Plain English with Derek Thompson - Can Solar Power and Battery Tech Save the World From Climate Change?

Episode Date: February 9, 2024

You could make the argument that last year was the worst year in human history for climate change. The Earth experienced its hottest day on record over and over and over again. Air surface temperature anomalies set a record in September. Ocean heat set a record too. The number of wildfires in Canada? Another record high. But you don’t have to squint too hard to see the good news. U.S. and European carbon emissions have actually declined this century. The rate of global deforestation is going down. And investment in clean energy technology—particularly solar and batteries—is smashing records and changing the world. Those glimmers of hope come from an epic annual report from Nat Bullard, an independent, Singapore-based climate researcher who spent several years at Bloomberg. In today’s episode, Nat and I discuss the twin pillars of the global clean energy revolution (solar and storage), how these two technologies have consistently beat expert predictions, how they’re reshaping energy generation around the world, and what stands in the way of a clean energy future based around sunshine and batteries. If you have questions, observations, or ideas for future episodes, email us at [e-mail].  Host: Derek Thompson Guest: Nathaniel Bullard Producer: Devon Baroldi Links: Nat's presentation on the clean energy revolution: https://www.nathanielbullard.com/presentations Learn more about your ad choices. Visit podcastchoices.com/adchoices

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bar records. Today's episode is about the revolution in solar and battery technology that is changing the global picture of energy, where we get it, how we use it, and how the energy that we use changes the planet. You can make an argument that last year, 2023, was the single worst year in human history for climate change. The Earth experienced its hottest day ever over and over and over again just within the same summer. Air surface temperature anomaly.

set a record in September. Ocean heat set a record. And the effects of climate change can't just be measured in heat alone. It was a year of droughts, of floods, of fires, the number of wildfires in kick a country. Canada? Well, that set a record too. If you want it to be really sullen, or some might argue, perfectly realistic, you could say, that's the best things will ever be. The number of carbon molecules and the atmosphere is just going to go up. The Earth is just only going to get hotter from here on out. You've just experienced the coldest temperature of your lifetime in the summer, weather anomalies will only get more anomalous. But you don't have to squint too hard to see the good news. Fossil fuel emissions have barely grown since 2015 worldwide.

U.S. and European emissions have actually declined this century. The rate of global deforestation is declining. In Europe, wind now produces more power than coal, and investment in clean energy technology, particularly solar and batteries, is smashing records and changing the world. And I want to make a point here about what moving to a future of clean energy actually means. There's a way to frame this conversation exclusively around the challenge of fixing climate change, producing less carbon when we derive energy from the world and more clean electrons moving to net zero. And of course, that challenge is important. But turning energy from a commodity into a technology also points us toward a future of energy

superabundance. You're moving from a world where energy is something that you simply have to pull from fossil fuels to a world where energy becomes a technology, just like flat-screen televisions or smartphones where software becomes cheaper and cheaper over generations. The same thing seems to be happening to solar and battery technology as well. And a future of energy superabundance causes us to dream dreams about the world that aren't possible in a commodity fossil fuel-driven environment. These glimmers of hope come to me from an epic annual report from Nat Bullard, an independent Singapore-based climate researcher who spent several years at Bloomberg. In today's episode,

Nat and I discuss the twin pillars of the global clean energy revolution, solar and storage, how these two technologies have consistently beat expert predictions, how they're reshaping energy generation around the world, and what stands in the way of a clean energy future based around sunshine and batteries. I'm Derek Thompson. This is Plain English. Nat Bullard, welcome to the show. Derek, thank you for having me. It's great to be here. You have published this 200 slide report

on the state of the global clean energy revolution, and I feel like it's really important for us to understand what's going on in two categories in particular, and that is solar and storage. And I want to make sure that listeners are all on the same page before we dive into the numbers here. I want to start with solar. Can you kick us off with a thesis statement?

how would you characterize the speed and strength of solar energy growth? How does it, for example, compare to other energy revolutions, like the growth of nuclear in the second half, the 20th century, or liquid natural gas in the last few decades? So I think it's important, if I'm going to start off a thesis statement, with sort of defining the challenge of thinking about this to begin with, which is that it's a uniquely distributed technology in a world of generating electrons that has historically been very concentrated. So it's typically been done and gained its strength over time by building small numbers of successively larger and larger units of something, bigger power plants that are more efficient,

bigger infrastructure that has lower costs of units over time. Solar, on the other hand, is something that is inherently distributed. it works in units as small as like a calculator charging capacity, all the way up to deployment in the scale of gigawatts or eventually terawatts, so a lot of watts, shall we say, of power, mimicking what the rest of the grid consumes. But it's manufactured. Instead of being something that's built custom that's built with heavy equipment,

it is manufactured in a line very similar in many ways that way the chips are made or the way the displays are made. And it therefore follows this sort of economics of manufacturing on one side in terms of what gets built. And then it has a sort of abundance behind it in terms of output that tends to find its way into fields faster than people expect. I like your question about comparing this to the way that new energy carriers have evolved in the last 50 years, the last half century. And there's a comparison that I did early on in my slides, and I'm borrowing a structure to be clear very clearly from Shell, from the oil major, which is, comparing solar against wind, against nuclear, and against LNG, and equified natural gas. And the crazy thing about this, if you're a long-term energy analyst, is you think nuclear,

