so resistant and so slow? What makes solid-state transformers sort of- viable today where they weren’t, you know, yesterday?

Raghu Belur: Yeah. Again, like I said, the grid is a marvel of the 20th century, but it hasn’t evolved. It needs to evolve. Everything in our lives, you nailed it. Everything in our lives revolves around power, power management, power electronics. Look at our future, right? As we move into the world of physical AI, what do you, what do these-

David Roberts: Yeah...

Raghu Belur: robots need, right? They all need batteries. They all need power. Look at satellites. Look at every aspect of our lives. We are relying heavily on power electronics. I wear a smartwatch. I carry a smartphone. Everything relies on power, power electronics, and power management, and it’s just because things are far more efficient. The old watches used to do one thing, whereas my smartwatch-

David Roberts: Yeah...

Raghu Belur: monitors my health in real time, right? It is amazing how much data it collects.

David Roberts: I guess the question is, has that revolution not reached the grid for some sort of physical reason or some sort of technological reason, or is it just institutional? Do you know what I mean? Social and political. Like, why hasn’t it taken over the grid yet?

Raghu Belur: I think it’s a combination of things. First, it is institutional, right? The grid tends to think in changes that occur a little bit more slowly.

David Roberts: Yeah, yeah.

Raghu Belur: Because the grid needs to be very reliable, right? We heavily rely on-

David Roberts: Yeah.

Raghu Belur: making sure that those electrons are delivered to our house all the time. They’re delivered inexpensively and safely and cleanly. I think that the grid has to evolve because the world is evolving around it much, much faster than the rate at which the grid is evolving.

I mean, look at things like, look at the loads are changing. We ta- just talked about it. I have two EVs at my house, you know, and I want to charge whenever I want to charge. And you know, we’re gonna be releasing a bidirectional EV charger.

Now, my EV is not just a consumer, it can also feed energy back into the grid, right? We have solar, we have batteries, we can control how we consume our power. We’re just driving so much intelligence to the home. That’s the notion of a distributed architecture.

David Roberts: Mm-hmm.

Raghu Belur: Right? However, everything in between, you need to m- tends to be not very intelligent. So the grid is evolving at a rate that is significantly slower than the world around us that’s evolving, right? Like we talked about physical AI, robotics. Everything is coming around. It’s just around the corner from us, and we need to evolve our grid as well, and it has to evolve faster. So it’s a combination of technology adoption and some institutionalization of the way the grid is. It’s just the way it is.

David Roberts: Mm-hmm.

Raghu Belur: But I think it’s more s- look at climate change. Look at fires here in California, right, as an example, or fires actually all over the US. And we have to deal with hardening of the grid as well.

David Roberts: Mm-hmm.

Raghu Belur: Which is why we started Enphase. We looked at it and said, “Wow, the grid hasn’t evolved at the rate at which our lives have evolved, and what can you do about it?” Obviously, we were not gonna go out there and start a company that would attack that problem out of the gate. We said, “Let’s think about distributed architectures,” because we know they always win in the long run. In network parlance, I always say push intelligence deeper into the network. Let the endpoints be autonomous, make autonomous decisions, but have the benefit of network effect because they’re all hyper-connected, right? Hyper network. That’s the notion.

David Roberts: You’re speaking my language now. So let’s talk about this distributed architecture. So there are lots of different companies popping up right now, we should say, in this space trying to make different versions of solid-state transformers. You know, as you say, the need for this has sort of come up relatively suddenly, but very legi- pretty intensely, so there’s a lot of people responding. Your approach is somewhat unique in that it is a distributed architecture, so you’re chaining together small repeatable modules rather than building bigger ones. So talk maybe first, just very briefly, about how you applied that philosophy to inverters. That’s how you got started is in the solar inverter field, and then how that same philosophy transfers over to transformers.

Raghu Belur: I do a lot of thinking, as you can imagine, for my job. That’s part of my role, is one of the dangers of if you have had success in a certain field is, you know, as they say, if you’re a hammer, everything looks like a nail. You don’t want that.

David Roberts: You overlearn some lessons, yeah.

Raghu Belur: Precisely. I’m very introspective about this, and I always step back and think about, “Hey, is this the right approach to solving a problem?” First and foremost, clearly, what problem are you solving? You always start there, and what’s the right approach to solving that problem? A bit overused, but always thinking about it on a first principle basis.

So distributed architectures is something that I very strongly believe in. And so it was very clear in my mind that when we were trying- gonna solve this SST problem, solid-state transformer problem, we said we must do it using a decentralized or a distributed approach because there are three things that happen when you’re distributed.

Over the long run, you get better cost, better performance, better reliability, right? And so what did Enphase do, right? Enphase really over the last 20 years, and we have shipped about 30-plus gigawatts of power electronics for solar, for batteries, and now for EV chargers. To be- put a finer point to it, we have shipped 90 million microinverters to date. Right? We are making millions a quarter.

So what have we done? We have really architected this, a piece of power electronics design or architecture that is, I’m gonna get into a little bit of detail, it’s called single stage-

David Roberts: Mm-hmm...

Raghu Belur: very high frequency using what’s called predictive control. We really don’t have a traditional boost stage, PWM, chop it up, feed it back, look at error, and then converge. We don’t do that. We actually run a mathematical model of the converter within our own chip. We build our own ASIC.

David Roberts: Mm.

Raghu Belur: Run it in there. It’s very, very fast. We calculate our control vectors in nanoseconds, and then we predict what the output needs to be, and as long as it’s in the safe operating area, we go, “That is the right output,” and that’s how we get fantastic response time.

So just to apologies for the words that I’m using here, single stage, very high frequency from 250 to 500 kilohertz using predictive control built in, and all the controls is on our own custom chip, on our custom ASIC. We have over five generations of ASIC, nine generations of inverters, and now we also use what are called wide band gap devices.

A lot of people use silicon carbide. We use gallium nitride, and we have- there’s a reason why we use ga- why we chose GaN over silicon. We are big fans of wide band gap devices. Actually, that’s one of the key enabler for it’s both the compute capability plus the availability of wide band gap devices that’s really enabled solid-state transformers to be a viable technology today.

So what we did was we took this piece of power electronics platform that we have built, and when we started, it was solar. We used the same thing, and we said, “Hey, now we’re gonna put it inside a battery.” Why? Because this was fully bidirectional, et cetera.

David Roberts: Well, let’s just pause for a second on what you did on solar. So solar used to be, it used to be if you put a bunch of panels on your roof, they would all connect to one big inverter, and if that inverter went down or screwed up somehow, the whole installation goes down. You broke that big inverter up into these little microinverters where you put one on each panel.

So they’re all kind of doing the same thing, but at a smaller scale. The benefit of that is if any one of them goes out, it’s a small degradation in the performance of the field, and you can just go replace that one without a huge repair job. So you shrank inverters down. That was your first product. That’s your main product still.

Raghu Belur: Yeah. Can I rephrase the shrinking part a little bit? You know, that was the conventional approach when people had tried microinverters before. They said, “Let’s take a big box inverter, and we’ll shrink it down into something smaller. We just-

David Roberts: Right...

Raghu Belur: take all the components, and we’ll change the values of them and make them smaller.” And our approach, we realized that that would have been the wrong approach. We really re-architected it from the inside out.

David Roberts: Hmm.

Raghu Belur: Made it a more digital device, heavy reliance on semiconductors, heavy reliance on software, and that’s where that single stage high frequency-

David Roberts: Got it...

Raghu Belur: predictive control system, which was very mathematical in its architecture, came about. That was one of the approaches. But the rest, everything that you said was absolutely right. Actually, it does improve performance.

David Roberts: Mm-hmm.

Raghu Belur: Because now you’re optimizing the output of every single solar panel, and every panel and its microinverter acts like independent energy producer. So I’m just tying a bunch of energy producers together, so if I have any impairment on one of them, dust, debris, shade, whatever, on one of them, it has no impact on the rest of them.

The rest are operating at their max capacity. The one that’s impacted is impaired, whether it could be temporary because if it’s a shade that’s just coming through. So you improve performance. The second one, absolutely right. I don’t have a power conversion single point of failure, right? If I do have one. First, I can make this bulletproof because it’s not a power problem I’m solving. I’m solving a power electronics problem-

David Roberts: Right...

Raghu Belur: using a lot of semiconductor and software, and that can be made extremely, extremely reliable. And then also when you make it into a microinverter that you put on the back of every single solar panel, you’re converting DC to home AC wiring, and right there at the panel it becomes a very Lego block plug-and-play architecture. So the simplicity-

David Roberts: Mm-hmm...

Raghu Belur: was another big driver. David, it’s funny, it’s been such a long time since I’ve explained the value proposition of the solar inverter. It’s kinda funny.

David Roberts: I’m constantly harping, preaching on the merits of distributed architecture in a variety of systems, and we talked about it in the context of the grid a bunch on this pod.

Raghu Belur: Right.

David Roberts: You know, every chance I have to just to underline that. You know, I mean, you’re describing the basic benefits of distributed architecture, the repeatability, the reliability, cheapness.

Raghu Belur: You’re on the right side of technology history-

David Roberts: Well, yeah, it’s-

Raghu Belur: if you do distributed architectures. But they’re hard to do. They really are hard to do.

David Roberts: So then how does that apply to solid-state transformers? Are, you’re doing a similar thing, you’re taking this old analog device, you’re making it into power electronics-

Raghu Belur: Right...

David Roberts: and you’re taking one big thing and replacing it with a chained series of smaller modules.

Raghu Belur: Yep, precisely. For example, a 5-megawatt system or a 5-megawatt transformer or a 5-MVA transformer, and we are building it with 1,000 of these 5-kilowatt power converters.

David Roberts: Right. So each power converter just takes a little bit of that power and converts it. And so working together they convert the-

Raghu Belur: They make 5 megawatts.

David Roberts: Right. Yeah, yeah.

Raghu Belur: Precisely. And so I get all of the benefits we talked about. One of the benefits, of course we talked about, you know, reliability. For example, a historical failure rate over the last 20 years is about 500 DPPM or defective parts per million, which is 0.05 percent, is our failure rate. So we have a very well-proven track record because of our architecture, and more importantly, because of the way we build our system. So everything from, hey, we make one thing, and I don’t care if it’s in the US at line-to-line 60 hertz, 240 volts, or it’s in Europe at line-to-neutral, 230 volts and 50 hertz, or if it’s in a battery, I just change it in software.

David Roberts: Mm-hmm. Mm-hmm.

Raghu Belur: Right? So when you make one thing, you can make it at very large scale, and you can really control the manufacturing process. You can automate manufacturing process because it’s a piece of electronics.

David Roberts: And get on that cost curve, get on that sweet, sweet, sweet cost curve.

Raghu Belur: Beautiful. Exactly right. And it’s cost, and it’s reliability.

David Roberts: Mm-hmm.

Raghu Belur: Because I just do one thing, and I make it over and over and over again. Simple example is look at today’s modern data center. It’s not like one big monolithic computer. It’s a bunch of GPUs-

David Roberts: Yeah...

Raghu Belur: that are tied together with software. Like, you know, in the case of the Nvidia GPUs, there’s an NVLink 72 that ties all of them together to produce a supercomputer, basically, right? We take the exact same approach. Instead of doing it with one giant or a smaller blocks of giant power modules, and these are power devices, we turn the problem into power electronics. We make 1,000 of them, and we have it done. We already do it at scale for our solar and battery applications today at homes, and we are just taking that platform and extending it into the data center market.

David Roberts: So just to help people visualize, basically, your transformer is a box of these modules. You could think of them like books on a bookshelf, and the size, you can build a transformer of any size just by sticking more of these modules in. They’re like Legos. You can customize the size based on how many modules you add, basically.

Raghu Belur: You nailed it. That’s exactly the approach. Just like if you think about a data center, and if you have TPUs and GPUs, you can build bigger or smaller data centers. You can make modular data centers-

David Roberts: Right...

Raghu Belur: just by changing the number of GPUs that are in there. Of course, you get some benefit from one family of GPUs to other, but those are incremental, not, you know, if I wanna go from a 100-megawatt data center to a gigawatt data center, I change the number of GPUs.

David Roberts: Right, right.

Raghu Belur: If I wanna go to a 1-megawatt transformer to a 5-megawatt transformer or a 10-megawatt transformer or an MVA transformer, I just change the number of Enphase power modules that go in there or microinverters that go in there. That’s exactly the answer.

David Roberts: Let’s talk briefly about materials here, about how this affects materials and supply chain. I’m guessing, you know, copper is emerging, I think, as sort of a limiter on a lot of grid infrastructure, especially, you know, as we get these bigger and bigger loads. If you just use traditional transformers, the only way to handle bigger and bigger loads is just bigger and bigger transformers, which means more and more copper, and copper is starting to be a problem. How much copper does one of these solid-state transformers save relative to a similarly sized conventional transformer?

Raghu Belur: Yeah. I don’t have a specific number, but I assume it’s like a hundredth or a thousandth. There is no copper in a... I mean, our whole 5-kilowatt power module, the entire power module, all the power electronics with wide band gap devices, we do have a transformer core. The transformer and core weigh nothing, right? In, you know, grams. Hundreds of grams.

David Roberts: Very little copper then.

Raghu Belur: Very, very little copper. Almost all of it is in the power electronics itself, which is all of the semiconductor devices. Actually, the biggest contributor to weight, I believe, is the, we encapsulate it in silicone potting-

David Roberts: Hmm.

Raghu Belur: so that it can be outdoors, it can be rained on.

David Roberts: Mm.

Raghu Belur: We don’t care. Like, you know. Think about our microinverters. They sit on a roof in Arizona, they sit on a roof in Alaska, right?

David Roberts: Yeah.

Raghu Belur: Extreme temperatures, extreme weather, and so we encapsulate them in silicone potting. They are waterproof. And so that’s probably the bulk of the weight.

David Roberts: Interesting.

Raghu Belur: And it’s got nothing to do with the copper or iron that’s in there. And so for us, whatever it takes to make the system much more reliable. So the supply chain moves away from, it’s not just the supply chain of copper and iron, it’s also the manufacturing process. You go to traditional high-volume pick-and-place, surface-mount technology type of technologies, very traditional PCB manufacturing technologies rather than, for lack of a better word, handicraft of building these copper and iron transformers, right?

David Roberts: What about the gallium, though? You know, to get back to your materials question. You’ve chosen gallium-

Raghu Belur: Right...

David Roberts: as this wide band gap. I won’t have to get into the physics necessarily, but you need gallium, and that’s not necessarily easy to find. And these gallium switches you’re using are not necessarily easy to find. Is that gonna be a bottleneck?

Raghu Belur: So actually, on the contrary, GaN is actually commodity. One of our, uh-

David Roberts: GaN is gallium-

Raghu Belur: Nitride...

David Roberts: gallium nitride. That’s what you’re using for your switches.

Raghu Belur: Gallium nitride. Correct. So GaN is commodity, and let me explain. And that was one of the driving factors as well for our architecture is because we wanted to run the converter at higher and higher frequencies. The higher the frequency you go, the passives like the transformers, the chokes, et cetera, they shrink in size. When they shrink in size, you can drop the cost down.

David Roberts: Instead of 60 hertz, which in sort of like physics terms is incredibly slow, that’s the grid speed, you’ve got little switches that are flipping back and forth like several hundred thousand times.

Raghu Belur: 500,000 times a second.

David Roberts: 500,000 times per second. You’re creating very high frequency, which is why your transformers can be so tiny.

Raghu Belur: Yep. And then we also do some very smart things because we have our own ASIC, because we are, the way we construct it. When we do the switching, we do what is called soft switching, which means that we only switch when those frequencies, when you cross the zero point. So you don’t create a lot of what are called harmonics. You don’t create a lot of EMI and EMC, or electromagnetic interference, right? And so we have a very, quote unquote, “from an electronic noise point of view,” a very quiet system. So GaN is really interesting. Let-

David Roberts: But if harmonics come in, can you smooth them out with your program switches?

Raghu Belur: Absolutely we can, because we can effectively shape the sine wave or shape the waveform because we have control over it.

David Roberts: Right.

Raghu Belur: Right? Because we can mathematically compute and say, “Okay, let’s shape the waveform.” The second thing is with GaN, it’s really interesting. Unlike silicon carbide... By the way, I’ve said this. We were one of the first companies, I think, to ship silicon carbide-based microinverters, and our first inverter, 2008, had silicon carbide devices in it.

David Roberts: And that’s what most of your solid-state transformer competitors are using, is silicon carbide switches. R- And you’ve chosen GaN instead.

Raghu Belur: We eventually moved to GaN. About 10 years ago, we made a strategic decision, and the reason for that is threefold. One, like I said, I wanna be able to run the converter at higher and higher and higher frequency because I can drive the cost down and increase the-

David Roberts: Right...

Raghu Belur: reliability, and GaN enables us to do that. The second thing, and I’m gonna get into some details here. It’s the way GaN is built on top of silicon. It’s GaN on top of silicon. So there’s-

David Roberts: Mm...

Raghu Belur: mostly silicon and a thin epitaxial layer of GaN on it. So the manufacturing process is much, much, much simpler than silicon carbide.

David Roberts: Mm.

Raghu Belur: Silicon carbide is the second hardest material in the world. And so, you know, manufacturing process is much hard. Ingots are much smaller compared to the GaN ingots, right? And so there’s advantage in terms of manufacturing. And then the third thing, a little bit esoteric, is for us, we use something called as bidirectional GaN. We actually work very closely with the GaN industry to basically do this, which is on one die, we can flow the power in both directions.

So again, you drive the cost down compared to what you would do in silicon carbide, which would require two dies. So the amount of die space that we have is much, much smaller. So GaN was a very deliberate choice. And by the way, it was a good choice for our approach, which is very high volume, commodity components, automated manufacturing, high frequency.

It was a good approach for us. I don’t fault others for using a silicon carbide approach, but in some sense, architecturally drives you to do that because you’re building power systems, not power electronics.

David Roberts: It is the case, though, that China controls almost all gallium supply. Is it not?

Raghu Belur: No, not for this. We have no exposure there. In fact, when you think about manufacturing, there’s something called as... I’m gonna digress just one moment just to answer your China question.

David Roberts: Okay.

Raghu Belur: There is something... We have to understand the critical nature of the transformer is such that it is being categorized as critical infrastructure. It is part of our grid. It’s national interest. You want to make sure that-

David Roberts: Mm-hmm...

Raghu Belur: everything is controlled, especially in this modern world where you do remote upgrades, and they’re software controlled, et cetera, right? You don’t wanna have what’s happening in Europe with 200 gigawatts of solar that is not necessarily in their control, right? And so we have to be very careful and mindful of the pieces of electronics that we are adding to the grid. All solar that’s been installed, even in the home, sits on the gri- on national grid.

David Roberts: Mm-hmm.

Raghu Belur: You know, you wanna be very careful about ensuring that you are what is called FEOC compliant or foreign entity of concern compliant. So for us, when we think about all the components that go into the power module or the microinverter that we are making for solid-state transformers, we have an 85 percent supply chain overlap between what we already do-

David Roberts: Mm...

Raghu Belur: with our current solar and battery microinverters. So we have leveraged everything that we have done there, 85 percent, like I said, and built this device. And on GaN supply, the amount of GaN that we are using is so small. Like I said, it’s mostly silicon.

David Roberts: Mm-hmm.

Raghu Belur: And there’s a GaN layer on it. We are not subject to any GaN supply chain concerns.

David Roberts: Mm-hmm. You’re not worried about any materials bottlenecks moving forward.

Raghu Belur: Yeah, I’m not concerned about it, not at this time. You know, things can change. We live in a very dynamic world.

David Roberts: Sure.

Raghu Belur: But I’m not concerned about it. By the way, we already have the manufacturing footprint. We have the capacity today to make 3 million of these devices per quarter. That’s what we do for solar and batteries. That’s the capacity we have, so 12 million devices, and so we have 50-plus gigawatts of capacity available today to make solar, batteries, solid-state transformers, et cetera.

David Roberts: Okay. Briefly, let’s talk about cybersecurity. I think a lot of people, their initial gut instinct is when you say, “I wanna move the whole US grid over from these dumb analog devices to computers, basically, like little computers in every node of the grid,” people think, “Well, computers can be hacked, and does this not make the whole grid hackable? Does this not increase what they call the attack surface for cybersecurity threats a zillionfold?” How do you think about cybersecurity?

Raghu Belur: We bank online. All our banking information is available online. We transact every day. I mean, I don’t remember the last time I transacted with notes. You know, I use electronic payment schemes all the time. Do you have to pay more attention? Yes. But more importantly, is the technology available to make things more secure? Absolutely, right? So you have to think everything from hardening during the manufacturing process. When I say hardening, I’m talking about cyber hardening-

David Roberts: Right...

Raghu Belur: to in use, to managing who gets to upgrade these systems. Are these systems... You know, you can even close form it. You can say, “Hey, I’m going to only have a very controlled environment in how they get upgraded.” I think both, of course, US has done an incredible amount of work in terms of cyber, but so has Europe. Europe is also doing a lot of work in terms of all of the cyber-related stuff. Absolutely, a major problem to be solved, but we solve those every day. We are solving these problems, right? But like I said, we bank online, we transact everything online, so these are all solvable problems. I’m not concerned about it.

David Roberts: And you don’t lose any sleep thinking about in two or three or five years, giant swarms of AI agents that have no purpose in life but to find vulnerabilities in the grid, just working constantly around the clock looking for vulnerabilities to get into the grid. You don’t worry about that?

Raghu Belur: No, I do. I do. I do think about it. Without, you have to, right? But that same applies to every element of our lives, right? Can somebody hack into my phone? Can somebody hack into my computer? Can somebody hack into my bank?

But that’s a race that we are in. There will be the good guys defending and the bad guys attacking. It’s just the nature of the world we are living in, right? We live in a highly, highly interconnected world. I apologize for being generic about it, but that is the reality of it, right? We have to make sure that we harden our systems at every level, starting with, you know, we call it a birth certificate. We actually create a birth certificate for a device that is manufactured on our line, so we know that nobody’s spoofing our devices as well, right?

So it starts from there, and then you look at software. Sorry, you look at firmware, then you look at application layer software, and then you look at, hey, where are the safety functions versus what are application functions? You try to segregate those, and you make sure that you are always updating and upgrading with the right safety protocols in place, right? But those mechanics exist today because a lot of systems are already doing it today. And so look at cars.

David Roberts: Yeah, yeah. Like we said earlier, I mean, power electronics have taken over everything else.

Raghu Belur: Look, EVs and smart car and autonomous driving and cars and-

David Roberts: Yeah...

Raghu Belur: you could have an impact there, but I think it’s constant race that you’re in. You’re gonna constantly make sure that you’re ahead of somebody who intends to do harm.

David Roberts: All right. Let’s talk about the markets. I mean, transformers are everywhere, but you have this sort of chart in your white paper about the first markets, the big markets, and then the later markets. It’s worth saying, interestingly, that trains, oddly, a lot of trains already have solid-state transformers in them for some reason.

But the next big proximate market that you’re going after is data centers. So let’s talk a little bit about why these are suited to data centers. One thing, and you mentioned this earlier, is just that a data center load, because of the way AI works and AI training works, is just gonna be jumping up and down constantly. It’s a very dynamic load. So talk about just what need are data centers creating, and then how do solid-state transformers meet that need?

Raghu Belur: Yeah. So like in every business, you look at business opportunities and look at demand, and data center was one place where very significant demand has been created, and it’s because of exactly the things that you pointed out. A couple of things that are happening. One is the load’s becoming extremely dynamic, particularly training loads, because of the way the [AI] transformers are computed, mathematically operated on, coefficients are generated, et cetera. So these loads may go from 10 percent to 100 percent, you know, five times a second, right?

David Roberts: Yeah.

Raghu Belur: So they’re fluctuating a lot. But the second thing that’s a big driver also is just the amount of power that these computes are beginning to demand, right? If you look at old data centers, they were, per rack, which is a seven-foot telecom rack, used to be 30 kilowatts.

David Roberts: Yeah.

Raghu Belur: Today, they went to 150. Today, we are already at 250 kilowatts, and now we are talking about getting up, them up to a megawatt. Now, recall the very first narrative that you had which said, “Hey, what do transformers do?” They boost up the voltage.

So if you stay at 50 volts and it’s a megawatt, you’re looking at 20,000 amps. 50 volts is what traditional racks run at, 48 or 50 volts or 54. There’s some nuance there, but let’s assume 50. You’re talking about 20,000 amps of current that you have to deliver to each of the servers in a megawatt rack. That’s just not feasible.

So what do people do? What’s the push? The push is to go to 800 volts DC out of the gate. Eventually, the National Electrical Code limit is sitting at 1,500 volts DC, but the push is, let’s go to 800 volts DC, so we can drop the amount of current that we deliver to each server by almost 20x or 18x.

And so we go, if you drop the amount of current, the amount of copper that you need is much, much less, and the losses are much, much better.

David Roberts: So this is all by way of saying that data centers are shifting toward using DC inside the building, basically.

Raghu Belur: That’s exactly right. There’s a push to move toward 800 volts DC inside what’s called the white space or the space where all the compute infrastructure lives. And where did 800 come from? That’s an interesting story as well. 800 came from the automobile industry.

David Roberts: Hmm.

Raghu Belur: Because when you do DC charging of your cars, you do them at up to 800 volts DC. So they said, “Hey, let’s just take 800 volts DC that the car industry has solved or continues to solve. Let’s take that voltage and apply it to data centers as well.”

So that’s where the solid-state transformer goes from medium voltage, which is 34,500 volts AC, to 800 volts DC. That’s where 800 comes from. And 800 volts DC solves that problem of very high current at 50 volts, which is not good, and we go to 800 volts DC and deliver 800 volts DC to the server.

Now, within the server, we gotta do a bunch of gymnastics because the GPU still runs at 1 volt or less than 1 volt. But that’s... We are breaking the problem down, at least to the servers, let’s make the delivery as efficient as possible, and that’s the driver for 800 volts DC.

So that’s the data center problem, if you may. It’s solving the dynamic load problem, making sure that that dynamic load is not reflected back to the utility.

David Roberts: Hmm.

Raghu Belur: ’Cause if you reflect that back to the utility, that would be very bad because rotating machinery, whether that is within the data center or the utility, is really impacted by this dynamic load. So we have to make sure, and batteries play a very big role, along with SSTs, to ensure that this dynamic load that the GPUs create is not reflected out to the utilities.

David Roberts: Right. So the... You want something in between those loads and the utility that smooths it out and that presents basically a smooth, steady demand to the utility, to the bulk grid.

Raghu Belur: To the bulk grid, and solve this load problem, which is racks going up to a megawatt, and it’s just not practical to service them with 50 volts DC.

David Roberts: And this is something we should say that is very much current and underway. Like, 800 volt DC is not yet the standard, I don’t think. It’s fair to say this is something that people are shifting to at the moment, and this is why you think it’s a big opportunity for SSTs.

Raghu Belur: Absolutely right. And I think we have said 2027, you should expect pilots at 800 volts DC, and then deployments in 2028. I mean, it could be maybe end of ’27 where you start seeing those first signs of deployment, and then 2028 you should start seeing a ramp-up. And I expect that any company or companies that deliver viable SSTs-

David Roberts: Hmm...

Raghu Belur: will see quick adoption because it makes sense. It makes sense because you’re dramatically simplifying the powertrain from the way it is today.

David Roberts: What are you saving? What equipment are you substituting for? Like, what is this gonna do f- tangibly in data centers? What are you getting rid of if you shift to an SST?

Raghu Belur: One of the use cases is you do eliminate what’s called the double-conversion UPS. So there are two conversions that take place. So there’s this traditional transformer, then you have a power control system or a PCS, and then you have a UPS, and then you have another PCS, and then you go create 415 volts or 480 volts AC, and then from there you transform yet again to 54 volts DC, and then you transform yet again at the server. How about I simplify that train and go from medium voltage, 34,500 volts, to 800 volts-

David Roberts: Which is what you get from the grid.

Raghu Belur: which is what I get from the grid, in one shot, boom. Straight into the server, and then of course, the server does the rest of the conversion. I mean, there are estimates, right? These are estimates. And again, depends on configuration, but estimates are you could save as much as, you know, 4.5 to 5 percent in efficiency.

David Roberts: Maybe this is obvious to everyone, but we just say it anyway. Every time you convert, you lose it a tiny bit. Like, all those conversions, you’re losing tiny increments. So the fewer conversions, the better, right?

Raghu Belur: Absolutely right. If I can make something 4 to 5 percent more efficient, that’s one. The second one is I can also reduce the cost, because I have one piece of equipment versus multiple pieces of equipment.

David Roberts: Mm.

Raghu Belur: Right? So I can see some significant improvement in cost. And by the way, I mean, without getting into the details here, Enphase specifically, because of our approach, because we do the single-stage power conversion, we have a very, very fast response time.

We can actually have additional savings because of the battery that you use. You can rely on the big battery energy storage system, the two-hour or four-hour BESS that’s sitting farther away in a yard. Again, those are really details.

But we can save a lot more money than going the traditional route or even what I speculate will be the traditional SST route. So we have some additional benefits. I don’t wanna go there. So there are CapEx savings, efficiency savings, and along comes reliability savings as well.

David Roberts: Well, I’ll go there very briefly, but the idea I think is, like, instead of having a battery next to each server rack doing this kind of smoothing and converting everything-

Raghu Belur: BBU, yep.

David Roberts: Yeah. You just have one big battery outside, and the SST is doing all the smoothing work for you, feeding it into, so you don’t need those individual batteries by every rack. This is the idea.

Raghu Belur: That is the general idea, but you put that big battery at the SST, or do you rely on a bigger battery that’s sitting maybe a quarter mile away in a gigawatt data center, which is a two-hour or a four-hour BESS?

David Roberts: Hmm.

Raghu Belur: So a gigawatt data center may have a 4 gigawatt-hours of batteries, which is... What is it? It’s gonna be about 30-plus acres. So it’s sitting a quarter mile away. I interconnect on medium voltage. I interconnect those batteries on medium voltage using an SST, and then I do the power conversion, and then I can... Can I absorb those load fluctuations at 10 percent, 100 percent, five times a second? Do I have to absorb it locally at the SST, or can I absorb it? Absorb means by definition batteries.

David Roberts: Right.

Raghu Belur: Or can I absorb it in the yard quarter mile away? Remember, a quarter mile away in a BESS.

David Roberts: Right. And then theoretically, you’re separating building big battery facilities, which you can just build batteries and use all the efficiencies of that, and then building the data center separately without all the batteries in it. You separate those two things, you can make each of them more efficient.

Raghu Belur: And you increase the amount of compute that you can add in a white space. That’s the big driver.

David Roberts: Mm, right, right. Right, ’cause you’re literally saving space.

Raghu Belur: You’re a double how... You’re saving 150 percent of the space because today 50 percent there’s a side, there’s this notion of a side rack which contains the battery backup unit, the power supply unit, the power distribution unit, and et cetera. So if it can simplify that entire powertrain, and if Enphase can show that, hey, you don’t even need that local battery anymore, hey, that could be a huge advantage to the entire system.

David Roberts: Yeah, yeah, lots more compute in the same building.

Raghu Belur: Yeah. So the question comes, if I save 5 percent in efficiency, do I take that 5 percent efficiency to saving electrons, saving energy? I think that’s a very good reason to do if you are power constrained, which in a lot of cases we are.

David Roberts: Right.

Raghu Belur: But in the other case, it means I can add 5 percent more GPUs.

David Roberts: Right.

Raghu Belur: I can add more GPUs, which means I can generate more revenue, I can be more efficient. My, the amount of tokens per watt improves.

David Roberts: So hyperscalers need this, and have a lot of money. So they’re the first big market that SSTs are going after approximately. And this is all semi-speculative. We’re talking about pilots of this next year maybe, and then, you know, the industry shifting to SSTs ’28, ’29, ’30, something like that. But that’s the big market with a lot of money that you’re going after first, correct?

Raghu Belur: Yes, I’m far more bullish. As an engineer, I think about it on a first principles basis. I go, “Why wouldn’t you put something that’s more reliable-

David Roberts: Sure...

Raghu Belur: more efficient, and lower cost?” And so if you believe in the AI transformation, which I’m a believer in, I think you should expect this to happen sooner than later.

David Roberts: Yes, but it’s always the engineering mindset running up against the institutional conservatism of people with lots of money who have been doing things a certain way for a long time. It always goes more slowly than one might like. But one way or the other, these are about to move into data centers in a big way.

Raghu Belur: Hundred percent.

David Roberts: Let’s talk then about... So that’s kind of s- the first big chunk you’re after. You say this, the later adopter, the next big market after that is gonna be solar and batteries. So talk about why SSTs are particularly well-suited for solar and battery installations.

Raghu Belur: So the battery problem we’re gonna solve in parallel with the data center problem because, like I mentioned, you’re gonna put an SST in front of the battery, in front of the BESS, because you’re not gonna transmit DC out of the battery over a quarter-mile distance. It’s too low a voltage. You want to bump that up to medium voltage, which you can either do it using a power control system plus a conventional transformer, or you could just put an SST there, and I can do it.

David Roberts: Right. Power control system plus transformer replaced by a single device that does both.

Raghu Belur: Precisely. So we’ll solve the data center and the BESS problem almost simultaneously because they are, they go hand in hand. It’s part of the Enphase vision. Enphase vision is always that you never make individual widgets. They’re all part of a system and they all have to cooperate and operate like a system. So that’s our view. But then the next big opportunity, I mean, if you look at just the utility-scale PV market itself for 2027, it’s 30 to 40 gigawatts, right? It’s a massive opportunity that you want to play in if possible. And-

David Roberts: To say nothing of the global-.

Raghu Belur: Oh, global is even bigger.

David Roberts: Yeah. Growth, which is even crazier in a lot of places. So why do these work well with utility-scale solar?

Raghu Belur: One of the biggest things that you can do, you know, today, if you look at conventional PCS systems, at least this is the Enphase perspective, the conventional PCS systems with a utility transformer, again, you’re simplifying sort of two components. You’re going to a single component.

David Roberts: So instead of one thing converting from AC to DC or vice versa, and one thing adjusting voltage, you’re converting and adjusting voltage in one machine.

Raghu Belur: In one machine.

David Roberts: Just to repeat that one more time.

Raghu Belur: Exactly. And then when you have a system like ours, you know, remember I, as I mentioned in a 5-MVA SST, we have 1,000 of these. We actually undersubscribe our inverters by about 6 percent. So what that means is I have 60 additional inverters. They still run, all thousand of them run, but there are like approximately 60 additional inverters that are just sitting there. They’re all underutilized by about 6 percent in power. So I can dramatically increase the reliability not of the copper and iron transformer, but that pair of copper and iron transformer plus the PCS.

David Roberts: Mm-hmm.

Raghu Belur: Because of the approach that we are taking, we can dramatically improve the reliability of the PV system. So, you know, typically they tend to be five-year warranty. Can we think about potentially offering 20-year warranty? You know, it becomes feasible. I’ve- You know, obviously our focus today is on data centers and BESS, but that’s definitely possible that we can 3x or 4x.

David Roberts: So you think you can take an existing utility-scale solar field, replace the converters and transformers on site with SSTs, and that would increase the reliability of the existing field?

Raghu Belur: Absolutely. Our approach, that’s exactly how, in a retrofit scenario, that’s what would be the selling point, saying, “Hey, we can really do something.” And, oh, I forgot to mention one really interesting thing. Remember those thousand devices that I talked about? Each one of them weighs about eight pounds or so, and it’s about two feet long, an inch and a half tall. Because they are racked in a backplane, so think about it like servers are, they plug into a backplane. We are building a robot, a cobot. Because there’s medium voltage there, you know, instead of sending a human being there, you know, send a simple robot that opens the door and slides one out if it’s failed and slides another one back in.

David Roberts: Right. It’s just like unplugging one of these things and plugging a new one in, basically. It’s as simple as that, replacing one of these modules, and you built a robot that can do that.

Raghu Belur: Yeah, we are working building it. We have not built it yet, but that is something. Because it’s so light, it’s feasible for us to do that. If this thing weighed hundreds of pounds, if our power modules were really big and weighed hundreds of pounds, that would be a difficult proposition. So we can hot-swap, you don’t have to take the whole system down.

David Roberts: Right.

Raghu Belur: And you can do it with a robot, so all of the regulatory requirements around trained personnel and all of that gets much, much simpler because you’re doing it with a machine, not with a human being.

David Roberts: And just, I don’t know if we said this, but it’s just worth saying that solar fields create, generate in DC, or they generate AC, and you have to convert it to-

Raghu Belur: The other way around. They convert. The panels are all connected in series. They create DC, and then the power control system takes that DC, converts it into low-voltage AC, and then the big medium-voltage transformer takes that low-voltage AC and boosts it up into grid interconnection at 34,500 volts.

David Roberts: An SST will basically do all that in one-

Raghu Belur: In one shot...

David Roberts: one step, one machine. So-

Raghu Belur: One machine, yeah...

David Roberts: you’re gonna increase reliability and reduce CapEx, I guess, is the vision for solar in the future.

Raghu Belur: Yeah, so the CapEx part, I think there’s so much value. I wouldn’t rather than pin down a specific thing. I mean, there’s so much value creation, whether that is through CapEx, OpEx, REL, all of those contribute. I mean, it’s all about total cost of ownership, so I wanna be clear that you think about.

David Roberts: Yeah. Yeah. Well, maybe this is a good time to talk about this ’cause maybe I shouldn’t have skipped past this in the first place. But everybody, of course, when I toss this out online, everybody wants to know about cost.

One of these solid-state transformers, just on a pure CapEx comparison based- compared to a traditional transformer, is much more expensive. It’s like 5 to 10 times more expensive than a conventional transformer. The idea here is- The system that you are enabling with solid-state transformers is going to be cheaper than the system that involves dumb transformers, basically, if I can shorthand the whole thing.

Because you’re gonna save on some CapEx ’cause you’re, have one machine instead of two. You’re gonna save on operating costs because you have higher efficiencies, et cetera. That’s the theory of the case here. Is that right?

Raghu Belur: Yeah, and I wouldn’t quite characterize it as 5 to 10x, but it will be more expensive to begin with. But, because it’s semiconductor and software-

David Roberts: Right...

Raghu Belur: you know, we can continue-

David Roberts: You’re on the cost curve.

Raghu Belur: We are on a cost curve. Remember, we are just starting. These conventional transformers have been around for 140 years. Then you solve the supply chain problem, you solve the reliability problem, you solve the ma- O&M problem. There are so many problems that we can solve with this device. But like every new technology, you gotta start somewhere, you gotta prove yourself, and then you build from there. And that’s all feasible with this, because it’s been done before, right? We have done power electronics.

David Roberts: It’s like many clean energy technologies. They’re going after data centers ’cause hyperscalers have the money to fund these early technologies, basically. Early deployment, and then you drive the cost down.

Raghu Belur: Right.

David Roberts: You move into solar, and then you drive the cost down further, theoretically, and then you get into my favorite piece of all this, also the most speculative part of all this, but I think the really interesting future vision here, which is get cheap enough, start working well enough, then you go after the transformers at the neighborhood level.

There are 60 million of these things in the US, these gray transformer boxes that people see around their neighborhoods on top of poles. All of those are transformers. So all of those are pieces of iron with two copper wires wrapped around them. Many of them, I think I read somewhere something like half of them, are basically at the end of their rated life cycle.

So this is of great interest to me. What could you do with a distribution grid where every one of those transformers was smart, was a solid-state transformer that has this software control, what could that enable?

Raghu Belur: And that is exactly- I don’t think it’s a nice-to-have. I think it’s a necessity.

David Roberts: Because of this bidirectional distributed energy evolution we’re going under.

Raghu Belur: Absolutely right. Because of this transformation that we are going through where the homes are becoming the units of intelligent. I have my solar, I have my batteries, I have my smart EV chargers, I have my smart robot running around. I have a lot of power needs in my house, and my house is becoming absolutely intelligent in how it produces energy, how it stores energy, how it consumes energy, and how it networks my energy to the rest of the neighborhood, my rest of the country, right?

Rest of the state, rest of the country. So that whole transformation has to happen, and it will happen because that’s what power electronics does. And so a core element of that transformation is this neighborhood transformer, that gray box that either sits on the ground or sits on a pole, that needs to evolve.

And so absolutely, I think that’s gonna happen. The most important thing that needs to happen from our point of view, before we can go attack that problem is we need to prove reliability because those transformers are extremely reliable. Cost is not something you really worry about because we know we are on a cost asymptote that will, you know, we can compress cost with software and semiconductors far better than you can compress cost with copper and iron.

David Roberts: I’ll just put it to you straight. Do you think there is a future where manufacturing of these modules is scaled up sufficiently, you’ve ridden the cost curve down far enough that you can get on something like cost parity with a straightforward analog transformer? Is that-

Raghu Belur: Yes...

David Roberts: the goal or just to get closer?

Raghu Belur: No, it’s the goal, and I think it’s achievable. I don’t know in how many years. You know, it could be three years, it could be five years. I’m not talking about 50 years, right? We are talking about a cost curve that is not in the very distant future. It’s not the next two years, right? We are still scaling, but this is a question of scale, right? You get to scale, you get to fully automated manufacturing, you get to a very efficient supply chain, all of which is feasible. We have done this with solar.

David Roberts: Mm-hmm.

Raghu Belur: You can really do this for traditional transformers as well. Now comes the institutional part.

David Roberts: Yeah, this is I was gonna say the technology piece, I believe, persuading utilities to change something fundamental that they do is, to me, a much more intractable problem.

Raghu Belur: Actually, David, you’ll be surprised. I think we are having a lot more discussions with utilities about solid-state transformers. They see this technology coming.

David Roberts: Huh.

Raghu Belur: They see the value of it. Now, that doesn’t mean that adoption happens overnight, but they do see the value of it, and so they are curious about it and they wanna learn about it. We are talking to them. We are having some good conversations with them. So I think the adoption could be faster than one could, one thinks.

David Roberts: Interesting. Is any utility out there using solid-state transformers on pole tops yet, or are solid-state transformers not really ready yet for that? Like, is anybody piloting it or trying it at all?

Raghu Belur: As far as I know, I could be wrong. In at least in the US, I don’t believe so. There could be some pilots, there could be some lab systems that are running.

David Roberts: Mm.

Raghu Belur: But I don’t know. But no reason- at least the folks that we are speaking with they are looking at it very seriously. But I don’t know what the timeline for adoption will be, but they’re definitely looking at shifting.

David Roberts: But is it fair to say if we want the kind of grid that we talk about all the time on Volts, which is a grid that looks a lot more like the internet, where there’s a lot more action at the distribution at the local level, where all these local devices are being networked together, balanced off one another, where power is being shared from household to household without ever going up into the bulk grid. All of this sort of local ground-up grid architecture that we talk about here on Volts all the time, you can’t get there without something like this, I think, without smart transformers in the middle of it all. Is that fair to say, do you think?

Raghu Belur: It’s absolutely fair to say. Today, we are making small steps toward it with things like VPP, flexible interconnection, et cetera. So we are doing that today, right? Flexing the home, flexing businesses. This is part of that first thesis I was mentioning. You know, we need to make the grid incredibly intelligent, which means all elements of the grid, all components of the grid need to have built-in intelligence that can not just monitor, but monitor and control the power flow.

That’s how we make the grid modern and more efficient, more reliable, drive the costs down, et cetera. But bear in mind that when we talk about SSTs today, and you talk about PV, you talk about front-of-the-meter BESS, you talk about data centers, you talk about fast DC charging, they are already connecting to the grid.

David Roberts: Yeah.

Raghu Belur: Right? On the grid side, we are interconnecting 34.5 kV or 13.8 kV. Sorry, they will be connecting. They are, in some sense, an extension of the grid. It’s just past the meter. But in the case of front of the meter, they are part of the grid, right? So you are interconnecting an SST into the grid, so they need to understand how an SST behaves, and that’s the beauty of it. That’s the first step to acceptance by the utilities. They go, “Oh, okay, I see you have an SST. You have a 50-megawatt PV array, and you’re interconnecting that 50-megawatt PV array with an SST, not with a PCS and a traditional transformer. Now I understand what the behavior of that SST.”

David Roberts: So grid operators will see these things operating in PV fields, in data centers. They will be connecting them to their grids, and this will give them a close look at how they operate and some confidence to eventually spread them into the neighborhood level. And it’s just worth emphasizing that that market, 60 million of these things, dwarfs the data center market and the PV market. Like, that’s the big prize basically is, like, infusing intelligence all throughout the distribution grid and not just at these select nodes.

Raghu Belur: Simply put, US grid is 500 gigawatts.

David Roberts: That’s a lot. That’s a lot of transforming going on.

Raghu Belur: That’s a lot of transformations that need to happen. Now, some of it happens at the transmission line, some of that happens at the distribution line, but it’s a 500-gigawatt grid. First, we gotta grow that. You’re not gonna- We can’t- 500 ain’t gonna cut it.

David Roberts: Yeah, yeah, we wanna 2x or 3x that if we’re gonna electrify everything.

Raghu Belur: Precisely. We gotta 2x or 3x that, and we gotta do it intelligently, we gotta do it smartly, we gotta do it fast, we gotta do it reliably, and we gotta do it cost effectively. So.

David Roberts: Yeah. Let me throw a couple of common objections at you, just sort of speed round here for you to respond to. The first is cost. I think we sort of addressed that. Like, currently these are more on a pure CapEx basis, but A, they’re coming down, they’re gonna come down the cost curve, and B, they’re sort of replacing multiple other kinds of equipment, and C, they’re enabling operational savings. So you think on, like, a total cost of ownership basis, they’re already competitive and they’re gonna get more competitive. That’s the cost question. On efficiency, a good old-fashioned iron transformer is about 99 percent efficient. It’s extremely efficient. I think, like, solid-state transformers are in the sort of 96, 97, 98 range.

Raghu Belur: No, we are targeting 98.5.

David Roberts: 98.5. You’re targeting that or you’ve reached that?

Raghu Belur: Oh, no, we’ll reach that. We’ll reach that. That’s the target and that’s where we’ll reach.

David Roberts: And so that’s not a limiter at all. That’s close.

Raghu Belur: Close enough. No, it’s not at all. Efficiency is not the limiter.

David Roberts: Okay. And then the big ding I see is lifespan. A piece of iron with two copper wires wrapped around it is quite durable and will last for 50-plus years with very little maintenance. Your solid-state transformer currently has a 10-year warranty. So I guess that is substantially less of a lifespan, and when I think about, you know, when you start replacing pole-top boxes in neighborhoods, utilities having to come and replace those every 10 years, that’s a substantial increase in operational costs. How do you think about the durability question?

Raghu Belur: Yeah, you have to work on it. So first thing, warranty is a business construct. Design life is gonna be much, much longer than 10 years, right? So look, today our solar microinverters, which sit on a roof in Arizona and sit on a roof in Alaska, are warranted for 25 years, right?

So, you know, electronics can be made very, very, very reliable. They follow a different reliability curve, right, in terms of useful life and wear-out, et cetera. But we can solve those problems, and the problem is worth solving is my point, right?

Because of the intelligence and because of all the other benefits that I get with it. Is it gonna be 40-year warranty from day one? No. Shouldn’t be. It won’t be. But is that something that we can work over time? Absolutely. You bet. Nobody thought that we could offer 25-year warranty on a piece of electronics on a hot, hot roof in Arizona.

David Roberts: So you think, like, a 25-year warranty on a solid-state transformer is not out of the question in a few years, in whatever?

Raghu Belur: Absolutely it’s not out of the question.

David Roberts: And what about eventually getting to 50 to matching traditional transformers? Is that even something that’s on the horizon or do you think there’s a, some limiters?

Raghu Belur: You know, with current technology, a 50 is a bit of a stretch.

David Roberts: Yeah, yeah.

Raghu Belur: I haven’t even thought about it because of where wear-out begins. You have to drive the MTBF way up. Let’s get to 25 first.

David Roberts: Okay. What about heat? Electronics do not like heat. Summers are getting hotter. It’s hot inside data centers. The massive variety of operating contexts in which transformers show up is really kind of mind-boggling. How do you think about heat and thermal management?

Raghu Belur: Yeah. It’s a straight-up design function. I can design something so if it’s 98.5 percent efficient, I’m losing a percent and a half in heat. So I can do the math on how much that is on a per-inverter basis. And then it’s simply a question of picking the right components, making sure that you have sufficient design margin, and making sure that you can dissipate that heat and not allow any one single component to be a point of failure, right? That’s what we do. That’s what Enphase does, is design equipment that sits in very harsh environments, like on a roof, for example, very high-temperature environments with minimum failures. And so it’s a design parameter.

David Roberts: And all that engineering transfers pretty straightforwardly from your solar inverters to your SSTs, like it’s the same type-

Raghu Belur: Yeah. Funny enough, I joke about this. In some sense, the SST thermal problem, it’s in a more benign environment-

David Roberts: Mm...

Raghu Belur: than being on a roof.

David Roberts: Yeah. Roofs, there are a lot of different kind of roofs, a lot of different kinds of weather.

Raghu Belur: Lot of different kinds of roof, and you really don’t have a lot of control in how they get installed because we, you know, our installers install them, we train them, but, you know, we’re all humans, and-

David Roberts: Yeah.

Raghu Belur: we don’t have a huge amount of controls. But what you do have is you have telemetry built into all of these devices.

David Roberts: Mm.

Raghu Belur: So we have a l- deep sense of, hey, how is this system performing under these grid conditions? Grid is very harsh, by the way. Grid is extremely harsh. So how is our system performing under these grid conditions? How is the system performing under these load conditions? How is the system performing under these weather conditions? So we have deep sense about that.

David Roberts: And theoretically, you can get information about degradation before you get total failure, right? If you have these telemetric-

Raghu Belur: Absolutely. So, you know, they are all running diagnostics on themselves, and we are all networked, so we have, whatever, 90 million that we have shipped. We have networked these devices. We are in five and a, 5.2, 5.3 million homes worldwide. You can imagine how many grids that is.

David Roberts: Mm.

Raghu Belur: Right? How many different types of grids those are.

David Roberts: Yeah, yeah.

Raghu Belur: And so we get data from all of them in real time. We know exactly what happens, how are these behaving, and so the intelligence is there in these devices that says, one, “Hey, I see an abnormal situation,” because of the control system that I was talking about, our own ASIC. They will go, “Oh, I don’t understand this situation. It’s out of my safe operating area. I’m just gonna shut down for a little bit because to protect myself.” We do that as a normal course of operation, right?

David Roberts: Interesting.

Raghu Belur: But if there’s a degradation as well, we are reporting up saying, “Hey, my performance is degrading,” and it start- could check on me or it’s now getting to the point where it’s more intelligent. It says, “Hey, this is what’s wrong with me, and I’m having a headache or whatever.” Right? So, uh-

David Roberts: Send me an aspirin. One other safety question. In an analog grid, when a tree branch or something falls or a cable or something causes a short, an iron transformer will push this huge surge of current, which is the signal to all the fuses and breakers to shut off and then sort of you cut the damaged, you cut off the propagation of that fault. Electronics can’t do that because the switches would destroy themselves if they tried to do that. How do you address that specific problem? How do you address faults or, you know, tree branches or squirrels or things that go wrong in the grid? How would those be absorbed and communicated so that you could cordon off the problem?

Raghu Belur: Well, it’s interesting that it’s posited as a problem. Actually, I see it as an advantage, right? I’m not dumping, you know, hundreds of thousands of amps into a fault, right, like what a conventional transformer would do. I’m intrinsically current limited.

David Roberts: Mm-hmm.

Raghu Belur: Now, the intelligence there needs to say, “Hey, I recognize that as a fault,” or, “I recognize that as a normal load fluctuation,” right? And that simply has to do with the di/dt or rate of change of current. So I have a lot of intelligence built into my system to recognize what’s a fault, and if I recognize what’s a fault, finding a way to trip a breaker, for example. So there’s a lot of work that’s going on in... For example, you may have heard of solid-state breakers. That’s something that’s coming, and people are working on those, and we can trip those.

David Roberts: Yes. I had a guy- I wrote an article about this in Vox years ago. I felt like over five years ago, a guy who was making circuit breakers solid state. Basically, like, the same thing you’re doing with transformers, he’s doing with circuit breakers. And I always thought that was so brilliant, such a brilliant idea ’cause that’s a little piece of intelligence between every single grid and every single device. And I always wondered, like, what happened to that? Are those things catching on? I always wonder what happened to that guy.

Raghu Belur: No, no, that’s happening. That’s happening, for sure. Yeah. I guess- Yeah. You know, look at it. Do you wanna deal with a 100,000-amp problem, or do you want to deal with a, “Hey, I need to recognize what’s a fault and deal with a few-thousand-amp problem,” right?

David Roberts: Right. Right.

Raghu Belur: But I need to recognize the rate of change of current. And I’ve s- all the intelligence there. I know what’s a fault, right?

David Roberts: So this will be much better at isolating faults, basically.

Raghu Belur: Without a doubt. Without a doubt because I can be smart enough not to take the entire system down.

David Roberts: Right.

Raghu Belur: I can isolate faults much more efficiently, much quickly. As long as I have that intelligence, I can trip a fast-tripping breaker, for example, right? Those are all doable. This is a good engineering problem, and it’s a good place to be, not a bad place to be. I do hear this as being posited as a problem, and I don’t see it as one.

David Roberts: Well, I guess, you know, people get used to a certain way of responding to things, and they, you know... Inertia is a real thing. Okay, I’ve kept you for too long. Just as a final sort of let’s look forward a little bit.

I think it’s pretty clear to me that, like, power electronics are gonna eventually take over the grid, like they’ve taken over everything else, with all the benefits we’ve been talking about for this whole episode. But- How is it gonna happen, like, on a one-, two-, three-year basis? Are there any sort of, like, policies that you would support? We have this transformer shortage right now, and so all these, like, places are ramping up their manufacturing of traditional transformers, and I sort of feel like we’re at the spot where we need a bunch of new transformers.

A bunch of these pole-top transformers are wearing out. We’re kind of at a spot where, like, we really need to get these SSTs going and out as quickly as possible before we just get sort of a surge of the traditional ones installed. I guess I’m just wondering how it all plays out. Do you have policies or policy recommendations? What would you like to see happen in the next two to three years outside of your own company, just in general?

Raghu Belur: In general, yeah. I think policies absolutely will play a role. Things like UL standards, they need to catch up because this is a whole new venue of dealing with power electronics on the main power grid. So there’s a lot of work going on in the UL standards-making bodies, the National Electrical Code. So it starts there, working with our first responders and firefighters saying, “Hey, so here’s a new piece of equipment” that will argue that it’s gonna make- modernize the grid while making it more safe, right?

David Roberts: Safer for the technicians that are out there repairing it, you mean.

Raghu Belur: Safer for the technicians that are repairing it, safer for the first responders if there’s a tree that falls across, and how do you deal with faults, et cetera, right? So I think this is all has to be viewed from the lens of this is the gateway to a modern grid, which we need to get to urgently given how our lives are transforming around us, right?

On the policy side as well, right? We have to have lawmakers, you know, recognizing that this such a technology exists, so it’s a lot of education to the lawmakers that says, “Here’s a brand-new technology, and it’s going to be, again, the gateway to the transformation of the grid, gateway to the modernization of the grid.” But along with it comes things like, hey, we need to make sure that there is cyber-related guardrails around it-

David Roberts: Right...

Raghu Belur: and intelligence built in. So I think you recognize what the future is, and you go knock out those barriers because those barriers are worth knocking out because you have to. You don’t have a choice but to get to a more modern grid.

David Roberts: And I would say, just to anticipate what I think is probably on some listeners’ minds, this would absolutely be necessary for, quote unquote, “winning the AI race,” if that’s your concern. But- It will also be necessary just if the grid moves more toward inverter-based resources like wind and solar, which is happening. Also gonna be necessary if transportation is electrifying, heat and cooling is electrifying, industry is electrifying. All of these changes point toward a smarter, more software-controlled grid. It’s not just an AI thing. It’s not just for data centers.

Raghu Belur: Hundred percent correct. It’s just the data center is maybe a point of entry.

David Roberts: A leading indicator.

Raghu Belur: Yes, a leading indicator. But again, like I said, we don’t have a choice but to modernize and make our grid far, far more intelligent. But more importantly, do it rapidly because we can’t wait for the ne- another 50 years for that to happen. This needs to happen in the next 5 to 10 years, and that’s just gonna be transformative for all our lives and our children’s lives.

David Roberts: All right. Well, we’ll leave it there. This has been predictably fascinating, Raghu. Thank you for staying with me for longer than I asked. You know, I could talk about this for hours, but thank you for coming on and walking us through it.

Raghu Belur: Awesome, David. Thank you. I actually had so much fun. You just have a way of asking the right questions and directing the narrative. It’s amazing. So much fun.

David Roberts: Well, thank you. Thank you. All right.

Raghu Belur: We’ll talk soon.

Volts guests have argued that data centers can be good for the grid if they’re built right. Here I hear the case against, from Ketan Joshi, a former wind-industry analyst who now tracks Big Tech’s climate claims. He sees data centers as the wrong kind of demand growth: lumpy, concentrated, unwanted by neighbors, and largely met with gas. Underneath it a…

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Clean energy is the cheapest, fastest-growing source of power in the country, yet politically it barely registers. Republicans gutted its tax credits last year without fearing any consequences. The Invest in Tomorrow Coalition, a super PAC backed by clean energy investors, is trying to change that the old-fashioned way: by punishing the industry’s enemies. It went six for six in this year’s primaries; it’s now spending at least $15 million against seven Republican House candidates in the midterms. Its chair, Tom Matzzie, makes the case for fear as a political asset, explains why the industry has been so slow to throw elbows, and describes what it would take for clean energy to become a lion instead of a gazelle.

For years now I have been grousing to anyone who will listen that the clean electricity industry is politically feeble. It represents the cheapest, fastest-growing source of new power in the country, but it commands very little respect and inspires absolutely no fear. Last year’s Republican budget bill illustrated the point: Congress gutted the wind and solar tax credits and nobody who voted for it seemed to worry for even a moment that they would face any consequences.

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It’s a truism: politicians respond less to reasoned arguments about costs and jobs than they do to threats to their own reelection. The oil industry, the NRA, and lately crypto have all figured this out, while clean energy has mostly stuck with whitepapers and persuasion.

This year, a new super PAC called the Invest in Tomorrow Coalition set out to change that, or at least begin to. So far its campaign spending has helped deliver primary defeats to three Republican US reps who led the charge to wipe out renewable tax credits — Chip Roy, Andy Ogles, and Ralph Norman (twice) — and to a Democratic governor who blamed clean energy for rising electricity costs, Dan McKee of Rhode Island. Most of its ads never mention energy; they attack candidates’ other weak spots. The PAC is now putting another $15 million into seven House races this fall, with more to come.

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The chair of the ITC, Tom Matzzie, is a familiar figure in my world. He came up through MoveOn and organized labor before founding the clean energy supplier CleanChoice in 2011. I want to ask him whether the ITC PAC represents a real shift in industry strategy or just one billionaire’s money, whether a PAC that targets Republicans can avoid being seen as a Democratic PAC, and what comes after November’s midterms, among other things. Let’s get into it.

Chapters

• 00:00 – Introduction

• 03:01 – How the Invest in Tomorrow Coalition got started

• 06:19 – Why a super PAC, and why it wants to be feared

• 09:50 – Punishing opponents to warn the rest of Congress

• 12:55 – Can the PAC prove it changed anything?

• 17:13 – How the PAC picks its general election races

• 21:41 – Could beating extremists make Republicans stronger?

• 24:53 – Why clean energy companies stay out of politics

• 28:58 – Who funds the PAC, and why the industry gives so little

• 32:44 – Why the industry keeps playing nice

• 38:28 – Did the Inflation Reduction Act win over Republicans?

• 40:35 – Is the industry afraid of Trump?

• 45:05 – Is this a Democratic PAC?

• 49:30 – Organizing clean energy voters in presidential primaries

• 53:20 – Why clean power trade groups include gas companies

• 58:37 – What the PAC wants after November

Resources

People & Organizations

• David Roberts (Substack - Bluesky - X)

  • Volts (Apple Podcasts - Spotify - YouTube - Instagram - LinkedIn)

• Tom Matzzie (LinkedIn)

  • Invest in Tomorrow Coalition (FEC Filings)

  • CleanChoice Energy (Website - LinkedIn)

• Solar Energy Industries Association (Tim Pawlenty Named President and CEO)

Company & Industry News

• Canary Media - Clean Energy Super PAC Names Its Target List for General Elections

• Inside Climate News - Super PAC Targeting Conservatives Against Clean Energy Touts Fifth Republican Primary Win

• E&E News - How Solar Donors Helped Take Down a Trump-Backed Republican

• NPR - Offshore Wind Developer Prevails in Court as Trump Calls Wind Farms Losers

Books & Articles Discussed

• Washington Monthly - Why Won’t the Clean Energy Industry Play Dirty?

• SunCast - 954: Can Clean Energy Build Mythic Power?

• Office of the North Carolina Governor - Governor Cooper Signs Energy Bill Including Carbon Reduction Goals Into Law

Related Volts Episodes

• Giving Clean Electricity a Political Voice of Its Own

• How Energy Politics Work Inside DC

• What’s Up With the New Federal Permitting Reform Bill?

• Building Our Piece of the Electric Stack

Transcript

David Roberts: All right. With no further ado, Tom Matzzie, welcome to Volts. Thank you so much for coming.

Tom Matzzie: Thanks, David. Happy to be here.

David Roberts: This is juicy, Tom. We have so much to talk about, but why don’t we start here with ITC’s... Because I know at least some listeners will be wondering, the initials ITC-

Tom Matzzie: It’s a little pun.

David Roberts: Which is a little pun. Also, the initials of the investment tax credit, which was killed in the aforementioned bill. That’s a little Easter egg, a delightful little Easter egg. Tell me quickly the origin story of the ITC PAC. You were not a founder. It came to you-

Tom Matzzie: Mm-hmm...

David Roberts: already extant, so tell us how it started.

Tom Matzzie: Yeah. I mean, I was one of the first funders of it, but really Peter Davidson and Brendan Bell at Aligned Climate Capital started phone banking some of us last fall, being like, “What are we gonna do? The super PAC effort, what’s our super PAC effort? What’s our response? We just got our butts kicked. How do we hold these people accountable?” And Peter really gets credit for, you know, calling a bunch of us and, you know, he called me because he knows my political background. You know, I ran independent expenditures in the 2006, 2008 election, pretty good years for Democrats.

And he’s like, “What do we do, Tom?” I’m like, “I’m busy, Peter.” But like, here’s what you should think about doing. You need to like find someone who’s got a soft spot who you could attack and maybe inflict some damage. Make them… You know, choose somebody who’s noisy as hell and make a big splash with it. And so to Peter’s credit, he went and talked a bunch of us into writing checks.

Initially connected with Chris Larsen, the investor. He’s also a big crypto investor, also a clean energy investor, who’s been one of our largest funders. And then we got off the ground and started going. And I also, you know, we hired a great team out of Tusk Strategies in New York who are interesting combination of political strategists and public relations impresarios.

Because it’s… what we’re doing is we’re narrating a story about the industry’s power using these elections as the kind of protagonists in the play. And so we sat down in the spring, some point during the middle of the Chip Roy stuff, I think after the first- after he made it to the runoff, Peter asked me to be more involved.

You know, we looked at the whole calendar through the year and said, “Let’s choose races so that we are filling the, quote-unquote, ‘news hole’ with some story or some news about our work every week or two for several months.” Because what we wanted at the end of the year was a bunch of reporters to remember that we had done this, and we wanted chiefs of staff in the Congress to remember that we had done this, members of Congress to remember that we’d done this.

And, you know, too often, there have been political investments made by the industry in the past, but often it’s been quiet, whispering. And my theory of change is you need people to be perceive you as powerful. The perception actually matters more than anything. The metaphor I use is you have to be a lion and not a gazelle.

Plenty of gazelles out there, and they have a wonderful, you know, life as gazelles, but no one Fs with the lions. You know, that’s really the plan we put together in the spring was to identify a bunch of races that would help us narrate a story of our ability to invest and defeat members of Congress.

David Roberts: I mean, usually when people come to this, I mean, I’ve seen a million of these in my lifetime. Usually people are like, “We need to tell our story better.” They come up with some public relations campaign or some sort of campaign, some sort of lobbying group, some sort of, you know, “Let’s tell our story.” You specifically went PAC-

Tom Matzzie: Yeah...

David Roberts: instead of those, and that is explicitly so that you could do measurable damage to these people.

Tom Matzzie: Here’s what to think about is often people are telling… They wanna tell a story about their issue. We’re telling a story about us-

David Roberts: Mm...

Tom Matzzie: as an industry, a group of investors, a group of entrepreneurs, about us as people. Are we safe or dangerous, right? Are we strong or weak? That is the kind of fundamentals of building blocks of political power, is how you’re perceived.

David Roberts: I heard on, you were on SunCast and you referred to mythic power.

Tom Matzzie: Mythic power. Yeah, that’s actually an, a term from my time as an organizer. We often talked about what are the story elements that we’re using to build our mythic power, right? And this was, you know, back in the day when I was at MoveOn, for example, right? We would take on fights all the time just for the point of demonstrating our power. And I think you very much see, you know, that’s what we’ve done here, is to try to illustrate a story about our power. And I would note, we’ve done it without having $200 million.

David Roberts: Yeah.

Tom Matzzie: And I don’t think it’s a tragedy, actually. The unpredictability of it is part of the myth, and the fact that we can inflict damage without having $200 million. ’Cause also, once you show up with $200 million, you look like partisans, potentially, unless you don’t spend it, unless you’re really just, like, using it strategically at different moments. But you mentioned the three Republican members. I mean, we intervened in six elections, and were successful in all six so far during the primaries, and now we’re looking... The general election will be much harder, I should note.

David Roberts: Yeah, we’ll talk about that later, but just to stay on this point. Like, you want to be seen not as part of a giant army, but as kind of like a guerrilla force that emerges unpredictably from the desert and, like, blows something up and then fades back into the desert, and you never know when it’s coming, right? Like…

Tom Matzzie: Yes, the you never know when it’s coming is a very important part of this. And that unpredictability is key. And the way I think about this is we are curating cloakroom conversation amongst members of Congress. And what we want is the next time a member of Congress circulates a sign-on letter asking people to, you know, oppose the clean energy industry in some way, their chief of staff sits down with them and says, “Hey, just remember, there might be somebody who drops $2 million into your next election if you do this.” And that unpredictability is, like, the name of the game.

David Roberts: Yeah. And you know, as a veteran of Washington, that once you create that mythos-

Tom Matzzie: Mm-hmm...

David Roberts: that narrative, those things are so durable. Those things last so long, even outside the sort of empirical details. Like, once you have a reputation, it really sticks.

Tom Matzzie: Well, yeah. When was the last time the NRA defeated somebody in an election? It was the 1990s.

David Roberts: Yes.

Tom Matzzie: So-

David Roberts: Yes. But they’re still feared.

Tom Matzzie: They’re still feared. I think that you’re exactly right if we’re able to make that durable, and it’s gonna take consistent investment for that to be true. But it is definitely the goal here, is to build that perception of power.

David Roberts: And also, I think on this same theme, like, it’s worth noting, I think several people have noted, that in the elections you have intervened in so far, the alternative to the person you are defeating is not a clean energy champion.

Tom Matzzie: Right.

David Roberts: In other words, these are not interventions meant to advance clean energy champions. These are specific-

Tom Matzzie: Well, we’ll be doing some of that this fall. We’ll be doing some of that in the general election.

David Roberts: Yeah, but so far it’s been specifically to punish opponents, even if the alternative to the opponent is someone else who is probably also not gonna be all that great on clean energy.

Tom Matzzie: Right.

David Roberts: And I think there’s an element of, you know, I think like a technocrat might look at that and be like, “Well, you’re just trading a bad person for a bad person. Doesn’t make sense to me,” but this gets back to the mythic thing.

Tom Matzzie: Right.

David Roberts: Like you want to be seen maybe as irrationally angry at opponents to the point that you’ll go after them even if it doesn’t help you measurably on your goals. Do you know what I mean?

Tom Matzzie: Well, actually, but it very much does help us on our goals because what we want is the other members of Congress to see it happen, right? And they are our audience here. You know, because I would much rather trade our impact on 435 members of Congress, you know, and lose one person.

David Roberts: Right.

Tom Matzzie: And so like that’s the math. Machiavelli had this line. Yes, I’m gonna quote Machiavelli. “You don’t need to hang all of your enemies, just one of them in the public square.”

David Roberts: Right.

Tom Matzzie: You know, the prince must be feared, right? So like that is the name of the game of what we’re trying to build here. You know, and look, that’s our theory of change. There’s other people who think like we need to bring in hundreds of millions and become like somehow an adjunct of the Democratic Party or something like that. That’s not what we’re doing.

David Roberts: The message is specifically to lawmakers because, like I mentioned, like the ads you’re running, from the perspective of a voter in one of these districts-

Tom Matzzie: They have no idea who we are.

David Roberts: they don’t necessarily see clean energy coming in and stomping around about clean energy. You know, unless they are reading, following political news, they’re not necessarily gonna know that you did this. But you are taking steps to make sure that the people in question and other lawmakers know, hear about it.

Tom Matzzie: That’s right. We have a whole effort to talk to the political media in Washington so that they repeat this and it’s covered by the people we want to see it. We run advertising. We have this Don’t Mess With Solar campaign that’s advertising we run in like the Washington, D.C., airport, in the, you know, transit system in Washington, D.C., to try to speak to the insiders so that they carry our story. “Oh, I saw the ads. Those are the people that went after Andy Ogles and defeated him, or went after Chip Roy and defeated him.” And so it’s the curation of that chatter amongst members of Congress and their staff that is what we’re focused on.

David Roberts: And this probably has a similar answer, but, you know, you can’t really prove that your intervention is what caused any one of these losses. I mean, I don’t know how-

Tom Matzzie: Well, I feel pretty strongly that in a couple of these cases it was definitely... I mean, for Andy Ogles, I feel like absolutely. We outspent both campaigns and all the other independent folks combined. The person that defeated Andy Ogles had never run for Congress before. We both spent money to raise Charlie Hatcher’s name ID as well as to tear down Andy Ogles.

But you’re right, and I don’t think it matters if we can de- You know, I think we can in some cases demonstrate that, but I don’t think it matters because the, you know, members of Congress still don’t want that extra million or $2 million spent against them. They don’t care, like, if it works or not. They don’t want it spent against them. It is the one thing that all members of Congress have in common is their own self-interest is their number one priority.

David Roberts: Maybe it’s too early and maybe there’s not a good benchmark yet, but have you seen any behavioral change among the political class based on these campaigns you’ve run?

Tom Matzzie: I mentioned Charlie Hatcher, who’s the nominee for the Republican congressional seat in Tennessee fifth. I mean, he was asked about his opinions on clean energy and he didn’t go into the Chinese Communist Party conspiracy Green New Scam rhetoric.

He’s like, “You know, I don’t support subsidies for clean energy, but I don’t support subsidies for farmers either.” You know, that’s kind of very straightforward Republican kind of, you know, point of view. And then he said something about like, people have it on their farms and, you know, it’s like part of, you know, the future of energy, you know, stuff like that.

So I just take that as a little bit of a tea leaf, you know, that he shows different rhetoric. And I mean, this permitting bill happened in the context of this environment. I would give the negotiators, we’ll see if it happens, you know, but I’ll give the negotiators really the credit for all that hard work to try to hash something out. But we’re gonna be part of that environment when the vote comes up during a lame duck.

David Roberts: Yeah, that was my next question is, is there some vote, have you thought about making public saying, “Here’s a test vote. If you go the wrong way on this vote, we will come after you”?

Tom Matzzie: We have not discussed that, to be very honest with you, because we’re so focused on executing for the general election in November. I could imagine that being something we do in the future. I wanna note, we’re not a trade group, right? We are an independent group of entrepreneurs, investors, you know, executives who have come together to do this. We don’t do policy also. That’s really in the hands of the trade groups. And I would note like, you don’t want me doing policy. I’m a political operative and a business person and I couldn’t tell you how to write a bill.

David Roberts: I mean, this is what I was gonna ask about the permitting bill. Like there’s a lot of in- as you know, a lot of internal division about the permitting bill, about whether that’s a good bill or not from various perspectives. So I just wonder like how, you know what I mean? Like-

Tom Matzzie: Internal amongst who? Who are you talking about? I mean, the clean energy industry is pretty unified on this.

David Roberts: On the left and on the right. The clean energy industry, I guess, loves it.

Tom Matzzie: Yes.

David Roberts: The green groups not so much. So maybe it’s not ambiguous from your perspective. I’m just saying like there are tough policy calls and I wonder how close you want to get to sort of making those, publicly saying, “Yes, vote for this.”

Tom Matzzie: We’ll watch the trade groups and, you know, talk to our supporters and look for, you know, what those moments might be. I think if this was derailed, for example, by a group of members of Congress, we would definitely look at the leaders and consider accountability for them. This is a very important measure to the industry. Unless you really understand how difficult it has become to build something, like I personally wear scar tissue from building projects in deep NIMBY territory, you don’t quite understand how important this legislation is.

And, you know, I should note, in my career, I helped stop Shell drilling in the Arctic Refuge. Like, I have my bona fides as an environmentalist, and I think we’re not talking about that right now. Oil and gas has not had any difficulty in building everything they want to build. It is not the case for clean energy.

David Roberts: So let’s look at the general election then. You’re putting 15 million into seven House races, at least that you have announced so far. How do you choose those? Are there specific criteria? Is there a measure of gut involved? What’s the process?

Tom Matzzie: I was… I’d tell some joke about, like, a chimpanzee and a dartboard, but that’s not really true. Look, we have a set of criteria, and you know, one of the most important is can we make an impact?

David Roberts: Right.

Tom Matzzie: And so we’re not looking at races where the incumbent and the challenger are really armored up with millions and millions of dollars already.

David Roberts: Which is quite a few of the big races this year. Like, these are the notoriously some of the highest-spending races in history. I guess that-

Tom Matzzie: Yeah, and I know, having run IEs during a wave election in 2006, for example, the Democrats will underperform in those races.

David Roberts: In which races?

Tom Matzzie: In the ones that everyone has been talking about for a year, and where the candidates have raised a lot, a lot of money on both sides. And the reason is that preparation for an incumbent actually makes a difference, and their ability to get ready for a challenge. And then there’s a set of races that people have been making competitive over the last few months that will be where probably a bulk of the wins come from, and then there’ll be a bunch of races that suddenly are competitive in the final stretch because maybe one demographic group has moved sharply against Republicans or something like that. And there’ll be a bunch of wins that come from that. So we’re looking at those three kinda categories.

Important piece for us is one of the most disruptive forces inside the Congress in our perspective on clean energy has been the House Freedom Caucus. If you look at our investments, we’re actually somewhat shadowing the House Freedom Caucus and their announced investments. These are candidates who will ally with the House Freedom Caucus should they get elected.

David Roberts: So these races you’re entering in the general are not necessarily against people who have voted against something that you like. In some cases, they’re di-

Tom Matzzie: Yeah, a couple of them are open seats.

David Roberts: Yeah, a couple of them are open seats. These are just candidates.

Tom Matzzie: Yes, that’s right. But they’ve allied themselves with, like, the House Freedom Caucus, which is a clear signal where they’re gonna stand should they get elected, or they’re on the campaign trail actively campaigning against clean energy. That’s the other thing we’ll sometimes see.

David Roberts: Mm-hmm.

Tom Matzzie: So on the targeting criteria, is it winnable? Like, is the candidate a good candidate or not? Are there dynamics that are interesting in the race like bombastic comments, a falsified biography, things that make people really lousy candidates? Right? When we went after Andy Ogles, he had only raised $60,000 for his reelect, and we’re like, “Okay, we’re gonna pick his pocket.” We have $2 million. He has 60,000. And so one of my favorite criteria we look at is, are they a whiner? Are they gonna complain about us? We actually really value the help they provide to us in spreading the word about our work.

