Stephen Lacey: This is The Interchange, conversations on the global energy transformation from Greentech Media. I'm Stephen Lacey, GTM Editor-in-Chief, joined by my co-host and our Senior VP Shayle Kann. Hello, Shayle.
Shayle Kann: Hey, Stephen.
Stephen Lacey: Well, we're asking a pretty big question. What's it going to take to slash carbon pollution in the electricity sector by 80 to 100 percent? We could use wind, solar and batteries for a large chunk of that. But to go from 50 percent to 100 percent, that's going to take a much more diverse range of technologies and market reforms. And we talked to Jesse Jenkins, a well-known energy consultant and MIT Ph.D. candidate who has devoted much of his attention to this exact topic. What should listeners keep an ear out for, Shayle?
Shayle Kann: The whole conversation was really interesting to me; it's a topic that I've been thinking about a lot lately. And I thought this was really valuable in helping me frame how to think about getting to true, deep de-carbonization.
But there were a couple of things in particular that stood out to me as being especially interesting and in one case important to think about moving forward. One is we talked a bunch about flexibility, and I think "flexibility" is a term that right now is starting to make its way through technical documents and some reports from government labs and things like that, to refer to what's going to be needed when you get to high penetration of variable renewable energy. In that world, really, what you need is flexibility. And that can come from a bunch of different sources. So we talk about some of that with Jesse, and I just think that's a term we are going to hear more and more as time goes on.
The second thing that was basically my favorite part of this conversation came toward the end, where we started talking about the tribalism that has emerged as people talk about high renewables and zero-carbon futures, especially on things like nuclear power. And I thought it was particularly fun to talk about that with the two of you because both of you come from and have experience with organizations that sat on either side of, or at least that represent two tribes within that tribalism. So that was a really fun conversation for me to see.
Stephen Lacey: Two really good points there, and the definition of flexibility is certainly changing from second by second to minute by minute. An hourly flexibility all the way into seasonal flexibility, which we do talk about a bit more.
And the tribalism piece is really interesting to me as well, because as you said Jesse and I came from two different worlds. In this conversation we agree on the complexity of the issue at hand. And I think that a lot of folks who are stuck in certain tribes or groups who are eyeing this deep de-carbonization question are bringing a whole range of values to this debate, and it influences the way they see the technical challenge. It is just really an interesting question of the values you bring to the conversation along with the technical parameters themselves.
Shayle Kann: I think that's right, and I have a tendency at least to zone out a little bit when we talk about what it's going to take to get to 100 percent clean energy on the grid. Because it sounds so academic and theoretical, but one of the others things that I thought was important that we talked a little bit about with Jesse was just the fact that the decisions that we're making today, not just from a policy standpoint but also from an investment standpoint, the generation capacity that we're building today, are decisions that will affect how we decarbonize 20, 30, 40 years in the future. So this stuff really does matter now.
Stephen Lacey: For sure. So before we get into that interview, we are going to talk briefly about what's on our reading list this week. We are voracious readers here at GTM, and we want to share some of the material that informs our thinking. Shayle, what's on your list this week?
Shayle Kann: So I've got something that's relevant to this conversation that we have with Jesse but it digs a little deeper on something else. And it's from this magazine that I didn't know about until really recently. But thanks to Twitter (thank you, Twitter!), somebody pointed this out to me. Which is a magazine called Foresight Climate & Energy Business Denmark. So it's based out of Denmark.
Stephen Lacey: I don't know it.
Shayle Kann: I just found it and it's great in general. It goes really deep on renewable energy and clean energy issues. It talks a lot about wind obviously, because Denmark has a ton of wind. But it's not just about wind. It's only a year old, the first issue was July 2016 and relevant to the conversation today, they did this extremely deep and detailed 17-page, three-part series. It's called "In Search of a Cure for Cannibalization." And it's basically about what are renewables doing to wholesale electricity prices especially in Europe, but globally. And how is that impacting their future and what are the potential market reforms, ways that we might change the wholesale electricity markets that would allow us to get further with renewables.
Stephen Lacey: Excellent. Well, I'm going to read that one and as soon as you pass that link along to me. I'll put it in the show notes so that everybody out there can read it too. And now we're going to go into our conversation with Jesse Jenkins. We started off by defining the concept of deep de-carbonization.