big, established, centralized, LNG, major way of carrying energy. But solar and wind both are faster than nuclear or LNG ever were once they achieve their takeoff and carrying energy. And solar is moving at about twice the speed that wind is, for instance. So just right now, solar is generating. about as much energy seven years after sort of achieving its early liftoff as wind was achieving in around 12 years or nuclear at around 13 years. It's basically moving twice as fast. And if you look at it on a chart, you see these other sources that have these sort of shapes wherein they achieve a

takeoff and then they sort of level out, whereas solar has the beginnings of a curve that is just tilting in a very familiar exponential fashion further up. It's beginning, you know, it's not only moving, but it's moving at an accelerating rate. The trickler about all of these things, of course, is that it starts from a small base. So it's hard to notice this early on either industrially if you don't pay attention, in capital flows if you don't pay attention, and definitely in the grid, wherein these are very sort of nominal additions of new power. But it's rapidly making its way towards being not that,

towards being the bulk of new power that's going to be added to the grid. Definitely the bulk of most of what's being built on a capacity basis in any given place. definitely globally, and starting to sort of reach what I would call like an end of the beginning kind of sense, like at a position where you're starting to see this achieve a takeoff that has a meaningful, measurable impact on the way that the global power system acts in response. Global solar installations are up 1,000x in the last two decades. And that is both a point of pride if you are interested in building energy that is clean, that can help us power. power the world abundantly and not spit up carbon into the atmosphere. It's also not just a point

of pride. To me, it's a mystery. Global forecasters like IEA, the International Energy Agency, have consistently and famously, perhaps even infamously, wift on projections of global deployment of solar energy. I think I read one statistic of the solar revolution that says we are 90 years ahead of IEA projections from just 2015. Like, just nine years ago, we whiffed on the deployment of energy by the factor of a century. Like, what is your answer to the question of how did this happen? And don't give me the tautological answer, like, we built more by building more? Like, what to you is, like, the root cause answer to the question of how solar energy growth

beat estimates by a century? Institutional failure of imagination on the part of generally linearly minded planners and future forecasters. So you expect the future to look, relatively speaking, like some incremental growth upon the past. This is the way that most things grow, especially when you're talking about big things. Things you expect to sort of reach some sort of asymptotic limit into either how fast they can, grow or how big they can get or both. And especially when you start to think about things that have these sort of inherent limits in them in terms of space and time and construction material and places to lay down your equipment and whatnot, it kind of makes sense. But if you think about

something that has a manufacturing logic to it, wherein the capacity to build something, you know, increased capacity 5x in a year is really not out of bounds, then it kind of confounds people's ways of thinking in ways that aren't particularly helpful, I find. Another thing is the remit for all of these forecasters was to sort of describe what seems like a defensible vision of the near future as opposed to a kind of supposition about a further out period of time. There's a kind of confusion between the sort of the forecast of the projection, which looks out just a couple years, and the scenario, which looks way into the future. And to be fair, for a lot of institutions, they do both of those things. But the reality is, but the reality is,

is that so the back test would tell you you should have probably just like put in a logistic curve and that things rip and you would have gotten a better description of the present day and of the near future than if you had tried to sort of impose constraints. And my old colleagues at Bloomberg N.EF where I worked for 15 years and was a solar analyst way way back when always had this challenge of like even them seeing that like I know intimately how this market is right now. I know it's constraints. I know the things. that make it go or not go in this moment. And therefore, I'm going to sort of tweak those incrementally along the future.

Whereas a better way to do it would be like, wait a minute. Like, there's no limit on capacity here. We already, like, even with solar growing 1,000 X in two decades, we could easily do three times more than we did this year, based on what we already know is in the pipeline in terms of manufacturing capacity. You have to ask yourself sort of like suspend disbelief would be another thing, not just failure of imagination, but do you want to suspend your disbelief that this won't happen and maybe lean more heavily on the side of, well, the capacity is there.

Manufacturers have this interest. You have to start thinking that maybe we shouldn't impose limits and sort of impose a sense of growth. Like impose a statement that says, well, we've been able to grow at this rate if we continue what's it going to look like, as opposed to saying, well, it surely is going to stop at some point. People want to always impose a law of large numbers. They want to impose a limit. And it's probably better off not doing that. Where is solar energy being used?

Is this something that is being used mostly to power electricity, or is it also being used in other categories like industrial? So there's many different kinds, whether there's several distinct different kinds of solar energy you need to talk about here. There is the thermal energy that you can use to heat water, you can use to, if concentrated enough, drive a steam turbine like in a power plant. This is a market.

It's not generally the market that people talk about when they think about big solar, which is electricity. And that is being used, roughly speaking, everywhere. Again, my old friends of B&F now track more than 100 discrete markets around the world where you have to have a model to think about what's happening. When I started, there was like a half a dozen. So the short answer is everywhere. There's almost no country on Earth that doesn't have some kind of additive market for building solar power.