David Roberts: Oh, that’s interesting. I was actually gonna ask about this, but it’s actually my next question, which is, like, a lot of the people you’ve gone after have used your attacks as a kind of badge of honor. Like, “Look, MAGA constituents, these lefty clean energy people are coming after me,” trying to make it into a positive. So you’re saying that’s not working, and you like it when they do that?

Tom Matzzie: We love it when they do that ’cause they’re telling other members of Congress about us, and maybe they think they’re being brave or courageous or it’s gonna somehow help them. Maybe it does with fundraising, I don’t know. But, like, I don’t know anyone in Congress who wants to run into the equivalent of running into a charging cavalry or something like that, right? And members of Congress would much rather we’re not spending in their race, right? They’re gonna complain about us, but, like...

Look, Ralph Norman, the second time we defeated him… We defeated him, you know, once when he was running for governor and then again in the runoff. His, literally his concession speech, half of it was about all the super PACs that attacked him. And so periodically Chip Roy has taken to, you know, X to complain about us. And I will periodically reply to thank him for spreading the word. Like, this stuff’s all serious, but that is actually, we really do like it when they whine and complain about us and spread the word to other members of Congress.

David Roberts: That’s funny.

Tom Matzzie: Yeah. It’s important that we also show that we’re not afraid of that, right? We’re fearless.

David Roberts: Yeah, yeah. Do you ever worry that by taking out, I mean, in effect, what you’re doing is targeting pretty extreme Republicans, the Freedom Caucus.

Tom Matzzie: Yeah.

David Roberts: Do you ever worry in these primary fights that the effect of your spending is going to be a better and more viable Republican winning the primary, thus having a better chance in the general? Do you know what I mean?

Tom Matzzie: Yeah, sure. Well, I would say like, look, we’re not the Democratic Party, and, you know, this is the criticism we heard a little bit in Tennessee, you know, went after Andy Ogles. I think the DCCC, the Democratic Campaign Committee, was hoping they would be able to run against Andy Ogles ’cause he was such a buffoon.

David Roberts: Right, right, right.

Tom Matzzie: Versus Charlie Hatcher, who’s like this nice, gentlemanly, you know, veterinarian farmer. And I just like, that’s not our job. We’re not the Democratic Party.

David Roberts: But okay, but I know and you know that clean energy is, all things being equal, more likely to get legislative victories if there are just more numbers on the Democratic side. Like, that’s just the evidence for that is everywhere in every state, in every country. I mean, maybe I wish, I wish it were not so. I wish it were more bipartisan, but in reality, like, the more Democrats control things at the state level, the better clean energy does. That’s just sort of like-

Tom Matzzie: But I wanna just note, though, we wanna push past that. And there are examples in certain states where the industry has done that, right? In North Carolina, for example, solar industry is so deeply a part of rural economic development in North Carolina. The North Carolina legislature was able to pass a bipartisan climate bill several years ago that had, like, real targets in it for build-out of solar and clean energy, et cetera. And so there is a model for how you can push past if you become more and more important. But they, also, the industry in North Carolina invested deeply in relationships. They invested in politics-

David Roberts: Hmm...

Tom Matzzie: in be… outside of elections, right? And I think this is one of our biggest gaps as an industry, is we don’t actually invest in the relationship work outside of lobbying crisis at the sort of scale that other industries do.

And I wanna be clear, like, there is a lot of work being done by the trade associations and by companies, but it’s not like the Realtors Association does it. It’s not like the insurance brokers. It’s not like the community bankers. If you’re a member of Congress, when you show up for your first day in office, someone knocks on your door and says, “I’m from the Realtors Association. I live in your district.” Someone from the Pharmacists Association knocks on your door.

“From the pharmacists, I live in your district,” et cetera, et cetera. And we just don’t cover the country at that sort of depth, right? We’re much more likely to have one person that covers, like, the Western US for a company. And that sort of build-out on the ground is those relationships are the fundamental building blocks of organizing and relationships, and they have that in North Carolina. The ind… solar industry has that in North Carolina.

David Roberts: Maybe this is a good opportunity to talk about what you call free riders, which is a problem in the industry. But how do you… So, like, the work that has been done to increase the profile of the industry and to get good policy passed benefits everyone in the industry, but a lot of companies in the industry are not doing investments in that stuff. They’re benefiting from the investments other companies are making.

Tom Matzzie: Sure.

David Roberts: I mean, maybe this isn’t your job and not what you’re about, but how do you persuade or browbeat industry participants, the companies themselves-

Tom Matzzie: Right...

David Roberts: into taking politics more seriously and investing more in it?

Tom Matzzie: Right. And so let me just talk about this a little bit more because it’s not as easy a solution as them just deciding. And the reason is there are actual structural problems and barriers towards clean energy companies that operate in the United States being able to do more politics.

David Roberts: Yes.

Tom Matzzie: The number one being foreign ownership. So some of our biggest operators in the United States are either European, multinational or Canadian or Asian or Australian companies, or they’re owned by the pension funds of the Scandinavians or the Australians or New Zealand or whatever. They actually, because of FARA, are not able to write checks into US politics. If you’re not familiar, this is the kinda law that regulates foreign influence in US public affairs and politics.

David Roberts: And that means election spending or any political persuasion, educational-

Tom Matzzie: It’s a pretty broad law. There is an economic kind of exception to it for things like joining trade groups, but they definitely could not try to, you know, write money to super PACs, for example. You know, there are certain prohibitions on things that you would not be able to do. So that’s one barrier, but I do think overall it’ll take a generation change in the leadership of these companies probably.

David Roberts: Isn’t it also a barrier that a lot of clean energy in the US is kind of through big utilities that also often own gas? In other words, a lot of the entities involved are also invested in fossil fuels.

Tom Matzzie: I’m trying to think if I’ve seen that, like, show up in, like, meetings or... I suspect it is probably true that there’s those sorts of conflicts, but there’s conflicts of other sort too. I mean, there’s c- I guess I’d say there’s general conflicts of interest.

But I do feel like the advocates that work in the industry are not mindful, not slowing down because of that. They care deeply about solar, wind, energy storage, and working to win. I think, you know, there is a somewhat of a talent gap where we don’t actually have a lot of people with political experience inside the industry.

We might have people who have a lot of regulatory experience, or they have some legislative or state legislative experience. I think I can name probably four or five of us who’ve ever worked on campaigns at a really national level that work in the industry. So there’s like a money problem, and there’s maybe a talent and like culture problem. And I think that there’s also just a desire to be everyone’s friend.

David Roberts: Yes. I wanna talk about this.

Tom Matzzie: Well, what people don’t understand is that the really the path towards everyone’s friend, it’s like in hockey, you have to have the fight to get the energy out, and then everyone can skate off together. And I have run elections in the past where we defeated like a US sen… I helped organize against Joe Lieberman in the 2006 Democratic primary where he was defeated by Ned Lamont, now governor of Connecticut.

And we defeated Joe Lieberman in the primary, and the next day had a meeting with the Democratic leadership in the US Senate, and they just go, “Are we still friends?” So like, I don’t think like that sort of that’s how the world works is understood broadly in the industry, which is you actually by being strong and demonstrating your strength, you make it desirable that people want to be your friend.

David Roberts: Yes. I wanna talk about that more in a little bit, but just staying on the point of the industry, the companies themselves, it seems like the fact that most of your money right now is from one person, from Chris Larsen. You know, he’s a clean energy investor, but he’s not really-

Tom Matzzie: He’s not an executive in the space...

David Roberts: not an executive in one of these companies, and so it just seems to me the small size of what you’re doing, I mean, you’ve been sort of advertising yourself for a while now. You’ve been around for a year now. Are people knocking on your door, or are you finding that other companies in this space are nervous, or they don’t like what you’re doing? What’s the vibe?

Tom Matzzie: It’s a little bit of both. I mean, we have dozens of executives who’ve contributed now-

David Roberts: Hmm...

Tom Matzzie: in the, like, 50 to $100,000 range. It’s not them writing million-dollar checks. I think, you know, we actually haven’t produced a lot of billionaires in our industry. We’re not quite as profitable as, like, crypto or oil and gas, or as the tech business or AI. And we definitely have some companies who’ve contributed to the 501(c)(4) companion to our super PAC, which will continue the advocacy work all year to advocate.

So it might be working on the permitting bill, for example, or it might be doing candidate education on the issues during the early presidential primary next year, and it can do some limited spending on politics. But yeah, no, is it dozens of companies writing seven-figure checks? No, not yet. But do we have enough money to make an impact right now? We do if we operate in that kind of guerrilla warfare sort of posture.

David Roberts: Yeah, yeah.

Tom Matzzie: Are we at the sort of scale where we’re desirous that, you know, the leadership and either Speaker Johnson or Leader Jeffries really, really want us on their side? We’re not- We don’t have that sort of money yet. That’s actually a place where the environmental groups fill in a little bit on the Democratic side, at least.

David Roberts: Yeah. And I don’t know how wise that situation is.

Tom Matzzie: Well, they have a lot of money.

David Roberts: You’ve said before that a mature industry spends about 2% of CapEx-

Tom Matzzie: CapEx, yeah...

David Roberts: on public affairs, and as I understand it, clean energy is not there.

Tom Matzzie: Fractions of a tenth of percent.

David Roberts: Yeah. So that seems like it calls out for some explanation. It seems like as industries grow, they sort of naturally move into this.

Tom Matzzie: That is true.

David Roberts: And clean energy has not naturally moved into it, so it seems like it calls for some sort of special explanation. Why don’t they do this?

Tom Matzzie: I will give you the reasons why. They’re mostly excuses. The fundamental reason is we’re in the growing up moment right now, right? And political scientists actually study influence and lobbying, and they will tell you that an industry is typically in its fourth or fifth decade before it matures politically. And we don’t have that sort of time. We have to grow up a little faster ’cause there’s also people trying to hurt our industry.

David Roberts: Yeah.

Tom Matzzie: But I think there are also some structural barriers. I talked about the foreign corporation ownership. The other one is we’re actually just not hugely profitable businesses. We build on 6, 7, 8% returns, and we also use project finance almost exclusively, which means the cash flow off our projects, our assets, our power plants, doesn’t come back to our companies. It goes to pay debt service-

David Roberts: Mm...

Tom Matzzie: and preferred return to tax equity, which means if we need a lot of money in a hurry, we might have to sell something sometimes. So it’s really just, there’s a lot of awkwardness, I would say, in the design of our industry that slows down our ability to invest at scale in public affairs. I do think there are some really interesting efforts going on inside the industry led by some of the companies to try to, you know, change that. You know, we’ll see where that goes.

David Roberts: Let’s talk about the industry generally then, ’cause I don’t know if you have listened to my recent pods on this, but it’s been a frustration to me. You know, I said in the intro, said it a million times now, clean electricity, not just clean energy, but specifically clean electricity, the electrotech, the electric stack-

Tom Matzzie: Yep...

David Roberts: all that comes along with it, is producing miracles-

Tom Matzzie: Right...

David Roberts: around the world. Like, it is a remarkable story when you tune into the details. It ought to be the belle of the ball. It ought to be, it seems to me, based on its trajectory of growth, the costs it can offer, the way it can support all these other things that people say they want, like AI, like drones and defense, like, you know, you name it, like a million things that have nothing to do with carbon. It ought to be the belle of the ball and have people lined up banging on its door, begging it, you know, to become its friend.

Tom Matzzie: Yeah.

David Roberts: And instead, it’s just a wimp. It’s practically a non-entity. Like, most- I don’t think you could pull 100 people off the street, I doubt one out of 100 could even sort of tell you that it is a thing in and of itself, much less give it any credit or, like, ascribe it any power.

Tom Matzzie: Right.

David Roberts: You know, I was reading this story in the Washington Monthly last month. I mean, you probably read it. You were quoted, I was quoted. The quotes from people in the industry made me want to jump out a window. Like, over and over again, you see, like, Tim Pawlenty saying, “Oh, we don’t wanna make enemies. We just wanna make friends.” And then you see even Tom Steyer saying basically like, “We don’t...” Saying some version of, “We don’t need to throw elbows. We have a better product. We’re cheaper. We’re faster. We’re better, and the betterness is just gonna win people over in the end.” And then I kept thinking as I’m reading this, I’m like, why do you think Republicans keep kicking you in the face over and over again?

It seems like you don’t understand why they’re doing that, so, like, why am I trusting you to lead this industry? Like, it just seems to me like the industry does not get it on a deep level. Am I wrong about that? Am I missing something?

Tom Matzzie: First, I would give Tim Pawlenty some time. I’m very excited about him becoming the leader of SEIA, and I think he’s a really strong communicator for the industry. I would note that their rhetoric on that topic has revised in the last 48 hours even. Where now they’re saying there needs to be a stick and a carrot. Not just, like, we wanna be friends with everybody. I don’t think that’s, like, coincidental. They have members. Tom Steyer’s an investor in several large funds related to the clean energy industry, but he’s not part of the industry per se.

And I find it ironic given how much negative advertising he’s probably funded in the last 20 years that he would make that comment. Must be bruising from his primary loss still. So people have all sorts of point of views, but the great thing about, you know, our political system is that entrepreneurs like Peter Davidson, Brendan Bell, myself, the other people involved in helping stand up Invest in Tomorrow Coalition, we can just go do the work. And I don’t need to wait for permission from anybody. Our trade groups are not the Congress of the clean energy industry. So-

David Roberts: You wanna go show that the stick works.

Tom Matzzie: Well, yeah. I mean, I think that’s part of it, for sure. I think the largest thing is that we just cannot let this moment after the OBBB pass without doing the work. You know, what happens in the future, next year, et cetera, is still, like, we’ll see how the fundraising goes, we’ll see how, you know, things evolve. But we certainly cannot let this moment pass without taking our pound of flesh. I didn’t need to wait for anyone’s permission. Peter Davidson didn’t wait for anyone’s permission to make that happen.

David Roberts: Nonetheless, I’m curious what you think about the trade industries in this area, like SEIA and Americans for Clean Power, which is not what the name of that group is, but I get it wrong every time.

Tom Matzzie: American Clean Power Association.

David Roberts: Thank you. American Clean Power Association. Those PACs typically, I think, split their spending pretty evenly between both parties, including, I think, some members who voted to kill the tax credits are getting money from those PACs. Just as an outsider, what’s your take on their effectiveness and their strategy, the trade associations?

Tom Matzzie: On their political strategy, like their PAC, well, I don’t think they have much of one, to be honest. I think they’re trying to start one, you know, in terms of politics. By politics I mean, like, elections-

David Roberts: Yes...

Tom Matzzie: candidate fundraising, soft money, super PACs, stuff like that. They have left that to others, and which is a choice. Like, there’s other industries that do the same thing. That’s not their thing. That’s not what they do.

David Roberts: What if I frame the question this way: if you were running SEIA, what would your approach be? Would you continue that or would you throw more elbows?

Tom Matzzie: I would definitely find money. Oh, well, I would find money to fund an operation like Invest in Tomorrow Coalition. But I would do it from outside of probably SEIA. I would let it operate a little independently. It’s actually important that Mike Johnson can’t call up Tim Pawlenty and say, “Can you get Tom Matzzie off my back?” And so that distance has value, right?

David Roberts: Right.

Tom Matzzie: And it’s part of the strategy intentionally. Obviously, because I’ve been in the industry for 15 years, I have relationships with people inside these trade associations. I’ve never been on the boards of either of them or have much desire to be. I’ll take their phone call, but I’m not gonna take their orders. And I think it’s important to have that distance and deniability as well.

David Roberts: There was a lot of talk, a lot of faith during the formation of IRA and the design of IRA, the Inflation Reduction Act, that prioritizing investments into red areas would dampen red opposition to clean energy. Do you think that was just pure naivete? Do you think there’s anything to that? It didn’t seem to pay dividends.

Tom Matzzie: I think there is something to it. We did not have enough time, and I also think Donald Trump is a moment in time that was a disruptor to, like, that. And had it been under, like, a more normal Republican presidency, I think it would’ve stuck a little more easily. And the reason I say this is ’cause we’ve seen this in some states, right?

I talked about North Carolina earlier. It’s also true in Georgia, where the tremendous investments that have been made in Georgia related to, you know, clean energy, batteries, clean transportation, are something that Georgians value. And I just don’t think it had enough time to take effect. I would also note it’s not geographically diverse sufficiently, right?

You know, we’re talking about dozens of places, maybe hundreds, but it’s not like it, you know, we’re covering all 219, you know, Republican congressional districts or whatever that number is right now. I do think that there’s a possibility for that. However, it’s clearly not what you should rely upon as a strategy.

It’s like deciding you’re gonna grow your own garden for all the food you eat this year, right? You plant the seeds in the spring and what are you gonna starve until the harvest in the fall? That’s just like not how the world works, and so you have to do the political work also, and that means the relationship building, that means the accountability work as well until, you know, your seeds for your beans can grow into a beanstalk, use my, extend my metaphor ’cause that is a slow strategy. That is not a fast strategy.

David Roberts: In terms of trying to persuade companies to get more involved and to give more money and to be more involved in politics, it is the case that Trump is kind of crazy and vindictive, and he has shown a willingness to go after specific people and companies-

Tom Matzzie: Mm-hmm...

David Roberts: if they cross him in specific industries. Like, you know, speaking of like mythic power, like in an entirely irrational way that I think is really uniquely well-designed to produce fear. And so I expect a lot of these companies, you know, and maybe this partially explains the industry’s overall unwillingness to fight more explicitly ’cause they’re just afraid. To some extent, that fear is justified. Do you run into that when you’re talking to people? And I guess-

Tom Matzzie: For sure...

David Roberts: people can donate to your PAC without being disclosed, right? Maybe that’s some shelter.

Tom Matzzie: Well, the PAC is all disclosed, but they can support the 501(c)(4) advocacy work that is not exclusively political and be anonymous. And so there are certainly people who have contributed to the C4’s advocacy work in order to be, and wanted to be anonymous. All right, so let’s just break this down for a second. Donald Trump has been vindictive to the people who have attacked him personally, and I do not think we have seen a lot of evidence of him being vindictive to the people who stood up for themselves in a way that was, like, good faith advocacy. And the one I’d talk about right now is the offshore wind industry has gotten run over.

David Roberts: Yeah.

Tom Matzzie: They mounted a litigation defense through the regional affiliates for regional clean energy kind of trade associations successfully. I think they’ve won, like, five times in court or something like that at this point.

David Roberts: Yeah.

Tom Matzzie: There hasn’t been any retribution. In fact, what we’re seeing is that offshore wind is becoming now a topic in the negotiation around the permitting bill. So I think there’s a, like, Trump respects strength, not weakness. That is something for people to hold onto. It has to be good faith advocacy. It’s not attacking Donald Trump personally, it’s standing up for yourself, and that’s a very different sort of thing.

My impression has been that the people who’ve drawn the fire were the ones who were weaponizing against Trump personally, and that’s not what we’re doing. In the primary elections that we joined this year, and more than one of them, our charge against the incumbent Republicans that they were not loyal enough to Donald Trump, that they were not MAGA enough for Texas.

We did defeat Andy Ogles despite Donald Trump campaigning for him. I think we’re the only outfit to defeat Trump during a primary this cycle. But the next day, Donald Trump disavows Andy Ogles as a terrible candidate. True. He was a terrible candidate. I would say he did not do his part of the deal with the president. He should have done, built himself into a stronger candidate.

David Roberts: Really just a terrible human, if I may go slightly beyond your description.

Tom Matzzie: Yes, a terrible human. And boy, there are some really terrible humans running in the general election too. The things we run into as we prepare, you know, these candidates are just really- I can’t believe this is what Republican Party is attracting as candidates. Anyways, yeah, some people are afraid. Viewpoint discrimination is a real thing in the Trump administration, but it’s also these guys are a moment in time. And yeah, we’ll get past this. Now, along the way, there’s gonna be a lot of wreckage. The offshore wind industry is one example of that.

David Roberts: Yeah. Well, I mean, and permitting is frozen for public lands for solar and wind. It’s- There’s a lot of suffering going on.

Tom Matzzie: Yeah.

David Roberts: Again, it’s not clear to me that, like, if they fought harder and stood up for themselves more, that that would get any worse. I mean, how much worse can it get? He seems to be doing everything he can to kill the-

Tom Matzzie: Well, if it’s vindictive, I think their history has been that they retaliate. If you’re doing good faith advocacy, standing up for yourself, I haven’t seen too much evidence that that draws attack.

David Roberts: So that’s the executive branch. To some extent, that’s beyond your reach, at least based on your current strategy. You’re not really in the business of trying to do anything about that. I don’t know what anybody could do about that.

Tom Matzzie: Well, we’re keeping an eye on the… what might evolve in the presidential primaries.

David Roberts: Right. Right, right. Well, we’ll get to that. So I mean, I did wanna ask about the partisan thing because-

Tom Matzzie: Mm-hmm...

David Roberts: clean energy, I think, has traditionally and is still largely coded as a lib thing. In practice, your strategy, even if you’re purely looking at what do you do to our industry, even if you’re not explicitly using partisanship as a differentiator, in practice, you’re gonna mostly end up supporting Democrats and opposing Republicans. Do you think that ITC specifically being coded as a Democratic-aligned PAC is a risk or a problem or something you think or worry about?

Tom Matzzie: It’s not what I want, and it’s not what I think our supporters want because that does not actually reflect who the industry is. We are all types of political persuasion. You know, we’re every flavor of American. And I think it has been more difficult to find Democratic targets. So, you know, that’s the thing. But there… I think as we look forward, we’ll look into the Democratic primaries and look for opportunities there as well. And there are plenty of places, and I’ve experienced this personally as a solar developer, where the local Democrats were the problem, and it was not the local Republicans were the problem. And we will be looking for those opportunities for sure.

David Roberts: So how are you approaching it? Like the general election, general elections are different than primaries. Primaries are uniquely designed for someone with a decent chunk of money to come in, have a big effect-

Tom Matzzie: Yes...

David Roberts: make a big impression on the lawmakers involved without making huge ripples outside that primary, basically. You know, it’s sort of ideally set up for what you’re trying to do. General elections are a little bit different. There’s more press involved, there’s more scrutiny involved, there’s more money involved, and there’s more, you know, if you’re just in a Republican primary, you’re gonna get a Republican out of that one way or the other. But in these general elections, you have to think about like what’s gonna be the composition of Congress at the end of this, and how is that gonna affect things? So I’m just curious how your general election strategy differs from your primary strategy.

Tom Matzzie: How it doesn’t just look like we’re partisans, you mean?

David Roberts: Yeah, or partly that, and just whether you are behaving any differently given the greater scrutiny, given the greater publicity. Like, if you’re thinking about general elections differently than you think about primaries.

Tom Matzzie: I mean, yes. Certainly, you’re right there. Primaries are designed that a large checkbook can make a big impact, and that’s ’cause people, voters are not in a partisan silo where they’re unmovable. Whereas in general elections, a lot of voters retreat into their, you know, partisan bunker, for lack of a better term, and very few of them are movable. And so the money just doesn’t go as far-

David Roberts: Yeah...

Tom Matzzie: in a general election versus a primary. However, because of our way of targeting, where we look for the opportunity to make an impact as one of our criteria, I think we have chosen races where we can make an impact.

That’s one. The second is the affiliation of these Republicans with the House Freedom Caucus, in our view, is dispositive, you know, of their fitness for office. In some ways, our problem is not with, like, the whole Republican caucus, it’s with these fanatics who wanted to deny the industry a glide path, went and demanded the administrative assault on industry from President Trump.

I mean, Ralph Norman, Chip Roy, Andy Harris, they all marched up to the White House and demanded the president stop the permits. Ralph Norman went on television to brag about how he was getting the president to stop permits. So, that House Freedom Caucus should not grow is one of our perspectives. And some of them we will confront in primaries, and some of them we will confront in general elections, and there’s different paths to victory.

That’s been one of our focuses, has been either the members of Congress who signed the repeal everything, including retroactive repeal letter, or their affiliates who are or will be part of the House Freedom Caucus. So I think that is good faith advocacy. That is not, you know, partisan behavior.

David Roberts: Mm-hmm. And then looking past the midterms, then you’re in presidential election season, basically. I mean, it starts these days, more or less, as soon as the midterms are over, to all of our great distress. How are you thinking about that? There’s a whole nother cycle of congressional elections, obviously, alongside that, but then are you thinking about getting involved at all in the Democratic presidential primary?

Tom Matzzie: Or Republican.

David Roberts: I mean, speaking of, like... Or the Republican presidential primary, which, speaking of, lots of scrutiny, lots of money, lots of deep enmities and lines drawn in various places, like just a more fraught landscape. How are you thinking about presidential primaries?

Tom Matzzie: I think the analog is what the ethanol industry has done over the last 40 years, where they have essentially used one state as a gate that if you wanted to get out of that state intact, you had to adhere to them.

David Roberts: But not everybody can dominate Iowa though, you know.

Tom Matzzie: Well, for the Republicans, Iowa will remain important, and there’s a very big wind and solar industry in Iowa. Michigan has its own clean energy industry, so does South Carolina, so does Nevada. The early presidential primary states and caucus states have very important clean energy industries in them. And I think as an industry, it’s a good organizing moment, right? It’s not necessarily that we’re gonna choose one of these candidates as our horse to get behind. What happens during presidential primaries, this is important to remember, is retail politics in a very real way.

David Roberts: Yeah.

Tom Matzzie: Where candidates go into diners and Kiwanis clubs and like, you know, kiss, you know, babies and take their photo with grandma and all that sort of stuff. Well, they should be met with, you know, “I’m a wind farm family,” “I’m a solar farm family” T-shirts, and Republican voters who have been organized, who are part of our industry to deliver a message to JD Vance or Marco Rubio, or if it’s Kamala Harris or Gavin Newsom or whomever, you know, that these issues are important to us.

What the ethanol industry did is they had organizers on the ground in Iowa, and they also got Iowans to pledge that they would not support someone who did not support the ethanol industry during the Iowa caucuses. So I think that sort of an organizing project is like a important opportunity during the presidential primary season.

And that’s, again, not choosing one horse and getting behind them. That’s really about good faith advocacy on behalf of the industry. And I really use that term deliberately, good faith, because, like, bad faith is if you just act like a partisan or, you know, good faith is if you’re really trying to advocate for your cause and your issues.

David Roberts: Well, let me ask you about this. Like the NRA and similar groups like that, and maybe I bet crypto probably also has something like this going on, which is something like you, presidential primary candidate, have to support Bill X or Policy X. What do they call it, NRA? There’s a term for it, but basically, like, they grade you on these specific policies.

Tom Matzzie: Right, scorecard.

David Roberts: Yeah. Have you thought about something like that? Like again, that starts to flirt with policy decisions. Is there a red line or something that you would tell candidates like, “You must be on this side of this line”?

Tom Matzzie: Yeah. People keep on wanting to drag me into policy discussions. I would really defer, to be honest, to our trade groups for that sort of what should be on the scorecard. And I know, like, if you think they’re feckless, Dave, that’s not satisfactory to you. But, like, that is where actually the industry has its conversation around what sort of policies we wanna support and what we care about. I somewhat have to respect, you know, that process.

David Roberts: Okay. Well, let me ask about that since I meant to ask about this earlier, but this is a bee in my bonnet, so I wanna get your reaction to it. To me, American Clean Power Association, it’s crazy to me that that is, like, half gas, right? That that is half fossil fuel, that the trade group is half fossil fuel. Like, the kinds of things, the kinds of policies I think clean energy should want are the kinds of policies that would have clean energy substituting for natural gas.

Tom Matzzie: Just to be clear so all your listeners understand, you know, what we’re talking about here is many of the companies that are on the board of the trade association are diversified energy companies that have large clean energy investments but also have fossil fuel investments. You know, example might be NextEra that has lots of gas generation and nuclear and, you know, other power technologies, but is, let’s be clear, the largest investor in clean energy in the United States.

David Roberts: Yeah, that’s kinda what I was getting at earlier, like the companies themselves are conflicted, but then, like, where is the trade group that can advocate for policies that would replace gas with clean energy?

Tom Matzzie: Yeah, I think that, I mean… That’s not what the industry is in business to do, right? The industry is in business to build its own technology, to build solar or to build wind or build energy storage. A consequence of that will be that resources, power plants that have fuel costs like gas and coal, will be losers at the end of the day, right?

David Roberts: And in home heating and cooling, if heat pumps replace-

Tom Matzzie: Yes...

David Roberts: furnaces, they’re gonna shut down pipelines. Like, that’s the point of clean energy.

Tom Matzzie: If you’re a solar developer, let’s say you’re not one of these utilities who spun off a clean energy business. Let’s say you’re just, you’re a company, you start your clean energy business, you only do solar, you know, something like that. You didn’t get in business to replace gas. You got in business to build solar. And that’s what I think the climate community, the environmental community needs us to be great at as an industry, is building our technologies.

We need to be the best absolutely at building more solar, at building more wind, at building more energy storage. I think there are moments when there’s a- could be a policy decision that advantages our technologies over gas. I can’t actually say I know how those have been worked out. I have not been in the room when, you know, that’s kind of become an issue.

But I don’t think you’re wrong that there are conflicts there, and I just don’t see... Well, let me put it this way. I haven’t seen our trade associations be less rigorous in their advocacy for solar, wind, and energy storage because of their membership has fossil fuel investments as well. I think the people who work at those organizations are deeply committed to the success of clean energy in a way that’s very competitive sometimes that I’ve enjoyed seeing. And you’re right that sometimes there could be a moment where there’s, like, a policy decision where it’s, you know, this will hurt somebody else to help us.

David Roberts: I mean, anything that, for instance, say you raise efficiency standards or whatever on home heating to the point that-

Tom Matzzie: I’ve never seen our trade groups work on that issue, by the way.

David Roberts: Well, that’s exactly. I mean, are they gonna work on an issue-

Tom Matzzie: They’re not actually thinking about the longitudinal growth of electricity demand in general. Let me put it that way.

David Roberts: Yes, but the clean electricity industry ought to be thinking about that, don’t you think? Like, that’s-

Tom Matzzie: Yes, total addressable market is a very important part of our industry’s long-term success. It’s just not in the cards. It’s just like it’s not happening. Yeah, I mean, it’s an interesting conversation about whether it should. I would say that of these trade groups, SEIA is maybe the best positioned to take that on. They do not have any utility members. It’s part of their charter. They probably do have independent power producer members who have, you know, thermal generation, who have fossil fuel generation as well.

Also, there’s been a lot the industry has had to deal with. We have had the IRA, we’ve had trade issues, we’ve had permitting fights, and the size of the addressable market for electricity, it should actually be something we’re allied with, like the Edison Electric Institute on. It should be something we’re allied with, you know, the utility sector more broadly. But I just haven’t seen that be a thing yet. It’s a good idea. I’ll bring it up in a meeting.

David Roberts: Yes. I mean, and this is just the final thing I’ll say on it. Insofar as the total addressable market for clean electricity grows, it is probably the mathematical flip side of that is that the total market for natural gas is shrinking. That’s kind of the only way this works. So like this weird notion, this weird notion in the industry that we’re gonna all be friends, that we’re all on a clean- that we’re all in this trade association together, that we all rise or fall together is just like crazy to me. It’s just- I mean, maybe like politically, I understand why we’re at that spot right now, but like sooner or later, we’re all gonna have to confront the fact that there’s a choice.

Tom Matzzie: It feels like a moment in time on the permitting bill. And maybe it was the same on the infrastructure, you know, bill a couple of years ago.

David Roberts: Okay, well, I’ve kept you too long. I do want to just ask as a wrap up, like looking past November, where are you trying to get? Do you, as ITC, think that a lot more clean electricity companies ought to be giving you money and that you ought to be a lot bigger? Or are you trying to sort of galvanize other changes in the industry’s behavior and the industry’s political behavior? Like, where do you want ITC to be, say, in five years or 10 years?

Tom Matzzie: Sure. Well, I mean, in my ideal utopian, we’re friends with everybody, we’re just part of the background of America, and we’re neither, you know, the Republicans don’t hate us, the Democrats, you know, like us. That’s my utopia, right? Like-

David Roberts: Where geothermal seems to sit weirdly.

Tom Matzzie: Yeah. We’re not necessary. I think that’s achievable, actually. It- you know, it’s just because the nature of how we are the only people who can deliver what America needs in the next five years. There’s just such an inevitability to us. You know, so I think in my ideal scenario, we don’t exist, but it- I am also a realist.

David Roberts: Because there’s no need because everybody loves you and is supporting you.

Tom Matzzie: Yes. Yes. Or we exist, but we’re like, I don’t know, the American nuclear fleet, we never get used. So, and let’s hope that always the case. That would be one scenario. But I do think what the industry needs to do more broadly is massive, bigger investment in public affairs activity, including relationship building at the state and local level, communications work.

And, you know, for another show, another episode, I actually have a whole vision for what that could be, what that could look like, you know, based upon my experience having built large political apparatus in the past for either the labor movement or at MoveOn. And the reason I think that investment is necessary is we have non-economic barriers to deployment, right? There are things that are in our way that have to do with public affairs, public education, community engagement-

David Roberts: Yes...

Tom Matzzie: and relationships. And so that investment has to happen. It has to be done on an industry-wide level because it is larger than any one company can do by themselves. And that has to be something I hope companies come to realize.

I’ve mentioned NextEra, a company I admire a lot in terms of their investments and how well they’ve done, you know, figuring out how to scale renewables, and some of the technology they’ve developed around deploying renewables internally is really remarkable. It spun- Some of it’s spun off into separate companies. And they have like a very small public affairs footprint across the country. And, you know, I think inside Florida where they have their utility, it’s gigantic, but it’s like, relative to what the competitors, you know, that they face have, it’s much smaller.

David Roberts: It seems like an explicit decision on the part of the industry to sort of keep its head down. You know what I mean? Like, it’s across the industry. Like it’s better for us just to plug away, and you’re saying it needs to speak up.

Tom Matzzie: I think it’s to speak up, but build relationships. And I say that as an organizer, former organizer, like relationships are the fundamental building block of organizing and power building. The, you know, if we have someone who knows all of the state reps and state senators and mayors and county commissioners that level up to a member of Congress, right? That’s a way to have influence over that member of Congress. And we just don’t have that sort of depth of relationships across the country.

David Roberts: All right. A success for you, let’s say, in six months, is-

Tom Matzzie: All right, we would need a list of wins.

David Roberts: You win these, whatever, 15 races?

Tom Matzzie: Maybe in the end we have... Well, yeah, it’ll be-

David Roberts: Or seven. No, seven.

Tom Matzzie: Yeah, there’ll probably be… No, in the end, we’ll do some governor’s races we haven’t announced. It’ll probably be over 15. It’ll be over 15 races, hopefully, and then we’re in the middle of a presidential primary where we’ve organized, you know, people in those states to advocate for solar, wind, and energy storage.

David Roberts: And having won those 15 races, or at least hopefully most of them, you think that will be sufficient to get some of that mythic power you discussed earlier?

Tom Matzzie: If we do a good job telling our story. It’d be much better to have like $100 million in the bank too. But look, I’ve done this on other issues. I led the US campaigns to end the war in Iraq, as you know, Dave, for many years when I was at MoveOn. We didn’t have $100 million, right? But Hillary Clinton didn’t become president in 2008. You know, there’s different ways to get things done.

David Roberts: And if people listening like what you’re doing, who can help you and how?

Tom Matzzie: If you’re a US... Look, if you wanna contribute to the PAC, you’re welcome to at investtomorrow.org.

David Roberts: Anyone can do that or do you have to be-

Tom Matzzie: You need to be a US person or a US corporation. No foreign money. And yeah, I think you have to be 18. It has to be your money. All the things that normally are part of giving to a political campaign. That’s the number one thing.

David Roberts: All right. We’ll wrap it up there. I’ll just say that I was very happy when you guys popped up and started doing this, ’cause as you know, I’ve been pounding the table for years for something like this mythic power, which, you know, involves both fear and attraction, I think.

Tom Matzzie: Right.

David Roberts: As you said, and people have been leaning on the attraction part and betting on the attraction part almost solely for many, many years now, and it’s just not working.

Tom Matzzie: It’s also not sufficiently attractive. Oh, I just wanna note, like, people talk about how much people like solar and wind and energy storage, and all that’s true. You know, there’s a difference between agreement and popularity. And people confuse those two things. What we have is agreement with people. The iPhone is popular. Right?

David Roberts: Right.

Tom Matzzie: We’re not the iPhone. Maybe for you and me, we’re the iPhone. But, like, for most Americans, they want their lights to work, and they want their bill to be, you know, moderate and, you know, they don’t want dirty skies and dirty water. And we can deliver all those things, but we’re still not delivering 3,000 songs in their pocket and social media. Like, we’re not popular. There’s a difference.

David Roberts: Do you think that is an achievable thing for people to care enough about energy period to, you know, normies to care enough about energy period to really get invested in?

Tom Matzzie: Well, it’s an intangible good, right? That’s the thing that’s complicated. It’s not like you can’t touch it, taste it, feel it, smell it, hold it, eat it, you know?

David Roberts: Well, I’ve been wondering, like, with all the smart appliances and the smart home management moving in and the balcony solar and the EVs, like, there are ways now that energy is bumping up against people’s lived experience. I just wonder if that’s gonna amount to anything.

Tom Matzzie: Time will tell. You know, I don’t wanna be a cultural predictor here. I mean, I love my home electrification projects, which are underway and almost not fully complete yet, and I really enjoyed my EV driving tremendously, but like, I think about electricity all day long, Dave.

David Roberts: I know. I know. Same. I have completely lost touch what other people, what normal people think about it or whether they do at all. All right, let’s wrap up there. Thank you for walking us through this, and thank you for what you’re doing.

Tom Matzzie: Thank you for what you do, and happy to be here.

Collectively, the electric stack (batteries, motors, chips, power electronics) has gotten about 99% cheaper since 1990. It is quietly remaking every machine that turns electricity into motion, heat, or work. Problem is, China makes most of it. Sam D’Amico, co-author of “The Electric Slide” and founder of Impulse Labs, is betting the US can still claim a piece of that stack. He’s starting with a battery-powered induction cooktop. We talk about why domestic manufacturing matters, what America would actually have to build to compete, and how Silicon Valley’s founder world really thinks about climate change, geoengineering included.

Energy analysis and journalism have traditionally focused on the supply side, but in recent years there’s been a welcome turn in the other direction, toward the ongoing revolution in the devices that consume energy. What’s happening, around the world, is an explosion of electrotech. The devices that translate electricity into motion, heat, and work are getting exponentially cheaper, smarter, and more sophisticated.

Electrotech basically comes down to four technologies: batteries, electric motors, chips, and power electronics. Together, that “electric stack” has gotten about 99 percent cheaper since 1990, which is why cars, drones, boats, and stoves keep going electric — and why, eventually, everything is going to go electric.

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Currently, China manufactures most of that stack, including roughly three-quarters of the world’s lithium-ion batteries and 90 percent of the magnets that spin the motors. That leaves the US in a weak and perilous position.

That, at least, is the argument of “The Electric Slide,” a sprawling, 40,000-word essay published in the newsletter Not Boring last year. It says while America is betting the future on AI, China is betting on the hardware, and China has made the smarter bet.

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One of the co-authors of that essay, Sam D’Amico, is trying to put the theory into practice. His company, Impulse Labs, makes a drool-worthy high-end induction cooktop with a battery built in. That lets it push ten kilowatts per burner while plugging into an ordinary 120V outlet. Impulse is now licensing that core platform to bigger appliance brands, and Sam has his eye on “every mid-sized machine that runs on electricity.”

I thought it would be fun to talk to Sam about why the electric stack matters, why he started with a cooktop, where electrotech might go next, and how much of it America can realistically manufacture at home. Let’s do this.

Chapters

• 00:00 – Introduction

• 02:52 – From VR headsets to kitchen appliances

• 07:07 – How a pizza oven inspired a battery stove

• 10:07 – Peak demand, at home and on the grid

• 13:25 – Which appliances could use a built-in battery

• 16:46 – Electric stack 1: the four technologies

• 20:28 – Electric stack 2: power electronics and motors

• 25:21 – China bets on hardware, the US bets on AI

• 30:08 – Why not just buy it all from China?

• 33:51 – Why engineers need to be near the factory

• 38:39 – How much does the US need to make at home?

• 45:19 – US EV policy and letting Chinese cars in

• 47:49 – Batteries in appliances vs. one home battery

• 52:04 – Impulse’s plan: its tech in other brands’ stoves

• 55:17 – What’s next after the stove

• 57:14 – Has Silicon Valley stopped caring about climate?

Resources

People & Organizations

• David Roberts (Substack - Bluesky)

  • Volts (Apple Podcasts - Spotify - YouTube - LinkedIn - Instagram)

• Sam D’Amico (Website - LinkedIn)

  • Impulse Labs (Website - LinkedIn)

Company & Industry News

• Impulse Launches “Powered by Impulse” Platform with Thor Kitchen as First Major Appliance Partner

• Impulse and Zephyr Partner to Launch First Battery-Integrated Cooktop in Showrooms Nationwide

• Trump Admin Bans “New” Foreign-Made Inverters. What Does That Mean?

• FCC Fact Sheet: Covered List Updated to Include Foreign-Produced Advanced Robotic Devices and Power Inverters

Books & Articles Discussed

• Not Boring - The Electric Slide

Related Volts Episodes

• Clean electrification is inevitable

• Induction stoves with batteries built in, and why they matter

• A clever new way to distribute storage on the grid

• Making the electricity grid work like the internet

• What’s up with clean-energy supply chains and global trade?

Transcript

David Roberts: With no further ado, Sam D’Amico, welcome to Volts. Thank you so much for coming.

Sam D’Amico: Thanks so much for hosting.

David Roberts: All right. So Sam, you were in consumer electronics in your previous life, and I’ve been sort of curious whether it was this kind of big picture thinking about electricity and the imperative of electricity and the electric stack and the evolution of global markets, et cetera, that impelled you to get into electric devices, or was it just something about cooktops specifically that lured you into this? So what prompted you to switch over?

Sam D’Amico: That’s a great question. So basically the storyline, it’s like in the mid-2010s, I definitely wanted to kind of start my own company, definitely wanted to work in hardware. I was at the company formerly known as Facebook at the time, and I was working on VR headsets and game controllers and stuff like that.

And I’d realized that, you know, if I wanted to do something like this, like something of this level of ambition, make a device of that level of awesomeness, well, you needed to do it inside a big company. And the reason why you had to do it inside a big company was... This has now changed as of AI and all this other stuff, but if you wanted to make a VR headset, you needed to have an app store.

David Roberts: Right.

Sam D’Amico: And in order to have an app store that was any good, you needed to have, you know, developers on there. And for the developers to want to develop for your product, you know, they would need to have millions of users on the other side. And so I kind of realized that this, like, two-sided marketplace problem was, in some sense, intractable for huge swaths of consumer electronics and hardware, and kind of the reason why you’ve seen consolidation at the top, where it’s like, okay, only if you’re as big as OpenAI can you decide, oh yeah, now we’re gonna do a big consumer hardware swing, which is what they’re rumored to be doing.

This is something where if you’re a, you know, individual user, or you’re a smaller company, or an individual founder, you’re like, “Okay, well, I need to get my millions of users before I can even get to the next thing.” And so that was a key thing that I was like, “Okay, that’s the first thing.” The second thing was, with stuff like smartphones and VR headsets and all those other things, they had already kind of been touched by these electric stack technologies, you could argue.

You’re kinda pushing the limits of, like, what the off-the-shelf chips are doing. You’re gonna... Like, Apple obviously has a huge fundamental lead in their smartphone chips, for instance. And, you know, to make a better product, you need to actually have, you know, a billion users, enough demand to do that, and being willing to customize things from the display, the camera, the chips, et cetera. And so I kind of looked at this in a way where I was like, okay, so there’s like three reasons why you really shouldn’t go do the smaller devices now. Because, like, you’re gonna get the floor mopped by like these, you know, trillion-dollar companies.

And then the other option is like, okay, well, you can do the larger machines. You can go do cars and rockets and all this other stuff. And I’m like, maybe it doesn’t make sense to compete with Elon on the first go-around, was kinda the thinking. This, like, medium-sized machine market is kind of everything left, and these are devices that have, you know, basically been built on kind of like the previous generation of technologies when there was, you know, a brief wave in the mid-2010s of kind of smart appliances and putting, you know, smartphone guts into stuff. But, like, there hadn’t really been a ton of core innovation in how the systems worked and how they were, like, architected.

And so I’ve zeroed in on that as like, there’s an opportunity here. And then the second thing is like, well, you don’t need multiplayer for a stove. Your friend doesn’t need to have the same stove as you to make the stove good, right?

David Roberts: No network effects.

Sam D’Amico: Fortunately or unfortunately, there are less network effects in this space. And so that means that you could start with, you know, selling one fantastic product to one person, and you’d still be able to, you know, be successful there. And so that was just an attractive thing. In that kind of early formation process of the company, I was like, I kind of realized that these were all key pieces that made this workable, whereas like me being like, “Hey, I’m gonna go raise for like some sort of newfangled AI smartphone thing,” or whatever, like that would’ve been a much more difficult ask, and arguably like more difficult to actually be successful at as well.

And then the second thing was like, okay, well why a stove, period? And it was the realization on my own was, this was like 2019. I’m at this like IEEE haptics conference in Tokyo because I was visiting, because I was working on the VR game controllers at the time. And my pizza comes out of this pizza oven in like 45 seconds and I’m like, “Okay, this is fantastic. How many watts did that really take to cook that pizza?”

David Roberts: Mm. An electric pizza oven.

Sam D’Amico: I was like, okay, so electric pizza oven. I like hosting barbecues at my house, so I like to cook for people. And so the realization was like, oh, and then I’m noticing that the guy’s not continuously putting pizza into this pizza oven. It’s like he puts the pizza in, comes out 45 seconds later. There’s a period where like the oven’s empty and I’m like, okay, so if you had a battery, you could just buffer the spikes when you actually have the pizza inside, and suddenly, you know, you could trickle charge that pizza oven, you know, over the rest of the day.

David Roberts: Right. But whereas you can’t get the wattage you need straight out of a 120-volt standard outlet.

Sam D’Amico: Yeah. I mean, if you look at like toaster oven pizza, you don’t really get good results out of those. That’s effectively what you’d otherwise get, you know, from a 120-volt outlet. And so this was kind of like one of the inception points where I was like, oh, there’s now a set of technologies, back to the electric stack framing where I didn’t have as cogent of a description at the time, but it’s more like if I could take basically the guts of an electric vehicle and I can apply it to spaces where it hadn’t been applied to before, well, fundamentally I can make a better device.

And I can make a better device without having to spend a billion dollars on R&D for new displays, cameras, all this other stuff, because the automotive industry already did this for me. And in some sense, like the stack was ready effectively.

And then, you know, with a bit more kind of like startup journey details, it was kind of like, okay, well, what’s the device that probably has the most touch time in the home that where also the flame is actually the UX for, in the case of a gas stove. And that, that’s what led to doing a cooktop first, was kind of like, okay, most people don’t know how their dryer’s powered, even if it’s gas. Like that was something I ended up learning over the course of... I think I smelled a gas leak in my house, and like the guy checked my dryer and I was like, “Oh, I didn’t realize my dryer was gas.” And so meanwhile, like you definitely know if your stove is gas.

So that was kind of the rationalization for like why pick on the stove as the first thing. But then it’s also just like a great thing to pick on because it’s got the most disparity in peak power versus average power. I think the Energy Information Administration says that an induction cooktop is how many watt hours per day? It’s like 200 to 300 watt hours per day.

But the peak power of a cooktop with all the elements turned on could be like, well, except for us, but like maybe like 7 to 10 kilowatts or something like that. And so you end up wiring like half of your electrical panel if you’re in an urban area to something that’s using like potentially less power than your computer.

David Roberts: I mean, this is just basically at the household level, the same problem we talk about at the grid level over and over again, which we’re being, up till now, we have been forced to build infrastructure for peaks, right? Which means a lot of the time, a lot of the infrastructure is not being used, and batteries solve that problem at the macro level, and now they’re solving it at the micro level too.

Sam D’Amico: Yeah, and I think there’s a metaphor here where if you think of the grid, the joke I would say is like we’re evolving from like the Tesla, the Thomas Edison electric stack to the Tesla, the car electric stack, you know, with a lot of these transformations. But the metaphor that I think has been very useful for me at least in terms of thinking about the grid is like the grid before the advent of storage looks kind of like a rotating shaft that’s spinning 60 times a second, or 50 if you’re in Europe or whatever.

David Roberts: Mm-hmm.

Sam D’Amico: And you kinda have to clutch into that shaft. Like to participate in the grid, you gotta basically make sure that like, if you’re trying to add energy to the grid or whatever, you gotta like turn that on and like, you know, slowly dial up the friction until you’re spinning at 60 times a second too. And if you do that poorly, like obviously this is why the interconnection queue is so long.

This exists at the micro level with like, “Oh, I wanna get permits for home storage for my house,” to the macro level of like, “Can I plug in a data center?” And so that was kind of like where electricity 1.0 gets you to. It’s like, okay, you’ve got a spinning shaft. You could even think of it even simpler. It’s like, where did the grid come from originally? It’s like, well, you were running factories, and the factories needed to use each other for backup. And what were those factories running on before electricity? They were running on water in many cases.

David Roberts: Mm-hmm.

Sam D’Amico: Like the Lowell Mills in Massachusetts and stuff like that. So it’s like, okay, you’ve got a water wheel. The water wheel is spinning, let’s say 60 times a second. That’s going into a shaft. That shaft is then powering all of these machines that are all running in synchronized, you know, off of the power being pulled off the water wheel. Or like, okay, then we evolve to generate electricity and then power all the machines with electricity, but again, they were still spinning at that same frequency, basically. And so what storage lets you do is it changes it from this sort of like, you could almost think of it as like a single shaft rotating to a network that looks like the internet.

David Roberts: Mm-hmm.

Sam D’Amico: Where you can basically be like, “Okay, well, there’s now packet buffers everywhere on the internet.”

David Roberts: Right.

Sam D’Amico: Battery storage, could be pumped hydro, et cetera. And now that makes the grid a lot more resilient. It makes it not like one single spinning shaft. It makes it very much a, like, self-healing network. And I would argue we’re, like, only partway through that transition. And this transition happens at the device level, obviously. It started with, like, your smartphone.

David Roberts: Mm-hmm.

Sam D’Amico: Actually, before the smartphone, it was like, what were the expensive things that needed lithium batteries initially? It was, like, camcorders or something like that. But basically it was, like, expensive consumer electronics now to all consumer electronics now have the lithium batteries in them. Okay, and then automotive-derived technologies on the other end, and then we’re kind of in this pincer movement where every device in between is getting filled in now at this point with having some level of battery storage or at least, you know, kind of smart computer-defined power electronics, basically.

David Roberts: I’m curious, so the cooktop is perfect for your purposes in that the difference between average draw and peak draw is huge, and that’s where batteries are handy. They can store up, and then they can be the ones to supply the peak. I guess I’m trying to figure out how big that space is. Like how many appliances fit that description?

Sam D’Amico: I can give you a good example of this is like, I think it’s pretty much everything.

David Roberts: Really?

Sam D’Amico: Let’s use your computer as an example. And I think this is kind of funny because it’s like your laptop already kind of does all this stuff. You know, it’s trickle charging off of its charger. If the GPU’s drawing a lot because you’re playing a video game or whatever, it could actually locally discharge during that period or maybe not charge as fast in some cases. And so like we’ve already seen this sort of stuff. Like so on computer side it’s like it just turns out that like you’re not drawing all the power all the time.

Actually, I can even give a better example is like the VR headsets where you spend all this compute to render the frame. You try to do it as fast as possible, then you show it, and then you basically wait and you often are like waiting and it’s, the chip is asleep after the frame has been rendered basically. And so that’s how you can get the battery life to not be like 45 minutes and to maybe get closer to like two hours or something like that.

And so it turns out that there’s kind of like lots of things like this. Data centers are like this. If you look at what’s happening with like training where like they have to like basically you do a ton of compute across all the racks, and then they have to share all that data. And then in the sharing of that data, that takes less power because it’s bandwidth constrained, not compute constrained. So that’s why these facilities all have giant batteries outside of them right now.

David Roberts: Yeah, but I’m talking about the medium-sized electric machines that you are honing in on.

Sam D’Amico: Yeah. So like oven preheat’s another example. It’s like your oven doesn’t use a lot of power except when it’s preheating, is a good example. And then most of these devices are just off all the time. So like another example is like your laundry machine might be relatively consistent in terms of how much power it’s drawing.

But like I live at home by myself, so maybe it’s like, maybe a little bit of an exception, but I use it once a week. And so as long as you can capture kind of like one session for use of all these devices, like you’re pretty much good in a bunch of the cases. And then even within that session it’s like, well, is your dryer running full bore all the time or only for part of the cycle, basically?

And then when you kind of look into that, you’ll notice that the same thing I mentioned where it’s like, okay, well, you’re using your stove an hour a day, but then within that one hour only two minutes are at max power. And it kind of like fractally is true through that whole thing. It seems like this pretty much happens on everything. Your water heater, it’s only when you’re taking a shower or filling up a bathtub.

David Roberts: Right.

Sam D’Amico: Otherwise, it’s like, okay, yeah, you put a little bit of hot water into your sink in your kitchen to wash some dishes. That’s not material. And also like, are you running water all the time in your house? No. And so HVAC is probably the one where it’s like it has more continuous load profile versus this, but even then it’s like, okay, well, if you’re looking at AC, there is a peak period, right? The grid even like prices it in a lot of cases with time-of-use rates. And so it may push you into more of a like four hours of storage type domain, but it’s still something that you can largely address with energy storage versus not.

David Roberts: Okay. So I wanna pull back the lens a little bit. We kind of jumped into the guts of it real quick. I wanna pull it back the lens a bit and then get back into the guts later. But let’s just talk about, for people who are not familiar, maybe for people who have not read “The Electric Slide,” or one of my ongoing agonies is that, you know, you and I are aware that electricity specifically is the thing. Electricity is the thing, storage use, et cetera.

But I think a lot of people just have kind of electricity and clean energy, capital C, capital E, kinda mushed up in their head. They don’t have electrification as a distinct category with distinct technologies and distinct dynamics in their head yet. And my mission in life is to try to do that for people, try to help people see that clean electrification is something distinct from the larger category of clean energy writ large. So maybe just talk a little bit about the electric stack. What are the four technologies? How do they fit together? Why those four? And, like, what is the sort of revolution that you are trying to capture in “The Electric Slide,” that big essay?

Sam D’Amico: Yeah, that sounds great. So basically, the four technologies are batteries, power electronics, electromagnetics, which include like electric motors and other systems, embedded compute. And the reason kind of all these things are together is like this is the first time that there’s a fully coherent set of technologies that are like addressable by software, is the other thing to really kind of underscore here.

David Roberts: Mm.

Sam D’Amico: And so you could argue that Tesla was revolutionary in making the first practical electric vehicle, but in some sense, the Model S being kind of the first car that was produced in some sense like a consumer electronics device, was equally revolutionary, in some sense depended on the fact that they could use the electric stack technologies basically. Like these were codependent, but in some sense, that was as big a revolution as being an EV, period. And so go back to history and kind of talk about why we’re here now versus, you know, earlier, it’s like basically we needed to ride down a bunch of cost curves to make this stuff work.

David Roberts: Mm.

Sam D’Amico: So lithium-ion batteries, I think early developments were like with Sony, and like these things, it really worked for consumer electronics if they were above a certain price, and they needed like exquisite battery life, basically. So this landed in portable camcorders first and then went to laptops in the 1990s. By the time that Tesla was able to start looking into this stuff, like the key revolution that enabled Tesla was like the founding team was like, “Oh, these laptop batteries are good enough, and you could build a car that would have like non-trivial 200-plus mile range just with these cylindrical 18650 battery cells that are already in scaled production for the consumer electronics industry, particularly in laptops.”

David Roberts: Yeah, the beauty of the cost curve, which I don’t know that everybody fully grasps, is that every little increment they get cheaper, it broadens the use space, the application space, the things you can do with them. And then if you broaden the things you can do with them, you create new industries, you create new scale, you end up manufacturing a bunch more of them, they get cheaper. The use case then expands again, et cetera, et cetera. And so Tesla was sort of right at that moment where kind of realization like, oh, they’ve gotten cheap enough now that EV has entered the viable use case space.

Sam D’Amico: Yeah. Laptops effectively enabled an electric sports car. Now, what enabled the subsequent development is actually wasn’t laptops, but it was actually just the EV industry itself in some sense. Once there was a certain class of high-end vehicles available, everyone realized that they could then invest in this and make it happen. Then the second core technology is power electronics.

So basically it’s like, if you go back to how the grid, you know, historically works, like we kind of avoided having switching or storage in a lot of the grid up until like the ’70s and ’80s. It’s kind of crazy. And it’s like if you look at what was done, it was like, okay, well yeah, you have circuit breakers. You’ve got the ability to turn things on and off, like kind of a macro level, but not at the like microsecond level, if that makes any sense.

David Roberts: Right.

Sam D’Amico: And so the invention of the transistor was obviously really huge, but the big story is like, I think in like the ’70s and ’80s, we started getting kind of these like higher power insulated-gate bipolar transistors and higher power MOSFETs. Those have just been improving ever since.

And so again, when Tesla was, you know, putting together their initial like motor controller and all this other stuff, it’s like, okay, yeah, it was possible then because the semiconductor parts existed to actually drive a three-phase motor off of the battery pack basically, or brushless DC motor or AC induction motor off the battery pack. That was also just an enabling technology that had to take time to develop and for the cost curves to go down. Because obviously like when you’re trying to do something with relatively high power, it ends up being a decent amount of semiconductor die area.

And then what’s happened since then has been just like a revolution with gallium nitride and silicon carbide, and now we’re starting to see like data center power where you’re able to do, you know, close to 20 kilowatts in like a single unit of rack space. You’re able to do like all the solid-state transformer work that folks like Heron Power, Enphase have been doing.

Like all this stuff started… And then even more mundane, it’s like your power brick for your laptop can be like half the size that it used to be. That revolution has been crazy and enabling. That means like, okay, you can throw a lot more power around with, in some sense, downstream of software control as well, so you can do a lot more, you know, crazy experiences as well. And then the next piece is electromagnetics, and this goes into like the motors and the supply chain there.

So like basically, I’m trying to remember. It’s funny, is like I wonder if the biggest use case for neodymium magnets a while back was like those toys that you could like construct things out of. That like, you know, kids ended up like accidentally eating and like having to, you know, get surgery for. I forget the whole story of that. But basically the neodymium magnet situation has been nuts because like in some sense, if you actually look at what’s been happening over the past like 20, 30 years is the magnets themselves have gotten better.

David Roberts: Yeah.

Sam D’Amico: And this effectively means like you could have more magnetic field density and all this other stuff, so like the motors have gotten better, and this is like-

David Roberts: Yeah.

Sam D’Amico: And what’s been very interesting with this is only now is like the US government realizing that, okay, this thing was kind of like, in some sense, the rare earth conversation was just ignored because it was like, okay, it was the electric vehicle thing, which was, like, not big, and now it’s big. And then it was, like, toys. And meanwhile, like, investing in mining and materials and all this other stuff is like, you know, historically was kind of, like, underappreciated in the US.

Now everyone’s waking up, but it’s kind of like, I think there’s definite arguments of, like, are we too late and all this other stuff. The other thing that’s really interesting about this is like, well, this is how you turn electricity to motion. And now that AI has just shown that, okay, robotics is probably coming pretty soon, there will be a, quote-unquote, “ChatGPT moment for robotics.” You know, if you’re on tech Twitter, you’ll just see that someone’s claiming that about every other day now.

So it’s probably gonna happen. I’m not saying I’m skeptical here, I’m just saying people are gonna- it’s gonna happen. And so now everyone cares and wants to have motors and actuators built in the United States, much to my benefit as an investor in one of those companies. But basi-

David Roberts: The way I would wrap all this up is these four key components of the electro stack, batteries, motors, power electronics, embedded compute, all have been riding down this cost curve, their own cost curves together, getting exponentially cheaper-

Sam D’Amico: And riding up a capability curve.

David Roberts: Right. So every bit they get cheaper, the capability curve goes up, the space of things they can do goes up, and the combination of the things they can do together now that they’re all cheap is sort of like, has grown exponentially, I think, faster than our brains and institutions can keep up right now.

So there’s, like, an explosion of things that electricity can do now that we are, like, groping around, trying to even figure out how large is that space. And we’re just, like, groping our way through that space now because it’s happened so quickly, like comparatively so quickly for all these things to get cheap together. There’s just been this combinatorial explosion of things they can do, and we’re just now groping, kind of checking the things off the list one at a time. But we keep discovering, like, oh, it could do this too, and this too, and this too. And one of the things it can do is AI.

So here’s one of the aspects of the essay I thought was really interesting. So one of the things you argue in this essay is that China is taking a different path than we are, has made different choices than we are in regard to the electric stack. You argue that it is trying to grab hold of the manufacturing and the expertise in making these substrates, these pieces of the electric stack, while it’s trying to commoditize AI, whereas we’re just going after AI and trying to make that our domain, and you think China’s got the smarter strategy there. I’m just curious what you mean by commoditizing AI and what are the implications of that?

Sam D’Amico: Yeah, so that’s a great question. So basically, what China’s been doing is basically, I think you can almost imagine it as like you ever played the video game Civilization or something like that where you, like, imagine, like, the technology tree. I think this is also how Elon thinks of it as well, to be very clear.

So I would lump, like, the China and Elon thinking in, like, one zone. I would lump, like, let’s call it, like, American finance minds in the other one. My stereotype of the US view is basically that, like, okay, figure out how to make the money, and then you can kind of demand pull everything through, which is generally a good strategy from a, you know, “Hey, you wanna make your business work,” right?

But if you think about it from the building blocks sorta layer, it’s like, okay, well, how do I do that? I need to have Lego blocks A, B, C, and D. I need to have my batteries, power electronics, embedded compute, electromagnetics, whatever. I need to have those building blocks. And I would argue that, like, China and Elon have specifically identified that they need… like, the bottlenecks will be their ability to have those Legos. And so making sure that you’ve got a complete Lego set is extremely important.

And then the other piece of this is like, well, AI is going to do this thing called, like, FOOM, AI doomers, or like, whatever it’s called, like FOOM, where it’s effectively AI will get to the point of self-improvement. But also, because of, like, Jevons paradox and all this other stuff, like, we’re gonna be using a lot of AI in the future. Like, it’s gonna be kind of unreal and a little bit, you know, beyond, I think, what people are expecting. And so demand for all the technologies that AI runs on is also going to explode.

Then if you wanna actually build things in the real world, like, you’re gonna be starved by the fact you’re competing with all of these AI demand, basically. And so I think the opportunity that America’s in danger of missing is that we’ve created this demand engine with frontier AI, and we’re not necessarily steering all of it onshore. If we had decided, like, hey, if we’re looking at, like, tens to hundred-plus gigawatts of new data center development over the next couple years, which is what I’ve been hearing, well, that’s a lot of hardware to be produced.

It’s a lot of hardware that is kind of like electric stack shaped, actually. And it would be pretty compelling if we use that to kind of reindustrialize America, build a lot of factories, do all this other stuff. That hasn’t exactly been happening yet. And, you know, there’s just tons of domestic companies making money on the AI boom, but you’ll notice that the tariff treatment of AI hardware is, you know, not less than, you know, what a lot of other things are. We’re intentionally not tariffing it to try to not slow that out, slow that down.

But what that also means is that we’re not necessarily onshoring production of all these things. That’s something that, like, I’ve definitely noticed and realized that there’s a gap here. Now, going back to Elon, because I think this is actually really interesting, is like, if you look, like, SpaceX is not considered the top frontier lab in AI.

David Roberts: Mm.

Sam D’Amico: People are preferring Claude and Codex to Grok in a bunch of cases, for now. But he is in a very enviable position in the space because he’s probably one of the few people in America who knows how to still build stuff.

And so they’ve been very successful at getting data centers plugged into power and being able to build these, like, large-scale coherent clusters, and that puts him in a position that he actually ends up having leverage over Anthropic, over, you know, some of these other folks, despite the fact that his models aren’t necessarily as good yet. And you could argue that this looks awfully similar to what’s happening in the robotic space with folks overseas in China, where it’s like, okay, well, you could build all the robots, you could be training the frontier models for robot control, like Pi or Skild or these other companies, but who’s building your motors and actuators?

And so I think there’s this really interesting thing of like maybe there’s gonna be a bimodal split in the winners of the AI race, which is, like, the folks that kind of control the electric stack technologies, and then, like, maybe the AI labs.

David Roberts: Clarify for me, though, like, I think maybe talking about this in the context of AI is gonna be driving a lot of listeners crazy, so let’s just talk about electric cars instead. What would be wrong if we want to get the benefits of electric vehicles, which relate to pollution, less maintenance, et cetera, et cetera, and we just bought them from China, which is very good at making them cheaply? Or, you know, same thing, like heat pumps.

We’re electrifying industry, electric furnaces, arc furnaces, or whatever, like all these... If China can manufacture enough of them for cheap, what is wrong with us simply buying the pieces from China and rearranging them in clever new ways? Our innovation is, you know, assembling new ideas out of these Lego blocks, and we just leave the manufacturing of the Lego blocks to them. What is wrong with that? What is the danger there?

Sam D’Amico: Yeah, so this is something where you can see recent FCC and I think commerce actions, the reception on this has been kind of bipartisan in some sense, which is, has been very interesting given, you know, kind of our current political climate.

But basically, the FCC banned new foreign-source power inverters. And you could argue that, okay, so let me define what an inverter is and all this other stuff, basically something that converts DC to AC so it can, like, you can send power into the grid. And if you go back earlier in the episode, it’s like I mentioned the grid as kind of a network. And then obviously these things run software on them, firmware. Okay, so you’re allowing foreign network devices to connect to our network, is kind of like the simple way to put this.

David Roberts: Yeah.

Sam D’Amico: And so it’s like, do you wanna do that without, you know, some sorta checks? Likewise, for any sort of large loads in the grid, it’s like, okay, well, if you give other countries software control over those devices, like, there are cybersecurity risks, right? Like, this ends up being kind of the same as the Cisco and Huawei disputes of, like, 15-plus years ago where, like, China kind of pushed Cisco out of their systems, US pushed Huawei out of their systems. And it’s like, in some sense, there is this sovereignty aspect of it. Like, do you actually control the grid or the network that you’re connected to?

David Roberts: Okay, but that’s an argument for then maybe manufacturing our own power electronics and the software controls. But, like, rare elements, you know, motors, those are not networked in any meaningful sense. Those are just kind of dumb, I guess, pieces of the puzzle. Is there a reason not to just let China do those?

Sam D’Amico: Yeah, so I mean, I think that the argument then is what happens if there is some sort of national security issue, and then you end up in this position where you don’t have the production capacity available to respond to a crisis because, like, okay, we could make a decision that, you know, uses up all of our interceptor missiles, for instance.

David Roberts: We would never do something so dumb, Sam, come on.

Sam D’Amico: We would never do that. And now there’s, like, rush to, you know, fix these gaping holes in our defense supply chains to produce, you know, be able to produce, like, that, basically restore our ability to produce things at volume. And so I think that us having a baseline level of capability is important, but there’s another reason why I think this is important, and it actually comes down to the innovation cycle.

So if you go to southern China, like Shenzhen, stuff like that, you go visit places like BYD or companies like that, one thing you’ll notice is, like, the engineers are pretty close to the factory. So, like, the ability for them to iterate is downstream of the fact that, well, the decision chain and the ability to, like, speak to the folks doing the production, that loop is really close.

David Roberts: Yeah. Let me insert here ’cause you’re teeing up my next question, which is one of the other arguments you make in the paper is that there’s enormous benefits to having design and manufacturing close together, like you’re saying, in a closed loop together. But, like, no American company has that. Like, Apple computers are famously designed in California and manufactured in China. Everything’s manufactured, your own company, Impulse, designed the stove and it’s manufactured in China. So, like, if that’s an error, then that’s a really fundamental error that the US is very, very far down the road of.

Sam D’Amico: I would argue that… So Apple actually is interesting here. So Apple addressed this sort of concern of co-location with a clever solution that a large megacorp could solve, which is they pay for business-class flights for their, you know, early-career engineers to just basically post up at the factory until stuff is done. And-

David Roberts: I guess you can close the loop by throwing a bunch of money at international flights.

Sam D’Amico: Yeah. They are, like, the number one United customer, if I remember correctly. I think there was some signage at some conference that was like, it was, like, $100 million a year in business-class flights on just United. They obviously spend on the other airlines too. But basically, closing that loop is super important. I would push back on there being no American companies that have done this. There’s a couple, and they all seem to be run by one dude.

David Roberts: This is the vertical integration that everybody talks about, that Elon’s so big on, is basically that, is basically bringing manufacturing and design under a roof so that they can iterate with one another, they can communicate back and forth faster.

Sam D’Amico: Yeah. And I would also argue that, like, there’s a lot of people who, like, speak the cult of, like, SpaceX vertical integration, but the real story is that the supply base just isn’t really there for the volumes and demands that they need. So it’s like there’s no satellite supply base that could make stuff for 10,000 satellites a year. Like, that was never a thing that anyone in the defense industrial base was doing.

David Roberts: Mm.

Sam D’Amico: Because of that, it’s like, okay, if you’re doing things that have never been done before, and your problem is actually like, they could have probably gone to Asian contract manufacturers and been like, “Hey, Foxconn, help us build some satellites.” The issue is they couldn’t because of ITAR, so they had to do it in the United States. International Traffic in Arms Regulations. So basically it’s like, you know, satellites are, you know, ballistic missile-adjacent, et cetera, et cetera.

But basically it’s like they had to do it in the US because of those regulatory barriers. What did Tesla do for a lot of their power systems and computer systems like that? Well, they work with Asian contract manufacturers for a good chunk of their system. They’re not fully vertical on every printed circuit board in the Model 3, for instance. Like, they’re working with folks that know what they’re doing and stuff like that.

And so that said, they now are at a volume that they can kinda pick and choose who they work with and all this other stuff. But the supply base, like Tesla’s not as vertical as you might think because they’re working within that ecosystem. And this kinda goes into, like, the big problem with the US on the innovation side. It’s like your ability to iterate in Shenzhen is just so much faster because it’s like three phone calls gets you, you know, 20 suppliers.

David Roberts: Yeah.

Sam D’Amico: And like things can be driven between... And like these are all the driving distance, and like prototyping goes way faster. I’ve been talking to founders who are like, “I’m just gonna spend two months in Shenzhen, just get the first prototype out.”

David Roberts: Did you go through this with Impulse?

Sam D’Amico: Yeah, yeah, yeah. Well, so we had a fun part where we started the company in 2021. You couldn’t really go to China until 2023, but I basically spent a huge amount of time getting stuff up and running, and now we’ve got, you know, building this kinda scale to arbitrary volumes. You know, mostly downstream, we’re just capital in terms of like pre-ordering parts and stuff like that. But we were a little bit early to kinda the second wave of this, but like if you’re some founder trying to build some, like, AI doodad or whatever, or a robot or whatever, it’s like this is clearly the path to getting you a prototype faster.

The difference too is because you’re prototyping in the production ecosystem, you’re kind of like what I would call like playing for keeps, where effectively if the decisions you make, if they’re, you know, made and applied to like a Shenzhen production line, it’s like, well, those will scale to your final product, versus if you go and prototype in the US with like McMaster-Carr, online hardware store, or whatever, it’s like, well, now you’re gonna have to remap that to a production process later. You’re gonna go through, you know, what certain people would describe as like manufacturing hell or whatever.

So this is the big gap is like the US lacks kind of this mature ecosystem that lets you kinda prototype anything. Meanwhile, Shenzhen is turning into this like what I would call like a matter compiler. Like it’s like, okay, cool, you can like almost like vibe code your hardware just by asking for it. Like we’re getting the Star Trek replicator, just happens to be a city.

David Roberts: Yeah.

Sam D’Amico: But then the frustrating bit, and this goes back to the electric stack, it’s like there’s only four things you need to be good at, so why don’t we just get good at those four things?

David Roberts: This gets to my question. Let’s cut to the chase then, because like- standing up a manufacturing ecosystem of the scale and skill that China has built honestly strikes me, and I think a lot of people, as basically fantastical. We’re pretty far down the road of being a service economy. A lot of things would have to change for us to get that, for us to truly manufacture our own stuff on the scale that China does.

So like, clearly the people who are saying this kind of thing, who are advocating what you’re advocating, are advocating for something short of that. So like what is the right percentage, right? Like, how much of our own stuff do we need to be producing, or what kinds of our own stuff? You can’t just say we need to become like China, because that’s the work of, like, a half-century. You know what I mean? And we’re in a hurry on a lot of fronts here. So like, what do we mean concretely when we’re saying this?

Sam D’Amico: I think the reality is it’s like, it’s not that many discrete things we have to get good at, and we’re honestly still pretty good at most of these things. Like, the automotive industry provides us enough backstop scale. Like, our existing automotive industry provides enough existing backstop scale that, like, we have some of these capabilities in-house, like still.

But a lot of it’s just like, can you assemble printed circuit boards with automated equipment, and then can you put them in boxes? If you wanna stick, if you wanna be really simple, it’s like that’s not rocket science. Like, that’s relatively straight. The big issue with all this is that the customer profile of someone who goes through domestic manufacturer, until very recently, was, “I am a fancy medical device company-

David Roberts: Right.

Sam D’Amico: and I’m building, like, an artificial heart, and it can cost a gazillion dollars,” or, “I am Raytheon’s sub-sub-subcontractor and I don’t care if this bolt costs a billion dollars.”

David Roberts: Yeah.

Sam D’Amico: Or it’s an automotive player that is like, you know, building something from the last century. And so I think that we ended up kind of pigeonholing ourselves, where it’s like no one was really doing the things that were going to inflect. And if they were, they were building exquisite systems for the military or for medical or whatever. It’s like they weren’t sold at enough scale to ensure that the pricing was competitive and all this other stuff. And so I think you’re asking me, like, what is the 80/20 of, like, US manufacturing?

David Roberts: And not just that, but like do we need also to be digging the minerals out of the ground? Do we need to be doing initial processing of the minerals into materials that go into these pieces of the electric stack? Like, how much of the... China has, like, so comprehensively grabbed ahold of all this. What bits of it do we need, or how much of it do we need? Like, what is the-

Sam D’Amico: The reverse engineering I’ve been doing is like, how is Elon the only guy who seems to be able to do this? And if you kinda look at, like, what’s crazy about this is like there’s all these technologies that were invented in California, for instance. And if I was like, “Hey, I just wanna make a factory to make this,” it wouldn’t be more expensive. It would actually just be illegal for me to do it.

And so the examples are like if you wanted to make printed circuit boards in California, I believe you have to deal with California Air Resource Board and your local water agencies and stuff like that because, like, you know, you’re plating, like, gold on- You’re doing electroplating and doing all this other stuff. And like, basically doing chemistry with metals has become largely illegal.

And so kind of the trade we made in the ’90s was like, as we were kind of deindustrializing from the fall of the Soviet Union, and then in the post-2008 recession when, you know, we didn’t really resurrect a lot of our US manufacturing base except for the auto industry, was like, “Okay, yeah, you can just do this overseas.” And like, we didn’t realize that we had made it impossible to reactivate these facilities because of, you know, environmental law and all this other stuff, because we kind of went into a like, it didn’t matter because you do it overseas.

Now, I think this is kind of ironic because it’s like, okay, we all like solar panels, we like batteries, we like all this other stuff, but like it’s kind of hypocritical if we can’t, you know, manufacture these things in places like California that ostensibly are like the biggest fans of these technologies.

