Huge electricity demand growth threatens US power grid

Markham interviews Dan Forman of Copper Labs, an expert in energy usage and efficiency, as well as commercial and residential demand response.

What is Energi Talks?

Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.

Markham: 00:04

Welcome to episode 296 of the Energy Talks podcast. I'm energy and climate journalist, Markham Hislop. After 15 years of no growth in electricity demand, the United States is bracing for significantly more growth this decade. To make matters worse for grid operators, load growth forecast shot up in the past year as numerous new manufacturing, industrial, and data center facilities were announced. Part of the growth is due to the fed is due to federal and state spending.

Markham: 00:35

Part of it is caused by the US private sector responding to investment opportunities in the emerging clean energy economy. Just how much growth is expected now, and can the power sector meet those expectations? To try to answer those questions, I'm joined by Dan Forman of Copper Labs, an expert in energy usage and efficiency as well as commercial and residential demand response. So welcome to the interview, Dan.

Dan: 01:01

Thank you for having me. I'm excited to have the conversation.

Markham: 01:04

Well, that makes 2 of us because we have done a number of interviews with grid experts, very of various types and dealt with both the Canadian grids, the American grids, issues that are common to both of them. And this idea of growth and how we're gonna handle it seems to flummox everybody. It just and and it's compounded by the fact that while we bring on new generation capacity in the form of mostly wind and solar, we're retiring thermal capacity maybe faster than we should, maybe faster than the grid can handle it, and NERC has had some some not very pleasant things to say about that in the in the past year. So maybe we'll start with your take on where the grid is going, where load is going, how we're handling it.

Dan: 01:58

Yeah. It's a complicated question. I think that most electric grid operators, when they saw electric vehicle charging coming down the the road a few years ago, started to get really excited about, hey. We're about to shift this this trend. And instead of trying to figure out how we're gonna make money in the in the future as as demand shrinks, they started investing in electric vehicle charging infrastructure.

Dan: 02:21

They started investing in managed charging technologies to try to get consumers engaged so that they can charge those vehicles at a time that is good for the grid, but also doesn't burden the consumer. And that was a sufficiently large set of challenges in and of itself. And now I think that the headlines you know, you mentioned some of them and even, you know, AI. The amount of energy required to train these large language models is not only why it's the it's it's it's a game for the big tech companies to play, but it's a huge burden on energy. And so, I saw an article actually earlier this week where Microsoft had talked about building a gas, dedicate partnering with local utility to build a dedicated gas line into a data center so that they could retire dirtier diesel generators.

Dan: 03:10

And I think that's representative of the big coordinated thinking that we need to to have on the commercial side. I love talking about the residential side even more, but that one was fascinating because, as innovative as that is, some of the folks in our circle who are very focused on clean tech pointed out, well, then why are you doing with this with natural gas? Why don't you find some, you know, cleaner burning something? But, it's it's it's a provocative topic, but natural gas has a a big role to play in this energy transition. You know, I we all love intermittent renewables, but they are intermittent.

Dan: 03:45

And you need to have technologies that can fill that gap. Natural gas, while not perfect, is a helpful, a helpful part of that. And I as we go through the conversation, I can talk about what we're seeing with, residential utility customers trying to figure out how do I electrify my home, if I'm if I'm still relying on gas. So it's a it's a provocative part of this story.

Markham: 04:08

Yeah. We've, wrestled with that question, ourselves, my wife and I. We needed to get rid of our natural gas furnace a couple of years ago, and we went with a heat pump, and it was amazing. I really far exceeded my expectations, in terms of comfort and and, low cost and all of those good things. And, you know, now we're like many people, we're looking at getting an electric vehicle in the next, year or 2, just waiting to see where the technology is gonna go.

Markham: 04:38

We've got electric bikes, and most of the people that we know are, you know, sort of in various stages of addressing these kinds of issues. It's for a lot of people, it's not a question of if I'm going to electrify, it's when and how. And is, now this is a small sample size, admittedly, and I live in a community on Vancouver Island that would probably you know, lots of old hippies here. So it's not not not surprising that they would be thinking like that, but is that common across the United States, you know, in most places?

