Power plays: grid economics and engineering, with Travis Dauwalter

Welcome to Complex Systems, where we discuss the technical, organizational, and human factors underpinning why the world works the way it does. Hi to everybody and welcome to Complex Systems. I'm here with my buddy Travis DeWalter. Um great to be here. Thank you very much for having me on, Patrick. Um it's a pleasure. I'm really excited about the conversation ahead.

Yeah, thanks very much. So we're going to be talking about uh the uh energy grid as an institution and uh engineering artifact today. Uh you've been in energy for a very long time, I think.

Yeah, I've uh been, you know, thinking deeply about our electricity grid here in the US for the last fifteen years or so. And I think every time I peel back another layer. I'm shocked at how complicated it indeed is. So it feels like a fitting topic for this podcast. I feel like I'm something of a talented amateur on this uh subject, uh perhaps less on the talent, but more on the amateur.

Uh, but it astounds me that we managed to put it together prior to one, like the physical instantiation of any networks to coordinate the installation of the grid, but to the sort of thinking about you know, formalized thinking of graph theory and networks and similar, which would seem to me to be necessary to, you know, string the wires together and have all the math balance.

But apparently prior generations were uh willing to tape things together, deal with the fires, and then eventually get us into some meta stable state. That's kind of how it flowed as well. It it got assembled off of a choice, you know, a choice made here and a choice made there. And some of them were stickier than the others. We can dig into all of that.

Um but I what you're saying really resonates with me in terms of just kind of the sheer physical complexity of the grid. If I'm looking at a light switch in this room that I'm in right now and if I were to walk over and flick it on and off. I would know with certainty that light in this room is going to toggle on and off, and there's a wire that's going from this light switch.

all the way back to some generating plant, maybe hundreds of miles away. And all of our devices, anything plugged in is at in some way connected topologically to this grid. It's really, really amazing.

The thing that blows my mind even more than the geographical implications and the you know. Like there physically must be a path hundreds of well, in some cases hundreds of miles along between you and uh some physical, chemical, electromagnetic generation apparatus.

There's also feels a little bit like calculus and a little bit like physics going on, where the instantaneous draw on the grid must exactly match the instantaneous uh production of the grid with you know as the universe is uh capable of perceiving zero difference between those two things. where the actual physical processes involved are not such that one can uh scale them arbitrarily quickly up or down. Uh and so there is some amount of slack in the system. Uh and

Implicitly there is some sort of demand and supply matching apparatus going on, which does possibly humanity's most efficient job of instantaneous demand and supply matching. What is that apparatus? Yeah. Uh, I think I totally agree with you. Like it's remarkable that you can turn on that switch with certainty. And that there is like this supply and demand match that's happening, not just like once a day, we're checking in to make sure we're matching up, but like at the second by second level.

And What ends up happening is like with all the puts and takes of people turning load on in the grid and then taking load off of the grid. the it induces incremental change in the frequency of the grid in that like local topology. And the generators can observe that. minor dip in frequency or minor increase in frequency. And then they're effectively responding to that. And the tolerance band that you're talking about, it's very narrow, but it's you know centered on 60 hertz.

Which is what our grid operates on. And If it starts getting if the frequency starts getting a little fast, that means that we've got an abundant supply compared to demand. And that's the signal to generators to start turning things down and If we're seeing the frequency droop a little, then you know, the supply needs to step in and start providing injecting a bit more power into the grid.

So I like I I totally get what you're saying. And it it does feel like impossible to orchestrate the millions of different users that are on this grid in that way. But there's this really tidy data point that you can observe happening continuously and you're keeping it within that tolerance band around 60 hertz. I suppose this is one of the original operations research problems where in sort of like the classical model of operations research modeling a factory, you'd be able to

uh perceive changes in demand in the market in like the flow of orders at the factory or uh changing stock uh issues, et cetera, at various workstations. And here you are like literally using It's been a long time since my engineering degree is at an oscilloscope. An oscilloscope on the wire and attempting to measure the frequency of the electromagnetic signal. Yeah. And like the alternating current that we operate most of our grid on.

is, you know, ready equipped for that sort of observation so that we can make those fine adjustments. There's also, you know, depending on the market there, and we can dig into this a bit more about how

regionally we've made different choices across the United States on how to structure those different grids. There's sometimes generating units that are just sitting there and providing frequency response services for the grid. And their whole job is to just like stare very intently at that oscilloscope and make sure that we're doing a good job of keeping within those bands. So

those sorts of I guess different policy decisions that were made by the different organizations that oversee our grid, I I think have been really effective in keeping the grid as stable as it is. I mean Think about the last time you had a grid outage. You can probably it it depends on location, but for the most part across most of America. You it's really rare for you to have a grid outage and if you do, it's often just a flip. Yeah.