And so I do think there’s gonna need to be a little bit of a reckoning on the environmental side for like just allowing, basically legalizing green jobs is probably the way that I would phrase it. It’s like there’s an opportunity for tons of blue-collar, quote-unquote, “green jobs” that frankly are not currently allowed in places like California, close to where the engineers that develop these technologies are. And so that’s a big piece of it as well.

But like going back to what would I say to prioritize is like, I think if you look at what’s missing in our industrial stack, it’s like… Frankly, it’s like we just need capability to build the replacement-level stuff, which is kind of ironic because the US likes to do the thing of like, this is the doomer version of it. It’s like we’re kind of like Germany entering World War II, where we had all the wunderwaffe, but we didn’t have the volume production of all the stuff that actually matter. Versus America entering World War II, where we could like turn washing machine factories into munitions factories.

Yeah, so not to kind of bemoan our like late-empire situation, but basically the point though is like being able to just have baseline production of the basic stuff, like, okay, can you go get drone motors in the US? Now, is the volume of drone motors from the entire Ukraine conflict enough to stand up a notable industrial base there? Honestly, maybe not, which is actually kinda crazy.

So then it’s like, okay, well, you probably need to have a domestic robot actuator business with, you know, drone motors for defense purposes being some sort of side effect, basically. And so you kind of end up navigating to like, I think ultimately you need to anchor with some sort of consumer demand, not just like the national security demand. The consumer demand is the industrial policy we need to be, you know, architecting.

But then to make that work and make it cost-effective, we need to do all the things like reform, you know, environmental law, permitting, make it offer cheap financing for factories, get states to compete off each other. It’d be like, “Hey, I’ll give you, you know, your tax abatements, incentives for workforce development,” et cetera. Like, there’s a lot of states that are actually starting to do the, do really clever things with this, but we need to start getting into that game too because that’s ultimately how China works.

Like, China’s ultimate thing is that they have like competition between all the provinces. The provinces, you know, step up and give people extremely cheap financing, like really good access to land, power, you know, facilities, et cetera. And they understand kind of this industrial policy finance ecosystem that like I think America’s starting to get, but it’s like that’s a key piece of it. We used to have this thing. They used to be called local banks.

David Roberts: Well, the, China also has central planning that decides on the overall industrial direction of the country. Then they have furious competition at the local level or within sectors, you know, and between provinces. But they also get the benefit of just deciding we’re moving in this direction. Let’s all row, you know, we’re all rowing in this direction, and then everybody’s competing. You get the benefits of competition down there at the sector level, but you don’t have this sort of either total lack of planning or flailing back and forth just about the macro direction of the whole country.

Sam D’Amico: Yeah, and I would argue that there is, the most interesting thing about the current moment we’re in is, I was joking with this on a panel at a conference like a year or two ago, but basically it’s like… You know, the tanks are gonna go woke even because basically, you know, the electric stack is gonna absorb even the most, like, masculine of combustion technologies at a certain point. That stuff, sort of stuff’s gonna happen. Very funny about this is like, I don’t think anyone in current administration, you know, in, disagrees with that statement actually. I just think that they might message it differently.

So there might be more alignment here than you would expect, you know, at the street level, if that makes any sense. I think that there’s definitely a kind of like, okay, what are we gonna do about the US auto industry and the EV transition and all this other stuff? And I think there’s gonna be big macro strategic disagreements. Are we gonna have a domestic battery industry that is, you know, underwritten by some sort of consumer demand? Yes.

David Roberts: I mean, what they’re doing now on EVs is the opposite of what you would do if you took the imperative to develop your own electric stack, et cetera, seriously. Do you not agree? Like, it is the opposite of what you would want to do. They’re protecting combustion long after its shelf life.

Sam D’Amico: Yeah, yeah, yeah. And then I would argue that, and this goes back to what you were saying, is, like, should we allow BYD and, like, Geely and Xiaomi to sell their cars in the United States? I’m like, I think the answer is yes, but I think if the answer is yes, and it’s kind of in this, like... It would just show how behind we are. You know, it’s kind of like, it would be like a Sp-

David Roberts: It would be embarrassing for many years.

Sam D’Amico: It would be a Sputnik moment, and so I do think that, like, we need to step it up and be competitive here, and that might mean that, okay, the Big Three need to, you know, need to reboot. There’s a lot of interlocking issues for why we’re in this spot. I would argue that, like, Jim Farley at Ford, like, they understand it deeply. It’s just that there’s a lot of structural issues that make this tricky. I think he does drive a Xiaomi SU7, by the way. Just to sh-

David Roberts: He was very impressed, very verbally, vocally impressed when he went and visited. We’re almost out of time. I want to get back to the stove for a minute. A little bit, a couple of stove questions. So this is your little piece of the electrotech revolution is cooktops. Couple of questions about cooktops, which is why, you know, the battery to increase performance, that’s a straightforward argument. Like, you’re gonna get really high levels of power at your burners, and so you can do certain cooking things you can’t do with a normal cooktop.

But that’s limited and a high-end, definitionally limited and high-end thing. Part of what you’re trying to do is get batteries in and then control the batteries. So a couple of questions about this. One is, why should you control the batteries rather than the utility controlling the batteries? Two, why a bunch of little batteries in appliances rather than one large home battery and a very good control software? Like, why the benefits of the batteries beyond performance? Talk a little bit about those.

Sam D’Amico: Yeah. So I think the performance angle was basically like, wanna convince people like, “Hey, you should buy this new product from a startup.” And like, the general attitude was like, “Okay, we have to just make sure this is the singular best stove on market.” Like, it was kind of, that kind of the argument. Because also, like, you’re not gonna win on price.

You don’t have pricing power and volume and all this other stuff when you’re starting, so you’re like, “Okay, you gotta do it that way.” The second thing was like, okay, so we put a inverter in the product. We haven’t turned it on yet, but we’ve got the capability to push power out of the battery into the house, and obviously there’s a bunch of changes with balcony solar laws and all this other stuff to make permitting that easier.

David Roberts: But to be clear, you can’t plug into anything into the stove, and the stove is not involved in any kind of demand response or anything like that yet.

Sam D’Amico: Yeah, yeah. We haven’t turned these features on. We’re piloting stuff like this, but basically the, there’s a bidirectional inverter in the product. It’s code compliant to like UL 1741, so it’s just like a solar inverter or any of this other stuff. One caveat here is like with a central home battery, you have this problem where it’s like you gotta either back up the whole house or you gotta back up part of the house, and then you have to like... At least that’s the killer consumer value prop. We don’t necessarily have that. The value prop for us is the stove’s really good, and it also backs itself up.

So like there’s no need to do the like partial home backup thing that like if you install a single Powerwall, that’s what you would probably do, versus like installing two of them and you can back your whole house up. That’s actually what like Base Power, for instance, has been solved, where it’s like-

David Roberts: Yeah.

Sam D’Amico: just make the battery so big that-

David Roberts: Yeah, yeah...

Sam D’Amico: you can back the entire house up, and then you don’t have to deal with this like weird half-assed installation situation that is like, adds like 50% more complexity on the electrician side, or if not more, 50%, way more. And so we were like, “Oh, well, the battery’s gonna be smaller than that by nature. It’s gotta fit inside a device.” And then it’s like, okay, so you just need to do grid-tie. You don’t need to do grid forming.

And then you can still do all the virtual power plant stuff, but you take backing up the house off the table, which makes the installation way, way more straightforward. So then going to like the second piece of it, which is why many small batteries versus one big battery. Well, it’s like I think there’s a role for batteries at kind of every layer of the network.

If you think of the grid as a network, going back to what I was saying earlier, there’s packet buffers at every layer, like down to the router in your house. And so you end up doing this in a couple different layers, and the reason this would make sense is like, okay, let’s imagine I have a central home battery, like got a Powerwall. It’s only got so much peak power out of the inverter. I don’t know, it’s like somewhere in the 7 to 10 kilowatts. I don’t know, I forget the exact number.

But like your house could draw more than that. And now if you could basically say, “Okay, cool, my major appliances all draw way less,” well, now that central home inverter doesn’t have to handle induction cooking, doesn’t have to handle all these things. And so again, makes the installation and distribution problem significantly less if you kind of scatter batteries everywhere.

Then the next piece is you gotta then kind of reaggregate them into something that is like legible to the utility. Ultimately, the utility is the one who actually gets the value out of the batteries that are distributed on the grid, because it’s like they’re the one who’s saving money by not having to upgrade transmission, because they can then harvest the battery storage. And so ultimately, that’s the person who gets the most value here. And then it’s all these other things are just structures to kind of share that value with the people who deployed the batteries, basically.

David Roberts: What’s the roadmap? Right now it’s a $7,000 countertop cooker, which is obviously going to be of, you know, limited sale. That’s a limited market. Is the idea to bring down the cost of the Impulse cooktop until it becomes a mass-market product? Or is the idea to take the basic core technology and power electronics that are making it work and embed those in other countertops that are cheaper? Like, what is the product roadmap for the Impulse cooktop specifically?

Sam D’Amico: Yeah, so we’ve got several partners in the appliance industry that are coming out with products at various price points, and these are both cooktops and ranges, so, like, basically with the oven integrated-

David Roberts: Mm-hmm.

Sam D’Amico: and other products like that. But basically we take the underlying electronics, largely the same stack. We can tune the performance in software depending on what the customer’s price point and all this other stuff is. There’s other things we can do in hardware to, like, defeature, you know, upfeature, et cetera. But this allows us to go from, like, hey, we’re have, like, a 30- and 36-inch cooktop available to a bunch of different SKUs in a bunch of different sizes and shapes. We’ve announced some of them already. We’re gonna announce more in the coming-

David Roberts: These are through other bigger manufacturers, other bigger appliance-

Sam D’Amico: Other bigger manufacturers. Now, we’re still making all the electronics ourselves, so it’s like that’s coming from our supply chain. Then it’s kind of like the goal is to set a new standard where it’s like, okay, well, one of the key features with our product is, like, you can set and hold an exact temperature, and you can set and hold an exact temperature inside the pan through some technology we’ve developed.

David Roberts: Yes. I think you tried to explain to me exactly how that works once at a demo, and I’m still, I’m st- I still confess to be totally baffled by how that works.

Sam D’Amico: Yeah. Effectively, if you control the temperature sensor and you control the induction, you can kind of measure the temperature through the pan versus just kind of, like, seeing some sort of second-order, like, the bottom of the pan is hot or whatever signal.

David Roberts: Wild.

Sam D’Amico: But that sort of stuff, super exciting for people. The fact that we’ve got, like, a screen, can put a bunch of content and stuff on there has been super exciting for some of these partners as well. And so, we’re kind of being like, “Hey, this is the new standard for where induction and kind of power systems for appliances are going, period.”

David Roberts: So you wanna be like the Intel Inside of the induction stove world?

Sam D’Amico: Yeah, but it’s also like Intel plus Microsoft is probably the way to think about it, like in the ’90s, because like you’re doing the software and cloud platform and all this other stuff as well. That’s how we’re taking this like more mass market than just like, hey, one brand, one SKU, or two SKUs, one industrial design, et cetera. Because people have opinions on all this stuff too. Like, people want some like La Cornue thing or, you know, whatever.

It’s like people have all sorts of preferences what they want for their kitchen, and so you end up in this pickle where it’s like the appliance industry is actually closer to like the car industry in a sense, where there’s like dealerships and like it is kind of the dealer model and like multi-step distribution and all this other stuff. So this allows us to kind of do the compelling thing right at the node where they’re, the most interested people are to buy it, which is like the appliance base or the appliance manufacturer specifically. That’s been a lot of my focus on that end, and then it’s also just like what other categories of devices to kind of go into and innovate there next.

David Roberts: That’s my next question is, you know, we’re talking about these medium-sized electricity, electric devices where, you know, like a lot of the smaller ones have been perfected, a lot of the bigger ones require a lot more scale than you have to get into, but like an individual company can get a toehold in this medium-sized electric appliance world, what else is in that world and what’s next on your list?

Sam D’Amico: I’m holding a little, a bit of this a little bit close, but basically it’s like there’s a lot of stuff in the home that’s really interesting. There’s stuff in cooking that’s interesting that, like, I would love to do a microwave, for instance, but that’s probably a little bit later.

David Roberts: Ha ha ha.

Sam D’Amico: The other stuff is, like, there’s industrial equipment is interesting because it’s like, okay, if you can buffer power to, let’s say, like a CNC machine or something like that, like now you can install more CNC machines in a building.

David Roberts: What are CNC machines?

Sam D’Amico: Like computer numeric control, like you have cutting metal. The machines that cut metal, like it’s the thing that machines like your MacBook’s body or something like that. But basically it’s like, you know, people are trying to reindustrialize America. There’s actually a pretty interesting opportunity in terms of just like power buffering industrial equipment, so that way, you know, again, it seems like everything, if you kind of look closely at power traces from pretty much any machine, they’re like not on all the time, and then when they’re on, they’re not at full power all the time. And you can just look at that across huge numbers of sectors, and there’s really interesting stuff to do there.

And so one of the things we’ve been doing is just like figuring out kind of like what the minimum viable like core module is for that. And then, okay, that becomes the thing that we can kind of like repeatedly sell across a bunch of these spaces. And then it’s got all the same software and control systems, and if you want the temperature sensor for some other use case, you could use it. You know, it’s like it all ends up being this kind of modular platform. That’s been kind of the way we think about it.

David Roberts: And the modules basically are like battery for buffer and power electronics for fine-grain control. You’re just applying that to machine after machine.

Sam D’Amico: After machine after machine. And then the thought here is like, how do you connect to the grid? Well, we got this grid-tie inverter. You now have that. You can do that in that sort of modular way as well.

David Roberts: All right. Should probably leave it there. Actually, I have one additional question, which I may or may not cut if you have like a minute or two left, which is semi-unrelated to the other questions. You’re kind of in the Silicon Valley founder world and community, which, you know, the rest of us, whether we like it or not, have to be aware of-

Sam D’Amico: You can’t escape, yeah.

David Roberts: what they think, what they’re doing, what their sort of macro thoughts are matter to the rest of us, whether we like it or not. And I’m just sort of curious about, I’ll tell you my external impression is that these people, through some mix of like AI sci-fi scenarios and effective altruism arguments about the distant future and et cetera, et cetera, have basically talked themselves out of caring about climate change much. Is that accurate?

Sam D’Amico: No.

David Roberts: You don’t think so?

Sam D’Amico: I think there’s a couple things going on that are, like, interesting here. So, like, I think what people have realized is that there is a kind of like AI will solve all problems sort of EA-adjacent, you know, thing-

David Roberts: Yeah...

Sam D’Amico: that I think is totally happening. But I have to be a little bit quiet about this, but basically it’s like, I think that there is relative conviction that geoengineering will work among a certain sector of folks, and it’s probably some sort of like stratosphere aerosol, stratosphere particulate injection situation.

And I’m reasonably convinced that we’re gonna have mitigations that look in that shape, or we’re gonna have to do those mitigations because again, we’re gonna get so far into trouble in the 2040s, 2050s that like, it’s gonna be inevitable that we’re gonna have to do that sort of stuff. I think the bigger aspect of this is, the bigger story is that the language has changed, but I’m not sure if the mission has changed. Does it make some sense?

David Roberts: Hmm.

Sam D’Amico: And when I say that, it’s like, well, if we’re reindustrializing America, we’re building, you know, stuff with all these new technologies, what are those new technologies again? Oh, it’s the same tech stack that we anointed as the saviors for climate change, basically. It’s the same stuff. It’s like, okay, well, how are we gonna solve climate change originally? It’s like batteries, power electronics, embedded compute, electromagnetics, rebuild every machine on that stack. Now everything is suddenly electric.

Oh, and then we need to make sure that we have clean firm power. Okay, well, building lots of batteries. Every data center is getting gigawatt hours of batteries attached to it or whatever. And then what’s the cheapest source of electricity? Well, it’s probably solar out in the desert in South Texas. And so it seems like we’re doing all the things that we were supposed to be doing. We’re just talking about it differently. I’m not sure if that’s reassuring.

David Roberts: It looks to me like a lot of them are perfectly happy to power AI on gas, and in fact are embracing that affirmatively and less and less talking about that as a bridge, as far as I can tell. Like, so that would, it seemed to indicate to me that they care a lot more about AI than they do about climate change.

Sam D’Amico: I do think that the thing is real is that, like, I think people are still underestimating how transformative AI is gonna be. Someone said, like, 2% of Americans have a paid ChatGPT subscription or something like that. Like, this is maybe six months ago. But the fact that that subscription rate is so low, which means that everyone’s just talking to some, like, low-end model and not talking to, like, the stuff that’s actually at the frontier, means that I think most people’s perception of this stuff is fundamentally inaccurate in terms of how transformative that’s made.

And so one thing to really put a point, to put a fine point on it is, like, I’m definitely in, like, this, like, you know, low tens of thousands of people, and I’m not even in one of these frontier labs. I’m not seeing what’s quietly happening at OpenAI or Anthropic or whatever. And it’s like, what’s actually happening there, to my understanding, is, like, people are, like, throwing thousands of agents at complex problems and walking away with solutions to, like, math proofs and stuff like that. It’s starting to get pretty spooky and, like, outside of the domain of, like, what humans can comprehend of the capabilities.

So we’re at the point then you have that group, then you have people like me who are, like, deep in the sauce with this stuff, and then you’ve got, like, typical software engineers that are getting dramatically more productive with this technology, and then you’ve got kind of people on the outside of this being like, “What is going on? This is wacky.” I think we’re in the biggest inflection point in the technology industry ever, basically.

Maybe since, like, the dawn of the invention of the transistor and the integrated circuit might have been, like, about as big. This could be the big one, basically. And I strongly suspect that I even think that I’m not taking this as seriously as I should be based on what I’m seeing in all this other stuff.

David Roberts: But what is the implication of that for climate change? Spell it out. What are we supposed to take from that about this gathering problem of climate change?

Sam D’Amico: So complex engineering work is going to be increasingly more tractable by machine intelligence over the next two to three years. The transformation of the economy with AI is gonna basically buy, you know, more batteries and solar than I think ever were bought before. Now, yes, they’re gonna buy gas turbines, but gas turbines are fundamentally bottlenecked by hard materials problems, whereas solar is not bottlenecked, right? And we’re not gonna go give China gas turbine technology, you know, to scale it. Like, that’s not gonna happen. That’s not gonna happen.

And so basically, I think what’s gonna effectively happen is, like, the economy will increasingly just electrify. Cars will go electric because of autonomy, because that’s, again, like, you’ll want the more controllable electric-native vehicle. Like, if you look at Tesla Cybercab, the brakes are electric. It’s like it has no hydraulic system anymore. I mean, you could argue that Starship is electric, an electric vehicle, just happens to have, you know, primary propulsion is methane. But, like, other than that, it’s, like, all of the actuators and all this other stuff, it’s an electric vehicle.

And so I think what’s gonna happen is we’re gonna see a slow or a very rapid transformation of, like, everything becoming kind of like a robot, and thus to be a robot, it’s gonna have to be electric. Then the last question’s gonna basically be like, “Okay, well, what do we do about the fact that, you know, Earth is several degrees Celsius warmer than it should be?” And I think the answer there is probably geoengineering. This is my guess. And are there people working on this right now? The answer is yes, but I also suspect that that’s gonna be the spicy topic in the next, you know, 10 years or so.

David Roberts: Well, everything you said could just spin off into a pod of its own. But I probably shouldn’t have cracked that can open at the very end of our pod.

Sam D’Amico: The point is, we’re gonna have to deal with climate change, but the tools we’re gonna have to deal with it are gonna basically be the entire economy is going to be electric within the next 10 years, period, driven entirely by forces, entirely by demand pull, basically, on robotics and data centers and all this other stuff. And then it’s like, okay, how do we clean up the mess we made of the past century? And it’s like, it’s genuinely a good question. Do I think people are not caring? It’s like, no, I just think that what’s happening, it’s almost like climate change was the concern and now there is a bigger concern, if that makes any sense.

David Roberts: All right. Well, I’m gonna resist the temptation to pull on all those strings and end it here.

Sam D’Amico: That’s another pod for another day.

David Roberts: Thank you for talking this through with me. It’s always, as you know, I love talking about electricity, so thanks for indulging me. All right.

Sam D’Amico: Cool.

David Roberts: All right, see ya.

American homes are filling up with batteries, EVs, and smart thermostats that could be coordinated to make the grid cheaper and more reliable — but almost none of them are. To understand why, it helps to watch what happens when the company best in the world at this tries to do it here. In Britain, Octopus Energy has built a giant virtual power plant out of its customers' devices. In the US, it has spent six years running into walls. Now it’s bought Uplight, which runs customer programs for 85 utilities. I talked with Nick Chaset, who runs both, about what's in the way and whether distributed energy can ever scale with US utilities … the way they are.

Distributed energy (rooftop solar, home batteries, EVs, smart thermostats) is accumulating in American homes. In theory, all of it could be coordinated to help the grid, shaving peaks and delaying expensive new infrastructure investments. In practice, very little of it is. Why is that?

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One useful way into that question is to look at a company that’s very good at that kind of coordination. In Britain, Octopus Energy is the single largest household electricity supplier; it has turned hundreds of thousands of its customers’ EVs, home batteries, and other devices into a giant virtual power plant. It came to the US in 2020 intending to do something similar. Six years later, it still sells electricity only in Texas.

So it has adapted. It sells flexibility services to utilities, supplies residential capacity to aggregators chasing data-center money, puts batteries in homes for a monthly fee, and, as of September, owns a majority of Uplight, which runs customer-side programs for 85 utilities. Is this all a clever way of routing around America’s dysfunctional market structures? Or is it just an elaborate holding pattern until those structures change?

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That’s what I’m going to discuss today with Nick Chaset, CEO of both Octopus Energy US and Uplight. What’s it going to take to scale distributed energy in the US from this kind of random bric-a-brac to an actual, substantial contributor to US electricity? Let’s get into it.

Chapters

• 00:00 – Introduction

• 02:02 – Octopus’s past year and the Uplight investment

• 05:18 – What makes the UK market work for Octopus

• 11:12 – Texas: fast growth, flattened volatility

• 14:57 – Will flexibility put itself out of business?

• 19:16 – Why Octopus stays out of Pennsylvania and New York

• 22:17 – Does residential retail competition have a future?

• 24:41 – Why utility programs trail Octopus on participation

• 32:17 – The demand stack and what planners can count on

• 39:11 – Kraken, Uplight and the overlap

• 46:04 – Consumer protection and the aggregator model

• 51:17 – Data centers and the social license to operate

• 55:11 – Do we need dynamic pricing?

• 58:30 – Five years out

Resources

People & Organizations

• David Roberts (Substack - Bluesky)

• Volts (Apple Podcasts - Spotify - YouTube - Instagram - LinkedIn)

• Nick Chaset (LinkedIn)

  • Octopus Energy US (Website - LinkedIn)

  • Uplight (Website - LinkedIn)

  • Kraken (Website - LinkedIn)

• Other orgs mentioned: Smart Meter Texas

Company & Industry News

• Octopus Energy Takes Majority Stake in Uplight to Scale Flexible, Digitalised Grids Across North America

• Why Is Google Funding PG&E’s Latest VPP Pilot?

• National Grid and Kraken Sign Deal to Bring Globally Proven Customer Service Platform to Over 6 Million U.S. Energy Customers

Books & Articles Discussed

• Brattle Group - Utilities Can Grow Demand-Side Capacity by 60% with a Demand Stack Approach

• EnergyHub - Building Trustworthy Virtual Power Plants: The VPP Maturity Model

Related Volts Episodes

• Octopus extends its tentacles into America

• Let’s dig a little deeper into virtual power plants (VPPs)

• The case for using prices rather than VPPs to coordinate distributed energy

• Making sure smart devices can talk to each other and the grid

• Sooner than you think, electricity is going to be cheap, abundant, and boring

Transcript

David Roberts: All right then. With no further ado, Nick Chaset, welcome to Volts. Thank you so much for coming.

Nick Chaset: Great to be here, Dave.

David Roberts: Okay, Nick, let’s start here. We talked a year ago about several things. A lot’s happened in the last year. You said some things last year about what Octopus is gonna do and not gonna do. We’re gonna revisit some of those. But maybe start just by catch us up on what’s happened over the last year for Octopus. It does seem to be spreading its tentacles into all sorts of areas. So catch us up with the last year.

Nick Chaset: Yeah. So in March, very beginning of April, we announced an investment in Uplight, which is a provider of flexibility management solutions to utilities, really under the premise that, you know, as you said, Octopus wants to go and engage with millions of US electricity consumers and enhance flexibility, open up flexibility, give greater customer experiences, help them save money, all that great stuff. But we really can’t go direct to consumer outside of Texas-

David Roberts: Mm-hmm...

Nick Chaset: given market structures and rules. Some of those are evolving. But so much of the electric customer experience is run through the wires utility-

David Roberts: Mm-hmm...

Nick Chaset: who are either fully vertically integrated or partially vertically integrated, but they own that billing experience, and they are exclusive providers to most US electricity customers. And so we want to work with those utilities to still achieve the end goal, which is to save customers money and give them a great experience and connect all that flexible load to accomplish those first two things. And so that’s the core thesis of Uplight.

Uplight has these relationships, so they have landed, and now it is time to expand the scope of what Uplight is doing with its utility partners to significantly accelerate the adoption of flexibility management and engagement with customers. Today, a great utility demand response program might see somewhere between 5% to 20% participation rates, depending on if it’s one where customers sign up themselves versus one where devices are auto-enrolled. That’s still very small overall participation rates. At Octopus-

David Roberts: Yeah, we’re gonna get back to that.

Nick Chaset: we see 60% rates. So the question ahead of us, and I think are we accelerating or are we just expanding but still in a holding pattern, the test of whether it’s the first or the second, obviously our hope indeed is that it’s the first, is our ability to go and significantly expand the participation in these flexibility management programs that Uplight runs for a utility to get closer to the levels of participation we see within Octopus.

David Roberts: Okay. Before we get to that, maybe just to level set, you know, I threw this out online and several people came back saying, “Octopus is amazing in the UK.” You know, just on and on about their experience with Octopus in the UK, where it seems like the market is set up to just let Octopus rip. So maybe let’s start with just, like, what is Octopus doing in the UK, and what are the features of the UK energy market that are allowing it to do what it’s doing there?

Nick Chaset: So the UK first and foremost has forced choice. Consumers must choose a supplier.

David Roberts: Hmm.

Nick Chaset: And so every customer at the end of a contract is gonna go select someone. So that’s one of the core conditions, and that is a condition you actually see in Texas as well. But in many of the states in the Northeast, you don’t have forced choice. I think a stat I saw recently was something like 97% of residents in the state of New Jersey have a choice but don’t choose.

David Roberts: They just go to the default. There’s a default provider.

Nick Chaset: There’s a default provider, and they just go to the default provider. That’s right. So that’s one. Two, the UK has robust markets for monetization of flexibility.

David Roberts: Hmm.

Nick Chaset: So if I’m a supplier and I have lots of connected electric vehicles or connected heat pumps or batteries, I am effectively able to fully realize the value of that flexibility in my cost stack, which becomes how I translate that value back to the consumer. And so contrast that as a for instance with most of the US where if you’re a residential consumer with a battery, you’re only able to realize the coincident reduction of demand from that battery. But you think about a battery might be a 3, 5, 7 kilowatt battery. The average home peaks at 2 kilowatts. You’re never gonna get the export value of that battery-

David Roberts: Mm...

Nick Chaset: from a flexibility management perspective. And thus, you know, the battery is potentially able to deliver 10 kilowatts of load flex, but I only am able to realize 2 and a half kilowatts of value. There’s a huge mismatch there.

David Roberts: Yeah.

Nick Chaset: Thus making it hard to justify making that investment in the underlying battery. And that’s not the case in the UK.

David Roberts: Right.

Nick Chaset: And frankly, actually Europe generally. And I would say that the Octopus story definitely most well known in the UK where we’re the largest supplier, but we have businesses in Italy and Germany that are now over a million households.

David Roberts: Hmm.

Nick Chaset: Fast-growing businesses in Spain and France, but also actually a very fast-growing business in Japan.

David Roberts: Interesting.

Nick Chaset: And we’re seeing to the degree that those markets start to adopt more open access for load, we’re seeing the ability to deliver similar results in those markets that we have in the UK.

David Roberts: And then maybe one other thing to mention is that the UK meters household electricity use, like every 30 minutes. It does not estimate or project or model, it meters. So actual timed reductions can actually be metered and rewarded and paid for in a way, which is not true, I think, in a lot of US markets as well.

Nick Chaset: That’s right. And so it’s not estimates, it’s not using measurement and verification frameworks.

David Roberts: Mm.

Nick Chaset: It’s actually metered benefits, which is also a really significant unlock. And so the UK, because of the broad deployment of smart metering, and actually data access, and I think this is actually one of the other important points, and we actually see a commonality in Texas, is Texas has, with Smart Meter Texas, what I would say is the best in class meter data access platform in the US. That's something that we have in the UK. It's what we have actually in a lot of European markets — not Germany. Germans, for some reason, are quite anti-smart meters. It's more of a cultural thing than a policy, but that's a whole other conversation.

David Roberts: Meaning in the UK, a competitive retail electricity provider can get access to that meter data.

Nick Chaset: That's right, and it's seamless access to the meter data. Actually, it's a similar dynamic in Texas. It’s very easy to get access to meter data. Obviously you need consumer consent. But you contrast that with PJM, where it is very, very hard to get meter data.

David Roberts: Yes. We’ve done a couple of pods on that. So if you were importing one feature, I mean, it does kinda seem like the UK, whatever its other difficulties at the moment, does kinda have the electricity markets dialed in. If there’s one thing you could import, which of those features do you think are the sort of highest value for consumers and for Octopus? Is it the forced choice thing? Is it the-

Nick Chaset: I’d say it’s the meter data access more so than forced choice.

David Roberts: Mm.

Nick Chaset: And I say that because-

David Roberts: That’s interesting...

Nick Chaset: there are going to be markets in the US that are not ready for retail competition or for a variety of reasons. That’s not the thing that is going to unlock the benefits to the consumer fastest. And so under the OctopusUplight partnership, fundamentally we wanna be able to work either direct to consumer through an Octopus retail business that we have in Texas or through the utility, but inability to access customer data becomes a hindrance to acceleration of customer signups and flexibility programs. So if you have robust access to data, Octopus can then operate as essentially a customer-facing channel-

David Roberts: Mm-hmm...

Nick Chaset: to identify which customers are most likely to benefit from flexibility, and then move those customers into programs that Uplight manages for that utility quickly and seamlessly. Without meter data access, settlement becomes more challenging, targeting becomes more challenging.

David Roberts: Yeah, yeah. Okay, let’s talk Texas then, ’cause Texas, I guess, is, as you’ve said a number of times now, the closest approximation to the UK’s kind of open competitive model. How is it going in Texas? That’s kind of your foothold. What are the kind of numbers in Texas? What’s the level of participation? How fast are you growing? What’s the Texas situation?

Nick Chaset: So from Octopus’s business perspective, growing very quickly. We’ve doubled our customer base in the last 12 months, starting from a fairly low starting point, just given some previous prioritization. What we’re seeing though in Texas today is-

David Roberts: Sorry to interject, but do they have forced choice in Texas?

Nick Chaset: Forced choice in Texas.

David Roberts: They do. Okay. All right.

Nick Chaset: Yep, exactly right. So the business, underlying business is going well. We’re not seeing as much active participation in flexibility programs as we have in other markets.

David Roberts: Hmm.

Nick Chaset: Interestingly, because Texas energy market has been so liberalized and there’s been so much utility scale solar and storage deployed, Texas volatility has essentially been destroyed.

David Roberts: Yes. This is such a fascinating story. This is such a... I’m gonna-

Nick Chaset: Really over the last 12 to 18 months. And so flexibility, especially in an energy-only market and one like in Texas where transmission and distribution rates for residential customers are essentially charged on a flat volumetric rate, the whole value prop of flexibility is intraday price arbitrage, right?

David Roberts: Yeah.

Nick Chaset: Cheap prices in the middle of the day, expensive prices in the evening. I wanna flex my load from the expensive into the cheap. That’s essentially what all the batteries have done.

David Roberts: Yes.

Nick Chaset: The utility scale batteries. And so it’s actually great for consumers because prices have been depressed, but it’s not great for the flexibility component of our business. It’s actually been great for the standard part of our business. So we’re growing very quickly in just the, “Hey, we’re signing customers up for 6, 12, 18-month contracts.”

David Roberts: Mm-hmm.

Nick Chaset: And, you know, from a flexibility management standpoint, that’s fine because at some point in time when we start to see volatility on the horizon, we’ve built this relationship with a customer, and then we will start engaging with them around flexibility management because it’s Texas, so everybody has air conditioning.

David Roberts: Mm.

Nick Chaset: We are now starting to sell batteries to consumers on a relatively small scale.

David Roberts: We’re gonna get to that too.

Nick Chaset: Mostly because of the economic dynamics for residential. So I think the big policy in Texas that we would like to see changed is greater ability for at least the retailer, if not the individual residential customer to manage their TDSP or transmission and distribution costs through flexibility.

David Roberts: Hmm.

Nick Chaset: So if you’re a medium commercial customer, say a 50 kilowatt customer or greater in Texas you are subjected to your 4 coincident peak-based demand charge. And so then batteries start to pencil again because you have some price volatility, but you have these 4 demand charges that you’re trying to manage against. And so suddenly batteries are able to monetize both energy and, you know, essentially avoided distribution costs.

David Roberts: Right. Right.

Nick Chaset: So allowing residential customers to benefit from that is something that we think is an important market modification that we’d like to see.

David Roberts: This is such an interesting story. I mean, I think maybe in the short term or medium term, data centers flooding into Texas might bring some of that volatility back, at least short term.

But this is something I’ve asked every flexibility provider of every stripe on Volts for years now and never really get a good answer, which is, if you succeed, you’re gonna put yourself out of business. Are you not? Like, if enough flexibility is available, prices are gonna flatten out, and the grid is gonna get sort of reliable and boring, and then you’re not gonna be able to monetize flexibility, right? I mean, that’s kind of like, who knows the time horizon, but that’s kinda what’s gonna happen, isn’t it? You sort of see it happening in Texas.

Nick Chaset: I think actually there’s a great story of what’s happened in Australia.

David Roberts: Hmm.

Nick Chaset: And you’re actually now seeing rates go down because you have such mass adoption. I think there’s 2 things, particularly when you think about batteries, but actually all residential flexibility. So the marginal cost of flexibility for the devices we already have in the home should, over time, go down to zero-

David Roberts: Right...

Nick Chaset: because we should functionally eliminate sign-up friction. We should compete away API fees.

David Roberts: What are API fees, briefly?

Nick Chaset: So an API fee would be if Octopus is seeking to manage the thermostat in one of our customer’s homes or frankly, when Uplight is doing this on behalf of a utility, we have to pay a fee to the hardware company-

David Roberts: Oh...

Nick Chaset: to be able to access the device. It's a gating fee. And as you get towards more open access, like a Bluetooth-like protocol, in principle those should be competed away.

David Roberts: Yeah. Right. Right.

Nick Chaset: In principle, those should be competed away, but today we don’t have a single open source protocol to access all devices, and so you have to pay to access the device. So the marginal cost of that, at least some amount of that flexibility should go to zero because charging an EV overnight should be massively flexible. You just want the car fully charged when you get up in the morning, and when exactly that car charges between 6:00 PM and 6:00 AM-

David Roberts: Right...

Nick Chaset: you should be largely indifferent to. So we should compete down the marginal cost of that flexibility to essentially zero. We should compete down a big chunk of thermostat flexibility to zero, and really it’s only when you’re asking someone to experience a perceptible temperature change in their home in response to an extreme grid event might you say we need to pay people. The day-to-day pre-cooling of the home-

David Roberts: Right...

Nick Chaset: while people are at work should be imperceptible, so that should cost zero. And then you’re left with the battery asset class, and battery prices will come down. Installation costs must come down. And we look at the rest of the world. I’ll actually take an example of our Spanish business, where we have a robust solar and battery installation. A 5 kilowatt solar system paired with a 10 kilowatt hour battery fully installed in the home 9,000 euros.

David Roberts: Hmm.

Nick Chaset: Contrast that with the US, right? That’s gonna be $25,000–30,000 after tax credits.

David Roberts: Yeah. So then what does this do to flexibility businesses? What does this do to Octopus then if you’ve competed basically all the flexibility value down to almost zero?

Nick Chaset: Well, Octopus fundamentally is a customer business, right? So we’re going to compete down flexibility, lower bills, and still have a lot of, actually, value that we can create for transmission and distribution deferral. We might compete down energy prices, like we’ve seen in Texas, increasingly across the country, but we still have a tremendous amount of transmission and distribution deferral to compete down. And so if our job is to continue to do that and we continue to drive down costs such that in 10 years we’ve put ourselves out of business, well, then we’ve done what we’re supposed to do, and we will move on to do something else.

David Roberts: So moving beyond Texas, so there is, like, retail competition, say, in some northeastern states, but you’ve not moved into those states in any kind of concerted way. So, like, what would have to change in a state like Pennsylvania or New York for Octopus to go in and set up a business there? What’s holding that back?

Nick Chaset: I’d say the single biggest thing that has held us back to date is consolidated billing.

David Roberts: Hmm.

Nick Chaset: The bill is really so much of where the customer relationship with their supplier sits because it’s the thing that the vast majority of people only care about, right? You don’t think about your electricity unless it’s out or it’s too expensive. And so if you don’t own the bill, you don’t have the ability to communicate, you know, what’s going on with the consumer around their consumption, help them think through ways to reduce their consumption, fundamentally, and it’s something that Octopus has spent a tremendous amount of time and effort refining. How we present the bill, how do we communicate with customers about their bill?

And in Pennsylvania, the bill does not come from the supplier. It comes from the transmission, the wires company, and you're just a line item — similar, actually, to what the CCAs have in California. And so you just don't have that same ability to build brand and build trust and build that customer relationship.

It also means that when you don’t own the bill, the first call when the customer has a problem tends to be to the billing utility. And again, we differentiate ourselves on customer service. And if their first call is to someone else’s customer operations team, we can’t guarantee that they’re gonna get the level of service that we want them to get. So that has historically been why we have not wanted to operate in those markets.

David Roberts: Interesting. It’s not the forced choice thing or anything about-

Nick Chaset: Yeah, I mean, that certainly makes customer acquisition more-

David Roberts: And meter data.

Nick Chaset: Yeah, I mean, those things are not nontrivial, but I think fundamentally it’s been we don’t feel we can give customers the type of experience-

David Roberts: Mm.

Nick Chaset: that we feel is a prerequisite of Octopus operating in some of those markets. Now, with Uplight, we’re rethinking the level of engagement, not necessarily as a retailer, but, like, engagement with customers in those markets. And so you take New Jersey as an example. There is choice. Most customers in New Jersey don’t choose a supplier.

David Roberts: Right.

Nick Chaset: But PSEG, the biggest utility in New Jersey, is an Uplight customer-

David Roberts: Mm.

Nick Chaset: for both home energy reports, so some customer engagement, and flexibility management. And so we’re now having a very active conversation with PSEG around how do we bring some of the special sauce know-how that Octopus has around customer engagement, particularly flexibility customer engagement, and integrate that know-how into the solutions that they already have with Uplight.

David Roberts: Right. I wanna get to Uplight in one second, but one more question about retail competition, which is, I think outside of Texas, retail energy providers have, let’s say, a mixed reputation, I think. Probably because they’re all buying from the same wholesale pool. They’re all sort of access to the same energy, and so it tends to be end up, like, the only differentiation they can offer consumers. And as you say, they can’t really directly interact with consumers ’cause they’re just a line item on a bigger bill.

So kind of the only thing they can offer is sort of slightly scammy deals, which means there isn’t a lot of, like, will or political energy to expand retail competition. Do you think residential retail competition has a future in the US? Do you think it’s gonna spread?

Nick Chaset: So what we’ve seen in Europe, and what we’re seeing in Texas, is competition for the customer does drive innovation around how you acquire resources, how you manage load flexibility that benefits the customers in terms of lower costs. And, you know, particularly when we’re thinking about PJM and the capacity deficit, that seems pretty structural, and they’re just not gonna be able to build their way out of that capacity deficit anytime soon because of limited access to turbines, unwillingness to allow grid batteries to be fully counted as capacity, you do need to start to engage on the demand side. And load flexibility is the way to get there.

I think there’s a strong argument that in states where they already have the regulatory frameworks in place for retail choice, there are some fairly no regrets changes that could be made that enhance customer protection, but also make it easier for customers to choose their supplier. That would undoubtedly attract companies like an Octopus-

David Roberts: Right...

Nick Chaset: into those markets and start to unlock significant load flexibility. And actually, we’re seeing it happen in C&I. C&I customers are starting to monetize their load flexibility in meaningful ways.

David Roberts: This is commercial and industrial.

Nick Chaset: Commercial and industrial. And if anything, the challenge right now is we’re locking residential customers out of those benefits.

David Roberts: Right. Okay. Well, let’s talk Uplight then. So Uplight’s doing these customer-facing flexibility programs for 85 utilities now, but their utility programs, as I understand it, are getting in, like, the single-digit customer participation numbers, whereas Octopus, where it is allowed to just rip, gets, like, 60, 70% customer engagement on these flexibility programs. And I guess what I most wonder about is what explains that gap? Is it something that the flexibility provider is not doing right that you could do better, or is it utility incentives? The old utility incentive problem in which those flexibility providers are embedded, and it’s thus structural and difficult to move much. What’s your take on that?

Nick Chaset: I think it’s multiple parts, right? So one of the reasons Octopus has had such great success enrolling our customers in flexibility management tariffs is we make it extremely easy to do so.

David Roberts: Mm.

Nick Chaset: We offer very clearly articulated benefits for flexibility. Save 25% on charging your electric vehicle if you sign up for our overnight flex tariff.

David Roberts: Yeah.

Nick Chaset: Okay, I wanna save 25% on my vehicle, and, you know, one, two clicks in an app, and the device is connected, and then I don’t have to think about it anymore. That is what we view as best in class and what drives great levels of participation. It’s done in our voice. We’re constantly iterating how we’re talking to customers.

David Roberts: Mm.

Nick Chaset: Compare that with a utility-driven program where there might be one or two mass emails sent out without lots and lots of iteration on, like, micro changes to messages. We’re gonna send out 50 versions of the same email to cohorts of customers. Some of that’s happening, but I think oftentimes that is not, you know, the ultimate mindset of the utility. And I guess somewhat rationally, utilities tend to wanna control lots of the direct marketing, right? So they’re not allowing a company like Uplight to just take total ownership-

David Roberts: Yes...

Nick Chaset: of engagement with their customers.

David Roberts: Is that going to change is my question.

Nick Chaset: I think there will be some utilities that are going to be increasingly open to allowing Uplight, particularly with the credibility that Octopus brings, to have more say in how and where to engage with customers, and there are gonna be some that are not as comfortable with that. I also think there’s some of the enrollment journey and experience is one that can be significantly improved. So today, if I’m a customer in most utilities and I have an EV, a thermostat, a battery, heat pump, you know, multiple devices, I’m gonna experience four different enrollment journeys-

David Roberts: Yeah.

Nick Chaset: for each respective device.

David Roberts: Yes.

Nick Chaset: And while you might see significant participation of one asset class, you see significant reductions in follow-on assets because the enrollment journey is not optimized. And so at Octopus, we are bringing multi-device enrollment journey to bear into the Uplight channel through the Octopus app. That is a version of the app that millions of Octopus customers, direct customers use. We’re building a version of it that can be productized and used by a utility to engage with their customers as well. So that’s another part of it.

David Roberts: Do you have a target or a number in mind for how high you can drive participation in one of these markets where you are a tool the utility is using?

Nick Chaset: I think let’s think about by different asset classes, right? I think there’s no reason why any battery that’s out there today should not be enrolled in some sort of a flexibility management program, unless of course the customer definitively says, “I prefer to have my two Powerwalls sitting in reserve constantly.” And there’s gonna be a subset of customers who that is a definitive choice that they make, and, you know, that’s fine. But let’s say that 70, 80%. Similar with EVs. In principle, every EV should be enrolled in some sort of flexibility management initiative because there’s no utility loss associated with it. Like, I don’t lose functionality of my EV-

David Roberts: Yeah, right...

Nick Chaset: by managing when it charges within a certain set of parameters. I think when you start getting into heating and cooling, there is the comfort dynamic, so it may not necessarily be just as many. But I think what we see actually with our heat pump products in Europe is it’s a selling point. Saving money on your bill by buying an Octopus heat pump is a selling point for the heat pump.

David Roberts: Right.

Nick Chaset: So again, I think two, three X the participation rates — 50, 60% participation rates — are totally reasonable.

David Roberts: Well, and this is all sort of in a perfect world, but like you are an app within a utility. You don’t necessarily own the whole customer experience. Like, there are some... It’s not a perfect world, right, that you’re operating in. Practically speaking, do you think you can get to those numbers within this context?

Nick Chaset: I think what we need to endeavor to do is focus on working with a couple utilities that are highly motivated to enroll significantly more capacity.

David Roberts: Just to show it can be done.

Nick Chaset: That’s right. This is one of the things that’s so exciting about this investment we’ve made in Uplight, is that we now have active relationships with a whole load of utilities, and there are definitively a couple that are coming to us saying, “We need to do this for our customers. We need to do this because of the stressors that we’re facing related to data center build-out-

David Roberts: Mm-hmm...

Nick Chaset: or rate pressures, or just we feel like this is now possible, and we wanna do this because our customers will benefit from it.” It's usually some version of all three. And we just have to show what's possible. It's actually the Octopus story, right? If all Octopus did was tell you, “This is all the amazing stuff that it can do,” I think no one would have believed us. The reason why the Octopus story is so unique, frankly, in this space is Octopus has always heavily oriented on the do side of the say-do ratio.

And that’s sort of our approach now in the US, is working with all of our utilities, but really going really deep with a couple of them to demonstrate that if you apply a different approach to customer engagement, the sign-up journey, the digital experiences, you can massively increase participation, and then everything becomes more cost-effective. That DERMS platform that they’re licensing is suddenly a really good investment because I have so many more devices connected to it.

David Roberts: Right, right, right. Uplight commissioned a Brattle, a study from Brattle to sort of figure out a fully coordinated residential demand stack, what it could do for the utility’s peak shaving. It found that it could take peak shaving from about 3% now to about 5%, which, like, I guess just on its face doesn’t sound like that big of a deal. Do you think that’s a peak of what is- can happen through the demand side, or do you think you can beat that?

Nick Chaset: So I think there’s a couple of things to think about, right? There is how do we drive more peak reduction with the asset base that we have today? So most of the assets out there today in most service areas, put, say, a California aside, where you do have a lot of batteries, are gonna be thermostats, right? And so yes, there’s some incremental peak reduction we can get, largely driven by more participation. If you think about 20% of thermostats today are gonna go to 50%, all right, that’s your 3% to 5% peak reduction.

I think the thing that is most exciting to me about the demand stack theory is not just the peak reduction potential, it is the fact that that peak reduction also comes with the potential for everyday cost reductions for consumers. And that’s really the premise of the demand stack, right? It’s you start with daily shifting from the peak or from the high-cost period to the low-cost period. You know, that’s a pre-cooling strategy or a managed EV charging strategy, and that’s the thing that’s gonna lower people’s bills every day.

And then the next step is on an event day, the 10, 20 days a year when there’s some sort of a stressor, you can then call on those devices, shift them from what might have been a simple pre-cooling strategy to a more dynamic strategy around we’re gonna pre-cool the house and then really focus on reducing that air conditioning unit’s draw from the grid for an hour of highest price or most constraint. Or for an EV, it’s the distribution feeder is constrained at 10:00 PM, so we’re not gonna charge any EVs in this particular area from 10 to 11 PM. We’re gonna shift it all to 12, 1, 2, 3 o’clock.

So that’s the second order, more event-based. But because you’re saving people money every single day doing the more simplistic demand stack management, we’ve now acquired all these devices at essentially no marginal cost for event-based demand response.

David Roberts: Hmm.

Nick Chaset: And this gets back to the scaling effect and the cost effectiveness, right? Is if we treat these assets as things that can do the thing that people care most about, which is lower their bill without impacting comfort or utility, suddenly I can acquire loads of devices to then solve peak reduction challenges at a very low cost.

David Roberts: Mm-hmm.

Nick Chaset: And that’s the power of the demand stack. That’s the power of flexibility that we really need to go out and harness.

David Roberts: Well, let me ask you how the utilities view that. So Uplight says it manages about 8.5 gigawatts of flexible load. I’m just curious, how much of that would a utility planner actually count on the way they count on, say, a gas peaker. I did a pod with EnergyHub about these sort of maturity levels of VPPs, you know, like how much like power plants are they in the view of utility planners, and they said the most advanced VPPs were like a 2 out of 4 or something like that. So like-

Nick Chaset: Their version of the Turing test for VPPs. I think it’s a really cool idea, yeah.

David Roberts: I love that pod. But they’re not there yet, so like how much of that 8.5 gigawatts is really, is a utility planner really viewing as available to them?

Nick Chaset: Not enough, and some of that is because the way we manage those assets today is very formulaic and tied to the program that they were acquired into that is not necessarily a program tied to market operations or distribution operations, right? So many of the assets that we manage, that EnergyHub manages, have been acquired to fulfill a regulatory obligation associated with a specific program.

David Roberts: Right.

Nick Chaset: And that program has specific parameters.

David Roberts: Yeah, right.

Nick Chaset: And those parameters are not necessarily parameters that the distribution planning team or the trading teams set ... So what I would say is a fair amount of the legacy asset base was not acquired or designed to fulfill the sort of new needs that these operators have. But a significant portion of the go-forward asset base that we are acquiring on behalf of our utility customers is very much oriented towards meeting the operational requirements of our customers.

David Roberts: And Uplight or Octopus can guarantee to a distribution utility operator that it will be available in the same way a power plant would be available. You’re confident in your ability to sort of-

Nick Chaset: So on Uplight, you know, what we find is 97% accuracy-

David Roberts: Hmm...

Nick Chaset: between our f- the forecast and the actuals. So in some sense, that might be better than a power plant because a thermostat doesn’t have the same kind of unplanned outage. A subset of thermostats, if you have 10,000 or 100,000 thermostats, on any given dispatch, some thermostats are not gonna respond because, oh, there’s a Wi-Fi issue in the house-

David Roberts: Right, right, right.

Nick Chaset: or what have you. And so there you just have to apply sort of a statistical normalization. So to say, “All right. For every 100,000 devices, I need to assume 2,000 devices or 5,000 devices at any given point may have an issue.” The challenge with a gas plant is when you have an unplanned outage, it’s the entire thing. It’s all out.

David Roberts: Yeah, yeah.

Nick Chaset: So that is, I think, a fundamental difference. But what I will say is for thermostats, in particular, we are still, I would say, improving how we think about measurement and verification, and I think this is where batteries become such a massive unlock. You don’t meter the thermostat reduction. It’s still kind of a statistical analysis-

David Roberts: Right...

Nick Chaset: of what didn’t happen. When you start deploying batteries at scale, it’s metered. The willingness of, say, an Uplight or an Octopus that may be deploying batteries to stand behind a service level agreement for distributed battery fleet is gonna be fundamentally greater-

David Roberts: Yeah.

Nick Chaset: than you might be willing to do with a thermostat, where at Uplight we don’t own the thermostats, right? It might be it’s our vendors, and so there’s always a little bit of tension there, whereas with a battery, it’s, it either worked or it didn’t. We can’t argue about it. There’s a meter.

David Roberts: Let me ask you about, last year you told me that Octopus was spinning off Kraken, and Kraken is sort of like the software layer that utilities can use to run their operations. You told me you’re spinning off Kraken so that utilities didn’t view Octopus as sort of a conflicted vendor or a competitor. Now Octopus owns Uplight, and it seems like there’s some overlap here, like KrakenFlex and Uplight AutoGrid software both orchestrate devices basically. So if like National Grid, for instance, wants device orchestration, does it buy it from Kraken or buy it from Uplight? And like, which one would you prefer, and are they now competing? How do you see the relationship between Kraken-

Nick Chaset: Gosh, great question. This is something that people ask me about internally all the time. So-

David Roberts: What is the relationship?

Nick Chaset: I’ll be careful with how I answer it. No, I’m gonna be, as usual, pretty blunt about it. So I think my view fundamentally is that Kraken is most differentiated when you think about it as an end-to-end stack, billing all the way to flexibility management, right? And that is where it really is an unbeatable solution because of its integration into that core billing system. This is what’s been such an unlock for Octopus, being able to seamlessly and quickly spin up new customer tariffs and then make sure that that connects very quickly down to the device. So the time in which it takes Octopus to think about, we wanna introduce some new variable rate based on a market dynamic we’re seeing in a specific area-

David Roberts: Mm-hmm...

Nick Chaset: is fast, right? If we see a distribution constraint that we think pointed electric vehicle managed charging can go and solve, we can move on that extremely quickly because our billing system is Kraken and our Flex management is Kraken.

David Roberts: Right.

Nick Chaset: When you don’t have that core billing s- modern billing system, the ability to sort of move on the creation of that new dynamic rate is going to fundamentally be slower, less reliable. So if you’re trying to do that in SAP or Oracle, I might say, “Well, it might take me 18 months,” or you know, I’ve heard a story of a utility here on the West Coast that is not able to implement any new rates without deprecating an old one, because their system can’t handle any new rates. I don’t understand how that works, but okay, fair enough.

So the way I think about it is KrakenFlex is built to fundamentally unlock flexibility at scale when you’re using the Kraken customer solution. And so you take National Grid as an example. I think as a general matter, I would say National Grid should absolutely be thinking about replacing its grid DERMS, which is not Uplight, but a different vendor. It should absolutely be taking a very hard look at KrakenFlex because they’re implementing the Kraken customer solution. And we at Octopus know that when those 2 things are together, it’s magic.

The reality is there are very few utilities in North America, you know, only one announced, hopefully more soon, that operate on Kraken. And so we’re talking about the vast majority of customers that are operating on a legacy system that is not designed for nimbleness and not designed to enhance flexibility at its core. And I think that’s where we feel like the Uplight solution is really built to suit that particular set of use cases. And then the exploration is around how do we blend aspects of the KrakenFlex product, where appropriate, into kind of the Uplight platform to try to bring the best of both worlds.

David Roberts: Is it fair to say that a utility that’s not using Kraken, it’s gonna be faster to adopt Uplight than it would be to adopt the full Kraken suite? Like you can do Uplight as, let’s say, a lower bar to clear, a faster, an easier decision maybe?

Nick Chaset: I mean, a flexibility management platform is definitely gonna be a lower bar to clear than ripping out your billing system.

David Roberts: Right.

Nick Chaset: So absolutely right. It is a lower bar to clear. I would also say that the KrakenFlex solution has a lot of powerful components to it, but for the most part, it’s a solution that is deployed at massive scale outside of the North American market too.

David Roberts: Hmm.

Nick Chaset: So I do think there’s something to be said for being able to go to these customers as a starting point and say, “This is a product that 20 other, 30 other, 50, 80 other utilities in North America are already using,” and then really think through how and where Kraken fits. In the end, we would love at Octopus, putting my Octopus hat back on, we would absolutely love it if every North American utility operated their core systems on Kraken, ’cause we think it would deliver tremendous outcomes to the customer, unlock flexibility in a way that-

David Roberts: But that would, to be clear, if that happened, it would put Uplight out of business, right? Like, if that happened, there would be no market for Uplight.

Nick Chaset: I think before we even got close to that, we would be very much sort of evolving the business model. I think it’s a problem that I’m not worried about because of the sort of realistic timescale on which utilities make big software decisions.

David Roberts: Yeah. It would be a nice problem to have if you were selling too much Kraken and then had to modify Uplight.

Nick Chaset: But to be clear, Kraken now is a separate company from Octopus, and so I say that less from a financial interest perspective because, yes, Octopus does have a small minority position in Kraken, but more from a fundamental perspective, that I see these legacy billing systems as the single greatest hindrance to the energy transition, lowering costs for consumers, giving them better experiences.

David Roberts: Yeah.

Nick Chaset: And so more utilities operating on modern billing platforms will unlock lots of opportunities for flexibility and maybe in that world, the Uplight solution shifts away from selling DERMS to be more consumer-facing in working with Octopus around how do we develop the customer propositions and engage with the consumer. So I’m fundamentally not worried about that being an existential risk to the Uplight business.

David Roberts: Okay. Several questions left, and we’re running out of time. This is story of my life, so we’ll have to hurry a little bit, but I do wanna ask, and I’m, I have been trying to make it a point to ask every sort of VPP provider, everybody who’s in this flexibility business, which is...

Well, like, there was a commentary that came out in Nature Energy, the journal, the other day, basically raising the flag, warning about the enshittification risks of this kind of software. And I think everybody at this point kind of is familiar with this concept where you, the platform lures you in with benefits, locks you in, then starts exploiting you, et cetera, et cetera, traps you. You know, so a lot of people, I think, are worried that, like, if I buy a device from one of these companies, and then they go out of business, is it gonna get bricked? Am I gonna have a useless device?

Or if these people have access to my home devices, my HVAC system, the EV in my garage, are they gonna be responsible with my data? Are they gonna start serving me custom ads on my EV screen because they’ve locked me into a platform where my EV is stuck with them? Et cetera, et cetera. I’m sure you’ve heard versions of these worries.

How do you think about this subject generally, what protections do consumers have once they’re letting these companies into really very intimate household home and hearth type stuff? What protections do they have now, and how do you think about that going forward?

Nick Chaset: So one, I don’t think they have adequate protection, and I think this is one of the reasons why I am not generally a huge fan of aggregator-led models-

David Roberts: Hmm...

Nick Chaset: say, as compared to retail or utility-led models, right? So when I’m the retailer, I have a fundamental obligation to serve.

David Roberts: Right.

Nick Chaset: And so much of the value-

David Roberts: A regulatory structure you’re embedded in that has that built in already?

Nick Chaset: Well, when I’m the retailer, like I’m servicing that customer, I have an obligation to serve per the terms of the contract that we’ve signed, and then when they leave, I have to let them leave, and I have to like let them disconnect their devices and take those devices to the next supplier they may sign up with.

David Roberts: Right.

Nick Chaset: Similarly, in a utility context, there’s a fundamental obligation to serve. Like they must serve these customers. They can’t not serve them. And in that relationship, there are far more opportunities to insert regulations and safeguards, and there’s a more clear alignment of incentives. What we’re finding ourselves actually in a lot of places in the US is because the utilities have not had the tooling, the regulatory constructs, in some cases really the capabilities to do that customer engagement, we’re heavily reliant on third-party aggregators who are trying to figure out a way to capture as much of the value of that flexibility themselves as they possibly can.

David Roberts: That’s the basic business incentive is they want to capture-

Nick Chaset: And it is the basic business, and the value stacks often are just gonna be too thin, right? So the question then becomes like if you have a dollar that needs to be split. When it’s the retailer or the utility and the consumer, you know, you’re splitting it, say, 2 ways, and when it’s the utility, that split is usually gonna be set in regulations. And when it’s the retailer, it is subject to sort of fundamental competition.

David Roberts: Right.

Nick Chaset: So both should derive, you know, some more sort of optimal setup around, like, what that split is. When you have an aggregator that’s able to intermediate doing something that consumers don’t really fundamentally understand, there’s a lot more potential for rent-seeking, let’s say. I don’t know, I don’t wanna say that there is, but there’s more potential for rent-seeking behavior.

David Roberts: Yes. And it wouldn’t take much to tar the reputation of the whole enterprise, right, of the whole market.

Nick Chaset: That’s right. So again, getting to the core thesis of the investment we made in Uplight is we feel like that relationship with the utility and the consumer is the right locus of engagement. And so we wanna build tooling and capabilities and services to work with the utilities to help them do it better, as opposed to disintermediating them as an aggregator and kind of operating in this gray area of customers don’t really understand what they’re signing up for, but when they sign up, we have control.

David Roberts: Do you think Octopus would support sort of new legal regime governing this stuff, governing these aggregators, or just governing flexibility in general?

Nick Chaset: So I also think that it’s hugely different in residential than commercial. I think when you’re talking about commercial customers, there is a level of sophistication-

David Roberts: Right.

Nick Chaset: that those customers have wherein they are better able to mediate between, you know, multiple potential aggregators, and I think that’s why commercial aggregation market has actually worked fairly well. I think for residential, we just have to think about consumer protection, but also not use consumer protection as a way to fundamentally block innovation, and I think that’s our tension, right? The flip side of that coin on a- the aggregator model is without aggregators sort of pushing the envelope, would we have made no progress?

David Roberts: Right. Right. Speaking of aggregators, data centers, you’re seeing more and more of these, you know, data centers wanna get online. They need capacity. They’re starting to sort of gather the capacity themselves through these kind of partners and then sort of present it to the utilities saying, “Hey, I’m gonna bring my own capacity.” Is Octopus involved in any of those deals? Do you see data centers, their need for speed to power, their giant bags of money, their urgency? Do you see that as a viable route to scale for this kind of flexibility stuff, or does it make you nervous?

Nick Chaset: I mean, it certainly is a valuable route to scale. I think one of the things we’re struggling with today is the market structures in, say, a PJM do fundamentally advantage large load flex over residential load flex. The battery example is sort of case in point, right? Is if you put a large battery behind a large commercial facility, you’re much more clearly able to manage that battery without ever having to export it, so you’re gonna get the full value of the battery. And whereas in a home, you’re not going to. So there’s just not as much of an economic rationale to deploy batteries in residential as there are in commercial. So that is a current blocker.

I do, though, think that where things are changing, I think they must change, and this is potentially gonna be benefiting consumers. And in the end, this all only works if customers are seeing benefits and lowering their bills. But it’s some sort of the interplay between bring your own capacity and the social license to operate.

So today, you know, there’s a huge debate around community opposition to data centers, and there are a variety of drivers of that opposition, but I think one of the important ones is consumer perception, actually, and real lived experience that my electric bill is going... These things are being built and my bills are going up.

David Roberts: Yeah, right.

Nick Chaset: So the question becomes: how do you actually turn the data center into something that is gonna lower the bill? I think there’s a lot of conversation on, well, data centers are gonna increase utilization and that over time, but that doesn’t actually give bill relief right away.

David Roberts: Yeah.

Nick Chaset: This gets to sort of an interesting concept in the social license to operate, which is should a data center be partnering with a utility and a company like Uplight to offer subsidized load flexibility measures across every customer in a specific geographic area?

David Roberts: Yeah.

Nick Chaset: Should a utility and a data center figure out a way to fund highly subsidized batteries, highly subsidized EV chargers, highly subsidized smart thermostats?

David Roberts: Those deals are starting to pop up, like Rewiring America just signed one with PG&E and Google. It’s starting to happen.

Nick Chaset: That’s right. I think the key there just becomes you have to have mass distribution for it to work, right? You have to be able to credibly go to every resident in Ashtabula County, Ohio, and say, “If you sign up for Octopus powered by Uplight, you will get $20 off your bill.”

David Roberts: Right. Right.

Nick Chaset: And not everyone might sign up, but I think sort of view that, “Hey, I can benefit, and I’m gonna benefit in a way that it tied to the thing that I’m anxious about, which is the higher electric bill,” helps to shift some of the community concern. One of the other big community concerns is, and I would be concerned certainly, is if a data center’s going in and they’re gonna build 200 megawatts of reciprocating gas engine behind the meter that’s gonna be pumping out NOx, I’m not happy about that. And so to the degree that load flexibility can help to push back against this trend of behind-the-meter fossil, that’s just a good thing.

David Roberts: Yeah. One other question about VPPs in general. I had a guest, Bruce Nordman, a few months ago, and his whole thesis is we could take out these middlemen entirely if you just had time and location-specific rates communicated every 15 minutes or 5 minutes or whatever, and you had devices that were smart that could receive that price signal and respond in the way that is best for the residences in which they are sitting. If you just had real-time prices and responsive devices, you wouldn’t need all these elaborate products that go and gather this stuff up and then skim off some of the value.

Do you, I guess, agree fundamentally with that proposition, and do you think eventually we’re gonna evolve in that direction where there’s just sort of an automatic communication between utility prices and devices, and all this elaborate layer in between is gonna disappear? Do you think that could ever really happen?

Nick Chaset: So I agree with part of it, and I disagree with part of it. I don’t actually fundamentally buy into the need for dynamic pricing because so much of the consumer value of load flex, it should be in more simplistic shifting from the daily high cost to the daily low cost period.

David Roberts: So you don’t think you need that kind of granularity?

Nick Chaset: I don’t think you need that granularity to get a significant amount of the consumer utility. And some of that is because you don’t need hugely dynamic shifting of loads to achieve distribution benefits. In energy, that may be right, that there are 5 or 10 hours a year, 25, 30 hours a year from a price perspective that are the ones you have to capture.

But increasingly, so much of the value of flexibility is increasing load utilization on the network, which allows you to slow some of the CapEx build, and I don’t need that level of dynamism to capture that. So we tend to drive towards very complex dynamic pricing and rates, and that might solve the tail part of the problem, but I think you can get a hell of a lot of devices connected and delivering value without dynamic prices.

Where I do agree, though, is that seamless connection and how do we make it such that these devices seamlessly connect into that core utility system. Again, this is the part of the bet with Uplight, is Uplight is that layer. It’s the single pane of glass for the utility that connects into every type of hardware. And then the question is, what signals do we wanna give? Is it a dispatch signal, or is it just a signal that is tied to the time of use rate that that customer may have?

Ideally, it’s both, and there’s some sort of co-optimization that is occurring. So the idea that we create seamless layers of connectivity is important, but even in a world where you have dynamic rates, you still need to find a way to connect the device to the dynamic rate signal. Establishing that connection is the expensive part ’cause that’s the customer acquisition.

David Roberts: Okay, wrapping up, let’s look 5 years out. So insofar as you have any sort of clear view, I wonder, 5 years out, what would you like to see? What levels of participation would you like to see? How many sort of gigawatts under management would you like to see? Do you have sort of like 5-year goals despite the kind of short-term volatility in all this?

Nick Chaset: I think 5 years from now, there’s no reason why 20, 30 gigawatts or connected. And I almost don’t think about it in terms of, well, like 20 gigawatts versus 25 versus 30. I think more in terms of every electric vehicle will be connected. I think Tesla’s announcement this last week that go forward all new Model 3s and Model Ys will have bidirectional charging enabled is a great indication that-

David Roberts: GM made a similar announcement. All their new models will be-

Nick Chaset: And so you just think about this, right? That in 5 years we should be able to sell and install fully all in a battery into a household for less than $5,000. Every electric vehicle will be seamlessly bidirectional without significant home electric upgrades required. I mean, those 2 things alone will mean millions of homes will have a battery or potentially 2 batteries ’cause they’ll have their EV battery, and then they’ll have their low-cost home battery as well.

David Roberts: Maybe one in their stove, maybe one above their refrigerator, maybe one embedded in their air conditioner.

Nick Chaset: And that’s exactly right. And so I think that world is the world we will see in 5 years, and I think that will be a world that is better for consumers. I’m optimistic. I think rates are gonna go down for consumers in the next 5 years because we’re gonna see tens of millions of consumers able to actively benefit from the load flexibility in the things that they have in their homes.

David Roberts: Well, let’s hope. Your lips to God’s ears, as my grandfather used to say. All right. Thank you, Nick. Thanks for taking so long. This is super fun. I appreciate it.

Nick Chaset: Always fun. Yeah. Cool. Thank you.

Denmark gets a large share of its power from wind and other renewables and has cut its emissions roughly in half since 1990, but independent analysts doubt it will hit its 70 percent target for 2030. Kristian Jensen, CEO of Green Power Denmark and a former Danish minister of taxation, foreign affairs, and finance, argues the next stage is electrifying how Denmark uses energy: heat, transport, and industry. I talk with him about district heating and heat pumps, EVs and vehicle-to-grid, municipally owned grid companies and hourly power prices, biomass, carbon capture, power-to-X, solar’s “fields of iron” backlash, a grid oversubscribed with data center requests (an October 1 agreement has since put most data centers at the back of the queue), and whether the country’s political consensus will hold.

As mentioned in my newsletter, I spent the last week of September in Denmark. I was on an “industrial symbiosis” tour, sponsored by the Center for Sustainable Infrastructure. (My own participation came thanks to support from the Scan Design Foundation — much gratitude to them.)

Industrial symbioses refers to processes wherein the waste products from one industry (say, heat) serve as the inputs to another. If you’re thoughtful about this you can harness some incredible efficiencies, and the Danish are extremely thoughtful about it. I highly recommend one of these tours if you ever get a chance.

I have lots of thoughts about Denmark, which I’ll mostly save for the newsletter. This is not the place to gush about riding an ebike around Copenhagen, which is probably one of the top five peak experiences available to a human being on Earth. Instead, on to today’s podcast!

While I was in Denmark, I got a chance to interview Kristian Jensen about the Danish energy system. Jensen had a pretty remarkable two-decade stretch in Danish politics, serving at various points as Minister for Foreign Affairs, Minister of Finance, and Minister for Taxation. He now serves as the CEO for Green Power Denmark, the trade association for the country’s big clean-energy industries. (Imagine, my fellow Americans, having a powerful clean-energy trade association. Sigh.)

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Jensen is on the center-right, but as you’ll hear, in Denmark that means something dramatically different than it does in the US — he’s a champion of the transition on both environmental and pragmatic grounds. Over the course of an hour we discussed just about every aspect of the country’s energy system, from its district heating systems to the rapid rise of EVs to the widespread use of biomass to the backlash against solar fields. Every time I dig into another country’s energy system and politics I find it more fascinating than I expected, and Denmark was certainly no exception. Enjoy.

Chapters

• 00:00 – Introduction: Denmark and industrial symbiosis

• 02:44 – Is the 70% target for 2030 out of reach?

• 06:24 – Carbon capture and storage, and the peatlands lag

• 09:57 – Why electrification has lagged: biomass and wood pellets

• 14:45 – Few batteries, many interconnectors

• 16:48 – Data centers and the grid-connection prioritization bill

• 21:34 – Municipally owned grid companies

• 24:32 – Smart meters, hourly prices, and thermal batteries

• 28:40 – The solar backlash and local ownership

• 35:04 – Agrivoltaics and biodiversity

• 37:24 – District heating: heat pumps, geothermal, and finance

• 43:24 – The EV transition and vehicle-to-grid

• 47:45 – Road pricing and fiscal room

• 50:07 – Power-to-X and eSAF

• 54:21 – Can Denmark build enough clean power?

• 57:12 – Will the political consensus hold?

Resources

People & Organizations

• David Roberts (Substack - Bluesky)

  • Volts (Apple Podcasts - Spotify - YouTube - Instagram - LinkedIn)

• Kristian Jensen (LinkedIn)

  • Green Power Denmark (Website - LinkedIn)

• Energinet (Website)

Company & Industry News

• Danish Ministry of Climate, Energy and Utilities - Aftale om akutplan for elnettet

• CINEA - Greensand Future inaugurates Europe’s first commercial offshore CO₂ storage facility

• Uniper - Uniper and Arcadia eFuels sign long-term agreement to accelerate aviation decarbonization

• The Copenhagen Post - Think tank: Under 1% chance of reaching climate goals

Books & Articles Discussed

• Danish Council on Climate Change - Status Outlook 2026

• Altinget - Årets ord går til Støjberg-udtryk

• State of Green - One of the world’s biggest turbines is being installed in Jutland with full local support

• RWE - Thor Offshore Wind Farm

• European Energy - Kassø e-methanol facility officially inaugurated

• ThinkGeoEnergy - Geothermal district heating in Aarhus officially starts operations

• Danish Government - Kilometerbaseret vejafgift for lastbiler

Related Volts Episodes

• What’s up with clean energy in Finland?

• What’s the deal with district energy?

• What’s the deal with burning wood pellets for energy?

• Making data centers flexible so they can serve the grid rather than stress it out

• Getting local communities on board with renewable energy, Australia edition

Related Volts Posts

• Volts community thread #31: Postcard from Denmark

• Volts community thread #30: what should I ask the Danes?

Transcript

David Roberts: I wanted to start with the big picture, the target. Denmark has cut its emissions by around 50% since 1990. It’s a very big deal, very incredible accomplishment, but the target is 70% by 2030.

Kristian Jensen: Yeah.

David Roberts: And the watchdog group, the Independent Climate Council, recently came out and said, basically, “We don’t see the path there. We don’t see that the government has a path there.” The Concito think tank ran a bunch of sort of probabilistic projections recently and put the percentage of hitting that target at about 1%. So I guess the first question is just do you think that target is out of reach?

Kristian Jensen: No, it is not out of reach. It is out of reach if politicians don’t do anything else. So if you have a frozen policy, we should be super optimistic and super lucky if we get to the 70. But the target is not out of reach if you change a few things. For instance, to cut emissions from natural gas powered heat in housing in Denmark and turn that into heat pumps, turn off the gas pipelines to private housing would definitely change something. If we added some more power to the industry and a little less natural gas, a little less oil, we could do something more in these areas.

But if you just have frozen policy from now to 2030, it’s a very slim chance that we’ll get there. When it’s a chance, it’s because Denmark are so focused on wind and solar, that all depends on how the weather will be.

David Roberts: Right.

Kristian Jensen: Will it be a cold winter, a warm winter? Will it be a windy day or a quiet day? So there is an opportunity, but really not a very big one.

David Roberts: Well, you have this new government that’s put together this new coalition that is proposing to raise the target for 2035, so it must be confident. Do you see those policies in the works from the new government?

Kristian Jensen: Perhaps to clarify, when we’re not on target to 2030, it’s a target of a 70% reduction since 1990. And we’re now going for a 82 or even higher per- reduction when we get to 2035. So it’s really an ambitious and we have picked all the low-hanging fruits, so we really have to reach out far up to get the next fruits picked down to reduce even more.

But of course, we should do it because we have an ambition of being climate neutral by 2045, so we should also take the hard decisions, the difficult decisions. But coming from the political sector and being a former political myself, I do know that it is difficult to take the hard decisions because you have to ask citizens to change the way they’re living today. They can’t drive their regular ICE car. They have to go to an EV. They can’t continue to heat their houses as they’ve done.

They need to go to other district heating or heat pump, and you need to tell the industry to change the way they’re using energy today. So we need to change, but boy, have we seen with the war in Ukraine, the conflict in the Hormuz, how difficult it is to be dependent on imported fossil fuels. So if not now, then when?

David Roberts: Yes. Trump and Putin have been quite the promoters of green technology.

Kristian Jensen: Yeah, in a very backwards way, they have been the biggest help we could ask for.

David Roberts: A big part of the government’s target was carbon capture and sequestration, and then, you know, they put out this tender, there was a bunch of projects that sort of popped up, and then one by one, those projects have kind of fallen away.

As I understand it, there’s one left, big concrete plant, which may or may not actually be online and actually burying carbon by 2030. Do you think the government put too much hope into carbon capture and sequestration? Do you think they overestimated and are continuing to overestimate the role of that technology?

Kristian Jensen: Our problem is that we need to take some chances on this area. My organization do not work with CCS. We work with CCU. We utilize the carbon for green fuels for shipping and aviation. But when we are working with CCS as a sidekick to what we’re doing, we still think it’s important because there will be areas where it’ll be very difficult to decarbonize directly.

So CCS should be a success, and the government has to take a chance, but they’re taking a really, really big chance here, and they’ve invested a huge sum on CCS where they could have used that on other areas that are giving them more decarbonization for the same funds. They went down this way because it was an area where companies, the industry didn’t have to change that much, but it’s still a very complicated game, and that’s also why with the Danish regulations on top of it, you run a pretty big risk of not getting to where you promised.

Some of the projects just had to say, “This is too complicated for us.” And we haven’t seen at that time when they had to put in the final bid, we haven’t seen large-scale CCS in action in Denmark. Now, actually, a week ago, we saw the first deployment of carbon to the North Sea, where the Danish minister and the King of Denmark pushed the red button and started to inject carbon into the North Sea.

