0:01

Hello, and welcome to The Energy Gang, at

0:03

the Distribute Tech Conference in Orlando. I'm

0:06

Ed Crooks. We've spent a couple of

0:08

days at this event, which is the leading

0:10

conference for the electricity transmission and distribution industry

0:12

in North America. You may

0:14

have heard our earlier podcasts from the event, which we

0:16

published last week. And for this last

0:19

episode from the conference, I've been talking to

0:21

people about how power grids need to change

0:23

in response to the growth of renewable energy,

0:25

and what that means for the decarbonisation of

0:27

the electricity system. To discuss that

0:29

question, I spoke first to Ali Ipachi, who

0:31

is an executive vice president and chief

0:34

visionary officer at LATI, which is a

0:36

grid technology company. Ali,

0:39

thanks very much for joining us. You're welcome. Glad

0:41

to be here. So, it's a

0:43

fascinating event, clearly, Distribute Tech. We've

0:46

had really amazing conversations with people

0:48

while we've been here. Tremendous

0:51

sense of activity and

0:53

excitement about the industry, a

0:55

tremendous amount of change going on. But

0:58

the question I had as I talk to

1:00

people and look around is how

1:03

much is really changing. And clearly,

1:05

this is an event which is very

1:07

much dominated by technology vendors. Everyone's

1:09

coming up with clever ideas for doing

1:11

this and that, for fixing some of

1:14

the challenges that the electricity system and

1:16

the grid in particular are facing. If

1:18

you look back 10 years,

1:20

I was looking at an article where you were quoted

1:22

from 10 years ago, Distribute Tech, I think, in 2014.

1:26

A lot of the same issues were

1:28

being talked about. People were talking about

1:30

distributed energy resources, people were talking about

1:32

effective EVs, people were talking about demand-side

1:35

response, and so on. And

1:37

it made me wonder how much has really changed

1:39

in that decade, that the key topics

1:41

of conversation still seem to be very

1:43

similar. What has really

1:45

changed in the industry? What's really different

1:47

now? Well, in my mind,

1:50

there has been a significant change. 10

1:52

years ago, there were a lot of discussions,

1:55

a lot of talks, a lot of visionary

1:57

statements that where things going, what the potentials

1:59

are. going be, what

2:01

the capabilities might be, etc. Now

2:04

things are happening. Things are going in

2:06

the field. Folks are

2:09

relying on these capabilities. Folks

2:11

are feeling the pain of

2:13

and the issues associated with

2:15

it and demanding robustness,

2:17

demanding scalability, demanding performance

2:20

and as a result

2:22

a lot of the

2:24

details of the

2:26

capabilities that were envisioned 10

2:28

years ago are becoming

2:31

forefront of the needs of the industry

2:33

and as you peel the onion, a

2:36

lot of issues pops up that when

2:39

you just kind of

2:41

a looking at the potential you

2:43

would not recognize those issues. So

2:45

the fact that the major utilities

2:48

have launched major programs to

2:51

address these things and the

2:53

issues they have not necessarily

2:55

as you pointed out perhaps

2:57

technology capabilities were there 10

3:00

years ago but organizationally, regulatory

3:02

wise, business process wise, things

3:05

were not there. Things

3:07

were not deployed. Now utilities

3:10

looking at how do I adjust

3:12

my organization, how do I adjust

3:14

my business process, how do I

3:17

apply the technology and integrate technology

3:19

with my business, how I train

3:21

my people on how I change

3:24

my overall business structure to

3:26

adopt this thing and when I was

3:29

talking about peeling the onion many of

3:31

these issues also translates

3:33

to some technology deployments

3:35

and I can give you some examples of

3:37

it which is kind of shows how things

3:39

are evolving and how things are moving forward.

3:42

Give me some examples then because I think

3:44

that'll help make it concrete for people. One

3:46

example of it that highlights the kind of

3:48

some of these issues. We have all talked

3:51

about leveraging flexibilities available

3:53

on demand side resources

3:55

and various different entities have

3:57

popped up such as aggregators, service

4:00

providers that go to customers and use

4:02

customers and sign them up to do

4:04

things. In order to integrate

4:07

those with utility operations and

4:09

do that in a robust

4:11

and reliable and accurate fashion,

4:14

you have to coordinate enrollments

4:17

and nominations and capabilities with

4:19

utilities, billing systems, customer services,

4:21

a lot of us. And

4:24

a utility is basically saying,

4:26

hey, I don't have any extra

4:29

staff to manage these things.

4:32

I want to have everything automated. At

4:34

the same time, consumers

4:37

and aggregators, everybody used to doing

4:39

everything online, doing basically

4:41

use portals, using screens. So

4:43

as a result, the need

4:45

for full automation of

4:48

customer engagement with utilities

4:50

and aggregators engagement with

4:52

utilities and total integration

4:55

with backend systems has

4:57

emerged to fully

4:59

automate end-to-end process that

5:02

you just go online, you click

5:04

a button, you start the process,

5:06

it tells you where you are

5:08

in that sequence, it approves

5:10

or if some information is missing,

5:13

it informs you, etc.

5:15

And so that whole integration with

5:18

utilities infrastructure and automation of that

5:20

whole process, one of the requirements

5:22

of this whole division was 10

5:24

years ago. And then there

5:27

are numerous other examples along these lines that

5:29

I can highlight. So before we get on

5:31

to some of those examples, and just to

5:33

think about that one you've been talking about

5:35

in terms of sort of automating the interface

5:37

with the customer, is that something that utilities

5:40

are adopting now or again, is there something

5:42

that they will be able to do? No,

5:44

certainly a lot of

5:46

leading utilities are adopting that, that

5:48

has become a requirement, the volume

5:50

of the demand side participation significantly

5:53

increased, we have customers that have

5:55

in excess of 1000 megawatts or even 1500

5:57

megawatts of customer

6:00

owned assets that are participating,

6:02

and you're talking about 1,500

6:05

megawatts, that

6:07

is equivalent to the nuclear power plant.

6:09

So you are not talking about small

6:11

amounts, then that may involve 100,000, 200,000

6:13

customers, and

6:16

at any given time, maybe 1,000 are

6:19

opting out today, 1,000

6:21

joining tomorrow, et cetera, et

6:24

cetera, and that requires automation,

6:26

that requires validation, and furthermore,

6:28

the amount of capacity, amount

6:30

of capability available to those customers is

6:32

not a fixed number, changes

6:35

hour by hour, but

6:37

accurately forecasting how much capability

6:39

is available for using for

6:41

grid operations, that by

6:43

itself require a fair amount of rigor, how

6:46

to forecast the batteries, or

6:49

EV charging, or other capabilities that

6:51

can be controlled, that by itself

6:53

is a major, major requirement that

6:55

has emerged. Has it been difficult

6:57

to persuade utilities to adopt some

6:59

of these technologies? I mean, utility

7:02

industry always has an impression of

7:04

being very slow moving, very conservative,

7:07

with good reason, because reliability, safety

7:09

are very, very important, absolutely

7:11

paramount for them, they have to keep the lights on,

7:14

and they don't want to take risks, and

7:16

adopting all kinds of new technologies

7:19

could create risks, and so there's

7:21

always a difficult job to do

7:23

to persuade them of the value

7:25

of utilities. We are seeing several

7:28

drivers, one being on

7:30

the regulatory side, there has been

7:32

a push to the whole issue

7:34

of a non-wires alternatives that started

7:36

from FERC many years back, and

7:39

the whole issue of basically commissioners, basically

7:41

taking position, don't come to me and

7:44

say you need to install a peaker

7:46

unit, why don't you use the demand

7:48

side flexibility instead of peaker unit, and

7:51

come back to us and show that

7:53

the demand side flexibility is going more

7:55

costly than building a peaker unit, and

7:57

we think that leveraging demand

8:00

side capabilities less costly. So that's

8:02

one driver. Second driver

8:05

is consumer expectations. Consumers, basically installing

8:07

rooftop solar, buying electric vehicles, they're

8:09

demanding fast chargers, they have, you

8:12

know, smart thermostats and smart appliances,

8:14

and when an aggregator comes and

8:17

knock on their door and says,

8:19

hey, I want to basically reduce

8:21

your bill by being able to

8:24

manage your thermostats and your consumption,

8:26

a number of folks sign up

8:29

on that. And the federal government

8:31

has basically opening up the door

8:33

for aggregators to be able

8:35

to take those capabilities to the

8:37

markets, the energy markets. As a

8:39

result, utilities sitting in between are

8:42

basically caught in the middle of

8:44

that process and they got to

8:46

do something. And a number of

8:49

also internally, a more

8:51

progressive management and utilities see

8:53

the future and

8:55

they want to basically be a leader, some

8:58

of the major utilities taking very

9:00

progressive approaches, especially coming from top

9:02

down, that we need to

9:05

embrace certain things and move forward.