Jesse Jenkins: Most of the plans for how we cut greenhouse gas emissions across the economy as a whole and across the world really rely on the electricity sector to play a pivotal role in that challenge. And that's largely because we have a set of available low carbon substitutes for the fossil fueled power plants that we rely on today for the majority of our electricity. So we have wind, we have solar, we have nuclear, we have hydroelectric power. We have a range of options to produce electricity without CO2 emissions. So most of the plans that call for mitigating climate change and reducing emissions or that call for holding global warming below 2 degrees Celsius, as the international community is committed to at the Paris talks, depend on the power sector to cut CO2 emissions furthest and fastest. And that means really getting to zero emissions or very close to it in the electricity sector. So that's the deep de-carbonization challenge. How do we go all the way to nearly zero emissions by roughly mid-century and perhaps sooner in the rich parts of the world?
Stephen Lacey: And there are generally two ways to think about this. People fall into camps or even tribes, these academic tribes around renewables-only scenarios and the more diverse technology picture that you've studied and advocated for in your research. How do those camps tend to break down? In the way that people are evaluating the sets of technologies and how they would work together to decarbonize the electricity mix?
Jesse Jenkins: We're making tremendous progress today in deploying wind and solar. They're the two fastest-growing sources of capacity, and in many cases energy, in most power systems in the world today. I think they recently surpassed about 5 percent or 6 percent combined of the U.S. electricity mix, so now about on the same scale as hydroelectricity in terms of its contribution to U.S. electricity. And you know as somebody who used to work as a renewable energy advocate in Oregon, I helped establish the Oregon renewable portfolio standard there that kick-started the renewables industry in Oregon. You know this is a huge step forward, we're talking about taking wind and solar from a fraction, a small tiny share of our energy mix to a substantial contributor. And at the same time the cost for those technologies are steadily falling and that also gives cause for optimism. That we can continue to harness these technologies as they get cheaper and cheaper and scale them up to become significant players in our energy mix.
So I think you have a class or sort of a group of folks who see those trends and continue to project them out and say, why not take that all the way? We are going to see ever cheaper wind and every cheaper solar and now batteries are sure becoming cheaper and cheaper. And together we can reach very low carbon goals with just that set of technologies. The ones that already kind of have momentum today.
And then I think you have another set of people who look at the challenge, and particularly those who look at the long term challenge of reaching very near zero emissions, the deep de-carbonization challenge, and try to model and understand the interactions of resources in that context. And like me they say hold on it's actually a little bit more challenging than that. Wind and solar are great resources but they play a particular role in our portfolio and making them play a different role that they are not well suited for and substituting for resources that they're not good substitutes for is going to make this challenge a lot harder than it seems on face. So that's where we come at it and I've been trying to describe the kind of different classes of technologies that we probably want to be pursuing. Something in each of those categories. And that's variable wind and solar and renewables like that, that help save fuel and energy costs when they are available. What I'm calling fast flexing resources, like energy storage, demand response, demand side flexibility, that can help meet short-term variations in the power system that we need to do. On the order of a few hours, or days.
And then what I'm calling flexible base resources which can provide a really solid foundation for a low carbon system. And can operate at relatively high utilization rates, so we'd get a lot out of the investments that we make. But are flexible enough to integrate wind and solar over weekly or seasonal time scales.
Stephen Lacey: So we have these two tribes that you're describing and I have a couple of questions about them. One is that, there seems to be very strong opinions on either side of this for what is in some ways an academic debate about how to design a low carbon, or zero carbon electricity sector in 2050. And yet, there are really strong tribal opinions here. I'm curious why you think that is, first of all. And second of all, maybe if you can point to some of the ways in which the decisions we make about how we think this sector should evolve will impact policy decisions.
Shayle Kann: And if you haven't seen that tribalism just go on Energy Twitter.
Stephen Lacey: Yes, it's on Twitter.
Shayle Kann: For any of our listeners.
Stephen Lacey: Right. Well, where else is there tribalism? It's always on Twitter.
Jesse Jenkins: That's a great question. I think the reason there's such intense opinion or argumentation about these two views is because I don't think it's an academic exercise. It's increasingly becoming very real, and the decisions that we make today about the pathways to zero-carbon power systems will have significant impacts in the real world, in the next decade and beyond.