Dan: 05:13

I I think it varies by geography, and I'm here in Boulder, Colorado, and same thing. We've got a bunch of hippies, whole lot of electric, vehicles, and a whole slew of contractors that are specialists in helping come into the home and understand what are the good loads to electrify. But I I travel a lot. I was in, Northern California earlier this week. Electric vehicles everywhere.

Dan: 05:36

3 weeks ago, I was in Savannah, Georgia. I saw 2. And so I think there's a mix of elements that that drive this. Some of it's cultural. You know, I I grew up in a much less, liberal area than than I live in now, and there aren't many there aren't many electric vehicles where I grew up in West Virginia.

Dan: 05:52

And so I think you see that as one of the the the big determinants. The second is what can the utility support? Because, certain utilities are are adept at electrification. Others, it's it's gonna take a while. Meaning, you know, in the northeast where we help a lot of, utilities, in particular for gas demand response, you know, they've got political mandates to decarbonize the grid, get rid of gas, but we're not ready because if you flip off gas in cold climates, whether it be the northeast, the mountain west where we are, up toward where you are, you create a net new what would be an unsustainable peak on the winter electric grid.

Dan: 06:33

And so how do you go about that? How do you do it in a more informed manner? And it's like any other hard problem or, you know, for basic analogy. How do you eat an elephant? It's it's one bite at a time.

Dan: 06:43

And so we're trying to help utilities sequence those decisions in a much more informed manner. So just as a brief example, we published a case study with National Grid, last year, detailing a behavioral gas demand response program that we supported for them on Long Island. And, you know, we had compelling results, an 18%, peak load reduction, behaviorally. And what we weren't looking for that we later analyzed in that data where we were getting gas consumption data every 30 seconds instead of the the typical 30 days, which is a bit of a magic trick that we have proprietary tech to do. But when we looked at that, we're able to identify a inefficient HVAC when comparing similar homes and similar conditions.

Dan: 07:27

And so that is great targeting when you think about beneficial electrification, and we see 3 types. There are types like you where pretty efficient building envelope. Go ahead and get a a heat pump, and it's gonna do just fine. The other end of the spectrum is if they've got a really leaky building envelope, you can't fix that with energy efficiency retrofits. They might just wanna have a more efficient, gas furnace.

Dan: 07:50

And in the middle are hybrid heat pumps, and I think hybrid heat pumps are a really smart solution for those areas in particular where they've got a really cold winter to manage.

Markham: 08:02

If I could talk to utilities and regulators and big customers, one of the things I would say is that new technologies are always adopted on a curve. In fact, curves. There's the s curve which is a way to describe how a new technology or suite of technologies moves into the economy. Very very slow for a long time, then it hits the inflection point, then it gets on that hockey stick kind of growth and it's very rapid. And we're now approaching the we've either hit the inflection point, we're past the inflection point with some of them, depending on geography makes a difference, But then there's the other curve, which is the bell you know, Everett Rogers Bell curve, where you've got innovators and then early adopters and then early majority adopters and late majority adopters and then laggards.

Markham: 08:52

And it's not necessary to, think that every consumer is going to adopt right away. They all do calculations. We all of us. Every time we buy something, we do a calculation. We look at what is that thing gonna cost me?

Markham: 09:07

Is it too expensive? Can I afford it? How much is it gonna cost to operate? How much risk is attached to this thing? It's a new technology.

Markham: 09:14

Is it gonna break on me? Can I afford to have it break? And then there's value with the things you can't attach a a dollar sign to. So it might be, status. It might be, you know, c Ford CEO Jim Farley says of the lightning f 150.

Markham: 09:32

People want to buy this thing so that they can power their house for 3 days if they that's the number one reason they buy it. Excuse me. That's the number one reason they buy a Lightning. And it's the calculation of those four variables. It's different for everybody.

Markham: 09:47

Every individual, every different family, and it's the access to that data and thinking about it that way that helps people prepare for whether or not do you can you get off gas? Do you need to keep gas? Do you need a hybrid system? Maybe, you know, like, if you're in Northern Alberta or Northern Manitoba, where it's 4050 below all the time, gas is gonna be your friend. And if you're in Southern California, where that's not an issue, electrification might be just right for you.

Markham: 10:19

We all make those different calculations.