9:07

So in my mind, basically,

9:09

genie is out of the bottle. And

9:11

also coming back to something you were saying earlier, the

9:14

pressures on utilities that seemed sort of

9:16

theoretical 10 years ago are now much

9:18

more real. If you think about the

9:20

generation mix being very different, much higher

9:22

proportion of variable renewables, as

9:25

you say, many more consumers having EVs,

9:27

having rooftop solar, having maybe a storage

9:29

system at home and so on, new

9:31

loads being added to the grid. We

9:33

had a lot of discussion yesterday about

9:35

AI data centers,

9:38

chip factories creating increased

9:40

load when it's been essentially flat

9:43

electricity demand in the US for 15, 20

9:45

years. So is

9:48

that the other thing that's really kind of, there's

9:51

a short fork, sorry. We're

9:53

kind of looking at myself 10 years ago, you

9:58

would go to a hardware store. you

10:01

purchase a thermostat. Most of the thermostats

10:03

were conventional thermostats.

10:06

They were programmable, but the

10:08

homeowner programmed it. Now

10:10

if you go to a hardware store, by

10:13

large majority of thermostats are smart

10:15

thermostats, with remote

10:17

communication capabilities and an intelligence

10:20

in the thermostat. And then

10:22

they are connected. They are connected

10:24

to the internet, you can remotely communicate

10:26

to it, etc. So there has been

10:29

a significant amount of technology advancements

10:31

over the past 10 years,

10:33

enabling some of the things

10:35

that were kind of postulated 10 years

10:37

ago, that would be

10:39

nice to do this, nice to

10:41

do that. There are not technologies

10:43

that are commonly available enabling those.

10:47

So, and they are being purchased by

10:49

customers, not by utilities. And so as

10:51

a result, utilities don't

10:53

have to make the capital

10:56

investment. They are being put

10:58

there by customers, and furthermore,

11:00

customers expect their utilities have

11:03

things to accommodate the level

11:05

of automation or building automation,

11:07

home automation, or I have

11:09

my e-recharging capabilities, etc. etc.

11:13

Utilities be on board with it. So

11:15

management and utilities realize that, hey,

11:18

things are changing and I need

11:20

to get on board with it. Yeah,

11:22

that is very interesting in the way that

11:25

those pressures are now really coming to

11:27

bear on utilities. You mentioned earlier, you said

11:29

apart from your example of aggregation of distributed

11:31

energy resources, there are other examples of things

11:34

that are really changing out there in the

11:36

industry right now. What else would you point

11:38

to? The climate-related

11:40

issues and the movement towards

11:43

greening the generation side, towards

11:46

renewable resources, the movement

11:49

towards, and actually these

11:51

days, the economics

11:53

of deploying large-scale solar power

11:55

plants, basically better than economics

11:58

of building computers. dimensional power

12:00

plants. And as a

12:02

result, a lot of developers

12:05

basically getting financing because

12:07

this is the most economic

12:09

resource and the payback is

12:12

there. So the bankers and

12:14

others financing projects, large scale

12:17

renewable projects because of its

12:19

economics and paybacks. And

12:22

as a result, a lot of utilities

12:24

faced with a fast growth of solar

12:27

and perhaps wind, but mostly

12:29

solar in their service

12:31

territories. Then even justifying

12:33

pairing the solar generation

12:35

with battery storage is

12:38

also proving somewhat economical.

12:41

So there is new types of resources coming

12:43

about and the whole

12:45

concept of being able to

12:47

operate the grid with resources

12:49

that they're fueled dependent on

12:52

the weather, dependent on the

12:54

sunshine. They are not as

12:56

dispatchable as conventional generation and

12:58

how operate the system. And

13:00

the thinking is in order

13:03

to balance the variability of

13:05

those generation, new types of

13:07

generation, one needs to have

13:09

flexibility on the load side. So

13:11

you have to pair the load

13:14

and the generation. You cannot just

13:16

assume the load is always just

13:19

demand whatever they want. You need to

13:21

have pricing signals. You're going to need

13:23

to have capabilities to balance the two

13:26

together. So that is

13:28

another driver coming in from the

13:30

basically lower cost of these resources.

13:32

And a part of it is

13:35

because of the global demand and

13:38

increasing production capacity. For

13:40

example, China, the amount of solar generation

13:42

panels coming out of China is such

13:45

that it is lowering the

13:47

cost significantly. And you're seeing

13:49

that the developers rather than

13:51

building conventional generation, they are

13:53

building solar farms. Staggering,

13:56

isn't it? It's amazing just how much of those costs have

13:58

fallen. And then plus of course, it's You've got the

14:00

inflation reduction act, you've got very generous

14:02

tax incentives also in the

14:04

US supporting that investment in solar and wind.

14:07

The thing I wonder about

14:09

this and kind of the pushback you'll

14:11

hear from some people is to say

14:13

these comparisons of costs on an LCE,

14:15

levelised cost of energy basis, are

14:18

misleading because they'll show

14:20

you how much cheaper wind and solar are, but

14:23

they don't take into account whole system costs and

14:25

they don't take into account whatever

14:28

investments may be needed to strengthen

14:30

the grid, put in new transmission

14:32

capacity, whatever it might be, invest

14:34

in the new kinds of software and

14:37

management systems. Well, I can, I

14:39

bring an angle. Others argue

14:42

that cost of climate change is

14:44

far, far more than if you're

14:46

worried about that I need a

14:48

new transmission line or upgrade my

14:51

technology for managing. Cost

14:53

of climate related issues, the

14:55

way things are going far,

14:57

far more than the amount of

14:59

severe weather conditions you're having, amount

15:02

of damage and the amount of

15:04

expenses that associated with the impact

15:06

of climate change is significant. And

15:09

to avoid those, we have to go on this

15:11

path. We have no other choice.

15:13

But you do have to resort to the

15:15

climate argument then you think. You can't just

15:18

say to people, look, if you go down

15:20

this route, cleaner energy, you will actually save

15:22

money. Well, I think, in total the cost

15:24

may be higher. I think right

15:26

now there are all these studies done

15:28

based on the levelized cost of energy

15:31

that looking at the, basically when you

15:33

say levelized, looking at the life of

15:35

the generation and what

15:37

is the basically cost of

15:40

megawatt hour generation ought to

15:42

be given to resource sites. And

15:44

for the past couple of years, solar

15:47

and wind are the least costly

15:50

inter-levelized cost which involves basically

15:53

deployment of it, delivery of

15:55

it, operating of it.

15:58

So the economics is there. The

16:00

climate is here, the climate change is

16:02

here, consumer expectation is

16:04

there, and

16:07

politically, you know, there

16:09

are supports there, so things have lined up

16:11

and the utilities have to respond to it.

16:13

And that is the way we see it.