So power plants that we invest in over the next decade are likely to be in operation in 2050. Nuclear plants last for 40 or 60 years, wind farms and solar plants last for 30 years or longer. Natural gas and coal power plants, 30 or 40 years. We're only really one investment cycle away from plants that are going to be in operation when we're talking about being at zero carbon.
At the same time we need to continue improvement over a whole range of tools that we have available that might be on the market but need to become cheaper, like energy storage and nuclear power and carbon-capture storage. And other technologies that we may not even have at commercial scale today. Like longer-term seasonal storage options or advanced nuclear designs that haven't hit the market yet. Those will all take many years to develop and bring to market and in many cases require significant public commitment of policy to help get them to the finish line. And so those decisions that we make today may bind and constrain our options in 2030 and 2040 and 2050 as we approach this really significant challenge.
Shayle Kann: I would also add, in addition to real policy questions being addressed today, in addition to what we invest in, we've been covering on the GTM site the debate about this California bill that has been introduced in the senate that's a 100 percent renewable energy target. Where I think you would argue it should be a zero emissions power sector target. Those are two different things. I think it would be useful for us to just spend a few minutes breaking down that distinction and why you think there is value in these flexible base resources. So, as you mention, you put a lot of solar and a lot of wind on the grid. And when we say a lot, even in your scenarios, we're talking about orders of magnitude more than we have today, right? So you can get to 50, 60 percent, maybe even 70, 80 percent before you really need the flexible base. There's some point in there where it turns, right? But the point being, if we are at 6 percent today we could get close to an order of magnitude above that with this current set of resources. So what happens when you do that? You have lots of very short-term spikes and valleys because of intermittency, cloud cover, there's not as much sun, or wind stops blowing. You're saying you can solve a lot of that stuff with demand response, turning off the lights, or by energy storage, which is injecting into the grid at that point and pulling during times of over generation.
Similarly, you have day-to-day diurnal cycles when there will be more solar or wind, or less. And again you're saying you can meet those things with what you call the fast-flex resources. Talk a little bit about seasonal variations and why that's a different story. Because to me that seems like the crux of your point. This is why we need these baseload resources.
Jesse Jenkins: Yes, there's actually two challenges there. There is increasing marginal challenge to meet those shorter-term variations as you push wind and solar to higher shares.
Shayle Kann: Which we talked about here on past episodes of this podcast. The more solar you put on the grid, the less valuable the next kilowatt-hour you put on is worth.
Jesse Jenkins: But also if you're trying to solve that spike in solar output during the middle of the day and the drop off when the cloud falls or when the night falls with energy storage and demand response, it also becomes increasingly challenging to do that with energy storage or demand response. So this is why I've talked about this capacity factor threshold, which is just a rough rule of thumb, it's not intended to be a hard and fast binding constraint. But the idea is, if you have solar, say with a 20 percent capacity factor meaning that on average it produces only one-fifth of the installed capacity of solar. That means that if you solar at 20 percent capacity factor and 20 percent energy share, so it produces one-fifth of our energy needs, then that means some times of the day or year solar produces nothing and other times of the year it produces 100 percent of our energy needs and on average it produces about 20. And that means in many hours of the year, as demand fluctuates up and down, you're going to start to have periods where you have excess solar. So that's the one problem, and in order to deal with that you could install energy storage and you could absorb that excess solar and you could shift it to a period of time when you need it.
Stephen Lacey: And I'll just note, just to interrupt you for a second. That's not a theoretical thing, we have negative power pricing all throughout Europe, we even have it in California today. So this idea of there being excess solar is a very real and immediate thing on some grids.
Jesse Jenkins: And that's with wind and solar at less than a third of our total energy share and in most parts of the world today, much smaller in some cases. So this is a real challenge. So you can solve this with energy storage but the more you push wind and solar into the mix the bigger and the wider those peaks in excess production are going to become. And so you need more and more and more storage to suck in all of that energy and to hold on to it for periods when you need it. Because that period might not be the next hour, it might actually be several hours before you can discharge and use all of that excess energy. Same with demand response, you know it's relatively easy to lob off a little bit of peak demand for an hour or two. But if you're trying to reduce demand by 50 percent for several days or several hours it gets much more challenging.