And then the grid is finding its way to its healthy, you know, 60 hertz frequency. And and part of that is the utilities have a lot of arrows in their quiver to help mitigate. this supply demand mismatch and ensure that we, you know, keep within tolerances.

And they'll just start running their playbook, you know, first try this, if still having problems, then try that. And they just kind of move through the cascade of activities and it will culminate if if none of them work, it it turns into rolling blackouts. But there's a lot of opportunities before you get to that point to um cure the problem and they take full advantage of it as they should. I mean, we've come to really expect

power to just be available whenever we want it. And it's it's almost a feature of living in the modern era. And, you know, so we we have very little patience for when the grid goes down. Yeah. I think the pervasive availability of power, along with bandwidth increasingly, water, etc., they're an infrastructural substrate that the rest of society kind of like leans on in a load bearing fashion for doing all the other things that we do with our lives. And so

There's always a background process in my mind when I'm flicking something. I'm like, wow, this is amazing. And amazing that the vast majority of users never have to think of how amazing it is or to like plan their lives around it. I understand that one of the things that both grid operators and power producers do is to plan around variations in the clock and variations in

I suppose the annual cycle and the business cycle in terms of power demand. Do you want to like sketch out what those curves look like for people who might not have looked at them before? Yeah, sure. Let's talk first about seasonality. And then we can zoom in a bit onto like what's happening hour by hour over the course of a day.

When And it it depends a bit on your location, but I live in Atlanta, Georgia, for instance, and it's you know, it's really hot and humid in the summer. And so generally speaking, the loads are high for Georgia power to, you know, they have higher loads that they're facing in the summer. And in the winter, it tends to be we tend to have pretty mild winters here with the exception of uh a pretty big snowstorm that came in uh a couple of weeks ago. And so you see that sort of seasonal cyclicality.

You might see something like a double peak in seasonality in places like the Northeast where there's kind of high energy consumption for air conditioning loads. But then in the winter, there's maybe, you know, not everyone has gas fired furnaces. And so there's higher electricity consumption in the winter as well as they're trying to heat their homes and their spaces.

And so, and you can contrast that with a place like San Diego, you know, notorious for having really lovely weather throughout the year. And they're gonna have from a seasonality standpoint, I I guess less amplitude to those, whatever that that annual cycle looks like. And then as we like zoom in a little bit to shorter time frames over the course of a day, I I guess like put yourself in the shoes of your own energy usage. You know, you at midnight, many of many of us are in bed and

the house is kind of shut down and you're not using a lot of electricity and then you wake up at whatever time you wake up and maybe you go down and turn on your coffee maker and Throw something in the microwave or turn on your oven, turn up the heat or turn on the air conditioning. And so there's like a little bit of a peak in the morning where the energy consumption goes up as everyone is consuming, kind of waking up and starting their day.

There tends to be a little bit, I wouldn't say like a lull. It's not necessarily like a huge drop, but things level off. And that's a lot of the reason why is because everyone is moving from their homes to wherever their place of work is. And that place of work on a kind of like

energy usage per person basis is a little bit more efficient. You know, think about a big commercial building with like really, really efficient air conditioning units and the like. And And so like the unit amount of energy you need to cool yourself when you're in a commercial building is lower than when you're trying to cool yourself in your home.

And then kind of the spike happens again as everyone's leaving work and returning to their homes and starting their evenings, turning on televisions and

doing their cooking and, you know, re-engaging with their HVAC system. And then it will taper off as everyone goes to bed and the cycle repeats. So that's sort of what it looks like on a day to day basis. And then there's that You could imagine that little waveform that I just described kind of goes up or down, flows up or down as uh we move through the different seasons of the year.