16:16

Some of those things may not be

16:18

true forever. There's an election in the

16:20

US in November, composition of Congress may

16:22

change, control of the White

16:24

House may change, policy could head in

16:26

a different direction. Is that

16:28

going to stop these trends? Do you think,

16:30

are we then going to see a reversal

16:32

and a break being put on the adoption

16:34

of renewables, other forms of low carbon energy

16:37

across the US? Good question. I think it

16:39

may slow it down somewhat. However,

16:42

right now, because of the global

16:44

cost, really, basically the cost of

16:46

these type of generation is a

16:49

global factor. It is not a

16:51

US controlled item, you

16:53

know, supply chain, as you had pointed

16:55

out, the amount of production and cost

16:58

of it. Furthermore, consumer

17:00

expectations. And once

17:02

utilities make a strategic

17:04

decision in moving in certain direction,

17:07

utilities don't turn on a dime. They

17:09

are kind of slow movers. And once

17:12

the decision is made, changing

17:14

it may take several

17:16

years. So we

17:18

are seeing a significant change

17:20

in the mindset. And

17:22

we think it's going to continue. It

17:25

may slow down somewhat, but

17:27

the movement is there. For

17:29

example, electrification of transportation, even

17:32

though in recent months purchase of

17:34

EVs can somewhat gone down. But

17:36

these days, if you visit the

17:38

auto show floor, maybe half of

17:41

the cars put on the show

17:43

floor are EVs. Manufacturing is

17:45

changing, the factories are changing,

17:48

and those things are not going to stop

17:50

because of the political changes. So

17:52

we should go back and I should ask a

17:54

question that I meant to ask. So you were

17:57

talking about LCOE, as you say, I am an

17:59

LCOE, but... you will

18:01

see that wind and solar

18:03

power look like the cheapest possible

18:05

forms of generation in the

18:08

US if you're building new capacity. What

18:10

I think a lot of people would argue

18:13

is those LCUE calculations are misleading because they

18:15

don't tell you about the whole of system

18:17

cost of an electricity system

18:20

and I guess you could also say that a lot

18:23

of the time what you're not doing is

18:25

building new capacity what you're doing

18:28

is retiring old capacity. If you've got an

18:30

old coal fired power plant which

18:32

is basically depreciated down to zero that's different

18:34

from building a brand new coal plant. Clearly

18:36

no one's going to build a brand new

18:38

coal plant in the US but

18:40

the old ones can still run and

18:42

generate power at a relatively

18:44

low cost. So is

18:47

it not the case as I say when you

18:49

think about I kind of look at data currently

18:51

in 2023 84% of new installed capacity was renewables

18:59

and storage. In the

19:02

queue the applications for

19:04

interconnection of generation going forward

19:06

right now what is queue

19:08

in across the entire United

19:10

States. To my surprise

19:12

and I was really surprised 94% of

19:15

it is renewables and in

19:19

other words developers whether

19:22

it's utilities or independent developers

19:24

and others they have

19:26

put their applications to build new generation

19:28

94% of it is renewables

19:32

and storage. Now

19:34

we can say all level of cost

19:36

of energy is misleading and what else

19:38

but somehow those developers have been able

19:40

to get financing have

19:43

to be able to get their

19:45

business plan in a position to

19:47

put application for building these generation

19:49

94% my

19:51

jaw dropped when I saw that

19:53

statistic and that translates to

19:55

that they are seeing something

19:58

that they think that is where the demand is. So

20:01

as a result, you

20:03

know, it's a market-based thing. They see

20:05

the demand, they put in the application,

20:07

they get the financing, bankers see that

20:09

they can get a return on their

20:11

investment, they put the financing in and

20:13

it goes forward. Now whether the

20:16

levelized cost of numbers that the

20:18

way DOE calculates or does things

20:20

is this way or that way,

20:22

I don't know. That is a very

20:24

good point though, yeah, yeah, that's absolutely right. So

20:27

I just want to ask you about

20:29

how OATI fits into this changing landscape.

20:31

We're sitting here at your stand at

20:33

Distrubitec, which has got this absolutely fantastic

20:35

layout where you've got this

20:37

sort of mock-up of electricity poles and

20:40

sort of red LED lights on the

20:43

wires flowing between them. Can you tell

20:45

us what you were trying to suggest

20:47

by this? Well, OATI kind of

20:49

looks at the OATI started

20:52

when federal government opened up the

20:54

transmission access for generation 25, 30

20:56

years ago. And

20:58

we have started looking at the

21:01

impact of renewables, the impact

21:03

of distributed resources. We truly

21:05

feel that we have capabilities

21:08

that there is end-to-end connection

21:10

from a thermostat behind somebody's

21:12

meter all the way up

21:14

to the ISOs and market operations and

21:17

everything in between. And we

21:19

truly believe we have systems in

21:21

the field, customers that are using,

21:23

and we have been able to

21:25

manage the information flow from individual

21:27

thermostat all the way to the

21:30

ISO market and the grid operation

21:32

and reliability of transmission systems. And

21:35

the demonstration here, even though Distrubitec

21:37

in the past historically focused on

21:39

distribution side of the business, we

21:42

thought that it is important

21:44

for us to demonstrate that

21:46

the capabilities can be end-to-end

21:48

integrated. And we put

21:51

together the visuals to illustrate

21:54

that end-to-end concept. And we

21:56

are getting very positive feedback

21:58

because a lot of values

22:00

of the demand flexibility get generated

22:02

when you bring them down to

22:04

wholesale side of the system and

22:07

then use it for grid operation.

22:09

So we are demonstrating that and

22:11

we are getting very positive feedback

22:13

from our folks attending

22:15

us or overall the industry. Yeah,

22:17

it certainly does make the point in a very, very vivid

22:19

way. Well, I know you have to run, I appreciate it,

22:21

I will let you go, but thank you very much for

22:23

joining us. Thank you for the opportunity.

22:26

I raise these same issues with the

22:28

one that failed, Business Manager for Energy

22:30

and Decarbonisation at Uplight because the software

22:33

company has heard these tendencies working on

22:35

decarbonisation. Thanks very much

22:37

for joining us today. Yeah, thanks very much Ed,

22:39

great to be here. So look, I wanted to

22:41

start off thinking about a question that has been

22:43

rumbling around a lot, I think, in the debate

22:45

over energy and it is certainly very present here

22:48

at the Ruby think, which is the question of

22:50

the cost of electricity and what is happening to

22:52

that. And I suppose essentially the kind of the

22:54

shorthand version of this is if

22:57

renewables are so cheap, why is power getting

22:59

more expensive? And

23:01

the kind of the longer version of

23:03

that I suppose is look at all

23:05

these levelised costs of energy calculations that

23:07

everyone has, it is very clear that

23:09

wind and solar are the lowest cost

23:11

forms of generation in the US. Wind

23:13

and solar are increasingly being rolled out

23:15

across the country for exactly that reason

23:17

because they are so competitive and

23:20

yet power prices continue to rise and people

23:22

will say, well, okay, what is going on

23:24

here is that the LCOE does not tell

23:26

you the whole story but if you look

23:28

at the whole system cost, if

23:30

you look at cost of new grid infrastructure that is

23:32

needed, if you look at the increased cost of balance

23:34

on the grid and so on, actually

23:36

what is happening is you are driving up that

23:38

whole system cost and so in fact it is

23:41

sort of misleading to think about the low LCOE

23:44

renewables and actually

23:47

in fact we are making electricity

23:49

more expensive by decarbonising

23:51

it. Do you think there is anything in

23:53

that critique and if there is, what can be done

23:55

about it? Yeah, I think I would frame it a

23:57

lot around the transition period that we are in. in

24:00

that a lot of the existing generation has

24:02

run a long asset life and is low

24:04

cost. And at this point, because it has

24:07

been capitalized over a long period of time,

24:09

so any generation being replaced had a cost

24:11

to come into it. And so the low

24:13

LC makes the renewables more effective. The other

24:15

part is transmission and distribution costs and the

24:18

upgrades that we have increasing demand, but also

24:20

renewables connecting into transmission upgrades. All of that

24:22

is new asset upgrades that have to be

24:24

part of it. And so it's more the

24:26

transitionary period of it that is introducing new

24:29

investment into the sector as opposed to like

24:31

possibly flipping time makes it look more like

24:33

that, I would say. Right, great point. And

24:36

also, as you say, it's not just

24:38

that we're trying to decarbonize the grid,

24:40

we're trying to add a load more,

24:42

new load into it because we're decarbonizing

24:45

other parts of the energy systems such

24:47

as transport and electrification of transport. Everyone's

24:49

getting an EV supposedly, that's the goal

24:52

in the long term. But it's also

24:54

having been largely flat for 15 years

24:57

now or more. Electricity

24:59

demand is starting to rise apparently quite steeply to hear

25:01

what a lot of people are talking about here in

25:03

terms of new AI applications,

25:05

data centers being required for that,

25:08

new chip manufacturing facilities being built in

25:10

the US, and we're a surgeon for

25:12

manufacturing in general in this country, that's

25:14

pushing up power demand. So you're putting

25:16

all those extra demands on the grid

25:19

at the same time that you're trying

25:21

to decarbonize them. Right, exactly. I

25:23

think back to 15 years ago when I first started at

25:25

the utility and a lot of conversation was around the death

25:27

spiral because there would be all the substitution with solar.