Dan: 10:22

It's an interesting point, and, you know, I I'll own up to we remodeled a 100 year old house here in Boulder about 7 years ago, and I I put in new gas appliances. I put in irrigation. And now fast forwarding 5 years later, 6 years later, knowing what I know, it's a little bit embarrassing. But I think that's emblematic of the broader challenge of education relative to economic affordability, and just general preference. And you invoked the Ford Lightning, and I I loved when that came out because it brought, a different demographic onto the electric vehicle side of things.

Dan: 11:00

Meaning, you know, I I I got an electric vehicle because, you know, number 1, I'm I'm in the business of energy efficiency, and and I wanted to see what it looked like using our technology. But turns out it's just really fun driving that thing. And so a lot of my friends, even here in in a, you know, progressive community like Boulder, still have such range anxiety or, you know, affinity for the past and allowed motor that they won't go there. But the f 150, I think, bridged that divide. And I and and to your question, I think it's all about meeting people where they are, understanding what the the the nuances, meaning don't talk to a SoCal person the same way you talk to someone in Manitoba.

Markham: 11:41

I would agree with that. As someone who does a lot of reporting energy reporting in Alberta, which is the Texas of Canada, you talk to someone there very differently than you do on Vancouver Island where I live, and Canadians will there's a lot of Canadians chuckling as they hear me say that. They, they understand what it's it'd be the difference between, Midland, Texas, and, Sausalito or some place like that. That that's the difference. So okay.

Markham: 12:08

This is that's the residential side. But I think what we're seeing is a term and a big bump in demand caused by the industrial side, the data center side. And what can you tell us about that?

Dan: 12:22

You know, I admittedly, most of my professional focus is on residential, but I I I know a fair bit about, commercial demand management as well. And I think that the prevailing wisdom is that we're not as behind the curve as as some of the fearmongering might say with respect to, you know, states that wanna bring in a a data center and say, oh, we don't have the infrastructure to do it. And the reason interesting. Yeah. But because even today, the peak on the grid is intermittent.

Dan: 12:53

Like, we might hit a peak demand a couple days a year. If you build the if you overbuild the grid to meet that, you're spent you're spending 1,000,000,000 that could be spent elsewhere. And so that's the entire premise of load flexibility or demand response programs. And so if you can take a peek and flatten that by offering an incentives that that is is, you know, costly, but certainly less costly than firing up a big peaker plan or building infrastructure to meet that demand. And so I think in the context of data centers, they are being savvy.

Dan: 13:23

We talked about Microsoft. They've been investing in renewables for for years, and so there are techniques to create load flexibility for data centers as well.

Markham: 13:33

Here's something I don't understand, and and I know that there are, grid operators who worry about this, and that is big industrial and commercial customers self generating. So if I was in Southern California, heck, I was in Northern California, if I was in Arizona, Nevada, and sunny places like that, Texas, I would seriously be looking at either buying the equipment myself, the solar panels and the and all the other gear that I would need to do it, but increasingly, I could if I was that kind of a customer, I could go to somebody who offers that energy as a service. And they would they would front the capital to put all that equipment on my property, and then there would be an arrangement where they made their their money back and made a profit out of the the savings that that I would enjoy. And that to me, that the the the that's the promise of distributed energy resources, is to be able to do things like that so we don't have to build all of this infrastructure. We don't have to take a 20th century, approach to the grid of the or the electricity system of the 21st century.

Dan: 14:44

I agree, and it's a tricky question because there is a tension between that model of, you know, a DER centric world where we sort of take control of our own energy production and utilities that, you know, they're still maintaining all the pipes and wires and poles to to carry that, and they've gotta be there to backstop if your stuff doesn't work. And so you see that tension playing out on the residential side, in particular in California, around net metering. You know, rooftop solar, lot of utilities don't love that because it's taking away load from the grid, and they'll put up arguments that say, you know, it's either unsafe for alignment if you don't have the right inverters or other. And so, you know, the more people deploy solar, the more it shifts the burden to other consumers. And so I see that about to play out on the commercial industrial side as well, and I think that the cover that those folks have, circling back to that Microsoft example, is they wanna tell their customers that they have a 100% clean energy operation.