So this is where the kind of short-term variability problems starts to become a seasonal problem. Because there are going to be periods of the year where you're routinely in excess of demand, where the wind supply or the solar supply routinely exceeds what you need, and you have to have a huge reservoir around to absorb all those excesses and not use them immediately necessarily but hold on to them for weeks or even months. Until you move into the period of the year where you are routinely below what you need.
Stephen Lacey: So let's talk about how we deal with that seasonal differential today. Which is basically operating flexible resources that are fossil fuels, generally without carbon capture at the moment. And maybe the only renewable version of that is hydro, which you actually can use as seasonal storage.
Jesse Jenkins: Think about the summer when you have lots of sun and the winter when you don't have very much. In the summer you're going to be in excess of production for months on end and you have to be able to absorb all of that to use it in the periods in the winter when you need electricity.
So you need huge amounts of energy storage. The studies that we reviewed that pursued this strategy, they rely on literally months worth of energy storage. So we could store up all the electricity consumption in the United States for several months and then live off that store in lean times when the wind and solar output are small, and there's just simply no technology on the market today to do that. With the exception of some places that are blessed with large reservoir hydro storage systems.
Stephen Lacey: I want to know what that storage system would look like and who controls it? Is that like the President of the United States who has access to this giant energy reserve.
Shayle Kann: So, you're right apart from some locations blessed with good hydro resources, we don't really have an answer to seasonal storage at the moment, or really long duration storage. And I should know, we talk about long duration storage a lot. Right now, most of the time we are talking about long duration storage were talking about six to eight hours of storage. And you're talking about months. So let's call it very long duration storage.
Now, the thing that gets me about these studies. I understand we're looking at a really long time frame here and we're talking about starting to really need this stuff at scale at like 2040, or 2035 or something in that range. Is it crazy to imagine that we develop a technology that can scale for seasonal storage by 2035?
Jesse Jenkins: I don't think that's impossible. You guys know I'm a believer in continued and sustained energy innovation and investing in new technologies that can expand our tool set. So having some very low cost seasonal storage available would be a useful feature in the electricity system and we should be investing research development demonstration dollars in pursuing those kinds of technologies.
But to say that the current positive trends in wind and solar are going to carry us all the way to the end. Well, ignoring the fact that that depends on the commercialization of a brand new suite of technologies. What I'm trying to do is not say it's impossible for us to pursue a high variable renewables path to zero carbon. I'm trying to say, here are the technical challenges that would need to be solved if that's the route we want to pursue. Those challenges are particularly unique to this pathway so if this is the pathway we are going to pursue we better invest in solutions to that set of challenges. And if we pursue other paths we may make very different investments today. So these are conversations and considerations that we need to make now and we need to think about how policy decisions shape that, how research investment portfolios shape that and how investments that businesses are making today shape our options.
Stephen Lacey: What exactly are we talking when we refer to seasonal storage?
Jesse Jenkins: There are basically two options that have been proposed in the literature. The first is what the Germans call power-to-gas which is basically taking excess electricity and using it to run electrolysis machines to make hydrogen. Potentially, then turning that hydrogen into synthetic methane which could be used as natural gas replacement in heating and industrial processes. And the challenge with that approach is that electrolysis machines are still capital intensive. You have to invest in the electrolytic, you know capacity to absorb all that power when you have big excesses in power. And yet, you don't use the full power capacity very often because you only use that when you have the maximum output from your excess wind and solar production. So we're talking about another very capital intensive investment that would be used only intermittently in order to supplement an existing very capital intensive investment that's only used intermittently, the renewables.
And so for that to work, both the renewable side and the electrolytic hydrogen production side need to be very cheap. The capital costs need to fall probably by an order of magnitude, in order to be cheap enough that we're okay having lots of unused capacity sitting around and that that doesn't cost too much. So that's the challenge with that route. It's possible that we'll see those cost reductions, but it requires sustained innovation on electrolysis machines. It requires sustained cost reductions in wind and solar probably by another order of magnitude to make it cheap enough for that solution to be cost effective.
The other option, which Mark Jacobson in particular focuses on, is under ground thermal energy storage.