Most of it is connected to the grid, so it pays power right into the distribution and transmission systems that you and I are using right now. Increasingly, though, there's the capacity to do it off-grid. There's always been off-grid markets everywhere. But there's another wrinkle to add onto this, which is that if you want to go on the pure bulk numbers, about half of all of the solar deployed last year was in China. China deployed more solar last year than the U.S. has ever. Wow. of the, this is a sort of common trope you'll hear. Anytime you talk about things in energy is the sort of China exceptions to everybody else's rules.

So it is sort of the prime mover, obviously, of the supply side of the equation, but increasingly of the deployment side of getting solar into market. But it's important to note that proportionally it's taking off, relatively speaking, in other markets to a massive degree. Like Europe had a huge year for solar in markets that people have. sort of written off ages ago. And that's because the economics of it work. It's because there's an increasing willingness to take market risk in power markets using solar in a way that didn't exist 15, 20 years ago. And because it is quick to add. If you are in a place where you're trying to reduce your dependence upon imported fossil fuels to run your power fleet, well, domestically installed solar obviates that. Any increment that you employ of that,

is an increment you're not buying of something else from somewhere else. I want to hold on China for a second. In 2023, according to your report, China's new zero carbon power generation. That's not just solar, that's wind, it's nuclear, it's hydro, could meet all demand growth in the world. That's such a confounding statistic. It's hard for me to wrap my head around it. And obviously, I'm a fan of supply abundance. I'm a fan of building stuff. I'd like energy prices to go down. If we build a bunch of clean energy generation, a much of clean energy capacity, we have the potential to provide abundant cheap energy. But I wonder, and I'd love for you to talk a little bit about this for a second, is there any risk that China is building too much, that China

is building so much clean energy generation that this stuff becomes deflationary to a point where certain technologists and companies in America and Europe, like don't even want to build it themselves because they just import the stuff from China? Like, is there a risk to building too much? Like a downside to the exponential curve that you have so adequately described? Okay, so there's not going on there.

The first is that China, so we need to see the final data. The projection that I had about China's growth in these zero carbon generation sources is actually meeting its own demand, although China's a substantial increment of global power demand anyways. Historically, the renewable energy ads from, say, wind and solar are, at least in recent history, like 80% of all demand growth, meeting all demand growth and power around the world, not yet 100%, but a lot of it. The other part of this question about the deflationary capacity,

I want to unpack a little bit. So the one deflationary sense is what it does, the power markets. I think we can leave that out for now. I think what you're referring to is, does it have more of a sort of depressive role on value chains elsewhere in the world? Does it discourage development or diversification in other markets? Well, there's one way to say it

is that that already happened. Like the U.S. and definitely Europe, and certainly Japan had a thriving solar manufacturing markets two decades ago. They no longer have markets of nearly the same degree. Now, in absolute terms, they've grown quite a bit, but relatively, they're kind of also ramps. Is this happening too fast?

It depends on who you ask. From a climate perspective, I don't think you'd call it happening too fast. In terms of value chain concentration, definitely something that countries everywhere are aware of is that it has created a reliance, not necessarily a vulnerability, but a major of reliance upon importing products from China or from a sort of archipelago of other value chains that flow into and out of it. And it does have a way of making it hard to do long-term planning for manufacturing and other markets. If the impression is China is not only where it is today, very well established, but in the future has roadmap and pipeline to be doing three or four

times as much as it is, it makes it very hard to make that investment case. But this is a sort of sort of non-energy concern, if you ask me. Or it's a non-electrons concern, and it's a non-climate concern in the sense that if you want to deal with that effect in the global market, then you have to make a policy decision. As our friend Conor Sen says, the future is a policy choice. What is going to change that is not going to be any kind of economic force, but policy decisions. Things like the IRA here in the United States or any of you. Europe's own green investment paradigms that it's trying to introduce, or any country's own policy efforts to sort of attract and retain manufacturing. Those are things that in a sense are

there are definitely ways of moving markets, but they're non-market in a sense. They really stem fundamentally from policy more than anything else. Moving to the U.S., you know, there's an election obviously happening in November. President, former President Trump, so you understand. Former President Trump and the National Republican Party does not seem particularly interested in a clean energy agenda. And so I think there's a little bit of a fear that the same way that Trump, in his first 100 days in 2016, immediately tried to undo a lot of President Obama's policies that Republicans in 2025 might try to unwind certain parts of the IRA, which brings me to the question of how much of the momentum

behind solar, and to a certain extent wind, but we're talking about solar here. momentum behind solar, not only in deployment, but also in cost decline. Do you think is reliant on subsidies like the Inflation Reduction Act versus how much of this do you think is market momentum? This is happening with or without the tailwind of big government subsidies like the IRA. The way that the United States subsidizes is unique and peculiar compared to most of the rest the world, which is that we tend to jimmy things into the tax code and create complicated arbitrages that small numbers of expert people understand and no one else really has any way of getting a sense of. That's different from other places that either give you direct cash

