Odd Lots - This Is the Case for Building a More Robust Power Grid

Episode Date: August 18, 2022

Thanks to surging energy costs and extreme weather events, there's a greater urgency to decarbonize the electricity grid. However, it's not enough just to add more solar panels, or wind turbines or even nuclear plants. We need a way to move all that power. And today's grid wasn't made for intermittent energy sources. On this episode we speak to Rob Gramlich, the Founder and President of Grid Strategies, about what we need in our grid to take advantage of intermittent power and what it would take to get there, both from a monetary and regulatory standpoint.See omnystudio.com/listener for privacy information.

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthal. And I'm Tracy Allo.

Tracy, you know, a cliche that I hear a lot, or I don't know if it's a cliche, but a line that I hear a lot, is that our electrical power grid is not made. What? Sorry. But you say a cliche that you hear a lot, like, you think everyone is just walking around going like, oh, the electrical power grid is not ready for renewables. Maybe I was exaggeration. Who are you talking to on like a daily basis? You're right. I'm talking to my six-year-old daughter says that to me a lot.

She says, Dad, it's great to have renewable energy, but our electrical power grid is not made for intermittent renewables. But you have heard people say that. That's good. Yes. Yes. There are lots of people, I mean, not just in the energy space, but in politics as well, who will make this point repeatedly. But I actually don't know what that means. So I hear it.

It gets repeated. But I actually do not know what they're saying. saying when they say that. Like, it sounds like a smart thing to say, but I don't have any intuitive sense of, like, what that means or what the difference between our existing grid and how it works versus a grid that is optimized for a world of much more wind and solar and intermittent sources of clean energy. I mean, I have this simplistic view of it, I guess, which is that I guess we need more grid, right? Like, just this is the simplest possible, like, interpretation of that, just that our infrastructure isn't where it should be, and so we should be

building newer. But you're right. I have no idea whether or not there are technical differences between like the types of electricity transmission you need for something like solar and wind versus more traditional energy generation by natural gas or coal or whatever. So the one thing that kind of does make sense to me, and everybody knows, you know, it's like wind turbines don't do anything when the wind isn't blowing. or you don't get any solar power when the sun isn't shining or if there's a lot of clouds or something. But if you had really widespread geographical reach of the grid, then you could sort of diversify away some of those risks so that if there isn't wind in one area, maybe it's more likely that at least

somewhere it's windy. So you sort of ameliorate some of these risks by longer wires, a bigger grid. But beyond that, that's it. That's the only thing that I sort of like can sort of intuit about maybe what's insufficient about our existing grid. I mean, it also seems like doing something like that would just be a massive undertaking, both in terms of the actual amount of money you would need to build something like that, but also just getting different groups of people, different states to work together,

especially in the current environment, that seems like a long shot. The idea that, I don't know, you know, if Texas is generating a lot of energy from solar, that they're going to be willing to send it over to a place like Vermont. or New Hampshire. And Texas, of course, has its own energy grid. So that's a really bad example. But it does kind of... It gets to those issues. Yeah, exactly. Yeah. And so I am also aware of this. There was, like, I think there was some plan to bring in more Quebecois hydropower in the northeast. But there was like a vote in Maine, and I think, and they shot it down. And sometimes you hear about these big land use battles in the West where people

want to make, you know, wires over big ranches and those can get held up. And, and, you know, Anyway, there's a lot. We need to learn more about the grid itself. Yeah, let's do it. Okay, I'm very excited to bring in our current guest. We are going to be speaking to Rob Gramlick. He is the president of grid strategies, which consults with all kinds of different players in the energy space on grid issues. He's been involved in the grid business for about three decades. And he's going to explain what that actually means, what an ideal grid would look like.

So, Rob, thank you so much for coming on oddlots. Great to be here, Tracy and Joe. I really appreciate it. So we do hear this cliche. And again, maybe it's not that common, but it is a thing that people say. But how would you summarize when people say, this is a grid that's not made for intermittent, renewable power. What are people saying in reality?

Yeah. No, well, you both had it right in your intro. Tracy kind of said, we need more grid. You said, you know, somewhere it's windy. And those two, of course, go together. Yeah. And that's how renewable energy works, is that there actually is pretty steady overall renewable supply, just not at your location.

So everybody thinks about renewables as intermittent because they're looking at their spot in the country. But if you look at across the country, there's actually quite a steady supply of renewable energy, but what that means is you have to connect it. and then we get into transmission. So I have a really basic question before we go any further. And actually, I have a feeling I'm going to have a bunch of basic questions during this conversation. But, you know, Joe mentioned your company grid strategies and how you talk to different stakeholders when it comes to grids.