David Roberts: In a spent oil field?

Kristian Jensen: Yeah, in an oil field where we pulled out all the gas, natural gas, we can put down the carbon instead.

David Roberts: And I heard also that agriculture was supposed to be a big part of the sequestration too, taking peatlands out of circulation, but that also has only gotten about a third of the way where it was supposed to get by 2030. Yeah. I know agriculture is a whole thing.

Kristian Jensen: Agriculture is a big thing in Denmark, and right now because we have been so focused on producing more and more and more, we’re also using wetlands and peatlands that are not fit for agriculture, and to turn them back into nature reserves would be very good for decarbonization. But it’s a complex game because you have to convey farmers to leave the land untouched. You have to be able to speak to other farmers that perhaps they should put in some land and change to the better land somewhere else. So it’s very complicated, and the idea is great, but it’s very complicated to get to an actual project. So we’re lagging behind there, which again, we have to look into the very core areas, which is the energy sector and how we’re actually using energy in Denmark.

David Roberts: Well, you’re speaking my language, so let’s talk about electrification. Denmark gets a very high percentage of the power it uses from renewables at this point. It’s got a ton of wind. Growing amount of solar. We can talk about biomass later, but electrification is not substantially more of the economy than it was in 1990, or in a very small amount. And you’ve said before, I think your quote was, “We’re 40% of the way to 1930, and we’re 2% of the way to the electrification we need.” Why has electrification moved so slowly? How do you accelerate it?

Kristian Jensen: Well, one of the reasons why electrification hasn’t taken off in Denmark yet is that we are still using a lot of biomass and biogas. We’re producing biogas, which is much more climate-friendly than natural gas. So in that way, we can actually get to where we want in other ways. But we need electrification, and there are two easy ways of electrifying in Denmark. One is our transport sector, and the other one is the heating sector. That has really been lagging behind because the upfront investments are quite big, and then the year-to-year costs are quite low. But the upfront investment has been a stopping point.

Since the full-scale invasion of Ukraine, we’re really seeing that take off in the heating sector. Heat pumps, both in private homes, but more often heat pumps and electrical boilers in our district heating has grown tremendously. So my view, my prediction is when we, in two weeks’ time from now, will see the new calculation of the electrification rate for 2025, it will have a increase, a jump up, that will be significant in Danish terms.

But you’re right, we have been lagging behind because we’ve been so focused on continue to live on biomass. Being an agricultural country, we are collecting a lot of straws from the fields that we’re burning in ovens. We’re using biogas, either in Denmark or exporting it to Germany, but we should do direct electrification much, much more.

David Roberts: You’re importing a lot of wood pellets too, aren’t you?

Kristian Jensen: Yeah, we are. Not the finest moment in Denmark. But we’re using wood pellet as well, and we try to put higher and higher standards on that the wood pellets should only come from sustainable-driven forests where you also replant so that there will be a natural turnover of the forestification there.

David Roberts: How much do you trust those certifications and calculations? They are taking place in faraway countries. You don’t have any sort of direct control over them. I know there’s a lot of controversy about how and whether those wood pellets are sustainable. Are you... If you had your druthers, would you rather get off that source entirely?

Kristian Jensen: What we can see is that we are turning more and more away from it. Our calculation is that the production of the electricity coming from biomass will drop approximately one-third of what it is today during the next 10 years because there will be less and less biomass. There will be more and more wind and solar coming into the system. The amount of power production will reduce dramatically. When we still have that, it’s because at some point when you’re so dependent on wind and solar, and the wind’s not blowing and at nighttime, you need something else to be there. So you need to have that backup mechanism.

David Roberts: Mm-hmm.

Kristian Jensen: Of course, you could dream of having a lot of battery capacity or a lot of hydro, but since you’ve been in Denmark, you know that Denmark is a very flat country.

David Roberts: Yes.

Kristian Jensen: Perhaps it doesn’t feel that when you’re on a bike, but it is really a flat country. So we don’t have that much hydro. We actually have next to zero hydropower in Denmark. So we need something else to be that backup. So I do believe that we should kind of save the biomass and save the biogas for those hours when we don’t have wind and solar.

David Roberts: Mm-hmm. Mm-hmm. Meaning get out of using it for heating and cooling, use it for the more high impact-

Kristian Jensen: Yeah, exactly, yeah.

David Roberts: back, backup electricity.

Kristian Jensen: And it’s much easier to save biogas than it is to save sunshine. It’s much easier to save biomass. We have lots of forestation, and we’re using a lot of woods for furnitures or for construction in Denmark, but there will always, always be some surplus material that we can utilize in that area when we don’t have wind and solar.

David Roberts: Why aren’t there more batteries? Everything I hear about your situation seems to cry out for batteries. And yet the penetration, as I understand it, penetration of grid-scale batteries or even sort of home, you know, sized batteries is very low. Is that, what explains that?

Kristian Jensen: Well, first of all, the amount of time when you have power in the socket in Denmark is 99.995% of the time.

David Roberts: Oh, so you don’t really need backup.

Kristian Jensen: I don’t need backup at home normally. It’s so rare that I have a power outage in my home. Now, the question is, will it be an issue because the price is very fluctuating in Denmark. Midday when the sun is shining, the price is really low, and in the nighttime it can be really high. So perhaps I could do some power arbitrage. I can buy it when it’s cheap. I can use it when it’s expensive. So more and more Danes are actually looking into that, but that’s really in recent years-

David Roberts: Mm.

Kristian Jensen: that we’re looking into that. The other reason is that we have actually used our interconnectors to Sweden-

David Roberts: Yeah.

Kristian Jensen: to Germany, UK, Belgium, and Norway to get power into Denmark when we don’t produce it ourself. Because the wind is perhaps blowing in Scotland but not in Denmark, or the hydropower has been working in Norway when the sun is not shining in Denmark. So that very interlinked position we have give us an advantage.

David Roberts: It is kind of like a giant battery, more or less. It is backup. Other countries are your battery.

Kristian Jensen: Yeah, but it goes both ways because when we really have a wind day in Denmark, we are sending tons of power to Norway so they can shut down the hydro plants and save the water for-

David Roberts: Mm.

Kristian Jensen: for later. So we are each other’s battery. It’s not a one-way street, it’s a two-way street.

David Roberts: Yeah.

Kristian Jensen: And we will be able to provide Norway with a lot of power in the coming years, and they will have to provide us back when the wind’s not blowing in Denmark.

David Roberts: Well, to get back to the electricity system, electrification is just getting going again, but grid demand all of a sudden is oversubscribed-

Kristian Jensen: Mm-hmm.

David Roberts: due to data centers.

Kristian Jensen: Yeah.

David Roberts: I was just in New York City all last week at Climate Week, and anybody can talk about data centers. Every five seconds it comes up. I heard you have about 70 gigawatts of requests to hook up to a grid that has about a seven gigawatt peak-

Kristian Jensen: Yeah.

David Roberts: capacity, and your central utility has just cut off all connections for a while, a moratorium on new connections. I’m just curious how you think about data centers. Are they helpful? Are they hurting? Are they something you want to work around? Would you rather just keep them out? What’s your mood towards data center?

Kristian Jensen: Well, data centers are necessary. Our computer systems work in a cloud. My bank is in the cloud. My pictures from my families are in the cloud. There’s so many things in the cloud, so we need data centers. The health system in Denmark also works via data centers, so we need them. And of course, we should have some in Denmark as well, but we can’t have all the data centers in the world.

And right now, data centers are just firing at the grid like they’re throwing darts at a board, wanting to go wherever they can, hoping to get a connection, and perhaps asking for three or four locations, but only want to use one. The 70 gigawatts of demand that’s out there is not real demand.

David Roberts: Right.

Kristian Jensen: Because some of them are data centers asking for more sites or batteries hoping to get online, but at some point, batteries will also be filled up in Denmark, not needing more on the market. So I think the realistic target in Denmark should be around 20, 25 gigawatts coming 10 years from now, but that’s also a huge increase.

David Roberts: Still a lot.

Kristian Jensen: A lot of increase, but we can manage this.

David Roberts: You don’t worry about that crowding out electrification of other sectors-

Kristian Jensen: Yes.

David Roberts: that sort of soaking up all the electricity and making it that much harder for-

Kristian Jensen: Yeah.

David Roberts: heating and cars and everything?

Kristian Jensen: Of course, we worry about that. That’s also why the government actually, in these days, this week, are discussing a bill-

David Roberts: I was gonna ask you about that. Very fascinating...

Kristian Jensen: that’s gonna prioritize. First, you prioritize health, defense, very essential things, and the natural growth of you and I having an EV and that kind of things. Next comes industry, district heating, hydrogen, eSAF, and that area. And then comes, you could say, batteries. And in the end, with the lowest priority, data centers. But still, I think we in Denmark need to have data centers. And there are also a lot of data centers that actually have a great connection today that is not using it enough. Perhaps they have one gigawatt connection, but only using 200 megawatts. So there could be a growth in Denmark still, even though they’re prioritized last.

But we could also see that if Denmark opened up for all the data centers wanting to come here, and all data centers in Europe chose Denmark because we have excellent connections to internet, we have a fairly low power price right now, it could be difficult for us to manage all of that. Of course, we need to also discuss how many data centers should be in Denmark going forward. And that’s why the government put forward this prioritization bill to see what are the highest priorities and what are the lowest.

David Roberts: And that would be Energinet, your central transmission operator, your central utility that would implement that, that would be doing that prioritization?

Kristian Jensen: They would do it in combination with the local grid companies. They have to work together because if you are a customer in Denmark, whether you are a district heating or an industry or a private consumer, you go to your local grid operator, and they collect all the requests for grid connections and then talk to our TSO in Energinet about how to manage all of this. So it is a dialogue between the local grid and the national grid operator on how to manage all these requests. And hopefully, we’ll have a system up and running where we can begin to add new customers onto the grid in a few weeks’ time.

David Roberts: Yeah, I wanted to ask about that utility model. It’s very fascinating to me as an American, where our utility model is a mess and a barrier to many of the things we wanna do. You have one central TSO transmission operator, and then every local utility, every distribution system operator is, as I understand it, municipally owned. Not out to make a profit-

Kristian Jensen: Mm-hmm.

David Roberts: responsive to its customers only. Are there any drawbacks to that system? Because it just looks great to me. What are the sort of strengths and weaknesses do you think of that system?

Kristian Jensen: The strength is totally that they are a very long-term investor.

David Roberts: Right.

Kristian Jensen: They don’t look at what are the next quarterly budget period. They’re looking on how to invest in next generation all the time, and they’re very responsible investors looking at what is needed, and also going into areas where you say that perhaps you can’t get a return on your investment right now-

David Roberts: Right.

Kristian Jensen: but you get a return on investment because you raise the value of the areas where you invest in. A lot of the local grid operators has invested in fiber optics to all houses in the area. So you’re not only getting your power, but also your fiber-optic internet connection through that local investments. And if you have looked at that commercially, 20 years ago when they started, no one would have said that was a good business idea. And I can assure you that politicians and others said, “It’s a very bad idea. You’re just digging money into the ground. It will never come back.” And now with the internet change that has been, how much we’re streaming-

David Roberts: Yeah.

Kristian Jensen: it’s a fantastic investment.

David Roberts: So they have some autonomy-

Kristian Jensen: Yeah.

David Roberts: from government even. They have… They’re making their own decision.

Kristian Jensen: They’re making their own decision. Since they are a monopoly, you only have one grid connection to your house, there are a regulation to how much they can take in revenue. But how they spend that revenue, how they put it back to society is totally up to them to decide. That is clearly the best you can say about it. They have the long-term vision at hand. The challenge they have is that you’re getting more and more multi-billion companies that are run by people who perhaps just be a school teacher or a nurse or having their own private company, and don’t have the insight. So therefore, more and more of the boards are having not only the local owners, but also external specialists and council to sit on the board because this is a very complex structure-

David Roberts: Yeah.

Kristian Jensen: you have right now.

David Roberts: Yeah. Yeah, it’s not- Some of those decisions have national reverberations, I would-

Kristian Jensen: Yeah.

David Roberts: I would imagine. I wonder if you’re moving toward a system, and maybe this is something that the local utilities decide, but moving toward more granular time-of-use tariffs and location-based tariffs just to encourage more of that behavior you want, more of the time shifting and load shifting. Is that on the radar?

Kristian Jensen: Approximately 15 years ago, the government took the decision that all Danes should have smart meters.

David Roberts: Yeah.

Kristian Jensen: So most of the Danes right now has system where you pay by the hour of how much power you do, and the price is set by exactly that hour. So when we can see that there’s a peak hour in the morning, I get up at half past 6:00, I get my morning coffee, everything gets going, and the power consumption rises. That’s more expensive than at 10 o’clock-

David Roberts: Right.

Kristian Jensen: when consumption is low. And the same in the evening from 5:00 PM to 8:00 PM, the prices is higher. And that has reduced peak hours significantly in Denmark. So-

David Roberts: And that’s just from people making choices about when to-

Kristian Jensen: Yeah.

David Roberts: run their dishwasher or when to-

Kristian Jensen: Yesterday was a Sunday. It was a sunny Sunday in Denmark. All the solar panels produced a lot of sun power. I was washing and dry tumbling like crazy from from 10:00 AM to 5:00 PM because it was so cheap. I charged my EV at the same time, and so on and so on. So we have actually looked into what can I change of my consumption so that I use the cheap hours.

And of course, I eat my dinner at the same time I always eat my dinner. So I need to cook my potatoes, and I need to fry a chicken when that is due. But there’s so many other things that can change. And by doing that, I’m working with the system, and we have reduced peak hours significantly in Denmark.

David Roberts: Are you seeing a rise or a spread of technologies that can automate some of those decisions, automate, like, when your hot water heater runs, or automate when your HVAC system dials back? Is there, like, smart appliances, are they starting to come online?

Kristian Jensen: Yeah. They’re coming tremendously online right now. So I don’t have to think about it, I just have to tell my system when do I want to use it, what prices would there be. You see systems right now that can communicate with the power price, so it can draw in when the price is low and then self-determine how to do it. For instance, if you take the heating system, that can automatically have a communication with what are the price levels. But to be frank, what I’m doing in my private home is rather a small issue.

David Roberts: Mm-hmm.

Kristian Jensen: So if we can take this to industrial scale-

David Roberts: Right.

Kristian Jensen: so we can take it into district heating, if you could take it into companies that are using a lot of heat and they can actually contain that heat in a system, it’s much more efficient. And what we see in Denmark with district heating are huge, is that this is actually what we’re gonna see. Thermal batteries-

David Roberts: Yes.

Kristian Jensen: you produce a lot of heat when prices are low, and saving that heat in thermal batteries and using that for later.

David Roberts: And that’s starting to happen already then? And that’s just a tanks of water, right? I mean, it’s not complicated. Yeah. It’s the simplest form of battery, I guess.

Kristian Jensen: It is the simple form of battery you have. If you have electric boiler in your kitchen, when you heat that up and it turns off, the water continue to be hot for some hours and at least for some, a long time, and that’s the same principle. You just have better isolated heat tanks.

David Roberts: Right.

Kristian Jensen: So thermal batteries right now are really gonna spread all over Denmark in the coming years because district heating can reduce the cost of the customers by using the low-price hours.

David Roberts: Right, right, right. I wanna get back to district heat in a minute, but let’s talk for a minute about solar. So my understanding is that onshore wind spread in Denmark like crazy, was very popular in part because a lot of it was owned by locals, basically. Owned by co-ops. There’s a lot of sort of tangible local benefits. Solar, as I understand it, is mostly not that way. Mostly investors and companies own it, and consequently, or maybe not consequently, but there is a backlash to solar spreading. The head of the populist right party coined this new word, which I’m not going to attempt to pronounce. Maybe you will.

Kristian Jensen: It’s called jernmarker.

David Roberts: Yes.

Kristian Jensen: Which means Field fields of iron

David Roberts: fields of iron. Yes. Yeah. It was the Danish word of the year last year. So clearly there’s some popular backlash to it. How worried are you about that, and what do you think overcomes that? You think it’s primarily trying to shift solar to a similar co-op model, more local benefits? What’s the approach, what’s the right approach to solar?

Kristian Jensen: This will be quite a lengthy answer. I’m sorry. But we began in the ’70s and the ’80s with these co-op models, and my dad was one of those buying a part share of local wind turbines being put up in the local area because we wanted to get rid of the import of oil. We saw the very high prices in the ’70s in Denmark, and there was a tax benefit if you go into a local wind farm. At that time, the request for technology, the request for environmental protection was very low because we didn’t look into what would the impact be on birds and bats and the flowers and so on if you create a wind farm.

If you need to create a wind farm today, you have to make an assessment. How would the impact be on birds, on bats, on animals, all the things around? Meaning that it’s much more expensive to do today.

David Roberts: Yes. It’s kind of ground to a halt a little bit, onshore wind, at least.

Kristian Jensen: Yeah, and that also means that if you are a group of locals wanting to go together and create a wind farm, it’s much more difficult-

David Roberts: Mm.

Kristian Jensen: because it has technical requirements today that we didn’t saw in the ’80s. That’s also one of the reasons why most of the development has been taken over by professionals. Mm. But some of those professionals are still saying, “We want a local ownership.” So if I create five wind turbines, I own four of them, and the fifth I sell out to the locals, meaning there’s still a local ownership.

So you look at the five wind turbines and say, “I own a part of that.” You want to see the wind blow. You want to see the turbines spin so you know that this is also money coming into your account as well. And that is one of the ways we’re overcoming the local worries about having a wind farm as a neighbor or having a solar farm.

A wind farm, you can see that from miles away, but actually it takes up very small part of the land because you can use the rest for agriculture or for recreational purposes. A solar farm takes up a lot of land. And the reason it takes up a lot of land is that the investment on creating the connection to grid are high, but it’s only high regardless of whether the solar farm are large or small. So if you want to lower your cost per produced kilowatt hour-

David Roberts: Right.

Kristian Jensen: you make it bigger and bigger and bigger. And that’s one of the reasons why the solar farm has become so big. Also because they have to take into account that they should also do an assessment on the impact on the environment, and that costs a lot of money. So in order to be profitable, the demands created by politician has actually pushed the solar farms to become larger. And we’ve created the demand that around a solar farm you should do a green belt of plants. So when you walk by the solar farm, you don’t see the solar farm.

David Roberts: Right, right.

Kristian Jensen: You see the trees, the bushes, there’s shrubbery and so on. But in the beginning it’s very low-

David Roberts: Right.

Kristian Jensen: and is gradually growing and gradually covering it. So that has created this backlash. And we are concerned about how to do wind and solar going forward onshore in Denmark. I still don’t think that you’ll see the big solar farms being cut into small pieces because then the economy is not there. You’ll see a lot of on rooftop solar farms, solar panels going forward. You’ll see a much more municipality industries with solar panels on roof.

David Roberts: Mm-hmm.

Kristian Jensen: But not all roofs are made for solar panels. Some could be placed in shadow, some could be-

David Roberts: Yeah.

Kristian Jensen: not strong enough. So you’ll still see a lot of land-based solar farms going forward in Denmark.

David Roberts: Are any of those developers trying to do a similar sort of municipal benefit the way you were talking about with wind? Is that model at all extending to solar?

Kristian Jensen: You see some in the western part. Actually, just a few kilometers from where I grew up, you had a farm, a solar farm where the local counties were giving the opportunities to buy a part of the solar farm.

David Roberts: Mm.

Kristian Jensen: And that has been quite successful in terms of how many wanted to buy. And of course, when you buy a part of that solar farm, you can’t oppose it in the same way because you actually say, “Yes, I want that solar farm.”

David Roberts: Right.

Kristian Jensen: So I think you’ll see much more of these mixtures with a large-scale developer with the knowledge and the experience to do the very difficult technical and commercial areas, but still a local community buying in.

David Roberts: Right.

Kristian Jensen: If you take the largest onshore wind turbine in Denmark, it’s actually an offshore wind turbine that’s been put onshore. It is owned by 2,800 families in the municipality, and it was created with zero complaints. No one was complaining. They were all a part of it.

David Roberts: And one other thing about solar land use, is there any agrivoltaics-

Kristian Jensen: Yeah.

David Roberts: taking off? This is a subject of a lot of discussion and hype in the US. Is that... It does seem like that could do something about the land, at least the land use part of the-

Kristian Jensen: Yeah.

David Roberts: objections. Is that happening anywhere?

Kristian Jensen: It is happening. There are a lot of companies trying to see what can actually grow. Should it be some kind of grass?

David Roberts: Right.

Kristian Jensen: Should it be some kind of other crops that could actually give a add-on, but also perhaps more importantly, adding to the local acceptance-

David Roberts: Right.

Kristian Jensen: of having a solar farm. I can’t say right now what we will choose to have in Denmark, but I think it has to be some kind of crop that are fixed with the climate and with the soil that will be there. So it can’t be just one size fits all.

David Roberts: Right. A lot of agrivoltaics in the US, I think, are being built around grazing.

Kristian Jensen: Yeah.

David Roberts: But as I understand it, most of the livestock in Denmark is pigs.

Kristian Jensen: Yeah.

David Roberts: I don’t know if it works as...

Kristian Jensen: No, no.

David Roberts: I don’t think it’ll work as well around pigs. I don’t think they’re as friendly to.

Kristian Jensen: I think we see in the beginning a lot try to have sheeps together with the solar farm. And what we’re seeing right now is some kind of planted crop being used. There are crops that are actually working best in some kind of semi-shadow areas. So it could be under the solar panels, but it need to be taking into account from the beginning.

And it’s still early days in exactly how to do that moving forward. We are looking into that, and we try to also look into how to create biodiversity around the solar farm so that you can actually add to biodiversity. I come from a rural area. Going back, my family has always been farmers, so some of them might not like what I’m saying right now. But there are more biodiversity in a solar farm in a traditional corn field.

David Roberts: Yes.

Kristian Jensen: Because the field, the corn or wheat or barley or whatever you have-

David Roberts: It’s a monocrop, right?

Kristian Jensen: It’s a monocrop. It’s one thing. And all you’re doing is trying to keep any other crop away. Just what you planted and want to harvest. But on a solar farm, you have much more biodiversity.

David Roberts: Yeah, yeah, interesting. So back to district heating. So we talked a little bit about its use as a giant heat battery. So 70% of Danish families are hooked up to district heating, which is just amazing. I think probably one of the highest rates in the world. And they’re municipally owned again, which I think is also maybe unique in the world. Replacing that biomass, a lot of them run on biomass, replacing that, is the main replacement heat pumps? How are you gonna replace the biomass? What’s the strategy?

Kristian Jensen: Well, the primary strategy is to go for heat pumps and electrical boilers, because those two in combination could really give a more efficient use of energy and a cheaper cost for the consumers. There are a few areas in Denmark where you can do geothermal.

David Roberts: Yeah, I was gonna ask shallow geothermal

Kristian Jensen: Yeah. In one of our cities in Denmark, they’re using geothermal right now in Aarhus, the second largest city. Just a few kilometers from there, they also try geothermal, and they just drilled a very expensive hole in the ground. Geothermal is not for all places, but where it’s possible, I think that will be a huge part of what we see in Denmark going forward.

David Roberts: And how do you incentivize the switch to heat pumps? Are you raising taxes on biomass? Are you subsidizing heat pumps? How are you trying to make heat pumps cheaper? What’s the right policy lever? I know you’re a finance minister and you’re probably some tax.

Kristian Jensen: Yeah. Yeah.

David Roberts: Something involved there.

Kristian Jensen: Yeah, I’ve been both Minister of Taxation, Minister of Foreign Affairs, and Minister of Finance-

David Roberts: Wow.

Kristian Jensen: before I came to Green Power Denmark.

David Roberts: All of that is wrapped up in heat pumps and district heating systems.

Kristian Jensen: Yeah, but taxes in Denmark, they’re a big part of our policy. We tax things we want to have less of.

David Roberts: Right.

Kristian Jensen: So therefore, we’re taxing the fossil fuels. We’re not taxing biomass, but we’re actually giving support for individuals that wants to have a heat pump. There are areas in Denmark where it’s very difficult to reach with district heating because the rural areas-

David Roberts: Right, right.

Kristian Jensen: remote areas and where prices of housing is not that high. So to invest in a heat pump is a very big chunk-

David Roberts: Right.

Kristian Jensen: of the value of your house. So we’re actually giving a state grant to take the decision to get rid of your oil or your natural gas heating system and put in a heat pump as well. If you take for district heating, there’s not a grant or subsidy, and they don’t need that because heat pumps today are so much more efficient than when we had-

David Roberts: Are we talking about individual heat pumps in those contexts too?

Kristian Jensen: Yeah.

David Roberts: Are we talking about a bigger centralized... You know, ’cause they are making these industrial-scale heat pumps now.

Kristian Jensen: If you do district heating, you have the industrial size and they actually want to change and they’re, the only thing holding them back right now is their access to credit because the business case are so clearly that you can do cost cuts if you do heat pumps in district heating instead of doing natural gas or biogas.

David Roberts: So you’ll save money now without any subsidies either way.

Kristian Jensen: Yes. It will do that. It’s when you get to the individual where the investment, upfront investment-

David Roberts: Right.

Kristian Jensen: on an individual heat pump-

David Roberts: Well, do, but do districts not also need some access to finance, too? I mean, are they all able to raise the upfront money for a heat pump, or is there some instrument to help them get credit, too?

Kristian Jensen: If you need to take up a loan, there is a municipality guarantee that are lowering your cost to take that loan. You can have a lower interest rate because in the end, the municipality is the bank, the guarantee for you.

David Roberts: Right, right, right.

Kristian Jensen: So you have that incentivized. But actually shifting from a gas to a heat pump is so much of a benefit that they don’t need additional incentives.

David Roberts: Huh. Huh, that’s really interesting.

Kristian Jensen: You can actually see that if you have a heat pump and you also own your own power production, like some wind turbines or a solar farm, when you can do that via direct line, you get even cheaper. So the cheapest heat system we have in Denmark is a district heating with their own production of the power.

David Roberts: So their own power, their own big heat pump.

Kristian Jensen: Yeah.

David Roberts: That’s the sweet spot.

Kristian Jensen: Yeah. I’d love to, my district heating to have that. I live in an area where that’s difficult.

David Roberts: And to make that change, this is, I guess, a municipal council or-

Kristian Jensen: Well, actually, the government said right after the full-scale invasion of Ukraine, the government at that time said, “We need to stop all use of natural gas in Denmark. We need to shut it off, and all district heating should go into heat pumps and electrical boilers.” That was in the spur of the moment. Now you need to take political decision, and perhaps some of the district heating just invested in a new gas boiler-

David Roberts: Right.

Kristian Jensen: six years ago.

David Roberts: Right, right.

Kristian Jensen: And they haven’t paid that back yet. And perhaps they calculated that it should take 20 years to pay that back because that’s long-term decision, and for them to take a decision to cut off that investment is difficult-

David Roberts: Right.

Kristian Jensen: unless you get another incentivize to do the shift right now. So therefore, you don’t just do that. When you invest in energy sector, you invest for decades, and that’s why it takes so long-

David Roberts: Mm.

Kristian Jensen: to make a change. Even though if you do a greenfield discussion right now, what would be the best way going forward? You would do heat pumps-

David Roberts: Right.

Kristian Jensen: and boilers, no doubt about it.

David Roberts: Right, right, right. The EV transition, I guess I didn’t know this before I came here, but it appears to be just going gangbusters.

Kristian Jensen: Yeah.

David Roberts: I heard that something like 96% of private new vehicle sales are EVs.

Kristian Jensen: Yeah.

David Roberts: Mind-blowing. Something like 80, 85% of total, ’cause the fleets, I guess, are a little slower. So is that the result of policy? Like, what drove that, or is that just economics, or what’s the main policy lever that’s produced that?

Kristian Jensen: Well, at the beginning, it was clearly a tax benefit for EVs, in contrast to traditional combustion cars. So the tax was much lower. We took away the taxes on cars that were EVs, which created a market. But if you look at it now, you can see that the new models coming in are almost the same price.

David Roberts: Hmm.

Kristian Jensen: And the day-to-day use for an EV are so much cheaper that I think that for many cars right now, even without the tax break, it would be a better lifetime total cost of ownership to take the EV over the traditional cars. And you see a lot of the things you can have in an EV you can’t have in a traditional car. It’s much more sophisticated vehicle to drive. And to say that as a converted driver, it’s much more fun-

David Roberts: Yes.

Kristian Jensen: to drive an EV. So of course, taxes created this, but taxes were not enough. There’s also a culture change-

David Roberts: Right.

Kristian Jensen: that had to come. When I started driving EV four and a half years ago, my friend said to me, “How dare you take that? Are you afraid to run out of power? And what will you do, and can you actually drive that all the way from Copenhagen to Jutland? And how do you do that? And can you take it abroad?” And now, if someone don’t buy an EV, then we’ll say, “How dare you?” “Don’t do that.” No one will buy a used diesel or-

David Roberts: Right.

Kristian Jensen: a petrol car in Denmark. How come you don’t buy an EV? The culture change is big.

David Roberts: And presumably, you built out charging infrastructure too.

Kristian Jensen: Yeah.

David Roberts: It’s a lot of piece of the puzzle.

Kristian Jensen: I think the one piece of the puzzle are the tax break. Other piece of the puzzle is we build out the charging structure. So when I’m going anywhere in Denmark today, I don’t speculate, can I go there and charge?

David Roberts: Right.

Kristian Jensen: I know I can charge wherever I’m going in Denmark. Within a 10 miles radius, there will be a fast charger, so, and slow charging will be even more normal. So there will always be a charging system. And that gives me the calmness. I don’t have to plan. I can just go.

David Roberts: Right, right, right.

Kristian Jensen: When you look at countries where users of EV are not happy and satisfied with that, it’s primarily because charging is difficult.

David Roberts: Right. Speaking of batteries, an EV fleet is a giant distributed battery. Is there a move towards vehicle-to-grid connection, a move towards attempting to use those batteries to support the grid?

Kristian Jensen: Yeah. From next year, all cars should be vehicle-to-grid ready in Denmark.

David Roberts: Hmm.

Kristian Jensen: So we’re actually demanding cars to be vehicle-to-grid ready. What we need right now is actually to the household part of it to be ready to take from the vehicle-

David Roberts: Right.

Kristian Jensen: back into the grid.

David Roberts: You have to have the technology.

Kristian Jensen: We have to invent that technology. So what we are doing right now, we are, we’re doing some large-scale testing to see how this will work. We have people within the energy sector actually working with this, testing in their own homes to get some experience on how to do vehicle-to-grid. And I think you’ll see next year that this will actually take off quite tremendously.

David Roberts: Interesting.

Kristian Jensen: Because this is the biggest battery you have in Denmark is what actually is parked right down here in the parking lot.

David Roberts: Yes, and customers bought it for you, so you don’t even have to, you don’t have to buy it.

Kristian Jensen: No one has to buy it. We just need to utilize it.

David Roberts: Yeah. Presumably, you lost some revenue when as gas cars decline, the revenue you’re getting from gas cars decline. Is a per mile sort of driving tax on the table? I know some think tanks are pushing it. Is that a viable politically?

Kristian Jensen: Almost 20 years ago, I was Minister of Taxation at that time. I served as Minister of Taxation from 2004 to ’10. We had this discussion of changing the Danish tax to a per mileage-

David Roberts: Right.

Kristian Jensen: payment instead of an upfront payment, and doing it in a way so that rural areas pay less, and inner city areas where you have an alternative-

David Roberts: Right.

Kristian Jensen: with the subway and the metro should pay more. And we’re still having that discussion.

David Roberts: Trucks are paying it, aren’t they, today?

Kristian Jensen: Yes. Trucks are paying it today because it’s a much smaller fleet-

David Roberts: Right.

Kristian Jensen: and it’s much easier to implement. But technology is actually getting there. And I think that we’ll get to that point within some years where you can actually do a per mileage payment, and you could have different rates, so you can charge more in cities with an alternative-

David Roberts: Right.

Kristian Jensen: pay less in rural areas. And we are always looking on how to do that in the smart way, and the ways we have done it so far has been too blunt-

David Roberts: Mm.

Kristian Jensen: too unintelligent-

David Roberts: Mm-hmm.

Kristian Jensen: and they have been cast away before they’ve been implemented. But we can see now that as EVs are taking over from fossil cars, we need to find something else than fossil fuel taxes-

David Roberts: Right.

Kristian Jensen: to bring in our revenue.

David Roberts: That’s a difficult decision, or a difficult-

Kristian Jensen: Yeah.

David Roberts: discussion everywhere, I think.

Kristian Jensen: But I think what has given us the fiscal substance is that we are changing the pensioning in Denmark, so as we go older and older, our pension age become increasingly higher and higher. So we don’t have the fiscal constraint that other countries have. If you look, for instance, for Germany, their pension’s just wearing out the fiscal maneuver room.

David Roberts: Mm-hmm.

Kristian Jensen: I don’t even wanna talk about US and fiscal maneuver room, because you have none whatsoever. The retirement age reforms in Denmark are giving us room and time to get that into place.

David Roberts: Interesting. Power-to-fuel, or power-to-X, I guess, is what they call it now. This is the thing I think you’re involved in. As you know, there are people who say that direct use of electricity is always going to be more efficient, and until you’ve sort of electrified what you need to electrify directly-

Kristian Jensen: Mm-hmm.

David Roberts: that power-to-fuel is sort of a drain on the momentum of that electrification. Just curious what role power-to-fuel plays currently, and sort of what you envision doing, and on sort of, like, what timescale?

Kristian Jensen: Well, you would also say that looking back at where EVs were 15 years ago, that was not very good use of power. You should use power for something else. But EVs came along, and became better and better, and more and more efficient, and now it’s a great use of power. And we need to find something that is also changing the hard-to-abate sectors. And aviation, yes, there are battery planes that can fly short distances with few passengers. Okay. You could also look at battery ferries for smaller distance and change the way trains are running. But you can’t do a London or Birmingham to New York-

David Roberts: Right.

Kristian Jensen: shipping on batteries. You can’t do long ha- a whole flight on batteries. You need to look into that. And perhaps we’re not there yet, but we need to begin, and every transition start with something that is not fully baked there. But if we don’t start, nothing will happen. 20% of the world’s population has tried to been inside a plane.

80% has not. Do you think they would like to fly it sometime? Yeah. I do. And as income is rising, they will fly more and more. And if we don’t have an answer to that, if we don’t have some kind of eSAF to put into the planes, you’ll see that becoming a greater and greater problem. So the aerospace industry, the long-haul shipping industry, the steel, the chemical industry need green hydrogen and green fuels.

We need to start on that, and from that we’ll be more and more efficient. And I agree with those people saying that direct electrification is the best way of using power, so we should do both. We should both direct electrify, but also looking into how to learn to do indirect electrification much more efficient.

David Roberts: Is that happening yet anywhere? Are you, there hydrogen being produced here or eSAF being produced in Denmark yet?

Kristian Jensen: Green hydrogen is being produced in Denmark, going into refineries. We have green e-methanol being taken into the Maersk container ships-

David Roberts: Yeah.

Kristian Jensen: being sold to Lego, who are trying to do green plastic. We have e-ammonia going into the fertilizer industry, so we are actually doing that, and we’re also doing green hydrogen that are being used for e-methane to create chains for natural gas. So we’re actually doing a lot of things, and we’ve just been announced last week that a German company are placing an order, multi-billion crown order in Denmark for eSAF.

So we’re now getting closer and closer to that production. And we are perfectly located to produce green hydrogen for the German steel manufacturers and chemical manufacturers. We have a lot of seabed in Denmark we can use for offshore wind to create the power. Germany has not that much seabed compared to the land size they have.

David Roberts: Hmm.

Kristian Jensen: So just the geographically facts about Denmark make it possible for us to produce more power than we can consume ourself. And since the grids are connected and congested through Europe, to change that into eSAF, e-methanol, hydrogen is a better way of using it.

David Roberts: It does sound though like almost everything we’ve talked about you’re gonna lots more electricity and heating, lots more electricity in transport, lots more electricity for data centers, lots more electricity for eSAF. That’s a lot of electricity, and with solar slowing down, onshore wind slowing down, offshore wind, I think, hit bumps lately. It does sound like just simply producing more clean electricity is the thing, is the-

Kristian Jensen: Yeah.

David Roberts: is the lever to pull that’s gonna make everything else work. Are you confident that you’ll be able to do that?

Kristian Jensen: Well, end of this year, we’ll have a new wind farm that will provide power for 1 million Danish homes coming online. Offshore wind farm coming online. We can see that onshore wind and solar has had local acceptance and allowance to go forward with grid connections that could double the production onshore. So the opportunities are there if the market for the green power is there. So we’ve been so focused over the last years of producing more power that we now need to focus on changing the energy consumption from fossil energy to electricity. So we’re coming back to what you said in the beginning. The electrification in Denmark has been under average in EU.

David Roberts: Mm.

Kristian Jensen: And we need to increase that going forward. I think last year proved to be a game changer, and I think when we get the statistics of last year in place, you’ll see that the increase has begun, and that will continue to grow. I have no friends, no family, no relative I know of that has gone to an EV and changed back to a fossil car.

I have no one who has installed a heat pump that has said, “Sorry, I want to go back to oil or gas.” So what we see is add-on to add-on to add-on, and it has really taken off over the last years. What we need to see is the large-scale industry coming on, and if we take the world-class dairy company of Denmark called Arla, they want to change all the dairy production sites into heat pumps going forward. And they can actually say right now that this is not just a policy matter. This is a business case matter for them.

David Roberts: Mm.

Kristian Jensen: Because heat pump is so efficient right now that they have a return payment that are comparable to all the other investments going forward.

David Roberts: It does sound like agricultural will be the kind of the tricky leftover electrification-wise.

Kristian Jensen: Yeah.

David Roberts: I’ve kept you a long time, but final question. Mostly I’ve been talking about business and technology, but I will ask one political question. Another thing that was extraordinary to me when I found out about it, especially from a US perspective, is that when you passed your big climate law a few years ago-

Kristian Jensen: Mm.

David Roberts: it was close to unanimous. Not just political parties, but agriculture, labor, industry.

Kristian Jensen: Mm.

David Roberts: Just a level of unity that is unfathomable from a US perspective. But I wonder, as you say, as the low-hanging fruit has been picked and you move into the more difficult decisions, trying to have to make tough priority decisions, you know, not everybody’s gonna be happy. Are you worried at all about that hanging together? Obviously, as we said, the, there’s a little bit of a solar backlash. There’s signs of tensions, agriculture, I think. There are signs of fracture. How confident are you in that unity holding together as you move into the harder parts?

Kristian Jensen: I think you’ll see that the basic scope of political parties in Denmark will continue to back the road that we’ve chosen. We’ve chosen this not only because it’s a climate issue, but also because we can now see that this is a business case. It is cheaper and better for our economy and our businesses to run on Danish-produced power than on imported fuels. We can see that in order to look at the geopolitics and the security policy, it is much better to have homegrown energy than to have imported energy.

So there is a consensus from the center right that we need to have independence and the business case in order. There’s a consensus from the center left that we need to do this for environmental and climate reasons, and that agreement from both sides of the aisle has actually brought us forward since the ’70s in Denmark.

David Roberts: Yeah.

Kristian Jensen: And you could say that one of the reasons is that we have also grown an industry in Denmark. The wind turbine industry are a huge part of our export and a huge part of our labor movement in Denmark. So whether you are center left or center right, there’s always been a business argument and a political argument that coexist together in moving forward.

Now I’m in charge of green power in Denmark, which perhaps in American eyes sounds like a very far leftish kind of a thing. But I actually come from the center right of the political party. I have no problem in arguing why this is a very good business case for Denmark, for our businesses, for our consumers, and especially taking into account how geopolitics is playing out right now.

David Roberts: So you’re confident?

Kristian Jensen: I’m confident, but remember that even though we have had large political agreements and voting in favor of the legislation, underneath there’s been pulls back and forward, how ambitious should you be? And when we decided that we’d go for a 70% reduction of our CO2 emissions, that was a big political fight.

David Roberts: Huh.

Kristian Jensen: But in the end, almost all parties said, “Yes, we wanna go there,” because we want to be part of not only setting the ambitions but also taking the concrete steps going forward.

David Roberts: All right. Well, I’m quite envious of all of this.

Kristian Jensen: Yeah. I almost said you ought to be. Because Denmark has actually showcased for many years that you can go in a greener direction, and you can still increase your GDP. You can still create good jobs, have a society that is just getting better and better paid jobs going forward as you’re reducing your CO2 emission and transforming into green energy.

David Roberts: Yeah. I saw the chart today with the three lines. The GDP, energy use, and emissions. It’s all very impressive. Well, thank you so much for doing this. I really appreciate it.

Kristian Jensen: You’re welcome.

David Roberts: It’s fascinating.

On this episode, recorded live at Climate Week NYC, I talk with Matt Traldi. He’s the founder and CEO of Greenlight America, which finds the local meetings where clean energy’s fate is being decided and recruits supporters to attend. Traldi argues that siting and permitting approvals turn on who shows up, and that local partners, conservative groups included, outperform outside advocates. We discuss how to measure impact, recent wins and losses, blue-state resistance, data center backlash, and Greenlight’s growth.

Back in January 2025, I introduced Volts listeners to a group called Greenlight America, a nonprofit with a refreshingly simple mission: find the local meetings where the fate of clean energy projects is being determined and make sure that supporters show up to those meetings.

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CEO Matt Traldi had about 20 staff then. He said the group had helped advance 4.4 gigawatts of clean energy over the previous year. In 2025, that number reached 20.9 gigawatts. In total, since our last conversation, it’s something like 55.7 gigawatts.

Staff went from 20 to 37, on track for north of 100 by the end of this year. In early 2025 they were involved in four local wins in a quarter; last month, they scored eight in a single day. The model has proven incredibly fruitful.

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Traldi shared all this good news when I caught up with him at a Canary Media event during NY Climate Week. We talked about how the group finds local partners, what kinds of messages supporters deliver at these meetings, how it measures success, and how he is navigating such precipitous growth. The conversation was fun and heartening; thanks to Canary for convening it. I hope you enjoy.

Chapters

• 00:00 – Introduction

• 02:09 – What Greenlight does and why Matt started it

• 04:43 – How Greenlight finds the decisions that matter

• 07:27 – Growth, and the tax credit deadline sprint

• 13:38 – Who shows up to local hearings

• 19:39 – Winning in conservative communities

• 22:35 – Bodies in the room, measuring impact, and win rates

• 27:46 – Losses, wins, and “there is no bag”

• 32:44 – Blue-state obstacles and organized opposition

• 36:31 – When data center backlash spills over onto clean energy

• 42:31 – Which projects Greenlight won’t back

• 45:38 – Lessons from housing and growing an organization

• 50:17 – Audience Q&A: disinformation and state permitting reform

• 54:39 – Audience Q&A: developers and elections

• 59:30 – Audience Q&A: funding local groups and designing community input

Resources

People & Organizations

• David Roberts (Substack - Bluesky)

  • Volts (Apple Podcasts - Spotify - YouTube - Instagram - LinkedIn)

• Matt Traldi (LinkedIn)

  • Greenlight America (Website)

• Other Orgs Mentioned: Faith in Place, Land & Liberty Coalition, Indivisible

Company & Industry News

• New York PSC approves Propel NY transmission line

• Yakima County commissioners approve new solar ordinance

• IRS Notice 2025-42: Beginning of construction for wind and solar facilities

Books & Articles Discussed

• PBS Standards - What is a truth sandwich?

Related Volts Episodes

• Organizing local support for clean energy projects

• What rural people actually think about clean energy

• The right-wing groups behind renewable energy misinformation

• What should state policymakers do about data centers?

• How climate activists can help get things built

• Checking in on local and state climate races

Transcript

David Roberts: Matt, let’s start here. We talked about two years ago on the pod, but maybe some of the audience here, some people listening at home, aren’t familiar yet with the basic model. So maybe just like give the elevator pitch. What is Greenlight? What does it do?

Matt Traldi: Sounds good. First, thank you. Such a pleasure to be back here with you, David. And thank you everyone for being here, everyone listening. So I’m Matt Traldi. I’ll do a quick personal intro and then, you know, go to Greenlight. My background is in political organizing. I was in the labor movement for around a decade. Then in 2016, I was one of the co-founders of Indivisible, a national grassroots network that sprung up to respond to the first time Trump won the election.

And a few years ago, a couple things happened at once. First, my wife and I decided to become parents. I’d always cared about climate, but that pushed it up my personal priority list. And right around the same time while I was at Indivisible, I got to work a little on passing the Inflation Reduction Act and felt very excited and optimistic about this area of work. Still do, by the way. Still do. Spoiler alert.

And so I started learning as much as I could about what it would take to transition the economy to build a ton of clean energy. And what I kept hearing from folks who were doing this work in the industry and the advocacy space was that in the next decade, the overwhelming majority of emissions reduction would come from the power sector, mainly from building big clean energy projects and taking fossil fuels off the grid.

And I also kept hearing that the big obstacle to doing that was not the technology, which is well established, or the cost. This was the cheapest and fastest energy to build. It was local permitting. Small numbers of opponents would show up. They’d make a lot of noise. Supporters are out there in every community, but they would not usually show up, and clean energy would lose by forfeit as a result.

Now that piqued my interest. I am an organizer. That’s what I’ve spent my time doing. So I decided, along with a few other folks, to start Greenlight America. Greenlight is a very simple organization. We only do the one thing. We track the local moments that are gonna make or break clean energy deployment, approval of permits for projects, and passage of local ordinances for these technologies.

And then we find, engage, and support local supporters, local partner organizations to show up, to advocate effectively, and to win favorable decisions that advance clean energy in their communities. When we last spoke, we’d just come off a great year. We’d had a pilot program. We’d advanced in 2024, our first year, 4.4 gigawatts of clean power. During our pilot program, we’d won 60% of the campaigns that we’d taken on. I am pleased to share that we’ve now advanced 67 gigawatts of clean power across the US, so some things have changed... since that time. The pace has accelerated.

David Roberts: Yes, we’ll get into that. But can you give us a just a little bit more granularity, a little bit more detail about, A, how you find out about these things, because there’s so much going on, and there are so many of these meetings happening and so many places? How do you find out about them and how do you prioritize them? And then two, like, what are we talking about? Are these, like, city council meetings, zoning meetings? What are they, what meetings are these? What do they look like?

Matt Traldi: These are great and important questions, and one of the really fun things about doing this work, I should say, is that this is a burgeoning field, in part because this rapid acceleration of clean energy deployment is pretty new. So we’re at the stage collectively as a field, and I see a lot of friends in the room, other folks doing amazing work in this area. We’re at the stage of building the tools that are gonna be necessary to deploy a massive, massive amount of clean energy over the coming years and decades.

And so one of the key things in any organizing and campaigning is knowing when and where to show up. You can’t organize, you can’t win unless you know when and where the decision is happening. We tackle this through something we call our early warning system, and there are two main sources of information for it. It’s more complicated than this, I’m sure, but the two main ones, the first is we spend a lot of time talking to developers of projects. We have a whole team that’s dedicated to this. We’re not developer-funded, we’re philanthropically funded, but our work is always gonna be much more effective if we’re coordinating really closely with developers and sharing information and, you know, some of them have been willing to share information about their projects, when they’re gonna submit for permits, you know, all of those things.

And the second is a big data operation to find, you know, agendas that get posted to local government websites and media alerts. You know, in a lot of places there are notice requirements for these public hearings.

David Roberts: Yeah, there’s not really a central repository for any of this. This is all extremely local, and some of these are just these people that have, like, pamphlets that... You know what I mean? There’s not... Even the internet is not necessarily the best guide.

Matt Traldi: That’s right. There are more than 3,100 counties in the US, and county is generally, I’ll get to this in a moment, but county is the most common decision-making body. But the joke about doing local and state work is if you know how it works in one state, you know how it works in one state, so that is a little bit true in this area.

But so we have web scrapers that gather this information. We have algorithmic review to determine which of the alerts coming from these things, and we look at thousands and thousands of alerts, which of them are actually relevant for us, which are situations where local voices could tip the scales. And then we also have an amazing research team that takes a look and tries to figure out what’s going on, you know, what are the decisions that are happening, and is this something where local advocates, local supporters, local partner organizations could make all the difference?

David Roberts: Yeah, I wanna get a little bit into all that in a second, but I wanna just briefly ask you about your growth story, which you referred to a little bit. Last time we talked two years ago, you had a staff of about 50, you had about $5 million in funding, couple dozen projects that you had supported, and as you say, 4.4 gigs of energy that you had helped usher through. Where are you now? What’s happened in the last two years?

Matt Traldi: A lot has happened in the last two years. So we’re gathering next week as a staff team, actually. Our team is amazing. None of the work that we do would be possible without our team. We’ve been very, very lucky at the incredibly talented people that have come to work at Greenlight, and we have now almost 100. We’re getting close to 90 folks on the team around the country. Our team is fully remote, and our biggest department is our campaigns team, which are folks who are, you know, based in the states and regions where they’re working with partners, running campaigns, you know, all of those things.

And we’ve raised almost $20 million this year. We’re looking to raise even more next year, and that all comes from our crazy aspiration. I mentioned earlier the challenge of losing by forfeit, so our aspiration is that we’ll be aware of, we’ll be able to see, and we’ll be able to influence, and then we’ll be able to win every single local decision for clean energy in the United States.

David Roberts: In all 3,100, uh-

Matt Traldi: That’s right...

David Roberts: counties?

Matt Traldi: Well, again, some states, it’s not the county, but it, this is that some of it’s municipality. That’s even worse. I don’t even wanna think about the number of municipalities.

David Roberts: Talk a little bit about there’s been a lot of policy developments in this space since we talked two years ago.

Matt Traldi: To put it in a manner of speaking.

David Roberts: Not all wonderful. So the OBBBA, hate that term, killed a lot of credits, sunsetted some, et cetera. It’s a very confusing mass welter of different things that happened to different credits. But I think sort of the upshot of this is that in terms of these local projects, there’s currently kind of a flurry, a sprint happening, trying to get projects built under some deadline or other. So flesh out for us exactly what’s going on with the credits and what is the sprint you’re seeing.

Matt Traldi: Yeah, absolutely. Some deadline or other is exactly right. I’ll try to paint a little more of a picture, but it is-

David Roberts: I can’t be wrong if I just say some deadline or another, right?

Matt Traldi: That’s right. That’s right. So first, taking a step back, the reconciliation bill last year, you know, that shall not be named, it did phase out tax credits for wind and solar specifically. It left in place tax credits for many other technologies that are critical for the clean energy transition, you know, again, something we can come back to.

But it did so in this really interesting way where developers needed to start construction on their projects by this July. But starting construction under IRS rules is something that, you know, many developers do off-site. They buy equipment, they start working on it. You know, that’s one of the common practices in the industry. And so particularly from some of the larger developers we work with, we hear that they’ve started construction on virtually all of their projects that are already in advanced planning.

So they met that deadline, but there’s more. There’s more deadlines. So then in order to get the tax credit, the project also needs to go into service within the four years after it starts construction. Most developers, most of the projects that we’ve heard about started construction in 2025. That means that they have to go into service by the end of 2029.

And you do at some point need to build on the ground to go into service. That’s necessary. In general, the conventional wisdom is developers need 12 to 18 months at a minimum on the ground to put steel in the ground, to actually build on site, and to get connected to the grid in order to go into service.

So working backwards, that means they’ll have to be through the permitting phase and be able to start building on the ground by early to mid-2028. And so we’re seeing an absolute explosion of the number of projects moving forward. Last year, you know, we had quarters where we were very proud and we had four wins in the quarter. We had a day earlier this month where we had eight local wins in one day.

David Roberts: So the upshot of this is that there’s just gonna be a lot of these meetings happening-

Matt Traldi: A lot...

David Roberts: soon in the coming year or two.

Matt Traldi: That is exactly right. Yeah, I read some statistics, I think it was Wood Mackenzie put this out, that something like 216 to 240 gigawatts of solar, then another maybe 20-some gigawatts of wind has been safe harbored. That’s the term folks will sometimes use for this. They’ve started construction. They’re eligible for the tax credit as long as they get across the finish line.

And the kind of obvious thing to say about that is that’s more than a few years of the pace that we had been building at before. You know, a good year might be, might’ve been 50 gigawatts. Now, of course, it’s not actually the pace we need to build at. That’s a whole other thing and something that I’m hoping we’ll get into today.

David Roberts: And are you worried, as I know some people in the industry are, that post-sprint, post-deadline, there’s gonna be a big drop-off. The incentives are gonna drop off. People will have pushed all their projects into, you know, into this window and then won’t have a lot left. Are you worried about kind of building up and then in 2028 sort of being over, overbuilt?

Matt Traldi: I’m not worried about being overbuilt, far from that. So I think this is a really important question, and I love Yogi Berra quotes, and one of my favorites is like, you know, “Things are hard to predict, particularly in the future,” right? So I would say take with a grain of salt. But we ask everyone we talk to in industry this question.

And in general, what we’ve heard has been pretty reassuring, in large part because there’s increasing power demand right now. In general, what we’ve heard is there might be a dip, but it’s probably gonna be a pretty modest one, and it’s probably gonna be pretty temporary. So the largest number we’ve heard on that front for folks who’ve been willing to put a number on is maybe 20 to 30% of a decline, and that maybe that’s in a year or two where folks have pulled forward some of their projects and there’s that temporary lull. We are not yet- I mentioned earlier our crazy aspiration to work on every single of these local decisions in the country.

We are not yet either at Greenlight or as a collective field anywhere close to working on 100% of these local decisions. So we still have a lot of room to grow, and we as a field need to grow in order to meet this demand for these decisions and for engaging local communities in them.

David Roberts: Let’s get into a little of the nuts and bolts of how it works, starting with who are these people that you are persuading to come to meetings? So a lot of, you know, a lot of these projects sort of are out in the sticks. They’re out rural. They’re out in small towns. They’re not necessarily like- They’re not big, developed activist organizations necessarily in these small towns. So who are the people?

Matt Traldi: Yeah. It’s different in every community. First, I should say one of the core beliefs that we have that kind of motivates everything about how we do our work, we believe that almost anyone can be an effective advocate in their own community. And that almost no one who’s from outside the community is as effective an advocate as anyone who lives in the community, right? And so everything that we do is kind of working backwards from the idea of getting folks who live in the community, members of local organizations that themselves have credibility in that community, getting them to engage, right?

David Roberts: So like the substance of your work is reaching out to them, trying to persuade them to organize around these meetings.

Matt Traldi: Yeah. And in general, the persuade word is tricky in the sense that, you know, usually folks are not aware that these are happening at all, right? So in some ways it’s almost more like alerting people to the fact that this decision’s happening. And, you know, I’ll say this, like I care a lot about the climate, as I mentioned earlier, and in general I am very politically motivated and care about social issues and, you know, I’m always interested in ways that I can make a difference.

And so usually when we’re reaching out to folks we’re saying, “There is this massive opportunity in your backyard to make a difference on something that you care about, and you probably didn’t know it was happening.” And the impact of these decisions is really outsized. A stat that we talk about sometimes is that a mid-size utility scale solar project is roughly the equivalent of planting 4 million trees in terms of emissions. And, you know, often at a county council meeting if you have five people, five local volunteers show up and speak, that makes the difference.

So that’s like you spend an afternoon, you plant 800,000 trees. You know? It’s just, there’s just very few things that give you that opportunity for immediate impact in your own community, right? So that’s the first thing is just like alerting folks. Now in some cases there are local partner organizations who are already working on these decisions, they already know, and we’re really more then trying to support them.

And then the second thing is in most of the country, there are exceptions to this, but in most of the country this is a very whack-a-mole situation. At any given time there are maybe hundreds of communities that are making these decisions, but that’s out of the 3,100-plus counties. You know, most places are not. And once they make a decision it’s then onto the next local issue, you know, whatever that might be. Whereas this is all we do. We only work on local permitting for clean energy.

And so we just try to be helpful, right? We try to share best practices, you know, things that work, things that, you know, other local volunteers have used to be effective. And, you know, a piece of that is that energy can be a technical subject. You know, you do an admirable job of walking that line of the nerdery of it all and, you know, making it engaging.

And complexity, technical complexity is the enemy of good organizing because it discourages people from getting engaged. It makes them think that someone else with better information should be getting engaged instead. And so, you know, we really take it seriously to demystify the technology, the process, you know, making it as easy as possible for people to engage ’cause people should be able to engage in their own community.

David Roberts: Yeah, I was wondering like what is your sort of balance of just giving people information versus giving people arguments and talking points and sort of visuals, you know what I mean? Like, how much of your work is, like, spreading good messaging? Or do you just tell them this is happening and trust that they’ll, you know, know what to say when they show up?

Matt Traldi: Yeah. So it’s a little bit of both. You know, we definitely try to synthesize the lessons that we’ve learned from campaigns in different places and to share them, you know, with volunteers. I know there are a lot of organizers in the room, and I think folks who’ve worked with volunteers know that, you know, the volunteers don’t work for you.

So you can’t… The more you try to tightly control what people do, the more elusive that goal will be. But in general, something that we found that’s very reassuring is that people wanna win. They wanna be effective. They wanna... You know, if they decide to spend their... You know, some of these hearings are at these ridiculous times because nobody ever goes to them.

So it’s like Tuesday at 9:30, you know. You’re spending your Tuesday morning at the library, you know, waiting for your turn to stand up to say something and maybe have your neighbors yell at you. You know, like, If people are gonna invest this time and energy, they wanna win. They wanna be effective, and so usually we find that people are really interested in what’s worked other places. There’s a balance, though, of best practices from these campaigns, and every community is different. You don’t know the winning message, quote, unquote. I’ve been asked that question before: What’s the winning message?

And it’s like you don’t know the winning message unless you know what the community wants. There are themes, though. I would say that one is in general, local decision-makers aren’t deciding whether climate change is real. They’re not deciding whether clean energy is good. They’re deciding, “Should we build this project here?” And that’s about whether it will benefit the community.

So what are the economic benefits? These are often big taxpayers. They fund public services, you know, that sort of thing. And then the other is property rights. You know, a lot of places, people are really- they care about folks having the freedom to do what they want with their land. I would say particularly in some of the rural communities where we work, you know, this is a place where if you wanna build a 150-foot statue of yourself, that’s your God-given right. If you wanna put a wind turbine in the same place, you know, you need a commission. You need several rounds of hearings and people telling you why it’s a bad idea.

So those are two things. Those are two themes. But again, it’s really important. Knowing the right way to advocate for a project is about knowing the community. And usually people know their own communities.

David Roberts: Yeah, like one of my questions was a lot of these rural communities are conservative-

Matt Traldi: Mm-hmm.

David Roberts: Republican, and I would imagine that one of the things you need to do or are trying to do is avoid triggering people thinking in terms of national partisan politics. So like specifically in like Republican communities, how do you dance around that? How do you walk that line and avoid saying the wrong word or just people getting the sense that like, “Oh, here come the libs,” and then you’re, you know, you’re off to the races?

Matt Traldi: Yeah, this is a really important question, and there are a few different parts of an answer, I would say. The first thing, I probably should have said this earlier, it’s so core to how Greenlight operates. We’re never showing up as Greenlight. You know, I’m based in DC. It’s not gonna be helpful if I go to a hearing or, you know, our staff team goes to a hearing. Our first priority when we decide, you know, we think there’s an important decision happening somewhere, is to find local partners. We’ve worked with almost 300 local partner organizations around the country, and it’s a super wide range. We’ve worked with Faith in Place in Illinois, which is a faith-based organization, and some other places.

Land & Liberty Coalition, a conservative organization. We’ve worked with labor unions, we’ve worked with Poder Latinx. You know, tons of partners kind of across the spectrum, that it’s really who are the organizations that are influential in that community, and that’s about the makeup of the community. So having like a big tent approach, you know, is really important to us.

Another thing really is about helping folks understand what motivates the decision-makers. Because in some of these places, if they were deciding is climate change real, I don’t know if we’d like the way the decision would go. But thankfully, that’s not what they’re deciding, and that’s for both crass reasons, you know, they wanna be popular, they wanna get reelected, but it’s also for high-minded reasons. Like, these are often unpaid jobs, you know, county councilor, right? Like, you decide to do this because you wanna serve the community, you wanna help your neighbors, you know, you wanna make responsible decisions.

And so I think it’s really important for folks to approach it with that mindset. One thing I will say that is actually really inspiring about this work is that most of the decisions are in conservative areas. Many of the decisions are made by conservative decision-makers. And, you know, our national politics is so toxic and so partisan and everything is kind of like you have to first figure out, you know, what side of the-

David Roberts: What what team you’re on.

Matt Traldi: That’s right. That’s right. And, you know, I- this is not to... I’ve spent a lot of time in national politics. This is not to critique all the reasons behind that, so much as to say that it’s, it is actually really inspiring in such a divisive period that actually usually people in local communities decide, “This is good for my community, so I’m gonna support it,” or, “My neighbors don’t want it, so I’m gonna oppose it,” and not like some national political leader on the right said something on TV about windmills, and therefore I’m gonna, you know, oppose it without thinking about it.

David Roberts: That’s interesting. And this is like, this is probably unquantifiable, maybe unanswerable, but I’m curious, like, in terms of what works, how much of the efficacy comes from saying the right thing versus just, like, the presence of bodies in the room? You know what I mean? Like, I’m sure in some of these small county council meetings, five people show up, and that’s, like, the biggest county council meeting they’ve ever had. You know what I mean? How much of it is just bodies versus choosing exactly the right thing to say?

Matt Traldi: Yeah. So I’m of two minds on this because I do think that thinking about the audience is always really important, and thinking about the decision-makers is really important. And I also think it’s very important to the success of this broader field that Greenlight’s a part of, that we have an array of organizations representing different constituencies advocating for clean energy, right? That I just think that’s essential. And, you know, just to contrast us, I think I mentioned last time I was on, I’m a student of the opposition.

That’s- I think it’s a smart thing to be in any area, right? And, you know, the opposition often is in the form of, like, they found the craziest person in the neighborhood. They start a Facebook group, and they are saying, you know, a lot of... That’s not always true. A lot of the time people have very reasonable concerns.

But whereas our side is like, well, if you’re not, you know, a priest who’s also a farmer who’s also got... kids in the local school and is registered to vote … ruggedly …

David Roberts: Ruggedly handsome again. Wearing boots.

Matt Traldi: Yeah, then we don’t want you, right? Like, and that’s just I think that we can make the work a lot more complicated, tie ourselves in knots. And that’s why it is really a core belief of ours that anyone could be an effective advocate in their own community, and that is, you know, to the center of the way we approach our work.

David Roberts: How do you measure impact? Like, if you turn up three bodies in a room and the decision goes your way, do you just count that as you having won it? You know what I mean? Like, how do you know what made the difference? How do you quantify?

Matt Traldi: This is a great question, a really important one, and there are kind of two different types of answers, right? So first, in general, when we talk about the big numbers that, you know, the 67 gigawatts, our work has averted more than 1 billion tons of emissions over the lifetime of the projects that we’ve worked on. The gigawatt number is 3.5 times what it would take to power New York City, so you know, these are very exciting numbers. That’s for every campaign we work on that we advance, right? We’re not, when looking at that, saying like, “Oh, well, did we really make the difference?” ’Cause with advocacy, you never really know.

David Roberts: Yeah you don’t know the counterfactual, really.

Matt Traldi: Yeah. But we do spend a lot of time thinking about this question of what is the counterfactual, like, what do we think the results would be otherwise? And have some, you know, partial thoughts on this front. So the first is that we look for anecdata. So we’re always on the lookout for situations where, you know, we won by one vote and we flipped somebody, right?

David Roberts: Yeah. I mean, like, do you reach out after the decision’s made and like say like, “What-” “What did it?” “Why’d you do that?”

Matt Traldi: Yeah. In my personal advocacy experience, they never tell you if you’re the... You know, at least not if you reach out like that. Sometimes decision-makers do say when they’re announcing their vote, they say, “You know, I’ve heard from people in the room, and this is the reason why I’m voting this way.” And sometimes it’s because you actually changed their mind, and sometimes it’s that decision-makers need political cover, right? You know, having been to a lot of these hearings, this gets back to your point about five people showing up. The feeling in the room is so influential to what seems politically possible. If the first five people speak up in favor of something, it feels like it’s sailing through.

If the first five people say negative things about it, it feels like it would be political suicide to go forward, and that’s true regardless of what decision-makers might have felt going into the conversation. You know, that’s just... It’s a feeling in the room, right? And it’s really important to influence the feeling in the room. So those are some kinds of situations. We also look at, you know, situations where there was a lot of opposition organizing and we out-mobilized the opposition.

There were more supporters there than opponents, and they were more effective in whatever way. But the other thing that we’re doing that I’m really interested in is that we can use the same tools we use for the early warning system to look historically to try to gather information on past decisions on clean energy. And so we can use that to start to approach the but-for question.

But for Greenlight’s effort, you know, what would’ve happened? And the early results are very encouraging. I would say that, you know, the first several states we looked at, Greenlight’s win rate was significantly above, you know, those baselines, right?

David Roberts: Mm.

Matt Traldi: And in general, we pay a lot of attention to our win rate. I mentioned, you know, during our pilot program, our win rate was 60%. We think that’s a bit higher than the industry average, but maybe not that much. You know, maybe it’s like a coin flip in general. And so just showing up even before we kind of knew what we were doing made a little bit of difference. Last year our win rate was 75%. This year so far it’s 79%. And so it’s really that trajectory over time also that shows, okay, we’re learning some stuff here. We’re figuring out how to do this effectively.

David Roberts: Presumably you, I mean, you lose some too.

Matt Traldi: Absolutely.

David Roberts: Obviously. Are there particular losses that haunt you or that you think a lot about or that really, that you really thought you had and they didn’t go your way? Like, what happens when you lose?

Matt Traldi: Yeah. So I hate to lose. That’s kind of in my nature, but it is inevitable in this work, right? Like, that’s just gonna happen. There are a couple different ways that I think about this. So first, in some ways the ones that hurt the most are just really big projects or ordinances in places that have a lot in the pipeline because at the end of the day, the scoreboard for us is gigawatts and tons of weighted. It’s not just us. It’s not that we only care about that for Greenlight. It’s like that’s the North Star that we’re working toward, and so, you know, the more something moves the needle on that, the more painful it’s gonna be if it doesn’t go our way. So that’s one way of thinking about it.

David Roberts: You’re talking about ordinances where they’re not just blocking a project, they’re sort of like laying down a ban on future projects, which is happening a lot.

Matt Traldi: Yeah. It’s happening in tons of places. The majority of places that we’ve seen ordinances go forward, they are restrictive, right? So that’s, you know, damaging for the clean energy transition. And it ranges from full-out bans to bans on everything but name, you know, something that’s so unreasonable.

David Roberts: Setbacks and whatnot.

Matt Traldi: Yeah, exactly. But so that’s one way we think about the losses. I will say something we learned early in Greenlight is that, you know, often there would be these situations where maybe there wasn’t a lot of opposition organizing yet, and, you know, folks didn’t wanna spook the community, you know, didn’t wanna trigger the opposition. Maybe the developer was worried about that as well, and, you know, where we therefore were hesitant to do a ton of mobilization to get a lot of people out.

And there were a few that were losses where the developer thought it was in the bag, and then at the last minute some opposition sprung up. And so we have this internal catchphrase, “There is no bag.” There’s no such thing as being in the bag. It’s not in the bag until you’ve won the vote. Even then you have to, you know, be careful.

But at least once you’ve won the vote, you know, that’s the binary decision, right? And so, you know, we’ve really spent a lot of time in response to that on... We talk about this sometimes as right sizing, but that we’re totally happy to engage local supporters and local partners and have folks show up at a meeting, and if the project is sailing through, maybe they don’t say anything. You know? Sometimes if opponents are not gonna say anything, you don’t wanna rock the boat, right?

But that it’s better to have people there ’cause otherwise, if there are a bunch of opponents who show up, you’re screwed, right? Those are some of the kind of more painful lessons. The last thing I would just say is every state’s different, so we’re constantly looking at where are we on track? You know, we’re happy with how things are going in the state. Maybe we’re not winning every project, but we have a good track record. You know, we’re seeing the results we want. Or are there places where we’re facing a lot of headwinds, you know, because there’s a lot of opposition organizing, and so we have to figure out how to adjust what we do.

And that’s why, you know, we have this goal of winning every effort we take on. It’s an unachievable goal, right? But the way you approach it is looking at everywhere that you’re having losses and trying to figure out how you have fewer of them over time.

David Roberts: Yeah, conversely, is there a victory that you, you know, sort of like are particularly proud of, or that when people ask you what you do, you tell the story of, or that you use as kind of, you know, your pamphlet or whatever, like?

Matt Traldi: Yeah, there are a couple that I’d highlight. So first, in Coles County, Illinois, that was one we worked with Faith in Place on, big solar project there that was a huge success. Yakima County Solar Ordinance, that’s in Washington State, tough turf. Two hearings, we had more than 10 volunteers, you know, engage in the hearings, 100-plus petitions, got a workable solar ordinance. It actually… Usually when you have surprises at the end, they’re not good surprises, but this is one where it actually got more permissive right at the end, you know, the based in part on the advocacy, and that covers solar and agrivoltaics. We also had a project, Morgan County, Colorado.

Colorado in general is an amazing... There’s a lot of good organizing happening there. 600-megawatt solar project. It was a very rapid response campaign. One thing we really pride ourselves on is rapid response. We would love to have several month-long campaigns every time we engage. That’s not always possible, and so we really pride ourselves on the ability to jump in quickly and at least have a little bit of influence.

And this was a situation where because of the short turnaround, we mainly got letters of support, but we got some really fun ones. We got one from the owner of an RV park locally who spoke to the impact that the development would have on local businesses, which was awesome, and the president of the local community college wrote a letter of support as well.

And those were just kind of critical voices, which is another thing we talked about earlier. Having those critical voices can really make all the difference. So those are a few that I’d highlight, but one of the really fun things about this work is that it’s usually my favorite is whatever the last one we had was because I’m really excited about it, you know?

David Roberts: Is there a state or a county where you’ve lost every time where you just can’t crack the nut? Is there like one place where you’re like, “Man, I can’t win there”? Where’s the worst territory?

Matt Traldi: Well, so there’s nowhere that I would say we haven’t been able to crack at all. But I do think there’s something that I wanted to mention I’m remembering when you were asking about conservative communities earlier, which is I’m a progressive. I’m a lifelong progressive. That’s how I identify. Been involved in progressive politics a long time. And we really need to get our house in order a little bit as a progressive movement about building stuff, you know? Some of the toughest places are blue places.

David Roberts: Oh, hilarious. God.

Matt Traldi: So there is a ton of… Here we are in New York State. On the one hand, we’ve had some big wins here. We just, the Propel transmission line just got approved, I think it was last week, a massive victory for the clean energy transition. But there are a ton of places with bans on battery storage in New York State, and that makes it very hard to make the clean energy transition work here. We had a really knock-down, drag-out fight in Santa Fe County. Again, these blue places, you know, the-

So I do think that that’s something those of the listeners here who identify as progressives, if we’re gonna transition the economy, which we have to be a movement that builds. There’s no other path. And in order to do that, you know, every once in a while there’s a kind of report that’s like, “Oh, you know, we could power the country with- if we only put things on these areas that have low downsides.”

David Roberts: Solar panels on parking, on parking lots.

Matt Traldi: There you go. There you go.

David Roberts: Kill me.

Matt Traldi: And, look, all of it is good. Like, we should do solar panels on parking lots too, you know? I’m not saying we shouldn’t do that, but there is a little bit of a fantasy there. These projects take up space. They use land. Most of the time land is useful for something else to someone, right? And so building all of the clean energy we need requires accepting that there are gonna be trade-offs for these things. It doesn’t mean every single project site is a good project site, I’m not saying that.

But we have to get comfortable with the fact that we’re gonna need to build a ton of this, and everywhere we build it, there’s gonna be something else that is the counterfactual for what could have happened there, what was happening there before the solar farm or what have you went in.

David Roberts: Yeah. Amen. Is there, um... I mean, presumably the more successful you get, the more likely it is that the Eye of Sauron is going to discover you. Is there an anti-green light? Like, is there now, like, people who are watching what you’re doing, and chasing you around, and trying to do the opposite of what you’re doing?

Matt Traldi: It’s certainly possible. You know, maybe if I say the wrong thing here, then we’ll see, you know, some opposition groups using the same tactic that I mentioned, you know, going forward. But I will say right now we’re actually in the opposite situation, which is that the opposition was ahead.The opposition was ahead. Usually, there were opponents showing up at these decisions, and we’re catching up.

And so I think it’s also important to... You know, if we’re kind of too constrained about how we talk about this work and the importance of it and these decisions, that could end up just contributing to the furthering of the current situation where opposition is showing up and supporters are not. But yeah, this is absolutely something that I think about and, you know, I think there are many folks who, you know, will show up who just have kind of regular concerns about a project, aesthetic concerns, you know, maybe something in their community.

Then there are also really powerful fossil fuel-funded groups that, you know, they write a paper about some made-up problem that is gonna happen based on a solar farm or some other technology, and then you see it cropping up.

David Roberts: Leaching. It’s leaching into the soil, Matt.

Matt Traldi: That’s right. That’s right. Yeah. And then you just see it cropping up and, you know, that’s one of the ways that, you know, opponents organize is spreading that sort of thing.

David Roberts: Let’s talk about these new things… I have heard about during Climate Week, they’re called data centers. I don’t know if you’ve heard of them. What?

Matt Traldi: No.

David Roberts: Um-

Matt Traldi: No, I have not.

David Roberts: So pardon me a small spiel, which I’ve been making to everyone I meet at Climate Week, and I’m gonna take the opportunity to make it again. I worry and see happening, people are very angry about data centers. They associate them with AI, with oligarchs. At this point, they kinda seem to associate them with all the angst of modern life. Like, they associate them with their kids getting, you know, addicted to porn. They associate them with, you know, you’re like name your social ill, people are like, “Oh, the data centers again.” Are you seeing, um... My great worry is that this fury is gonna spill over the bounds, and people are going to start associating electrification writ large with data centers and start hating the whole lump of everything and fighting the whole lump of everything, and that solar and transmission and batteries are gonna get tainted and associated with AI and fought for the same reasons. Like, is this happening, and how do you feel about it?

Matt Traldi: This is such an important question. You know, I know that everyone probably is really refreshed to hear us talk about data centers since it probably hasn’t come up all week. Finally, some data center conversation. So first, I should just say Greenlight doesn’t work on data centers. We don’t work for data centers, we don’t work against data centers. We don’t work against any-

David Roberts: Yeah, just to clarify, is it wind, solar, and batteries? Is that-

Matt Traldi: Wind, solar, and battery, but we’re technology neutral. Any clean energy technology-

David Roberts: Geothermal? Have you looked into it?

Matt Traldi: We have not yet, but we’re very intere- If there are any geothermal developers with projects coming up listening to this podcast, please reach out to me. I am at matt@greenlightamerica.org. But in general, our work follows what’s in kind of mass deployment because that’s where the kind of permitting work we do is needed. And so solar, storage, and wind is the bulk of it, and we’re also doing some work on transmission, which I’m really excited about. Happy to talk about that. You know, say what you want about data centers, they are not clean energy, so they are not something that we work on, right?

But we are really tracking this spillover effect. You know, in particular, there are a couple ways it plays out in our experience. The first is that opponents of clean energy will sometimes use the grassroots opposition to data centers and, you know, trump up some kind of connection between the two. I

David Roberts: Is think Steve Bannon... is o- I’m not kidding, is out doing this on purpose.

Matt Traldi: Yep. That’s, like, a very dangerous... You know, whenever there’s a lot of grassroots energy about something, that can be dangerous. But then the other thing which in some ways is even more, you know, damaging for Greenlight’s work, it’s our belief about what influences these decisions, that they’re about who shows up. They’re not a 50% plus one vote in the community. They’re not a popularity contest.