Dan: 15:43

And so pursuing that and going and and procuring their own renewable energy supply is a good way to serve that goal while also creating this backup independent energy that they could use to power a data center, for example, when the grid operator says we don't have the demand. Or, sorry, we don't we don't have the capacity.

Markham: 16:04

I I'm on a a a newsletter list, that, Severin Bornstein, writes. He's the professor of economics at Berkeley and also sits on the CASIO, board. And, of course, as you can well imagine with all the changes that have come around rooftop solar or, distributed solar regulation, he's been a big part of that. And so he wrote a piece that, and part of it is to justify the decisions he and his colleagues on the board helped make where they cut back drastically, cut back the amount of money that people were receiving. Customers were receiving, putting power back into the grid.

Markham: 16:42

And he said, you know what? Okay. So granted that hurt, but now what's happening is customers are getting smarter and aggregators are getting smarter, and they're actually making just as much money or more money because they're smart about when they do this. And they've come up with new strategies to to cope with that, and I'm simplifying his argument by by, you know, factors of who knows how much. But that it seems to me there's a growth curve here, a learning curve, And and California's grappling with, rooftop solar is on that curve and a lesson to everybody else.

Markham: 17:21

Would you agree?

Dan: 17:23

I would agree. And even if you look a little bit deeper into what the energy looks like in California on a daily basis, most days, they are curtailing grid scale solar, meaning they got more solar than people can consume. And I think it rhymes with the story I said about myself where I'm I'm specifically in this business, and I made this flawed decision to put in new gas, put in new irrigation. And so if you can find a way to tell people, hey. If you can charge your electric vehicle while you're at work, it's gonna cost you half as much.

Dan: 17:53

It'll help the grid. This is where it's really the the ethos that that, you know, we're focused on here is how do you create these data driven channels between consumers and utilities so that they can both make more info informed decisions in those moments that matter to the grid?

Markham: 18:11

I asked for an interview today from a company that does I don't maybe they're competitors of yours or they do something complimentary, but it's certainly around predictive analytics for utilities. And the point that they made, because they had a case study for a a big utility in Ontario, and they said, prior to implementing this new cloud based platform, they had they were getting information. You know, they would do load forecasts over, you know, almost back of the neck, like, cocktail napkins, by comparison. You know, it'd be like getting out your abacus to figure this out. Now they have, if not real time data, they have 30 second data or they have they have so much more data and it's so much more granular.

Markham: 18:59

Like, they've got it right down to the neighborhood. And so when they start to do planning around where do we have to beef up our distribution, infrastructure, where can we offer rates to get people, you know, to shift load onto non peak times, all of Now they're far, far more strategic than they could have been otherwise when they didn't have that window into their into their grid. And, the experts that I've talked to say this kind of technology is critical to managing the modern grid. It's not the the be all and end all, but it's one of the really important tools. Are we adopting it quick enough?

Dan: 19:38

I I think that yes and no, because, you know, utilities are regulated state by state. They're all in a different phase. Investor owned utilities operate differently than municipally owned utilities. And so I think that the the bigger challenge is how do you get consumers, technology vendors such as ourselves, regulators, and utilities all on the same page? Because, you know, it's a smattering across the US.

Dan: 20:07

I I I'm not as familiar with how things work in Canada, but here, everybody is on a different phase of the cycle. Everybody's looking at technology, on an individual basis. The good news for utilities is that they rarely compete with each other. So when one of them finds a good technology solution like that, it tends to propagate pretty quickly. But, there's a few different areas where you need that.

Dan: 20:27

One is down to the residential meter level where we unlock data that no one else gets to, which better better data is gonna lead to better results and short term load forecasting. The other side of this is light utilities don't have visibility into people that are charging electric vehicles. And the the last person that goes on and blows a transformer or a feeder, they could often be on the hook for that. And so everybody has a vested interest in learning more, but most people don't from a consumer or residential perspective, they don't wanna get into these nuances. They just wanna sit back and let the utility solve these problems, and so the utilities are doing their level best to to to get there.

Markham: 21:03

Yeah. I it's it's funny. I I watch economists, you know, professors of economics who are really into this data and they're, you know, tracking what goes on with the grid and tracking their own solar consumption and so on. And and they talk about how, you know, you can we can we can fiddle with our rate, and we can do this, and we can do that. Nobody wants to do that.