transfers or provide sort of incentives just for the production of energy or things like that. I don't want to be overly sanguine because I'm not as close to this by virtue of not. no longer living in the United States, as other people are. But these incentives, when they've made their way into the tax code, tend to be fairly robust. You're talking about revising things that are in the federal register, which could be done to change the incentives for generating power, for instance. So I think those are likely to be more secure. Now, other things are than the IRA, policies that directly support with cash transfers, with budget allocated to help fund or grant money, those have pulled back for things that might be helping manufacturing capacity, could be

helping deployment. Those certainly would be more at risk. The question, I suppose, is moving from the theory of doing so into the practice. And again, I'm not the world's best person to ask on this. but every time you see an announcement about things that are being built as part of the Inflation Reduction Act, there's an overlay within them of where they're located, what jobs they're creating. And I think the politics in particular when there's a sort of toothlessness to the discussion in that it's not actually going to happen right now that you withdraw any of this, morph very quickly into actually being done.

And I'm trying to imagine, in a sort of thought experiment way, going to a town in a in a purple state that has recently stood up hundreds of well-paying professional and trade jobs and saying because of national politics now that all of the money to support this is gone this capacity will not be built your jobs are gone and that's a decision that I have essentially abdicated in a congressional role to the president and so be it I don't know how that's going to work, or if it would work. And I also don't know that it would necessarily change, particularly on the power generation side, the economics of acting in certain places. You know, the state of Texas is nobody's idea, really, of a particularly green state, certainly at a policy level, it has

very little incentive for supporting green power to the degree that a place like California does. But it has built more solar in a couple of years than California has built in almost four decades. Can I jump in right here and just finish the thought? Because I really want you to go deeper in the Texas story. It goes so closely to the answer that I'm becoming convinced of, which is that once people, once both consumers and energy producers begin to get this momentum on clean energy capacity generation, it would take a lot of political power, I think, to pull those things away and hurt the economic momentum that's happening on the ground. So you look at what. what's happening in Texas, where the growth of solar is just amazing. I mean, in 2015, Texas had almost no solar generation capacity. Nine years later, to your point, it is now lapped California and leads the country. And so you have this, you were getting at this, I think, in your point, this profoundly ironic situation where California easily leads Texas in raw sentiment of carbon reduction. However, that was measured, you know, backpack pins,

stickers on laptops that say end fossil fuels. California lapsed Texas maybe, you know, 10 times over. But Texas now leads California when it comes to solar capacity. What is the lesson that you think we should draw from the Texas success story in solar? So a couple of things. Lapping is a little unfair to California. It's barely stepped ahead. What does lapping mean?

Does Lapping maybe be doubling? You're talking to it. You're talking to a high school swimmer here, meaning mapping is when somebody has passed you all the way right. And someone who can barely swim or run is asking the question. So that's when someone has gone so far. Yeah. They've gone so far ahead of you that they've passed you from, they've passed you from behind and have gone ahead of you again. Texas is a little bit ahead of California, but with this speed of growth that is just unprecedented in deployment in the United States.

There's a couple of reasons. One, Texas is a great place to build things. It has a very, very accommodating planning and permission regime. It has a great deal of private land as opposed to public land on which to build. It also has a long, and in this case, very, I think, constructive history of experienced landowners and builders who understand resource and resource rents. The pitch to a landowner, I want to build. solar on, you know, on your land is not dissimilar to, I would like to strike a deal with you for your artisanal, or artisan water, or I would like to strike a deal with you to graze on your

land, or I would like to put some pump jacks on your land as some rigs, or I would like to put wind turbines on your land. These are of a type. They are more, they are more similar than not. there's also the case where the power market in Texas is highly, highly competitive. And so if you think you can catch a bid, go for it. That's something that actually encourages not just rapid deployment of anything that can bid economically into the mix in terms of generating power. It's also been really instrumental in getting a lot of energy storage, namely big batteries built in Texas. The real challenge, I think, is to sort of think that, you know, all the rest of the markets in the United States are going to be some kind of crossfade between this. Like, we're not going to find that every market is like Texas, nor are we going to find that every market is like California.

And to be clear, I think California does still build quite a bit. But California is also sort of the postcard from the future in terms of how markets with a high penetration of renewable energy are going to behave over time. the kind of challenges that you're going to face when you get towards sort of literal and figurative congestion, when you get to the point where a lot has been built and you need to start building something beyond just power generation capacity, and you need to start building all the other stuff that goes with it to make it useful, namely transmission lines. Yeah, and this is where I want to talk about some of the bottlenecks to solar before we move on to batteries. First, there's a couple lessons that I want to draw from the Texas success story as you summarized it.