25:29

And the reality is that a lot of

25:31

additional loads have come on, whether it was

25:33

air conditioning initially, but now to your point

25:35

around electrification of transportation. And

25:37

that's all driving demand up. The opportunity though is

25:39

to not have that add to poles and wires,

25:42

but to connect it in a smart way at

25:44

the time of adoption, have it be a flexible

25:46

resource from day one to not

25:48

just offset that investment, but also be able to

25:50

add value to the grid as well. Right,

25:53

so that was what I was going to ask you about

25:55

really, which is what can you do about that? And

25:57

given that set of challenges, how can technology

26:00

help address some of those things and as

26:02

you say potentially avoid some of that increased

26:04

cost in terms of investment and physical infrastructure

26:07

that is otherwise going to be needed. Yeah

26:09

I think that's the opportunity is that as

26:11

customers adopt these technologies if they're thinking about

26:13

it it's the first time they're getting into

26:15

getting used to using electric vehicles adding smart

26:17

dimer stats adding connected water heaters etc that's

26:20

the prime time to get customers adopted into

26:22

having these devices connected and the great thing

26:24

is that they bring a diversity with that

26:26

low flexibility as well across the customer types

26:28

and the customer categories and so

26:30

you can very easily see the value

26:32

that they can provide simply at a

26:34

wholesale level but even getting into network

26:36

deferral network avoidance by just being able

26:38

to control them or curtail them when

26:40

the receipt constraints in that. So is

26:43

that flexibility real though? I mean it's

26:45

often talked about in theoretical terms I

26:47

always wonder if you start saying to

26:49

customers anyway you are can't actually charge

26:51

your EV at the moment or

26:53

actually you're going to have to switch the

26:55

air conditioning to a higher temperature now because

26:58

the grid's under screen pretty clear people

27:00

don't like that right anytime that's been

27:02

trialed in pilots tends to

27:04

be quite a lot of consumer pushback so how

27:07

can you kind of sell this to people?

27:09

Technology might be ready but the people aren't

27:11

that's pretty fundamental problem. Right I think you're

27:13

spot-on I think it's not a technology problem

27:15

at this point it's a people and even

27:17

regulatory element to it and so that's where

27:19

the diversity and the like how much you

27:22

expect to get out of that low flexibility.

27:24

I think if you want to take approach where

27:26

it's like a big red button that when I

27:28

push it and everything sheds you'll pretty quickly get

27:30

people annoyed and they'll leave this type of program

27:32

the factor is the more like account for the

27:34

human elements of I want to make sure that

27:36

they're comfortable with their thermostat so step back to

27:38

the temperature not being too significant but the fact

27:40

that I have a population I can run across

27:42

and the incremental cost of running those events in

27:44

Bureau then that can add a lot of value.

27:46

Same with the EVs and that as well like

27:48

not everyone has to be in it but if

27:50

a car is sitting there and it doesn't need

27:52

it till 6 a.m. and it's 6 p.m. at

27:54

night you know being able to adjust those just by

27:56

a couple hours can have a zero impact to the

27:58

customer. So you're kind of

28:00

offering people flexibility rather than mandate it. Right,

28:02

exactly. Yeah, and making sure that they get

28:04

a fair exchange for value because they're giving

28:06

up something or enabling a service to the

28:08

greatest part of that. So in terms of

28:10

what you're doing it up like then, how

28:12

are you working on this and what kind

28:14

of solution do you offer? Yeah, so we

28:16

do everything from the customer education and customer

28:18

engagement piece to make them prime for increasing

28:20

their propensity to take into these programs, being

28:22

able to enable them with the technology. So

28:24

we do e-commerce marketplaces for utilities to help

28:26

them adopt the smart technologies and at the

28:28

point of sale be pre-authorized to be so

28:31

as soon as they're connected to Wi-Fi

28:33

there are a dispatchable resource which overcomes

28:35

a whole heap of these acquisition challenges.

28:37

But then bringing all those resources through

28:40

into the Uplight AutoGrid Flex DERMS to

28:42

essentially make all of those assets controllable

28:44

and dispatchable alongside CNI resources, alongside behavioral

28:46

resources or even alongside front of the

28:49

meter resources as well. And

28:51

DERMS probably is an acronym that we should

28:53

agree with. A distributed energy resource management system,

28:55

right? Exactly, yeah. And what does that mean

28:57

exactly? In this case it's the software that's

28:59

enabling the control of those devices in

29:02

a fleet sense. And

29:04

something of the software would be, you know, sort

29:06

of selling it short to go to the extra

29:08

step of the actual business model behind it then

29:10

get into the next sort of acronym of BPPs

29:12

or virtual power plants. And that's the other part

29:14

is not just stopping at software but bringing the

29:16

services towards that so that you can acquire customers,

29:19

help support the customers to retain them and then

29:21

provide that as like a dependable megawatts back to

29:23

the utilities. And going back to that point then

29:25

about getting customers to buy in and persuading customers

29:27

this is something that is attractive to them and that

29:29

they want to adopt. What results

29:31

are you seeing for that then? How is the progress

29:33

going in terms of educating customers to

29:36

a lot of things that are really very

29:38

new to people and saying to people, never

29:40

mind regulated when people can charge their cars,

29:42

people just getting used to the idea of

29:44

charging cars in the first place. That's one

29:46

step. And then all the

29:48

extra sophistication that you're talking about, pretty

29:51

big step, isn't it? I mean I

29:53

think within the energy sector, I say this as an

29:55

electrical engine myself, but we bring all of that complexity

29:57

to the customer and it's not necessary. Like when we think

29:59

about what What is the message that resonates, the

30:01

words that resonate, the experience that resonates? Thinking

30:04

about non-energy related experiences where you're reducing friction

30:06

or removing friction altogether such as selling a

30:09

customer a thermostat that's already incentivized for energy

30:11

efficiency value for demand responsibility and you're selling

30:13

them on the convenience that now they can

30:15

control their temperature automatically or from the comfort

30:17

of the couch. But the reality is they're

30:19

also getting an ongoing value proposition to them

30:21

through bill reduction because it's being dispatched as

30:23

well. Because that's another thing that people have

30:25

been talking about a lot here over the

30:27

past couple of days is

30:29

the political implications of all this. If

30:32

you're effective as general public, if you are

30:34

giving people the perception perhaps that their bills

30:36

are being pushed up even if that's not

30:38

really what's going on but that's

30:40

what people will see that decarbonisation

30:43

is happening and also the bills are going

30:45

up and they'll make that connection if you're

30:47

creating what people see as increased inconvenience in

30:49

things when they can and can't use their

30:51

service steps, when they can and can't charge

30:53

their EVs, whatever it might be, then

30:57

that turns the energy transition into more

30:59

of a political issue and

31:01

that means then that policy is

31:04

going to change and policy which

31:06

has been hugely supportive, very, very

31:08

supportive under the Biden administration in particular

31:10

obviously because of the inflation reduction act, all of the

31:12

other things the administration has

31:14

been doing in order to

31:16

try and accelerate deployment of

31:18

low carbon energy technology. That

31:21

could go away, right? And obviously we have an

31:23

election coming up in this country in November, it's

31:25

quite possible that control of the

31:27

Senate will change, control of the White House may

31:29

change, could end up with a

31:32

very different political environment and

31:34

a policy environment one

31:36

year from now. How

31:38

do you view those kind of changes

31:40

and how do you think about if

31:42

you're kind of planning your business and

31:44

you're working with your customers' utilities, obviously

31:47

trying to make kind of long term plans,

31:49

what are your expectations for what a very

31:51

different policy regime might be like? Yeah, that's

31:53

a really great question Ed. I think one

31:55

of the great things about the US is

31:57

that it is a capitalist system and there

31:59

is so much diversity across. the 50 states

32:01

and even within the states in that as

32:03

well. So ultimately price talks or the market

32:05

talks and so the clients are going back

32:08

to the LCOE of renewables before. They are

32:10

just the more cost effective solution to go

32:12

in and so the market in the even

32:14

in highly conservative states are rolling those out

32:16

like Texas just being such a leader in

32:18

the adoption of renewables but also they even

32:20

have smart policies around interconnection where a solar

32:22

farm or wind farm can choose to connect

32:24

and have the risk of curtailment but they

32:26

get connection much quicker, bring value much quicker

32:28

rather than wait for a really long interconnection study

32:30

and all that sort of stuff. So even

32:33

in those areas you can see the adoption

32:35

and that sort of continuing otherwise. The same

32:37

with the consumer technology while the upside might

32:39

be slowed a little bit but the adoption

32:41

of EVs because they are fun, enjoyable, comfortable,

32:44

quiet, affordable vehicles that continuing through same with

32:46

smart them as that same with heat pumps

32:48

and the cost and those sort of things.

32:50

So I see it more as like the

32:52

potential might be slowed but the sort of

32:54

runaway training that is a lot of this

32:57

transition or transformation happening continuing at a speed

32:59

regardless. And another issue then which is sort of

33:01

related to that which also people have been talking about

33:03

here is the question of

33:05

equity in the transition

33:08

and particularly as it relates to

33:10

this industry in power people talk

33:12

about the way that tax credits

33:14

are available. You can get a

33:16

tax credit if you're putting residential solar in

33:18

your home, you've got a residential

33:21

storage system, tax credits if you're

33:23

buying an EV and so on which

33:26

a lot of people would argue is inequitable

33:29

in that obviously the benefits of those

33:31

tax credits go to the people who

33:33

are paying more tax and they have

33:35

higher incomes and they can afford to

33:38

invest in those systems like residential solar.