This is something that has been used only at demonstration scale at a few planned communities in Canada and Germany. Basically you drill bore holes into the ground, deep enough to hit the layer of the earth where the temperature doesn't change very often. It's a very constant temperature. And you use some kind of glycol or other heat transfer medium and you basically take excess heat from either solar thermal or from resistive heaters from electricity and you pump it underground in the periods when you have extra heat and heat up the ground and use the ground itself as thermal storage. Then in the winter when you need that heat, you pull it out. You could use reversible heat pumps to do both air conditioning in the summer, to take heat out of the air and put it in the ground and run that off electricity, and then pull it back out to heat your homes in the winter.
The secret to Mark Jacobson's studies, what makes it work besides some other questionable assumptions about hydro flexibility, is that every single building in America would have an underground thermal energy storage system capable of about a month or two worth of collective energy storage beneath that building. So that's the scale we're talking about, this is a technology that has not yet been used in commercial scale and so far only for heating not round-trip heating and cooling. It would have to be deployed virtually everywhere for those scenarios to pan out.
Shayle Kann: Right, for anybody who's not paying attention to this debate on Energy Twitter, Mark Jacobson is a professor at Stanford who's one of the more well-known proponents of the tribe that says we can get there with 100 percent renewable energy not just zero carbon power. So, you know I think to recap what you're saying there, seasonal storage is a possible solution, but by no means a guaranteed solution and requires a lot of work between here and there. Before we move on to what you're saying some of the more likely solutions might be, let's talk about the other ones that I think often get thrown out. And here we talked about energy storage and demand response. I think the other big one is expansion of grids and having high voltage transmission that expands the geographic footprint of a given grid such that resources that may be complementary to each other but are further spread apart geographically actually operate on the same grid. So if you have one area of a country or in fact the world where there's a lot more load in the summer and the other place has a lot more load in the winter, or you're talking about cross-hemispheric grids, that is often argued to be one of the solutions here. Why do you think that's insufficient or what's the risk there?
Jesse Jenkins: So, look. The United States is trying to do this to some degree right now. We have an enormous wind resource in the Midwest and the Great Plains, and we're trying to bring more of that wind east to population centers. You know, there is the Clean Line Transmission Project, for example, that would come from Oklahoma and link into a hub in Arkansas to bring power back into the Southeast. That's the first long distance high voltage DC line that is probably moving forward. Although we'll see if it continues. Building interstate transmission lines of any type, particularly several states long to span the entire continent is just logistically and regulatory quite challenging in both the U.S. and in Europe where you cross international boundaries. If you look at these 100 percent renewable energy studies, they all include a substantial expansion of the transmission grid to entire different regions the way you described. So this is not an optional solution, this is part of the plan.
The 80 to 90 percent renewable energy futures vision that NREL published calls for literally a doubling of the megawatt miles worth of capacity of high voltage transmission in the United States. To get to 80 or 90 percent renewables in the United States, and that's not just wind and solar that's also including more stable renewables like geothermal and biomass, the National Renewable Energy Laboratory envisions doubling the U.S. electricity transmission grid by 2050. So that's theoretically possible and in fact it wouldn't actually be that cost prohibitive given that transmission only accounts for about 5 or 10 percent of the total cost of delivered electricity. So even if we doubled the grid it would maybe only add 5 percent to our bills. But try building, you know, double the transmission capacity in the United States across the U.S. today. The regulatory fights, the not in my backyard obstacles, the cost allocation puzzles that would be required to do that. And I think anybody who's trying to develop the transmission line would say that's a stretch goal at best.
Shayle Kann: Though that's a good segue. You're talking about regulatory fights and not in my backyard battles and one of the arguments that you're making is that we'd be better off at least considering the inclusion in these studies and in this planning of resources that you call flexible base load. But more specifically nuclear and carbon capture and sequestration. Let's talk about nuclear because if we're talking about regulatory issues and NIMBYism, nuclear is right at the epicenter.
Stephen Lacey: I'm also a little bit confused because I know that Mark Jacobson actually came out and sort of criticized your literature review saying that nuclear as it's used in the United States is not flexible. And I've heard people talk about nuclear as a flexible resource, and I've heard other people say absolutely it's not. I'm honestly very confused about that.