Number one is that, and I've talked about this a lot, I wrote a feature story about it for the Atlantic. Technology isn't enough. The fact of price declines in solar isn't enough. You actually have to build a thing in order to make a difference to actually add energy to the grid. And different places have wildly different permitting regimes and, you know, nimbious cultures when it comes to the sighting of these solar farms. The second is that you mentioned this very briefly, but let me know if you disagree. The same way that there are learning, in building solar panels themselves. You could also say that there are less dramatic, but still existent, learning curves in siting and permitting,

that where it's possible to build solar farms, where it's possible to build houses, where it's possible to build anything, you tend to have cultures where the permitting is easier, and as a result, builders are more experienced in actually breaking ground and building stuff, and as a result, they get better in building, not only simple projects,

but also more complex ones. And so there are sort of multiplicative dividends that come from having an easier permitting regime. It can't just be measured in the number of permits. It's also measured in the ability of builders to know exactly what they're doing because they've done this before the previous year, the previous year, the previous year.

You're nodding. So I'm just going to move on to the next point, which is that there is a difference between solar capacity, which is the amount of solar that can be brought, solar electrons, I guess we should say, that can be brought to people's houses to turn on their equipment, to light their living rooms, and the actual jewels of energy, or the terawatt hours,

that are finally measured in terms of the power that people use. One way that I sometimes think about the difference in terms of capacity and final energy used through this question is sort of this analogy of Amazon, that we're familiar with like Amazon warehouses and we're familiar with the Amazon workers that bring the books and the toilet paper to our front of, doors. And to a certain extent, I'm beginning to be worried about the United States where we're

building a lot of, there's a lot of solar energy capacity, but the Q lines are getting longer. We're not doing a good job of building transmission lines to bring energy from where the energy is being generated to where it's finally used. And it's a little bit like, what if Amazon was at this point in its growth where they had built warehouses that could hold everything we could possibly want? But there were all these barriers to hiring people who, could bring those things to our door. And that to a certain extent, we're kind of in that moment, I'm worried, with solar and clean energy, where we're not building the transmission line fast enough. We're not getting integration fast enough. To what extent is that a major concern for you,

that we are doing a really good job building energy generation, but we're not building transmission fast enough in the U.S.? So I like the analogy, but I'm going to tweak it a little bit, which is that the bigger concern is not the workers, the workers of the electrons. The bigger concern is the highway. Imagine that Amazon was to go out and build its latest logistics center, and there was no connector road. That basically you built the warehouse, you built all of the internal capabilities to hire, to get people trained, you had all of the internal logistics working,

Maybe you even had electricity flowing in to serve the warehouse, and you were missing 800 yards of four-lane road to get in and out. And that was the thing that was going to take five years to get built. So that, I think, is more constructive in terms of how to think about this, because if you posit it that way, the answer isn't, I'm just going to wait for the road to get built. It's like, no, I'm not going to build it until the road is there. So the reality is we have a kind of potentiality in what they call the interconnection queue. All the stuff in the U.S., two terawatts, which is about 50% more, nameplate capacity than exists in the grid right now, waiting to be connected. But it lives in this sort of Schrodinger's cat state that, like, does it exist? Does it not?

Well, if you were to run a wire to it, then it would. somebody would start deploying the additional money going through the additional critical path to actually start building it, and then it would exist, and it would start generating power. As it is, it's a sort of asset in this quantum name-only state that is essentially waiting for that access, the physical connection to the rest of the network of energy in the United States before it gets built. So in a sense, I don't have a worry that we're building too much capacity with that interconnection. My worry is that we're not building enough interconnections, so we don't have the capacity that we should have.

If you look ahead at that ability to build 50% more capacity than the U.S. has already built over the last 140 years of building power networks, we don't really have a potential supply issue. What we have is this deep challenge about whether or not we're going to come to an agreement, societyally, more than technically, that we need to build a lot of wires, and that we are then going to allow people to as quickly and as expeditiously as possible get these resources connected into that and made part of our active functioning grid. The other major criticism of solar energy of criticism, one is it's fantastic that we're seeing

these learning curves. It's fantastic that we're getting this capacity built, but we are terrible right now at adequately building the transmission lines in order to move these electrons from city to city and state to state. The other big criticism of solar energy is intermittency, right? Renewable skeptics are always crying intermittency, which essentially is the code word for the sun doesn't shine for, you know, eight, nine, ten hours a day. No solar energy is being generated in that point. And if you have, for example, temperatures plummeting as they did in Texas, or as they often do now in Texas every December, plummeting to, you know, 20 degrees, 30 degrees sometimes, you have enormous electricity demand spiking at a time when you don't have the sunshining.

And this brings us to the question of storage. What if you could generate this solar energy and just store it long enough that it could provide energy for when you really need it. This is the transition in, or this is the revolution in battery technology that I now want you to talk about. I think it makes sense, now that we're movings a little bit from solar to storage, let's have another thesis statement here on batteries. What has happened to storage technology in the last 10, 20 years? So before we talk about the technology, I need to step into why it matters.

evolve a little bit what you just said there, which is that, so I, as a long-time writer and an analyst, I'm very precise in my language, and I always find the word intermittency fascinating. It's essentially encoded language that somehow it's intermittent when the sun goes down. We know that the sun goes down, okay? That's not a surprise. We've known this probably since before we were homo sapiens, that as a general rule, every day the sun goes away. That's variability, right? And you have variability on multiple different timelines. It's fractal, right?