33:41

And again just in political terms that feels like

33:43

it's only which is very much kind of rising

33:45

up the agenda, it's something that people are becoming

33:48

increasingly concerned about. Do you see that? Do

33:50

you see that then becoming something that people

33:52

are more worried about and starting to impinge

33:54

on your business and among your customers the

33:56

utilities? A good point Ed, there will definitely

33:59

be states that. are the incentives

34:01

that are coming from a federal level or

34:03

the incentives that are or the direction coming

34:05

from federal level that'll be on the line

34:07

if there's a policy change there and that

34:10

forth there are definitely those states that are

34:12

independent of anything federal like very progressive and

34:14

pushing around like and even cities as well

34:17

I think about Sacramento has incentives that are

34:19

specifically designed at the installation of EV charges

34:21

for not just low-income but underserved communities or

34:23

underserved groups and so for the

34:25

general population it might be five hundred dollars they put towards

34:28

getting a smart charge because it comes with all these other

34:30

benefits but the underserved customers can get up

34:32

to fifteen hundred dollars towards them as means

34:34

to test around and so that I've taken

34:36

it's self as within

34:38

any given week as hundreds of customers in Sacramento's

34:40

territory applying for these incentives which is surprising that

34:43

you would think that these type of the customers

34:45

are adopting EVs but the reality is that with

34:47

the right incentives targeted that they still can't accept

34:49

the municipal doing that. That is very interesting and

34:51

so would you expect that type of program to

34:53

become more prevalent in the industry? I think as

34:56

long as the mechanism is defined I mean Sacramento

34:58

is sort of fortunate because they can stack pieces

35:00

you know they're offering to customers so there's definitely

35:02

going to be a motivation and a willingness to

35:04

do it but I can see that where whether

35:06

it's the utilities or individual states offering programs to

35:08

help target and we see that you know in

35:10

other legacy energy efficiency programs and all

35:13

those sort of things where incentives towards low-income customers

35:15

even in conservative states can still be there. And

35:17

then of course the other thing in California that

35:19

was very significant was the change in their net

35:21

metering rules which again that had

35:24

an equity kind of argument behind it

35:26

right I mean essentially the upshot was

35:28

it made it significantly less attractive

35:30

to invest in residential solar because you

35:32

were getting rewarded so generously for it

35:35

but part of the thinking behind that

35:37

presumably was that again the

35:39

old system as it had previously existed

35:42

was excessively generous

35:44

to relatively well off people who were

35:46

to put investment in their systems. Yeah I'm sort of torn

35:48

on this one a little bit too because you know at

35:50

this point in the time we need as much renewables as

35:52

we can get to come on to reach our goals with

35:55

that said though to the point sending this mechanism

35:57

where you're encouraging people to attach batteries to your

35:59

system. those systems is actually a good thing

36:01

for the grid for all customers and to

36:04

your point like avoiding crust subsidizations with it

36:06

as well. So I know like in California

36:08

like the general solar installation rates have massively

36:10

dropped but the percentage of battery attachment rates

36:12

has gone significantly up or the number of

36:14

batteries have continued to roll out at the

36:16

same rate that they were beforehand so it's

36:18

unfortunate from the renewables that we need to

36:20

be coming online but it's not undermined the

36:22

flexibility of those systems that we need ultimately.

36:25

Yeah actually that is a great point about

36:27

California and residential storage I think I saw

36:29

numbers from Sunrun you know the residential

36:31

solar company saying that

36:34

in California in January 48% of all the

36:37

systems they sold had storage sold

36:39

along with it so right yeah and that's

36:41

that's the rate that has shot up in

36:43

the last couple years. In that instance too

36:46

you know for a long time in California

36:48

has been incentives to help with resilience to

36:50

help with grid support and then even having

36:52

a mechanism to participate into the wholesale market

36:54

through the demand response auction mechanism but there's

36:56

a number of different sort of pieces there

36:58

that are helping encourage that load flexibility or

37:00

resiliency or you know backup generation element of

37:02

batteries can bring with the solar pairing too.

37:04

And so what difference does this make for

37:06

your business then as Ublight when you're thinking

37:08

about working with these

37:10

utilities trying to kind of get

37:13

adoption of your software and

37:15

systems for managing these

37:18

distributed energy resources and

37:21

helping those utilities manage grids with

37:23

increased flexibility on them as you

37:25

say you're expecting that trend

37:28

to continue evolving it's going to keep going

37:30

in that same direction but it

37:32

might be at a slower pace right so is that

37:34

going to mean slow adoption of your

37:36

technology? I think the most exciting part of

37:38

all of it is that in the past

37:41

Ublight has really been a lot of our

37:43

products were bought through energy efficiency use cases

37:45

and the adoption of either behavioral or customer

37:47

engagement or marketplaces to help enable energy efficiency

37:50

over time that energy efficiency at least as

37:52

a percentage in the market and for Ublight

37:54

has reduced because of things like electrification because

37:56

of things like load flexibility there's sort of

37:58

needs around both of those last year, the

38:00

electrification piece, because customers will adopt electric

38:03

heating or electric transportation regardless, and because

38:05

the need through the ISOs or through

38:07

the utilities for increased load flexibility because

38:09

renewables are just coming on and the

38:11

grid is becoming more sporadic in its

38:13

production, that's all coming and continuing on.

38:15

So I think if anything, the potential

38:17

there is a challenge to meet and

38:19

so it will continue down that path

38:21

regardless. And that's, you know, Uplife works

38:23

in the US primarily, but we also

38:25

do have programs like in Australia, in

38:27

India, in France, and each of those

38:29

ones has their own sort of characteristics as

38:31

to what is driving that adoption or that

38:34

transition. Like in the Australian context, not that

38:36

much EVs, but so much solar, and the

38:38

solar has now mostly all gone uncontrolled. So

38:40

the battery adoption, the need for batteries and

38:42

that flexibility of the market is really important,

38:44

particularly as coal power stations shut down as

38:46

well. So I think all of those trends

38:48

mean that it just continues, and I particularly

38:51

think around electrification and load flexibility. Yeah,

38:53

that is fascinating. I was saying this the other day, and

38:55

this has been my kind

38:57

of lasting impression of being

38:59

at Distributech, is it's

39:01

just been fascinating to see the real

39:03

nuts and bolts of the individual transition

39:06

actually at work and to

39:09

talk to everyone about the technologies

39:11

that are available, the new technologies

39:13

that are being developed, the

39:15

things that our people are starting to deploy.

39:18

And it's kind of easy often to think

39:20

about things, I think, in a very kind

39:22

of abstract way, you know, like I was

39:24

at COP28 in Dubai back

39:27

in December, and the world's policymakers are

39:29

there and they're talking about decarbonisation in

39:31

this very kind of elevated high level

39:33

way about what the world needs to

39:35

do and where the world needs to

39:37

go. And then what you're doing

39:40

and everyone else in this room is

39:42

doing, what we're seeing here is

39:44

what that actually means in terms of

39:46

real change on the ground. I

39:49

find it quite inspiring, I have to say.

39:51

Like it's very impressive that, you know, so

39:53

much work, so much activity, so much capital

39:55

is being spent, so many

39:57

brilliant ideas are coming forward. to

40:00

actually change things and make a difference. Yeah,

40:02

I think walking the expo, I

40:04

imagine 10 years ago at Distribute Tech, there

40:06

would have been so much more switch gear

40:08

and poles and wires related technology. You walk

40:10

through here and it's almost like software has

40:12

eaten the Distribute Tech floor in the sense

40:14

that there's so much more around flexibility, whether

40:16

it's flexibility for the utility poles and wires

40:19

and traditional systems, or flexibility on the customer

40:21

side. And there's just a number of different

40:23

technologies, business models and capabilities that

40:25

just, across the expo floor,

40:27

I think, which would represent the decade

40:30

bookend of each side that would show that transformation or

40:32

give the excitement for what the future holds. Absolutely, yeah,

40:34

as you say, it really is a remarkable change. Tom

40:36

Wuppel, thanks very much indeed for joining us. Thanks so

40:38

much, Ed, I appreciate it. Great talking to you. Enjoy

40:41

the rest of your conference. Thank you, you too. And

40:43

finally for this episode, I talk to my

40:46

Wood McKenzie colleagues, Fahir Makasampur and Elam Akkavan,

40:48

about what they'd learned from the event. So

40:51

it's my pleasure now to be joined by

40:53

two of my Wood McKenzie colleagues, Eheima Kasampur,

40:55

who is our Head of Grid Modernization. Thanks

40:58

a lot for joining us. Absolutely, pleasure being

41:00

here. And also Elam Akkavan, who is our

41:02

senior research analyst for Grid Edge

41:05

and specialist in microgrids. So you've

41:07

been spending a couple of days

41:09

here at DistroverDeck looking around, meeting

41:11

people, finding out what's going on

41:13

and also talking about what we know at

41:15

Wood McKenzie about the state of distribution technology

41:17

and the evolution of the grid in general.