Who are the stakeholders? Like, who is making the decisions on how grids are designed and built? Sure. Well, it's worth stepping back. in saying that our electric utility business or industry in this country and around the world really grew up around electric utilities. And these are the ones that send you your bill. Every listener here kind of knows who they are in their community. And they were kind of vertical silos, vertically integrated utilities doing soup to nuts, generation transmission

distribution in their local area or sort of around their city. Or maybe they would cover half a state or something like that, and there are hundreds of them around the country. Those continue to be the main players in the electricity business when we are talking about these kind of large regional and interstate transmission lines, because this is the bulk power system. It's a little bit of a separate world from what's happening locally on the distribution grid and in your community. But this bulk power system, as you both said in the introduction, requires a heck of a lot of coordination and a lot more than it ever used to. So what we're doing in the electric industry, and we've actually been doing this for the three

decades I've been in it, is working to develop these regional processes and institutions. So we've gone from hundreds and hundreds of these little vertical silos to more connections between each of them, this sort of horizontal integration through the transmission grid, both with physical connections and the institutions that plan that and operate that. We have these organizations called regional transmission organizations that sometimes cover 13 states. And they're regulated at the federal level, the federal energy regulatory commission is kind of a key federal entity that's been trying to put those in place around the country and is continuing to try to do that. And that was all happening in order to create, mainly to create competitive markets. We could buy and sell power from many states and different suppliers, but then as renewable energy came on the scene, really starting about two decades ago, suddenly the need increased dramatically to do that because, again, the wind is always blowing somewhere and you need to make the power output more steady and move the power back and forth.

So that need increased. We're trying to do that. And now, as people are talking about electrification of transportation with electric cars and electrified buildings, just the whole demand for electricity goes way up. So now, now, you know, all of this is on steroids, and we really have to work on this regionalization of the power system. So, first of all, it seems like, you know, even though we have yet to see the big upsurge in EV demand on the grid, we all sort of expect that that's coming. But even before that, we're seeing strains on the grid right now. Of course, we all know about the blackouts that we've seen in Texas. I know there are concerns about whether the grid strains in New England this winter and even in the Midwest.

Can you just sort of maybe quantify or give us your summary of like, why is this happening? Why are we seeing the grid under such strain today? And how much worse is it going to get? What is the scale of the problem that needs to be solved as? we electrify more parts of industry. Sure. And you're right. There are a few lenses through which to look at this power system. And you can forget about for the moment climate change and clean energy, you can forget about competitive markets and just think about these severe weather incidents we're getting.

And for that reason, it turns out what happens, you know, not always, but maybe nine times out of 10 is that there's power sharing from one region to the next that keeps the lights on. And the recent Winterstorm Uri experience, everybody knows about Texas, and it was a horribly tragic event for a few days in the middle of winter where people lost their lives. And Texas imported all that could, but it just could not import much power because it's physically disconnected from the eastern and western grids. Whereas all the states to the north of Texas going up through the Dakotas had the same way. weather situation, but they did have strong interregional transmission connections, and they did

import a tremendous amount of power from places like the Mid-Atlantic region. And what you tend to find, again, not always, but almost always, is that the grid is physically bigger than the weather pattern. So even a big weather pattern like that big polar vortex was big, but the grid is bigger and can be bigger if we build it up. And so you can have this power sharing opportunity to save the day and keep the lights on. So that's another completely separate reason to work on these large regional and inter-regional connections. So the idea is that even if you're short energy in one particular area, because maybe there's a supply disruption or there's a sudden surge in demand that you can get it from somewhere else where the weather is stable or things are more normal,

I have another basic question when it comes to this sort of grid interoperability. But is there a difference in the types of transmission mechanisms that you need for renewables versus more traditional energy sources? Or is it just the case that you build more electric wires in general? Generally, it's the same technology and our transmission system is regulated to be open access to all resources. And so, you know, you can't, even if you wanted to, there's no, there's no entity that could say block coal power from getting access to the grid or gas or, you know, whatever your preferences are, the federal regulators have to be technology neutral. And you generally use the same types of high voltage AC alternating current lines, interconnected networks across large regions that are the same types of lines we used decades ago and some high voltage DC lines that tend to be more economic, that's direct current.