Jesse Jenkins: Yes, so let's set the record straight on that. In the United States today for both economic and regulatory reasons, all but one nuclear power plant in the United States operate at basically base load whenever they are online. The exception is the Columbia generation station in Washington state where, during the spring when you have an excess of hydro availability and you can't store all that hydro up, they ramp down the plant to match the stream flows.
Outside of the United States in Germany, where they're now ramping plants in Bavaria on a daily basis to integrate output from solar, or in France, where they've operated nuclear plants flexibly since the 1970's in order to follow load patterns given the high share of energy they get from nuclear, this is routine. I'd say they are as flexible as a coal plant -- the conventional U.S. and Western European designs -- and more flexible for some of the more advanced designs including SMR's the new scale SMR. The initial deployment of that is planned for Utah where the deployment will be designed to integrate with a wind farm and follow the load of that wind farm very actively.
Shayle Kann: So let's move on briefly from nuclear because the other sort of bigger option that I think lies in your technology portfolio that does not go into 100 percent renewables goals is carbon capture and sequestration. Potentially having a coal plant that has CCS. How might that fit in and how does it differ from what nuclear might be able to do?
Jesse Jenkins: So, with coal with CCS or natural gas with CCS, which in the United States might become the more attractive option soon, we have the option to continue to use fossil fuels without contributing to climate change. Of course it'll have other environmental implications that we need to take very seriously, like the continued mining and production of fossil fuels. But if you can get the capture rates for CO2 at the power plants high enough, above 90, 95 percent, then you can run a coal or gas plant in a low carbon mix and have it play the role of flexible based resource that would help match the variability of wind and solar. And provide that sort of steady supply that reduces the overall challenge and makes the total capacity we need much more appropriately sized to our energy demand.
That technology is further away from large scale commercialization, or large scale adoption, than say Gen III+ nuclear reactors, which we are building throughout the world today, but they're making tremendous progress both in post combustion capture, which means capturing the CO2 after burning the coal, as at the Petra Nova Plant in Texas, that went online earlier this year, the Boundary Dam project in Saskatchewan. But also new natural gas fired power plant technologies that would run on a super critical CO2 working fluid. So very different design, not a steam turbine or a combustion turbine but a super critical CO2 turbine that would strip the CO2 out at the beginning of the process and could potentially operate at a much higher efficiency.
Now that's a pre-commercial technology, their building a demonstration in Texas right now with Exelon and we'll see how that goes later this year as they try to get online. But there could be a range of new options that open up in that space too. Now again, should we bet on those? Not necessarily unless we hedge our bets with other options as well. But if those technologies become available, they can play a very cost effective role in the overall low carbon energy mix.
Stephen Lacey: Now you said something really important there and that is "if". And if many of the arguments that you are making against a mostly renewable scenario seem to be the same arguments against many of these other technologies. You know, we're kind of hoping that costs improve and so far on a commercial scale costs are not improving. Experimentation with commercial scale CCS in the US has been a disaster so far.
Jesse Jenkins: I wouldn't agree with that. The single IGCC plant, which is a pre-combustion technique that was being built by Southern Co. has been an engineering and procurement disaster in terms of the process of building the plant. That's a very different path than others are pursuing. It's very different than the post-combustion technology which uses amine scrubbers to pull the CO2 out of the smoke stacks. There has been tremendous progress in the cost of post combustion capture over the last several years as that technology has scaled up. So it's not impossible to see future cost reductions. But you're right, it's uncertain and we have to be clear about that challenge as well.
I'm not trying to say CCS has no challenges ahead of it, but in the models that I run across a wide range of different technology costs, I assume significant cost reductions for wind, solar, and storage. Then I add existing nuclear cost and existing post-combustion capture costs and they still show up in the least cost zero carbon mix. Now you get less of it if it's less expensive and more of it if it's more expensive. But in no cases do I end up without any flexible based technology in the mix, even assuming today's costs. So, further cost reductions would be great I think they're achievable but they're not necessary for nuclear or CCS to contribute cost effectively to a low carbon mix. Even if we assume significant declines in the cost of wind and solar. And that's the part that keeps shocking me, as I see my results and saying, "Hey, there's something here that's really important." Because even if we don't make further progress in these technologies they appear to be an important part of an affordable low carbon technology mix.