41:19

What have you learned, do you think? What

41:21

have you been really struck by and what

41:23

have you thought is most interesting? I mean,

41:26

Fahir, maybe to start with you. So you're

41:28

saying you've been coming to these DistroverDeck conferences

41:30

for... That was my fifth time. Your

41:32

fifth time, right? And I love it. I

41:35

actually, yeah, I keep

41:38

saying that DistroverDeck is

41:40

like Paris Fashion Week. It

41:42

sets the color of the year. Each

41:45

year I'm coming here and I detect, okay,

41:47

what's gonna be the next color? Actually, what's

41:49

gonna be the next buzzword for the next

41:51

year to come? This year for sure it's

41:53

AI. AI, AI, AI. Yeah,

41:56

absolutely, I've been picking up that as well. As you say, everyone wants

41:59

to talk about AI. What

42:01

are the aspects of the AI conversation

42:03

that you found particularly interesting? Absolutely. So

42:06

I think that there are lots of excitement

42:08

about different applications of AI. And

42:10

I think that many of the applications,

42:13

it's not really real, new. Some of

42:15

them have been around for a couple

42:17

of years. But we weren't really talking

42:19

about those applications until I think a

42:22

couple of months ago that chat GPT

42:24

became mainstream conversation of houses, of dinner

42:26

parties, of things like that. So

42:29

that application, I think, AI,

42:31

then AGI, started becoming mainstream

42:33

of conversation. And all those

42:35

solutions providers that have been working on

42:37

AI-related applications, mainly using machine learning models,

42:39

now all of a sudden start saying

42:42

that these things that you are talking

42:44

about, we had a solution around that

42:46

for many years. So applications that existed

42:48

before, and now I think this year

42:51

what I'm seeing at D-Tech is many

42:53

new applications that are being developed or

42:55

are being talked about or utilities coming

42:57

to a stage or even ourselves talking

43:00

about the fact that they haven't started

43:02

using AI. So to what extent is

43:05

it just sort of fashionability? And

43:07

you say because of chat

43:09

GPT, open AI, everything they've

43:11

managed to do, suddenly

43:13

conversation about AI is everywhere, including

43:15

at D-Tech. How much

43:18

is just that sort of fashionable

43:20

buzz? And how much is there something really

43:23

changing, do you think? So my

43:26

entire professional career has been on

43:28

the innovation side of climate tech.

43:30

I've been around for many years

43:33

to know that any emerging technology,

43:35

any innovation of that sort will

43:37

go through innovation lifecycle. It

43:40

gets to a point like innovation triggers. It

43:42

goes through an overhike or harp

43:44

cycle. It reaches that

43:46

peak of inflated expectation. It goes down

43:49

and it really is up to us

43:51

as the society working on that to

43:53

decide whether it comes out of value

43:55

of death, gets to a plateau of

43:58

productivity or not. already

44:00

has applications that are really useful,

44:02

that are really unique to AI

44:05

and really it can transform those

44:07

part of things. But conversation about,

44:09

for example, autonomous management of grid

44:12

using AI, I would

44:14

put a question mark on if and

44:16

if it will happen, then when we

44:18

will get to that point. So

44:20

is it a buzzword or not? I think that it

44:23

will go through that lifecycle for sure. And

44:25

you put a question mark over that idea

44:27

about autonomous grid management because what? There

44:30

are many challenges that we have to

44:32

overcome first. For example, I think one

44:34

thing that I'd like to talk about

44:36

is data readiness, data

44:39

quality for utilities. Even

44:41

integrating and implementing traditional pieces

44:43

of software, utilities are struggling

44:45

with because of the data

44:47

readiness level. And I

44:49

think you're familiar with that. Data said

44:51

that we have on utility investment in

44:53

grid modernization. The 50 major IOUs in

44:56

the own utilities that are serving 40%

44:58

of US population.

45:00

They are investing or they're planning to invest 64

45:02

billion dollar in grid modernization.

45:05

30 billion of that

45:07

is going to infrastructure. It's only

45:09

grid modernization part of infrastructure. And

45:11

on data side, only eight IOUs

45:13

out of those 50 major

45:16

ones are investing only 300 million dollar data

45:20

related activities. Data cleanup, data

45:22

management platforms, data lake

45:24

house, warehouse on data lakes.

45:27

So I think that if you have

45:29

a long road ahead of us, maybe

45:31

AR technology is going to be ready

45:33

sooner than that. But then for us

45:36

as utilities, as the energy

45:38

industry to actually start using this technology and

45:40

be prepared for that, I think like you have a

45:43

long road ahead. That's very interesting.

45:45

And as we've been saying many

45:47

times over the past few days

45:49

as well, that's a great example

45:51

of the utility industry is inherently

45:53

conservative. It's inherently risk-averse. It

45:55

is highly regulated. All

45:58

of those things very much militarily. against

46:00

risk-taking, aggressive innovation, radical change. And

46:03

so I guess, is it inevitable

46:05

that the industry is gonna evolve

46:07

slowly? I think if history is

46:10

teaching us anything, is that yes, there will

46:12

be a slow adoption, but then

46:14

at the same time, many issues around

46:16

that, AI can actually also provide a

46:19

solution. One thing that I

46:21

wanna actually put awareness around is

46:23

that AI hasn't become mainstream enough

46:25

for regulators and policy makers to

46:27

start creating policies around that. I

46:29

do not know what kind of

46:31

policies will come into place. I

46:33

don't know if society starts accepting

46:35

AI and then the autonomous controls,

46:37

for example, if that's the end vision.

46:40

If that's the end vision, then regulators and

46:42

policy makers, how supportive they would be, or

46:44

would they create policies around that or not?

46:46

Because technology is only one part of,

46:48

or one leg of these three-legged

46:51

tools. Yeah, and it's something people

46:53

have been pointing out while we've

46:55

been here in Orlando, at Distributech,

46:57

talking about technology, there has been

46:59

simultaneously the conference of NERUC, North

47:01

American Regulated Utility Commissioners, so that's

47:03

all the utility regulators

47:05

have been meeting at a separate

47:07

conference in Washington, DC. And

47:10

it's a great kind of symbol of

47:12

these two parts of the industry just

47:14

not talking to each other and regulators

47:16

aren't finding out about technology, technologists aren't

47:18

finding out about regulation, it's just two worlds

47:20

not talking to each other properly, and that

47:23

does seem like a real problem. Absolutely,

47:25

so it's very interesting that you're

47:27

mentioning that, because the past

47:29

two days, I've

47:31

met and I've spoken to many

47:33

folks from DOE, different offices, I've

47:35

met and I've spoken to many

47:38

people from ISOs, different ISOs,

47:41

utilities, of course, I think that's the place for

47:43

all utilities to go, but I have not come

47:45

across a person from

47:47

regulators. There's a good

47:49

chance that they might have started hiding their

47:52

badges, so no one can notice that they're

47:54

a regulator. I've been into rooms

47:56

that are actually their hostile conversation

47:58

about the rough regulators Why are

48:00

you barriers and stuff like that? So yeah,

48:03

but that has been my observation. Yeah, that's very

48:05

interesting. So Elhan, what about you? What have you noticed

48:07

while you've been here? Besides what Fahime

48:09

mentioned on the, definitely AI

48:11

is the main trend. Everyone

48:13

is interested in talking and

48:15

visibility of the grid is

48:17

another interesting aspect, but looking

48:19

into and talking to people

48:21

from the area that I

48:23

work on, which is demand

48:25

and micro-grids and behind the

48:27

meter generation, I am seeing

48:29

another angle of this trend

48:31

on AI and data, which

48:33

is the need of infrastructure

48:36

for having and providing those data, like

48:38

data centers that needs to be deployed.