There are these hearings, there are these moments where community members showing up can have an outsized impact. And because of that, we try to really not over-focus on what the opposition is doing, and instead focus on supporters, how we find supporters, how we help them engage effectively. These, there are always gonna be opponents, and, you know, it’s like, if you’ve ever done political door-knocking, you know, if you figure out someone’s a four, you don’t stay at that door very long. If you figure out they’re opposed to you, you know, that’s probably not the right place for you to use your time and energy.

So we really focus on supporters and on supporting them. And so in some ways, the more damaging thing for our work is that many potential clean energy supporters, natural allies, if you will, are either flipping to opposition or staying on the sidelines because of a perceived connection between clean energy and data centers. And on the one hand, it’s not a totally unreasonable connection to draw because, you know, load growth from data centers and other things is certainly part of what’s driving energy development and all of those things.

But we do also think it’s based on some misunderstandings in a lot of cases. For example, we’ll hear that there’s a rumor a data center is coming in, and if a solar project gets built, then that will encourage the data center, and if it doesn’t, that will mean the data center doesn’t come in.

David Roberts: Yes, precisely.

Matt Traldi: Yeah, and like, you know, I’m not an expert on the tech companies. I don’t think they’re gonna not build the data center wherever they can just because the solar project didn’t come in, right? So we’re really trying to just alert as many people as possible to this problem of confusion between data centers and clean energy and the spillover of grassroots opposition to data centers into clean energy, and just encourage folks to... You know, we’re creating tools and resources for this to try to help stop the problem as much as they can.

David Roberts: So you are helping people with arguments and resources and education about-

Matt Traldi: Yep, that’s the plan. Yeah...

David Roberts: About this. And is this, like, something you’re mostly nervous about happening, or have you- You’re seeing this?

Matt Traldi: We’re seeing it, yeah. We see it on campaigns. Every community’s different, so in some places they’re like, “We already approved a data center, and we wanna build clean energy ’cause otherwise we’re not gonna have enough energy,” you know? So it’s, there’s no one size fits all, but we are seeing this dynamic on campaigns. And one of the critical things about this challenge, I would say, a lot of Greenlight’s work is binary. You know, there’s a decision at the local county council, and it’s either a win or a loss, right?

And in some ways, that’s actually really satisfying, right? It makes it easier to tell how you’re doing and all of these things. This problem is not a binary situation. No matter how effectively Greenlight and all of our partners work on this challenge, we will not completely eliminate it. We will not get to a state where there’s absolutely zero confusion between clean energy and data centers.

On the other hand, everything that any one of us does just to na- Like, this is a problem. This spillover is happening. It would be better if it didn’t happen, and there are significant differences. These two things are not related. Everything that we do on that front is better than not doing it, so we think of it as something to chip away at and manage and to think about on each of our campaigns, rather than something that it’s either happening or it’s not.

David Roberts: Are there projects, wind, solar, transmission batteries that you will not support. Are there projects that if certain allies or groups are opposed to them, you won’t get involved? Like, how do you make those kind of decisions?

Matt Traldi: Yeah, a very important question. I’m gonna say yes and on this one. I’ll start with the “and.” As I mentioned earlier, we need to build a ton of this stuff. Like, I think folks have not fully grappled with how much of clean energy and transmission and all the related infrastructure we need.

David Roberts: Yeah, and one… Briefly to make a point about that, ’cause I was having this discussion with someone yesterday. Even if you’re some kind of de-growther... even if you don’t think our economy should grow any bigger than it is now, even if all you want to do is replace extant fossil fuel infrastructure with new clean energy infrastructure, you gotta build the hell out of things for years and years to come. There is no not building option.

Matt Traldi: 100%. At one point, we did a calculation of what rate of building these things it would take to meet emissions reduction goals, and it was 600 projects per year, so almost two per day of these large-scale clean energy projects. So our orientation is we need to get to yes on the overwhelming majority of this stuff because that’s just necessary for the clean energy transition and for the climate and for the world, right, and for all of the people in it.

And so that’s kind of our starting place. Now, that said, we look at projects, we think about them. We have... Internally, we call them red flags and green flags. You know, we have these things that we look at. So for example, you know, conservation might be a good example. Every project has trade-offs when it comes to conservation because it’s using land that could otherwise be used for something else.

But at the same time, you know, if a project were gonna destroy the only habitat for a species in its entirety, then that would be too much for y- That would be a red flag, right? And so you have to have a bit of a sense of perspective. A role that we’re really proud of playing on some of our campaigns is that at times we think that winning the grid of the future is gonna depend on close collaboration between the companies who are building clean energy and transmission and the local volunteers and nonprofit organizations that care about climate and care about the environment.

And that hasn’t always been, like, an easy everyone is pointed in the same direction collaboration, but we think it can be, so we spend a lot of time on that. And some of the projects that I would say I’m proudest of, we’ve been able to introduce broker conversation, so to speak, between folks with a reasonable-sounding concern about the project and the developer, and usually they found they weren’t so different. They weren’t in such different places. We worked on a solar project on reclaimed mine land, which sounds awesome, right? It is awesome. It turns out... This is obvious once I learned it, but at the time it was surprising to me.

It turns out building anything on reclaimed mine land has watershed concerns. Mm. And we were able to introduce the developer to the watershed association, and they had a good conversation. I think it turned what could have been opposition and, you know, a pretty toxic situation for the project into an asset for getting to approval.

David Roberts: Interesting. How many housing people have come to you and begged you to extend your model to housing in addition to me?

Matt Traldi: I wouldn’t say... Well, you’re the first to exactly that way, so let’s talk about it later. So I wouldn’t say exactly that way, but what I would say is we’re actually learning a ton. One of my taglines, I did a longer, you know, elevator speech when you asked for the elevator speech earlier, but, you know, the shortest elevator speech is YIMBY for clean energy, right?

And YIMBY comes from the housing space, right? Yeah. So we’ve learned a lot from the folks doing that work, and we’ve also been really happy to share when we’ve got something to do. We’re often working in different geographies, not always, but, you know, a lot of the biggest need for housing is in urban and suburban areas, so there hasn’t been, like, a kind of direct collaboration on... There’s one ordinance that does both clean energy and housing or something, but we do learn a lot from them.

And I think in general, you know, I mentioned earlier having a progressive movement that builds. I think that’s a really good example that we need to build a lot of stuff to have the world and the society that we want. We need to decide what is good stuff to build, and then we need to align around it and, you know, make the machinery work to put it in the ground.

David Roberts: Amen. I wanna take some questions from people, but just sort of by way of wrapping up, I’m just sort of curious, like, just internally speaking, a lot of groups founder in the transition from we’re sort of like a small band of brothers to we’re an organization with levels and departments and management and HR and whatever else. You are growing very quickly. How do you think about how to manage that, just how to navigate that transition to size, to scale?

Matt Traldi: I love this question and would love to... I would do a whole pod just on... ’Cause I think we need more non-profits and social enterprises, and in general, there’s less of a culture in this space of, like, we’re always starting new stuff that’s, like, purpose-built for the problem we’re solving. I think maybe it’s because in the for-profit space, there’s the allure of maybe you’re gonna have the unicorn and, you know, become a billionaire or whatever, so maybe that’s an incentive.

But there’s just less of it in our space. I’ve been now part of starting a few organizations and am very proud of all of them. I think the first thing is getting the right people on the team. Like, that is absolutely the core of it. If you have the right people on your team, everything is easy. If you have the wrong people on your team, everything is hard.

So hiring the right people, making sure they understand what they’re signing up for, right? Like, what it is that we do. Greenlight is blessed, I would say, with the simplicity of our mission because I think often complexity is part of where there can be confusion and misalignment internally. No one could possibly think permitting clean energy is the only important thing to do in the world. There’s lots of, even just within the climate space, there’s lots of other important stuff to do.

And so everyone who joins the team knows this is not going to be everything important to do in the world, but I’m gonna go deep on this one really important thing. And I think we’ve been able to offer folks a huge opportunity to have impact on something that they care about. Again, we’re very lucky with our team. We’ve attracted amazing people.

I think the second thing is just really investing in the time you spend together as a team, the culture of the team, and we have a lot of fun together, but we also throw down. You know, it’s a very dynamic, it’s campaigning environment, you know, and that’s really important. And so having those ties that bind. You know, I think the personal thing I’ll say here is I’m not sure if you were kinda doing like a point system checklist for like what’s a good life choice, you know? That starting a nonprofit would kind of come up with the most points, right?

And I have the bug for it because it’s so magical to see something go from being an idea to, you know, being a team to being this, again, organization, right? And like the thing that I love the most at Greenlight is that I’ll like hear about campaign wins that we had or new projects people are doing and like I had no role in starting them. You know, sometimes I’m like, “Oh, that’s amazing. I didn’t know you were even in that place,” you know?

And so that’s, I think, the magic of it. Of course, there are like, challenges to an organization growing as there are about everything, but you have to really love that ride and the magic that comes with it as well.

David Roberts: All right, well, I think I’m supposed to be wrapping up, but I’d love to take a few questions. So how this is gonna work, we’re recording this for a podcast. You don’t have mics. So you tell me your question. I’m gonna repeat it into the mic so that it gets recorded, and then — don’t make me say it — no “comments more than a question,” please. Brief questions straight for the board.

Yeah, go on.

David Roberts: The substance of the question is, can you deploy social media to help against what is often social media-rooted campaigns against projects?

Matt Traldi: This is a really important question. First, thanks for the work you’re doing. It sounds awesome. I would say yes and no. So on the one hand, I do think that one of the challenges in this area is disinformation, and a lot of disinformation spreads through social media. And so I do think that there’s work to do to prepare volunteers and also the folks you’re working with directly to use best practices for stopping the spread of disinformation.

And some of those are... You know, in general, you don’t wanna, like, repeat and then myth bust the disinformation. That just spreads it further. People just remember there’s a controversy. So instead, you want to start with a shared value. This is called the truth sandwich. It’s a George Lakoff thing. Start with a shared value, then name why there might be people spreading disinformation about this thing without saying what the disinformation is, without repeating that talking point, and then redirect to the point that’s actually, you know, more apt, like more something that folks should consider in deciding about the project.

And so those are things that you can do on social media, and it can be- Because there’s negative stuff spreading, it can be an effective area to engage there. And people within the community are the people who matter to local decision-makers. They’re the constituents. They’re the ones who those local decision-makers are there to serve. And, you know, maybe this is me getting older, but showing up in real life, it always is way more impactful than anything that you can do socially.

David Roberts: Than memes?...

Matt Traldi: Yeah. Yeah. And I’m not saying don’t do the memes. I’m just saying that that’s an important thing. I guess last thing I would say, those are areas where there are some good groups on the ground. And so even if you’re not able yourself to kind of go into the community with your team and funding and, you know, mobilize folks and, you know, really do that work, you might find a partner, you know, in one of those places who’s really interested also in getting involved, and that could be the difference. So anyway, thank you for the work you’re doing and the question.

David Roberts: Oh, that’s a nice simple question. Top recommendations for state-level permitting reform.

Matt Traldi: This is a tricky one ’cause I do think this is one that’s like every state is different, right? So there are a bunch of states that have state rules that work, and I would say if it ain’t broke, don’t fix it. In general, a couple things I would think about. The first is we are very motivated by speed at Greenlight, and some of that is just our organizational orientation, but I think some of that is the nature of the challenge that we’re trying to tackle, that climate change is urgent and, you know, delays in a project can result in cancellation, can result in, you know, equipment getting more expensive and, you know, things like that that kinda make the project unviable.

So I think one thing is to really think about speed. I think another piece to think about is to balance in general the processes that kind of tend to work the best in our experience. Illinois is a, it has a state law that works pretty well, I would say. We, you know, we’ve engaged in a lot of places there.

And it doesn’t actually take the decision away from local communities, but there are rules of the road, like developers go in and know what kind of criteria they need to meet and, you know, what they can expect and everything like that. So I would say something to think about in any kind of state legislation on permitting is balancing like there is a need for local input, local engagement with if there’s not certainty about the way the process works or what’s able to be considered, then opponents will absolutely use whatever uncertainty there is to derail stuff. It doesn’t matter, you know, the tiniest little bit of daylight.

So those are some general principles, but again, I would say every state is different, and Greenlight, we’re not working on state legislation. My understanding from, you know, adjacent to that field is that the opportunities are gonna be really different in different places based on who’s in power in the state, which party, and also based on the history of engagement in the state, what the kind of standards and expectations are around permitting in that state, then that’ll influence what’s possible.

David Roberts: This is a great question. You’ve been watching these now, these fights for a couple of years. Are developers getting any better about community engagement, about communication, about the way they approach these things, or are you finding that you have to clean up their messes to some extent?

Matt Traldi: Well, every developer is different. This is a really important question. Every developer is different, and so there are certainly ones who are better at this than others, right? Like, it just depends on the organization and the personnel at the organization and so forth. But, you know, when Greenlight was starting, a bunch of folks who’d been around the industry for a while told me, “Cool idea, and also developers are gonna be really hesitant about getting your help on their projects, sharing information with you, et cetera, because they’ve been burned by working with nonprofits before.” And in general, we got a really welcoming reception, warm reception. Usually, developers wanna kind of work with us a little bit to see how it works before they, you know, then are like, “Okay, let’s work on 50 projects together.” But that’s normal and human, right?

That’s not a surprise. And, you know, I think that’s that a lot of folks in the industry have seen this problem play out in their own projects. It’s very expensive and disruptive for a developer when they lose a project. They don’t want that to happen, and they’re really interested in how to solve the problem and very motivated to solve it, and that includes both working with organizations like Greenlight and also the stuff that they can do internally. Something I’m really interested in, which is not directly related to Greenlight’s work on local permitting, is that there’s a broader conversation happening in the industry right now, and some guests of the pod have spoken to this, you know, over the past few months about, you know, how much being good at advocacy and political communications and that sort of engagement is gonna be core toward establishing the clean energy industry as a leading player, right, and, you know, protecting its interests over the long haul.

And there are lots of different ways people are thinking about that problem and, you know, probably as many developers that as you talk to, you get slightly different answers. But it is something that folks are really interested in talking about. I think I’ll just end by saying, you know, we have had a really great experience partnering with industry. You can always find examples of things that are tricky, and there’s conflict and, you know, all of that. But in general, it is necessary for us to be effective at our work, and we’ve been very gratified at how it’s gone.

David Roberts: This is a great question. Is it worth time and organizing money to try to get better, more favorably inclined people elected to these decision-making roles?

Matt Traldi: Super important question. And here I’m gonna distinguish, I’m gonna do a Greenlight answer first and then kind of zoom out a little bit. So Greenlight is not working on elections. That’s not something that we’re doing. And that’s for a couple of reasons, but one of them is that we know of other folks who are working on it, and I, you know, I’m happy to, you know, connect and share what information I have on that front.

But I’ll go back here to one of the really fun things about this space. There are lots of different ways of looking at this moment. You can look at this moment and say, “We’re in this window because of the IRA that’s gonna close, you know, on clean energy deployment,” or, “The data center conversation’s gonna take over everything.” You know, you can look at it that way. The way I look at this current moment is that we’re at the beginning of a multi-decade massive wave of clean energy deployment, and that what is gonna be happening in terms of deployment in just a few years is gonna leave everything happening right now in the dust.

It’s gonna be just dramatically out of proportion to what’s happening right now, and I’m very excited about that possibility. And if you have that orientation to the moment that we’re in, then a really cool thing is we’re now in the stage of we’ve gotta build all of the stuff that’s gonna make that happen. And so again, zooming out from Greenlight’s work, I would say that a really normal, healthy process is to think about what are the different types of decision-makers that really influence these sets of decisions, these next steps, and what are the levers of engagement, and that could include electoral engagement. I come out of the democracy space before and, you know, 10 years ago, there was not a lot of attention paid.

I guess I’m, I should actually say more than 10 years ago because 2016 was 10 years ago. That’s a depressing thought. 15 years ago, there was not a lot of attention paid to local election officials, and then everyone realized that’s actually a really important thing to pay attention to. And all of the ways that you would pay attention to it, investing in those races, thinking about advocacy, thinking about, you know, having candidates who would run, you know, all of those things kind of came out of that, and there are lots of different... There’s an, a whole ecosystem of efforts that is thinking about that challenge.

And so I would say this is an interesting one as well, where Greenlight is- We’re very proud of what we do, and also we’re just one organization in this growing ecosystem of efforts.

David Roberts: Yeah, and there’s also growing attention paid to PUC races and PUC appointments, which I think is all to the good.

Great question. Why, if you’re dispensing funding dollars, why not fund the local organizations themselves rather than a national centralized organization?

Matt Traldi: This is a great question. Couple different answers. First, it’s not an either/or. People should absolutely fund local organizations, I’m here to say. And, you know, Greenlight in particular, when we ask a local organization to work with us on a campaign, we do offer some modest funding if it makes the difference for whether they can engage. But we’re not primarily a funder. We’re not gonna fund any organization’s whole budget.

And our work is enabled by the presence of these organizations, and it’s a lot harder in places where there haven’t been local organizations funded. So we would not only like to see the local funding continue, we would like to see way more of it and way more investment in the rural communities and conservative communities where maybe the pro-clean energy side, so to speak, pro-clean energy funders have not built infrastructure, have not invested those dollars.

So not an either/or. I do think that the nature of this challenge is very whack-a-mole. I mentioned this earlier, that, you know, at any given time, there’s gonna be decisions being made in hundreds of communities across the US, but that’s hundreds out of several thousand, right? More if you’re at the municipality level. And for a local or membership-based organization, that means it’s very hard to build a long-term program around clean energy engagement. My background is in membership organizations, and you really have to have asks that engage all of your members at the same time and that are ongoing.

That’s how you build a program, because otherwise people drift off and do other things, right? So the reason we built Greenlight as this solely issue-focused and we’re going from place to place thing is the idea that you can’t do a membership organization structure that is gonna survive from one campaign to the next in each of these different places. Frankly, you know, coming out of Indivisible, the first thing that occurred to me when I was thinking about this challenge was should we build, you know, local groups everywhere, right? You know, the same as we did for Indivisible.

But it just doesn’t really make sense for the nature of this problem in the same way. The thing about Indivisible that’s magical is everyone has a member of Congress. Except me, I live in DC, so I only kind of have a member of Congress. But almost everybody has a member of Congress. Almost everybody can ask their member of Congress roughly the same thing at the same time, right?

And that’s just not true for clean energy. So that’s why I think this partnership between national organizations that are really focused on this issue, this is all we do, like Greenlight, but there are also others, and local organizations and membership organizations building a constituency, building local power, et cetera, is, like, really at the heart of how we solve this problem.

David Roberts: This is a great question. Like, what is the... You know, if you were God for a day, how do you design processes that fairly gather representative community feedback... without unduly empowering, say, a few busybodies who have time to go to all the meetings? Do you have thoughts, having now bumped into a million and one of these feedback mechanisms and these meetings and these types of things? Do you have thoughts about how they ought to work?

Matt Traldi: I have lots of different thoughts, and they’re kind of conflicting with one another, so I’ll try to organize them. The first thing that I would just say, because I think this is... In some ways, maybe this is an unpopular opinion that I have, but I think it’s important to say. I’m a veteran of, like, progressive politics starting in student organizing when I was in college. We love process. Progressives love process. We love procedural justice. We love, like, lengthy input things, et cetera.

And the important thing to know, and again, I can think of examples of this in my student organizing time, is that process is a tool for people who wanna create delay. Whether or not it’s intended that way, that’s one of the main functions that process ends up having. So it’s really important to always think about speed, predictability, and not creating those opportunities for opponents to gum up the works. Because otherwise, that’s, like, all the process will be used for functionally. So that’s, like, thing number one.

David Roberts: I’m from Seattle, and I just wanna... give, just give a little hooray to this line of thinking. Boy, do we love our process.

Matt Traldi: If the... And you know, I think that on the flip side, I would say that actually a challenge we run into, we at Greenlight would love for all of our campaigns to be at least a few months long. We don’t necessarily want years long because we’re mainly working with grassroots volunteers. And I don’t know about y’all, but I don’t wanna volunteer on anything for a few years, so it’s, that’s a hard timescale to motivate people.

But months would be nice. Sometimes it’s weeks. We’ve even had some that are days. That’s not my favorite, and it’s harder to do as much good work. And so thinking about things like public notice, having meetings at times that people can actually attend. Some communities have good methods for providing input that aren’t showing up in person. Of course, showing up in person is always gonna be better.

But I do think in general that’s a good practice to have, like, a docket that people can submit letters to and things like that. Because then decision-makers, you know, even if you have, like, a couple of loud opposition voices in the room, decision-makers are able to say, “Well, I’m looking at a bunch of comments here, and actually a lot of people want this to go forward.” So those are a couple of things I would say. Speed and not creating process that is itself a weapon against the thing moving forward, and then more notice and more different ways of engaging so that you just have more ability to participate.

David Roberts: Thank you. Thank you, Matt.

Matt Traldi: Thank you, everyone. Thank you, David.

David’s Notes

1. 🇩🇰 As promised in last month’s note, I flew straight from Climate Week NYC — where I found the sideline conversations quite doomy — to Denmark, where I was immersed in thoughtful, cooperative, successful green infrastructure. It was a balm.

I was on an “Industrial Symbiosis” tour — you can read about it and see the itinerary here.

There were many highlights:

• Copenhagen itself, of course, which is just as dreamy as everyone says — probably my favorite city I’ve ever visited. During every free second I rented one of the many ebikes from one of the many bikeshare services and just rode, rode, rode. I probably put in 200 miles, all of it on safe, grade-separated bike infrastructure, which is ubiquitous. I could go on about this forever but I’ll just say that, although the city is big, every particular spot in it is somehow … cozy. Human-scale. This includes large-scale, dense housing, which is never fronted by busy roads, always tucked away so it feels quiet and intimate. I didn’t take enough pictures (I never remember), but here are a few:

• Aarhus, the second largest city in Denmark, is a hidden gem. We visited the port (we visited so many ports …), but my favorite part was our visit to Sydhavnen, the new arts district. They’re developing this raw, post-industrial area between the port and the rest of the city into a district devoted to “creative industries” — artist studios, sound studios, music venues, etc. It is extremely cool. One of the best bits was the recently opened “coal bridge,” adapted from an old rail line that use to carry coal. Modeled on NYC’s Highline, it will connect residential areas to the arts district. Just awesome.

• In Skive we got to hang out and talk with the CEO of GreenLab, a semi-off-grid industrial park in the middle of extremely rural land. The park generates most of its own power (~90 percent, as I recall) with wind and solar and uses it to power industrial facilities on the site. There’s a facility that processes agricultural waste into biochar; one that processes plastic waste into chemical feedstocks; one that processes marine byproducts into animal feed; one that electrolyzes hydrogen; and so on. Industrial symbiosis! The extra power goes into batteries and heat batteries, so industries receive steady power and heat around the clock. They’re planning something like a dozen of these parks across the country. I may do a whole pod on it at some point.

• The port of Esbjerg (which I heard said aloud probably 100 times and still can not pronounce) — one of Denmark’s newest cities — was cool mainly because it’s become a hub for the offshore wind industry, so we got to see all the giant towers, nacelles, and blades waiting to be loaded on ships. Y’all, that stuff is so big.

We learned about ports, district heating systems, biomass, carbon capture, on and on, but if I had to pull out a central theme, it is this: a society high in social trust can achieve wonders. The drive toward carbon neutrality is supported across the political spectrum. Municipalities own their own electric utilities and district heating systems, so they can make long-term plans and investments, secure in the knowledge that policy won’t lurch in different directions every few years. They conceive of themselves as involved in a common project, as an Us, and it enables an incredible degree of planning and forethought.

The contrast to the US — a notably low-trust society, getting lower all the time, where we can’t get our shit together to do anything for more than a few years at a time — was glaringly evident.

2. 🥊 This great story in Washington Monthly, by Kainoa Lowman, examines a subject near and dear to my heart: why is the US clean energy industry such a wimp, politically speaking? Why won’t it fight for itself? The story quotes me, which is fun, but it also contains some amazing quotes from figures in the industry basically telling on themselves. Say Tim Pawlenty, the milquetoast Republican running the solar trade association: “we’re in the business of making friends, not making enemies.” (Barf.) Basically it’s the industry saying, “everyone loves us, so Republicans are sure to stop kicking us in the face soon,” as Republicans continue to kick them in the face. (More on this in a pod coming soon.)

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3. 💩 This great commentary in Nature Energy, by Will McDowall & Michael Fell, examines another subject close to my heart: the risk of enshittification in distributed clean-electricity technology. We’re all going to be getting smart devices in our homes, which are networked to one another and to the grid. It would be extremely bad if those devices get bricked when companies go out of business, or if they impose escalating subscription fees we can’t afford, or if they lock us in and service degrades — basically, if they treat us the way social media platforms treat us. I did a pod on this with Cory Doctorow if you want to hear more.

4. 🔌 The New York Times has a great piece on Jonas Birgersson, the Swedish entrepreneur who is trying to remodel the electricity grid to make it more like the internet. I did a podcast with Birgersson in January, one of my all-time favorites. To my knowledge, basically no one in the US was aware of or engaged with his project before that pod. Then, later the same year, the NYT discovers it! What a coincidence! (Volts is not cited in the story.)

5. 🗼⚡ If you’re a Volts listener you’re probably already convinced of America’s desperate need for more high-voltage interregional electricity transmission. If you’re not, though, read this great new report from the Center for Public Enterprise.

6. 🗳️ Here is a comprehensive guide to the most important elections in the upcoming midterms. Pay attention, and vote, all the way down the ballot!

Nate’s Notes

1. 🔌 Balcony solar, an update. David has been tracking plug-in saga over the years. Last time we checked in (thread #28), Virginia’s bill was waiting on the governor. It was signed in April. And on Sept 30, California Governor Newsom signed SB 868, the state’s plug-in solar bill, which takes effect Jan 1, 2027 (pv magazine).

A bit of thread history: the balcony solar episode itself started as a reader question. Jason Titus asked for it back in thread #11. Thanks, Jason. If there’s an episode you want to hear, leave it under EPISODE IDEAS & GUESTS. I read every one.

2. ✅ Comment of the month. Last month James asked whether paying his utility extra for green power actually adds clean energy, or if it’s squishier than that. Christopher wondered the same about a $200 community solar panel. John C answered both, starting with what that extra money buys: renewable energy certificates (RECs), credits proving a megawatt-hour of renewable power was made somewhere. His bottom line:

Do either of these things help make the grid cleaner? Yes, in a sense… if no one bought REC’s and no one bought the power from a solar project, that solar project would not get built. But plain old RECs are pretty cheap these days.

The full exchange covers community solar too, plus Mark on community choice aggregators. Want the deep version? David’s episode on the debate over RECs gets into it in detail. Know how your own utility’s program works? Tell us in the comments.

3. 🗳️ Coming up. After the 2024 election, Caroline Spears of Climate Cabinet came on Volts to walk through how state and local climate races turned out (listen here). She’s coming back after Nov 3. Which races or ballot measures are you watching for climate and energy? Leave them under ASK DAVID, and I’ll pass it along before they record.

Monthly Thread: How It Works

This is the monthly place to share. Reply under the pinned headers in the comments:

• ASK DAVID (keep it light): the questions David likes answering. The top few go into his next bonus episode, or get a one-line answer here.

• EPISODE IDEAS & GUESTS: who or what should be on the pod. When one becomes an episode, this thread says who asked.

• OPPORTUNITIES: jobs, events, meetups, and calls for collaborators. Post only what’s real and current, one post per org, and reply to people who reach out.

• EVERYTHING ELSE: including replies to the notes, community questions, and other topics.

Reply directly under a header so people can find you. A few rules of the road: bare links get removed, so tell us in a sentence or two why yours matters to this crowd. Spam and anything inappropriate get removed too. Be nice, and have fun out there.

Rather email? Write to nate@volts.wtf. Send a question for David you’d rather not post, or something you made with a Volts episode (a class, a deck, a chart, a build). With your OK, it may show up here. And if money is the reason you’re thinking about canceling, write to me before you do.

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The proposed bipartisan federal permitting bill is 417 pages filled with extremely consequential provisions that have left the climate community some mix of excited, infuriated, and confused. In an attempt to bring some clarity, I asked Daniel Palken of Arnold Ventures, a veteran of Senate permitting fights, to walk through what’s in it. We cover the blockbuster transmission reforms, the rule making data centers pay more than their share of grid costs, the wins for geothermal, and the fossil carve-outs. Then we get into NEPA reforms that render the act toothless, limits on state water permits, and the permit-certainty sections that have lawyers worried about “forever permits.” And finally: whether it restrains Trump, why Democrats shouldn’t wait for a better deal, what the modeling says about emissions impacts, and Daniel’s odds of passage. This is a long one, folks. Buckle up.

If you are involved in energy discussions, you are almost certainly aware that the long-awaited federal permitting reform bill has finally been unveiled. The Bipartisan American Affordability and Jobs Act (BAAJA) was hashed out over the course of many fraught months of negotiation among Sens. Shelley Moore Capito (R-WV) and Sheldon Whitehouse (D-RI) of the Environment and Public Works committee and Sens. Mike Lee (R-UT) and Martin Heinrich (D-NM) of the Energy and Natural Resources committee. It is a genuinely bipartisan proposal in that it contains provisions each side loves and provisions each side hates.

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The bill is more ambitious than analysts expected, in almost every direction, and it has divided both coalitions. Many climate organizations have urged Democrats in Congress to vote against it, though others have remained neutral or tentatively positive, while clean energy industry boosters and investors love it. Fossil energy groups also love it, though the more radical Freedom Caucus in Congress objects to the presence of virtually any provisions that help renewable energy.

Everyone is fighting over it. Online discussion has been, even for our era, heated and vicious, with personal insults and skepticism about motives flying in every direction.

What I’m going to attempt to do today is have a reasonable discussion of the contents and relative merits of the bill. My guest is Daniel Palken, who runs infrastructure and energy permitting work at Arnold Ventures, a philanthropy devoted to sustainable energy systems. Before that, he spent more than four years in the Senate working for various senators on various bits and pieces of permitting legislation, including 2024’s ill-fated Manchin–Barrasso Energy Permitting Reform Act (EPRA). He has seen the process from the inside and followed the development of all the various provisions closely.

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We’re going to discuss how we got here, what the bill actually says, what we might reasonably conclude it will do, and the political considerations going forward. I expect this pod will fully please no one, but I hope that those of you out there who have not tuned in yet will find it, at the very least, educational. Let’s get into it.

Chapters

• 00:00 – Intro: the bipartisan permitting bill

• 04:15 – Why permitting reform matters

• 12:23 – Agency staffing and capacity

• 16:59 – Past permitting attempts

• 20:26 – Transmission 1: planning and federal backstop

• 28:28 – Transmission 2: who pays and grid upgrades

• 38:17 – Data centers 1: paying more for grid access

• 43:20 – Distributed energy and geothermal

• 49:06 – Oil, gas, and mining provisions

• 57:06 – Data centers 2: will they go off-grid?

• 1:00:19 – NEPA 1: courts can’t halt projects

• 1:08:57 – NEPA 2: the main objections

• 1:17:10 – State water permits

• 1:23:35 – Endangered species

• 1:27:37 – Permit certainty 1: limits on revoking permits

• 1:36:43 – Permit certainty 2: lawsuits and damages

• 1:48:12 – Politics 1: Trump’s wind blockades

• 1:52:57 – Politics 2: why not wait for a better deal?

• 1:58:33 – Politics 3: elections, courts, and modeling

• 2:10:57 – Politics 4: next steps and odds of passage

Resources

People & Organizations

• David Roberts (Substack - Bluesky)

  • Volts (Apple Podcasts - Spotify - YouTube)

• Daniel Palken (LinkedIn)

  • Arnold Ventures (Website - LinkedIn)

• Orgs

  • Federal Energy Regulatory Commission (Order No. 1000)

  • Environmental Policy Innovation Center (Website)

Company & Industry News

• Heatmap - The Senate’s Big Bipartisan Permitting Deal, Explained

• Utility Dive - Senate Permitting Bill Would Expand Federal Role in Transmission Siting

• Latitude Media - Senators Strike Bipartisan Permitting Deal

Books & Articles Discussed

• Senate EPW - Bipartisan American Affordability and Jobs Act of 2026 (Bill Text)

• Arnold Ventures - Statement on the Senate Bipartisan American Affordability and Jobs Act

• Arnold Ventures - Why We Need to Rethink Transmission: The 3 P’s

• Permit Me To Explain - Senate Permitting Bill, Take One: States Could Take on ESA Consultations

• Permit Me To Explain - Senate Permitting, Take Two: This Bill is a Net Positive for Endangered Species

• Environmental Law Reporter - Dispelling the Myths of Permitting Reform and Identifying Effective Pathways Forward

• US Department of Energy - National Transmission Needs Study

• US Supreme Court - Seven County Infrastructure Coalition v. Eagle County

• US Supreme Court - Sackett v. EPA

• Third Circuit - Transource Pennsylvania v. DeFrank

• Ninth Circuit - Center for Biological Diversity v. US Fish & Wildlife Service (Rosemont)

• Utility Dive - An Outdated FERC Policy Is Undermining the White House’s Ratepayer Protection Pledge

• Utility Dive - It’s Time for Customer-Oriented Approaches to Generator Interconnection

• Crux - Impact of Federal Permitting

• Rep. Yassamin Ansari - Ansari Bill to Develop Standards for Geothermal Energy Passes

• Rep. Jared Huffman - Statement on Senate Permitting Deal

• Senate ENR - Manchin, Barrasso Release Bipartisan Energy Permitting Reform Legislation

• Utility Dive - House Passes Permitting Reform Bill with Anti-Offshore Wind Amendment

Related Volts Episodes

• Building a big, abundant, clean grid

• Is there way more conventional geothermal than we thought?

• The Democrats’ new consensus bill would supercharge transmission

• Who is paying for all that data center power?

• The progressive take on the permitting debate

• What’s up with Manchin’s plan to reform energy permitting?

Transcript

David Roberts: With no further ado, Daniel Palken, welcome to Volts. Thank you so much for coming.

Daniel Palken: Thank you so much for having me, David.

David Roberts: We got a lot to do here. A lot to do. So just to maybe prep listeners slightly, I’ll just sort of lay out kind of the arc of the conversation here in case they wanna skip ahead. So we’re gonna start with a little bit of background and scene-setting context. Then we’re gonna discuss the energy provisions, mostly the stuff that came out of the Energy and Natural Resources Committee.

Then we’re gonna discuss the environmental stuff that came out of EPW. And then toward the end, we will talk about the politics. Why do this now? Why not wait? What are the balance of considerations? What does the modeling say it might do? All that kind of stuff. We will get to that stuff at the end. In the middle, it’s gonna get maybe a little technical, just to warn people, but there’s a lot to discuss.

All right. So Daniel, let’s start here. Maybe for listeners, you know, everybody I think who’s yelling about this online, who’s engaged with it, takes this for granted. But maybe for listeners who have not been following this for ages, why don’t we just start with, like, what is the problem here? Nothing is bipartisan these days, and yet somehow we’ve found something that both parties agree, at least agree is a problem here. So maybe just lay out briefly, like, why do we need permitting reform? Why is everyone so exercised about it?

Daniel Palken: Yeah, that’s the right question. It brings us to kind of what is the energy sector for? What are we trying to do in this country? I’m gonna take a framing from one of the co-founders and chairs of my own organization, Arnold Ventures. The way I’ve heard John Arnold put this, which really I think resonates with me, is that there’s six or seven things we care about solving for in the energy sector. We care about affordability. That’s obviously topic number one in political discussions these days. We care about reliability and resilience and kind of having the comforts of everyday life and not having to think too hard about how they get to us. We like to turn light switches on and have the lights come on.

We care about economic growth and scalability and the ability to absorb new industries and opportunities. We care about energy security. We’ve seen a lot of that recently with foreign entanglements and how scary it can be, the prospect of either prices going way up or reliability going down or worse as a result of not having secure energy supply. We, of course, care about jobs and the ability of the people who work and might work in the future of the energy industry to be gainfully and well-employed.

And then lastly, we care about sustainability and the environment and the climate. And historically, permitting reform has been something that I think most proponents, and the opponents probably wouldn’t contest this themselves, can help deliver on the first five or so of those.

So affordability, reliability, resilience, growth, energy security, jobs, making it easier to build things. We’ll maybe discuss in a second why it’s hard to build things. You can draw a pretty straight line to all of those. But the last one has always been and remains contested. Is it a good strategy for the environment or the climate to make it easier to build things, or is it gonna backfire? And are you gonna, at a minimum, be trading off that value for the other ones? In the background, right, two things have happened as a monotonic trend in American society and a lot of Western society.

As we’ve become more affluent, as we have more people populating the land, it has become harder and harder to build things, in part but not in whole because of the presence of many permissions that you need to get from local, state, tribal, federal government. And the federal ones play a big role in that, and we’re discussing about a federal bill today, so we’ll restrict ourselves to talking about those, but it’s worth flagging that there are definitely other permitting regimes out there that add and layer upon this challenge.

It’s become harder and harder as our laws have matured and as our country has matured to build things, and yet in the background, and this really bears on that last point about sustainability and the environment and kind of that dimension, the clean technologies, the ones that kind of show great technological promise for delivering us a more affordable, reliable future while also having fewer carbon emissions and less environmental pollution, have surpassed the wildest expectations of even the most astute observers 30, 20, even 10 years ago. When I was born in 1991, the price of a solar module was about 1,000 times what it is today.

Meanwhile, the price of extracting or the cost of a barrel of oil in inflation-adjusted terms is about the same today as it was when my grandmother was born. That’s not a knock on the oil industry. There has been tremendous innovation and progress, but there is a nifty asymmetry between technologies that you have to drill for, where geology competes against technology, and technologies that you mass produce, where economies of scale and learnings accumulate. And obviously, if we were to dive deeper into that, the price of a solar module is not equivalent to the price of solar electricity, et cetera, et cetera.

But there is this trend that I think underlies the theory of change that we are now living in a paradigm where making it easier to build things may structurally advantage some of the cleaner technologies and actually present us a path, perhaps not a trade-off free path. We’ll discuss some of the pros and cons and the trade-offs of different parts of this bill. But I would argue that it actually scores quite well on this last criterion that historically skeptics have said, “Well, you know, that’s a major trade-off reason not to speed up permitting.”

David Roberts: Yes, that asymmetry point is one that I love and could spend a whole pod on, but I’m going to tear myself away from it and move on. I do have a couple of just general questions about this. You are correct that the general theory of the case for Democratic involvement here, and for the involvement of the left basically in this, is this premise that if you make it easier to build everything, clean energy will win, right? That’s kind of the premise of their involvement.

But then you got Republicans who are also involved in this, who presumably can overhear us saying that and have access to all the same models and the same background information, and have come to the opposite conclusion, I’m assuming. They think that if you make everything easier, their favored sources of energy, principally gas, is gonna win. Is that right? Are they just wrong? What’s their thinking on this?

Daniel Palken: I mean, I do think you’re hitting on kind of a fundamental dynamic that underlies the politics by which this bill can happen, which is that both sides have faith in their preferred technologies, and I’ve actually heard some of the negotiators of this bill describe it plainly in those terms, almost as a bet where I bet you that on a level playing field, my technologies will outperform your technologies.

There’s kind of a cynical way to view that bet or, like, a nervous way to view that bet where it’s like, well, what if the side I’m rooting for is wrong, or something like that. And fair question. But I think also it is healthy as, like, a baseline matter that this is the bet our policymakers are making, right? It tells us a priori that our policymakers on both sides of the aisle believe that their resources are genuinely better and will succeed in a level playing field, and they want them to succeed, and they’re willing to tolerate the other side’s resources succeeding if they’re wrong. I think that that is far better than any imaginable alternative of, like, you know, I want the world to totally come to a halt if my resources can’t eat the whole cake. It’s also not a zero sum, I wanna highlight, as that kind of very naive and first order framing provides. There’s a lot in this bill for resources that are, first of all, very popular with both sides. So geothermal has a big title of eight or nine sections, and a number of the provisions that aren’t specific to geothermal but are tech neutral will actually probably have large asymmetric effects on geothermal. It is like a shouting contest between the parties for who likes geothermal more. So there’s a lot of resources-

David Roberts: Yeah. We’ll get back to that...

Daniel Palken: that see positive sum. But I do think you have hit on a dynamic where the Democrats who negotiated this sincerely believe that the attributes of renewable sources, including but not limited to geothermal, will win out in the long run. The Republicans who negotiated it believe that fossil will. One other potential way to square this is there’s different time horizons, right? The time horizon on which clean wins is potentially somewhat medium long, right? It’s not to say it’s not also winning in the short term. You look at the interconnection queues. But that figure I gave about a 1,000-fold cost reduction in the cost of solar modules over my lifetime, if any trend like that continues in the next three decades, and trends will be bumpy, right? You’ll have ups and downs.

David Roberts: Mm-hmm.

Daniel Palken: But if the trend of Wright’s law, which has thus far been a somewhat iron law of technological development for small modular factory reproducible technologies, continues to hold, and there’s good reason to think it will, the case only gets stronger in each coming decade for how this would advantage clean technologies, and I think that’s an important point.

David Roberts: Yeah. Another sort of general question about the whole thing, although maybe we’ll get into this more when we get to the NEPA section, but it seems like one of the premises of this entire bill, of many, many sections of this bill, is that sort of regulatory provisions are holding things back, and the solution is to cut back on those regulatory restraints.

There’s a sort of general counterargument to this. I’m sure you’ve read the paper by Adelman and Pleune about myths about permitting reform, but their basic point is Biden was actually accelerating these environmental reviews of various kinds, and the way he was doing it is not by sort of artificially restricting their timelines or their reach, but by better funding and staffing the agencies involved in doing them, and having those agencies talk with each other and coordinate better, and having earlier and better public engagement. And you know what I mean?

So how do you view that sort of macro argument about this whole thing? Because when I look through the bill, I see very little of that, and I see a lot of just sort of restricting the reach and timing of regulations. Do you follow me?

Daniel Palken: Yeah, I follow exactly what you’re saying, and I think it’s a valid point. The ability of the federal government to permit things of, you know, private industry or public entities to move through those permitting processes is a two-termed equation. It is both what is government being asked to do. On the one hand, which as you say, is a large and obvious focus of many sections of this bill, and also what tools are they equipped with to do it?

David Roberts: Right.

Daniel Palken: And, you know, you said something interesting there, which is that you see very little kind of things in the second bucket in this bill. I would actually put to you that there are a number of medium, high impact things kind of lurking throughout this bill, Easter eggs, if you will, that only take a line or two in, you know, this is a 417-page bill with 71 sections, so I’m not faulting anybody who at first blush sees some of the bigger titles and the longer changes to regulatory text and has these escape their notice. But to give a few examples, which is not an exhaustive list, right? This bill has a section which gives pay flexibility to the PMAs, the power marketing authorities. This is the Bonneville Power authority.

David Roberts: Mm-hmm.

Daniel Palken: This is the Western Area Power Authority that provide power to collectively dozens of states. They’re traditionally in the hydropower business, but they’re major players in the transmission and grid space. This bill gives them a lot of new hiring and pay authorities commensurate with other public sector utilities. I think that’s a no-brainer, and it equips these large public utilities to actually operate as more normal quasi businesses.

It does another thing where it gives FERC special hiring authority for economists and lawyers, and anybody who knows FERC knows it’s just a building full of economists and lawyers. And so being able to bring on a lot more of those talented experts without having to go through this current provision, which is in law, which requires them to consult with the Office of Personnel Management, which tends to be a real buzzkill on can you have a special exception under law for hiring these sorts of people out of the normal process, is actually going to be a big deal there.

It creates a new geothermal ombudsman, it’s called, and it allows that person to pay 25 percent of current salary retention allowances to people in the civil service who are doing permitting work. It creates a new grant program of $20 million a year for tribal historic preservation offices for implementing digitization work of allowing people to kind of access where are the resources that we’re going to potentially run into conflicts with when doing a National Historic Preservation Act.

It creates a new grant program also, I believe, of $20 million a year for five years for implementing streamlined permitting of distributed energy resources like rooftop solar. It explicitly names EV charging, home batteries. These things collectively add up and I think help on the other side of the scale, which as you point out, is often somewhat neglected in the discourse alongside, I think, also very important, like right-sizing the burden that federal government has in terms of what it has to do.

David Roberts: All right. Administrative capacity Easter eggs, a good name for a band as well. As we go by those, as we’re talking later, maybe you can shout some more out if we bump up against them in our discussions. And I think you’d probably agree, those are gonna be relatively small beans relative to the macro decisions of Congress about how and whether to fund agencies, full stop. Those are the big decisions, and maybe we’ll return to that in the politics-

Daniel Palken: Correct.

David Roberts: We’ll return to that in the politics section. But one more background question, and this we need to be quick about ’cause I want to get to the bill itself, but this is not the first time Congress has tried to grapple with this issue, as you are no doubt painfully aware. Could we just briefly run through, like, what is the history of permitting attempts? How substantial were they, and why did they founder?

Daniel Palken: Yeah, it’s like that scene in, like, “The Matrix Reloaded” where he goes into that special room with the architect, and the architect is like, “This is the sixth time we’ve, you know, failed at passing permitting reform, and we’re getting terribly efficient at it.” That’s kind of how it feels working on this issue. The real SparkNotes version is there were a lot of efforts, like every five years in the highway transportation bills that slowly ramped up over about two decades, and until 2015 didn’t do all that much when they enacted the FAST Act, which created this big permitting dashboard that exists at the federal level and some judicial review protections.

Then fast-forward to the modern day, there were three real kind of recent era efforts. There was the effort that took place that was the kind of Joe Manchin, Chuck Schumer negotiated permitting deal that tried to be attached to NDAA in 2022, but failed on a deadlocked vote, 47 to 47 in December of that year and didn’t go further. It had transmission provisions. It had the Mountain Valley Pipeline, which was very controversial.

That Mountain Valley Pipeline then actually made it into the second of the three kind of modern efforts preceding this one, which was the Fiscal Responsibility Act, which was when there was a threat to default on the debt ceiling from House Republicans who’d said, “We’re not going to raise the debt limit unless we do federal permitting reform.” And there was an effort to try to get a kind of NEPA judicial review for transmission bargain in there, but the two sides couldn’t really align on that, and they settled on what were some pretty, I would say, milquetoast timeline and page limit reforms, as well as a study on interregional transfer capacity and the permitting of the Mountain Valley Pipeline.

And then there was the EPRA bill, which I spent a lot of time with a great team of people working on when I was on the Energy and Natural Resources Committee working for Senator Manchin and his staff. That was a bipartisan negotiated product between Senator Manchin and Barrasso. It contained a lot of transmission provisions. It contained provisions on hardrock mining, on liquefied natural gas, on leasing of renewables and fossil fuels, on geothermal. It took a vote. There was a vote on it in the committee. It passed the ENR committee 15 to 4, very strong bipartisan showing, but there was no real path in the House, especially after the election resulted in a Republican trifecta.

And then it kind of went back to the drawing board with new negotiators starting up this Congress, who, as you alluded to, have spent really the whole two years of this Congress embarked on a colossal negotiating effort to bring forward this much bigger and more expansive product than any of the three previous efforts.

David Roberts: Maybe that’s worth emphasizing here is this permitting bill is bigger in every sense and more ambitious, I think, in every sense than any of those previous attempts. You agree?

Daniel Palken: Correct.

David Roberts: And the transmission stuff, I mean, we’re about to get into it, but how much of that is your leftover work? How much of that is your EPRA work that somehow lived on?

Daniel Palken: Definitely not, you know, my EPRA work. It was a number of people who worked on it. The EPRA provisions have been preserved and key ways actually strengthened in this proposal, but they’ve been added to a number of other really interesting provisions on everything from advanced transmission technologies to interconnection and things like that.

David Roberts: Okay. Well, that’s enough by way of background. Let’s get into the bill. Let’s start with the good, happy stuff that makes people in the clean energy world happy. So let’s start then with transmission, and we’ll discuss how true this is, but I think a lot of people in our world are viewing this as transmission is the big get here. Transmission is the big prize, and to some extent, the political question is just how much other stuff do you want to trade in exchange for getting this great transmission stuff? And I think the transmission stuff is better, at least from my read, than anybody really expected. So let’s talk about it, how lines get permitted. How does a big interstate power line get permitted today? What does this bill change about it?

Daniel Palken: The short answer is it often doesn’t.

David Roberts: Yeah. I guess that’s the right answer.

Daniel Palken: So in reality, right, I kinda say that tongue in cheek, but before you even get permitted, transmission has a more fundamental problem, which is that because it is centrally planned infrastructure, it’s good dating back to the kind of origin of the utility regulatory compact. It is kind of one of the things that is most, like, shared infrastructure. Power flows over it between territories. It’s hard to have a model where it’s, like, privatized in a way where anybody can just build a line anywhere without having, like, a million lines running down Manhattan as you kind of see these pictures of in, like, the 1800s. So transmission at some level usually be planned or go through some centralized vetting process. And what that looks like today-

David Roberts: Yes, you got the three Ps, the background here, permitting, planning, and paying. We’re gonna touch on all those.

Daniel Palken: Planning is, in my mind, the kinda the most fundamental of the Ps ’cause if you don’t have transmission that gets planned, there usually isn’t another mechanism to bring it forward. And so in the US today, we do a decent job, maybe a too good job, at building transmission within utility service territories, but we do a bad job building it between utility service territories, and we do an even worse job building it between what are called regions, these kind of RTOs or ISOs-

David Roberts: Mm-hmm.

Daniel Palken: and then equivalent regions that live in the parts of the country where they don’t have those organized wholesale markets. And so what happens today, as an example of this that really, like, crystallizes how bad the situation is, interregional transmission. There’s 11 of these transmission planning regions that were instantiated after a 2011 rule called Order 1000. Those 11 regions, there are 15 region to region borders where they touch each other, and that rule, that 2011 rule, has been on the books for 15 years.

So some quick back of the envelope math, region pairs times 15 years is 225 region pair years, where every year since that order was passed, we have had an opportunity to do what the order lays out as interregional coordination, where the regions are meant to coordinate their needs with each other and find transmission solutions that meet them. Do you wanna guess how many interregional transmission lines have been planned and built as a result in those 225 region pair years?

David Roberts: Is it meaningfully larger than zero?

Daniel Palken: It is actually identically zero. We’ve built zero transmission lines as a result of that process that FERC tried to set up to do interregional coordination. It’s not hard to understand why when you look at the process. It’s incredibly toothless.

What this bill does as a remedy to that is it writes a actually quite, I guess toothsome would be, like a version with teeth of an interregional planning rule that requires all these regions to get together with their neighbors on a periodic basis and go through a planning exercise subject to a bunch of known best practices, which have kind of been emblematic of the regional planning processes in regions where that has worked in the last several years, and identify needs that can be met with transmission, identify transmission solutions to meet them, and then select those solutions if they’re meeting a set of affordability and reliability metrics that are essentially set forth in the bill, which there’s very good reason to believe there’s so much pent-up need on the grid that we would have a lot of lines be able to meet.

So that is one of the kind of central reforms in this bill, and then by the way, it does the same thing at the regional level.

David Roberts: But what if they don’t? You know what I mean? What if they don’t? Is there a forcing mechanism?

Daniel Palken: There is, and this is the part that carries over from the EPRA bill is kind of the one-two punch of these two priorities. The first is this, I’m not gonna call it top-down ’cause it’s really middle out. It’s driven by the regions, but this middle-out policy of having the regions get together and plan themselves. But then the failure mode of planning that we have observed time and again in this country is there are certain stakeholders that sometimes have a strong financial interest married with a capability to delay, delay, delay planning until it essentially becomes a paper exercise. To say it plainly, sometimes certain utilities are the entities that have the incentive to do that.

This is probably unintuitive for people, right? Utilities, the first thing you learn in utility school about them and that they want to build more infrastructure to deploy capital to make a regulated return, so why do they not wanna deploy the biggest kind of capital of all, which is a large hulking transmission line between territories? And it’s that last part. It’s when you build transmission between territories, there’s two things that are wrong with it from a utilities perspective oftentimes.

One is that by virtue of going out of the territory, there’s no obvious God-given reason why the utility that’s only in one of the territories that the line is touching should have the right to build it. Right. And so there’s no reason that they can articulate to their regulator why we have to build this, and indeed, that’s been reflected in regulation for years, where regulators have said, “Yeah, like economically significant transmission that’s built to solve problems like this, you gotta bid that out competitively to make sure people are getting the lowest cost.” That ensures that utilities don’t like it. The second thing, which is even worse for them, is that you often don’t get to build the generation on the other side of it. The generation is being supplied from another RTO or another utility or developer somewhere else.

David Roberts: It eases congestion in your area, thereby lowering prices in your area, which in a sane world would be a good thing, but not always from the utility’s perspective.

Daniel Palken: To get back to your question, which is the essential question of what if they don’t, what if they turn this planning into some sort of paper exercise, what the bill does in Section 2101 is it overhauls the existing backstop siting process, which is a process that already exists at FERC, but it makes it, puts the applicant in the driver’s seat.

So another, a non-incumbent can bring a transmission proposal to FERC and say, “Hey, FERC, we would like you to take a look at this, and if it passes your cost-benefit tests, and if it improves the reliability of the system and meets these other guardrails that are set out in the bill, you will permit that line, and you will cost allocate it according to the normal beneficiary pays cost allocation, where you’re having the people who benefit electrically from it pay.”

The thing that does is very powerful. It creates an incentive where every market actor can see proactively that if planning does not go apace, there is an alternate pathway where independent developers can go into the room of the regulator and say, “Please consider our line.” The theory behind that backstop is that by having that there, it will be a massive incentive check on utilities to say, “We’re not going to turn this into any sort of paper exercise.”

’Cause as much as utilities might not love an interregional planning process that involves building some lines out of territory, they would much rather be, see through that process in which they have a big privileged seat at the table than have somebody else be able to identify real needs on the grid and bring things to FERC in order to build them.

David Roberts: Right. FERC basically bypassing their planning process. They do not want that.

Daniel Palken: Yeah. And we want the utilities doing this, right? We want the regions. We don’t want a thousand lines going to FERC and them having to evaluate them. FERC doesn’t have the state capacity to do that no matter what hiring authorities we give it. Like, the theory of this bill is to get the regions working collaboratively, and we’ve seen enough success at the sub-regional level, at the intra-regional level, to know that this is, like, not an unattainable task. Like, SPP is doing a very good job at this. ERCOT does a very good job at this in Texas. You know, MISO has done a decent job at this over the years.

David Roberts: Here’s a slightly technical question. That’s planning and permitting. There’s also paying. You said these things are gonna be paid for according to benefits, basically. That’s the kind of principle. But there’s a provision in here that state policy benefits, like emission cuts or compliance with renewable portfolio standards, do not count as benefits and are explicitly excluded. My understanding is basically this is red states’ way of saying, “We do not want to be dragooned into paying for blue state climate policy.” Do you think that is a meaningful provision? Do you think that’s gonna make it harder to justify building lines that are specifically gonna be built to reach renewable resources?

Daniel Palken: My personal view is that is the only way that we are ever going to get transmission planning at the interstate level to work is if red states and red counties within blue states, which is most of the country geographically that’s going to be hosting transmission lines-

David Roberts: Yeah...

Daniel Palken: is not on the hook for paying things that they, paying for things that they do not agree with. If we lived in a different world where everybody said, “We’re willing to pay a premium for, you know, reduced emissions,” that might be a different story. But I think that the nice thing about transmission is that there is a lot of genuine economic need for it. There really, really is. Like, the DOE under Trump, like a few weeks ago, put out a, what they call the Transmission Needs Study, which Biden had previously put out a version of three years prior in 2023, and that study identified billions and billions of dollars in opportunity.

Like, just the dollar per megawatt hour transfers that they were identifying for kind of inter-seam from the Western to the Eastern Interconnect transfers of power are very massive. And so I think the case is it’s widely understood, like this is a tremendously non-controversial statement, to be very strong that just on the grounds of raw, honest affordability, reliability calculations alone, you can make a lot of transmission that is really meritorious to the country pencil, and if you try to kind of juice the numbers with some extra benefits, you might succeed in juicing the numbers, but you will make everybody really mad and grind process into something that where you’ll never move lines through in practice.

But by and large, like what does transmission do for like different sources of energy? You know, whether we’re talking solar today or geothermal tomorrow. I would say it does three things. One is it creates headroom. This is in many ways probably the most important. We live in a system now with almost no headroom on it on the generation or load side.

And so anytime anybody goes to say, “I have a new wind farm,” or even, “I have a new gas plant, I have a new anything I wanna connect to the grid,” they run into a paradigm where it’s like, “Oh, look, we have to do an incredibly complex electrical engineering study to figure out just what the minimum is we can build to get you onto the system.” And it’s highly non-trivial ’cause the grid is the, you know, world’s most complex machine, is how some people have described it. And also it’s going to take several years and result in several tens, if not hundreds of millions of dollars of network upgrade costs and cost to the system.

When you have a system that is a bit plus size that has a bit of headroom, so the next thing that comes on is able to come on quickly, even if you charge that somebody a fair rate for their share of the infrastructure, that is just a paradigmatically different world in which they can integrate for the grid.

So headroom is number one. Smoothing is number two. You know, the variable resources are obviously not smooth. You know, the wind is not always blowing anywhere, but it’s usually blowing somewhere. You get benefits like that. That’s also just good for the bread-and-butter operation of our existing resources. We’ve seen a lot of winter storms have taken out gas over like 1,000-kilometer radii, and being able to move power from one region to the other would provide real reliability benefits both for the legacy resources and for new resources.

The last one is access, which is building to new areas allows you to access prime resources. You know, geothermal is really only good in the Western Interconnect, but the Western Interconnect serves 20 percent of US electrical load. So if you want to ever have geothermal in the near term for the resources we might access in the next decade or two be a resource that matters for the country’s growth and decarbonization trajectories, you’re going to need more than the paltry 1.3 gigawatts of transfer capability that we currently have across the seam. And I wanna stress that that access point isn’t necessarily synonymous with, “Oh, I’m building a long line out to go to the geothermal well and drink the electricity from it.” It’s often I am making better connectedness on other parts of the system so power can flow, you know, from one geography to another where it’s currently congested and constrained.

David Roberts: Right. And just to reference here, our mutual friend Jane Flegal’s frequent point, which is it makes a lot more sense to build in advance of load sometimes. Do you know what I mean? Like build the capacity with the presumption that load will be built around it rather than building increments of capacity with new load, which is our current torturous system, which is just going slow as hell.

Daniel Palken: Yeah, I cannot endorse Jane enough on that. Like having transmission tends to be the slowest to build and deploy of generation, transmission, and load, and so by the time you realize you need a big transmission upgrade to accommodate your load or generation, it’s five or 10 years too late, and that’s unfortunately the situation we find ourselves in today.

David Roberts: Yes. That point also transfers straightforwardly to public transit, but we won’t get into that. Okay, the points I wanted to make is that one point I’ve seen many people make is this bill goes a little harder at utilities than I think a lot of people expected, and I think sort of bespeaks the fact that utilities are somewhat kind of politically and socially on the back foot right now, which also speaks to sort of the unique opportunity we’re in.

But there are some other things that are sort of happening that maybe utilities are not super excited about. Part is states can refer local transmission spending to FERC, and FERC, there are some penalties involved, including ROE cuts, things like that. Talk about that very briefly. We’ve gotta move on from transmission pretty quick, but let’s touch on a few other things.

Daniel Palken: Yeah. Okay, just quickly on this one, totally novel authority, and this one is kind of really interesting ’cause it’s for the states. The state in which the transmission that is of concern is in has sole discretion to refer their utility to FERC, essentially for an investigation.

David Roberts: Mm-hmm.

Daniel Palken: FERC is then given its full investigative authorities that are normally reserved for like market manipulation cases where they can compel testimony, subpoena documents. They run a big exercise in tandem with up to three representatives from the state looking into if there’s been imprudent investment, and then if the commissioners by a vote determine that there has been, as you say, the statute recommends a number of penalties to them, including fines up to $5 million for imprudent facilities, reductions in returns on equity, eliminating the entire presumption of prudence for the class of local transmission facilities that’s been developed and planned. This is attempting, I think, to address a real problem, which is the overbuild of local transmission that is weighing down bills and crowding out other investment.

David Roberts: Yeah. They’re not gonna like that. And then quickly, let’s talk on grid-enhancing technologies. Volts listeners know grid-enhancing technologies are, to a first approximation, ways of getting more capacity out of existing lines or existing rights of way. This bill makes them mandatory whenever the benefit-cost ratio exceeds one, with, again, penalties to state utilities if they don’t do that. Is that correct? And is that as cool as it sounds to me?

Daniel Palken: So yeah, it sets up a best available conductor standard, and that standard is based on the ability of the conductor to transfer power and transmit power efficiently and other factors. And then basically, FERC applies that standard, and utilities are tasked with applying it when they build new transmission or upgrade existing transmission. And they are given a presumption of prudence if the benefit-cost ratio is greater than one for those new facilities. The other thing this bill does on advanced conductors and these advanced technologies is it really streamlines the permitting for them.

David Roberts: Mm.

Daniel Palken: Oftentimes, these upgrades occur in existing rights of way. Right. And, you know, an existing right of way is something that we’ve already permitted, and so it says it really reduces the permitting burden, in many cases to zero under laws like NEPA, specifically for activities that happen in existing rights of way that are these types of upgrades.

David Roberts: Anything else worth mentioning quickly on transmission before we move on?

Daniel Palken: In the transmission title, I wouldn’t say this is transmission qua transmission, but there’s an, a few interconnection provisions that are really interesting. And one that I wanna highlight is this interconnection automation provision. This was a bill that actually passed as part of the DOE AI Act in the previous Congress, and it was a provision that was in there that basically requires FERC to direct all the RTOs and the other providers of interconnection to update their interconnection processes with a bunch of the modern technologies that are now available around cloud computing and AI and machine learning. RTOs are not generally the hotbeds of computational innovation that running a fast and modern interconnection process would demand.

And this is the sort of thing where could FERC do it under existing authority? There’s actually debate on that within FERC, as I understand it. It’s a very granular finding to have to make, that rates are unjust and unreasonable because people aren’t using this specific computation technique. Right. But directing FERC to do it not only answers the question of could they do it, but answers the question of will they do it. And I think we’ve already answered the question of is there meaningful upside to this? I definitely think there is.

So that’s like a sleeper provision that I see as having a lot of upside if some of these new companies and technologies that are doing this sort of automation work kind of achieve the heights that they’ve set for themselves.

David Roberts: Okay. So transmission, better planning, better permitting, faster permitting, more interregional cooperation, easier to permit, faster to build, mandatory or close to mandatory grid-enhancing technologies and better, faster interconnection procedures at RTOs. These are all things that I think everybody in clean energy world, or almost everybody agrees are huge wins and hugely necessary for expanding the clean energy grid, I think. Unqualified goods as far as I can tell. Let’s talk about data centers real quickly. This is interesting to me. So talk about what the bill requires of data centers.

Daniel Palken: The bill has a number of provisions. The section to really look at here is 2107. It’s also in the transmission title. A number of them try to encourage a number of best practices. Some just give the states authority to do certain things, like try to allocate interconnection rights based on a open-season auction concept.

It’s been pointed out by very smart people like Travis Kavulla that the current way that we do interconnection for generation and load is often that we have people get in a line, and we, like, award them a property right as if this were, like, the Colorado River, and say, “If you were here first,” like, you know, “you have a God-given right to get considered before, you know, the guy who came after you, even if your project is way less ready and has a bunch of other things wrong with it.”

A good way in other walks of life where we have a fixed resource that we need to allocate administratively, like spectrum, is to say, “We’re just going to auction it off and let people’s willingness to pay money for those rights be the first indicator of their seriousness and willingness to come online.” So there’s concepts like that that will both hopefully raise a lot of money for the system, because if you’re having these people bid, they will be paying that money, and that will be going into the grid and to ratepayers.

David Roberts: But isn’t the result of that gonna be that data centers get all the capacity ’cause they have all the money?

Daniel Palken: Not necessarily. Data centers are somewhat unique in the size of their loads to begin with, so other smaller loads I don’t think are going to necessarily be facing these competitive processes. This is an optional authority for the state, and I don’t think a state would say, like, “Joe Schmo, you have to bid against a data center to, you know, connect to the local utility.”

I think that there’s a lot of details up to the implementation, but I don’t see the sorts of, you know... You could imagine really pathological interpretations of implementing this. I am less worried about scenarios like that. The other provision I think really deserves highlighting that has gotten a lot of attention, this is maybe the one with the most teeth of the data center, you know, ratepayer protection type provisions, is this provision that has to do with something called “and” pricing. FERC people name things in, like, the most hopeless, imperceptible way.

“And” pricing traces to a 1994 policy statement that FERC put out, where it basically said that if you’re a load connecting to the system, you can either be made to pay the incremental cost of any network upgrades that you need to connect, or you can be made to pay the average embedded cost, the total cost of the wires on the system divided by the number of, you know, megawatt hours used multiplied by your number of megawatt hours used.

Fine. Either of those things, either of those bases at looking at cost, if you made everybody pay one or everybody pay the other, it would sum to the total cost of the grid. But what this bill does is it says that data centers, you have to pay both. It says computational loads, and that’s called “and” pricing. You pay the incremental cost, and you pay the average embedded cost.

And what that does is it’s going to be, and we can discuss kind of the pros and cons of this, ’cause the calculus of it isn’t entirely obvious. But it’s going to be a very big, significant revenue pull in kind of human terms, potentially billions of dollars from data centers into ratepayers’ pockets and into grid infrastructure ’cause they will be paying more than their fair share. And that is like a policy decision. Like Congress has it within its right to make that decision, and I think it responds to this political moment where there’s a lot of angst around are these data centers driving costs up? And to be honest, there are a lot of kind of hidden vectors where data centers can drive costs up.

Sometimes policymakers think they’ve covered the obvious ones by saying, “Okay, we’re sure we’re making them cover the right universe of incremental costs on the transmission system.” But then what about the distribution system? What about energy costs? What about capacity costs? Ancillary service costs? What about the costs of inputs and commodities and equipment that they’re driving up? And so I actually don’t think it’s a dumb idea to make sure that in this one area of kind of grid network costs, that they are paying, in a sense, more than their fair share.

David Roberts: Yeah. I guess just to give voice to, I think, what might be the reservation about this is just once you open up the Pandora’s box of treating different large loads differently, what else might sneak through that door? Although I personally have no problem at all with charging data centers as much as we wanna charge them, but I just thought I’d get that out there.

Daniel Palken: It’s fair.

David Roberts: Okay. That’s data centers. So data centers basically are going to be paying more than the costs that they impose on the grid for hooking them up, and this will be a revenue source for going back to ratepayers’ pockets or investing in grid capacity. That is a good thing. Let’s talk very quickly about a couple of other energy provisions. Distributed energy gets a shout-out here, a little VPP piece. Quickly, what is that?

Daniel Palken: So it’s a piece that kind of tries to speed up compliance and answer some unanswered questions around Order 2222, which was FERC’s year 2020 order to require regions to allow aggregations of distributed resources to sell into wholesale markets. And then there’s a second section on these distributed resources that I already alluded to it kind of in the Easter eggs for state capacity that provides a $20 million a year grant program for having technical assistance and other federal resources to help localities speed up the interconnection of all kinds of distributed resources. I actually think that one is pretty interesting and is getting a low amount of attention ’cause, you know, it’s candidly not one of, like, the 50 biggest provisions in this bill. It’s an interesting provision.

David Roberts: And then geothermal. You mentioned that this is getting a little bit overlooked. What is geothermal getting out of this?

Daniel Palken: I think this deserves a lot of attention in how this bill is talked about, and let me kinda just frame up why for a second before I say what the bill does for it. Take a step back, and you look where the US and the world is right now in kind of its decarbonization trajectory and its energy transition. We basically have, you know, when all is said and done, in the decades of blood, sweat, and tears of scientists and engineers and politicians are tabulated and accounted for, we have, like, two clean generating technologies that are being deployed at scale around the world.

We have wind, and we have solar. You know, nuclear is being deployed somewhat in, like, China and South Korea, but not so much in Western nations, and, you know, China’s building some hydro as well. But, like, mostly, we have two clean technologies, and geothermal is, like, the one other technology, along with nuclear fusion potentially one day, that, like, stands to come on the scene and be a massive disruptor for that. And among the technologies, it is the only one where you can say with, like, confidence and credibility that if the US does not do this, nobody else is really going to on a relevant timescale. The US is the one with the fracking technologies, candidly.

David Roberts: Mm-hmm.

Daniel Palken: It is the one with the workforce. It is the one with the motivation and the companies that are currently on an upward trajectory. And we have great geothermal resource.

David Roberts: And if you listen to Zanskar, which I did a pod with a few weeks ago, we also have way, way more conventional geothermal resources than we even thought we did.

Daniel Palken: Yes. So there’s three different dimensions of it. There’s conventional hydrothermal, there’s, you know, enhanced geothermal, which is what Fervo does, and there’s advanced geothermal, which is even bigger, hotter reservoirs that are potentially accessible anywhere in the country in kind of the deeper future. And my way of thinking about this is this sort of nascent technology, if you look historically, is kind of susceptible to butterfly effects. You know, we had combined-cycle gas turbines for a while, and then one day fracking and combined-cycle gas turbines took off. We had solar panels since like the late 1800s, early 1900s in some form or fashion, and they slowly and steadily ramped up and then all at once with really frankly China going all in on them. We had, you know, wind technology dating back many centuries depending on how you look at it. It took off under the right conditions, and sometimes those conditions are permitting things. Like with oil and gas, they got a famous categorical exclusion in the Energy Policy Act of 2005 that people give some amount of credit to allowing them to kind of innovate and iterate quickly and have the kind of boom that they had.

But if there were to be a bill that would unlock some of the butterfly effects that would move geothermal forward in a way that we may be very grateful for in 20 or 30 years, let’s look at the things this bill does. Like, it has a geothermal title that has like nine provisions. None of them on their own are monumental, but they add up.

This is a bill from Yassamin Ansari from Arizona and Jared Huffman in the House. They create what’s called a Gold Book for geothermal, which is something that the Department of Interior has created for oil and gas for decades, where it’s basically a manual for how to navigate the federal government if you want to get a permit. Like how kind of the federal government to kind of give you the kind of one-stop manual if you’re an oil and gas driller, not if you’re a geothermal driller.

So it has them make that for geothermal companies, which will be very helpful as we have a lot of new up startups who will want to know how to navigate the permitting regime. It creates new CATEXs for certain categories of test wells that mirror the one that oil and gas has that I alluded to a minute ago that helped that industry take off. It increases the frequency of lease sales. It rationalizes the royalty rates when you make an upgrade to a geothermal facility. It removes permitting requirements in certain instances where you’re drilling into private land and private minerals and taking a lateral into federal minerals. It allows applications to keep being processed while lawsuits are pending. These are all important good deeds that I think add up. The two biggest things this bill does for geothermal, though, are like not in the geothermal title.

They are the NEPA and transmission reforms. If you talk to Fervo, if you talk to the companies, they will tell you time and again their number one priority in permitting reform is transmission. But very close on that list are these reforms like NEPA and NHPA reforms, and I can’t stress this enough, asymmetrically apply out west where all the federal land is because that is where the NEPA process incurs the most. That is also identically where the geothermal is. And those processes are long and arduous to comply with, especially for new technologies that haven’t navigated them before and where a lot of new bespoke analysis needs to be done. So geothermal kind of has all these features that align it with having a world where it is easier to permit on federal land, which is where the geothermal often is.

David Roberts: Okay, big news for geothermal. Okay, those are the energy titles. There are some fossil bits in the energy titles that I wanted to address here. I know there are groups worried about these things. I think one of the biggest areas of concern for a lot of groups is that there’s a section here that basically exempts increasing capacity for existing natural gas rights of way, exempts that from NEPA entirely, makes it much easier to expand existing natural gas rights of way. And of course, like notably, there are a bunch of data centers flooding into the parts of the country where are, there are existing natural gas rights of way, and of course they want to 2X, 3X the throughput on those rights of way.

There’s a lot of different models flying around, but I’ve seen at least one model that says this is probably the single most emission-increasing portions, titles of the bill. What do you make of that section and the rationale and who it benefits?

Daniel Palken: I think the section you’re referring to is Section 1102, which provides these exceptions from NEPA, and it does, as you say, include upgrades to pipeline and transmission line, it’s important to say, infrastructure.

David Roberts: And compressors, compressors which are often sort of the big ugly things next to communities that communities are fighting.

Daniel Palken: Yeah. I assume you’re right on that, but I not thought about the applicability to compressors, but we’ll stipulate that that’s correct. It does allow for those sorts of upgrades to not have to go through NEPA. I am like a little skeptical that this provision is truly game-changing from like an emissions perspective. And the reason I say that is if you look at where pipeline capacity is being built in the country, it is often in areas, like it’s in the Haynesville in Louisiana, it’s in the Permian in West Texas, it’s in the Marcellus in Pennsylvania, West Virginia, Ohio. These are areas where it tends to be relatively easy to get permits.

There are tens of BCF per day that are currently going through these processes and that are not having trouble getting their NEPA processes done. In fact, traditionally, gas pipelines have a pretty good record on NEPA. There was like a study of all NEPA analyses that had been done over like a 10-year period recently by some folks at Stanford, and gas pipelines, somewhat shockingly, underwent fewer NEPA EISs than solar over the same period, even though that period coincided with the peak of the shale boom, during which solar almost functionally didn’t exist. So gas pipelines very often do EAs. This was a big issue, by the way, under the Biden administration. The Biden FERC tried to move gas pipelines from mostly doing EAs to mostly doing EISs, and a big controversy ensued, and FERC ended up not taking that action.

And so NEPA just has not been the rate-limiting step as much as, like, the Clean Air Act and other substantive environmental laws that are generally not amended. In the case of the Clean Air Act in this, and getting the permits requisite to run these compressors and on-site gas at data centers where that is the route that’s being elected, the data center development is disproportionately incurring in regions where NEPA often isn’t even done anyway or is a pretty minimal burden for this infrastructure, and the circuit courts are very favorable, et cetera.

David Roberts: Okay. There’s also, so a cluster of things that are sort of trying to ease burdens on oil and gas drilling. There’s 2211, 2229, 2201. These are all more or less exempting various activities or removing the need for permits for various activities. We probably don’t have time to go through all these individually. I’m just curious, sort of in the aggregate, how much more drilling do you think these things will enable?

Daniel Palken: I think maybe some more. Like, it’s worth noting that shale resources disproportionately exist on non-federal land. In the US, there’s only one shale play of note that sits under federal land, and it’s the New Mexican Permian, and it- they don’t seem to have any trouble getting their drilling permits there, if you look at the production numbers.

The first thing to say is that, like, with 90-ish percent of US onshore production not occurring on federal land, these federal provisions are, I don’t think, going to move the needle terribly much, even if you believed in something that I don’t believe in, which is that supply-side restriction of a fungible, like, globally traded commodity, and a highly inelastic one at that, is going to do much to change emissions, right?

If you bring on more oil in particular from the US, because it’s such an inelastic commodity that is traded so fluidly around the globe, you may not be able to identify the well that somewhere in Russia or the Middle East that is going to output a nearly commensurate amount less, but that is how the economics of it largely works. And it’s not to say there’s not perfectly inelastic, there is some effect. I just think it’s a very bad strategy to try to achieve emissions goals through supply-side restrictions, and the bargain of this bill is we are gonna make it easier to drill for oil and gas, especially on, you know, federal resources. But we are also gonna make it easier to build, you know, clean resources that compete.

David Roberts: Okay, quickly, mining waste on public land.

Daniel Palken: Yes.

David Roberts: This says miners can use as much federal land as is, quote, “reasonably necessary for waste rock and tailings.” I think the clean energy rationale for this is we need a lot of lithium, a lot of copper, et cetera. We don’t necessarily want to be fully dependent on other countries for those things, et cetera. Of course, the communities next to mines will view this differently. Curious what your thought is on the net effect of that provision.