If you're going a really long distance, like it used to be a hydro plant in the middle of the interior west, trying to get to a major urban area or a mine-mouth coal plant going hundreds of miles to a city. Now we have similar opportunities, but just with remote wind and solar areas on the end of the line that we're trying to access. And so we do probably have a little bit more of a need for these very long distance types of lines, which tends to lead to more high voltage DC lines relative to the amount of AC. But, you know, we've always had both and we're going to continue to need both. So it's largely, you know, similar from a technology standpoint. That said, there's a lot of, if you look at the industry, there's a lot of dynamism in the innovation.

There's advanced conductors, there's grid enhancing technologies. The HVDC lines themselves and the converter stations provide tremendous reliability benefits. that they didn't use to. So, I mean, I would say it's, you know, generally the same type of network to any layperson looking at it. But for those people who kind of know what the capabilities of these new lines and the assets are, there's a lot of opportunity to increase the reliability and services that they provide. I'm June Grasso, inviting you to join me for the Bloomberg Lawn podcast. Every weekday, we help you make sense of the legal stories that shape the nation and the world. Listen for complete analysis of the biggest court cases, the latest actions from

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But can you sort of explain either the math or the physics of very long distance transmission and how much degradation is there? And like, what's realistic? Like, can we get, you know, can we get electricity from, can we get wind power in Iowa to Los Angeles or New York City? Like, what happens when it goes that far? Yes, absolutely. And this is one of the marvels of the electric system. And, you know, it's worth noting. I mean, we do have an engineering marvel on our hands here that we've inherited, and it provides tremendous reliability relative to other countries and, you know, what anybody sort of expected years ago.

You know, now as we look forward and this need to move power around, both for reliability reasons and for clean energy and climate reasons, yeah, we have to be realistic about that and think about what it can do. A short answer is if you're going from the middle of the country to the coast with a good high voltage line, you probably lose about 10% of the power, which is pretty impressive. I mean, that's an amazing. My assumption was going to be like 50% or 75% or something. Yeah. Right. I mean, most people would think about that. And it is, and it can be if we have insufficient capacity.

I mean, that's why everything in the transmission business is about scale. There are massive economies of scale, meaning the cost per delivered megawatt is lower if you build it at a bigger size. And you have to build it at that bigger size to get those numbers of efficiency and productivity for your delivery. So Joe asked you about the technical aspects or some of the technical aspects of building long distance lines. Can you talk to us a little bit about the social or political aspects of that? Like if I wanted to build or if someone wanted to build a line from what was the example, Ohio to New York or whatever, how easy would that be to do? And what would it involve? It is very difficult. As you said at the outset, Tracy, even if it were easy from a financial and technical standpoint, how do you get the coalition and the support to build and construct these major power lines? And I would on this score, if folks are interested, recommend, the book, Superpower by Russell Gold.

A very good read about, you know, one experience, one company's experience trying to do this. And it is very hard. And there are more recent experiences like in Maine with the citizen referendum. Yeah. I would say the problem in those instances, first of all, we can overcome those problems. I'm optimistic about this generally. I want to leave that impression because we've done it successfully in other instances. But there have been a lot of failed.

examples where there wasn't really the broad recognition of the problem or how everybody would benefit. So, for example, in Maine, almost nobody, from the polling I've seen and talking to people there, almost nobody even really thought about the regional clean energy benefits of building that line to access Quebec and their hydro and wind and clean energy sources and the need to move power back and forth between the regions. It was really viewed as sort of, You know, one company who, you know, people thought, well, maybe it's in their interest, but it's not mine. And similar instances around the country when one line was trying to traverse a state and local stakeholders said, well, some investor halfway across the country may like it, but why do I care about it? So I think we actually, we should look instead at these successful examples.

And we have built some very successful long-distance lines that generally came out of kind of open, transparent, planning processes. This is probably boring as I say it out loud. No, no, this is the good stuff. But they do work. And even just recently, this group called MISO, it's the grid operator and planner in a 13 state region in the center of the country. They just put together another agreement where all the states involved, all the utilities, and they put together a $10-plus billion dollar transmission plan that would connect many, many tens of gigawatts of clean energy and also provide reliability benefits. And I think when everybody's engaged in that process, and then it goes into a local or a

state transmission permitting proceeding, right? We have mostly local and state authority over the permitting of these lines. Then that regional consensus can be reflected. And the technical people from those planning organizations can come in and testify. say here are the benefits. When that happens, the batting average has been over 90%. When it's just one developer on their own, the batting average has been closer to 10%. And so I think we need to get more to the regional planning process. There can and will and should be some of these independent developers out there picking off opportunities. And if they can put together all the lease agreements with ranchers and