There's variability in terms of what gets generated by day, by season, sometimes by year, depending on, you know, what might be happening. Then there is actual intermittency that's like things that are either harder to predict or that happen at sort of non-ideal times. And this is the case wherein storing some of that energy, is very important. And why do we, why do we want to store it? Well, we want to store it because, first of all, it has zero marginal cost. Like the solar, once it's been generated, it doesn't have a cost, right? It doesn't have any fuel behind it. So it's the cheapest power you could possibly

have. And, you know, you could technically, they call it curtailment, which means you could just essentially shut off the switch from where it is and it goes nowhere. This is not great economically, right? Like, if you have something that is useful, has the ability to do work and is free, you should probably want to pump it into the system and let it perform. Now, you can do that a couple of ways. One, back to our transmission point, you could just have a network of transmission that allows things to move all over regions and all over the country very quickly with as little loss as possible, and that would solve one thing. Batteries can come in and do a couple of things, and again, in this sort of fractal fashion, different levels. One of them is

store power for almost instantaneous use, like to make sure that the grid itself stays operating at exactly the degree that it should, right, at exactly the frequency you want. This is stuff that is being discharged like in fractions of a second of time. There's another which is to move from like a couple of hours at a time, right? In that period when you know that like the sun is going down in West Texas and the wind has not kicked in yet. And you know, you're in the case where the grid is going through these. massive swings that five years ago didn't happen, and you need to smooth those out.

You need to accommodate for them. Or you might need to counteract some other sort of mission-critical thing that's happening, an extreme temperature event, not just an extreme event, not just the normal change that happens on a really sunny and a really windy day. Batteries, another manufactured technology, right? Another thing where there's an intense learning curve behind them. Another thing that has blown past a lot of expectations on what people might have thought was going to happen in terms of deploying them. Another technology that has the potential to really, I would say, rewrite our engagement with how we think about building assets and energy. To be very clear, we are not yet in the position where the same fundamental technology that is powering my laptop

and yours is going to be providing what they would call interseasonal storage. Like you're not going to be pumping electricity in West Texas into a battery in July and then deploying it in February. The technology doesn't do that. It generally operates in the range of a few hours at a time. But it does a couple of other things. One is the technology to make the grid operate differently, but also creates business models that are different. And that's people create the effectively the equivalent of high-frequency trading capability within markets to respond very, very quickly to market signal. It gives assets that might otherwise not want to take market risk, the ability to take

market risk. This is in the power market's called being merchant. You basically don't have a long-term contract for 20 years. You're willing to play the market as it lies. And also to empower, pun somewhat intended, consumers to have a more transactional or transactive role within power. Now, that's going to be a really fascinating question if you ask me. We've designed the grid on a sort of collective agreement that you pay for the grid so that you don't have to pay for it yourself. We pay for it collectively and all participate. It's why it's called

a utility. It is util, useful, so that we individually don't have to do that on our own. I'm in a 21-story high-rise building in a very densely populated city on the equator. I cannot imagine trying to provide my own energy in this scenario. It might be easier to do where you're located in the DMV area, but still, it would be kind of silly. But batteries do allow us to conceive of new grids built in different ways where there's a bigger transactional capability, where companies and individuals might say that they're,

A, either willing to take on a bit more risk in the market, or B, are aware that the markets themselves have become riskier, and you want to have some sort of control of backup, providing power when the grids go down, things like that. And again, the economics of it start to become compelling to the point where people start to consider that as a possibility. I want listeners to have a really clear sense in their head of where these batteries are. Like when we talk about solar technology, I imagine most people can very clearly envision solar farms, the zillions of solar panels in a desert, or, you know, solar panels, photovoltaic installations

on people's roofs. Maybe it's on their roof. Maybe it's on a neighbor's roof. When we talk about the significance of the storage revolution, the battery revolution, this might be such a stupid question, but it's just, it's helpful for me to visualize. Where are the batteries? What do they look like? I like this question. I don't think it's a silly question. So if it's at the utility scale, So the analog and the accompaniment to all those really big solar farms out of a field somewhere sunny, then you should picture a sort of analogous setup of what looks like a bunch of shipping containers. And in fact, sometimes are shipping containers. Basically, a metal enclosure sitting on a concrete pad with a bunch of wires flowing in and out of it.

And if you get up close to it, a sort of electrical hum. That's what you should picture, right? They're made up of cells that are not dissimilar to the cells that are in any of our bigger consumer electronics. They get integrated into packs. The packs get integrated into some kind of enclosure and wrapped up with a bunch of power electronics and software. And you can deploy them in these sort of aggregated units of thousands if you want. Now, if you want to think about them in sort of closer to home, literally home, I guess the analogy would be, like, they're probably the equivalent of like the extra fridge that you've got in your garage.