Stephen Lacey: What do you make of the argument that I've heard a couple of times, that mostly this is a market design problem? Specifically in that we don't right now have great mechanisms to compensate for the things that you're saying we're going to need in the future. We don't have a great mechanism to compensate for the ability to provide seasonal storage. We definitely don't yet have the compensation right for flexible ramping ability. We're working on that. California ISO has a new flexible ramp product that it's sort of designing right now. And then if you get all of those compensation mechanisms right and let the technologies fight amongst themselves for what becomes a relatively lucrative share of the pie that it'll naturally work out according to whatever technologies are the best fit.
Jesse Jenkins: Obviously if we have the right price incentives in place and we don't think about risk aversion or policy intervention or those kinds of challenges, then yes, that's basically what I model with my optimization models. I say, here's all the technical constraints, here's all the costs available, let's find the least cost mix and a well designed market with the right price signals that would lead to the same outcome as an optimization model.
Now in practice, we have all kinds of policy interventions that we make that tilt those markets in different directions. And investors are risk averse and so they need certain policy interventions to make the investments that we want. So rather than a simple, you know, sort of unconstrained market, we always have a guided market. And we're guiding that market with certain conscious designs that we take in policy and in R&D Investments and in market design decisions. And so the reason I think that it's important to think carefully about what we want because we are making active decisions today about what we want. We're saying we want 30 percent renewables in California, now 50 percent. We're saying we want 50 percent renewables in New York. We're saying maybe in Massachusetts we want either an 80 percent low carbon technology neutral standard, that the Governor's office has proposed, or a 100 percent renewables requirement. So we're making these decisions, we're saying that we're going to make investment tax credits available for solar but not for CCS or new nuclear. So these are decisions that we're making now that guide the course that we're on. And I think it's important to make those decisions with a view towards which pathways are most likely to succeed and think carefully about what we really want and what challenges we want to undertake.
Stephen Lacey: I want to go back to the tribalism question again because this is like a really fascinating and fun conversation but it always devolves into tribalism, it always devolves into bickering and there's this ideological dent to the argument that really just frustrates me. So why do you think people react the way they do to this discussion?
Shayle Kann: Can I propose a thought on that? It feels to me like a lot of it comes back to the split in environmentalism. It's a little bit broader when there's a class or a tribe of environmentalists who really oppose and will never stop opposing nuclear and fossil fuels. And I'm not saying this as a pejorative, but I think that they're never going to get behind nuclear. And then there's a class that probably would call themselves more pragmatic. Whether or not they are, that believe what we should be trying to do is find anything that's low carbon and focus on that.
Stephen Lacey: I would also argue that there's another class, and that is the solar optimist. People who believe that, similar to nuclear advocates in the '70s and '80s who thought that nuclear would be too cheap to meter, that solar eventually will some day be too cheap to meter and that it will take over the entire world.
Jesse Jenkins: I think there is a third dimension. I think those are both true, and I think there's a third dimension as well which is the early era of debate about what to do about climate change. You know the Al Gore era, the 1990s and 2000s. You had scientists and you had certain politicians like Gore, saying, "Hey, this is a real threat -- we need to take it seriously. We should be ramping up the solutions that we have on the table that we developed largely to replace oil initially as part of the Carter era efforts to respond to the oil embargoes. You know, and that was basically onshore wind and solar PV. We had these technologies on deck and we're going to ramp them up and make them work at a larger scale." And I think that you had a group of folks sort of embodied in the Bush administration stance, George W. Bush administration stance, about Kyoto and responding to climate change. They were saying no, no, no, no, no, those technologies are not ready for prime time. They're too expensive and what we really should be doing is continuing to invest in better technology.
And so every time someone like me says wind and solar are amazing and they're great and they're moving forward and we should keep doing that but there may be some limits to how far they should go. That I think calls up echos of those pitched battles where it was simply a fight to prove that solar and wind could even work at all. And everybody was throwing up any barrier they could come up with to say we shouldn't even use these technologies. And so I think there's a whole other class of tribalism triggered by language and by discussion about any kind of limitation for these technologies. And rightly so given the battles they went through. But that's not what I'm saying and that's a very different argument, and it's one thing to say we have tools that are ready to deploy today, that we should be supporting with public policy, but we should also be both improving those tools and expanding our tool kit. Then to say, which is what I'm arguing, we don't have anything that works really and we should just keep in the lab doing our research until we get something that works.