farmers along the way, and hopefully I know the administration's trying to open up interstate highways more, railway corridors, some of these existing corridors, you know, then that could be more of an opportunity for independent developers. So I think we'll see some of that too. But there are a couple different ways to do this that I think can be successful, but, you know, they have to work around exactly what you're asking about is these occasional local resistance, largely with people who say, well, what's in it for me? Why is this something I should put up with? You know, I want to ask further about that is a actually two questions but a are there other clear things that could be done at the federal level either regulatory or bypassing laws that might make it easier and b we're recording

this august fifth as of right now the uh the climate bill or the inflation reduction act hasn't passed so we don't know for sure if it will but is there anything in there that affects grid specific development so i would say honestly there's not a lot that has passed or is likely to pass real soon that helps a great deal. I would say to the credit of the administration and some of the various centers, including Senator Manchin and some of the Republicans, there seems to be a much greater will and interest in seeing this type of transmission infrastructure and supporting the clean energy evolution with it and supporting reliability as well. but we haven't quite converged on exactly what that policy should be. Despite a lot of the headlines, there really was barely any actual money and that bipartisan infrastructure law for transmission, you know, folks like me had sort of argued, look, we spend, our interstate highways are paid for 90% by taxpayers by the federal government. Shouldn't we have something closer to that for transmission, which are interstate highway in nature, and that everybody,

benefits across dozens of states and we almost got a tax credit for transmission didn't make it through I think they are looking at alternative ways and there's this conceptual agreement between Senator Schumer and Senator Manchin holds great promise and hopefully that would that would help a lot and separately at the regulatory level the Federal Energy Regulatory Commission has very strong jurisdiction over this and they have a priority this very issue and they're working on it. And thus far, they've been moving forward on a bipartisan basis to try to fix some of these problems and get the transmission agreements together in these

regional planning processes. So there is some, there's definitely some hope and maybe where there's a will, there's a way. But my honest scorecard of where we are sitting here today is that there hasn't been a lot that's passed that would really transform this like I think needs to happen. What would be the most helpful in terms of building out the grid? Like if you could see anything, whether it's, I don't know, just having people be more amenable to having electricity wires strung up in their backyards or more funding from the federal government. What would you like to see? If I had my brothers, I would say, let's get these regional and interesting. inter-regional processes set up to plan a robust grid for the expected future power mix, say, 20, 30 years out, put together plans, use as much as possible existing corridors.

That example I mentioned in the Midwest, 90% of those lines are going to be upgrades over existing rights-of-way in corridors. So, yes, there will be some new lines, but there doesn't need to be that much actual needs. new corridors and rights of way. And then, importantly, those regional agreements involve who pays and how much. And I really think either Congress or this Federal Energy Regulatory Commission need to put together a policy where everybody who benefits shares in the payment. The economic problem here is the classic public good, where if everybody benefits and, you know, even if some individual pays a lot into this fund, everybody else benefits just as much as they do, which means they don't have an incentive to do that.

So there's a strong disincentive to actually fund this infrastructure. So we need to get some kind of collective agreements together in partnership with states in the region. But what I just described is a million conversations with a million entities and all of that has to go well. So it's hard work and it's not maybe too, doesn't sound too exciting, but it really needs to happen. And if Congress and FERC, the federal agency here, can require that to happen or direct it or encourage it, then I think we really can get this done and get a grid that's able to handle the climate clean energy goals, the new severe weather challenges, we're getting as well

as the coming electric electrification. You know, you mentioned the idea of improving the process for longer-term planning of the energy grid. And I feel like it's difficult at the best of times to get people interested in fixing long-term problems. But secondly, what seems to complicate this with energy specifically is it seems really difficult to predict what energy needs will be, you know, 20 or 30 years out, and it seems difficult to predict what the mix should be, what the weather might be when we're talking about renewables. How much confidence can we have that the grid we're designing today or trying to design today is going to be the right one 20 or 30 years out? Well, I think we should have a lot of confidence. We're using this transmission network at or beyond its capacity every decade since

this thing was invented. We've relied on it more and more. Electricity is all through our daily lives at home and at work. And we know for a fact that there are these going to be the vast tracks of land amenable to very low-cost wind and solar development across this country. And almost all countries in the world have that same phenomenon. And so it's not like, sometimes you hear, oh, we don't want to build a bridge to nowhere. Well, look, You know, I can guarantee that our great, great, great, great grandkids will come to this spot in, say, Western Oklahoma, and it's going to be really windy, you know, and it's, you know, and it's going to be really sunny all through the Southwest. So, you know, we know that for, you know, far more certainty than we have about anything else we, you know, we invest in. So I think we can very solidly invest in that. I think there is a question of, you know, how much realistically are we going to get done?