You know, they may not be, they may not be quite that large, but they're another thing that kind of occupies that same psychic space. If you have a rural property, they may be, they might be sitting outside, again, on a board concrete pad, they might be in a garage or an outbuilding. They're definitely, they're definitely another thing that kind of fits in this weird, this is kind of a consumer durable headspace, if you ask me. I think we should consider them the same way we think about water heaters or refrigerator. They're able to last for a long time. They're not necessarily cheap.

Ideally, they serve their purpose quietly and without drama for long periods of time the way you want your water heater to work. But they're actually, funnily enough, not much to look at. I don't think there is a sort of sense of the technological sublimat. that people get when gazing out over a field of containers sitting on a poured concrete pad. Unless it's me, I've had that happen where I pulled off a highway somewhere in Nevada to go try to figure out what model of battery is being deployed at what giant solar project. But I will freely admit that I'm a bit of an edge case in that respect.

I do, though, want people to get a little bit of a wondrous feeling from this energy revolution that we're discussing. So you can look at the numbers and see that energy storage installations tripled between 2022 and 2023. You can look at the fact that now stationary energy storage, according to your graphs, has now exceeded, I will not say, LAPT, has now exceeded nuclear investment. I mean, this is the scale of the revolution that we're talking about. And again, I think it's important to say that on the manufacturing side, this is not happening predominantly in America. It is Chinese companies, South Korean companies, Japanese companies, companies that are by far leading the manufacture of lithium ion cell batteries.

But I do want people to have a sense of how a revolution in storage technology could actually change the way we use energy, and because energy underlies everything that we do, could change sort of the texture of the future. Like what does an energy super abundant future look like? So I understand that we're moving a little bit from, you know, Nat as analyst to Nat as sort of, you know, sci-fi writer here. But, you know, walk with me, you know, forward into this question a bit. If we can make battery technology more powerful, more dense, cheaper than ever, like, what kind of steampunk future is in the offering here? Is it like super powerful batteries in everything, appliances that run without having to jam them in

into a wall electricity socket for days, weeks, and months, is it the possibility of super cheap technology allowing us to do things we couldn't previously do before, like make cellular meat and desalienized waters that we don't have to worry about rivers running dry because we've just got so much cheap electricity from solar and storage that we can do extraordinary things technologically that we couldn't do 20 years ago?

Like, what is the sci-fi promise? In addition to just not burning up the planet, great, fine, box check. What is the sci-fi promise of a world with super-duper-cheap solar and super-duper cheap batteries? I am happy to put my solar punk hat on for this purpose because I actually think that a sort of narrative approach is extremely helpful for thinking about this future. We're in the models just running your logistic curves forward don't necessarily give us an idea. of what the businesses might look like, what the investment decisions and what the capabilities might look like.

I believe it was Carl Sagan who said that it was easy to imagine a world full of automobiles, but hard to imagine Walmart. Benedict Evans, to give him full credit, has referenced that multiple times, and I believe it comes from Carl Sagan. And there's something similar at work here

is that you have to think sort of like multiple steps ahead to what might happen in an abundant world where the marginal cost of a new unit of electricity is basically zero. So what does that look like? For one thing, it looks like a couple of things. One, you need all of this supporting infrastructure

and architecture to make sure that you can do something with that zero marginal cost energy. Because it can be weirdly, it could be like zero marginal cost and going nowhere and it's not useful. It can have no cost and be highly useful when people can get it. So you have to build a lot more.

You have to build a lot more. wires. You have to build a lot of batteries. You have to build them as cheaply and robustly as possible. That's one thing. You have to also start thinking of business models that evolve around using energy that may not be there in the same fashion that an aluminum smelter was using energy in the 1980s. Basically, your building capacity just to supply something that runs all the time forever until it gets turned off. And in fact, basically cannot be turned off in substituting it with something else, with things that are optimized and designed from a principle that you can have all the energy you want 20% of the time. I'm designed around this case, and I'm going to build for it.

Some of that would be really abundant batteries that are regardless of quality in terms of quality in terms of efficiency at a price point that works. As the saying goes, quantity has a quality all of its own, right? A lot more stuff being built. everywhere. A lot more interaction at a commercial level, at a transactive level, between lots of different entities that are willing to make a market. That's the part that I think is very exciting, is that you're going to have people willing to be like, no, I've stored this specifically in this 18-hour time interval because I think that's where I'm going to make the most money. And there's somebody for me who's willing to say, I'm going to do that because I'm going to

buy that because I've actually optimized something to buy this stuff at these weird hours, you know, where I built my business case around that. I think it's helpful to imagine the deployment of more batteries and more solar as just, you know, revolutionary in result, but like incremental in big increments in terms of being affected, built year on year on year. And I think the revolutions are more fun to think about with a blank sheet of paper and what people are going to do with all of it. I love your concept of like, are you going to use this to run your bioreactors?

Yeah. You know, like that would be fantastic. If it turns out that we can reach the point where you can synthesize chemicals, electrochemically, using variable electricity or things that's stored on a short interval of time, that would be amazing. It requires a sort of rethink of all of the systems downstream of that principle, I think, is part of it. But people do that.