48:40

And like I'm quoting from one of

48:43

the people that I talk to that

48:45

in the past, the main challenge of

48:47

data centers was finding a site and

48:50

location, but right now the challenges actually

48:52

find the power to power up those

48:54

data centers to be able to transmit

48:57

and communicate and gather the data and

48:59

then act based on that. So that's

49:01

an interesting angle and that's kind of

49:04

a cover, my area of expertise working

49:06

on micro-grids as one solution, not

49:09

only, but one of the solutions

49:11

that trying to address, to bring

49:13

more renewable energy on site, not

49:16

only address the resilience piece, but

49:18

also anything that application of renewable

49:20

energy can offer to

49:22

value stack and add. So this

49:24

is another angle. To add to

49:27

that, not only the data center

49:29

is our challenge, but another part

49:31

is all of this US

49:33

activity to bring all

49:36

of the material, cheap manufacturing,

49:38

the raw material, just bring

49:40

them back from offshore to

49:43

do and develop everything in-house

49:45

so that demand just increase,

49:47

usually on manufacturing, mining

49:49

applications, so everything is powered

49:52

to run. Yeah, that's really interesting,

49:54

isn't it? And that is something, as you

49:56

say, I've also been very struck by which

49:58

is expectations about how totally... demand for

50:00

electricity is going to grow much more strongly

50:03

and probably has already started to grow much

50:05

more strongly than was the case and it

50:07

essentially was flat electricity demand in the US

50:09

over the past 15 years or so wasn't

50:12

it and just suddenly now really starting to

50:14

take off. And the joke of it usually

50:16

goes you say we think about AI and

50:18

data centers and the added load they're putting

50:21

on the grid you know AI is simultaneously

50:23

the solution to and the cause of the

50:25

grid problem. Yeah it's kind of a vicious

50:28

circle right now. Chicken and egg issue here.

50:30

As you say yeah totally chicken and egg and then

50:32

you'll hear people of course will say well therefore it's

50:35

also sort of capable of having a chicken

50:37

and egg solution which is that we'll have

50:39

wonderful AI breakthroughs for instance I was talking

50:41

to Zach Cass who used to work at

50:43

OpenAI who was saying what we're going to

50:45

get is AI

50:48

helping us to make the breakthrough we need

50:50

to get to fusion power and large-scale low-cost

50:52

low-waste fusion etc all the purported advantages that

50:54

fusion power would have if we ever got

50:57

there and therefore that'll be the cheap and

50:59

easy way to provide all the electricity that

51:01

we need in order to power all the

51:03

AI that's going to happen because you know.

51:06

Yeah go on. Just want to add something

51:08

I mentioned that earlier that everything that

51:10

you're speaking about this is

51:13

the imaginable part of AI. AI

51:15

has an unimaginable part into that

51:17

because for innovation to

51:20

happen it needs intelligence so

51:22

far we have been limited to human

51:24

intelligence but AI is

51:26

giving us human level artificial

51:29

intelligence so what innovation that

51:31

intelligence can create I think they're yet to

51:33

see but we saw early signs of that

51:35

couple of weeks ago AI helped

51:38

scientists discover a new material for batteries

51:40

right we are yet to see what

51:42

can happen but actually if this tool

51:44

can help. Yeah that's very true and again

51:47

going back to your point about sort of the hype

51:49

cycle of technology clearly there would be people who would

51:51

have told you with good reason that the internet was

51:53

overhyped in 1999 and internet

51:55

stocks were overvalued and turned out to be the

51:57

case a lot of them were overvalued and they

52:00

went on to crash but the internet has

52:02

got on to change authority and is continuing

52:04

to change authority in ways that we

52:06

could not have imagined. I was

52:08

making this example that the first

52:10

V2G, I designed

52:13

a solution around that and then we deployed

52:15

that in 2014. That's

52:18

vehicle to grid, V2G. Vehicle to grid, exactly. So

52:20

technology was ready in 2014. We

52:23

did lots of tests and analysis

52:25

on that. It still to this

52:27

very day to V2G is not

52:29

mainstream solution. Policy, regulatory, financial incentives

52:31

for grid, but the challenges that

52:34

may exist for grid operation if

52:36

V2G is actually widely adopted. So

52:38

there are so many issues around that that needs to

52:40

get resolved. So the thing is

52:43

that with AR it may go much

52:45

faster but it will go through the

52:47

same circuit. Talking about expectation and applications,

52:49

when it comes to deploying emerging

52:52

technologies like storage microgrids, we are

52:54

seeing that a lot of delays

52:56

happen just because of commissioning of

52:59

those microgrids sometimes take a lot

53:01

of time, like four times more

53:03

than conventional solutions. And when

53:05

we talk to developers we learn that

53:07

this is because a lot of lack

53:09

of knowledge on testing of these emerging

53:12

technologies, even permitting of them

53:14

has some challenges. The utilities

53:16

have to redo the application

53:18

just because of not have

53:20

enough expertise and communication. So

53:22

one of the applications of

53:24

AI here could be helping

53:26

to develop and train the

53:28

workforce and optimum communication and

53:30

usage of those intelligence to accelerate

53:32

this process and deploying the

53:34

project faster. Yeah, that's really interesting

53:36

and that's definitely another theme I think I've

53:39

been picking up on over the past couple

53:41

of days is the sense that the technology

53:43

is making rapid progress evolving very

53:45

quickly. The people are not evolving

53:47

so far. Human beings have

53:49

the right... That's the nature of human beings, it needs

53:51

to be that way. But we are intelligent

53:54

too so we can benefit from

53:56

the technology that we develop to

53:58

help us optimum. out operations.

54:01

Yeah, great point. F what

54:03

did it go back to you? You were saying then, so you

54:05

started coming to Distributed Tech five years ago, this is your fifth.

54:08

What changes have you noticed in that time? Is this

54:10

a different event now from what it used to be?

54:12

It's different and also at the same time the same.

54:15

So I think that we didn't have

54:17

this day for a couple of years

54:19

during COVID years, but really the fact

54:21

that each year there's a buzzword. A

54:23

couple of those buzzwords are not around

54:25

anymore. No one talks about them. Remember

54:27

that life cycle of innovation that I

54:30

talked to, they stayed and remain in

54:32

the valley of death. They couldn't survive

54:34

because they didn't have applications. So what are

54:36

those then? What are things that have died off now? We

54:39

may get some controversy around that if I actually

54:41

talk about here, but blockchain is one of them,

54:43

for example. Blockchain, it's a

54:45

good point. I was at

54:47

Dtech, everyone was talking about blockchain.

54:49

They were giving up t-shirts

54:52

with blockchain things on them. And I was

54:54

like, explain to me what

54:56

is this thing? And when they

54:58

explained, I was like, I don't feel

55:00

that there are applications for that in the energy

55:02

industry. And they were saying that if

55:05

you use it, you can track an Apple

55:07

from warehouse to the customer's house. I was

55:09

like, why do I want to do that? But

55:12

anyway, yeah, that was buzzword

55:15

at least for two, three years. Many

55:17

startups started working in that space. None

55:19

of them are actually like operation out

55:21

anymore. One point that I want to

55:23

say on Dtech, there are waves of

55:26

trends that are coming and going, especially

55:28

because I was a utility before joining

55:30

with mechanism working at the innovation hub

55:33

of a utility for many years. The

55:35

thing is that there was a trend

55:38

like utilities attendees, they definitely some of

55:40

them are very advanced, they attend the

55:42

panels. And I believe you and I

55:44

having this conversation before that, I

55:47

constantly see top five person utilities

55:49

in terms of innovation and like

55:51

expenditure, being invited to sit on

55:54

panels, talk about the emerging technology

55:56

that they're doing innovation that they're

55:58

actually going through. And I keep

56:00

asking myself that we have 3,000 utilities in the US.

56:04

How about there is 2,950 other utilities? Who's

56:08

actually addressing their needs? Who's

56:11

actually talking about the

56:13

struggles that they have? Are the applications

56:15

that we are talking about, for example,

56:17

AR is a very big ticket item

56:19

of expense for utilities? Others

56:21

actually can go through that. And now there's

56:23

this notion of utility as a service. Other

56:26

utilities that are actually succeeding to

56:28

become that AI-centric future grid can

56:30

start actually working with the smaller utilities

56:32

to help them go through that process.

56:34

The other trend which is very interesting

56:36

to see is that a couple of

56:39

years ago, the conversation was that we will

56:41

be okay with system of systems because

56:43

we want the best in breed. I'm

56:46

really happy to see after many years

56:49

now that trend is kind of like

56:51

not there anymore. And so

56:53

what does that mean, system of systems? Basically,

56:56

we will be okay with

56:58

patching someone's ADMS to another

57:00

provider's OMS to another

57:03

provider's GIS, then add another derm

57:05

on top of that, then work

57:07

with couple of aggregator derms. Now

57:10

the theme that I'm seeing this year

57:12

is convergence. Convergence

57:15

is because I was on the side

57:17

of utility and I could see what

57:19

a maintenance nightmare it ends up to.