a lot of people like me who would say we need to build this vast network and make it a whole nationwide, in fact, continental macro grid. And I believe that. But I also think, you know, I might not want to bet my, you know, kids college tuition on that happening. That's going to be very hard. So I know you've had people like you've had Jigger Shaw on this show. And, you know, he, I think, believes in that and supports that. But also he doesn't, he doesn't want all of his eggs in that basket. And so there are things like small modular nuclear reactors that you can put on the site of a closing coal plant. You know, there's hydrogen. There's a lot of other things that we can and should do as well. I don't want to rely on this, you know, this opportunity alone.

So just, you know, as long as we're talking about your sort of dream, if you could if you could just write the policy and get it implemented, what are we talking about from a dollar perspective? in terms of what you think it takes to invest and get to this more modern grid. And what do we talk about even in terms of physical, you know, what do we talk about in terms of miles? What do we talk about in terms of the raw materials that we need for the wires and the labor? Like, give us a sense of the scale of the project in the ideal scenario. Sure. Like if Eisenhower came back and said, all right, we built that hybrid system.

Now it's time. Let's get this grid in our energy problem. And we want domestic homegrown energy that's very affordable and reliable for everybody. Honestly, I think the current president is interested in doing that to the extent he could. I would say a $200 billion investment in a national macro grid, which would take 10 years if everything goes right, putting a lot of it along, existing corridors, highway and rail systems, that would enable, that would be the best $200 billion our government could spend because energy is so important to our lives, reliable energy is so important to our lives. The climate is such a problem. And if you build the network, we have very

cheap wind and solar all over the country that can utilize that. And we know it's going to be there. certainly there's supply chain problems in every in every sector and there will be materials needed but i think those are solvable given the materials needed needed here and you know certainly we can if we do that and commit to it then we get more and more of that business and manufacturing attracted to this country put a lot of people to to work you know it's no surprise iBEW the labor union for electrical workers you know loves this idea they're tremendous you know a number of well-paying jobs in this. And I think it would lead to the lowest cost because what I said earlier about scale, scale is everything in transmission. You build it bigger, the dollars per delivered

megawatt are cheaper. So, you know, consumer advocates are a very important player in this space. And I have a lot of conversations with them. And it's tough, right? Because what they're being asked to do is authorize a big spend of rate payer dollars for something that's super long term in nature and benefits everybody across everywhere. But, you know, that's the way to get the cheaper power, ultimately, the cheapest delivered cost to the customer in the long run. So I think we all need to, you know, look at this opportunity. Certainly consider, you know, different scenarios and test it out and kick the tires. But I think that's the scenario that is best for reliability and clean energy and affordability in the long run. Let me just get your take on a different vision, because

I see people, many of whom will interact with me on Twitter, they say, you know what, instead of building all these, like, wires that go all the way across the country and all these fights with, like, farmers and ranchers and all this stuff, why not just build a bunch of nuclear plants locally and just have that be the silver bullet solution? Yeah. Well, I thought you were going to go to rooftop TV and batteries in your garage. Oh, we're going to get there, too. I was going to do batteries, actually. That was also the question. But, you know, let's talk about all the other visions. Yeah, both camps are out in force on Twitter, that's for sure. Yeah.

Look, you know, I think there are opportunities for nuclear, particularly the small modular nuclear, especially in that case, you know, putting them at the site of the old co-plants. And it's great for the communities there to keep the jobs going and plants. I do think, you know, it is expensive. now and it is going to take quite a while to like get to commercialization and and wide deployment in contrast to you know we're doing a wide deployment of wind and solar all over the country all over the world so really the you know it's the renewables that are the mature technology and you know I never want to say that what we have now is going to beat out everything that could come but I also don't put too many eggs in the basket of things that are not not there

yet. So that's the, I think, the main nuclear answer. And heck, we're going to need all of it if we really want to decarbonize. It's worth noting that, you know, the properties of nuclear is it can operate at all times. Some of them can be dispatchable. They can ramp up and down. That's obviously very helpful wind and solar operate when they have their power source and not when they don't. And so you do need other resources. I don't want to necessarily advocate for 100% wind and solar because then what do you do in the other times? For quite a while, we're going to be using dispatchable gas plants. And we may either continue that or use other clean, firm dispatchable sources as they come on in the future. So it is, I think, more of a portfolio outlook than any single technology. It's not going to be a winner-take-all type of situation. Hi, I'm PJ Vote. My podcast Search Engine has a new two-part series for you. Of all the new technologies coming out of AI, the most transformative one might be driverless cars.