Markham: 21:26

Nobody wants to do that. All they want is to to be as simple as possible, flip the switch, plug in the car, and stuff happens. And I frankly, count myself as one of those those kind of people. And it sounds like we're getting closer and closer to that ideal situation for the average customer.

Dan: 21:46

I would agree. And and, you know, despite the quality of our grid, you know, here in the US, we do have more outages than any developed country in the world. And so there's good room to do better, but imagine a world where you go and you flip that switch and it doesn't reliably come on. And so I think that's where demand response is for residential right now in these really peak periods of either a winter storm or summer heat when people start to realize, oh, if if we run out of gas in this territory, everybody's heat goes off, that that's life threatening stuff. And so I think those acute moments, are what has people's attention now.

Dan: 22:22

The more nuanced of how do we modernize our grids without sacrificing affordability. How do we do that while still solving this slew of new problems that we're facing with decarbonization? That's the challenge to my mind for utilities now is that the the problem set is growing faster than the solution set, and they're not fast moving entities.

Markham: 22:45

I don't often laugh on this podcast, but that one caught me. The the the describe utilities as not fast moving entities is probably the understatement of the at least this week, if not the at least not the month. Utilities, for listeners who aren't aware, are notoriously conservative. As well they should be. I mean, reliability is a big issue in the power sector, and, they're not they're not out, experimenting, until technology is is fairly bulletproof.

Markham: 23:17

One of the issues that we're talking about, the grid is transmission and how we're going to move electricity around because one of the and we're grappling with this in Western Canada, because here we have 4 provinces. The 2 on the bookends, BC and and Manitoba, are huge hydroelectric producers. BC is, like, 97%, and Manitoba is, like, a 100%. It's crazy how much hydro potential there is in Manitoba still. And in the middle, you have 2 provinces, Alberta and Saskatchewan.

Markham: 23:52

In the southern part of the province have the some of the best, wind and solar resources in North America, and they all trade north and south. They don't trade east and west. And if you could hook up the renewables with the hydro dams and use them as batteries, you know, ideally, that would be wonderful. But that's just an illustration of one of the problems that utilities all over North America are grappling with, and our ability to build new transmission capacity is severely curtailed from what it used to be. It whether it's NIMBYism or whatever it is, we don't build linear infrastructure like we used to.

Markham: 24:35

And that's one of the reasons why, a, new technologies so for instance, we have, one of our groups here at Energy Media, we have a bunch of electrical engineers who are talking about recabling. You know? Upgrade your cables, and it can handle 3 or 4 times as much, power. You don't have to build new towers and string new new cables. You just replace the ones you've got now with more modern technology, all kinds of stuff like that.

Markham: 25:03

And so what I wonder is and then the second thing was the distributed energy. So are we going to be, in North America, going to be flexible enough to say, okay. Look. Our problem set our problems are growing faster than our solutions. How do we get really creative and smart with this so we get to where we need to go with all this new load coming on the system?

Dan: 25:27

It's a very challenging question, and, you know, you brought up recabling. And, you know, recabling, reconductoring with more modern technologies can enhance that capacity as can dynamic line ratings, similar to your your example on forecasting, using better data to update legacy models to deal with a current state. But the challenge is that a lot of those transmission lines, they are not in the right place because we're going from concentrated coal gensets or nuclear, and now it's solar spread everywhere. And to the point of permitting, nimbyism, I think it's why we have to basically take an an all of the above approach and say, what what is the most in a world where nothing is perfect, what is the the best next effective move to make? And I think it's gonna require recabling, dynamic line ratings, building new transmission, and also figuring out how do you concentrate some of these DERs in a way that you can leverage existing infrastructure that's being underutilized?

Markham: 26:29

This is a bit of a tangent, but the it's a question I'm gonna have to get an I'm gonna have to find an expert in the Chinese, power sector to to answer it for me. We the reports latest reports out of China are that electric vehicles now account for 47% of all new retail sales car sales. That's that's insane. I mean, that's Norway at a gigantic scale that we can barely, imagine. And and it looks like the Chinese government is going to continue to subsidize the expansion of the electric vehicle manufacturing sector.