Daniel Palken: Yeah. I mean, this is another one, right? We’re kind of kidding ourselves if we think that by not mining metals that are critical to the economy here, mines do pollute, and you can run them better or worse, and the US tends to have better environmental standards for them. I don’t think we’re doing the globe’s environment any favors, let alone US energy security, or as you mentioned, the nexus with clean technologies which disproportionately require many of these critical minerals by making it so hard to mine here that we don’t have a domestic industry, which is largely the case today for everything other than in some precious metals and some copper.

But what this provision does is it actually returns to the status quo, like pre-2022, I’m gonna say, where there was a ruling out of the Ninth Circuit, called the Rosemont ruling, yeah. And if you look at the General Mining Law of, like, 1800 whatever, my mining friends are gonna beat me up ’cause I’m gonna either get this completely right or get the reverse of what it did. The law, I think, says that you have to have a discovery of a mineral. You have to believe that there’s a mineral somewhere in order to activate the law and stake a claim and plant four flags in the ground. And if you don’t have a mineral, you can’t do that.

And so what historically happened was people would, like, identify a mineral, and then they would just identify, you know, they would stake their claim for their mine, and they would build a disposal site next to it to process and, you know, responsibly dispose of mining waste. I think what happened was they said, “You actually can’t dispose of waste unless you discover a mineral on the land that you’re disposing of waste on because you’re also relying on this law to stake your claim there.”

David Roberts: Right.

Daniel Palken: The thing that happened, that is facially somewhat ridiculous because, like, you don’t wanna have to discover a mineral in order to paper over that land with mining waste. Like, that is not good policy. But that was how our court interpreted the law. This bill fixes that. It says you can designate these things called mill sites for, like, milling activities that can also be used for waste processing. And you can then put the mining waste on those, but critically, you have to pay a fee. It’s like $400 per some number of acres, which is actually twice what the EPRA bill had. And that fee goes into the Hardrock Mining Restoration fund, the abandoned Hardrock Mine fund that Senator Heinrich fought for and set up in the Bipartisan Infrastructure Law in 2021.

David Roberts: Okay. Before we move on to the environmental committee stuff, one final question about data centers, which I think you probably have sort of implicitly answered, but maybe we’ll just make it explicit. I think one worry is that if you are going to charge them a lot more to hook up to the grid, and then you’re simultaneously gonna make it easier to expand capacity at existing natural gas pipelines, that might be interpreted as increasing the incentive to build behind-the-meter gas plants rather than hooking up to the grid. You think that worry is unfounded?

Daniel Palken: No, I don’t think- Look, I think the effect is real there, and, like, I think that in thinking through some of these provisions, like the “and” pricing provision, we should do some careful economic analysis-

David Roberts: Yes...

Daniel Palken: and think about, like, the effect is there, right? If you are charging data centers more than their fair share to connect to the grid, an economist would slap you in the face if you said you’re not creating a financial incentive for them to not locate on said grid.

I think the reason to not be out of proportion alarmed about it is what’s called the bit-watt spread in the data center industry parlance, like how much money it costs you to install a gigawatt of power at your facility or connect to the grid for a gigawatt of power versus the amount of money you make at a data center the way they’re capitalized today that’s a gigawatt in size, is like the highest of any industry in the history of industries. It’s 50X or something like that.

And the prices that we’re talking about increasing by here, even if it’s something like five or even $10 a megawatt hour or even more, is very small compared to the profit margin of being able to connect. And all I’m saying there is the thing that we already know in other terms, which is speed to power. Speed to power and social license are like the two rate-limiting factors for connecting-

David Roberts: Yeah...

Daniel Palken: data centers to the grid. And I think that the social license that comes from charging them more than their fair share, that rightly comes from that may, but it’s hard to tabulate that in a model, may offset the small, in the scheme of the bit-watt spread, economic disincentive, all else equal, to locate on the grid. And the fact that this bill will be driving a lot of grid build-out all the while through its transmission provisions-

David Roberts: Yes...

Daniel Palken: also makes that pathway in the medium and long run, right? This transmission isn’t gonna be built by next Tuesday, but also makes that pathway in the medium and long run much more available. And if you ask the data center developers, even the ones that are going off grid, they will tell you that they do not want to be in the business of being their own utility and fuel procurer and supplier. They would much rather just connect to a grid and not have to think about it. And it’s the fact that the grid is out of headroom and out of capacity that is driving the off-grid rush.

David Roberts: Yeah. Although we do get back a little bit to the disparate timescales here, like what’s gonna be incented in the short term versus long term, but maybe we’ll get back to that.

Daniel Palken: Yeah. This is not a trade-off free territory. I can’t promise that over every timescale, you know, the provisions that do X went out. But my kind of calculus on it is I think there is more time under the integral in the medium and long term than there is in the short term. And the time under the integral is kind of what matters for how much emissions we end up putting into the air or effects on affordability or other things we care about.

David Roberts: You’re assuming regulatory and policy stability over the medium and long term when you make that calculation, and we’ll get back to whether that confidence is justified. But anyway, let’s talk about the environment stuff. So NEPA. NEPA is the big thing here. A lot of changes to NEPA here. A lot of people angry about various and sundry things. It seems to me like the big one here is that NEPA cannot stop a project. Like if the environmental review is found insufficient, courts cannot stop the project from continuing to be built while they do another review. And as I understand it, this was the primary delay mechanism of NEPA, is these injunctions stopping the building of a project. So just tell me if that’s correct, and maybe like, I don’t know why I’m talking. Let’s back up. Just talk about the biggest changes to NEPA.

Daniel Palken: That is the biggest one, and there are a lot of others we can talk through. But the one you’re referring to is the kind of no vacatur, no injunction, no preliminary injunction change. It is a big change to NEPA, and I think that people are right to think about the trade-offs attendant to that. We will definitely be entering a regime not in which NEPA doesn’t exist by any means.

I think NEPA will continue to play a very meaningful role in federal infrastructure permitting, but in which NEPA plays a different role than it does today, and a role that is much less capable of being used as a tool, you know, by opponents to obstruct projects. And the trade-off to that is obvious, right? Sometimes there are projects that, you know, don’t deserve to go forward, and sometimes, you know, there will be one less tool for stopping those projects in some sense. It’s not that NEPA can’t be a tool for that, but it will become a much less effective tool for that.

On the other hand, there are a lot of projects that should go forward that I would argue that NEPA has traditionally also played a big role in stopping an even larger universe of projects that I would argue is what’s been called the dark matter of NEPA. And I think there’s actually really good evidence that, like, lets you kind of ballpark how big this dark matter is that we don’t even see in the first place.

David Roberts: Meaning projects that don’t try.

Daniel Palken: That don’t try because they have seen what happened to previous people that entered the cavern, yeah. So what is the no vacatur thing doing specifically? It is basically saying that when a court finds that an agency has erred in its responsibilities under NEPA, somebody can file suit under what’s called the Administrative Procedure Act. All NEPA lawsuits actually happen under this other bill because NEPA doesn’t have a federal cause of action. It doesn’t have a right to sue for third parties.

But you can bring a lawsuit under this general-purpose law that says you acted arbitrarily and capriciously. And for a while, NEPA had become a very big obstacle to development because as NEPA grew over time, its analyses, these so-called environmental impact statements and environmental assessments, grew from like 20 pages in the early ’70s after it passed to, in some cases, 10,000-plus pages, you know, with records that were 100,000 pages long-

David Roberts: Yes.

Daniel Palken: into the 21st century. And the courts had all different precedents across the country. This is something that is not terribly well understood, right? We have, you know, 11 or 12 circuit courts across the country that cover-

David Roberts: Mm-hmm...

Daniel Palken: usually several states at once. Some of them had very lax standards on NEPA, and if you violated NEPA, weren’t going to do much to you. Actually, the Fifth Circuit, which is the circuit in which most oil and gas infrastructure centers, it’s like Louisiana and Texas, is famously by far the kind of most oil and gas industry-friendly circuit. And so NEPA already wasn’t as big a barrier there as it is in, like, the Ninth Circuit, which is, like, California, which is famously the most liberal circuit. And what happened recently that shifted all of this was there was a big Supreme Court case called Seven County Infrastructure Coalition-

David Roberts: Yeah...

Daniel Palken: versus Surface Transportation Board or something like that. And that case basically had a bunch of pronouncements. The central holding of the case by the eight justices, it was a unanimous opinion, but one justice abstained, that wrote in the majority was that you have to give substantial deference to the agencies if you’re a court. These agencies have a lot of expertise. We could comment on the irony that, like, the people who architected this ruling often don’t want to afford agencies that same level of expertise in general-purpose regulatory rulemaking.

But in the case of NEPA, there is a sense that agencies have expertise, and they should be afforded, quote-unquote, “substantial deference.” It said a bunch of other things, too. Kavanaugh said in the majority opinion that you don’t necessarily have to vacate things if any part of the decision is wrong, and that gets to this vacatur reform that’s in the BAAJA bill.

David Roberts: Kind of interesting, just to insert a note here. It’s kind of interesting when these Supreme Court conservatives do and don’t want to defer to agencies.

Daniel Palken: Yeah. I think there’s a little bit of irony in, like, the-

David Roberts: Yeah. One begins to suspect that they might be working backwards from their goals to those principles.

Daniel Palken: And to be fair, I think that some of the hypocrisy runs in both directions. In, like, 2022, Elizabeth Prelogar, who was Biden’s solicitor general, brought a case to the Supreme Court and argued an oral argument that, like, vacatur should not be allowed as a remedy under the APA, full stop. And so that would also affect vacatur under NEPA potentially. And so, you know-

David Roberts: And just to clarify, sorry, we’re using a lot of technical terms, which vacatur is vacating the-

Daniel Palken: The vacating of a ruling, yeah. It’s nulling and voiding the whole ruling, you know, agency decision and saying, “Go back to the drawing board and do this again, and come back to us, you know, if you still think it’s worthwhile.” Whereas remand is just like-

David Roberts: Come back with another 10,000-page report.

Daniel Palken: Yeah. And you know, another 10,000-page report and public comment period. And so, like what was happening in a lot of the circuits is vacatur was the default remedy, or even in some cases the sole remedy. It was... Some courts interpreted it as the only thing you’re allowed to do, no matter how small the error. If the error clears the bar of like, you know, being arbitrary and capricious, if they didn’t consider the effect of the government permit on some aspect of the environment, then you have to kind of redo the whole thing. That is, I think, I kind of have like a common sense objection to that.

I think that if you’re going to have an error that’s discovered that plainly wouldn’t have changed the trajectory of the agency decision, we shouldn’t hold up large, you know, wind, solar, transmission, even g- you know, gas, whatever projects for it.

David Roberts: Yes. It just made it very, very easy to halt a project in its steps, whatever the phrase I’m groping for is.

Daniel Palken: 100%. And so this outlaws that fully. Like it says there’s no more vacatur, it says there’s no more injunction. You can still remand things-

David Roberts: Yeah, I think you were expecting just sort of a higher bar for vacatur, right? And they just nuked it entirely. I’m sort of just curious, like what is gonna be the practical effect of that?

Daniel Palken: I think the practical effect of that, like when I first learned about NEPA, I was like a young congressional staffer working for John Hickenlooper, and I called up the Congressional Research Service and was like, “Can you explain to me this law?” And the way it was explained to me actually has still stuck with me today. It’s like NEPA is the law that if it didn’t exist, you would have to invent it because there are so many other government analyses that happen of infrastructure projects where like, okay, you gotta do a Clean Water Act, you know, 404 permit, and you gotta do your ESA Section 7 consultation, and you gotta get your Natural Gas Act certificate, and you gotta do your NHPA consultation.

If you didn’t have a process that tried to bring all of those things under one roof, it would not only be incredibly cumbersome for the federal government to kind of corral its knowledge and efforts, it would be hopelessly impossible for the general public to have like a unified source of the environmental impact information-

David Roberts: Right.

Daniel Palken: of the project. I think under this law, NEPA will still serve that, like, very good purpose of government efficiency and state capacity in alerting the public. But it will stop serving, to a great degree, the second purpose, which is being a tool for blocking projects. It is essential to note, though, that if projects are still violating the other environmental laws, the Clean Water Act, Endangered Species Act, the Clean Air Act, some of which have changes to them here, but none on the scale of this change to NEPA if, and certainly not to the substantive standards in those laws.

If you are found violating the substantive standards of air and water quality or harming a species in a way that is not appropriate under the ESA, your action will be just as stoppable tomorrow as it is today. So I think like the casual listener may be just like, “What are they saying? That nobody can bring lawsuits against projects for environmental harms?” Like, that’s not the case at all. You can still have lawsuits brought for environmental harms. You can still have lawsuits brought for procedural fouls if you’re not properly considering and collating comments on the record under other authorizing statutes like the Natural Gas Act, which is the law that governs the permitting of pipelines.

David Roberts: What about this poison-pill concern, which is it now says if NEPA’s involved, you can’t do an injunction and stop the project. Now people are worried that if you bring cases under other laws that are attended also by a NEPA claim, that the appeals court will not be able to issue an injunction even based on those other laws. In other words, that might strip remedies for other claims. This is poison-pill concern. I’m sure you’ve heard it. What do you make of that?

Daniel Palken: I surprisingly had not heard that one. I think the only other law that that would attach to is the law that people bring things under NEPA on, which is the Administrative Procedure Act. I had read the judicial review language in this bill to be very clear, and I think there’s, like, savings clauses or language that actually expressly says this, that no ability to bring suit under these other laws that also at, are part of the NEPA, quote-unquote, “umbrella process,” like Clean Water Act and ESA, pretty much any law that governs the, a permitting or authorization or consultation for a project, those are not affected except in as far as other titles of this law, you know, make changes to them. So I am quite confident from the lawyers I’ve talked to that you would still... If it were the case that you couldn’t bring any ESA or Clean Air Act or Clean Water Act lawsuit-

David Roberts: No, you could… Yeah. I think the concern is you can still bring them, but an injunction can’t result from them if the NEPA claim is also part of that same-

Daniel Palken: Yeah, I don’t think that’s right. I think an injunction or vacatur of the decision can certainly result if you’re in violation of a substantive water or air standard or even a procedural requirement of those laws.

David Roberts: Okay, a couple other questions about this. One is, it cuts the window to sue over this down from six years to 150 days, which is supposed to give projects some sense of certainty. That makes some sense, but then the question becomes, if you have an administration theoretically that was slashing federal agencies to the bone and defunding them and firing half of agencies. In the case that you’re stripping agencies of their administrative capacity, does not in that circumstance cutting the timeline down just amount to a rubber stamp?

This is true of the timelines across a bunch of these, across NEPA, across NHPA, the whole range of them. If you’re cutting down timelines but you’re not staffing, aren’t you basically creating a rubber stamp? Of course, like Democrats won’t do that, but Republicans might and are. Do you worry about that?

Daniel Palken: I also think the answer to that one is no because I think NEPA is in itself not a law that requires you to have any permits. NEPA only attaches when there is at least one other law that requires you to have a government authorization or permit or money given to you or something like that. And in the case of permitting, you’re gonna have to comply with that other law. And those other laws, there’s a lot you have to go through to still, you know, take comment and review the comments. And some of that, if you were violating that egregiously enough, even on a procedural basis, you could certainly be sued.

If you look at lawsuits going to FERC now on natural gas pipelines, even before this law, which is obviously not even passed, you know, so it ha- can’t have gone into effect, people are bringing those lawsuits against kind of balancing factors, you know, that you have to consider when permitting a pipeline under the Natural Gas Act because NEPA has already been diminished, whether we like that or not, from the Seven County ruling.

It would be a bad strategy for any administration, Democrat or Republican, to say, “We’re going to starve our agencies just because this procedural law has, you know, diminished in its ability to halt projects,” because you would end up having people that aren’t able to comply with the Clean Water Act, with the Endangered Species Act, with myriad other laws, and they would just run afoul of those.

And so, like I’m a big advocate of smart permitting and doing things quickly. If you passed this law yesterday, I would still be out there saying we need to resource agencies to do a good job at, you know, permitting all these things above and beyond what this bill does tomorrow for the reason that I don’t think this bill has that, you know, loophole in it ’cause I think that wouldn’t work.

David Roberts: Final question on this. One way of viewing this might be because you’ve stripped courts’ ability to stop projects, it’s basically reduced all of NEPA to an advisory bill, which means that administrations who care about it, i.e., Democrats, will take violations of NEPA seriously and still slow down and still waste time on them, whereas a Republican administration could just ignore it entirely. It’s got no teeth left, so there’s no reason for it to care anymore at all. Do you think it will have asymmetrical effects on administrations in that way?

Daniel Palken: That’s an interesting... Not heard kind of that theory of kind of how this could play out. What I said a second ago I think holds, which is that NEPA is this sort of process or law that if it didn’t exist, you would have to and want to invent it because there are all these other analyses that happen under the federal umbrella, and that if you try to run them all separately through a bunch of separate agencies, you’re actually going to result in a more inefficient process.

I think this is something that the proponents of a strong NEPA say that I actually strongly agree with. NEPA does this aspect of it, which is a critical aspect of it, the one many people learn about first, does play a really essential role in promoting both government efficiency and public goodwill by having people understand in advance what is being proposed in their neighborhoods. And I think if an administration of either party wanted to take the view that, like, we’re just going to live with having a bunch of lawsuits, you know, first of all, that’s still quite inconvenient on NEPA because we’re not going to comply with it. That administration would actually be sacrificing on the efficiencies that, like, this sized-down NEPA legitimately provides.

And, like, I think that would also be a bad strategy for how to respond to this bill. Like, I don’t think this bill has, like, that sort of obvious loophole where, like, if you just do this one quick thing, you’ll never have to think about NEPA again, and everything will be easy for you in permitting your preferred type of project. Permitting is still going to be a real and hard endeavor, as it should be for, like, large physical projects in the real world.

But NEPA, which kind of provides one of the most subjective lenses through which to challenge projects, and also I believe has been asymmetrically applied against clean projects, which is a kind of controversial and non-obvious statement to probably many who are listening, is going to be less of a barrier. And I think, you know, while that has trade-offs, I would be the first to acknowledge that. It will mean that some projects get through that should have been contested in different ways of both clean and fossil varieties. It also has real upside for our ability to build at speed and scale.

David Roberts: Yeah, there’s quite a bit of controversy, I should just say, and I’m the last person to be able to adjudicate this, but there’s quite a bit of controversy about whether NEPA has been asymmetrical like that, or in what direction? This is very much a live argument in the legal community.

Daniel Palken: Can we dive into that for a second, though, before we go to-

David Roberts: Okay, briefly. We’re so far behind schedule today.

Daniel Palken: Stop me if you want. We can go to the next-

David Roberts: No, no, go ahead.

Daniel Palken: If you look at federal lands, which is not the only place that NEPA attaches, but the place that it certainly attaches disproportionately and kind of, you know, often requires the most fulsome and robust analysis. On federal lands in the US, federal lands make up 21 percent of the Lower 48. They account for 3 or 4 percent respectively of each of our wind, solar, and geothermal.

If you look at a map of federal lands across the country overlaid with utility-scale wind and solar development, you can see the wind and solar development filling in in the negative of all the federal land. It is deliberately avoiding it. There have been polls of developers, veteran developers who’ve developed 10 to 200 solar and transmission projects, and they ask them, you know, “What is the most challenging kind of permitting, federal, local, or state?” And they say federal by overwhelming majorities. They’ve asked them, “Have you ever avoided federal lands as a result of anticipating, you know, NEPA or other approvals?” Eighty-two percent yes, 18 percent no.

Like, we have an effect we observe in the real world, and when you ask the actors, “Are you avoiding these lands because of NEPA?” they emphatically say yes. To me, that is good evidence that there’s, like, an asymmetric or at least a large burden placed on clean energy by NEPA.

David Roberts: Okay. There’s probably lots more to say about NEPA, but-

Daniel Palken: Yeah...

David Roberts: for the love of God, we really gotta keep moving. Let’s talk about state water permits. This, I think, is one where the trade-off is most lopsided from the perspective of environmental groups. So the Sackett versus EPA case in 2023 shrank the sort of reach of the Clean Water Act in various ways. Now, this law goes after state water permits and restricts state water permits limited to water quality, and it says, if you’re gonna deny a state water permit, you need, quote, “clear and convincing evidence” and that the remedy must be, quote, “least burdensome.” And from the lawyers I’ve talked to, they say there’s a lot of shenanigans you can sneak in under those phrases. It’s very difficult to meet that bar.

So basically, this is going to allow a lot more pipelines that might have run afoul of state water permits. It’s going to allow a lot more of them under this and remove the ability of states to stop them. What is your take on this provision?

Daniel Palken: I think you are correct that this is the title of the bill that is most asymmetrically geared towards-

David Roberts: Conservatives have been after this for years.

Daniel Palken: Yeah.

David Roberts: They’ve been pursuing this for years.

Daniel Palken: Right. This bill is a compromise. It contains provisions that, you know, Democrats wanted on renewable technologies. It contains provisions that Republicans wanted on fossil technologies. These are provisions that have been primarily driven by pipeline developers. As you mentioned, it applies to the Section 401 of the Clean Water Act certification process. So permits don’t kind of start under Section 401. Where Section 401 applies is if you’re seeking a permit for some other thing, in the dredging and filling operation, for example, for installing a pipeline or potentially a transmission line under the Clean Water Act.

The state then has to certify your compliance with water quality standards it administers from the Clean Water Act and with any of its own policies that it’s layered on in the state. And the controversy that kind of gave rise to this provision is that blue states, kind of New York in particular, have at times toyed with the idea, shall we say, of saying, “We’re going to deny a pipeline’s water quality certification for reasons that don’t have directly to do with water quality, like we have a climate law. This pipeline, in our view, is incompatible with that climate law. We’re going to deny you certification with this state, this cooperative federalism provision of the Clean Water Act.” And pipeline developers have cried foul on that.

I personally think they have a point that, like, the Clean Water Act, that is kind of an extension of its natural use. Now, as you say, it does other things. It goes a little further. It says you have to meet a clear and convincing evidence standard. That’s like a little bit of an odd provision. It’s something that’s- I’m not a lawyer, but it’s ported over, as I understand it, from criminal law, where you usually hear that sort of phrase on “Law & Order,” you know, alongside like preponderance of the evidence or beyond a reasonable doubt.

It’s kind of one of the middle standards from that area of case law, and it’s not entirely clear to people how it’s going to map onto an administrative law context, but it is probably a higher standard than the arbitrary and capricious that exists today. That said, the things to note about the kind of strongest reforms in this section, which say that you only can look at direct discharges into waters of the United States, those only apply to pipelines and to transmission lines. I will concede happily that this provision is asymmetrically useful for pipelines, but I don’t think it does nothing for transmission lines.

I think there’s like an, a line of argument out there that transmission lines don’t tend to have their 401 certifications denied today, and therefore they won’t tomorrow, which would be a good bet if we didn’t pass the rest of this permitting bill. Because the other provisions of this permitting bill make more usable potentially this federal pathway for permitting transmission, and that may make water crossings a more natural nexus for denying a certification for transmission lines.

David Roberts: So you think making it easier to build transmission and putting the federal backstop on transmission might make states that want to resist transmission look for other means of blocking it, and they might look to state water permits as one way to block it, is the risk?

Daniel Palken: Yes. I think that is like a plausible thing to believe. I think there’s another vector also, which is a 2025 ruling called the Transource ruling in the Third Circuit, which made clear that states cannot reject siting certificates for transmission lines based on economic factors if they’ve already been approved through a FERC planning process. And so to unpack that, what that means is that if a state basically wants to come up with a reason to say no to a transmission line post that ruling, which is already out, they will have to find some other reason than we don’t like this thing economically because the federal government has preempted states on that by saying that FERC is the economic regulator.

And so that was, believe it or not, a bit of case law that was a bit hazy and unclear until this Transource ruling. And now at least in the Third Circuit, and I think there’s good reason to believe that other circuits might rule the same, it is not the case. And so that is another kind of stone on the scales of states potentially looking for other tools, and the Clean Water Act is one of the most obvious ones at hand for denying certification for dredge and fill materials when you’re, you know, putting a transmission tower, you know, into or near a body of water.

David Roberts: And what about the least burdensome thing? I was talking to someone who said that that’s kind of what sank EPA’s attempt to ban asbestos back in 1991, is that this least burdensome standard is very difficult to meet, and basically industry can find friendly courts that will raise the bar for that until they’re allowed to do basically anything.

Daniel Palken: I mean, as a general matter, what I would say is that most pipelines today are not being held up by states that are denying water quality certifications, right? This is like an issue in the Northeast. You know, by the way, there’s not like a bunch of data centers chomping at the bit to locate in like Rhode Island or Massachusetts at this point. Like, those aren’t the big markets. So I think will you see more pipelines built maybe in the Northeast Corridor and maybe in a few other Atlantic states? I think that’s possible, yeah. I think that the main markets for this are not suffering from this problem, and it’s important to keep that in perspective.

David Roberts: Okay. Probably lots more to say on that too, but let’s move on quickly to endangered species, the Endangered Species Act. I know a lot of people are upset about this too. If someone who’s- the way someone phrased this to me is, “What if I’m not a climate person? What if I’m a biodiversity person, and that’s my exclusive focus?” Or not exclusive focus. That’s my top focus. What should I make of the reforms to the Endangered Species Act in this law?

Daniel Palken: So I actually think the ESA reforms are very modest in nature compared to pretty much all of the other laws we’ve been discussing. I think they’re mostly a sideshow.

David Roberts: Hmm.

Daniel Palken: One that has gotten a medium amount of attention is this federalism one, where it says that states-

David Roberts: Yes.

Daniel Palken: Yeah.

David Roberts: The determination moves to the states, and of course, like a lot of states are, as previously discussed, very friendly to fossil fuel infrastructure and very unfriendly to endangered species claims. It’ll probably be easier if the decision moves to states.

Daniel Palken: You still have to meet all of the substantive standards of the Endangered Species Act, and there’s actually- There have been previous versions of these sorts of bills that have been proposed before that have not had the language that this one has, which requires a level of certification that the state has the technical and financial and personnel resources to carry out this responsibility. They have to kind of be proactively certified before any applications can even go to them to say, “You’re going to have this authority delegated.”

I think it’s worth stepping back. Tim Male, who is at group called EPIC, wrote two really good pieces on the ESA provisions. I’ve always wanted to be the guy on a podcast who says like, “We’ll put this in the show notes.” Do you have show notes?

David Roberts: I do have show notes. What should we put in there?

Daniel Palken: Okay. We’ll put these in the show notes. They’re on his blog called Permit Me to Explain, his Substack. It’s the Senate permitting bill take one and take two on the ESA considerations. He makes the argument, and he’s a longtime like ESA practitioner who I think it’s fair to characterize as having real sympathies towards both the environmental and the kind of developmental permitting equities here. He’s a pretty balanced voice in my experience. I’ve learned a lot from him. And he makes the argument that, look, like in other laws, we have these cooperative federalist things, like within the Clean Water Act, where states have this big certification role.

David Roberts: Mm-hmm.

Daniel Palken: Like within the National Historic Preservation Act, where you have these state and tribal consultation roles. It’s not a priori better or worse to do things through a state pathway as long as you are making sure that you are doing it reasonably right, and the provision here is, seems to be doing it roughly the right way. It’s also kind of ironic the people who are saying, you know, the ESA provision is very bad because it gives authority to states are then also upset when authority is taken from states in other provisions of the bill, like the Clean Water Act and NHPA.

All of these arguments can be perfectly good faith, but I think the ESA ones in particular, like at least the way Tim has argued it, and I tend to buy it, and again, we’ll put his pieces in the show notes, I think make the case that there may be a transition period where states get up to speed on this.

But it’s not like the federal government in its current incarnation is particularly friendly to endangered species. Like if you’re somebody who’s like, “I’m worried that Texas, you know, will not do a good job,” do you have a lot of faith in Doug Burgum’s Department of Interior to do better than Texas? At least this way blue states, you know, under Republican regimes would have the right to run the ESA process themselves and could chart out the standard that they’re comfortable with.

David Roberts: The best available science standard has been somewhat redefined in this bill.

Daniel Palken: Now we’re treading into territory beyond my expertise. Tim definitely argues in his pieces that the language changes there. Like if you step back from this, are pretty objectively fine. I think the way he puts this is something akin to that if you were a Martian that kind of knew, you know, what this language meant, and you stepped down and saw that best available science language, it’s not terribly more offensive today in this statute or less offensive than it is in case law and regulation as it exists today. I don’t have the ESA-level expertise to know if he’s spot on there or if there’s an argument that he’s overstating it, but I’ll leave that for listeners to decide.

David Roberts: Okay. Let’s move on to what I think is one of the more lively and contentious bits here that’s getting a lot of pushback, Sections 1401 and 1402. The idea here, I think, as far as I know, tell me if I’m wrong, maybe you don’t know either, as far as I know, these provisions were written by Democratic staffers.

So like I think the intention here is to put a stop to the kind of thing that Trump is doing, which is capriciously interfering with the permitting of specific types of energy because he doesn’t like what they did to his Scottish golf course decades ago, just to stop a president from mucking with permitting on capricious political grounds.

But the way these things are written, I think a lot of lawyers out there worry that they’re sort of slightly sloppily written and could have lots of negative consequences. So 1401 basically says if a permit has been issued, you can’t un-issue it, more or less. Tell us what 1401 says.

Daniel Palken: Yeah, it says that, “An agency shall not take any new action that would revoke, rescind, withdraw, terminate, suspend, amend, or alter a federal authorization or permit, or take any other action to interfere with or prevent the construction or operation at full capacity.” People are trying to figure out exactly kind of what the extent of what that means is.

But I think the core of it is well-motivated in its real use cases, as you say, right? I should also mention that a bunch of exceptions are provided, so it’s like except if a court has ordered you to do this or if the, you know, permit was obtained through fraud or otherwise illegally, or if it really would prevent specific and urgent harm.

But the key thing is it places the burden on the federal government to show, under this clear and convincing evidence standard that we discussed in the Clean Water Act sections, now being ported in again from criminal law, that there really is a problem, that there really is, like, a national security concern, or that there really is, like, this permit was given illegally.

David Roberts: Specific, urgent, proximate harm-

Daniel Palken: Yes...

David Roberts: is the phrase.

Daniel Palken: And today, the standard, the burden is on the developer, I believe, to show that the government acted arbitrary and capriciously, so both shifting the burden and raising the standard is, I think, like, it’s going to make it a lot harder for a future Trump administration or the current Trump administration to revoke, w-rescind, withdraw, terminate, and which has been exactly its strategy on so many of these permits of, you know, wind and solar projects in particular.

So that is the use case that is intended, and I think that use case is very plausibly well met here. One trade-off that, like, you know, people who are focused on, like, the emissions puts and takes are going to have to grapple with is this will make it much harder for a future Democratic administration, were it to want to revoke, with-rescind, withdraw, terminate, et cetera, permits on fossil infrastructure, and we saw the Biden administration do that on pipelines.

David Roberts: This is the big worry from environmental groups is that these are now forever permits, as they’re called, which means Trump can spend the next two years lowering all his standards, permitting any and everything out into the Alaska wilderness, out into sensitive lands, blah, blah, blah, can permit a whole bunch of fossil fuel infrastructure, and future administrations will have no way of undoing or blocking any of that.

Daniel Palken: I think that certainly overstates it. Like, as already discussed, all these other laws apply. This is about revoking permits, so if you can’t issue the permit in the first place ’cause it’s illegal, this doesn’t do anything to a court’s ability to, you know, say, “You issued that illegally. It’s in the Alaska wilderness, dummy. Like, the Wilderness Act says that-” “... you know, you can’t build there.” The obvious examples of, like, you’re building somewhere illegally, and now we have, like, a one-way ratchet on permits where it’s open season during one administration, and the next can’t undo them. I actually think the exceptions that are provided in the law kind of as smartly as you can cover that.

The challenge of permit certainty, like I don’t envy the task that the negotiators on this one on the Democratic and Republican side have because permit certainty is the hardest of all of these things to legislate. We know roughly what people wanna legislate and don’t on transmission or on pipelines or on NEPA or on NHPA. With permit certainty, there’s so many human behavioral elements. Like in the extreme-

David Roberts: Mm...

Daniel Palken: it’s impossible to legislate truly good behavior. But it is possible to put the gun in the safe. Like it is possible to say we are going to take away the most readily at hand tools that have been used and might plausibly be used to block infrastructure and set up incentives where it’s hard to do that. Like another thing that’s controversial about this provision-

David Roberts: And sort of note here, I mean, climate change is almost certainly not going to meet the bar of specific, urgent, proximate harm.

Daniel Palken: I wouldn’t think so.

David Roberts: So like a Keystone-style or Arctic Refuge-style reversal of permits is gonna be off the table.

Daniel Palken: I mean, the Arctic Refuge reversal of leasing that happened in the IRA actually was done through statute and pulling back lease sales that had been put in place in the 2017 TCJA. So like Congress can still do whatever it wants, like Congress can override its laws with its other laws. The Keystone, yeah, like you wouldn’t be able to cancel a lawfully granted permit if there wasn’t some legal deficiency, and I think, you know, people are gonna have to be comfortable with that as like this is the price of admission.

The theory of this bill is like this tit for tat of during blue administrations, we cancel and stymie all the fossil infrastructure, and during red infr- administrations, we cancel and stymie all the renewable infrastructure. I think it’s negative sum. I don’t even think it’s zero sum. I don’t think it’s like, ah, you know, one side’s getting hit as hard as the other.

I think a lot of these projects take longer than four years to build, even under a more favorable permitting regime, and yet administrations are four years and tend to turn over after four years, and we haven’t had a two-term president in a while now. Like I think that we mostly end up building nothing under the current regime, and here’s an asymmetry, right? That favors the status quo. The incumbent system today is predominantly fossil.

David Roberts: Yes. This is such an important point to make, is that freezing things in place benefits the status quo, which is filled with fossil fuel infrastructure.

Daniel Palken: Right.

David Roberts: You know what I mean? Even if you’re like a- I don’t know if this is the right place to make this point, but it’s a little rant I gotta get out of the way. Even if you’re like some kind of de-growther, or even if you think the economy should be smaller or whatever, even if you think, you know, our primary goal should be reducing emissions immediately, there’s no way to do any of those things without building replacements for existing fossil fuel infrastructure. Even if that’s all you wanna do, you need to build like a mofo. Like, you gotta build a lot really quick, even if you just want replacement-level infrastructure.

Daniel Palken: Hundred percent. There’s a massive asymmetry here, and like the people who are most wanting change should, all else equal, be the people who are most eager to see, you know, laws go into effect that speed up the rate of change. And you have to have a plausible theory of the case behind that for why changing those laws would lead to the deployment of the technologies you want. But I do think that case has been articulated both on this podcast and by many previous guests and, of yours.

David Roberts: This is just still on 1401, on the permit certainty. It still allows permit revocation based on national security grounds, which is, of course, like what Trump has been saying. And those national security grounds, I think the Trump administration has demonstrated pretty clearly are just loosey-goosey as hell, and you can do almost anything you want under the guise of national security. So what about the idea that, like, that is a loophole through which a malefactor like Trump could drive a semi-truck?

Daniel Palken: I think what Trump has discovered is actually that you can’t do anything under those justifications ’cause the courts on those ones have been very quick to say- I think in one case, they actually used the word pretextual. They said something like, “This is pretty plainly pretextual. We’re turning this down.” All this bill does is it creates a new right of action where, like, you can sue on this specifically for this specifically, and it moves the presumption, it moves the burden of proof from the developer to the administration.

So now, as hard as it’s been for Trump to make this showing yesterday, he’s going to be the one that has to make the showing and have to make it under a higher evidentiary standard than exists today. So it just supercharges the dynamic on which these things have been being turned down already fairly quickly today, and the speed matters here. Like, making it so they’re turned down even more quickly tomorrow is better. The other thing it does, which this has attracted some level of controversy too, and I could argue this both ways, but it creates potential compensation for people who have been the victim of, or companies.

David Roberts: Well, hang on a second. Let’s talk. This is 1402. This is sort of like what do you do if someone is blocking these things and you want to sue? So let’s talk about this ’cause this is where I think the lawyers are really freaking out, which is you can sue under this disparate treatment standard, which is you can say the administration is blocking my kind of technology in a disparate way, you know, out of proportion to the merits. How do you demonstrate that? You compare it against the approvals and denials of the previous five years.

And then, of course, you have the obvious danger, which is that the previous five years are the Trump administration, where all the fossil fuel projects are being permitted and as many possible clean energy projects are being blocked. So that’s setting the five-year standard so that then you could argue if a future administration starts approving clean energy projects at speed and scale, that in itself is disparate treatment. You can imagine a fossil fuel developer saying it goes against the last five years, that diverts from the last five years in a way that suggests disparate treatment. What do you make of these legal controversy around this?

Daniel Palken: That specific iteration of it won’t work. You won’t be able to say you’re permitting wind and solar too quickly, slow down, because the unreasonable delay or improper denial standard, which the language which is in Section 1402, only goes one way. It only goes towards slowing things down. So it’s not disparate treatment under the language of the statute to be like, “Ah, you’re going too fast.” I think the concern, though, that I’ve heard, which is very closely related, which, like fair enough, is like this would stop a future Democratic administration from doing a lot of predatory slow-walking on fossil permits and doing unreasonable delay there.

David Roberts: Or even not predatory. Don’t sneak in the word predatory there. Even if they start denying them on perfectly reasonable grounds, the Trump administration has been extraordinarily liberal in approving them. Even if you just sort of return to a Democratic administration baseline, that would look like disparate relative to the Trump administration.

Daniel Palken: So I’ve heard different versions of this, and, like, the denials still, they have to meet the standard of being improper and if they’re, you’re in violation of any law, which is the reason that an administration would have to deny it, it’s like you’re violating the Endangered Species Act, I don’t think that would meet the language of this section, which says you actually have to make a showing that it meets all the relevant legal standards for all of the authorizations it needs.

So that’s a required showing. I did slip in the word predatory. I probably should have used a more neutral word that was like for reasons that go beyond the letter of statutes as they exist, because if we’re talking about denials, it would have to be for some reason other than you’re violating the law.

I’ve heard another version of this that is like, okay, what if the Trump administration is permitting all the pipelines in, like, 20 days, and a future Democratic administration wants to give them, you know, a fair shake, but, you know, take the full year to afford it under the deadlines of this and other statutes and, you know, deny some of them if they’re breaking the law and approve the others that are adhering to the law? Isn’t it the case that you could show some disparate treatment because you’re going much slower? Like, you’d be able to show that the Trump administration was doing it in 20 days, assuming they did it all legally, which is questionable if you’re doing it in 20 days.

But, like, for the sake of this hypothetical, that wouldn’t work either as I read it because in order to meet the unreasonable delay standard, the permits have to be more than 60 days past due. So not only do you have to pass the applicable deadlines, you have to pass them by two months. And you have to not only do it for your own project, you have to do it for other projects as well because you have to make a showing that this is happening on a systematic basis to your type of projects. My reason for not being as worried about this section is I will caveat that I have not fully thought through all of the potential hypotheticals in this section. I’m open to persuasion that there is some gameability that I haven’t envisioned is that one-

David Roberts: Well, we will link to some arguments to that effect again in the show notes.

Daniel Palken: Yeah, and there are smart people who disagree with me on this, but I personally think that one provision of this section really comes into play here, which is that only developers are allowed to sue. And that sounds obvious, but if you actually look at a lot of the litigation against fossil projects, you know, that happened during, like, the Biden administration and subsequent administrations or renewable projects, they’re usually brought by attorneys general or they’re brought by trade associations. And it’s very clear in the statutory language that you have to be the developer in order to bring it.

And I just kind of think it would be somewhat crazy for a developer to look at a permit that’s been denied to them and say, “Instead of taking the 1401 pathway or some other pathway that exists in this bill around permit timelines, I’m going to try to make an industry-wide showing that not only has my permit been improperly denied or unreasonably delayed,” you have to make that showing too, “but in addition to that showing, I’m going to make a showing that this is happening on an industry-wide basis as a general trend.” Companies generally don’t like suing the federal government. They generally like having state actors or trade associations do it for them because companies are repeat players before the federal government.

And to take on a lawsuit that is much bigger than necessary in order to do an altruistic good deed for your competitors in your own industry who are trying to out-compete you at selling your own product, I think supposes a greater degree of camaraderie than often exists between competing actors.

David Roberts: But if the remedy as established in the law is 50 to 100% of the expected construction cost of the project. Depending on the size of the project, that is a substantial amount of money you could basically be making for not even building anything. So it seems to me that gives quite an incentive to venue shop and find a sympathetic judge and claim under either 1401 or under 1402 that you’ve been unjustly denied a permit, and then you could get billions of dollars from the public purse just for winning a lawsuit. That seems to me to create a pretty substantial incentive to do those lawsuits.

Daniel Palken: Yeah, and we should differentiate 1401 and 1402 here ’cause, like, 1401 is not the one where you have to make the industry-wide showing. It does have a version of that you get damages provision. It’s a slightly lower number than 50 to 100%. I think it’s, like, 25 to 50. I do agree that that creates some enticement to it, but as mentioned, right, the government actually does- It can’t have just merely be slower than the Trump administration. It has to be actually blowing by deadlines consistently by months.

There are still a lot of incentives not to do this. There is a lot of judgment that is left up to the judge in all of this, and the judge is not just going to wanna hand out very large sums for kind of marginal cases where it’s not clear that there is unreasonable delay or bad intent. But I, like, I am not-

David Roberts: There are judges and judges out there on the federal court.

Daniel Palken: I mean, like, fair enough. For the reasons stated, I don’t really think this is the likely outcome of the bill, but suppose you stipulate a world where this provision proves a lot easier to access and use than I think. I hear your argument on, like, the immediate five years coming will, you know, make it hard for a future Democratic administration in 2029 to block fossil, but not a future Republican administration, ’cause four of the previous years will have been Trump to, like, do differently on wind necessarily. Yes.

But if the next administration you do have that permits wind, the same thing will then apply in reverse to the next administration that wants to block wind. You know, we should not, when we’re thinking about reforming our permitting laws, which tend to get reformed every 20 to 50 years, just think myopically about the next five years. We should think about the next 50 years.

Is it possible that the first turn of the wheel, because of that five-year number, cuts a little asymmetrically depending on how one imagines future elections going against some resources and not others? Yes, to the degree that you believe this provision gets used, which I’m not entirely convinced of. Is it, like, very also likely that if you stipulate that world, you kind of have to believe that it washes out over the subsequent several administrations? I think also yes. So I realize that answer is not gonna be, like, fully satisfactory. I think that’s fair ’cause these laws come with trade-offs.

David Roberts: In almost any other case, I think that would be convincing, but Trump is just, you know, a bit of a one-of-one here, and preemptively ratifying everything Trump is going to do in the next two years, I think perfectly rightly freaks people the F out.

Daniel Palken: But it’s not preemptive ratification. Like, I really wanna stress that. For the reasons stated, like, he doesn’t have license to grant permits to things that are in violation of the substantive laws. That’s not what this is.

David Roberts: Why not just something like in the Levin-Casten bill? They had a parity test, basically. You just have to treat permits from different energy sources roughly comparably. Do you think that would be simpler, or why not just like a fixed pre-2025 baseline instead of a baseline that’s constantly changing with the whims of different administrations? Just seems like there are simpler ways to do this.

Daniel Palken: I think when you sufficiently probe any of the ways it kind of... It’s easier to write things that’s like, “Don’t do bad thing to this permit.” It is harder to write things that are like, “Don’t do anything to, you know, the whole class of permits and authorizations for this industry.” You know, I think Casten and Levin took their own thoughtful approach, but I think when you really probe all of these different avenues, they all end up, if you pressure-test them, having potential gameability things because you’re trying to kind of make a one-way valve for things that occasionally need to go two ways.

So like with the idea of what if you did like gigawatt-for-gigawatt parity, which is an idea that gets discussed, and you say that, you know, in order to permit any fossil, you need to permit a comparable number of gigawatts of, you know, renewable in the previous year or vice versa.

David Roberts: Yeah, I think that’s a terrible... Well, that is a terrible idea.

Daniel Palken: Yeah. Those sorts of ideas are, you know, maybe terrible for perfectly obvious reasons. Sometimes you run into like these hypotheticals where it’s like, well, what if in one administration or one year they just, there aren’t any applications, and then the number is stuck at zero for both classes-

David Roberts: Yeah.

Daniel Palken: of technology for all subsequent iterations. Permit certainty really is the hardest area to legislate. I think that the authors of this put a lot of thought into these provisions, and I think on the whole, they’re accomplishing the job they set out. I definitely allow for the time to ingest this from lawyers and the healthy debate that is happening around it. You know, I think the potential good news is both sides are kind of going to be somewhat alarmed by the worst-case scenario that the other side could kind of exploit this, a true error here for their preferred technologies on.

And so if there are real technical errors, Sheldon Whitehouse has said at the introduction of this bill that there will be a manager’s package. I am not obviously in a position to speak to kind of what things will be in or out of that, but I think the debate that’s happening is healthy.

David Roberts: Okay. And as I said, we’ll link to various arguments on either side of this question in the show notes. It’s pretty technical, but it’s the one where I’ve seen the most sort of open alarm among lawyer types. Okay, that is the bill. Now let’s talk about politics. My apologies to long-suffering listeners who just had to listen to a lot of very technical policy talk. For those of you who skipped straight here, I understand why you’re doing what you’re doing. I wanted to cover the whole waterfront ’cause I have not really seen, like I said, the online dialogue about this has not been great. A lot of team sports, a lot of shouting back and forth.

So I just wanted to get into the substance of all these questions. So let’s talk the politics. Couple of things about politics and going forward to wrap up. One is, does anything here prevent Trump from continuing to capriciously block wind and solar permits for the next two years of his administration?

Daniel Palken: Yes, I believe it does. So like Section 1403, which is also in the permit certainty section, basically creates a cause of action for unreasonable delay on specific permits. So if you’re slow-walking permits past the deadlines, and this law sets a bunch of new deadlines that apply to all resources in all of their authorizations and permits, you have a right to go to court and say, “Hey, this is being unreasonably delayed. Give me an answer. Order the agency to do something,” et cetera.

So like it has provisions like that kind of littered throughout it, but 1403 is kind of a judicial remedy that maps onto them. It comes with a bit of a sidecar deal that was negotiated extratextually, but which has been reported on, where the Trump has reportedly agreed to move forward on a clutch of wind farms that are being held up at the FAA and Department of War.

David Roberts: Yeah, like 20% of them, something like that, I think is the number I saw.

Daniel Palken: Yeah, yeah. So not all of them, but a number of them. And you know, we live in the world we live in, and this is what Trump is doing, and I don’t like that Trump is doing it. But the deal to kind of let those go, and I think the Democrats may be in a position to take a trust-but-verify approach, where it’s like, “Okay, we’ll vote for this as soon as those permits are, you know, cleared,” or something to that effect.

David Roberts: I mean, you just can’t trust Trump as far as you can throw him. He could just change his mind on anything he says now, a week from now, you know what I mean? There’s... Well, then this presumes that Trump is, you know, subject to the law or will obey court orders, I guess. You know, at a certain point, you have to have some sort of bedrock assumptions about proper functioning of government, but like I get why people are nervous about this.

Daniel Palken: Yeah, I do too. But if you’re gonna presume that Trump doesn’t have to obey the law or won’t obey the law, like, why do you care about any of these other permitting changes anyway? Like, it’s like, you know, okay, if none of the laws apply, like, why are we so stressed out over, you know, federalist changes to the ESA or something? Like, I think that one has to be consistent in one’s concerns there, and I am concerned with some of the actions I’ve seen from the administration, but I think that the negotiators did a good job on that front in getting language that will make it harder to do that in the future, right? Congress should not just roll over and say, “Deny more projects.” Putting stuff in law that makes that way harder is a good thing, and also negotiating stuff on the side as a precondition, good thing.

David Roberts: Okay, but that’s denying projects going forward, those changes in law going forward. The ones that he has in delay now, he’s agreed to release 20% of them. Like, I’m just curious about that. Like these FAA, these denying wind turbines their permits under these pretextual national security grounds, they’re gonna mess with drones or something. This is hundreds, hundreds of wind projects. Will changes in the law make those justiciable, I guess, is my question, or are they just kind of a done deal?

Daniel Palken: If this were really like just a comment on the pretextual nature of this, right? If this were really like a national security hazard, it would be the best national security hazard to discover of all time because, like, China in some years builds five times as much offshore wind as the rest of the world combined. So the worst thing to do would be to publicize it and to say that, “Hey, we think you can fly drones through these because we should keep that secret in case we’re ever in conflict with China due to this massive national security loophole they’ve created for themselves.”

In all seriousness, like for projects going forward, it will make it a lot harder for some of the projects that have been negotiated as part of this, and I’m not like fully up to speed on like how significant the proportion of projects is. But like you say, I think it’s on the order of like low-double-digit percents. I think a lot of those other projects are under active litigation that is generally going well. Like the good news is that courts have not responded favorably to Trump’s pretextual delays on these projects for a range of reasons.

And so once those projects are back going through the motions of permitting, they will be on a better track as well. I am not saying that this bill is a panacea and is going to solve all the permitting problems that you would wish to solve. The question is, does it materially move the ball forward from where it would be otherwise? I just think it’s hard to argue that the answer to that isn’t yes.

David Roberts: Okay. The big political question, which in some ways I feel like is the easiest to answer, but the big one coming, I think from a lot of... I think when I talk to insofar as I interact with normies at all anymore in my weird life, I think one of the sort of questions people have about this is, why do this now? We have a Republican Congress, a Republican administration. The midterms look like they’re gonna go well. There’s lots of high hopes for 2028. There’s some thought that we’ll have Democratic Congress and maybe even a Democratic trifecta within the next few years. Why not just wait and hash out a better deal when Democrats have more control? What’s your answer to that?

Daniel Palken: So one answer is that there’s nothing stopping from Democrats from hashing out their own, you know, better deal or changes to things in a world in which they truly have unfettered power and wanna exercise it. I’m not opining on whether that would be a good thing or bad thing, but like the two pathways of doing something now and doing something later are not mutually exclusive. At a meta level, right, the thing we’re trying to solve with permitting is there’s a certain level of urgency for national security and climate and affordability and other reasons to stop slow-walking all of the large infrastructure in the United States.

And to say that, you know, the medicine that we would take to stop that slow-walking itself should be delayed yet another two years after two previous Congresses in which that was the exact conversation and that happened, right? Often by the other side, right? Republicans were the ones on EPRA who, you know, in the House said, “We don’t want to do this now. We’re going to wait until we’re in a better position.”

And then they waited, and they’re in a better position. But actually, Democrats have also been in a good position this Congress. Like, this has been a very level playing field negotiation between Whitehouse and Heinrich on the one hand, and Capito and Lee on the other, and it really do- is a bipartisan, I think, balanced product that they’ve put out.

So I think the notion that you’re like, a priori going to get a better product or a product at all, right? ’Cause the very foreseeable scenario, if you wait until the next Congress, for example, is that Republicans will be like, “Okay, we’re in less power now than we’ve been in in the past. We will wait for a better deal.” And this is not a hypothetical. This has been done.

David Roberts: Yes. This is just worth emphasizing, like the idea that Democrats can just jam through something on their own, they need 60 votes. Unless the next Congress is gonna get rid of the filibuster, which I think is a long shot. They’re gonna need 60 votes. They’re gonna need 60 votes, and they’re not gonna get 60 Democrats in the Senate probably in our lifetime, but definitely in the next two elections. So Republicans will be in a position to block a bill next Congress and the Congress after that. That’s like a 95% certainty that that is the case.

Daniel Palken: Correct. And now that the bar has been set roughly here, right, what we’ve seen on each successive permitting bill is both Democrats’ and Republicans’ provisions get monotonically stronger each time. So, like, now that the bar is set here, on the next permitting bill, both Democrats and Republicans are gonna say, “We’re- I guess we’re stuck renegotiating, but we’re not going to accept any backsliding from where our side was previously.”

But the other reasons to not do this later, next year is a presidential election cycle. It is very hard to move significant legislation like this when everybody is fixated on massive presidential primary and general election. It is much easier to do it in the lame duck. I think that the turnover of a number of the committee chairs, like the people who have really built up subject-matter knowledge, like Sheldon Whitehouse, are turning over, and you’re gonna have people like Jeff Merkley, who I think it’s fair to say are more on the spectrum of skeptical of doing this kind of deal. I don’t wanna prejudge what his posture would be.

And then people like Bruce Westerman, who unless he gets a waiver in the House to serve another term, has built a lot of knowledge and credibility within his caucus to sell this over there. You just have a lot of people who have, I think, done a lot of work to contribute this, all of whom are going to turn over. You’re going to delay solving the problem when the very nature of the problem that you’re trying to solve is speed. It is kind of self-defeating to do that all for the possibility, and I would say a low possibility given that it’s within election year, of negotiating any deal that could pass, let alone a better one, quote, unquote.

David Roberts: This is just a point I want to sort of bang because I feel like some of the green groups who are opposing this are pretending that there’s an, a better deal to be had in the next Congress or the one after that, and I just feel like they know that’s not right. I feel like they’re misleading their members somewhat, and it is very irritating to me. So there’s just not a better Democrat-only bill on the horizon. That’s just not an option. That’s just not an option here. Like, nothing is an option, but some phantom better deal next Congress I don’t think is an option.

Daniel Palken: You said it better than I could have or did. Like, it’s just like you go down every avenue, and you look through every door, and it’s like, nope, that doesn’t really work for this reason. And as you say, right, like I don’t want to ascribe motives to people. It may be the case, though, that some groups who are saying the wait till next Congress thing, as you say, no, that that is not an option. If that is the case, I just think we should be having the debate, do we wanna pass this bill or do we not wanna pass this bill?

I would argue that this bill is good enough on enough dimensions, you know, that matter to Democrats. Or we haven’t even discussed labor, but like labor has come out very strongly in support of this, and this is something- You know, that’s another constituency that beyond just the environmental climate angle and affordability angle that matters to Democrats.

David Roberts: Well, the, yeah, the electoral thing, how do you think that balances out? Because some people are worried that this is like an insult to frontline communities and that you’re gonna lose a bunch of votes and support from frontline communities. Just to be sort of mercenary about it, how do you think the electoral W- how do you think this will affect, say, the midterms if this becomes something that Democrats support and are pushing for and are about to pass? It’s not gonna pass till after the midterms, I think. But, like, do you think there’s any substantial electoral consequences one way or the other if Democrats come out in favor of this?

Daniel Palken: I am skeptical of electoral consequences on this. I think this is a conversation that, though it’s very robust in the circles that you and I travel in, people are not aware that there is a permitting bill under consideration. People are not aware what it would do, and people will certainly not be aware that it has passed until it is having effects in the real world. And look, effects in the real-

David Roberts: Probably not gonna listen to three-hour podcasts on it.

Daniel Palken: Pro- certainly, we’re at a point in this podcast where we’re so far from the listeners who tuned out in the first hour that everything we say now is essentially behind closed doors. No, this bill will have real-world effects which may cut in opposite directions with respect to voters. Like, even good projects that are, like, eminently environmentally friendly and permitted well sometimes attract a lot of opposition, and sometimes people will channel that opposition into a vote against who’s ever currently in office. It’s worth noting that Democrats aren’t currently in office in the main.

But secondly, people also are frustrated that things can’t be built and that prices are going up. And if you wanna create an environment where people are happier with their politicians and aren’t just throwing out the incumbents every two to four years as a matter of course, having a world that is well-functioning and able to build things that should be built and still able to say no to things that shouldn’t is actually, like, not just the right thing to do, it is probably good long-term politics for the interests of incumbents who don’t want people to always be mad at them. And so I think that is worth considering.

David Roberts: That’s one side of the possib- The other possibility is, and this is something I’ve heard expressed a lot, which is transmission, even though these provisions are great, is slow. You know, it’s gonna probably be 10 years out before you see substantial changes on that front. Geothermal, everybody loves it. Still pretty slow. Probably gonna be 10 years before you see really substantial macro changes in the energy balance based on that. Whereas the things that ease the burdens on oil and gas permitting are immediate. So in terms of the short-term effects of this bill, do you not worry that the short-term effects are gonna be a crap load of oil and gas permitting with no visible benefit for the climate community?

Daniel Palken: So I think Democrats should believe their own talking points on this, right? Democrats will often say wind and solar are the quickest resources to deploy. We’ve already discussed how solar is really asymmetrically burdened by a lot of not the lowercase P permitting provisions, you know, the NEPA, the NHPA provisions that appear in, that are in existence today and that are amended in the statute.

I think that quick-to-deploy resources in general, and you are right, the transmission is, does not score well on being a quick-to-deploy resource. I don’t know that I fully agree with 10 years, but it’ll take some mid-single-digit number of years before you start seeing effects there. You know, first of all, for the projects that are improperly halted today, like that’s the quickest effect of all, and those are the renewable ones that we were already discussing.

Second of all, that for projects that will benefit from a new regime in short order, projects that are quick-to-deploy, which in some cases may include gas projects and in some cases may include solar projects or battery projects, will-

David Roberts: VPPs...

Daniel Palken: will definitely move. Yeah, VPPs. So like on a short timescale, I don’t think that argument really holds up that there’s this asymmetry that then maybe is only rectified in the long run.

David Roberts: Oh, what about a different asymmetry argument, which is that a lot of this goes to the courts and is dependent on courts, and so a bunch of Republican judges could make this materially worse, whereas trying to make it better, I’m talking about from like a clean energy standpoint. A bunch of Republican judges could make it worse by the way they interpret some of these key phrases and key provisions, whereas making it materially better would require new legislation, which would require 60 Senate votes, which is never going to happen. In other words, the risks are somewhat asymmetric, and the modeling that shows the effects doesn’t necessarily take into account those asymmetric risks.

Daniel Palken: So a lot of the provisions in this bill, not all of them, like we’ve pointed to some for which this is exceptions, but a lot of the provisions in this bill send projects straight to the appellate level. Like the appellate level tends to be a more stable environment. Like as discussed, there are still big differences between the Fifth Circuit and the Ninth Circuit and every circuit in between them, but there’s a lot less scattershot variability than there is at the district court level. I also just don’t know that I see the argument that like, you know, you look in like red states like Texas, which are subject to the Fifth Circuit, Texas is building a lot of renewables today.

Like, it’s not like their judges are doing something where like they’re secretly blocking all the renewables and finding like ways to do this. I just don’t look at like the red state experience with their judicial system, and I also don’t look at all the judges who have been very quick to slap Trump down, even Trump-appointed judges, which he often, you know, complains about on Truth Social-

David Roberts: I’ve noticed.

Daniel Palken: slap Trump down on these specific questions of blocking of disfavored energy infrastructure and have that fear.

David Roberts: Yeah, I guess which just comes back really to where we started 112 years ago, which is the core argument for this bill, which is just, if you make it easier and more predictable and smoother and faster to get permitted, clean energy will win. That is the core bet here, and if Democrats believe that, if they believe that their sources are cheapest and fastest, they should believe that it’s a good bet to make, basically, is the core of the politics here.

Daniel Palken: I think that is explicitly the bet that people like Sheldon Whitehouse and Martin Heinrich kind of are making, and that is their vision. I don’t wanna put words in their mouth, but I’ve heard them say more articulate versions than I could of we believe that clean technologies have this structural advantages going into the future, and Republicans believe the opposite, and may the best technologies win.

David Roberts: Well, speaking of bets, people have- just a quick touch on modeling. People would like to know what the outcome of this bill would be. People often would like to know things that are unknowable, and this is no exception. People really would like to know then. So there’s been some attempts at modeling. As far as I can tell, the sort of like, the modeling that’s been done is mostly of the good stuff and not of the bad stuff.

So I’m just curious. And then, like, you know, I saw a different model from someone the other day who was trying to do a ground-up project-by-project modeling of it, and their sort of conclusion was, like, the net emissions effect of this is kind of a coin toss over the next 10 years. Do you have any confidence that we know what the net effect will be on, say, greenhouse gas emissions of this bill?

Daniel Palken: I am confident that I know the sign. I believe that the net effect of this will be to drive emissions down and do so materially, especially in the medium and long run, but also very plausibly in the short run. I think modeling the magnitude on this is very fraught, and I applaud the people that are trying to do it and ballpark it. Modeling can sometimes be an exercise in false precision. It’s like we’re getting the inputs of the gas supply model just right to the third significant digit. And meanwhile, like, we don’t even know about large macroscopic seismic shocks that seem to occur within the energy sector, like every three to five years at this point. Like five years ago, we had no idea that data centers were going to totally change the economics of the power sector.

David Roberts: I mean, Iran-

Daniel Palken: Iran-

David Roberts: Yeah... I mean, fracking… Stuff happens.

Daniel Palken: Yeah. The cost declines in wind and solar. Like, none of these things were in the mainstream models, let alone 10, let alone 100 years, you know, before they happened. And yet they have all been the things that have determined the trajectory we are on. And so I think we should ask, like, what are the things that enable us to be successful under a number of scenarios rather than, like, just what is our central scenario?

I do think the central scenario looks good, but I think that, like, whether or not the data center load growth persists, having a robustly built-out transmission grid and having the ability to build at more than 3 percent of total deployment of wind, solar, and geothermal on federal land, when that federal land is 21 percent of the Lower 48’s land mass, is like a good thing if you care about the deployment of those technologies and, like, a number of other structural factors. It’s not that I think there are no trade-offs. It’s not that I think there are no individual titles of the bill that asymmetrically point in a different direction. And it’s not that I think there aren’t considerations outside of the climate environmental space.

I actually also happen to think a lot of those considerations point in a good direction as well. I do think that we know the sign. We know that the magnitude is likely not small, but like anybody who’s telling you a number with two significant digits is definitely making up the second. And you know, the first one should probably be taken as like a magnitude indicator rather than a faithful prediction of the future. We don’t know the future.

David Roberts: I sort of feel about modeling the way I feel about issue polling, which is like, sure, go ahead and use it to make your case and get what you want, but, like, don’t get too high on your own supply. And I think maybe to return to your sort of original kind of six considerations, I think we can be much more confident that this bill will increase speed and resilience and et cetera, et cetera, et cetera. It’s really the emissions piece that I think is the most uncertain probably.

But I will just say if climate is your thing, if climate is your top thing, and it really ought to be more people’s top thing, there’s enough uncertainty that I think we should extend grace to people who are upset or angsty or just uncertain or, you know, even opposed to this. I’ve seen a lot of very snotty, sneering dismissal of these concerns, and I think we’ve been through enough of the specifics that, like, there’s a lot of uncertainty here, and things could go the other way on a lot of these provisions, and there’s no guarantee it’s good for climate. I just throw that out there.

Daniel Palken: I agree with you. When I’m at my best, I try to believe that everybody who is objecting is objecting in the same good faith that I am, and I think 99.9 percent of the time, I think that assumption is either true, or you should operate as if it’s true because it’s very close to true. Like, I think people don’t get into nonprofit work and public sector work and government work to do a bunch of evil deeds on behalf of shadowy interests.

They do so because they believe in positive outcomes and public benefit, and I genuinely believe that people who think of themselves as fairly far across the political spectrum, actually, when you really probe what they want, want similar things and had just have a very different calculus as to, like, how they read the evidence of the world and how to get there. At the same time, there are no guarantees, right? It’s not like by keeping the status quo the same, we are guaranteeing ourselves a good and prosperous and sustainable future.

David Roberts: Yeah, things are not going well under the status quo. We are not under a trajectory we want to lock in-

Daniel Palken: Yeah...

David Roberts: here. Again, like, a lot of people are saying, “Well, we don’t need to do this. We can just mess with state and local permitting, and we can use executive authority.” I think a lot of people are fooling themselves a little bit on that stuff. You know, I have been convinced by speaking to enough different experts who are coming at this from different directions that federal permitting really is a core issue about speed here, about the speed of-

Daniel Palken: Federal permitting really matters. I’m for sure convinced of that. State and local permitting also matter. To that, I’m like, yes, we can do both, totally.

David Roberts: Okay, final question. Praise be. Let’s talk about what happens next. What’s gonna happen? This thing is gonna get argued, debated. A lot of people, I think, are worried that utilities, to return to something I mentioned earlier, like, utilities really kinda take it on the chin in a couple of places in this bill, I mean, in ways I thoroughly approve of that I think they’re not gonna be happy about.

And I think if you’re looking around for, like, blockers of this bill and people who are gonna muck it up or screw it up, there’s a lot too much attention on green groups and not enough on utilities, who are gonna be lobbying behind the scenes to change a lot of the things that I think you and I probably like most about this law. So just, like- What happens next? There’s gonna be debates, amendments. When is there gonna be a vote? What do we see happening in the next, whatever, six months?

Daniel Palken: Yeah. So nothing’s gonna happen until after the election in early November, and then the Senate will come back and it will take vote to essentially take this bill up and it will be a 60-vote threshold under the filibuster, and then they’ll have to actually vote on the bill itself, which will be a series of votes. The Senate is very slow-moving and requires a lot of process, but in that process, I-

David Roberts: Vote-a-rama.

Daniel Palken: Not a vote-a-rama. Not a vote-a-rama. That’s a technical term reserved for when you do things on 50-vote legislation through reconciliation, and it is a torturous process where the senators and legislative staff must stay up till like 7:00 in the morning mostly-

David Roberts: Yes.

Daniel Palken: to take a bunch of votes that don’t matter.

David Roberts: We’re not gonna do that though...

Daniel Palken: Yeah, so we’re thankfully not going to do that. One of the perks of going through regular order is not doing that. They’re going to file a manager’s amendment. They’re going to bring in like a redone version of this bill that is, I think at a minimum, going to fix kind of some of the technical issues are being discussed with it, where both sides are like, “Yes, this is a technical issue.” You know, it’s a 400-page bill. It was drafted very thoughtfully, but no document that long is perfect.

I think there also are some unresolved… There’s like at least one unresolved issue, which Sheldon Whitehouse flagged at the press release, where like there was an issue of some language around some of the, affecting some of the offshore wind farms. So that will presumably be addressed. Assuming those things are all ironable out, the Senate will take a vote, and at that point, you know, the paths kind of fork in front of us. Like assume the bill passes the Senate, which is not a given, but if it passes the Senate-

David Roberts: Yeah, what’s the House gonna do?

Daniel Palken: Then there’s several ways it could move in the House. It could move as a standalone bill, so the Senate will have sent it over as a standalone bill on like a House-passed vehicle that was unrelated that they amended. And so the House could take it back up, and if they do that, there’s like two procedural pathways. They can either do it by rule, which is rule is the fancy way of saying like a provision that governs how you actually go to voting on something. And rule votes, for reasons of how the House works, generally speaking require nearly unanimous support of the majority party. Even for minority members who support the bill, the general practice is to vote against the rule.

There are a few exceptions to this, like few members like Jared Golden and Marie Gluesenkamp Perez, who have been voting with Republicans on their rules and causing some consternation, but generally speaking, that pathway you would need unanimous or near-unanimous Republican support to bring it to a vote. Or you can go by what’s called suspension of the rules, where you don’t need to do that process that requires a near-unanimous kind of pre-vote, but you do need to get a two-thirds majority of people in the House. This will all be complicated by the fact that after the election, there are likely to be attendance issues where people who have lost their seats in either party are like, “Why should I come back to Washington?”

And so the math will be affected by that. There is another pathway, which is that there are certain must-pass vehicles, so-called, that are before Congress. There’s a funding bill that des- expires on December 11th that will wanna fund the government again, and there’s the NDAA, which is usually passed at the very end of the year, like towards Christmas, New Year’s time.

And so you could imagine a pathway where even if the Senate passes it standalone, the two sides just agree they’re gonna enter into some negotiation in both chambers and potentially attach it to a must-pass vehicle, and then there’s all the same considerations around House and Senate would apply again there. Like, all of the pathways come with challenges, which is why I think nothing is assured here.

Even if we just stipulate that this bill is, like, popular with, like, a very healthy fraction of both parties in the administration, there’s, like, a lot of ways that it could not pass when you’re this late in the game.

David Roberts: Yeah. Jared Huffman of the House, you know, one of the sort of energy leaders in the House, said that he thinks the bill will have to get much worse to win over the Freedom Caucus in the House. Do you agree with that?

Daniel Palken: No, I don’t agree with that. I think that in the same way I wouldn’t agree that the bill will have to be negotiated, like, dramatically in either direction. I think that what the negotiators did put out was a pretty balanced product that includes a lot of things that excite equities in both parties and also make some people in both parties dislike it. And I think the Freedom Caucus is on the list of people that we’ve learned from experience with bills like the SPEED Act, which was, like, a more Republican, you know, favored permitting bill that the House passed, that even then, members of the Freedom Caucus took exception to a number of provisions and made it very hard to move the bill.

But that said, like all the pathways I just laid out, a lot of them, you know, don’t require three or four marginal Freedom Caucus members. Some of them do. Like, I think the people who support this bill should make an earnest play to earn the support of everybody from pr- the most progressive to the most conservative members of Congress, and let the chips fall where they may with respect to put the proceduralists in the best possible position to have the most optionality. But, like, is it possible that we find ourselves in a world where the Freedom Caucus doesn’t like it? Yes. Does that foreclose the chance of passage without the bill getting dramatically worse? No.

David Roberts: Got it. And do you at Arnold Ventures have any red lines here? Is there anything that could happen to this bill in the coming process that could diminish it to the point that you would withdraw your support?

Daniel Palken: Too many hypotheticals to name, right? Like we’ve come out in support of this bill because we think on balance, the provisions tilt positive. But like we were discussing a hypothetical at like hour 12 of this podcast like a few days ago where, you know, you said, “Doesn’t this bill prevent anybody from suing for anything?” I’m misparaphrasing you here. And I was like, “No, I don’t think it does that.” Like, we would not support a bill that, like, takes away the right to sue under substantive, you know, the substantive environmental laws as a general matter.

And like engaging in all of the hypotheticals on like would this be enough to get you off or this, probably not a good use of our time, but there are an infinitude of way, there’s an infinite space of legislative text you could write that would do more harm than good, and actually a narrower space of text you could write that would do more good than harm. This bill is, in my opinion, happily in the habitable zone right now. But if it changes, we’ll reevaluate it.

David Roberts: All right. And final question is, put a number on the odds of passage. I realize this is a wildly arbitrary exercise, but just your gut.

Daniel Palken: 50/50. That’s like the worst answer ’cause it’s unfalsifiable. I’m equally right and wrong no matter what happens. I’ve been telling everybody throughout this process, if you took my pulse at any time over the past six months, you know, like, “Daniel, what do you think the chances of permitting happening are?” I think at my highest I’ve been at 30, at my lowest I’ve been at 10. So I’ve been oscillating around 20. I am now at 50%. So-

David Roberts: 50/50’s-

Daniel Palken: reasonably, uh- 50/50 is very high for me. Yeah. I think this is- like, this is a real shot. It also is a real shot of failure.

David Roberts: Yeah. Yeah. All right. Well, good grief, Daniel. It’s nice to be alone in this room with you. If there are any listeners still with us, God bless you in your fortitude. Thank you so much. This was immensely satisfying for me personally. If for no one else, if for no one else, perhaps I personally really enjoyed this. So thank you so much for coming through and talking through it in such detail.

Daniel Palken: Yeah. Thank you so much for having me, Dave. This was a great conversation. I hope listeners take things from it, and I hope people correct me on the many points I probably got wrong on the fine details of this 417-page piece of legislation that came out a week and a day ago.

David Roberts: I’m sure we will hear about it if we got stuff wrong. All right. Thank you, Daniel.

Daniel Palken: All right. Thank you.

On September 14, I sat down with Leah Stokes in front of a live audience at Seattle’s Town Hall to talk about her new book, The Carbon Wave. It’s an insider account of how the Inflation Reduction Act got made, braided with the story of the high-risk twin pregnancy she went through while helping to make it. We get into why electrification is the heart of decarbonization, the enduring mystery of what’s going on in Joe Manchin’s head, what it means to trade your carbon footprint for a carbon wave, and how much of the IRA survives. It was followed by questions from the audience.

As listeners know, I tracked the ups and downs of the fight for the Inflation Reduction Act quite closely. Nonetheless, when I read the new book by climate policy scholar and professor Leah Stokes, The Carbon Wave: A Story of Democracy, Parenthood, and the Race to Protect Our Planet, I was turning pages late into the night, in a cold sweat. It might as well have been a thriller.

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See, it’s not just about the struggle to write and pass the bill, but about the personal dramas of a few key figures involved, including Stokes herself. During the bill’s two-year gestation, she endured a high-risk pregnancy, bed rest, the premature birth of twins, and 75 days in the NICU. She did media hits from her hospital bed! And that’s only one of the stories in the book.

It does an incredible job of humanizing a story that many people, including us here at Volts, experienced mainly as a wonky battle of models and whitepapers.

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Her twins are doing fine today, which is more than one can say about the IRA. The grim Trumpian end to the story is just one of the things I discussed with Stokes at a live book event at Seattle’s Town Hall on September 14. We talked about the bill’s core push for electrification, the enduring mystery of what’s going on in Joe Manchin’s head, and what it means to shift your focus from your carbon footprint to your carbon wave. I hope you enjoy it as much as I did.

Chapters

• 00:00 – Welcome and housekeeping

• 03:05 – The twins, the NICU, and writing the book

• 08:51 – Carbon footprint vs. carbon wave

• 13:39 – Sam Ricketts and 100% clean electricity

• 18:13 – Why electricity is the core of the solution

• 23:28 – Utilities and the politics of change

• 26:18 – Tech companies and data centers

• 29:11 – Inside the Manchin negotiations

• 33:57 – Why Manchin got to yes

• 38:46 – Trump, setbacks, and where things stand

• 42:55 – Clean energy politics and the global shift

• 46:25 – Audience Q&A: the transmission gridlock

• 48:59 – Institutions, speed, and structural reform

• 53:27 – If Democrats win the House, what next

• 55:43 – Permitting reform

• 59:06 – State utilities, coal, and getting involved

Resources

People & Organizations

• David Roberts (Substack - Bluesky)

  • Volts (Apple Podcasts - Spotify - YouTube)

• Leah Stokes (Website - LinkedIn)

  • Notes from the Electric Era (Substack)

  • UC Santa Barbara (Faculty Profile)

• Other Orgs & Individuals

  • Sam Ricketts (Evergreen Action), Sonia Aggarwal (Energy Innovation)

  • Climate Cabinet (Website), Sierra Club Beyond Coal Campaign (Website), Third Act (Website)

  • Town Hall Seattle (Event Page)

Company & Industry News

• Senate ENR - Heinrich, Lee, Capito, and Whitehouse Introduce Bipartisan American Affordability and Jobs Act of 2026

• EPA - Greenhouse Gas Standards and Guidelines for Fossil Fuel-Fired Power Plants

• Clean Investment Monitor - US Clean Technology Manufacturing in Q2 2026

• E&E News - Renewable Energy Donors Square Off for Round Two Against Chip Roy

Books & Articles Discussed

• Leah C. Stokes - The Carbon Wave

• Leah C. Stokes - Short Circuiting Policy

• Saul Griffith - Electrify

• All We Can Save

• The New York Times - What Joe Manchin Cost Us

• Greenpeace Unearthed - Inside Exxon’s Playbook

• Inflation Reduction Act of 2022 (H.R. 5376)

Related Volts Episodes

• Voltscast: How to Decarbonize Electricity Through Budget Reconciliation

• Should We Feel Good About the Trajectory of Clean Energy Post-Trump?

• Giving Clean Electricity a Political Voice of Its Own

• Saul Griffith and Arch Rao on Electrifying Your House

• Sen. Brian Schatz Wants Permitting Reform, but Not Like This

• This New Organization Wants to Remake PUCs for the Energy Transition

• The Inflation Reduction Act: Everything in One Place (With Transcripts!)