They're already on the road in 10 American cities, and they're quickly coming to more. We tell the story of how we got here. The secret team at Google that spent 15 years building what might be the safest vehicle on the road, and we cover the fights brewing in blue cities, where unions and politicians are working to keep those cars off the streets. Listen to search engine wherever you get your podcasts. So can you talk a little bit more about storage then? Because if the issue is that we have intermittent energy supply, then could we just, have everyone or large population centers build giant batteries where they could store excess

energy when they have it to make up for times when they don't, rather than build multiple long distance electricity lines. Yes. In theory, yes. And what we have commercially ready and being deployed all over the country are roughly like four-hour batteries. So people call them short-duration batteries. It's the same technology that's in your car.

lithium ion. And they are very helpful. They provide a number of different services on the grid. And in some places, like if you're in the southwest, you can go a long way with solar and short-duration batteries together because the batteries will provide your power from, you know, say 5 p.m. through, you know, 10, 11 on a hot day, you're still air conditioning and you're doing it with your batteries. And then, you know, if it's a cloudy day and you didn't get to charge as much because you didn't have as much solar, well, that's okay. You probably don't need as much air conditioning on those days. So that works. It doesn't do everything, but you can do a lot.

Other places like I grew up in Michigan, and there's a lot of parts of the country where you're not going to be able to do that in the winter for certain. And a lot of these systems are becoming more winter peaking than the old regime where, you know, you thought it was a typically a, you know, late. July afternoon was going to be your peak. It's going to be more of a winter situation. It's dark. It's not as sunny. And really everywhere, you will have multi-day periods, could be six, eight days, with very little wind and sun. They have a word in German for that, don'tcalfleauta. Of course they do. Doldrums, sort of, you know, dark and still time periods. And then what do you do? So you have to have something else around for that. And that's where we get into the, the portfolio that you need.

And maybe on storage, you know, we do have some promising, interesting technologies that are longer duration. And there's a tremendous amount of research and development going into that. Everybody recognizes that we want longer duration storage. And if we get it, then great. That will provide tremendous value. And we can do a lot with that.

It's hard to see, you know, that coming in sufficient scale to sort of replace the need for moving power around geographically. but it's absolutely a promising opportunity. What about other storage technologies? When we had a jigger Shaw on a month or two ago, he talked about hydrogen stored in salt caves, to have the wind turbines spin in the winter

when there's not as much electricity demand from air conditioning. Also talked about things like water elevators or sand elevators, other types of technologies that can maybe store, potential energy long term for use when we actually need it. Yes, there are a lot of promising opportunities. Hydrogen is really exciting and different forms of storage. And I think people generally in the business recognize what we're looking for is something that can produce when the wind and solar are not, both kind of on a daily basis, but also

sort of seasonal and annual basis for these other time periods when you need something. And what that means, by the way, is you don't know. necessary need something that operates 24-7 or even operates very much at all, you just need it as a backup. If we can rely on wind and solar for, let's say, 70 or 80% of our energy, and that's providing the carbon-free energy, the megawatt hours, then what you're looking for is the backup. So I think about it like our, you know, we have a gas-powered minivan that sits in my driveway almost all the time, and we put all our miles on the little, you know, Chevy Bolt EV, you know, around town.

But every once in a while, you know, we need to, you know, put more people on the car or go a longer distance or what have you and it's sort of there as a backup. I think we're going to have some, a variety of different backup sources. There's a lot of competition for what technology is going to be that best backup source, and that's great because we need a lot of options. And right now we don't have a perfect one. So we need more innovation in that area. One other political question that comes up is, you know, this idea of smart grids.

And, okay, if we're going to put, if we're going to be electrifying more things and cars are the answer, then, you know, you create incentives to charge your car maybe at a certain time when there's less demand. But then that also like raises its own set of politics questions. So we talked about the politics of land use, but then there's also like, well, do people want the, uh, the utility nudging them or monitoring what. they're using their electricity for at a given time, like perhaps some people feel it's invasive or people feel like it is a privacy violation in some way or that maybe the utility operator is just going to unilaterally warm up their house or cool it down at a time because they've decided, you know, whatever. Do you encounter much of that? Like, how real is that sort of impulse against grid modernization? Yes, that's also important.