57:22

You are responsible and you see yourself being

57:24

stuck in the middle of his or she

57:26

said when you're working with multiple vendors. And

57:30

now I'm really deeply happy to see

57:32

that solution providers have found their space.

57:35

They have become comfortable. They're

57:37

in their space in the main solution that

57:39

they actually they're offering. And

57:41

then they have started collaborating and

57:43

making strategic partnerships with others. And

57:49

this is I think, absolutely amazing for the

57:51

industry as a whole. Now

57:53

we will start talking that, okay, I'm

57:55

really good at this space. And

57:58

I know that I'm not good at the others. but

58:00

I don't need to. I can focus on

58:02

my own space and I can actually go

58:04

through applications through my strategic

58:07

partner. So now take a

58:09

step back then. Everything you've been hearing,

58:11

talking to people about over the past

58:13

couple of days, I wonder what it's

58:15

made you think about the

58:17

energy transition in general. What, after all, is

58:20

the point of so much of this activity,

58:22

which is decarbonizing the power

58:25

system and while also meeting

58:28

increased load, keeping the lights on, providing

58:30

the electricity that everybody needs at the

58:32

same time. It often seems to me

58:34

that when people kind of discuss in

58:36

kind of general terms the energy transition,

58:38

you'll sometimes hear people talk about power

58:41

as being kind of a problem that's

58:43

been solved. You know, oh, we have

58:45

renewables and we have maybe nuclear and

58:47

we have battery storage and we have

58:49

these technologies and they're all available and

58:51

they're zero carbon and

58:54

we can apply those to the power industry

58:56

and then we can get to zero emissions

58:59

from power on a

59:01

foreseeable timescale by the 2030s or whatever

59:03

it is that people want to be

59:05

able to do that. You

59:07

come to Distributech and it's immediately clear

59:09

that it's not actually at all easy.

59:12

All these thousands of people here are

59:14

working on this problem and

59:16

the more you dig into it the more

59:19

problems and challenges emerge. I talked to someone

59:21

earlier who said it's like peeling an onion

59:23

but kind of each time you think you've

59:25

solved one set of issues you

59:28

discover another set that come up

59:30

and actually decarbonizing power

59:32

in the US and globally

59:35

is going to take an enormous amount of effort and

59:38

it's going to take an enormous amount of innovation and

59:41

creativity and smart thinking as well

59:43

as hard work. When

59:45

you've been talking to people and as you've

59:47

had these conversations over the past couple of

59:49

days, how has it left you feeling about

59:51

that effort of decarbonizing and

59:53

getting to zero emissions grid? Do

59:56

you feel more optimistic, less optimistic

59:58

about the same? I mean, Faber,

1:00:00

what do you think? Two

1:00:02

words, actually three words, fears and hopes.

1:00:04

That's the general theme that I got

1:00:06

from DistributeTech and from the audience, fears

1:00:10

for all the challenges that we have ahead

1:00:12

of us from resource adequacy,

1:00:14

from renewable energy. Like many

1:00:17

of these solutions providers have

1:00:19

committed to renewable energy. Some

1:00:22

of them actually for 2025, we are

1:00:24

talking about one year. And

1:00:26

that is actually like one of

1:00:28

the major data center providers in

1:00:30

that space. And then hopes because

1:00:32

this detail was around 17,000

1:00:35

people. The smartest of minds were here,

1:00:38

like in the past two years. If

1:00:40

we all can't get it right, then

1:00:43

who can? I'm really hopeful. But then

1:00:45

I think that let's be realistic. There

1:00:48

are challenges, many challenges, and

1:00:50

everyone needs to work together. All

1:00:53

different streams actually need to collaborate together for

1:00:55

us to get there. Ellen, what do you think?

1:00:57

I'm optimistic generally. But when

1:00:59

we are talking about renewable

1:01:01

energy and power system, the

1:01:03

elements of challenge that we

1:01:05

are tackling here and all

1:01:07

the brains we put

1:01:09

together to solve it, we inherited

1:01:11

a grid, we inherited a

1:01:14

big system that has more than 100

1:01:16

years. I'm

1:01:18

not talking about the aging of the

1:01:20

infrastructure. I'm talking about the concept of

1:01:23

the power grid, which we inherited 100

1:01:25

years ago. And it's a big transmission

1:01:27

lines, power plants, all the way to

1:01:29

customers. And now we are trying to

1:01:32

add all of these new

1:01:35

and merging fast, evolving technology

1:01:38

on a system that is so

1:01:40

large, giant, and so old concept.

1:01:42

So merging all of this together

1:01:44

is a really, really big challenge.

1:01:47

And that's why I respect to

1:01:49

all of these trials and errors

1:01:51

that I'm seeing happening in this

1:01:54

space that's coming. Everyone rely on

1:01:56

that or try to pilot

1:01:58

and then get there. on the

1:02:01

field, test in and then go

1:02:03

out and then the next one

1:02:05

evolve and the better one come.

1:02:07

Generally I'm optimistic. We are a

1:02:09

little bit beyond the schedules of

1:02:12

everything like the mismatch between the

1:02:14

growth of the load versus the

1:02:16

permitting process, resource adequacy, the payment,

1:02:18

touch on that. So all of

1:02:20

these pieces bring fears for sure

1:02:23

but I'm seeing at least in

1:02:25

my space I'm seeing accelerated announcements

1:02:27

more like people that try to

1:02:29

kind of sit together, try

1:02:32

to understand. We are seeing regulators

1:02:34

that are slowly

1:02:36

but gradually helping utilities

1:02:40

also. So I think everyone is

1:02:42

just gradually understand the accelerated needs

1:02:44

and to need to act fast

1:02:46

on that. So I try to

1:02:48

be optimistic. Excellent. That's good. I'm very

1:02:50

pleased to hear that. As I say,

1:02:52

I think my sense, I would agree

1:02:54

with both of you really, which is

1:02:56

you've got to be realistic about the

1:02:58

challenges but also it's tremendously impressive the

1:03:01

amount of brain power that's

1:03:04

being dedicated to this problem. And as

1:03:06

you say, there is real progress being

1:03:08

made, definite steps forward, there's so much

1:03:10

going on and that has

1:03:12

to make you feel reasonably optimistic, cautiously

1:03:14

optimistic maybe about the future. I think

1:03:16

we are following Eddie's son that

1:03:18

at the end he said that I

1:03:21

try multiple approaches, none of them go

1:03:23

to the electricity but I learned multiple

1:03:26

roads that don't go there but then

1:03:28

eventually I think we are kind of

1:03:30

continuing on that path and we will

1:03:32

get there. One thing that I want

1:03:34

to add is that many of folks

1:03:36

that I met or I've worked with

1:03:38

or I know in my network, we

1:03:40

all have very young children at home

1:03:42

and for us it's no longer an

1:03:44

option. I think he said,

1:03:46

for example, I have a five-year-old. She

1:03:48

may live to see the day

1:03:50

that the temperature has risen by

1:03:53

2.5 degrees Celsius. What

1:03:55

kind of earth am I living for her? Like

1:03:57

for me, it's out of option, out of option. question

1:04:00

that we need to do something. Is

1:04:02

it going to be expensive? Of course.

1:04:04

What should we do it? Of course.

1:04:07

Like we have one Earth, even if it's

1:04:09

expensive, if it means that like cutting some

1:04:11

other expenses and pay for this transition, I

1:04:13

want that to happen. Yeah, no, that

1:04:16

is a great point and I do think that's

1:04:18

a really important perspective I have. Veyma,

1:04:21

thank you both very much for joining me on the Energy

1:04:23

Gang today. Thank you for having us. And

1:04:25

that's all from us from Desrubitex. Many

1:04:27

thanks for him and Kevin Poore and Ella Makavan

1:04:29

for joining the Energy Gang this time. Thanks also

1:04:31

to Don McPhail of Oplite and the Apache of

1:04:33

AAPI and everyone else who talked to us while

1:04:35

we were doing here. Many thanks

1:04:38

to our producers, Don Toto and Sam Nash. And

1:04:40

above all, many thanks to all of you for

1:04:42

listening. Please do keep your feedback coming.

1:04:44

As you know, we're always keen to hear your views. And

1:04:47

we'll be back soon with all the latest news

1:04:49

and views on the Energy's transition. Until

1:04:52

then, goodbye. Thank

1:04:56

you.