Markham: 27:07

So things are just gonna get cheaper and better and and more available, and so you can expect I I I'm expecting that we'll see, electric vehicles, electric transportation, be an ever growing, a hugely growing, and rapidly growing load for the system. And at the same time, they're building these massive solar farms in Mongolia and and, you know, rooftop solar makes up half of it's crazy what's happening over there, and yet somehow it works. And I it looks like they're they they have to be grappling with the same issues that we are in North America, and I'm dying to know how they do it. Any insights you can provide?

Dan: 27:48

I unfortunately, no. Aside from higher level, I'd say, directionality in how they work. Meaning, if you're a nimby in in China, good luck. Like, they're they're gonna go ahead and move your village and build a dam, and, you know, that's what's driven the growth of their economy. And if you look at the electric vehicle growth, you're feeling it here.

Dan: 28:11

I mean, just last week, Tesla reported earnings, and that was a big part of it was there for now, who if the winds shift direction quickly there, but for now, they're abandoning their low end electric vehicle because I think they see it coming. These Asian automakers can flood the market with subsidized subsidized product that we just with which we can't compete. So that might force if we put in tariffs, it might force even more onto their grid, but I think it comes down to how do you build big infrastructure. And people talked about it last week when the the Baltimore bridge went down, and we said it's gonna take us 10 years to build that. I don't think it would be quite that long in China.

Dan: 28:47

They've got a very different way of industrializing their country.

Markham: 28:50

They they do. They do. I I I from what I have the interviews I have done, it's a little more complex than that, but nevertheless, I think it's a it's a truism that they get things done quicker than we do, and that's the price you pay for living in democracy instead of something else. Let's talk about some of these big loads that are coming on and where they're likely to come on stream. Because if you're talking about data center growth, I don't think you're talking about Connecticut.

Markham: 29:21

I don't think you're talking about, you know, Nevada or Nebraska. You know? You're putting likely putting them in California. You're likely putting them maybe in Arizona. Texas would be another logical place.

Markham: 29:34

In Canada, I don't know if there is a logical place. We'll we'll see. That is yet to be determined how that'll sort itself out. But what do you what do you where is that new load going to be, located, do you think?

Dan: 29:48

I think it's gonna come down to the resolution of the tension between public officials who want the economic development of saying, I'm bringing the jobs and economic uplift of a data center into my, jurisdiction relative to a willing utility to wanna take that on because I I think that's what's driven some of this fear that we talked about earlier where, you know, in a mid Atlantic state, a governor or whomever it might be says, we're gonna bring in data centers. We're gonna grow jobs. The utility raises their hands and says, well, we can't support that. And so what's the next step in that argument? That if if that if that individual that wants to bring the that economic opportunity to a state can't transfer that to his his neighboring governor that has a friendly utility, what's their upside in doing that?

Dan: 30:33

And so I think that the the from a public policy perspective, those with economic development interests are gonna have to start making friends with utilities and find a way through this. And it's not it's like everything else, it's not gonna be a straightforward answer. It's it's nuance, and it's a mix of well, great. Are are we gonna build a dedicated gas pipeline to your facility? Are we gonna build solar?

Dan: 30:55

Are you gonna have batteries? And, it's a brave new world for that. There's a a pretty broad suite of technological options that you could choose to pull that off. And, there's more coming every day, and most people don't know what's already available.

Markham: 31:09

I wanna talk, for a moment, in a moment about climate change, extreme weather, and and what that's gonna do to the grid and what your customers and the folks that you talk to in the industry are saying about that. But one of the points, and I don't know if this is even a talking point for us, but I'm gonna throw it out there. I have said for a long time that I believe that clean, abundant, low cost electricity will be the foundation of the 21st century economy, and those that get it right will have a competitive advantage, and those that don't are going to be handicapped in terms of, economic growth and and prosperity and so on. I'm getting to the point now where we don't have much time. Our our competition is is coming for us.

Markham: 31:58

And in both and I say this about the US and Canada, and it's all hands on deck, and that means the public treasury. You know, this whole business about it's like being at war, World War 2. You didn't worry about writing a check. You wrote the damn check. You built the factory to build the the boat the the ships or the tanks or whatever it was, and you're worried about paying the bill afterwards.