There's a tremendous opportunity, first of all, in the whole demand side of the equation here. And that is the perfect example. If you buy an electric vehicle, you don't have to necessarily charge it at 6 p.m. when you pull in your driveway. Because that's probably the time, certainly in the summer, where everybody's coming home, plugging in, everybody's cranking up their air conditioning. if there were just a way to shift that charging to be, you know, between midnight and 4 a.m. say, you could save a tremendous amount on electricity infrastructure. And so how do we put that actual retail customer in the position where they benefit from that, you know, and they trust that it's where they benefit?

Because as you say, people don't trust many institutions at all anymore, let alone, you know, big electric utilities. and there was a lot of pushback to the smart meters when people thought they were being monitored and all these sorts of privacy concerns. But on the other hand, people who buy Tesla's, for example, or there's different states allow a different rate plan where you come home, you just push a button and say, do you want discount power or do you want to pay for premium power?

Push a button, boom, discount power, that's all they know. They hop out of their car, they push discount power, and then they go on their home and about their business. And behind the scenes, what's happening is that battery knows to start charging itself at midnight rather than at 7 p.m. There's got to be a lot more ways to do that that people will be comfortable with, that will trust, and it will be to their benefit where they save money. They get paid for doing that. There really are a lot of ways, but it goes through this process of retail rate making.

And there's always the politics around the pricing and the tax. terms of that retail rate making. So it's, you know, it's hard, but we absolutely have to do more with that. And there's a huge opportunity to do that. So we've been talking a lot about the U.S. for obvious reasons. But of course, America isn't the only country that's trying to upgrade its electrical system and its power grid. And I'm thinking specifically about China, which I think is about to start upgrading its grid or building out a super grid, I think, sometime this year, later this year. And they're spending billions and billions of dollars to do it. But when you see a massive project like that, what sort of takeaways or lessons would that have for the U.S.? Or, you know,

looking across the world, what sort of things can we learn from the way other countries are upgrading their electrical systems. Yes, I think there is a lot going on around the world on that, these large connections between countries, because the physics and the economics are pretty much the same everywhere. There's certainly exceptions, but those are like Hawaii. Hawaii is a whole different situation. They're just not going to string a line to some other place. But there's a lot of talk about stringing a line from Morocco to England and between different Southeast Asian countries and across China and, you know, between Ireland and other countries and all sorts of, you know, subsea cables in the North Sea, Arctic Sea, you know, this is happening all over the world because, again,

the technology opportunity and the value of remote renewable resources is such and the, you know, ability to move power back and forth when you need it really is there. Now, in all these cases, you need some type of cooperation. I look obviously more to Europe than China, because it's because the government political situation is a little bit different in terms of permitting lines and, you know, figuring out who pays and all that arguably a lot easier, which is why China's way ahead on this whole large-scale transmission agenda. But, you know, we have the governance system we have. Here we have. Here we pass what it has. There are ways to do it.

It just, you know, requires a lot more coordination and work. So one simple question that I don't think we've asked yet is, okay, the biggest are a big source of electricity. demand coming forward or new electricity demand is going to be in cars and electric vehicles. What are we talking about specifically? Like, you know, if we wanted to have an all-EV fleet in 20 years or 10 years or something, like what are the numbers in terms of how much more we're going to power we're going to need to have on the grid than we have today? Sure.

I would estimate in a quarter to a third increase in overall power for that, which in one sense is huge for grid planners, but in another sense, there's a lot less than what most people expect. And the reason for that is that it turns out internal combustion engines on your car are extremely inefficient. And if you compare, even if we didn't clean up electric power production and we just had a whole bunch of coal plants producing all the power, going to EVs would be tremendously beneficial from both an environmental perspective and a cost perspective. What are we talking about?