Like, I've seen pitches for that that feel both wildly futuristic, but if you think them through on an evidentiary basis, likely at some time. Timing them exactly is probably very difficult to do. But again, if you sort of draw the math forward and look ahead, you can see these possibilities. And more importantly, you can see people that take on faith all of the stuff that you and I are describing as revolutionary as now essentially backbone for what comes next. And they're building accordingly. And that's the exciting thing. Yeah, I think what excites me most at an abstract level is the idea that in my mind, we've had a slowdown in progress and invention in the physical world. If you look at the real technological revolution of the last 40, 50 years, it's making smaller

and smaller and more powerful chips. And that makes the Internet possible. It makes AI possible to a certain extent, an extension of that technology makes things like solar cells and solar energy possible. But a lot of it exists in the virtual space, in the digital space. We don't have a similar revolution when it comes to look at nuclear. That hasn't gotten any cheaper, any more efficient. What happens if we go from, you know, we've gone from this world of atoms to this world of bits. What happens if an energy superabundant future brings us back to a world of atoms? What kind of new things can we invent? What wouldn't be possible if we had, you know, fusion power, like ultimate limitless, really, really dirt, cheap energy,

it's actually hard to get our 2020, you know, internet addled brains around what would be possible if inventing in the physical world became much, much cheaper. So that's my sci-fi vision. I do want to end because you don't have that much time left. I want to end on a point of skepticism because I can easily, you know, run my mouth on optimism for hours and hours.

But a lot of people I know who want the solar energy revolution and the battery revolution to take off, say, I don't know if we have the ability to easily, safely, and ethically source the materials that are necessary to build all of these solar panels and all of these batteries. Because you look at the technology that is materials that are necessary to build this. The silver, the cobalt, a copper, a lot of it is either sourced in countries like in Africa where there are just terrible unethical practices and near slavery conditions. A lot of the processing helps in China where you see saber rattling between the U.S. and China over the future of Taiwan and other issues. How vexed are you by the material and

geopolitical problems of sourcing all of the material necessary to build the panels and batteries that we need to power this future. This has got multiple layers within it, so I'll sort of try to work through them in sequence. In terms of like the sort of pure earth crust abundance and distribution of stuff, if we if we sort of will ourselves into saying that we want to do this as a future. We tend to have a way of finding supply that's more diversified than it is right now. You know, so that's one thing that like, like the analogy here is that, you know, the cure for high prices is high prices. You magically begin to find more supply. I would say you need to overlay other things within that that's not just price because in price, certain markets will sort of

dominate and look at security of supply, ethicality of supply. And a lot of the big the producers of any of these items are definitely well aware of that, not only because it's, you know, in a sense of the right and the most important thing to do, but also because there is a shareholder demand to do so. Then there's a matter of processing capability, which is more industrial than it is based on the abundance of things and distribution of the within the earth's crust. That is a bigger challenge. That's a geopolitics challenge. But it's a, it's a, back to where we sort of initiated part of this conversation, it's a policy choice. You know, this is a decision that countries need to make that I am going to actively enter into

processing capability to make sure that I have access to the things that I need, my supply chain needs, or that I friend shore them. I'm doing this in countries that I think of as a sort of reliable ally along the way. On a pure volume basis for all of these things, I mean, I've used this analogy before, borrowed from Hannah Ritchie at Our World and Data, one of your previous guest, as I know, we dig up and materially transform forever, except in geologic time, about four billion tons a year worth of coal and oil and gas.

That rarely gets talked about in the context of what we're thinking of in terms of silver and cobalt and things like that. Those are materials that, remember, don't vanish. Like the cobalt that is used in any device, the silver that goes in the solar panel, is still there. Like should you ever decide to recycle it,

the silver will come back out. It's also something that we get really relentlessly efficient about reducing the use of over time and seeking alternatives. So I think that there's there's sort of longer term, probably more nimbleness in these markets than I think we give credit for. I think in the short term,

that we have a lot of decisions that need to be made, and they really are much more at the kind of geopolitics an ethical decision-making frontier, than they are just about where are things located within the Earth's crust. And they are a concern, but I think that seeing markets aware of these and seeing companies, again, set up around these challenges as the prime mover of them building new businesses, is heartening, and it's also essential for us to be able to build something.

My last thought here is, and this is a through line at all of what we're talking about, you call it a very abundant in future. I would agree, if you want to get us to net zero greenhouse gas emissions by the middle of the century, we've got to do about $200 trillion worth of investment. You cannot wail that away through magic. And investing means doing stuff. But it also means doing it as well as possible, as quickly as possible, as efficiently as possible. And there is, in getting us to a future that is both cleaner and abundant,

the need to do all of these things. So these are things that we must solve. Matt Pollard, thank you very, very much. Thanks, Derek. Thank you for listening. Plain English is produced by Devin Baroldy. We've got new episodes every Tuesday and Friday. If you like what you're hearing, give us five stars

and a nice review on Apple Podcast or Spotify or wherever you get your podcast. For feedback and episode suggestions, email us at Plain English at Spotify. dot com.