Stephen Lacey: Yes, now we're bleeding into the other major Twitter centric rift in this community. Which is the like deployment versus R&D debate. And I deeply, deeply do not want to go down that road right now. But it's a similar very charged, very opinionated, multiple camps who all basically agree on where we need to end up. But can't find common ground situation.
Shayle Kann: And in fact now that I'm realizing you guys actually are the perfect ones to have this conversation because you are, the two of you are alumni of, I would say the organizations that I define as being in these two camps or in these two tribes. Where Jesse you used to work at the Breakthrough Institute, which is like a very pro-nuclear think tank. I know they wouldn't call themselves that necessarily but it's obvious and true.
And Stephen, you used to work for Joe Romm who's the editor at Climate Progress, which is very much in the we need deployment and not R&D and we can do with existing technologies camp and has done all sorts of work to try to make that case. So I guess, my question for you guys both coming out of each one of those tribes, what was your experience within that and how has it influenced sort of how you think about this debate?
Stephen Lacey: My answer is simple. It made me really uncomfortable, and there was a certain framework that we were sort of expected to write within. And you had to do all these mental gymnastics to ignore a lot of intellectual arguments. And quite frankly I was so sick of the tribalism that once I moved beyond that job I made a much greater effort to understand the wide range of arguments here, because as we've just discussed this is so incredibly complicated. To fall into one camp is to ignore how incredibly complex and important this transition is.
Jesse Jenkins: I resonate with a lot of that. Literally the very first article that I wrote, blog post for the Breakthrough Institute, before I even moved to Oakland to officially start working, was a response to one of Joe Romm's blog posts. Basically trying to articulate the thing I just said to you. That there is a difference between saying we need R&D only, and we should wait until some magic breakthrough appears to do anything, and we have technologies that are great and ready to scale up but need to be continually improved and we need to expand our tool kit so we should invest to do that today. That was literally the article I wrote in 2008.
I was coming out of two years as a paid renewable energy advocate, advancing deployment polices in Oregon. So clearly I was somebody who valued both sides of this picture, and I was trying to defuse the debate that was happening. The response from that immediately became this sort of charged fight. At one point I was called a "radioactive disinformer" by Joe, which I still think about putting on the bottom of my business cards.
An articulated argument about this that had nothing to do with ideology or tribal preference could immediately become cast in a tribal context. And that was exhausting.
Shayle Kann: But I want to be clear that came from both sides.
Jesse Jenkins: Oh absolutely.
Shayle Kann: But the camps you guys were both in, I sat on the outside of all of it and watched this whole thing happen and I'm continually watching it. And both sides of this debate, similarly they all start by saying. "Well, we all agree that there's technologies that are great that we should continue to deploy. And we all agree that R&D is important in a central tenant of this future." And then they take a pause and then with vitriol attack the views of the other side.
Jesse Jenkins: So what I realized in wading through these debates were two things. One, that it's really important to try to avoid those sort of heated personal exchanges. That even when you get frustrated with something like that, you have to just walk away and say, "Ok, that conversations over there's not a lot of point in continuing." But you get back the next day and you keep at it.
And the other thing is that these are really complicated, hard challenges and we don't know all the answers. And that's what motivated me to go and get a PhD at MIT and to study electric power systems and how they're changing. I wanted to learn the tools that I needed to have to actually explore and answer these questions for myself and to help communicate that and inform people as to the challenges that we face. And so it's not just enough to get into our camps and to roll back out the same talking points. We actually have to go beneath that to understand what the challenges look like and what our options are and how we expand and improve those options.
Stephen Lacey: The other thing that you don't know about Jesse since you're just listening to a podcast is that he has a neck tattoo that says "Deep De-Carbonization" on it.
Jesse Jenkins: De-carb for life!
Stephen Lacey: That's right, so if you ever see him on the streets don't be too afraid. Jesse Jenkins is a Ph.D. candidate at MIT, he's a writer, a consultant, a thinker on these issues. Thanks a lot for coming in. This was a lot of fun.
Jesse Jenkins: Thanks, it was a great conversation.