Markham: 32:19

It's kinda like that. We need to solve this problem, and we need to make the investments. And if we make mistakes, we need to write a check to fix them and move on to to the next one because this is mission critical for North America. If we don't get this right, we all gonna be sucking, wind behind Asia and maybe even Europe. And I don't know.

Markham: 32:41

Just so I'll throw that out there. What do you think of that?

Dan: 32:44

I totally agree. And whether you look at you know, we talked about the capacity required to train AI models, and there's been a lot of hype through the years. I'd say AI is just as transformational as the Internet and mobile after that. And so we need to be able to power that. We need to be able to build our own chips, and so I'm glad to see us investing in chips.

Dan: 33:02

And I I think the energy infrastructure is is in that, vein as well. And you you invoked World War 2. Like, we we built that. We created a middle class. China ran that playbook.

Dan: 33:13

That's how they brought, you know, more people out of poverty than than anyone. I mean, they're they're feeling a little bit of the overhang on that now. But if you're in a state where you've got people looking for jobs and these jobs are they've they've got a multiplier on the value that comes out the other end when we can build that kind of infrastructure to actually compete and and and lead instead of trying to to catch up. And when you've got a 10 year lead time to build chip fabs and, you know, even more than that to start building transmission. To your point, we're we're already behind.

Dan: 33:44

We need to get started.

Markham: 33:46

Yeah. I couldn't agree more. And one of the handicaps we've got now, to doing that is is, climate change, extreme weather. We're seeing that all over the place. We've seen that in British Columbia.

Markham: 33:56

We've saw, you know, the numb the highway number 1, you know, that stretches from coast to coast. Big portion of it washed out a couple years ago, you know, because of an atmospheric river that came settled in and and we weren't it they weren't wasn't built to handle it. And, of course, down there, you guys get hurricanes and tornadoes and a lot of extreme weather we don't get. And what how how is the grid going to be hardened, so that and can we do it so to withstand that kind of extreme weather?

Dan: 34:30

The only way that we get there is to to to start with some fresh thinking. And most grid modernization conversations right now are fundamentally the same as they were 50 years ago. The world is not the same.

Markham: 34:43

Dear. Oh, dear. Yeah. That's not

Dan: 34:45

Well, and so we have to find a way how do you how do you do more with less? How do you unlock new value from existing infrastructure so that you can free up budget to go solve these new problems? Because if we just keep doing it the same, we're already in an affordability crisis. Like, you you can't keep jamming that in the rate base, and so you've gotta find trade offs. And it's, I mean, it's the core of what we're doing is trying to more efficiently modernize grids to free up some of that capital to go solve emerging problems.

Markham: 35:11

See, I I've hoped for a long time, I believe for a long time, that the Americans were well ahead of the Canadians in terms of thinking through their grid issues and understanding the importance of it. After what you've just said, I'm not sure sure if that's the case now, but I worry about the dinosaur thinking in the system. And I ran up, I'll just use this, and I won't use the the gentleman's name because, you know, protect the unit the the guilty. But he's he's an retired oil and gas executive, and and he was griping in my ear yesterday on on social media, you know, that there there's no replacement for oil. Oil is gonna be here forever.

Markham: 35:51

It's not going anywhere. The demand isn't even gonna go anywhere. And here we are talking about essentially building out the infrastructure to supply the competitor to oil. And how anybody in 2024 cannot see that is you just have to be completely unmoored from reality. You're just and and I'll go even this much further.

Markham: 36:11

I know a lot of executives and a lot of middle management in the Canadian oil and gas industry. I've never met an industry more ignorant of their competitor. They know their industry really well. They know nothing about the electricity system and the electric demand technologies that are coming down the pipeline. And what kind of conversations are you, hearing, and what's your take on that?

Dan: 36:37

Yeah. I I it's the same. And I I I forget the quote, but it's hard to convince a man of of something if his if his salary depends on him not believing it to the

Markham: 36:44

Upton Sinclair? Upton Sinclair? Yes. One of your guys.