• Can the US Reach Biden’s Climate Goal Without the CEPP?

Text Transcript

David Roberts: Hi, thanks for coming. Thanks for coming, Leah.

Leah Stokes: Thank you to David for doing this. I don’t know, who is a Volts fan in the room? Do we have some Volts fans? Woo-hoo! Yeah. And do you subscribe with your cash money? ’Cause that’s an important thing to do.

David Roberts: I did not set any of this up.

Leah Stokes: I was paid a lot to say that. A lot of money. I’m getting a big cut tonight, yeah.

David Roberts: Yes. Thank you. So let’s jump in. So Leah, I read your book, and as you know, I followed the IRA fight very closely at great cost to my mental health. So I knew all the twists and turns of the IRA fight, and yet I’m reading your book, like, sweating, like, staying up late at night because I’m like, “Her kids. Are the twins okay? And what’s, how’s the pregnancy gonna turn out? Is Adrian ever gonna get home to his family?” Like... So, like, the personal stuff was very, very interesting to me. And I looked it up. Right when the bill was about to pass-

Leah Stokes: Yeah...

David Roberts: we did a pod about it-

Leah Stokes: We did, yeah...

David Roberts: you and Jesse came on.

Leah Stokes: Yeah.

David Roberts: And I looked it up and looked at the book chronology, and I’m pretty sure you did the pod, like... So you had, like, had this problematic pregnancy, bed-bound, early delivery, one of your kids is in the NICU for 75 days. And I looked it up. I think literally the day we recorded the pod, you had to cancel their first birthday party-

Leah Stokes: Yeah...

David Roberts: ’cause you found out they had COVID, and then you found out you had COVID.

Leah Stokes: Yeah. That’s actually true.

David Roberts: I knew-

Leah Stokes: I didn’t think about that...

David Roberts: I knew none of that. Like, you’re just, like, cheerful and informative and did the podcast. I was like, “That was great.” I had no idea. So I mean, I’m just amazed, like... So just tell me how you survived all that and about your decision to weave the personal stories through the book.

Leah Stokes: Yeah. Well, thank you so much for coming, everyone. We’re really excited to do this. The book, which you probably haven’t had a chance to read yet, ’cause it’s only been out for two weeks, is a story of how the largest climate law in American history passed, and it follows a few people who happen to sort of be in the middle of their lives, and having kids while they were working on this big climate fight.

And so my own story follows my really high-risk pregnancy. I had twins, and we didn’t know if they would live or not, and spoiler alert, they’re alive and happy and learning four languages right now. So you don’t need to stress. A lot of readers are like, “Are they okay?” at the end of the book. They are happy and healthy, which is a real blessing and a testament to all the people in the NICU who made that happen. Um-

David Roberts: I think you found out that you were having twins-

Leah Stokes: Yeah...

David Roberts: as you were in the midst of this 10-hour-a-day fight for the bill itself.

Leah Stokes: No, so I was a Canadian citizen at that time, which is relevant because there was literally a conversation happening about, “Oh, you know, should I go into the White House? Could I take a job?” It’s really hard for Canadian citizens to take jobs in the White House. Not impossible, but, you know, so when I got this scan, as I tell in the book, and discovered I had twins, I just thought, “Well, how is this gonna work?” Because I have all this important work to do. And the thing about a twin pregnancy, if you’ve experienced it or know someone who has, is that it’s really difficult.

And so they quickly were like, “We don’t know if they are what’s called mono mono or mono di.” What does this mean? It just means, like, are they in one sac or not? And if they are in one inner sac, you have to go to, according to my doctor, baby jail. That was her language. I don’t think that’s a medical term. Where they put you in the hospital, I believe, at 32 weeks, and they keep you there for as long as possible to monitor continuously three times a day.

And I just was like, “How am I gonna do this work from baby jail? This doesn’t seem really doable.” I end up in baby jail in this story, but actually, I got a lot of work done in the hospital. I go on TV. I’m doing interviews. If anything, it was easier. The people bring you food. You don’t have to go anywhere.

David Roberts: There’s a very vivid story where your husband wheels in one of the big hospital lights-

Leah Stokes: Yeah, it’s true...

David Roberts: the surgery lights-

Leah Stokes: Yeah...

David Roberts: to do, like, backlight you for a TV appearance.

Leah Stokes: Yeah, yeah. For Democracy Now!, right? I mean, wouldn’t you go on Democracy Now! if you had the chance? Come on, that’s badass. The thing is, Democracy Now!’s on the East Coast, so they want you on at 5:00 Pacific. And so I was like, “The sun’s not up then.” So the nurse brought me a giant obstetrics, like, light, but it was broken, so we were not misusing hospital equipment. I always wanna say that just for clarification.

So yeah, it was, like, kinda crazy, but I feel like, first of all, that was this huge window of opportunity to pass a climate law. And what I write about in the book is that when people think about, like, baby-proofing their lives, they really think very narrowly in terms of, like, sticking things in outlets or coffee tables, and I think much more expansively, like, I don’t know, giving my children a livable planet. And I encourage all of us to think in that way, and that’s really the point of the book.

So you know, I just think that as much as it might seem crazy on some level to read about these choices that me and other people were making in this book, it’s also about making sure that, like, our kids have a livable and safe world to grow up in, and I want everybody to be part of that story. You know, I want everybody... They don’t have to make the same life choices I make but, you know, pushing for that livable future.

David Roberts: It really demonstrated to me that it’s good I’m a journalist working alone at home ’cause, like, I barely survived the IRA fight and I wasn’t even part of it, and I didn’t have any kids.

Leah Stokes: Well, you were writing stories, and that is very true. The journalists who shine a light on these issues, including David Roberts, who’s been at it for 25-plus years, amazing, and is now running his own independent outlet to keep this attention, that was so important to having an opportunity to pass this law. And that’s not just lip service.

Like, if we don’t talk about climate change, if we don’t have media attention and conversations, it makes it way harder. Like, this particular moment per se, it’s a lot harder to make progress because we don’t have that air game in terms of conversation. So journalists, including David Roberts, writing about it and talking about it is actually a critical part of the story in terms of how we get this bill to become a law.

David Roberts: Well, let’s talk a little bit about trying to make change. So you have this analogy, the carbon wave, that you contrast to the old term carbon footprint. And I think that’s a very vivid and interesting contrast. So why don’t you spell out what that means? What the carbon footprint is, where it came from, and what you mean by carbon wave.

Leah Stokes: Yeah. So I would bet that every single human being knows what a carbon footprint is in this room, right? Everybody who’s gonna listen to this on David’s podcast will know, and do you know what the crazy thing is? Even normal people who did not come to the event tonight will also know what a carbon footprint is if you ask them.

Why? Why did that idea travel so far? Well, it wasn’t invented by fossil fuel companies. That was academics who really came up with the idea, but it was popularized by BP in the, you know, 2005, ’6, ’7 era when so much popular consciousness was happening around climate change with films like An Inconvenient Truth. You know, and we started to talk about these issues for the first time really after Hurricane Katrina and things like that.

The fossil fuel industry tried to make the narrative about individuals and what we need to do. And so BP spent upwards of $100 million a year on this advertising campaign, and they also built a carbon footprint calculator and put it on their website.

And in their first year of that calculator, 250,000 people went and checked out their carbon footprints. It just... You know, and it was like, “Did I take a plane? Do, should I feel bad about that? Yes.” It wasn’t like, “Is that fossil fuel executive, like, capturing our political system so that we don’t have other alternatives? Should I feel bad about that? No.” So that paradigm is so ubiquitous, and what I’m trying to do in this book is throw the paradigm out, and some people, including environmentalists, feel a little bit of hmm. They feel a little way about that. They wanna hold onto that carbon footprint a little bit.

But what is the carbon wave idea? It’s about rather than an individual by themselves, you know, trying to reduce their footprint within a fossil fuel-based energy system, it’s about groups of people joining together to rip down the fossil fuel-based energy system. It’s a lot more empowering, wouldn’t you say? So it’s about structural change, not individual change, and not behavior change.

And so that means the carbon wave could look like you electrifying your house, ’cause that is potentially fossil fuel infrastructure that you’re owning and operating. It could look like getting an electric vehicle or an electric bike, and it could scroll, it could go all the way up to electrifying a school in your community or weighing in on a law in your city council or working on state policy, working on national or international policy.

And you cannot do that work alone. That’s why this book is kind of a tapestry. The idea of the metaphor is that we’re each like a drop, but when we join together, we can become a wave. And it’s really only through that collective action aimed at structural change that we can really rip down the fossil fuel energy system.

David Roberts: And a big enough wave can wash away all our footprints.

Leah Stokes: Yes. That’s the other nice part of the metaphor. A wave washes away footprints. So- and I’ve had this paradigm for a long time. Like, if you feel bad ’cause you took a plane or something like that, why don’t you just, like, go run a radical campaign to, like, electrify all the schools in your community? And then you don’t need to worry about that plane ’cause you fixed all those heat pumps, and, like, that gives you good karma points forever. I mean, it gives you carbon pollution tons that you collectively reduced, which if that’s your metric of choice, which I support, there’s a lot of easier ways to change the...

I mean, I wouldn’t necessarily say they’re always easy, but they’re bigger ways. They’re more structural ways. And, like, why does getting a heat pump in your house matter? Because let’s say you sold the house to someone else, then they’re moving into an electrified house, right? So that’s infrastructure. That’s a structural change that you control. And so I’m hoping that this makes people feel empowered and that, like, they can change the system, that they can join with others to really be a bigger part of society.

And even if you don’t wanna do it on climate change, you know, go do it on another topic. There’s so many important ways that we can create structural change, and I want people to sort of envision themselves as actors with agency because if we’re just scrolling on our phones all the time, which all of you didn’t do tonight, so gold stars all around. But if we’re just doing that, that’s keeping us alone and isolated. If we go out into community and join with others, that’s how we can actually change the system. And so that’s the sort of story I really wanna leave people with this book.

David Roberts: And as a bonus, you can stop stressing out about the number and variety of grocery bags you use at the store.

Leah Stokes: Oh, yeah. That’s like you don’t even have to think about that one again, unless you’re becoming like a plastics radical. But again, if you wanna be plastics person, which I fully support, go up the system, man. Change the laws because otherwise there’s just plastic everywhere, my friends. This is, you’re the little tip of the iceberg there.

David Roberts: Let’s give a little shout-out to Seattle since we’re in Seattle. One of the-

Leah Stokes: Woo-hoo, Seattle!

David Roberts: One of the central ideas in the book was born in Seattle.

Leah Stokes: Yes, it’s true. One of the central characters in the book.

David Roberts: Via a Seattleite who-

Leah Stokes: Yep...

David Roberts: worked for our beloved Jay Inslee. Why don’t you tell a little bit about 100% electricity by 2035 and where that came from?

Leah Stokes: Yeah. So I don’t know if anyone knows Sam Ricketts in the room, but- Woo! Woo-hoo! We got some Sam Ricketts people.

David Roberts: I believe we have some Ricketts in the house.

Leah Stokes: I hope we have some Rickettses ’cause Sam when I was texting him before this was like, “I don’t know if they’re coming,” so I’ll tell him he was wrong. Sam fans, good. So Sam Ricketts is from Seattle. His mom actually ran a book series and did a lot of community events and was a really cool person that I write about in the book. And he kind of was a young progressive activist looking for something to do, and he stumbles across Jay Inslee when Inslee was a congressman and ends up working for him and driving him around the state before he becomes governor.

And when Jay Inslee decides to run for president, Sam Ricketts gets drafted to write a lot of his climate plans. And the thing about Sam Ricketts, if you were to know him, is that he is a very verbose guy. In the best way. He’s like, if you give him a writing assignment for 100 words, he’ll give you 1,000. You know? That’s just his energy. And so he really took the idea of a Green New Deal and fleshed it out. He wrote, I believe, more than 200 pages of climate policy ideas during his primary.

David Roberts: I think I’m one of, like, maybe a dozen people who read every one of those.

Leah Stokes: Yeah. Me and David Roberts were, like, poring over every word. The rest of the world was like, “What?” So he put out five climate plans while Jay Inslee was still running, and you know, he didn’t get that deep into the primary, if you forgot. And so after that ended, they decided that rather than having a campaign for a politician, they would have a campaign for an idea, for climate policy. And one of the things he wanted to do was pass a policy for 100% clean electricity by 2035.

And when I came across this idea, I thought, “What is this? This is too ambitious. Could we actually do it?” And I just kind of became obsessed with it. And the first time I met Sam over the phone, I was probably a little rude, and I was like, “Do you really think you can do this? Let me grill you on the subject.” And he really won me over with his infectious energy and ideas.

And together we went on a sort of quest, like siblings, fighting with each other on occasion, to try to get that idea into law. And that’s a bunch of the story of the book. And the other fun thing about Sam is that the very first episode of David’s podcast was us. It was me and Sam Ricketts talking about this idea of 100% clean electricity. And since Sam Ricketts is such a historian, he’s always talking about this fact. So there you go, from the deep cuts.

David Roberts: And something else I took from that story, and this gets back to the carbon wave thing, is, you know, you might hear carbon wave and you’re just like, “Well, I’m just some schmo, you know, whatever. I have a literature degree, and who am I?” Everyone who’s a hero of this story, in one way or another, stumbled into their role that ended up being absolutely central to, like, crucial policymaking, and it was just a matter of, like, no one’s doing this, I’ll do it.

And you start doing it, and everybody looks at you like, “Oh, that’s the person who’s doing it,” and then you’re officially the person doing it. It was like, there’s no magic to it, you know? Yeah. It’s just like, just do the thing.

Leah Stokes: Yeah, Sam and I are very close friends, and whenever we find somebody in the activist space, like Caroline Spears, for example, who runs Climate Cabinet, it’s like a way that you can think about how to donate to different candidates in state and local races who are climate champions and find out who they are. She’s awesome, and we’re always like, “Oh my gosh, thank God Caroline Spears exists because she’s off doing that thing,” right? Like activism is an improvisational act, you know?

Nobody’s gonna tell you, “We need you to go do X.” What it really involves is people kind of raising their hand and saying, “Hey, we should have a way that people can figure out who to donate to who are climate champions, so maybe I should build a whole organization around that.” And before you know it, that exists, and it’s got staff, and it is helping drive money into these low salience down-ballot races.

So that’s really the magic of the story here, especially because I follow more everyday people. It’s like the protagonists of the book are not Biden or Manchin or something like that. They’re these more everyday people, and I can only tell, of course, so many stories in one book, but really this is like thousands and thousands of people who came together to make this climate bill a reality, and some of those people were working for decades before this bill passed. So, you know, it really is this symphony performance rather than a sort of solo act.

David Roberts: Yeah, you can just do the thing. Let’s get slightly nerdy here for a minute. The electrification thing. This is an obsession of mine. It’s practically the founding principle of Volts, the reason Volts has its name. I think when ordinary people hear climate, I think they still just sort of vaguely hear environment-

Leah Stokes: Plastic straws...

David Roberts: recycling something. And if they think about energy at all, they just think clean energy. Explain briefly, and you tell the story of sort of staring at this pie chart and this sort of insight coming to you, and I think it sort of like hit a lot of people in our world-

Leah Stokes: Yeah. Yeah...

David Roberts: roughly at the same time. Why specifically electricity, clean electricity, is the core of solving climate change? Not just clean energy generically-

Leah Stokes: Yes...

David Roberts: not just environment generically, specifically clean electricity. Talk about why that’s so central.

Leah Stokes: Yeah. So when you think about climate change, the way it’s often depicted is a pie chart of the different sectors of pollution. Has anybody ever looked at that, like the greenhouse gas inventory for the United States? It’s really cool. I recommend it. That’s how I spend my weeknights.

So that has all these slices, and like one slice will be the pollution that comes from the electricity system, which is like coal and gas plants churning out pollution. And then another slice will be buildings, and it’s like furnaces and hot water tanks running on gas and, or even oil some places. And then another slice will be transportation, and that’s like trucks and cars and of course airplanes, but they’re really small, guys. Let’s be real.

And then, you know, you’ll have industry, which is like factories making potato chips, and milk processing plants, and pulp and paper, and I have gone very deep into that particular wedge recently, so if you’re interested, let me know. And then there’s another slice which is direct emissions from oil and gas, which obviously my goal is to eliminate, spoiler alert. And then there’s an agriculture one, which is like direct, you know, methane or whatever.

So you’re like, “Oh my gosh, I’ve lost you there. That’s so many slices. How did you even remember them all?” So here’s the trick. If you wanna take that pie that shows you the problem and turn it into the solution, you really just need two big things: clean electricity plus electrification. What does that mean? It means you take the electricity system and you stop using coal and gas, and you run it all on solar and wind and batteries, and even the legacy nuclear fleet that exists, right?

Like, you clean up the-

David Roberts: Geothermal.

Leah Stokes: Oh, and hydro. We’re in, we’re of course here, but you can’t do a lot more hydro, spoiler alert. And geothermal, yes, with, like, the Fervos of the world. So you know, you’ve got this whole set of technologies, and you use those to run the electricity system. Once the electricity system is clean, as it is, for example, in Washington State largely, you can run all the other machines of your society on that clean power.

So you can plug your car into the electricity system. With an electric vehicle, suddenly it’s running on clean power. You can plug your heat pump in. You know, there are so many... And you can plug a heat pump water heater in. And even in the factories, you can plug in a giant heat pump, which can then make low and medium temperature steam, and make your potato chips and your milk without fossil fuels.

So clean electricity plus electrification actually can cut about three-quarters of all of our carbon pollution. So that’s really the only thing you need to remember if you wanna go forth and, you know, change the system. We try to clean up the electricity system, and then we run every machine that we can on electricity.

And of course, this framework really builds off the work of Saul Griffith and Sam Calisch. Saul Griffith wrote this great book, Electrify, that I recommend, and you know, he really helped people see this, because he counted up all the machines that run on fossil fuels in the United States, and it’s 1 billion. So on the one hand, you might be like, “Oh my gosh, that’s a big homework assignment. We have to change 1 billion machines.” On the other hand, well, now each of us can adopt three or four of them, and then we’ll change all the machines.

And so, and what do you wanna adopt? You can adopt the furnace in your house. You could adopt the furnace in your kids’ school. You could adopt a coal power plant. A lot of people have done that, too, at the Sierra Club’s Beyond Coal campaign, like Mary Anne Hitt. So you know, you can think about what are the machines that you wanna take responsibility for and join with others.

David Roberts: School buses.

Leah Stokes: School buses, or what about postal trucks too, right?

David Roberts: Postal trucks, my personal obsession.

Leah Stokes: Yes, that’s your, that’s his baby right there. So you wanna adopt some machines and figure out how you can change them, and you can, and often you gotta go to the systems level to do that. So that’s really the framework that I hope people will go forth and carry because it’s very empowering actually. It focuses your attention on the things that really matter and allows you to stress out a lot less about the plastic straws, which I personally feel like is a good psychological coping mechanism.

David Roberts: Yeah. The way Saul puts it is the way to solve climate change is any time any machine that involves combustion dies-

Leah Stokes: Yes.

David Roberts: replace it with a machine that does not involve combustion. Do that to the horizon and bada bing, bada boom, problem solved. It really simplifies, I think, people’s... ’Cause it can seem overwhelming, like Leah says, ’cause everything is fossil fuels everywhere, but this is it. Just, like, replace the machines. That’s it.

Leah Stokes: Yeah.

David Roberts: And it also, like, there’s one political aspect of this too, which I did wanna ask you about, which you raise in the book, and I have questions about. So, like, one of the insights you had is another advantage of this electrification lens is you can take two of the big beasties in your way, big oil and utilities-

Leah Stokes: Yeah...

David Roberts: and you can get utilities on your side in the fight against big oil. Because utilities, it seems like, ought to like the idea of electrif- if they run electricity and they sell electricity, they oughta love the idea of running everything on electricity, and then you’ve tamed one of the beasties and turned it against one of the other beasties.

Leah Stokes: Yeah. That was a political theory. Yeah.

David Roberts: That’s the idea.

Leah Stokes: Yeah.

David Roberts: It doesn’t-

Leah Stokes: Oh, I know...

David Roberts: totally seem like it’s worked out that way. It worked, no. I’m curious of your thoughts on that.

Leah Stokes: Yeah. One thing about the book is that it’s not all like, “I did everything right, and I’m a genius.” I’m not writing that flavor of book. I’ll leave that to the tech bros to do. Like, you know, I reflect on mistakes that I make. I think about, you know, the different strategies we were coming up with, and if they worked or they failed, because that’s really what campaigning and change-making is like. You’re not, like, the super evil or, I guess, not evil genius that coordinates everything, and everything you say happens. Like, you’re in a complex system. You’re in a democracy. And so, you know, you make mistakes.

And so yeah, one of the theories of the book, when I wrote my first book, it was all about utility politics, and bizarrely, people read that book, quite a lot of them. They’re, they even brought some that if you wanna buy that book tonight. But it’s, like, a pretty nerdy book about utility politics. And the challenging thing with utilities is that they tend to be staffed in a really conservative, small-c conservative way. What do I mean by that? I mean, like, they struggle with sort of change. And what we’re talking about with the clean electricity and electrification revolution is a big change. It’s a big change.

And so the utilities are slow to get on board with that. Like, what Sam Ricketts and I and a bunch of other advocates, like hundreds and hundreds of people in this group that we helped build, this coalition, we tried to pass this Clean Electricity Performance Program, which was going to pay the utilities 150 billion, with a B, dollars to do the right thing and build more clean electricity, and they just, like, couldn’t really see that. They’re like, “But, like, why? Why would I take money?”

David Roberts: It was a-

Leah Stokes: Yeah...

David Roberts: help us help you-

Leah Stokes: Yes...

David Roberts: type situation.

Leah Stokes: It was a help us help you, and they really struggled with that. So that’s a challenge, right? Like, trying to get utilities to think about distributed energy, by which I mean solar and batteries, as equally good resources and assets to the grid as other kinds of, you know, power plants and, you know, thinking about investing on the distribution system and not just the transmission system. There are both incentive reasons why they’re bad at that, but also sort of culture and technology and history reasons why they’re bad at that.

So I do feel like we made some progress along this goal of trying to get utilities to sort of see the future. The challenge now, which we certainly don’t need to get into, is that of course we now have this huge other demander of electricity, which is AI and hyperscalers and tech companies, and that is really starting to complicate the story. Because when I’m telling this book’s story, we had the tech companies on the side of trying to pass clean electricity tax credits, of trying to pass this Clean Electricity Performance Program, because they wanted to meet their climate goals.

You know, we’re in the town of the Climate Pledge Arena here right now. That was an Amazon pledge, right? And they’re not doing a great job on that pledge. Spoiler alert, not great. But they’re not the worst. We also have Meta, which is literally building a giant data center the size of Manhattan that’s gonna be powered by a, like, bunch of gas plants. So that’s the challenge. It would’ve been really helpful had the tech companies stayed the course on this whole climate change apocalypse thing before they decided to take a right turn to another apocalypse, but alas, we-

David Roberts: It’s ironic though-

Leah Stokes: Yeah, yeah...

David Roberts: that now it’s the tech bros-

Leah Stokes: Yeah...

David Roberts: who think that they’re, you know, gods and can make anything happen. Now they’re banging their heads on the utilities, and the utilities-

Leah Stokes: I know...

David Roberts: are still old and stodgy and won’t do what they want either, so like it’s-

Leah Stokes: And they can’t get an interconnection either.

David Roberts: I know.

Leah Stokes: And they’re starting to be pretty darn unpopular, those folks, so that’s gonna complicate things. But yeah, we need to build a lot of clean electricity, and we need to run all our machines with it. That is the takeaway, and you know, there is a real tension now about... Like, one thing I’m very worried about because I’m doing all this work on industrial electrification and for example, let’s get a milk pasteurization plant to run on a heat pump.

Well, you might need to increase your interconnection and bring more power into that plant because you’re gonna use that on electricity rather than burning gas on site, and that could be an, a pretty large load, right? And we’re having all these conversations around large load tariffs for data centers that kind of ignore the whole electrification, we need to have cheaper power for good things part of the equation. So yeah, I think we really have to get clear that electricity is a really important asset and lifeblood of our society, and it needs to be used for electrification because, you know, that is the number one North Star of what we have to do to deal with climate change.

David Roberts: And I also feel like another thing that fighting this fight over many, many years really teaches you is that I think a lot of people come into this with a sort of naive idea that businesses are these sort of ruthless, rational self-interest maximizers. And you really, once you butt your heads against them long enough, you really get a sense that these are just people. And they’re old, and they’re set in their ways, and they’re watching Fox News just like everybody else. Like, they are not in some back room with spreadsheets. They’re just, like, clueless dummies like everybody else. Speaking of clueless dummies-

Leah Stokes: I know where this is going.

David Roberts: The reason your beloved Clean Electricity Performance Program ultimately did not make it into the bill, it had 49 out of 50 votes, and the 50th vote was one Joe Manchin of West Virginia. Let’s talk about him for a minute. I mean, just to begin with, just narrowly on the electricity program, he didn’t like it, and even in the book you admit that, like, it’s really hard to grasp onto why.

Like, he would say one thing about it, and then he would say another thing about it. He would say things about it that were so patently, obviously wrong that you would have to think, “Is he lying on purpose? Is he super dumb? Is he just repeating the last thing the last lobbyist in his office told him?” Like, for instance, he said, “I don’t wanna pay utilities to do what they’re doing anyway.”

Leah Stokes: Yeah.

David Roberts: And it’s like, well, Joe, if they’re doing it, the program wouldn’t pay them. Like, it only pays them if they’re not doing it, pays them to do it if they’re not doing it. It won’t cost anything if they’re already doing it, Joe. So… And like just generally, like he was the problem. He was the singular problem getting this whole thing passed from start to finish. And like did you ever feel like throughout this entire process that you got a good grasp of-

Leah Stokes: On his psychology?

David Roberts: why Joe Manchin-

Leah Stokes: Yeah. Well, one thing I tried to do in this book, it’s a reported book. What do I mean by that? I interviewed a lot of people, and it’s a work of narrative nonfiction. So this is a story, and it’s a braided narrative of a bunch of different people who are working from different vantage points, outside of government, in Congress, in the White House, and you see things from different perspectives.

And I wanted to try to see things from Senator Joe Manchin’s perspective because I just feel like that was my duty for the book, you know? Like, I wanna make this person a real person and really understand his motives and why he thought the way that he did. ’Cause I don’t... You know, he’s not like a cartoon villain, and I certainly didn’t try to paint him that way.

You are entitled to your own opinions on the subject.

David Roberts: He’s a cartoon villain.

Leah Stokes: And of course, all readers are gonna read the book however they want to, too, right? But at least from a writing perspective, I really tried to report it and understand. And some of the things that I think really mattered are the first bill that they pass, you know, in Congress, Joe Biden is elected, they get the majority-

David Roberts: Build Back Better...

Leah Stokes: Well, they pass… The first thing they try to do is the COVID recovery bill, right? The American Recovery Act. And that bill includes an enormous amount of spending to help people, and Joe Manchin gets pushed pretty hard to pass that bill by Schumer, and he gets mad after the fact because he feels that that led to inflation and that it was paying people to stay home and that people needed to get back to work. And so that view that he was pushed too hard, that they spent too much money, that they were paying people to do things they were gonna do otherwise, really affects how he approaches this climate negotiation.

He doesn’t wanna pay people to do things they’re gonna do anyway, and he doesn’t wanna put a bunch of money into the economy where it’s gonna burn hot. So you see when the inflation report comes out in July 2022, when they’re really, really close and they’ve been working with Manchin’s team for months and months to get to yes, he suddenly gets cold feet again because he’s worried that if they put too much money into the economy, it’s going to lead to inflation.

So I think he had some legitimate concerns, you know, and I also think he did have a character, because people say this, that he kind of was listening to whoever who he last talked to. He was a bit of a weather vane. And the fossil fuel industry, we know, was going and talking to him all the time because during this time period, Greenpeace does this sort of sting operation where they fake interview an executive from Exxon, and the poor guy thinks he’s going to a job interview when really he’s being filmed and he’s gonna go on the internet, and he’s like, “Oh yeah, we meet with Senator Manchin’s office every week.” So… You know, we kind of got a little-

David Roberts: Yeah, they have a regular conference call. Yes. Like a scheduled thing.

Leah Stokes: I don’t think activist groups have a regular standing call with Senator Manchin’s office, but Exxon did at that time period. And it’s also true that he took the most money from the fossil fuel industry from campaign donations at that time, and he also personally benefited from the fossil fuel industry in that he made money off this coal company, and that was reported on in The New York Times and things like that. So I think he was, you know, he had some conflicts of interest when it came to dismantling the fossil fuel industry.

But I also think he had some genuine concerns. And why does he get to yes at the end of the day? We were talking about this earlier. I think there’s sort of two reasons. One, there were things he was going to lose out for his community if he didn’t pass this bill. He had spent months getting everything he really wanted into this bill, including, you know, tax credits specifically targeted to disadvantaged, you know, communities like coal communities that had been left behind in the energy transition. He gets re-upping of the Black Lung Disability Trust Fund. He’s gonna theoretically get this whole other package through with permitting.

David Roberts: I mean, there were several times-

Leah Stokes: Yeah...

David Roberts: we should just make it clear, there were several times when the, when, like Adrian, when, like people were in his office saying, “Tell us what you want.” Yes. “Write the bill. Say whatever you want, put it on paper, we’ll pass that as the bill.” And he still-

Leah Stokes: Yes...

David Roberts: wouldn’t do it.

Leah Stokes: Yes. And I think he was really just conflicted based on, you know, the fossil fuel industry and the inflation concerns. But then when he steps away again, and Schumer tells the press this, the outpouring of anger against him, including notably from famous people. And why do I say that?

Well, at one point, we meet with Senator Heinrich from New Mexico, me and Saul and a bunch of other people go, we give like testimony in the middle of the book, and we learn from Senator Heinrich, ’cause they’ve got offices right next to each other, that Manchin’s office is full of photographs of him with famous people. And you’ll see this at the inauguration. I think there’s a picture of him with Lady Gaga, Senator Manchin and Lady Gaga, for example. And so Bill Gates is one of those famous people who is meeting with Manchin and talking to him and trying to get him to yes on this climate bill. So I think being the super villain in history was not Senator Manchin’s goal.

And you have to remember there was this horrible heat wave hitting at that moment, ’cause it’s summer in planet Earth at the time, and Europe was under this huge heat wave. And so all the anger of the world when it came to the climate crisis was really just being directed at one person. And I heard afterwards that all these people were texting him and messaging him and, you know, telling him, “Why’d you do this?” I write an op-ed at this time period for The New York Times that’s bas- I don’t know how they ran it given the kinds of things they run these days. But it was like, “Joe Manchin, F you,” an op-ed. And so, you know, that’s why the Manchin people don’t love me. Sorry, guys. And even people like John Podesta, who’s sort of bedrock Democratic establishment, he was saying, he was trash-talking Manchin publicly.

So I think he didn’t wanna go down in history as being the super villain. You know, I take it at face value that he cares about his grandchildren and, you know, he didn’t wanna like screw everybody over. So, you know, there’s lots of kind of threads in the book as to why he did what he did. Did I get to the bottom of it? No, I feel like I didn’t. I would love to interview Senator Manchin one day. I would absolutely love to, but I don’t think that’s happening.

David Roberts: Leah, Leah never says that he’s vain and shallow as a puddle. So if you see that between the lines, that’s on you. Uh. Okay.

Leah Stokes: In fairness, David Roberts came in with that perspective before he read my book, okay? He just confirmed his priors.

David Roberts: Okay. We’re running out of time. I got a million more questions. We’re running out of time, though. I wanna get to some-

Leah Stokes: We got a little more time. Chill...

David Roberts: I wanna get to some audience questions. So… Yes, they have direct financial incentive to keep coal-

Leah Stokes: Yes, he makes money.. I do document that in the book... He made more money from the coal business than from his senator salary at the time.

David Roberts: This is my thing about Manchin, like, that would make sense to me. If he was just evil and about his own money, that would make sense to me. Being vain and inconstant, like a weather vane, and moving whichever way the last important person in your office in a suit told you to move is worse somehow to me. There are billions of dollars, millions of lives on the line. And then at the end he’s like, “I’m not gonna do it,” and then everybody got mad at him, and he’s like, “Okay, I guess I’ll do it.” You know, I’m just like, “Mm. Anyway.”

Leah Stokes: Well, and in fairness, as the Manchin apologist somehow in this conversation, I don’t know how that happened. In fairness, he goes on to sell the bill on Fox News. He stays firm to his commitment to Schumer that he will vote down every amendment, and Senator Sinema doesn’t do that. You know, she ends up in the middle of the night during this vote-a-rama insane process where they stay up all night, and one of the senators has COVID.

This part of the book is very dramatic. I, like, reported it and even when I read it, I’m like, “My gosh, this is dramatic.” I know. I know. This crazy stuff going down, and Sinema decides to go hang out with a Republican in the middle of the night, and she decides, “Actually, let’s reopen negotiations on a few tax credits.” And Anna Taylor, who works for Schumer, is literally in the hospital recovering from birth. She’d just given birth, and she’s like, “I’ve gotta get in on this negotiation over those tax things because we’ve gotta land this deal.” And she does, so kudos to her, and they land the deal.

So, you know, it’s, like, he says, “I will say yes,” and he goes and sells the bill on Fox News, and he sticks to his word, and I think that is, you know, that’s impressive. I will say, however, that the thing that Senator Sinema wanted was paid leave for new parents, and Manchin wouldn’t let that happen. So that’s a bummer, ’cause that would’ve been a good policy for America to have in the year 2022.

David Roberts: Anywho, I had a lot more to say on that subject. We gotta move on. Let’s talk about where things stand. One of the things you say repeatedly, you and Sam both, I think, are simpatico on this point, which is that despair is contagious. Like, there’s a million points during this fight-

Leah Stokes: Yes. Yes...

David Roberts: where someone like, for instance, me, would’ve given up and run screaming into the woods to raise sheep on a farm somewhere. And you guys just are like, “I don’t care if it looks dead, we’re gonna say it’s not dead.” “We’re gonna will it back to life.”

Leah Stokes: Yes.

David Roberts: And Sam had a, has a very memorable line. He says, when it looked dead and he was out telling reporters, “It’s not dead yet. There’s still a chance,” he says, “I’d rather look like an idiot than a cynic.” I read that line and I was like, that is the difference between an activist and a journalist. I would way rather look like a cynic than an idiot. So, like, there’s this almost, like, psychotic, like, force of will. Like, it’s not dead, it’s good. Things are good. We’re moving. We’re doing this, you know?

Leah Stokes: Yes.

David Roberts: The reason I frame this is, like, I read your epilogue about-

Leah Stokes: You’re bringing your cynicism into the room.

David Roberts: Trump coming along and-

Leah Stokes: Yes, stamping on all our dreams...

David Roberts: and stamping on all the work you did, and sort of where things stand now. And you sort of like, “Oh, we’re,” like, “we’re treading water instead of moving forward now.” And I’m like, oh, are we? Feels a little like drowning, you know? Like, you know, like-

Leah Stokes: I didn’t say on immigration or women’s rights or other subjects-

David Roberts: Like US emissions-

Leah Stokes: or the surveillance state. I just said on climate policy...

David Roberts: but US emissions are rising. You can feel depressed. US emissions are rising. All the forecasters are dialing back their forecasts for emission cuts for 2030 and 2050. Like, it looks pretty bad. So-

Leah Stokes: From where I’m sitting, it’s pretty depressing, yeah...

David Roberts: so give us your honest assessment of-

Leah Stokes: Yeah...

David Roberts: like, where things... ’Cause even you wrote that in December 2025, and since then he’s done several horrible things, including just a couple days ago, we learned that EPA is now going to scrap all regulations on greenhouse gases from power plants-

Leah Stokes: Yeah...

David Roberts: or cars, which was sort of your and Sam’s fallback plan if this didn’t work. So like, what’s your level of optimism or what, how do, where do you think things stand now, honestly?

Leah Stokes: Yes. Well, funny enough, right before I came here, I was texting with Sam and Sonia Aggarwal, who works in the White House and is one of the main characters in the book and is a brilliant person, and she was saying, and I wish I had fact-checked it before I came, but she was saying that more coal has shut down under Trump than under Biden. So yes, it is true that a lot of things in our country are depressing right now. I am with you on that.

But when it comes to climate policy, I think a lot of people feel like with the Inflation Reduction Act, we were 10 steps forward, and with Trump, they feel like we’re 12 steps back, so we’re minus 2. And what I’m saying is we’re more like 10 steps forward, 3 steps back, which means we’re plus 7, okay? That’s what I’m trying to say.

So why do I say that? The largest tax credits in this law were two tax credits. One was to manufacture clean technologies in the United States. These are things like solar panels and batteries and electric vehicles. There are more than 500 of those factories still moving forward. So when we counted them all up, nine in 10 of them still exist. That is going to change the political economy, and it already is.

Not a single Republican voted for this climate law, and yet when it came time to repeal it, we had Republicans in both the House and the Senate renegotiating and saying, “No, no, no, you’re not gonna get rid of that tax credit. You’re not gonna gut this.” They didn’t want to throw it all out. Why? Because there were jobs in their community in these clean technologies. And that isn’t just, like, pie in the sky, they wrote a letter.

In the middle of the night when the One Big Beautiful Bill Act was moving through the Senate, the same vote-a-rama process I write about in the book, you had Republicans saying, “Actually, no, let’s keep the tax credit for batteries,” for example. And so we still have a tax credit for batteries. This is because these senators, these Republican senators, now had a stake in the clean technologies of the future.

And I’ll also say that the clean energy industry is getting a lot more politically savvy. So Chip Roy in the House, he ends up in the middle of the night gutting a bunch of this, these policies, and when he goes to try to run for higher statewide office in Texas, it’s the clean energy industry that shows up and spends a bunch of money in the primary, and he loses that race.

So I think that we’re starting to see the politics shift here, and that’s what’s really going to unlock us. And also, those tax credits to deploy solar and wind and batteries are, you know, mangled, but they’re still alive, and they’re still moving forward for the next several years. And if you’ve looked at the history of tax credits, which I have unfortunately done, you could read academic papers on the subject that I have authored, they go back to 1992. They go back to the Bush, the George H.W. Bush administration, and they’re constantly being repealed, being extended, expiring, getting extended. So this is just another continuation of this choppy story that is American politics.

David Roberts: Precisely what IRA was supposed to, like-

Leah Stokes: Yeah...

David Roberts: solve. That was like the point.

Leah Stokes: Well, it will. These tax credits will get extended again. I absolutely believe that. And so, and yes, you can talk about the Clean Air Act regulations and get super bummed about that, but the really sad story there is that they were never really implemented. They never really existed in full force, despite people’s heroic efforts to the contrary, you know? But that has been an endless fight that has never exactly worked. So losing them sucks, but since they weren’t really in place anyway, that’s not as big of a loss.

And the last thing I’ll say is that Trump is turning out to be a wonderful advertisement for electrification globally. I don’t know if people have noticed, but he has started multiple wars that have jacked up the price of oil everywhere, and that has caused electrification rates to go through the roof. If you’re depressed, you need to go start reading about solar in Pakistan, you know what I mean? It’s cheaper to put up a solar fence than a wood fence there. The... You should go look up the deployment rates, and tragically I’ll say in Nepal, where people are adopting electric scooters at just insane rates.

So yeah, right now America is not the hotbed for the clean electric future that we’re dreaming about, but the rest of the world has watched Putin invade Ukraine, jacking up energy bills, and then watched Trump invade Venezuela and Iran, jacking up oil prices, and they’ve said, “You know, this whole fossil fuel thing seems kinda sketchy. Maybe we should move to electricity.” So these are the things, these are the bright lights that keep me moving, you know?

David Roberts: It’s funny, one of the smarter critiques of IRA from the climate community is that it focused too much on US emissions and not enough on-

Leah Stokes: Yeah...

David Roberts: what the US could do to make it easier for other countries-

Leah Stokes: Yeah...

David Roberts: to decarbonize. And you could say that Trump came along and just absolutely solved that problem. Like he’s-

Leah Stokes: Tariffs, oil wars.

David Roberts: I mean… He is absolutely accelerating the rest of the world...

Leah Stokes: I am Canadian, and let me tell you, those Canadians hate, hate our president. I mean, I have my own prime minister and president ’cause I got two citizenships here. But I mean, the things that are going on in Canada, right? They’re bringing in Chinese electric vehicles, and they’re starting to talk about doing manufacturing plants for electric vehicles with Chinese companies rather than American companies.

So this is not good news for America, but it is a good news for electrification. You know, I think the rest of the world really gets it. And someday there- Alexandria Ocasio-Cortez likes to say this. There was a day before Trump, and there will be a day after Trump. And that is a day that will be a great day for clean electricity and electrification in this country.

David Roberts: All right. All right. We talked too long, but we got a little bit of time for questions.

Audience Member: I think the idea of clean electricity over here and putting out all the machines, making them electrical over there, there’s the connection piece, the transmission issue that I still haven’t quite figured out how that’s gonna get fixed, if it’s utilities, if it’s state government, if the feds should be doing it. I mean, how do we fix sort of the gridlock in transmission?

David Roberts: What a fantastic question that is. If only anyone in the world had a great answer for that question. I mean, I think the main thing is just nobody’s planning... The way utilities grew up, they grew up inside states, and so all transmission planning, such as there is any, is inside states and trying to build transmission across states, much less regionally, much less nationally. There’s just no authority.

Leah Stokes: Yeah.

David Roberts: So, like, FERC is trying, taking halting steps in that direction. I don’t know if there’s anything else you wanna call, but like that’s-

Leah Stokes: Yeah...

David Roberts: that is the puzzle.

Leah Stokes: With transmission, it’s who pays, right? That’s an issue. Who pays for that line? There’s another issue of how do you permit it across state lines? It’s very unpopular, like building things, including transmission, is unpopular. And so, you know, people talk about permitting reform and how we can make it easier to do it, but there’s also cost issues. Transmission’s a big problem. I will say I’m a big evangelist for the distribution scale system, and I do not feel like we’ve maxed that out.

Like, if you really start to think about all the solar electricity in the middle of the day, I mean, maybe not in Seattle, but in other places, you can store that in the form of... and you store it in a battery, you can store it in a car, an electric vehicle. You can store it in thermal energy, in a hot water tank, a heat pump hot water tank, right? Like, there’s a way that we can actually maximize the amount of electricity on the grid, because in California and Texas, we’re already wasting about 10% of the solar energy that we create in a year. So yes, transmission of course, but also distribution. That’s fun too.

David Roberts: Yeah. Both and. Yeah. And I’ll leave you with one little fact, which is natural gas pipelines get permitted by the government saying, “We’re doing this,” and-

Leah Stokes: Deal with it.

David Roberts: Deal with it, and yet transmission-

Leah Stokes: Yeah...

David Roberts: lines have to ask permission from every single farmer and city council that they run through, so-

Leah Stokes: Yeah...

David Roberts: maybe we could flip that around. Yeah.

Jason Huff: Hey, Jason Huff with Pacific Northwest Climate Week. Thanks for the book in advance, and this is a super good teaser. Zoom out and forward. Ezra Klein just had this fantastic podcast Friday talking about hyperpolitics, how easy it is for people to get so passionate about different things. But all those passions, all these movements in the current moment oftentimes aren’t tied to institutions that bring about longer change. Talk a little bit about some of the organizational institutional lessons that you’ve learned from, you know, both sets of these bills in the current moment as far as like how do we organize better for longer-term change that gets past the whipsaw of the politics?

Leah Stokes: Mm-hmm. Well, two things. I think it’s really important when we talk about a carbon wave to talk about joining groups. Like you are not going to be able to change policies and do all these things by yourself. You need to be networked, and there’s a bunch of folks who advertise this event and are here, and there’s amazing organizations in your community. You should be part of them. You should support them. That’s not second-order work. It’s really first-order work.

And the second thing I’ll say, a really big lesson which I write about in the end of the book, is that some of the money in the Inflation Reduction Act was in the form of grants, and it took too long to get that money out the door. And that’s a real tragedy because a lot of that money was to help disadvantaged communities, Indigenous communities, you know, places that have been on the front lines of fossil fuel pollution. And had that money just been a little bit further along in the implementation stage, so that Speaker Johnson, who had an award in his district that that had broken ground, we would’ve been able to hold onto that money more.

And so I think a lot of the ideas that folks in the abundance movement talk about moving faster and speeding things up are very important lessons because sometimes, especially in progressive spaces, we can sort of lionize process like, “Oh, process, so great,” and forget that process can be weaponized by our opponents to slow down justice, right? And every year that we chill and wait and don’t remove pollution from communities, that is costing people in their lives. And so speed is a progressive value in my book. And so I think we have to build institutions that can move a lot faster.

David Roberts: And amen. And I’ll add one thing, taking a step even further back, a lot of the reasons the bill got squeezed into the weird shapes it got squeezed into has to do with structural features of how our government work that have been around so long that people stop thinking about them, like the filibuster. You can’t write a normal bill ’cause you need 60 votes in the Senate now, and you’re not gonna get 60 votes for anything, so this had to be a reconciliation bill, and a lot of weird policy choices-

Leah Stokes: Yeah...

David Roberts: were downstream of that. And you can go down the line, gerrymandering, malapportionment of the Senate, money in politics, on and on down the line.

Leah Stokes: The Supreme Court. You forgot that one.

David Roberts: The Supreme Court. Yeah. A lot of these structural features of our government that have strangled our ability to do anything, and we find ourselves wiggling around in the tiny space left. We need to think about how to break some of those barriers, and the only way... Like, all those barriers serve inaction, and so they all-

Leah Stokes: Yeah...

David Roberts: serve conservatives, and the only way you’re gonna change any of those barriers is Democratic supermajorities.

Leah Stokes: Yeah, or getting rid of the filibuster and packing the Supreme Court. It’s another idea. Just another idea.

David Roberts: You’ll never get that without Democratic supermajorities, I’ll just say.

Leah Stokes: Well, I love your hopeful vision. I think there’s gonna be a very big blue wave this fall, because that’s what political science suggests. It’s also what all the measures and metrics suggest. Americans don’t like things swinging too far in one direction or the other. This is called thermostatic backlash. You know, you have a backlash in the other direction. And remember that 2018 was two years into the first Trump administration, and that’s where the Green New Deal idea comes from. That’s where AOC runs for office, right? And a lot of the resistance to Trump’s first term is the seeds of all of these shifts that we then see, you know, years later.

David Roberts: And I’ll say, like, final thing, voters tend to hate hearing about process and procedure issues. They find those boring. But, like, nothing happens without them, so just, like, what you can do is insist that court reform not slip away, not slip down the priority list. If there’s a chance for it, people have gotta speak up and make politicians understand that that precedes almost everything else we want to happen.

Leah Stokes: Mm-hmm...

Paul Lee: Hello. Paul Lee here, former Department of Energy, was DOGEd when-

Leah Stokes: Oh, sorry...

Paul Lee: during the craziness.

Leah Stokes: but thank you for your service. Can we all clap for this amazing person? Yeah. All right. Yet another person who helped make all this happen. There’s thousands and thousands of them.

Paul Lee: So dovetailing on the previous point, so assuming we win back the House, what next? Like, what do we do?

Leah Stokes: And the Senate. Mm-hmm. And then we pack the court, assuming all that utopian future?

Paul Lee: Yeah.

Leah Stokes: Yeah. Well, it’s interesting because when Sam Ricketts was involved in the Obama era, you know, he was working for Inslee at that time in Congress, and I tell some of the story in that book. And when they were writing the Recovery Act, they didn’t have enough shovel-ready projects on clean energy to just pile money in. So there’s $90 billion in that law for clean energy, but it’s not more because we didn’t have ideas. The cool downside of, you know, Trump trampling all these dreams that we had is that there’s a lot more shovel-ready projects. You know, I have a friend, Jade Begay, who worked with an Alaskan community to try to electrify a seaweed harvesting boat.

I mean, how, that’s awesome, right? And that’s a whole plan ready to go. You’ve got community centers that wanted to put solar on their roof, right? Like, all these ideas that folks had ready, I think that it’s gonna be very important to put those into packages and make sure that we fund them. And one of the key lessons in this story that Adrian Deveny from the Schumer’s office really tells is that when our issues go further down the list and we don’t do it in the first bill, and we don’t do it in the second bill, and, you know, there’s often not that many bills.

David Roberts: Yes.

Leah Stokes: Even Trump-

David Roberts: There’s only a couple of swings.

Leah Stokes: There’s only a couple swings, and so it’s really important that we be creative. If we’re gonna be talking about affordability or institutional reforms, how do we get our ideas into that bill, right? Like, we have to be flexible and creative because you don’t get a lot of swings at bat when it comes to changing laws.

David Roberts: Yeah, and I just, I totally agree and would say in support of that, one of the things I love about progressive congressional aides and think tank people and all of them is that they’re all super smart, and they all wanna do super clever, really well-thought-out policies, but, like, clever takes time. You know, we’ve learned that time is the resource, so maybe next time let’s think big, dumb, fast.

Leah Stokes: Give people stuff, especially heat pumps.

David Roberts: Give people stuff.

Leah Stokes: Yeah...

Pete Erickson: Hi, Pete Erickson. A bit of a too clever climate wonk myself. Thank you so much, Leah. You talked about Joe Manchin and permitting reform even a little bit. I wonder if you had any thoughts on the current debate around permitting reform, potentially also in a lame-duck session, and where you see that with regards to NEPA or other issues-

Leah Stokes: Yeah...

Pete Erickson: that are being discussed. Thank you.

Leah Stokes: Yeah. So the first thing I always say when I talk about permitting reform is I am not a world-leading expert on the subject of NEPA. I’m just not. That’s not my area of expertise. What I have gleaned from reading reports and talking to people who are more deep in the weeds on this, is that there’s a question here, right? Which is, like, can we get a permitting reform package that does more to accelerate clean electricity and all the good stuff, transmission, and doesn’t do quite as much to accelerate fossil fuels?

And can we do that, you know, with... It’s, on the Democratic side, it’s Senator Whitehouse and Senator Heinrich, who are wonderful people who really care about climate change working on this, and with President Trump, and would he sign such a bill, right? So there’s a lot of questions about even getting the bill to become a law, and it’s also possible that in the last two years of the Trump administration, we could see more fossil fuels accelerated by such a bill.

But in the long run, it’s really going to accelerate clean electricity and electrification and transmission. And that’s just a really hard deal for some people to get to the table on because they think, “Well, we can’t have anything bad happen,” right? Like, the same dynamic played out with this climate law that I write about in the book. There were some bad things that Manchin put in the bill, and there were some people who said, “Well, I can’t accept, you know, if there’s two bad things and 40 good things, I don’t, I won’t say yes to that,” right?

And so that’s the challenge, trying to get people to agree that this is a package that is going to, you know, do good things for clean electricity and also get Trump to sign it. I mean, think about the heroic work that people like Senator Tina Smith and Senator Elizabeth Warren did to pass this bipartisan housing bill. I mean, did you guys notice that happen? And Trump, like, wouldn’t even sign it. Now, the good news is it became law anyway.

David Roberts: He said it was boring.

Leah Stokes: Yeah, he said it was boring. Yeah. So, but they managed to package together this amazing bipartisan deal, and we could see something similar on permitting. What Trump does about that, what progressive people do about that, I think is a question mark. But it is very clear that we are not building fast enough on transmission, on clean electricity, and we do need to reduce barriers at all levels of government. So yeah, I think that we’re gonna see how this plays out. I talked to somebody much closer to that issue in the last few weeks, and he said he gave it a 20% odds that it’ll happen.

David Roberts: Which in DC is pretty good.

Leah Stokes: Yeah, that’s probably not bad, actually. That’s probably good.

David Roberts: Yeah. And one thing I’d add on that, too, is some people wanna wait until, like, there are more Democrats in Congress. They think they’ll get a better deal. Yeah. It’s gonna have to be bipartisan, and right now we’re in a situation where both sides think that if you make permitting easier, their favored form of energy will win. I worry if we put this off, Republicans are going to figure out that if we make permitting easier-

Leah Stokes: Clean-

David Roberts: clean energy-

Leah Stokes: Yeah...

David Roberts: is going to win, and they’re gonna back off on all their support. So I really think, like, as much as it will require eating some crap sandwiches doing what’s on the table right now, I think it absolutely should be done insofar as it’s possible.

Dick Fiddler: I’m Dick Fiddler. I- one of my great privileges in life is to be working with the people on the Beyond Coal campaign.

Leah Stokes: Yes, and nice to see you, Dick. Yes. Thank you for your work.

Dick Fiddler: Yeah, and to be a good friend of Mary Anne Hitt, who is one of the great-

Leah Stokes: Mary Anne Hitt is a wonder of the world...

Dick Fiddler: one of the wonderful people to walk the face of the earth. This is marvelous stuff at the federal level, and I just wanted to see if you could shine a little love on what’s happening at public utility commissions at the state level, where we’ve got a bunch of lawyers and activists that have just been kicking the crap out of utilities and local industries. It’s one of the things that we really can do. It’s why coal plants are being shut down at a high rate under Trump is ’cause Trump doesn’t have any way to stop it. The fed- it isn’t a federal thing. And I wonder if you could just shine a little love on some of the state-based-

Leah Stokes: Sure...

Dick Fiddler: activity and things of that sort, and in addition to all the work which we’re so grateful that you’ve been doing at the federal level.

Leah Stokes: Well, the good news is that I wrote a whole other book on that subject. So for those fabulous people who care about public utility commissions and all the inner workings of that, there are a few copies of Short-Circuiting Policy to buy. And there are passionate people working on this, and it’s so true. Public utility commissions are these under-the-radar institutions that dramatically shape our energy system, and sometimes they have elected people, sometimes they have appointed people. And, you know, shaping the decisions that these people make is the whole ballgame. And it really is the story of the Beyond Coal campaign. Mary Anne Hitt wrote about this in this collection of essays that I was part of called All We Can Save.

But that campaign really looked at all the coal plants across the country and all the decision-making bodies, which are often public utility commissions, and then just worked it year after year through a whole network of activists. I’ll also say that Third Act has been working on this more in these days, too, which is an amazing organization that Bill McKibben founded. And so yeah, like plugging into Sierra Club campaigns, plugging into Third Act, these are great ways to get involved. And imagine if you shut down a coal plant. You never have to worry about your carbon footprint ever again, right? So-

David Roberts: Yeah, and in terms of the carbon wave, like if you’re looking for a place where big, important decisions are made and a very little bit-

Leah Stokes: Yes...

David Roberts: of attention and pressure can have a very large effect, like these are very boring regulatory meetings so no one goes and no one pays attention. So if five people show up, that’s an earthquake-

Leah Stokes: Yeah...

David Roberts: for a PUC. So a little bit of attention can have a huge effect on those nodes.

Leah Stokes: Yes. In that book, Short-Circuiting Policy, I tell a story of this fight over solar at the Arizona Corporation Commission, which is their public utility, and they managed to organize 400 people to do a protest, and it was just- it freaked the commissioners out. They were like, “Oh my God, we have never had a protest this large in history.” And like 400 people’s good. I’m not trying to say it’s not, but think about how much bigger the protests have been in Seattle, right? Like they’re not 400 people.

So that outsized leverage when you work at the Public Utility Commission or you work at rural electric co-op boards, you know, we can actually really shape the system when we try to, you know, use these institutions. So do I ever have a book for you if you’re interested in that subject. Yeah.

David Roberts: All right. Thank you, everybody. Thank you, Leah. And thanks to everybody who worked on the bill.

Volts published seven conversations in September, which is a lot for anyone to listen to. We’ve rounded up the highlights into less than an hour. Enjoy!

I am in a hotel room in Aarhus, Denmark, just about to go to bed, but I wanted to get this out to you, so pardon the sound quality. Once a month, I pull one chunk out of every episode, string it together, and create a clip show to give you an overview of the month’s episodes.

This was a big month for Volts, a couple of technical deep dives, a couple of broad overviews, and lots more. Some of my favorite episodes of the year, I think, this month.

Subscribe now

Paid subscribers get these early. Each one opens up to everyone when the next one comes out. So the Best of August is now open to everyone. If you know somebody who’s been meaning to check out the show, that’s the one to send to them. All right. Seven conversations this month, one piece of each.

As always, I deeply appreciate all of you who pay for subscriptions. This podcast is entirely listener-supported, and I couldn’t do it without you. So let’s get into it.

Chapters

• 00:00 – Introduction

• 01:32 – Leah Qusba on which clean energy messages work

• 07:17 – Carl Hoiland & Joel Edwards on hunting for geothermal

• 13:09 – Jane Flegal on philanthropy and the environmental NGO world

• 19:36 – Nelson Abramson on data center noise and water use

• 25:37 – Frank Maisano on the pace of climate action

• 31:36 – Cole Ashman on who is buying plug-in home batteries

• 36:36 – Luke Winston-Almanzar on a heat pump water heater with a computer

Resources

The Full Episodes

• How to respond to disinformation about clean energy, at scale

• Is there way more conventional geothermal than we thought?

• Building a big, abundant, clean grid

• How to build a more flexible, quieter, less obnoxious data center

• How energy politics work inside DC

• Do small residential batteries make sense?

• What’s up with heat-pump water heaters?

Related Volts Episodes

• Best of August 2026

• Best of July 2026

Text Transcript

David Roberts: First up, we begin with Leah Qusba, CEO of GoodPower, which pushes back on clean energy disinformation.

I’m curious what else you have found just in your message testing. I mean, is it just all the intuitive stuff like cost and convenience or what matter, you know, that kind of thing? Like, what have you found about messages themselves?

Leah Qusba: Yeah, definitely. I think messages, right, we have to get away from, and I think our biggest failure is sort of our own egos and wanting people to care about climate or wanting them to care about… And really essentially what it boils down to, we got almost 70% of Americans that live paycheck to paycheck right now. So we’re thinking, “Am I gonna keep my job? Everything’s more expensive. What about my health care? What about filling my car up with gas?”

We do this great series, it’s on our GoodPower YouTube channel, called What We Pay. And we’re telling these stories. There’s a story on there from Pennsylvania 10, this is Scott Perry’s district. He’s a House Republican, and we just talked to this family. They have an $859 utility bill. They pull it up on their screen.

We did, like, a mini documentary. They’re like, “Yeah, we have other bills due tomorrow, so we’re gonna have to choose which ones to pay.” So essentially, yeah, economic security, Republicans and Democrats all have to fill their gas up, their car up with gas. They all have to pay an energy bill. So I would say election cycle after election cycle, having economic security and feeling like one is getting ahead, I would say really helps. How do we tie that to the energy transition? Oh, well, how about we stop the tyranny of far off wars-

David Roberts: Mm.

Leah Qusba: and just break our dependence on this stuff, and just, you know what, charge your car in your garage for a couple bucks? That sounds pretty great, and if you look at Australia and if you look at Europe, EV sales are through the roof right now. I mean, the trends are everywhere globally, so I’m hoping to see that in the US. But I think the values argument around some of these technologies and how ideological they are and how polarizing they are across political lines is really holding us back. So I think what is working, definitely economic security. I think second, when we look at audiences in rural conservative places where most of the utility-scale renewables are being built-

David Roberts: Mm-hmm.

Leah Qusba: energy security, grid reliability, like keeping the power on around extreme weather, American competitiveness with the rest of the world, and keeping us ahead and making sure that, you know, we can build these technologies here. I would say, you know, the jobs message, while I feel like we’ve, some practitioners have kind of turned away from that, we still see a lot of potential and influence when you show really cool people in clean energy jobs that love their jobs, and they’re showing beautiful vistas from the top of turbines or women in solar or people on battery energy storage sites. There’s a ton of stuff on our YouTube channel about that. So I would say it depends on the audience. Sometimes a climate message really works for, like, a young audience under 30.

David Roberts: This is what I wanted to ask about. One of the big fights right now is I think, like, everybody, almost everybody has come around basically to thinking yes, obviously, like, cheaper energy, more reliable, better for your personal immediate life is the best thing, is the top thing, is the best thing to lead with. But now there’s this argument about, like, some people wanna say, but, like, yes, bolstering that with climate-will boost you a few points. And then other people will say, “No, if you throw climate in fact you polarize a bunch of people away. Even if you’ve got them on your side from that, then they’ll polarize them away with climate.” Like, I wonder specifically about climate, what you’ve found.

Leah Qusba: Can I just start by saying something maybe very polarizing? But I think this is just the most ridiculous false debate that is so dangerously distracting from the bigger issues. I’ll just say that. I mean, we-

David Roberts: They love it on social media though, Leah. They’ve-

Leah Qusba: They love it. They love it, and they, I’ve been reading all the blogs, and news stories, and Substacks, and everything about it. I mean, how we think about it is maybe a little different, but I think we can have our cake and eat it too. And to continue with the dessert analogy right, we think about it like a pie. So there’s some people right now, like 8% of young people under 35 rated climate as their top voting issue in 2024, right?

That’s a lot of people. So we wanna use a climate first message for them. And, you know, it’d be great if people who are kind of could be predisposed to being really driven around a climate message to get more of them, to increase the size of that slice of the pie. But then there’s other people who will never be driven by a climate message. I will reference my dad who is a staunch conservative Trump supporter, but he now loves solar because his HVAC guy has a side hustle doing rooftop solar, not because his daughter works at GoodPower, but because his HVAC guy convinced him, you know, he could save money.

So I mean, it really depends on the audience, and this sort of crude segmentation between should we say climate, shouldn’t we? When you look under the hood and really look at the nuances of how we communicate the audience segmentation, how we market, the answer is just not black and white like that.

David Roberts: Right. Yeah.

Leah Qusba: It’s, you know what? Use it if it’s advantageous. In most cases, it’s not incredibly polarizing.

It’s also, what I said, a logistical issue. When you say climate, how do the algorithms respond?

David Roberts: Right.

Leah Qusba: On TikTok, there’s evidence that your content is suppressed.

David Roberts: Yeah.

Leah Qusba: So it could be a logistical reason. It’s not even a polarizing thing. I’m less worried about the polarization of saying climate. I actually don’t think it’s that big of a deal for most people right now. We’re seeing it. We’re living it. It’s really a logistical thing with certain platforms deciding to suppress or serve your content to different audiences, and how do we get by the goalie?

David Roberts: Next up, Carl Hoiland and Joel Edwards of Zanskar, who use machine learning models to hunt for conventional geothermal.

And so then let’s talk about this third discovery. This is called Big Blind in Nevada and this is sort of I think the news that made everybody really sit up and pay attention because this was unlike the previous two we’ve discussed. This was genuinely new. There were no prior wells on this site to give you any data. There were no surface manifestations of activity on the surface. This was a genuine blind site. So how did you find it? In a nutshell how did you find it?

Carl Hoiland: Yeah, this is really our bread and butter. So Joel, I’ll let you kinda talk through how greenfield perspective exploration works.

Joel Edwards: Yeah, it’s that concept we talked about at the beginning David, that you build models. Everybody can build models, Zanskar builds models. But you have to pair your model predictions with tests in the field of those predictions. And so this is one of those cases where we had made a set of predictions in… across this part of the state, and we were out testing those predictions and ran into this system at this location. And this is a system that’s west of Tonopah, Nevada, so pretty remote. And like you said, there was no prior data at the site and if you or me or anybody were to walk across the site, there would be nothing at the surface that would clue you into that there’s a massive system below. That initial discovery was made at the end of 2023, and then we went through the permitting processes and we came back with a larger rig and drilled into that resource in...

What year is it now? It’s 2026. I think we drilled into it in 2025, and we encountered commercial reservoir conditions at around 2,000 to 3,000 feet. The thing that’s really exciting about this system in particular is how big it is. This system by the surface footprint of the heat flow anomaly is much bigger than Pumpernickel and much bigger than Lightning Dock.

David Roberts: Oh interesting. I guess you’ve just kind of started exploiting it right? I mean is it commercially operational? Where’s the state of play there?

Joel Edwards: No, we’re in the well field stage of the project. So we’re permitting additional exploration wells right now to go back to the site. So we’re still early stages and yes.

David Roberts: Still trying to figure out how big the site itself is, how big the resource itself is?

Joel Edwards: Exactly. We have a sense of sort of the surface area, how big it is. That’s why I can make that claim relative to some of the other projects. But we do not yet know at depth how big and hot the system is. It seems quite spicy. To think that this thing was sitting out there. There’s lots of exploration across the West for minerals and other things, and to just think that this had been missed for so long, you know, gets us really excited about the future.

David Roberts: So you had your models, and they gave you a sort of probabilistic sense, and then you go out and do some exploration in those probabilistic areas, and you just got lucky on this one. Or I guess not lucky, the model… The probabilities paid off in this spot.

Joel Edwards: Yeah, I know. Maybe the models got lucky. Maybe we got lucky. There’s luck in all this, and there’s also bad luck when we miss. And to be clear, we’ve missed way more than we’ve hit. Like, to make this sound like this thing has been working better, you know, than the legacy explorers. In the early days, our models were frankly much worse than expert explorers. And we do benchmark against expert predictions in our modeling space, and it’s really only… Our models really only in the last year or two have started to outperform. And, you know, every model that you build, sometimes your models get worse.

So it’s not like it’s up into the right. It’s like there’s a wobble. It’s sort of like the climate, right? Like some years it’s wobbling hotter and cooler, but you’re generally up into the right, and that’s very true for our modeling space.

David Roberts: So you think from now on over time, the more exploration you do, the more data you feed into the models, the better the models get. Over time, you think you’re gonna get better and better at finding these things?

Carl Hoiland: And that’s actually quite clear already from the data we’ve collected. Like Joel said, they started out much worse than humans. They caught up, and they’re performing better in many locations and areas. And we’ve seen it improve in two ways. As you put more data into the models, the same architecture ends up yielding higher precision, you know, better performance. But in other cases, actual changes to the architecture, the way we’ve designed the model itself with the same data yields an improvement in prediction. And so the teams are constantly driving improvements on both of those fronts.

David Roberts: Interesting. So maybe not up and to the right for every increment, but over time, in the fullness of time, you’re going up and to the right with your models.

Carl Hoiland: Yeah. And really those sort of side steps that Joel’s talking about are what might feel like even a step back is often in a certain type of metric, like precision or accuracy. But it usually reflects that we weren’t realizing that there was something less generalizable about the prior model. And so this step back is getting you to a more accurate representation of the uncertainty. So it’s still a better model, you’re just being more correct in your estimation of uncertainty for it.

David Roberts: Right. Interesting. Interesting.

Joel Edwards: You know, this manifests... It’s funny, you would expect our sort of hit rate, like when we find a system, to be like consistent and linear. But what I’ve found is that our hit rate is like, you know, like in sports, you get into like a streaky zone, like home run after home run or whatever, you’re hitting the threes like back to back to back. That’s the same thing in our models. Like, we go through periods where bang, bang, bang, like survey after survey after survey, we’re hitting, hitting, hitting, and then we go through like a cold slump for a period of time, and then we push out a new one. So it’s been a very like non-linear sort of spikiness to the discovery rate.

David Roberts: Then on to a truly epic conversation with Jane Flegal, senior fellow at the Searchlight Institute. She spent years funding environmental groups from inside philanthropy, and I asked her whether that had left her somewhat disillusioned.

You know, you worked inside philanthropy for a while making grants, and so you had a lot of intimate behind-the-scenes interactions with green groups, with big green groups, small green groups, the environmental community, let’s say. And my impression is that you came away from that rather disillusioned.

Jane Flegal: Careful, David.

David Roberts: I know, I know. I don’t know how much you wanna get into this, but I think a lot of this, I think it’s helpful, I think, to air a lot of this out. So I’m curious, you know, you’ve said on Twitter and I think maybe elsewhere that you think there’s something like an epistemic crisis going on in that world, inability to distinguish expertise from advocacy. However much you feel like getting into it, I would love to hear your critique of the environmental NGO complex.

Jane Flegal: God. Okay. First of all, let me say, I have long funded, when I have been in philanthropy in the environmental groups, and I adore many of them, and there are great people working at those organizations. Let me just say that. Also, you know, they are all different. They are not all the same. Let me also say that.

David Roberts: Gotta use the monolith line.

Jane Flegal: One way to frame this, I think, David, is like, okay, I’ve been thinking a lot about our current political moment and, like, what’s next on the federal agenda for climate, and we can get into that later. But I remember being at the Hewlett Foundation before the 2020 election and having a similar feeling of, like, what the hell is the plan?

What are we gonna do? We’re obviously not gonna do cap and trade again. Like, are we really gonna do the Clean Power Plan 7.5? Like, what are we doing? And thank God, honestly, for the Sunrise Movement, because I think we needed some insurgent energy to sort of, like, reframe things, and I think that is kind of a symptom of one of the problems I see, which is just that in any domain, if you have a bunch of really big organizations who share kind of the same large funders and have kind of, like, a shared way of viewing the world and kind of coordinate and have really big staff and have all sorts of interests they have to manage institutionally, it can just be hard, A, to, like, generate novel ideas and, like, generate alignment across a large organization about what should, you know, so and so’s organization’s posture actually be on federal permitting for reform, for instance.

Like, it’s just really hard. And many of these organizations, like, grew up in a different time, where, as everyone has pointed out multiple times, the chief objective was to, like, stop bad things, the sort of pollution paradigm that I pointed to as problematic in international climate governance also I think applies here, where it’s just maybe, as Steve Rayner would say, kind of a wrong trousers situation. And, like, you know, a lot of litigators and blah blah blah. That’s just, like, kind of core to their institutional DNA.

And then I think… Maybe the last thing I’ll say is just we’re in a kind of a new era. Like a lot of the work those organizations did to advance clean energy standards in states, for instance, I think was incredibly valuable.

And now we’re in a phase where like, turns out you gotta actually meet those targets somehow. The world evolves, things change. It’s really hard and like you can’t... Simply enacting legislative targets of like expressive climate ambition is not enough. We gotta like actually build this stuff, and that is just kind of like a different moment.

And then there’s the broader political anxiety I have about someone who is climate obsessed. I’m also concerned about the rise of fascism, not just here, but everywhere around the world. And like, as much as I would like my party to prioritize climate change, I also think it’s very important that they get elected and need… that ought to be the first priority.

And so like anything that I think, and I don’t think climate always is in tension with electability, but there are some cases where like running on climate is not a...

We’re talking about climate hushing. I have to stop, but like-

David Roberts: You told me not to bring it up. I didn’t bring it up. Here you are bringing it up.

Jane Flegal: I know. I guess I think like so much of the posture has been pressure for more ambition at every moment. And on the epistemic issue, this is where this has really shown up for me is just for a while things were really wacky and you couldn’t even say like, climate change is a risk management challenge without being told you were a climate denier. And so like this notion that there like are in fact real trade-offs on the path to net zero, we need people in the world who are able to like inform policymakers and decision makers about those trade-offs so that those people can use their judgment to make the right choices. That capacity, academia I’ve also worked in and is kind of broken, obviously.

Maybe I should blame you for this, David, ’cause you were always like, “This is a political problem. You gotta like elect Democrats. That’s the way to do it.” And so like everyone kind of did that, but I do think we kind of lost this functionality of actually just doing really balanced, careful analysis to like help people make decisions in a credible way.

David Roberts: Part of me returns to the thought that like you want a group defending old school environmental stuff, air and water. You want a group pushing for clean energy industrial policy. You want a group doing sort of disinterested careful empirical policy analysis, it’s just a little crazy that we’re looking to these groups to do all these things.

Jane Flegal: Yeah. You want industries who can get Republicans to say yes. Like, they’re not all the same thing, and this is why I get so frustrated when people say that I’m, like, punching the enviros or whatever. The only argument I have ever tried to make is that is a necessary but insufficient part of the overall funding strategy that a philanthropy should take. We don’t have enough state capacity. We d- all these things that you’ve described, like, we are gonna have to build some new institutions now that we’re, like, in this era of climate policymaking, and I just feel there is a real reluctance to do that because it’s viewed as, like, a threat to the status quo.

David Roberts: Here’s Nelson Abramson, CEO of Verrus, which says its data centers will be quiet and use almost no water.

And so you’re asking these communities to approve your applications based on these sound claims. But as I understand it, the sound study has not been submitted yet in Salem, and you submitted one, I think, in Lyon Township, but it hasn’t passed review yet and there’s some dispute about whether it’s good enough. Have these sound claims been independently tested yet, I guess, verified to the extent that the communities ought to be confident?

Nelson Abramson: So Salem, the sound study has not been done yet, purely for a, I think, very straightforward reason, which is you can’t study the sound until you have progressed the design and done the equipment selections that you know what you’re studying.

David Roberts: Mm-hmm.

Nelson Abramson: We only have done our first site plan submission in Salem, and so until we get a little bit farther with the city and settle sort of the broader site plan questions, the sound study just wouldn’t be robust enough to withstand your scrutiny.

David Roberts: Right. ’Cause it’s site specific in some sense ’cause you get these berms and the walls and everything and-

Nelson Abramson: 100%. To do a sound study, you have to take into account like the actual piece of land and what is the topography of the land and what else is there and where are the various sources of noise coming from, and it is very, very specific. There’s no such thing as like a generic sound study. You can pull up the spec sheets for pieces of equipment, and the vendors will provide you the data, but if the piece of equipment says it has, you know, whatever X numbers of DBs, that doesn’t answer the question you’re actually asking or what any community member would wanna ask, which is, how will this sound when I stand on the street nearby?

David Roberts: Yeah, yeah, yeah. I guess that’s my question. So are you willing to say categorically that the data centers you build in these places and elsewhere will not be obnoxiously loud, even if you are standing as close as you are allowed to stand given the setback?

Nelson Abramson: Categorically, our data centers will be quiet, and we will be operating them with sound in mind, as in we will be monitoring our own sound and making sure that we are holding to limits that we agree to with the local municipality.

For Michigan, we have submitted updated sound studies based on feedback from the township’s sound consultants to our sound consultants. There were very technical disagreements about, like, what kind of study is appropriate under these circumstances, whatever. You get too many experts in the room, everybody has an opinion.

That’s fine. We just agreed to do what the township’s consultants wanted us to do the way they wanted us to do it. It’s fine. There are different ways of doing it. They have one. We’re doing it that way. We’ve done it that way and submitted it. And the data, the modeling that I’ve seen says it’ll be a pro- in the neighborhood of a library level sound at the property line, which is well below what is actually allowed by ordinance.

David Roberts: Okay. What about water? Closed loop cooling uses much less water, I think, as a general matter. But unless I’m sort of misreading things, like there’s a December 2025 presentation to Lyon Township where you said you’re gonna use 15,000 gallons annually, and then there’s some July 2026 materials that say the annual usage will be under 12 million gallons, which are like several orders of magnitude different.

So what am I missing there? Is there a firm number on the amount of water you will use at this data center? And help us sort of like contextualize those amounts relative to, say, other industrial uses or whatever.

Nelson Abramson: Yeah. I’m not sure the 15,000 number you’re talking about, I haven’t heard. I don’t recall that one. It would also surprise me, just the order of magnitude. I think we’ve been pretty consistent with our numbers, although it has refined over time as the details have come into focus. But overall, the number of gallons has been pretty consistent. The, you know, reality is day to day, by design, like this, you don’t have to trust me, you can look at the physics, the design of the system. We have air-cooled chillers, which means on an average day, the water we’re consuming at the site is for bathrooms and landscaping. Like, you can look at what’s on the plan. There’s just nothing else to consume water. It wouldn’t make any sense to run the adiabatic system on a normal day. It would just be wasted money.

On the hottest day of the year, which we’re talking fives to tens of days a year in a worst case year, we will run the adiabatics, and that’s the bulk of our water usage for the whole year. That’s where you get the millions of gallons. In terms of how to compare it to something meaningful, because this is, I think, sound and water are both things that we don’t have particularly good intuition on. People don’t... Maybe you look at your water bill, but people don’t generally actually think how much water they consume on a day-to-day basis.

David Roberts: Yes. It’s very easy to just say, “12 million sounds like a big number.”