What's the efficiency gain by just by having a generation of power at a power plant as opposed to and a power plant within each car? Great question. I don't want to give you the wrong answer. Okay. I'm just going to guess, you know, it's sort of an order of magnitude, sort of tenfold. Just, you know, the fact that you're burning in this tiny little power plant inside your car under the hood compared to a massive, you know, scaled power plant that could be a thousand megawatts in size. there are massive efficiency gains. Again, it's all about scale in the electric industry, and it's just a lot cheaper to do things at large scale. So again, if we were only, you know,

shifting from internal combustion gasoline engines to central station coal power, we would get a lot of environmental and efficiency improvement. But what is happening is that we're also replacing, you know, old fossil power plants with clean mainly wind and solar. And so that, that power source is getting cleaned up. But again, that increase in electricity demand isn't as large as a lot of people think just because the engines in your car are so inefficient today, and the batteries in your car and the EVs are so efficient by comparison. Well, Rob Gremlin, this was an extremely helpful conversation

in terms of sort of getting our heads around the scale of the need and the opportunity and the challenge. So really appreciate you coming on on lots. Great to be here. Enjoy the conversation. Yeah, that was great. Very helpful. Thanks so much, Rob.

Yeah, that was really interesting. Well, thank you both. Tracy, I thought that was a very helpful conversation. That last point at the end was actually particularly interesting, that even if you don't decarbonize the grid at all, and it makes sense, but, you know, people don't talk about it that much. ICEs are not particularly, internal combustion engines are not particularly, you know, particularly, efficient at turning fossil fuels into motion in your car. And so the idea of like big gains just by having the power done centrally is kind of interesting. Yeah, totally. I mean, the other thing, well, I didn't realize the grid in the U.S. was sort of like source agnostic, that it doesn't really

matter where the energy comes from and that it has to accept energy from all different types of things. I thought that was kind of interesting. You should set up a little coal plant. with the coal in your basement, if they have to take anything. I mean, there might be some other permitting or something. I don't know. But if they have to take anything, you're like, hey, I have some coal. I'm setting up a little coal plant in my basement. Is this like small batch electricity supply?

Like just out of my backyard, just burning a bunch of coal and sending it back into the grid. Okay. People add solar to their roofs. So why can't you do that with coal? But no, I thought that was a really interesting conversation. And I do, you know, if you look at it. at it on the surface just at the U.S. and you think, oh my gosh, this seems so difficult, not just because it's really expensive to build these power lines, but just because you have to get so many

different people and bodies on board to do it, you know, ranging from federal and state legislature to individual homeowners or property owners who might not necessarily want to have lines running through their yards or whatever. But on the other hand, you know, if you if you look at the rest of the world, they're having these same discussions. And China might be an extreme example because, of course, China is quite good at central planning and these large-scale infrastructure projects. But there are places in the world where these are getting done. It's not impossible. And if you think about, you know, the two things that people really need on a day-to-day basis, it has to be energy and food, right? So we should be paying attention to this and we should be trying to build it out and improve it. Yeah, the interesting thing, though, about the politics and what you say sounds exactly right is like, you know, you do get conflicts in what is even the sort of environmentally friendly solution. Because a lot of those people who say voted down that new transmission line that would have brought in hydro power from Quebec in the northeast, they argued that they were doing something for the environment because they didn't want, you know, new towers put up through old growth forest. and areas of the state that had never been touched. And so, you know, there's different priorities. But to Rob's point, you know, we already have, we have the federal highway system, we have rail

system. And so to the extent at which physical corridors, which have already been, you know, developed for some sort of interstate use could also be places where we just put a lot more lines. Obviously, that sounds compelling. But it does seem like there needs to be more active effort, at least. nationally on some level to get all the stakeholders on board and move these things along. Yeah. The one thing I was, I don't want to say not convinced by, but the one thing I had a little bit of reservation about was the question over long-term planning of the grid and whether or not

we can be confident that the thing we're building right now is something that will be useful in 30 years. Because I think maybe I'm just scarred by the experience of the summer with multiple heat waves and lots of talk about the impacts of climate change and things. But it does seem like there are things happening right now, which we did not anticipate 20 or 30 years ago when we were building, for instance, a nuclear power reactor that needs a certain amount of cool water in order to function, right? Yeah, but, you know, we probably are going to be using a lot of electricity in the future. Yeah, okay. Yes, that's right. Okay. Shall we leave it there? Let's leave it All right. This has been another episode of the All Thoughts podcast. I'm Tracy Allaway. You can follow me on

Twitter at Tracy Allaway. And I'm Joe Wisenthal. You can follow me on Twitter at The Stallwart. Follow our guest Rob Gramlich on Twitter. He's at Rob Gramlick, D.C. Follow our producer, Kerman Rodriguez, at Kerman Armin. And check out all of our podcasts under the handle at podcasts. Thanks for listening.