Dan: 36:47

Exactly. And it's it's it's symbolic of our current political climate where everybody's in their corner. You're either right or you're wrong. All the answers are always nuanced and in the middle, and and we we face this. We're a venture backed clean tech company that, you know, is meant to help de accelerate decarbonization.

Dan: 37:04

A lot of our business is gas demand response, and people say, oh, well, you're you're perpetuating gas. We're saying, no. We're accelerating the transition to electrification in a more informed manner. We're creating a nonpipes alternative to keep from going and building this infrastructure. But the challenge is that nobody's looking to get into the messy middle, have a nuanced conversation, and recognize that, you know, again, one of my favorite quotes from a a a a book I'll throw out is a conversation with a center, not sides, and that's what we're having.

Dan: 37:35

We're we're polarized on politics. We're polarized on energy, and I I wish I had a better answer on how we fix that. I thought maybe COVID would be that cat catalyzing event to bring us together, and it it sort of went the other way. And so, sadly, I I think the way this happens is when we start having dramatic power outages where we have a a severe storm and a major coastal city is out of power for a month. Like, the the the catastrophic economic impact of that is I I hope it doesn't come to that, but I fear it's gonna take that scale of, issue to to really drive change.

Markham: 38:12

I will say because, you know, in my job as an energy reporter, I I read widely, you know, and then so I I've run across speeches that have been given by some of your senior politicians in Washington, you know, people like Gina Ray Mondo and Janet Yellen and so on. And I would say that compared to the Canadian politicians, there is a clarity of vision for the future, the energy future, that we don't we don't have. We're all fuzzy and, you know, we we just talk about, oh, we're gonna need to reduce emissions for climate change, and we don't have a clue what's coming for us. And there is an old adage amongst historians, I was trained as a historian, is that when crises come, whether the civilization rises or falls, depending on the quality of the leadership, and I fear that this is where we're gonna follow fall down. Is we are I mean, in the short conversation that you and I have had, we've identified, I don't know how many challenges, like, almost existential challenges that are very, very they're wicked problems in some respects and very difficult to solve, and I worry deeply that our leadership is not up to it.

Dan: 39:25

I I share your concern. I you it requires a level of of courage that doesn't fit with the way politics works currently, whether that's, you know, professional politicians all the way down into energy infrastructure. And even on that, I I have to be careful because we sell the utilities and and, you know, we're friends with all these energy infrastructure folks, but I see the the the gas people yelling at the renewable people. And it's like every other fundamental human problem. You're both wrong and you're both right.

Dan: 39:55

Find a way to have a conversation and get to the middle. And I think that there are political wins that can drive that in the right direction with the right economic incentives to your point of, let's get started putting shovels in the ground and build transition transmission. Because with that, you're gonna satisfy both sides of the aisle. You know, folks that might not even believe in climate change or renewables, suddenly they've got a job where they're making twice as much as when they were in the coal mine. That's how you get people to come together, and I think it'll be it'll be different in every state.

Dan: 40:26

It's really hard to get large scale infrastructure that's in a political vein done in a nationwide perspective, but it's once one state sees it and they see, boy, these guys have got an extra $100,000,000 in tax revenue this year from all this new employment. Like, I I want some of that money.

Markham: 40:45

Well, speaking again as a historian, we I think we've got a pretty good idea that the the, state in institutions that got built in the depression as a response, you know, FDR and and some of the the the big states, the the programs and institutions that they built really were integral to the response to World War 2. Without those, probably would would not have, you know, been as successful, as the war effort, in fact was, and I fear that you are correct that it's going to take catastrophic something, crises, to focus us enough that we put aside these differences and cooperate and and and move forward. And on that almost depressing note, Dan, thank you very much for this. This has been, you know, I I like these kind of conversations because we had plenty of detail. You know, we talked about where the load's coming from and what some of the specific problems were, But then then we got up to the 35,000 foot level, and gave that perspective on it, which I think is really important.

Markham: 41:52

I think we don't pay enough attention to those. So thank you very much.

Dan: 41:56

Thank you. I really enjoyed the conversation, and I hope we find our way through this challenge.

Markham: 42:00

Well, we here at Energy Media will be doing our part. That's all I can tell you.

Dan: 42:05

Cheers to that.