Nelson Abramson: Exactly, and 12 million does sound like a big number. Here’s what 12 million gallons is like. It’s like three Cheesecake Factories. Right? And I don’t mean to plug Cheesecake Factories, but, like, it’s just an easy number. And so is it a lot of water? Like, objectively, if you put 12 million gallons of water into a pond, would it look like a lot of water? For sure. How does it compare to other users of water?

It’s like three Cheesecake Factories. Acre for acre, it is dramatically less than agriculture. It’s dramatically less than golf course, although not everybody loves that metaphor, and, you know, it’s 95 to 99% less water than a traditional data center.

David Roberts: From there on to Frank Maisano, who has done media relations for the energy industry in DC for about 30 years.

How would you describe your job? What does it consist of? You know, you have clients, they come and hire you. What are you doing for them, and how do you do it?

Frank Maisano: Yeah, you know, Dave, the best way to really look at it is that I am like a conduit to reporters, to folks who have a position that they wanna get across, right? So back in the day when we first started talking, I was working for, as you said, utilities that were mostly heavy with coal. In fact, many of those guys today are utilities that are almost equally as balanced with renewables, right? Which is over 25 years, which has been kind of an amazing guidepost that they’ve been on.

But basically, when we were first starting this, we always felt like environmentalists had the advantage, right? Environmentalists could put out studies, they could put out reports. They could say what they wanted. They were always willing to be quoted. And a lot of times, industry clients were afraid to talk to the press. They were afraid of reporters. They just didn’t want their views. They thought it was better for them to just, you know, not say anything, right?

And so over the years, my colleague and I, Scott Segal, who you know well as an industry expert, and others who we brought on, were able to convince a few folks that we needed to get in the game. Not to send out press releases that sounded exactly like press releases that were self-serving and certainly would never be published by a mainstream journalist, but to try and level the playing field in a story so that you heard the views of industry, because, you know, there is a second side to the story, and not necessarily one that environmentalists are always gonna agree on.

But there is an energy interest, there is a cost interest, there is a supply interest, there is a technology interest, right? All of these pieces oftentimes get left out in a very narrow view that many environmentalists looked at when they talked about these things and they promoted. So our goal was to get into the game, to be a resource, to provide good information to people, be clear about who was saying it, right?

And I think what we’ve done over the years is we’ve maintained a reputation as somebody who, as you said, is helpful, somebody who is quick and able to respond with good experts and valuable information, and reporters over the years have grabbed onto that.

David Roberts: Yeah, I’m curious if it was always kind of the founding, if it was always your strategy from the beginning, because, you know, mostly if I just described to a random third party like, “Oh, he’s a media guy who works for, you know, the industry.” They think of someone who’s aggressively pushing a message, but most of what you do is just help. Most of what you do is just connect people to sources, send reports out, give quotes. Mostly you’re just being helpful and you’re not really pushing your perspective, and I wonder if did you always have an instinct that would work better?

Frank Maisano: Well, you know, again, I felt like the things that I looked at what was happening with industry spokespeople before, right? And we were looking, Scott on the legislative and lobbying side and me on the public relations side, we kinda came together and said, “There’s gotta be a better way for us to influence this discussion,” right, to get these points in. And I guess my personality kinda fits into the MO that you were talking about, which, you know, I don’t wanna go out there and bang the drum and hit people over the head with stuff.

What I wanted to do is be, develop a reputation as somebody who they could rely on, right? Somebody who was valuable, somebody who they could have a beer with, right? And it’s funny because Bruce Nilles and I always at these SEJ events, and, you know, and environmentalists and Joel Finkelstein and all these guys who are titans of the environmental community media shops, that I always found purchase with these guys when we were at these events and where we were standing outside EPA, you know, waiting for reporters to come out, and I always wanted to be the nicest guy I could be because they always wanted to not like me, right? It’s very hard to not like a guy who is nice, is affable, is willing to share a joke, and is a very normal person, right? And just happens to, you know, represent the natural gas industry or a pipeline or something like that, right?

So for me, the value was common friendship. For me, the value was being a nice guy. For me, the value was trying to figure out a way to beyond that, level the playing field in stories so that at least the industry perspective was understood, and not even necessarily quoted, but understood and represented where possible.

David Roberts: You gotta turn the Rage Against the Machine down.

Frank Maisano: Yeah. There you go. It’s funny, that’s another thing, Dave, that people don’t know about me. I’m a huge fan of Rage Against the Machine, which is kind of the opposite of what Rage Against the Machine stands for, so don’t tell Tom Morello.

David Roberts: I know. I’m sure Tom Morello would find this highly ironic and amusing that you’re a huge fan.

Frank Maisano: Yes, it is an irony. In fact, we saw the last show on their last tour in New York City, of all things, and I took my kids.

David Roberts: I like following your musical adventures.

Frank Maisano: Yes, we tend to do some fun stuff. That’s the other thing, Dave. With the newsletter, right, I started reaching out and providing information to people through the newsletter, and then I tried to make it personal, right? I tried to have a good time with it. I tried to put a regular face on it. And so whether it was in person or whether it was through the newsletter, I was just trying to show people that the industry guys were a regular guy, and it really kinda changed the dynamic about how they were perceived and gave us a chance to get in the game, and that was really the point of it.

David Roberts: After that, Cole Ashman, founder and CEO of Pila Energy, which makes small plug-in batteries for the home.

When I look out to the future, I see, like, there are already some sort of high-end stoves that have batteries built in now. Carrier is talking about building batteries into their AC units. You know, as batteries get cheaper, as battery cells get cheaper, I could sort of envision batteries just kind of being built into everything, including, like, new homes that are built or new apartment buildings, new appliances, you know. Do you worry that, like, a separate battery product is, in the fullness of time, gonna get squeezed out by just sort of, like, all these other built-in batteries becoming ubiquitous and battery storage basically becoming sort of, like, taken for granted and everywhere?

Cole Ashman: I share that conviction. That will be the future in 10 years.

David Roberts: Mm-hmm.

Cole Ashman: And I think if this is successful, the quote-unquote battery becomes much less visible as a category. You know-

David Roberts: Right.

Cole Ashman: storage will end up inside appliances and-

David Roberts: Right.

Cole Ashman: yeah, attached to HVAC and in cars and electrical equipment, and scattered throughout the building because it gets cheap enough that you stop, you know, asking, “Do we want to buy a battery?” But the hard question there is how do all of those things behave as one system, and can you count on them like grid infrastructure? You know, the grand vision of Pila is certainly not we want to go sell standalone batteries. But having built products in this space for a while, we tend to be pretty pragmatic and we think we have our finger on the pulse of, you know, what the moment demands. And in this moment, we are at the Roku, the Fire Stick stage of smart TVs.

David Roberts: That’s a good analogy. And, but, like, you theoretically could pivot. You could be a supplier to, like, a refrigerator manufacturer for built-in batteries or something like that. Like, you could do other things than a standalone battery.

Cole Ashman: Absolutely. The core technology is kind of infinitely composable into these different shapes and sizes.

David Roberts: Mm-hmm.

Cole Ashman: And the hard part is, you know, the power electronics, the coordination, and the software layer that kind of wraps them, keeps the whole building coordinated locally, and can connect that coordinated building-level asset upwards towards the grid while balancing occupant needs, appliance needs, and requests from grid operators. That’s the hard problem. The hard problem is coordination. That’s what we’re most focused on. We decided to build the first version of that platform in this way because it allows us to go, frankly, faster-

David Roberts: Right.

Cole Ashman: than, most other folks. You know, if we had put a battery in a fridge, we’d have probably a pretty expensive fridge that-

David Roberts: Yeah.

Cole Ashman: you know, worked for some folks and not for all.

David Roberts: The stove with the battery is a very high-end stove, let’s just say.

Cole Ashman: They’re very nice, too. Yeah, they’re super nice. I am big fans of what the Sams are building. And, you know, I think we need more of this from all angles.

David Roberts: Speaking of speed, like, do you think, are you willing to sort of predict that these sort of smaller edge batteries are going to race ahead of full-scale home batteries? Like, do you think you’re gonna deploy a lot faster, get a lot more batteries into a lot more homes and apartments? Like, that’s kind of the premise, right? I mean, that’s sort of the premise of the whole thing.

Cole Ashman: That’s the bet. And it’s not just faster, but further, you know, into more of the built environment, the condos, the renters, the multifamily, the commercial spaces, for which a big battery in your yard, you know, designed for your yard is probably not the right architecture.

David Roberts: Mm-hmm.

Cole Ashman: So I think we do believe that, we’re, that this is a way to go faster, and it is not only faster, but in many cases, like we discussed, it’s a lower landed cost. And in taking this distributed approach, we have higher fidelity data which feeds into better control.

So I, it’s not just about cheaper, smaller, it’s actually about kind of recognizing that the most interesting parts of the distribution grid are where the loads connected to it exist. And by having that understanding, you can actually do a better job shaping things. Here’s one example. If you’re living alongside the HVAC system or the refrigerator, you know, and you’ve got a, you know, small 1.6 kilowatt hour battery, but you also have awareness of internal temperature in the home, inside the fridge, you can play with power modulation to make that 1.6 kilowatt hours go further.

You know because what is a fridge if not a thermal battery? You can’t do that unless you’ve got that really, you know, close relationship with the appliance and the load. So maybe a little bit of a forward-looking hint at some of the interesting controls that we’re building.

David Roberts: And to close it all out, Luke Winston-Almanzar, CEO of Reservoir, which makes a heat pump water heater with a computer in it.

I wanna sorta go through the sort of critiques of typical heat pump water heaters, aside from just being expensive, which we’ll get to later.

I think the standard critiques is that they’re really big, they’re really complicated to install, and they’re really slow to heat water, which means in practice, most of them today have electric resistance backup, and my understanding is that in most conventional heat pump hot water heaters today, that backup is doing, like, 30 percent of the work. So you’re getting, like, a third of a electric resistance water heater anyway, even if you buy one with a heat pump.

So let’s go through those and talk about how you have kind of addressed or solved those problems. Starting with the size, you have wrestled this thing down to not that much bigger than a conventional water heater. I think it’s a 50-gallon tank. Talk about how you shrunk it down without losing performance.

Luke Winston-Almanzar: Yeah. I’ll kinda go down, like, a little bit of the thread you’re talking about, like some of the trade-offs with just a typical heat pump. And so I think the great thing about a heat pump is it’s insanely efficient, right? And so we wanted to take that, but if you take a typical heat pump water heater, like with a heat pump on a 50-gallon tank, that heat pump will take five to six hours to heat up that tank.

And so if you have a traditional, like, algorithm of heating the water on that, where it’s like you have a big draw pattern, then the typical water heater’s like, “Oh, geez, I gotta heat that back up again,” it then goes to the electric resistance elements, which are fast. But I guess the way we look at it is you can get anywhere walking on time as long as you leave on time. And so what Reservoir does, it spends the first month in your house, like, learning your behavior, right? So it learns that David’s an early riser and you shower at 6:00 in the morning.

David Roberts: It’s definitely not gonna learn that, Luke.

Luke Winston-Almanzar: Okay. So it learns that David is a midday shower. You shower at noon every day, and all of us are jealous of you. But then it starts heating the water at, call it 6:00 in the morning, since you shower at 12 noon. And so it has plenty of time to do that, and it can anticipate that. And then when you take your shower, it doesn’t freak out that it needs to be ready for the next one because it generally knows your behavior. And so in this way, we can optimize the efficiency of the heat pump because we can just use it more, because we know when you shower and things like that.

And so what we saw, like, a lot of people doing with typical generic heat pump water heaters was they, for like a family of four like mine, they were oversizing the heat pump water heater. So instead of getting a 50-gallon heat pump water heater, they’d get an 80-gallon heat pump water heater, and that’s so they can either use the heat pump more or so that they can be ready for Thanksgiving and things like that. And so on Thanksgiving, you have a big tank, which is nice when you have your family over. But the rest of the year, you have a tank that’s just way too big, and you have standby losses, and you have this tank of water just sitting there.

We decided to add a fully onboard computer that can learn your behavior as I mentioned, and so we can have a smaller tank. We can give you higher efficiency, but then you don’t run out of hot water. You don’t have to worry about that kinda thing. And then we built in what we call party mode into the system, so we can get 150 gallons out of a 50-gallon tank for Thanksgiving, for when you have family and friends over. So party mode is not the most efficient piece of the system, but we think it’s okay to be inefficient on a couple days of the year and be more efficient the rest of the year.

David Roberts: Right, and this is where you’re superheating the water and then combining it with basically just tap water to get the right temperature. So you have 50 gallons of superheated water, which translates to whatever, 150 gallons of typical hot water.

Luke Winston-Almanzar: Yeah. There’s a little bit more that goes on there, but yeah. We have a safety mechanism called a mixing valve in there that actually prevents the super hot water from getting to your faucet, but then you mix it with colder water and you effectively have more. We also can dynamically manage the backup elements so that we can top up more precisely than anybody else.

But there is one other aspect of the system that’s super important. If you wanna do this kind of thing, you’re effectively storing more heat in the tank. When you raise the temperature of the tank, in a typical water heater, you would actually end up accelerating corrosion. So you actually, like, would burn out the tank faster, and we’ll get to the analogies of batteries in a little bit.

David Roberts: Right. ’Cause extremely hot water is corrosive to all the elements in there.

Luke Winston-Almanzar: Yeah. So if you’re like 150-degree water is much more corrosive than 120-degree water. But we have what’s called an electric anode rod built into the system. It’s like technology from the maritime industry, oil and gas. And instead of having a sacrificial anode rod, our system can actually prevent corrosion in the system, which means we can do a lot more things with heat than most people out there.

David Roberts: But this party mode, that’s something that I, as the homeowner, would need to invoke on purpose. I would tell the thing somehow that a party is on the way, right?

Luke Winston-Almanzar: Yeah, you would tell people. So what it does on a normal basis is it learns your behavior, and it can be more extreme or less extreme. You can give it some feedback. “I wanna prioritize not running out of hot water,” or, “I wanna prioritize efficiency.” But it doesn’t know when your in-laws are gonna show up, so you do have to tell it, yeah. But you can schedule that so it turns off when they leave.

David Roberts: All right. That was September. Thanks everybody, as always, for listening, and I will see you in October.

Heat pump water heaters use a fraction of the energy of conventional electric resistance heaters — which use more electricity in a year than an EV — but they're only 2 percent of the market, mainly because they tend to cost more, be slow and loud, and require a plumber and an electrician. Reservoir is a Boston company trying to fix all that, with a smarter, quieter machine and its own plumbers. I talk with CEO Luke Winston-Almanzar about how it works, what it costs, and its potential role in demand response programs.

There’s nothing less sexy than a water heater. Even among home appliances — not the sexiest category to begin with — it is unprepossessing and plain, ubiquitous yet invisible. At least until it breaks down. That tends to be the one time a home or building owner interacts with the hot water heater at all: when they replace it. That happens about 10 million times a year in the US.

Of the water heaters sold each year, about 45 percent burn natural gas, and that number is declining; about 50 percent are electric, and that number is rising. Of those electric water heaters, about 4 percent use heat pumps rather than electric resistance.

Perhaps because water heating is so seldom commented on, it comes as a surprise to many people to learn that it accounts for 20% of home energy use, second only to space heating. A conventional electric-resistance water heater consumes more electricity annually than an EV.

Heat-pump water heaters use much less electricity, but they have tended to be not only more expensive but more complicated, more difficult to install and maintain, and honestly pretty big and ugly.

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A new company called Reservoir is trying to drag the heat-pump water-heater space into the modern world. It designs and builds its own machines and uses its own plumbers to install them. Its machines include sensors and machine learning that adapt to a family’s water usage, monitor pipes for leaks or pressure failures, and can theoretically participate in utility demand-response programs. And the company claims its water heater uses 80 percent less energy than a conventional electric heater. It’s certainly less ugly.

Today I’m going to talk to CEO Luke Winston-Almanzar about why this appliance is so important, the possibilities a modern water heater opens up, what it costs relative to conventional heaters, and where water heating should fall on the electrification priority list.

Chapters

• 00:00 – Introduction

• 03:06 – Why water heaters

• 06:34 – How gas, resistance, and heat pump water heaters work

• 09:33 – Size and slow recovery: predictive heating and party mode

• 15:31 – Installation and vertical integration

• 22:19 – Cutting electric resistance backup

• 20:31 – What Reservoir builds and what it sources

• 23:41 – Tankless gas, virtual capacity, and the booster heater

• 27:11 – Recirculation, freeze protection, leak detection, and Legionella

• 32:03 – What it costs and what it saves

• 36:01 – Placement: small rooms, basements, and cold climates

• 42:37 – Noise and durability

• 48:19 – Demand response and virtual power plants

• 53:22 – A. O. Smith’s CO2 split system and Reservoir’s moat

• 55:54 – Policy headwinds after the IRA

• 59:29 – What’s next for Reservoir

Resources

People & Organizations

• David Roberts (Substack - Bluesky)

• Volts (Apple Podcasts - Spotify - YouTube)

• Luke Winston-Almanzar (LinkedIn)

  • Reservoir (Website - LinkedIn)

Company & Industry News

• Reservoir raises $8M to make water heaters that people and the grid will actually want

• We’ve Got Sexy Heat Pumps. Now It’s Time for Sexy Water Heaters.

• A. O. Smith Announces Voltex X Outdoor Split Heat Pump Water Heater

Books & Articles Discussed

• NEEA - Heat Pump Water Heaters in Small Spaces Lab Testing: The Amazing Shrinking Room

• Department of Energy - DOE Finalizes Efficiency Standards for Water Heaters

• IRS - FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under the One, Big, Beautiful Bill

• Federal Register - Energy Conservation Standards for Consumer Water Heaters

• IRS - Energy Efficient Home Improvement Credit

• Mass Save - Heat Pump Water Heater Rebates

Related Volts Episodes

• Heat pumps with thermal batteries

• Let’s dig a little deeper into virtual power plants (VPPs)

• Streamlining the difficult work of whole-home retrofits

• So you want to electrify your home

• Do small residential batteries make sense?

Text Transcript

David Roberts: All right then. With no further ado, Luke Winston-Almanzar, welcome to Volts. Thank you so much for coming.

Luke Winston-Almanzar: Yeah, thank you so much for having me here, David. That’s a great intro and overview. Excited to dive in.

David Roberts: Yeah. So you’ve worked at some cool companies in the past. Your partners have worked on some cool stuff. Why water heaters? Why try to solve this problem?

Luke Winston-Almanzar: Yeah, like you said, it’s mostly overlooked. I guess, like, the way I like to put it is it’s the biggest energy guzzler that nobody talks about. As you point out, like I worked at a previous company called Formlabs, where we built 3D printers and talk about like exciting, amazing devices, smart devices. I basically learned how to build a big smart device company, but I’ve also been super passionate for so long about climate, energy. I’ve worked in construction. I’ve studied energy business and climate, and I wanted to make a big impact on homes, and I was looking down the list of what’s the way to make an impact on homes that you could start fast, make a really big impact.

Honestly, it blew my mind away when I realized how much energy I was using on water heating. I mean, you already pointed it out. You use more energy to heat your water than it takes to drive an electric car. I guess coming from a smart kinda device company, what also kind of blew my mind was you have these devices that are using so much energy, so like a fifth of home energy, and yet my air fryer is smarter than the typical water heater. And it’s the kind of thing that you can replace in a morning or an afternoon, and so you can actually make a really big impact on your energy in your home and actually your comfort.

You may not think about your water heater, but you definitely think about your hot water, you think about your shower and things like that. And so it was the chance to make a new device with some intelligence. Like my smart ring is smarter than the typical water heater, and yet these things use a God-awful amount of energy. And as you pointed out, like a lot of people don’t actually think about them until they fail.

But I think the other crazy thing about it, it’s not just how much energy they use, it’s how they tell you that they’re failing. The failure alert that you get from the water heater in your basement is that there’s water all over the floor, right? And in an age of smartphones and smart devices and all these kinds of things, there’s a better way to find out that your water heater failed. There’s also a better way of using the energy and things like that.

And so we saw an opportunity to come in, take a much more efficient kinda device, so we can help save people a bunch of money and help save the planet, help save energy and stuff like that. But water heating is also the intersection of energy, water, and health in a home, and it’s also a way of getting started in the home. Like, I can install a water heater a lot faster than I can install a whole home HVAC system or change a lot of the different components in the house. And so the way I put it is it’s the fastest path to home electrification, and we wanna do more than that, but it’s a super fast way to get started.

David Roberts: Did you set out thinking, “I’m gonna make a heat pump water heater,” or did you just look, analyze the situation, and determine that, you know, was the heat pump the result of it, or did you set out from the beginning with heat pumps in mind?

Luke Winston-Almanzar: Set out from the beginning with heat pumps in mind. I guess first I zoned in on, I saw water heating as this amazing foothold to get into the house, because as you mentioned, there’s 10 million replacements in a year, and the large, large, large, large 98 percent of them are not heat pump water heaters.

And so heat pump water heaters are dramatically more efficient. It’s nothing new to say that you can- It’s, like, much, much more efficient than electric resistance water heaters. It’s much more efficient than gas water heaters, and at the same time, it’s 2 percent of the market. And so there’s a big question as to like, why is it only 2 percent of the market? So you have the benefit of sure, we can get a lot more efficient, so why is nobody adopting them? Some people would say it’s because it’s a new technology, but it’s actually not a new technology.

David Roberts: Yeah. Heat pumps are not, I don’t think they’re new anymore. Before we get into the details of your water heater, which I do wanna do, I just wanna briefly walk through, because people don’t think about water heaters. I just wanna briefly walk through like what water heaters are doing. So like a natural gas, it’s a big tank of water that’s getting heated basically in all cases. In natural gas, is that just a flame directly on the tank, or is that heating a heating element that then winds around the tank? How do these things-

Luke Winston-Almanzar: Yeah, if, I mean, if you look at... It’s pretty basic technology, right? You have a fire heating the bottom of the tank, and it heats up the tank, right?

David Roberts: And then electric resistance, it’s like a radiator basically. It’s, like, heating a coil that wraps the tank more or less, right?

Luke Winston-Almanzar: No, that’s actually not correct. So actually, with an electric resistance, you have a heating element that’s, like, plugged straight into the tank. It’s a little bit more like a rod, and there’ll tend to be two of them. And so they’re stuck directly into the water. And I guess the way I kinda put it is, like, if you have natural gas or fossil fuels, you’re burning dinosaur guts just over a pot, right? And then if you have electric resistance, you’re using a toaster to heat your water, right? You literally are just pumping a bunch of electricity through a coil so it heats up, and then you transfer that to your water.

David Roberts: Right. So a heat pump water heater, we don’t have to go through the whole mechanics of a heat pump. I think I’ve just covered this before on Volts. But I think the easiest way to think about it is it’s a little bit like a reverse refrigerator. So, like, your refrigerator takes heat inside a box and dumps it outside the box into the room. This takes heat in the room and dumps it inside the tank, basically, more or less.

Luke Winston-Almanzar: Yeah, exactly. So you cycle a bunch of air through a heat exchanger, you pull the heat out of the air, and then you dump it in the water. In the summer, that’s great. The byproduct of it is you have some air conditioning and also some dehumidification.

David Roberts: Yeah.

Luke Winston-Almanzar: But that’s effectively what it does. You’re not creating heat, you’re just moving heat around.

David Roberts: Right. And this is why you get these miraculous COPs, these coefficient of performance. Again, if anybody’s listened to any of my previous pods on heat pumps, they know what this means. Basically, like, with any kind of natural gas or resistance heater, you’re somewhere under 100 percent. You put a unit of energy in and you get less than that in heating out. But with a heat pump, you put a unit of energy in, and you can get four or five units of heat out, because it’s not generating the heat, it’s just gathering it.

Luke Winston-Almanzar: Yeah.

David Roberts: And so the COP is what? Four on your devices? We don’t… we’ll get into that a little bit more later, but.

Luke Winston-Almanzar: So this is actually where there’s some nuance with heat pump water heaters in general. So there’s, like, UEF, which is the government reported, like, efficiencies. We have a 3.51. But just like cars where they have miles per gallon in the lab, what actually happens in the field is actually different, and I think that’s where we’ll wanna talk a lot about, like, the predictive intelligence we have in our system. But we can talk about that.

David Roberts: Yeah. It depends on the room, the heat in the room, the humidity, a lot of things. We’ll get into some of that later. So heat pump water heater. So but the ding I wanna sort of go through the sort of critiques of typical heat pump water heaters, aside from just being expensive, which we’ll get to later.

I think the standard critiques is that they’re really big, they’re really complicated to install, and they’re really slow to heat water, which means in practice, most of them today have electric resistance backup, and my understanding is that in most conventional heat pump hot water heaters today, that backup is doing, like, 30 percent of the work. So you’re getting, like, a third of a electric resistance water heater anyway, even if you buy one with a heat pump.

So let’s go through those and talk about how you have kind of addressed or solved those problems. Starting with the size, you have wrestled this thing down to not that much bigger than a conventional water heater. I think it’s a 50-gallon tank. Talk about how you shrunk it down without losing performance.

Luke Winston-Almanzar: Yeah. I’ll kinda go down, like, a little bit of the thread you’re talking about, like some of the trade-offs with just a typical heat pump. And so I think the great thing about a heat pump is it’s insanely efficient, right? And so we wanted to take that, but if you take a typical heat pump water heater, like with a heat pump on a 50-gallon tank, that heat pump will take five to six hours to heat up that tank.

And so if you have a traditional, like, algorithm of heating the water on that, where it’s like you have a big draw pattern, then the typical water heater’s like, “Oh, geez, I gotta heat that back up again,” it then goes to the electric resistance elements, which are fast. But I guess the way we look at it is you can get anywhere walking on time as long as you leave on time. And so what Reservoir does, it spends the first month in your house, like, learning your behavior, right? So it learns that David’s an early riser and you shower at 6:00 in the morning.

David Roberts: It’s definitely not gonna learn that, Luke.

Luke Winston-Almanzar: Okay. So it learns that David is a midday shower. You shower at noon every day, and all of us are jealous of you. But then it starts heating the water at, call it 6:00 in the morning, since you shower at 12 noon. And so it has plenty of time to do that, and it can anticipate that. And then when you take your shower, it doesn’t freak out that it needs to be ready for the next one because it generally knows your behavior. And so in this way, we can optimize the efficiency of the heat pump because we can just use it more, because we know when you shower and things like that.

And so what we saw, like, a lot of people doing with typical generic heat pump water heaters was they, for like a family of four like mine, they were oversizing the heat pump water heater. So instead of getting a 50-gallon heat pump water heater, they’d get an 80-gallon heat pump water heater, and that’s so they can either use the heat pump more or so that they can be ready for Thanksgiving and things like that. And so on Thanksgiving, you have a big tank, which is nice when you have your family over. But the rest of the year, you have a tank that’s just way too big, and you have standby losses, and you have this tank of water just sitting there.

We decided to add a fully onboard computer that can learn your behavior as I mentioned, and so we can have a smaller tank. We can give you higher efficiency, but then you don’t run out of hot water. You don’t have to worry about that kinda thing. And then we built in what we call party mode into the system, so we can get 150 gallons out of a 50-gallon tank for Thanksgiving, for when you have family and friends over. So party mode is not the most efficient piece of the system, but we think it’s okay to be inefficient on a couple days of the year and be more efficient the rest of the year.

David Roberts: Right, and this is where you’re superheating the water and then combining it with basically just tap water to get the right temperature. So you have 50 gallons of superheated water, which translates to whatever, 150 gallons of typical hot water.

Luke Winston-Almanzar: Yeah. There’s a little bit more that goes on there, but yeah. We have a safety mechanism called a mixing valve in there that actually prevents the super hot water from getting to your faucet, but then you mix it with colder water and you effectively have more. We also can dynamically manage the backup elements so that we can top up more precisely than anybody else.

But there is one other aspect of the system that’s super important. If you wanna do this kind of thing, you’re effectively storing more heat in the tank. When you raise the temperature of the tank, in a typical water heater, you would actually end up accelerating corrosion. So you actually, like, would burn out the tank faster, and we’ll get to the analogies of batteries in a little bit.

David Roberts: Right. ’Cause extremely hot water is corrosive to all the elements in there.

Luke Winston-Almanzar: Yeah. So if you’re like 150-degree water is much more corrosive than 120-degree water. But we have what’s called an electric anode rod built into the system. It’s like technology from the maritime industry, oil and gas. And instead of having a sacrificial anode rod, our system can actually prevent corrosion in the system, which means we can do a lot more things with heat than most people out there.

David Roberts: But this party mode, that’s something that I, as the homeowner, would need to invoke on purpose. I would tell the thing somehow that a party is on the way, right?

Luke Winston-Almanzar: Yeah, you would tell people. So what it does on a normal basis is it learns your behavior, and it can be more extreme or less extreme. You can give it some feedback. “I wanna prioritize not running out of hot water,” or, “I wanna prioritize efficiency.” But it doesn’t know when your in-laws are gonna show up, so you do have to tell it, yeah. But you can schedule that so it turns off when they leave.

David Roberts: Hmm. Interesting. Okay. So wait, coming back to the size, so just like try to give people a sense of the size of this thing. Is it about the size of a normal water heater?

Luke Winston-Almanzar: It’s taller, but it takes up about the same footprint. So it’s about five and a half feet tall. You’ll notice, like, the cylinder of it is about the same footprint as a 50-gallon generic water heater. And then we have what we call the hydronic system on the side of it. So there’s this really elegantly designed, like, rectangular portion where you can see the touch screen.

But that ends up taking up about the same amount of space as a typical water heater once you include the pipes that you attach to it. We wanted to make it as easy as possible to get through doors. We wanted to make it as easy as possible just to fit in a space without taking up a bunch of your space.

David Roberts: Okay. Now let’s talk about the install here ’cause this, of course, one of the classic problems with trying to get one of these as a homeowner is that you end up calling an electrician and a plumber, and then you have to take bids from both, find a good one on both ends, and then coordinate them together. It becomes a kind of project management. It becomes a project management thing just to get one of these installed, which of course, like, especially if your water heater just broke, you obviously do not want to do.

So you guys build and install these yourselves. How does that work? What’s the install process look like from a homeowner’s perspective?

Luke Winston-Almanzar: We design, manufacture, and install these ourselves because for exactly what you’re saying, we think it’s important that it’s easy to get these, that the customer experience is great, but then that it’s affordable. And we could talk about that in a minute. But we have a fully licensed plumbing company in Massachusetts, so we’re not that big of a company yet. We’re only installing in the Northeast. We’ll be expanding pretty rapidly in the coming months and years.

But right now, a homeowner can come to us. We have what’s called the virtual assessment. We don’t even have to visit your house to evaluate your house. You can submit a couple questions as well as a couple photos. This is where we do use a little bit of AI to make sure your photos are correct of your panel and whatnot. And the first time we visit your house is when we actually install it, because you don’t want a plumbing van showing up to your house, like, three or four times just to install a water heater, right? So what this allows us to do is save you the peace of mind, it allows us to be more efficient.

And then we show up, we install Reservoir, and it’s actually easier to install than the typical heat pump water heater because we’ve integrated a variety of different components. We’ve integrated the condensate pump, so you don’t need a separate device. You don’t need a separate power supply. But then we’ve also integrated a couple other things, like, so we actually have built-in recirculation into the system so that we can actually have instant hot water, but then we can also use that for other amazing features like protecting your plumbing, which we can talk about.

But since it’s all an integrated device, we just have a couple connections to your house. We have the hot water, the cold water, the power, and condensate, right? It’s actually a pretty seamless install. We can install in a morning. We can install in an afternoon. And if you think about it, in that morning or afternoon, we dramatically impacted, like, a fifth of your energy, right?

David Roberts: Mm-hmm. And does this get plugged into a 240 volt outlet, or can you get by on a 120 volt? I know some other companies are putting out 120 volt water heaters now, which sort of eliminates the need for an electrician.

Luke Winston-Almanzar: Yeah. So we typically install on a 240 volt. We can install on a 120 volt. We actually see that as more helping you with the project management. If the electrician can’t show up the same day, if he needs to show up a week later, start at 120 volts and then convert to 240 volts. We’ve also installed with batteries before. But for the typical family, especially if you have kids and whatnot, like, I’m a family of four, I don’t think a 120 volt’s the best experience because you just need to be able to get some more capacity out of the system sometimes. And so we think for the best experience, you should have 240 volts.

David Roberts: You don’t have electricians on staff that can do that piece of it. That piece of it, the homeowner will have to do.

Luke Winston-Almanzar: No, actually that’s not true. So we don’t have them full-time employed, but we do coordinate that whole thing. This is once again, we don’t want homeowners to be the project managers, so we actually have trusted electricians that we coordinate. You don’t talk to them directly, so they’re effectively on our team. And so you talk to us, you transact with us, we get you fully installed, we get you a Reservoir, we manage the electrical components of it, and we also get rid of your old system.

David Roberts: And this still sounds a little bit like something you have to plan. I wonder of the sort of 100 units, I think, or something like that you’ve installed at this point, how many of them were emergencies? You know, how many of them were a response to, “Hey, my hot water heater is broken. Get over here as fast as possible”?

Luke Winston-Almanzar: Roughly like a third of them-

David Roberts: Hmm...

Luke Winston-Almanzar: at this point. We’re a new company, so we have a lot of early adopters who get excited about this kinda thing, so they’re proactively planning. There’s a lot of people on the home electrification journey, and water heating has actually been one of the last things that they’re able to upgrade. So we have quite a few that are proactive.

But then this gets to one of the biggest reasons we actually are vertically integrated, is because we have stock, we can respond within 24 hours. And so you have a lot of people... Let’s say you care about the environment, David, and you’re thinking about a heat pump water heater, but you’re procrastinating, and then your water heater fails. You need a new one within 24 hours or 48 hours.

David Roberts: Right.

Luke Winston-Almanzar: One of the things we’ve found is most plumbers don’t stock heat pump water heaters. Sometimes it’s even hard to get ’em in Home Depot, and so are you gonna wait two weeks for them to acquire it, right? So one of the big reasons we’ve been able to be so successful is because we can respond really quickly. This is why, I mean, love to tell you more about, like, the technology and everything, but the product really is the hardware and the service component. This is a huge piece to helping homeowners electrify.

David Roberts: Yeah. Yeah. I mean, one of the things that sort of came out as I was looking into this, researching and reading about it, is that the vertical integration model, the service model, is one of the biggest differentiators here, I think. It’s a big part of the business model. We’ll get to the technology in a minute, but I kinda wanted to probe a little bit on this vertical integration.

When you say you design and build and manufacture it, how much of it are we talking about here? Because, like, manufacturing, as I understand it, what is, like, a giant glass-lined tank, is not a trivial thing. You have a lot of very big companies that do this. Tell me, like, how much are you buying off the shelf versus how much you’re genuinely designing and manufacturing on your own?

Luke Winston-Almanzar: Oh, no. That’s a great clarification. So when I say we manufacture, I mean, we do have a contract manufacturer. We work with a partner that does this. Like almost any hardware company, we have a supply chain, we have sub-suppliers, and we do other things like that. We don’t have our own team, like, manufacturing tanks.

What we do do is we source components from a variety of different manufacturers and tried-and-true kinda components by manufacturers that manufacture in the millions, if not hundreds of millions. And so that’s everywhere from the tank, as you mentioned, all the way to, like, the recirculation pumps, which are manufactured in the hundreds of millions, to the mixing valves and things like that. Where a lot of the innovation that we actually have is on the integration of these kinds of things, like the integration of the computer, the integration of the ultrasonic flow meter, the recirculation pump, the tank, the heat pump, and then making them all work in this amazingly efficient way because we have a computer.

So when I say we manufacture it, we do have an extremely experienced partner specifically with these kinds of things, and that’s how we’re able to have an amazing product and also scale faster than you’d actually imagine.

David Roberts: Right. Okay, and then we talked about this already, but the slow piece of it. You know, typical heat pump hot water heater will, as I said, like 30 percent of the heat ends up coming from electric resistance. You are presumably reduced the amount that the electric… You do have electric resistance backup, but you reduce the amount it’s used to what percent on average? Obviously, it’s gonna depend, but by doing this preheating, this learning and this preheating.

Luke Winston-Almanzar: Yeah. We’re still doing different studies like on this kind of thing. There’s studies out there that show with predictive intelligence you can significantly improve it, but we’ve seen improvements on the scale of 30-plus percent depending on the homeowner, right? And so you can dramatically improve it. I guess one piece I wanna clarify is like we are not like purists in the sense of like thou shalt never touch an electric resistance element. It has its purpose.

David Roberts: Yeah.

Luke Winston-Almanzar: And so most homeowners aren’t… Their number one priority is not necessarily efficiency. They wanna save money. They do wanna save the environment and everything, but they wanna make sure they’re not running out of hot water. And so we can optimize use of the heat pump, like I said, on a scale of like 30-plus percent or more. We’ll publish more of this. We’re still a young company, but we’re able to get a lot more use out of the heat pump than other kinds of systems. But we’re also able to do some other stuff, which I won’t get into right now, but happy to dive down this rabbit hole for a bit.

David Roberts: Well, talk a little bit about the continuous loop, ’cause one of the questions I got … I threw this out on Bluesky and one of the questions is just, you know, a lot of people are into these days the on-demand water heaters just because you can get as much hot water as you want, whenever you want, as long as you want. So you’ve got this sort of continuous loop thing built in that mimics that functionality, as I understand it. What does that mean?

Luke Winston-Almanzar: Yeah. I don’t know what you mean by the continuous loop side of things, but I’m glad you brought up tankless water heaters because that’s actually what I had before this. I’m actually in the middle of five boys, and I had a lot of cold showers as a kid. And so I hate running out of hot water. But like switching from the tankless gas to a heat pump water heater, that was like my wife’s number one thing. She’s like, “Are we gonna run out of hot water?”

David Roberts: Right.

Luke Winston-Almanzar: And so what we tried to do is create Reservoir that’s a heat pump water heater that can be a tankless gas killer. So one tankless gas system can continuously produce hot water, but it doesn’t store hot water.

David Roberts: Right.

Luke Winston-Almanzar: And so if you actually wanna do recirculation, which can actually warm your pipes before you turn your shower on to get like instant hot water, you typically would need a tank so that you can actually enable that. You have to augment it in different ways. A tankless gas water heater is also more expensive to install than it takes to install a Reservoir.

And then the other piece is more than half the country doesn’t have the option to install a tankless gas water heater. And if you start talking about like tankless electric water heaters, the power draw on those is just like insanely high. You end up taking up more than a panel of space for some of these kinds of things, which just makes them absolutely impractical.

And so what we want to do, we call it virtual capacity. Maybe that’s what you’re referring to with the continuous loop side of things, and that’s how we get up to 150 gallons. Because like I keep saying, we wanted the efficient option where you don’t run out of hot water, where you don’t have to worry about this side of things so you can save money. But then our tagline is save power, save your showers, right? Because we can predict your behavior. Like you don’t notice the efficiency side of things as long as you get plenty of hot water, right? And so we’re able to manage that on the back end.

And then we also have a backup, what we call a booster heater built into the system. So as opposed to the two electric resistance elements I was talking about, like inside the tank, we have an inline booster heater, so we can actually heat the marginal amount of hot water. So in the God forbid event at your noon shower, David, you are about to run out of hot water, we can turn on that just marginal electric resistance element, be a little less efficient, but make sure you get the rest of your shower, and then turn it off, right? And that way we can get rid of some of the range anxiety you might have with a more efficient device.

David Roberts: Do you guarantee to a homeowner, family of four, whatever, install one of these and you will never run out of hot water. You will never get that cold shower thing.

Luke Winston-Almanzar: It’s gonna depend. You would not believe, like, some of the shower fixtures some different people have. Like, you can put any system to the test, but that’s our guiding light, right, is like never run out of hot water. When we do, we get feedback from the customer, and we’ve adjusted the algorithm. Most of our customers do not, but I’m not gonna guarantee that.

You can’t even guarantee that with a tankless gas system. Like, I can put a tankless gas system to the test with the right hot tub, right? And so what I can say is, like, for the most part, you’re not gonna notice. Like you said, people don’t think about their water heater. What I can say is we will save you a bunch of money, and you will almost never notice that whether you have hot water or not, and you also will have a plumbing security system. So like one of the things we haven’t talked about as much is, like, how we can help protect your pipes, and I’d love to go into that kind of thing as well.

David Roberts: What’s something else the computer is doing? Like, what else is the computer doing? The computer’s learning your… creating a predictive algorithm, learning your behavior. What else is the computer in there doing?

Luke Winston-Almanzar: Yeah. So we didn’t just put a computer on a water heater so that we can have a computer on a water heater. So we can do more, right? So one is we can use the heat pump better. That’s what we’ve been talking about. The other piece is we’ve integrated a hydronic system, which includes things like the recirculation.

So this is one of the coolest whiz-bang kind of features we have on it. So we can actually heat your pipes before you even turn on the faucet in your shower, so that when you turn it on, it’s just hot. There’s a couple benefits to that. So like in my home in Massachusetts, it would take like two minutes normally to heat up before it’s actually hot and I wanna step in.

David Roberts: Yeah. This is the very traditional, I mean, you don’t even really think about it, but when you take a hot shower, there’s like 30 seconds, a minute of cold water before the hot water arrives. That’s what you’re talking about, right?

Luke Winston-Almanzar: Yeah, exactly. You gotta pump out the cold water out of the pipes before it arrives. Some places it’s five seconds, some places it’s two minutes. I’ve seen places it’s like almost five minutes. And one, you’re waiting, but then you’re pouring a God-awful amount of just cold water down the drain, and the average family wastes like 4,000 gallons of water each year just holding their hand out, waiting for the shower to heat up. And so this is cool. Like in… You can save water. The problem with a traditional recirculation system is you’re also wasting a bunch of energy just keeping your pipes warm unless you do it intelligently.

David Roberts: Right. I think maybe this is what I was referring to with continuous loop thing, just the recirculation thing, keeping the water in the pipes hot thing.

Luke Winston-Almanzar: Oh, okay. Yeah. Yeah. Well, so, you know, there’s one way we could do it is we can just keep your pipes hot all day long, and it’s kinda like having a taxi driving around your house all day long for the moment you need it. Or because I already know you shower at noon every day, we heat up your shower at noon. Or I can let you use our app on your phone, and you can warm it up. You can even tell Siri to warm it up. And in that way, we can save water, save your time, save your shivering time, and also save energy at the same time.

A typical heat pump water heater has no idea what’s going on when a recirculation pump is, like, drawing water, and then it’s doing that reactive algorithm. What this actually enables, that’s a whiz bang, that’s a comfort feature, stuff like that, but it actually enables some of the plumbing security system feature kinda talking about.

Because we have a recirculation pump built into it, we can sample your cold water. We can predict if your pipes are gonna freeze. And in Boston, that matters a lot more than I imagine in Seattle. And then we could say like, “Hey, David, your pipes are gonna freeze. Do you want us to pump warm water into your pipes?” And so we actually can help prevent your pipes from freezing.

David Roberts: And you can do that remotely presumably, like I could do it with an app when I’m not in the home.

Luke Winston-Almanzar: Oh, yeah, go to Jamaica, and you can do it from there if it’s January. We also have a pressure sensor in the system, so sure, like a lotta water heaters can detect a leak in the water heater itself, but we can actually see into your plumbing. So we can actually detect if you have a leak or an open faucet in your broader plumbing system because we have a pressure sensor, but we also have what’s called an ultrasonic flow meter, and so we’re using sound to measure the flow of your water. It’s so sensitive it can actually detect the thermal expansion of water. So like when you heat up water, it expands.

David Roberts: Right.

Luke Winston-Almanzar: Our system is so sensitive it can detect that, and so what that means is we can detect so much more beyond just the water heater itself in your plumbing system.

David Roberts: I’m curious how precise that is. Like, you can tell me somewhere in your plumbing there’s a leak, or you can say where the leak is.

Luke Winston-Almanzar: We can say somewhere in your plumbing. We can also characterize the leak, so we can characterize, like, the rate of it with a flow meter. We can ultimately, like, make kind of like a digital twin of your system where we can sense if it’s a, you might be washing dishes, or you might be taking a shower or taking a bath. We can see pretty minute changes in it. I won’t be able to tell you it’s in bathroom number one, at least not yet. We will be adding more technology, right?

David Roberts: I was gonna say, that would sound like magic if you could do that. So you’ve got a computer that’s can prevent freezing pipes, it can detect leaks, it can basically monitor the health of your plumbing alongside all this stuff.

Luke Winston-Almanzar: Yeah. And it can tell you if something’s wrong rather than waiting until the water’s all over your floor or in your walls, right? The other side of things is something people don’t talk about all that much is, like, Legionella bacteria. And so water at certain temperatures, call it, like, 90 to 100 degrees, is great for breeding Legionella bacteria. If you’ve been on vacation or if a certain part of your tank or your pipes may have been sitting at a temperature for a certain amount of time, you can get bacteria built up.

It’s pretty simple to kill it. You just heat up the water to a higher temperature, 140, 150 degrees Fahrenheit. But most people aren’t gonna go down to their basement and turn it up and manage all these kinds of things. Reservoir can predict when your water’s been in a kind of an optimal area for breeding that kind of bacteria and then just kill it, right? This is especially important for little kids as well as elderly people, so you don’t wanna be exposed to that kind of stuff.

David Roberts: Okay. How much does this thing cost? I’ve seen inconsistent numbers in a couple of different sources. I’m curious to just pin it down. Off the shelf, how much does this thing cost?

Luke Winston-Almanzar: Yeah. So we have two different packages. Before I say, like, exact price, this is such an important question because a lot of people just think about the hardware cost, but the bulk of the cost of acquiring a new water heater and a heat pump water heater is on the install. And so that’s one of the biggest reasons we have the vertical integration is because once you actually get a quote from a plumber, your eyes will pop, particularly in metros like Boston.

And so our system is between $5,000 and $6,000 before incentives. And in a place like Massachusetts, you have incentives of $1,050. And so you can get started with Reservoir for $3,950 and just go up a little bit more from there.

David Roberts: That’s just the hardware.

Luke Winston-Almanzar: That’s a great clarification. That’s including installation, that’s including removal of your old system, and everything like that. And so if you compare that to, like in the Boston metro, a typical electric resistance dumb tank, I’ve seen install costs everywhere from 2,500 bucks to more than $6,000. For a tankless gas system, I’ve seen it cost $5,000 to $10,000. And so with Reservoir costing between just below $4,000 up to about $5,500 once you include the incentives, we’re very mainstream. I didn’t wanna build a company that’s just building green products for rich people. I want it to be available for a bunch of homes, right?

David Roberts: So your hardware costs a little more, but your install costs much less, and you’re netting out, you think, roughly comparable to a traditional water heater. Is that fair to say?

Luke Winston-Almanzar: Yeah, on the install cost. And then if you then start comparing to the fuel cost, like a, an electric resistance tank, we can save you 800 bucks to 1,000 bucks every year versus an electric resistance tank in a metro like Boston, even more in California and other places like that.

David Roberts: Right. I guess it depends on the cost of electricity, right? But you’re saving a lot of electricity. I’m curious, just on the fuel cost question, I guess the comparison to natural gas is gonna be very sensitive to your location, obviously. What about in Boston? Like, what’s the fuel cost comparison in Boston, your amount of electricity versus the natural gas it would take to run a natural gas heater?

Luke Winston-Almanzar: Yeah. There’s different types of natural gas heaters, right? So there’s the tanked gas heater, which is the least efficient one ’cause you’re just burning gas under the tank, and so you can have efficiencies as low as, like, 0.6, right? And then you can have a tankless gas system, which is a bit more efficient, so you can have efficiencies like 0.9 to 0.95.

So from an energy use perspective, we’re way more efficient. But natural gas is cheap, and ultimately, that’s what we wanna beat, and that’s where we think the predictive intelligence is what you need to actually beat it. And so versus, like, a gas tank, we’ll save you a couple hundred bucks a year. If you take the direct comparison of the upfront cost plus the-

David Roberts: That’s in Boston.

Luke Winston-Almanzar: That’s in Boston. Yeah. You’re gonna have to compare that in different metros. Most of the places-

David Roberts: The price of electricity will vary. The price of natural gas will vary. The price of plumbers, honestly, will vary. Like, all of these things vary depending on where you are.

Luke Winston-Almanzar: Absolutely. But then half the country, right, doesn’t even have access to natural gas, so this isn’t even a conversation. So, like, if you go to Florida, 90 percent of water heaters use electric resistance, and so it’s a different kind of equation.

David Roberts: Your table, your cost comparison table says you can save 800 a year versus a conventional electric resistance heater. It says you save 100 a year versus a typical heat pump water heater. Is that just the computer and the predictive efficiency?

Luke Winston-Almanzar: Yeah, that’s the intelligence. Yeah. We didn’t invent some crazy new type of heat pump. We’re just using it smarter.

David Roberts: Right, right, right. Like, the heat pump itself is a typical heat pump.

Luke Winston-Almanzar: Yeah, it’s a typical heat pump. I mean, we’re very much of the philosophy of, like, let’s not reinvent something awesome. Let’s deploy, deploy, deploy. We’re getting more out of it because of the predictive algorithm.

David Roberts: Okay. I wanna talk a little bit about where to put these things and how they affect the rooms they’re in because I find this fascinating. So, like, one of the things your sort of marketing materials say, “Hey, as we shrank this thing down, we shoved everything, we shoved a bunch of stuff into a single package.” Like, it’s funny, the picture of yours installed versus a picture of a typical heat pump water heater install. The typical heat pump water heater install is comical ’cause they’re just, like, 50 pipes and gizmos and gadgets all over the place. It’s visibly ridiculously complicated. You have shrunk this down and put it in a single package so you can theoretically put it in a closet. That’s what your marketing says, but the heat pump is taking the heat from the room it’s in.

So, you know, there’s this study, I’m sure you’re familiar with it, I think it’s sometimes called the Amazing Shrinking Room study, which shows that the smaller of a room a heat pump hot water heater is in, the COP, its efficiency declines the smaller the room gets for the simple reason that, like, in a tiny room, you take the heat out of the room, and then the air’s cooler, and then there’s less heat in the room to take.

And in a closet, I would imagine, you get terrible efficiency ’cause you can take all the heat out of the room very quickly, and then you’re, like, straining more and more to get to less and less heat. I’m just curious, like, what do you recommend for homeowners? Like, you don’t seriously think they should put it in a closet, right? Like, what kind of room should they put it in?

Luke Winston-Almanzar: You really do like to go deep. I’m impressed that you found that study. That’s one that’s gone around our team quite a bit, obviously. So basically, like, a heat pump works with airflow, right? Like, you’re pumping a bunch of air over a heat exchanger. The more air you have, the more heat you can pull out. That’s the simple way of explaining it.

So smaller room, less air, or you’re recycling that air more frequently. And so if you put it in a closet or a small utility room, you need makeup air somehow. So, like, pretty simple ways to do that. You can add some vents. My utility room, we added a louvered door, so that’s basically a big vented door, and it can pull from there.

And there’s gonna be a variation of efficiency. Like, the absolute best place to put a Reservoir is in an unfinished basement or a garage, right? Like a big one. If you’re in a basement, you’re almost using geothermal energy, right? ’Cause you’re just drawing it from, like, the surroundings.

But then it’s gonna vary. We don’t typically recommend our system for, like, apartment buildings with a tiny water heater closet. That’s something we’re going to want to solve for at some point in the future. The thing is, like, the large, large, large majority of homes in the country are single family, and so we think we can address a huge amount with our existing product, and we’re not stopping here, right?

David Roberts: Right. One thing about a basement, especially in some climates, is it’s quite cold and just, you know, there’s less heat in the air in a cold room. Does your efficiency decline in cold climates or in cold rooms? Like, if it’s an unfinished basement, it means it’s not heated.

Luke Winston-Almanzar: Yeah. It’s a great question. I mean, so the efficiency does go down. Like, the more heat that’s in the air, the more we can extract from the air, so it’s pretty logical that a lower temperature would be harder to pull heat out of the air, right? And then we can only go to a certain temperature. We can go down to, like, 42 degrees Fahrenheit, and then we have to use the electric resistance backups.

But one of the amazing things about a basement is its reasonably steady temperature because it’s slightly below ground, right? And that’s why it’s one of the ideal areas to do it. In the summer, it’s great, particularly, like, in basements in certain parts of the country, you might have more humidity. It actually helps dehumidify.

David Roberts: Yeah, I was gonna say, the flip side of this is in a hot, humid climate, you’re cooling the air, which is a nice bonus, and you’re in, to some extent, dehumidifying the air, which is a bonus. So, like, you get bonus in a hot room, but in a cold room you get a little loss of efficiency. That, is that fair?

Luke Winston-Almanzar: Yeah. We could save, like, a couple hundred bucks a year just on dehumidification because people, like, dehumidifiers are not efficient devices, and you just have ’em running, like, all the time. It doesn’t replace it, but it definitely helps shoulder the load. What I will say is there’s the inverse benefit, like you’re talking about the winter, but, like, in the summer, so my air conditioning at my house in Massachusetts was actually having some trouble, so my Reservoir was actually helping air condition some of my finished space. And so you have some less efficiency in the winter, but you have a big efficiency boost in the summer.

David Roberts: And this is another question I got which made me think, which is if I’m in a cold climate, which Boston is, and I’m heating my home, I’m paying to create that heat that is heating my home, and then your appliance is taking that heat out of the air to make hot water. So do you know what I mean? Like, this is financial. Like, you’re taking heat that I paid to create and making hot water with it.

Luke Winston-Almanzar: Yeah. So like all things, it depends. This is one of the biggest conversation pieces around heat pump water heater nerds and all these kinds of things. So, like, in a bunch of cases, we’ll actually have a Reservoir installed near a oil boiler, and the oil boiler has a bunch of waste heat, right? And so we’re actually just sucking off heat from that kind of thing, and it’s like, so it actually makes the whole system more efficient.

In my house, I have very high efficiency whole home heat pumps. So those can go to much, much, much, much lower temperatures. Those can go down to minus 14 Fahrenheit, but they can’t actually raise the water temperature that high. So it’s almost like you need two different heat pumps. So you bring the heat into the house with the whole home heat pump, and then you heat up the water with it. You don’t get your maximum efficiency that way, but you still are much more efficient than a generic water heater. You still have a COP well in excess of one, and actually in excess of two with the system.

A lot of people try to criticize that as, like, you have a parasitic load off the outdoor heat pumps. I don’t know if you’ve covered the concept of cascading heat pumps, where you use one heat pump to do part of the lift of temperature and a second heat pump to do the next lift of temperature. This is used in industry and all these kinds of things. You could say, like, the second one’s robbing the first one, but it’s actually part of the design, right? And so you don’t get perfect efficiency, but an amazing kind of combination is whole home heat pumps for space heating as well as a Reservoir.

David Roberts: Right. Right. But regardless, like if you’re heating the air, there’s some ding on efficiency of the water heater just because the money it takes to heat the air, you’re losing, I don’t know, some tiny fraction of that to the heat pump.

Luke Winston-Almanzar: Yeah. But I think some people kind of put this like, “This is the nail in the coffin,” as if they’re like, “Ha ha, I found like less efficiency.” The simple thing is heat pumps are less efficient in the winter than they are in the summer. So what, right? Is it still more efficient than what the alternative is? Yes.

David Roberts: All right. Let’s talk briefly about noise. The materials say this runs at about 40 or 50 decibels, which is, I guess, for comparison, roughly like a refrigerator, the hum of a refrigerator. So not obnoxious, but maybe not something you’d want like in a bedroom closet or something like that. Like is noise an issue at all?

Luke Winston-Almanzar: With heat pump water heaters broadly, yes, people complain about it all the time.

David Roberts: Yes, they’re loud. They’re loud. The traditional ones are loud. This is a common complaint.

Luke Winston-Almanzar: And they’re, like, misadvertised, but there’s different sources of noise, right? So one, if you don’t build a reliable product, you have screws that are rattling and stuff like that. If you don’t isolate the compressor well enough, you have that 1980s refrigerator sound, which you can either measure the decibels or you can just say, “That’s a really annoying noise.” With a Reservoir, we actually have basically three sound levels. So at full power … we have a very strong build that’s really reliable. We’ve focused on this a lot. We’ve focused on isolating both noise from vibrations as well as the annoying compressor noises and stuff like that, and most people will hear it and they’re like, “Oh, that’s not bad at all.”

We also do have a quiet mode you can schedule. It actually goes, like, slightly quieter with the fan. And then if you really, really, really, really — you don’t want the noise right then — you can also schedule electric resistance, or you can just schedule it to heat at a different time of day. You can say heat at night or heat in the middle of the day when I’m not even home, right?

David Roberts: Got it. Let’s talk durability, ’cause this, I think, is also one of the primary critiques of heat pump water heaters traditionally, is that these compressors wear out. You know, one of the things I heard on Bluesky is this guy had a heat pump water heater. His compressor wore out, died. The whole thing shifted to resistance heating, and the way he found out was through a much higher electricity bill at the end of the month. Like, it didn’t tell him. So how are you focused on durability specifically?

Luke Winston-Almanzar: Yeah. We have replaced a non-insignificant amount of bad generic heat pump water heaters for exactly this reason. I won’t mention any names or anything like that. There’s a couple different aspects to durability. The biggest reason a typical water heater fails is because the tank corrodes and then just starts leaking all over. When you see water leaking on your floor, it’s because the water ate through the tank.

David Roberts: Mm.

Luke Winston-Almanzar: And with a typical heat pump water heater, they use the same technology to prevent corrosion, which is called a sacrificial anode rod. You literally have this stick of magnesium that the water eats before it eats the tank. When the water’s done eating that stick of magnesium, guess what it does? It eats the tank. All the manufacturers will say, “Well, you could replace the anode rod.” The problem is, especially with a generic heat pump water heater, that anode rod is, you go through the heat pump and you have, like, a one-inch size nut on there. You need this giant, like, wrench to pull it out. And so basically nobody does this. It’s just, like, a really big pain. So still, even with heat pump water heaters, they will corrode at a normal rate, and then you can’t… It’s really hard to replace the anode rod.

We have an electric anode rod that you don’t need to replace. It uses a tiny, tiny electric current that stops corrosion. We were talking about that at the beginning of the pod. And so you don’t need to do that replacement kind of thing. That makes the tank actually probably the last thing that’s gonna fail on a Reservoir.

On the other side of things, like reliability, so first and foremost, it’s how you manufacture. Make sure you have great QA with the manufacturing partner. We source components that are manufactured in the millions. The heat pumps that we use are manufactured in huge, huge numbers. But then the final piece, and this gets back to why we’re vertically integrated with our own plumbing team, there’s no hardware company in the world that doesn’t have problems with their hardware at some point.

The question is, what do you do when something goes wrong? And so we are very proactive. Because of the sensors that we have on it, we can actually tell if you have a compressor failure. We can tell the temperature inside your compressor and if anything’s wrong with it. We can tell the temperature at the bottom of your tank. We can tell the temperature at the top of the tank. We can tell if there’s a leak in your system.

David Roberts: So you’re monitoring the performance of your water heaters from a central location. Like, you could see into them in some-

Luke Winston-Almanzar: Yeah. I mean, assuming the homeowner wants to share it with us, you don’t have to be Wi-Fi connected to use a Reservoir, but all of our units are because people love the app, and they like the over-the-air updates. But we can see energy use, we can see water use, we can see temperature variation in the system. We can see leaks.

We can actually reach out to you. We’ve done this before. We’ve reached out to customers, “Hey, you have a very high pressure reading in your plumbing system. This doesn’t have to do with the Reservoir.” There’s some towns that just have absurdly high pressure in their water mains, and so we’ve been able to advise customers, like, “You should do something about that because of this.” And this kinda gets back to the point, like we added a computer so we can add more capability, and we can see further into your plumbing system, and nobody else is doing this except in like crazy high-end homes or like industrial or commercial buildings, right?

David Roberts: So you monitor the compressor, and you can see if it goes bad, or you can see if it’s wearing out. You can see if it’s dying before it happens.

Luke Winston-Almanzar: Yeah. We can see if there’s aberrant behavior. We can see all kinds of stuff. Because we’re a new company, and we know that if customers don’t have a good experience, they will reject our product. But if you get back to it, heat pump water heaters were invented in the ’40s. The biggest reason they’re not, like, everywhere is ’cause they’re expensive, but they’re not reliable, and the, you know, and plumbers and installers might be afraid of them because they’re worried about these kinds of things, so we’re taking on that burden ourselves to start.

David Roberts: And your warranty, does your warranty cover labor and parts? Like, what’s the warranty like?

Luke Winston-Almanzar: Oh, yeah. Yeah, so we have a 10-year parts warranty and then a two-year labor warranty. You can pay more for an extended warranty as well.

David Roberts: Okay. We’re running out of time, so I’m not gonna be able to get... I had even more nerdy questions, believe it or not. Before we’re done, I wanna talk about the VPP stuff. Lots of people, for a long time, have been saying hot water heaters are a perfect application for demand response, for virtual power plants, basically, precisely because it doesn’t really matter when you heat the water, as long as the water is hot when you want it, right? So you can shift load.

If you have these computers installed and you’re monitoring these things, presumably you could enroll them in these programs. As I understand it, you have not yet, but talk about your thinking and the possibilities around that aspect of the product.

Luke Winston-Almanzar: Yeah, I’m glad you brought it up. First and foremost, our focus is on making homeowners happy, getting into homes, and all these kinds of things. Like virtual power plant doesn’t matter until you have a bigger install base-

David Roberts: Right...

Luke Winston-Almanzar: a bigger fleet to work with. I think one of the absolute biggest reasons, like everybody’s talking about water heaters. It’s like a holy grail of distributed energy resources. It’s invisible. You don’t care when we heat your water, you care when you get your shower. But there’s been so many stop starts with it because they’re not connected, and there’s a variety of different reasons they’re not connected. Often, there’s poor execution between hardware and software. Guys that have been manufacturing steel tanks for 100 years are not that great at software.

And then the other part is you have this disconnect between the OEM, the distributor, the installer, and then the homeowner themselves, and somewhere in that chain, someone doesn’t care as much about connectivity. And if your devices aren’t connected, you don’t have a virtual power plant, right? 100 percent of our systems are connected because our homeowners see value in that.

And the first step of this, so before you even get into virtual power plant, we already have homeowners using it for time of use rates arbitrage, right? So like-

David Roberts: Right. Which you have in Boston, yes or no?

Luke Winston-Almanzar: It depends on the town. The major utilities don’t yet have it, but some of the municipal light plants, so like one in Groton, their off-peak is five cents, their on-peak is 50 cents, and so you have this 10X spread. So yes, you wanna use the five cents, not the 50 cents to heat your water.

But so this is one of the things that I’m super excited about. Like if I could make, wave a magic wand, I would say, “Let’s get time of use rates everywhere, and then we’ll bring the tools,” right? And so we could do it. So you can use it as a thermal battery at the home.

But then if you do wanna talk about, like, the virtual power plant side of things, you know, once you start getting a big enough install base, we’re talking to multiple major utilities. Can’t disclose that right now. Hopefully, we’ll have some exciting stuff to announce soon. But you can offset energy use. So like, I guess I think about the grid kinda like a highway. You can either build a bunch of lanes around rush hour, or you can try to move some of that rush hour traffic to a different time of day, and it’s the same with the grid. If you can shift when a bunch of people heat their water, you don’t have to build as much grid infrastructure and things like that. I think some of the stop/starts with water heating is the connectivity piece I talked about.

David Roberts: Mm-hmm.

Luke Winston-Almanzar: But then it’s also hard to recruit people after the fact. Like, if someone who didn’t care about the connectivity, like a plumber who’s a great plumber, but wasn’t really, like, thinking about VPPs and whatnot, didn’t connect the homeowner, then the utility needs to go and get them connected, and you’ve seen people put, like, transponders on existing water heaters. You destroy the economics of the system. But if you have an install base from a company like Reservoir where we’re already connected, our customers already love it and everything, we will be able to more affordably and rapidly recruit homeowners for VPP programs.

David Roberts: Are your customers agreeing to this already, or is this just something that you could theoretically contact them about and sign them up for later?

Luke Winston-Almanzar: No. So we would contact them after the fact. We would never enroll a customer in that kind of thing without telling them. What they already can do, so our app, iwe have a couple of integrations, so you can sync it with your solar panels, you can sync it with time of use rates, you can get really fancy with Home Assistant. But when we actually get to the virtual power plant stage, we’ll talk to the homeowners.

I think one other aspect we actually have that’s very interesting, so I talked about our ability to see, like, flow of water in our systems because of the ultrasonic flow meter. We can actually spot homeowners who will be more likely to run out of hot water if you do a demand response event. And so we could say, like, “David showers at the wrong time of day, so let’s not do demand response with him. Let’s do it with these other homeowners.”

’Cause I think, like, if you look at VPPs and demand response with, like, smart thermostats, you’re changing someone’s comfort, which gets a bunch of people to opt out, like if you’re turning off the air conditioning in the middle of the summer. With a Reservoir, one, because it’s already storing energy in a tank of water, we can avoid that. But then because we have information, we can more precisely avoid that.

David Roberts: Mm. Okay. So this is theoretically in the future, maybe a small discount for users. They get a little increment of income for them that offsets the operating costs of the thing. But that’s not currently integrated in your cost comparisons. Your current cost comparisons are all just about efficiency, right?

Luke Winston-Almanzar: Yeah. It’s about efficiency and the predictive intelligence. So we will soon have demand response kind of offerings, but our goal is just to make it more affordable for the homeowner. If with demand response, we can make it even more competitive against gas, the sooner we can kill gas.

David Roberts: Right. Here’s a question. A month ago, a company called A. O. Smith shipped a CO2 split heat pump water heater with Panasonic. It works down to minus 25 degrees. It heats quickly, has no electric resistance elements at all, and is completely silent indoors, and plugs into a standard outlet because it has the compressor outside. It has a outside unit where, that does the noise. I’m curious, like, A, why not put the compressor outside? Did you think about that? A split system. Why not a split system?

And then B, in competitiveness terms, what is your sort of what they call a moat? You know what I mean? Like, what protects you from competitive pressures from these bigger companies that have more money to dump on these things that are rapidly improving their products?

Luke Winston-Almanzar: So, I mean, as far as my read, we’ve looked at that A. O. Smith one. I think it’s a CO2 heat pump, which is similar to the SANCO2 system. As far as I can tell, they haven’t published a price on it. I do know that the, like SANCO2 system is very expensive, and so that’s where you start getting into it. So just the monoblock itself ends up being very expensive because with CO2 you have higher pressures in the system, and so you need more metal and-

David Roberts: Right. This is using CO2 as the refrigerant if people aren’t following along.

Luke Winston-Almanzar: Yeah. Yeah, using CO2 refrigerant can be very exciting, and then you realize it’s not as easy as you’d think it is. So one, you raise the cost, but then you also raise the cost because for a water heater, you’re running these lines, so you have to have a pad for the compressor outside. Then you have to have, either have refrigerant or you actually have to have water lines going from outside the house into the house, into the tank and everything.

And so maybe you make up for some of it with plugging into a normal outlet, but then you have more install costs, right? And so that’s where you start getting into this thing like how many homeowners are gonna let you drill through the walls and do all these kinds of things, and what’s the final cost?

I would find it kinda hard to believe that their system is gonna be able to be as competitive on cost basis as us. Like what we’ve seen in the market with systems like the SANCO2 system, you’re talking in excess of $10,000 for a system. And so yes, you have those benefits, but how much are people gonna pay for those? And you’re effectively doing a lot of the work for space heating without actually getting space heating, right?

David Roberts: Right.

Luke Winston-Almanzar: And so sure, you can have some features that are… do get rid of some of the issues that you might see with an integrated system, but I don’t see how you’re gonna be as efficient or as affordable for a lot of the houses in the country.

David Roberts: Got it. Got it. Okay. A big question here is about policy, specifically policy headwinds. The tax credit, there was in the IRA a big tax credit for these more efficient systems. That died. That was killed dead at the end of last year. So that’s one competitive piece that you lost. And then second, and perhaps more importantly, the Department of Energy was gonna put out a new efficiency standard for water heaters in 2029, which is supposed to tighten efficiency.

And the idea, I think, in the industry, and this is, I actually heard this from the sort of heat pump water heater trade group which exists, saying, you know, right now we’re a tiny fraction of water heaters, but once these new standards come in place, that’s expected to boost heat pump water heaters up to like 50 percent of new units because of these efficiency standards. Trump is trying to kill those too. He’s trying to rescind those new standards before they’re ever implemented.

So I guess my question to you is, with the loss of the tax credit and theoretically without these new standards, do you not feel like you are slogging uphill here a little bit, condemned to some extent to be a niche forever, or do you think you can be competitive without them?

Luke Winston-Almanzar: Gee, David, you really know how to bring down a room.

David Roberts: I saved it to the end. Maybe nobody’s listening anymore. They can… It’s just between us.

Luke Winston-Almanzar: Yeah, exactly. No, I mean, so we chose hot water for a variety of reasons. I don’t care what the incentives are and whatnot, people are not gonna go without hot water. You know, they might go without a lithium ion battery. They might go without solar panels and stuff like that, but you are going to have a water heater. It’s actually required by law. So that’s one, and I wanted to build a business that can exist without incentives and things like that.

Am I sad that the IRA tax credits are gone? Yes. It’s very helpful, and who knows where the efficiency standard’s gonna go. My philosophy is we need better products that homeowners just want, as opposed to saying, like, “Everybody must drive a Toyota Prius,” right? I don’t think everybody wants to drive a Toyota Prius. We want a more efficient product that’s just a better product, and that’s how we’ll compete. We’re insanely competitive against electric resistance water heaters just ’cause it costs so much, against oil, against propane, a bunch of other things like that.

What we have seen is the incentives in Massachusetts were lower when the IRA existed. Incentives have gone up. They’ve gone up in Maine. They’ve gone up in New England. They’ve actually gone up in some regions.

David Roberts: Yeah. I mean, and blue states might, to some extent, compensate with their own incentives, some states.

Luke Winston-Almanzar: Yeah. And so it would be helpful to have these incentives, but at the end of the day, if you’re building a business around incentives, that’s not a business I really wanna be in. I’ll take it as, like, give us some tailwinds and whatnot, and there’s, like you said, in some of the blue states there is. But we will innovate, and we will advance to the point where we wanna drive down costs regardless of incentives, and that’s why we’re doing the install piece as well, right?

David Roberts: Right. So the real… Where that really hurts you is in your competition with natural gas water heaters. But insofar as there’s a move toward electrification more generally, which is a larger phenomenon than just these specific efficiency standards, you think that’s gonna help you because you’re already competitive with electric resistance water heaters, basically.

Luke Winston-Almanzar: And, you know, you bring up blue states with more incentives. It’s actually the blue states that have more gas, and the red states, the further you go south, have more electric, right? So you go to Florida, it’s almost all electric.

David Roberts: Yeah. That’s funny. It’s a irony. So, all right. Well, let’s bring the room back up to finish with then. Let’s talk about-

Luke Winston-Almanzar: Yeah, let’s do a positive note.

David Roberts: You’re already moving heat around the house. I know there are some other companies that are trying to sort of combine water heating and space heating in various ways. Harvest, I think we had on the pod a couple of years ago. I wonder if you’ve thought about that at all, or if you’ve thought about a version for multifamily buildings, or I guess just sort of like generically, like what’s... Obviously, you’re trying to get this nailed down and build a business around this, but like, what’s next on the horizon if you’re able to get a stable business going?

Luke Winston-Almanzar: Yeah. We wanna manage the majority of thermal energy in a home, and that includes space heating and cooling, but you gotta start somewhere. And I’ll tell you, it’s morning or afternoon to install a water heater. It’s like open heart surgery to do whole home. And a lot of people do it all the time. That’s a lot to bite off for a brand new company. What’s really interesting, though, is you install a Reservoir in a home, and we’ve already got a relationship, and actually some of the trades are pretty similar, some of the technology is pretty similar to getting to that kind of thing.

And so my question always is, how do we get to 120 million homes as fast as possible? The reason 120 million homes is because that’s how many homes are in the United States, and water heating is the fastest way to get started. But we will absolutely get into more products and everything like, you know, we could talk about the thermal battery side of a water heater.

Imagine if we had 70 percent of home energy. When residential energy is 20 percent of US energy, what if we had 70 percent of that in tanks of water that you can balance with the grid? But we wanna move fast. We don’t wanna just be a tiny regional company, and so we’re doing it in an efficient way.

David Roberts: For bigger buildings, multifamily buildings, is there a version of this product for bigger buildings? How does it scale up in terms of building size?

Luke Winston-Almanzar: There definitely is. Most people don’t realize, like the large, large, large, large majority of homes in the United States are single family. I think something like 90 percent of homes are single family. And so going after that is actually going after the bulk. That’s just like why are we focusing there to a certain degree.

Then there’s multifamilies. You’d be surprised how many multifamilies have apartments with individual water heaters throughout them. We’ve talked with a bunch of operators … like you’d think, ’cause it is more efficient to have a really big system that services everyone … it’s crazy how you don’t actually have that. And so if you have an individual water heater, our system is the one, or like a version of it, a future version of it will be great for apartments.

And then you get into the systems where you talk about a bigger heat pump and a bigger tank of water. I don’t think that’s an underserved piece of the market, though. I think the underserved part of the market is homes, smaller homes.

David Roberts: And so right now you’re in Massachusetts, statewide now, Massachusetts, or just Boston?

Luke Winston-Almanzar: So we’re in Massachusetts, we’re in Rhode Island, we’re in Maine, we’re in New Hampshire. We’ll have more announcements to come.

David Roberts: The idea is to expand. Optimistically, how soon are you nationwide?

Luke Winston-Almanzar: Two to three years. And by nationwide, I mean we’ll be in, call it 20 to 30 metros.

David Roberts: All right. Well, we’ll end there. That’s an optimistic vision. Thank you for this. I love to nerd out. This was fun to nerd out on. This is a product I’ve sort of had in the corner of my eye for a long, long time, been wanting to do a deep dive on. So I was happy to nerd out on this, so.

Luke Winston-Almanzar: Yeah, this was awesome. You went a little deeper in some places than I expected you to, so.

David Roberts: All right. Well, thanks for coming on and walking us through it.

Luke Winston-Almanzar: Yeah. Happy to be here.

David Roberts: All right.

Home batteries like the Tesla Powerwall are nice, but what about people who can’t afford them, or renters who aren’t allowed to install them, or people who just don’t want the hassle of dealing with a permit and an electrician? A company called Pila is selling small (1.6 kWh) batteries that simply plug into a normal electrical socket. They can serve as backup for a refrigerator or other appliance in the event of a blackout, but they can also “mesh” with one another to form a network, pair with rooftop solar, or participate in VPP programs. CEO Cole Ashman explains the value proposition.

Here on Volts we’ve done a lot of coverage of the burgeoning category of “plug-in DERs” (distributed energy resources). Sometimes called “permissionless DERs,” these are the clean energy technologies you can just plug in whenever you like, with no permits and no interconnection agreements. Back in November 2025 we talked about balcony solar. In June we looked at small batteries that a company drops into businesses for free and pays for out of electricity bill savings.

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Today it’s small residential batteries, for houses and apartments — not the big ones, like the Tesla Powerwall, but wee batteries you can sneak into a corner of your living room or kitchen. There are lots of players crowding into this space — Blip Energy, WATTS, EcoFlow, Jackery, Anker, the list goes on — but the one that’s gotten the most attention from the tech press is Pila Energy, which sells a 1.6-kWh battery meant to back up your appliances.

I’ll confess that I’m a little skeptical about this niche — not because I don’t love batteries, y’all know I love batteries — but because they’re converging from every side. Distribution-scale batteries, full-sized home batteries, EV batteries, batteries getting embedded in stoves and air conditioners. Is there room left in the middle?

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To hear the case, I’m talking with Cole Ashman, founder and CEO of Pila. We’re going to get into what these batteries are for, what they cost, what they can do for the grid, and who’s actually buying them.