So one of the things that fascinates me about the economics of this is that one, for most grids, there is intentionally a mix of different um

power generation modalities to uh hit various points among that waveform such that there are there's a great amount of physical capital in the world that is deployed at midnight, but which is known to be offline at midnight, for example, solar generation.

unless you're in a very rare location, you will not be getting sun at midnight. But our sort of natural desire for for offtake is lower at midnight and then solar comes on during the day and towards the peaks the there are let's say higher marginal cost or higher marginal nuisance generators such as believe the word is peaker plants where you might be burning liquid natural gas where from a societal perspective

Many people would assume, okay, if we could make it one hundred percent renewable energy use at some acceptable cost level, we would like to do that. But at certain margins, that is cost prohibitive. And so we can cover those margins.

And maybe those margins alone with the the use of the peaker plant and then intentionally keep the peaker plant offline for 80% of the time, 95% of the time, potentially even in some grids, perpetually offline, except in the case of emergency, which provides that sort of like system-wide slack for the extremely disruptive, tough to predict events. I lived in Japan for 20 years and so the only sustained interruption power that I can remember from my time there through

many, many thousands of earthquakes was the combination earthquake tsunami event in uh twenty eleven. And uh that would have uh been a non-event but for uh a power plant being directly impacted by the tsunami and several power plants. being directly impacted by the tsunami and a great system wide wrench thrown in the works uh in amidst

Much more direct tragedy, but uh the infrastructure being down for longer than the period of a few days also causes its own rolling wave of tragedies. So pit pip for grid operators. You know, like I want to just echo the point that you made about renewables being it's challenging to go to a 100% renewable grid.

And it's more of a it's like a physical problem. You know, the sun is up and available to provide us or to harvest energy for, I don't know, some fraction of the day, between one third and one half of the day typically. And wind, you might combine you might think, Well, let's combine it with wind. And wind tends to do well in the shoulders where the sun is setting and the or the sun is coming up and you're getting the temperature inversions. And so

there's still this like tricky period where you, you know, tricky tricky hours of the day where you just you there's really no harvestable, renewable energy source. And so you would have to combine it with some sort of energy storage. What's been great about kind of observing the grid in the last few years? I guess maybe the last decade is that energy storage is starting to become a more effective way to, you know.

manage the grid and it's doing it's doing two things. First, it's like back stopping renewables and and removing some of this intermittency that you've been describing. And the second thing that's doing is it's, it's allowing us to drive a bit of a wedge between that supply-demand, that mandatory supply-demand match that we have. And instead we could have, you know, the demand be a little bit high and we're using batteries to satisfy that demand load and supply can be lower as a result or

There could be periods of the day, like think about that middle period of the day that I was describing where people have kind of moved to their places of work and the and the energy consumption has dropped incrementally. That's a good time. You know, in in places like California where there's a lot of solar panels that are on the grid.

that's a good time to take and redirect all of that solar energy that we're harvesting, you know, fulfill the load that is on the grid, but then take any excess and charge it, or or rather charge these storage units. And then you can, you know, you have energy and reserve that you can deploy later. So that's been a technique that we've started to be able to use because chemical batteries and other storage solutions that are out there are are becoming a bit more uh financially tractable.

for these sorts of problems. And then the other point I just wanted to respond to was this sort of peaker plant issue that you described. And it's really, really prevalent in places that have heavy amounts of renewables because you have that sun setting right around the time, you know, this is really prevalent in California, for instance, where the sun is setting and that's about the time that a lot of people are maybe making that transition back to their homes.

where the energy, there's a spike that's coming, but the solar panels aren't there to provide any support against that. peak demand, that that little spike in demand. And that's where the peakers have to come in and really rapidly respond. And there's this graphic that was created by Kaiso, the California ISO, which is the kind of transmission moderator, orchestrator in the state of California. And Kaiso released this.

Amazing chart that kind of tracks year over year what that kind of big spike in late afternoon looks like. And it takes When you look at it year over year, it it looks a lot like a duck when you're looking at the graph. And they've come to dub it the duck curve. And it's it's Quite a great illustration of precisely the problem that intermittent renewables can create on the grid that we, you know, when we were designing this grid to begin with, but I don't know if they even conceived of the idea.

of having solar panels harvest energy and inject it onto the grid. And so now here we are, we have this technology, we're using it, but the grid maybe is not quite designed around that sort of scenario. Yep. I think the acknowledgement of an ad read sounds cooler in Japanese. この番組は次のスポンサーの提供でお送りします

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And while we perceive electricity consumption as instantaneous because slip switch light goes on immediately uh at something slightly under but imperceptible to our eyes, the speed of light.

There's physical processes involved in generation where I think I saw a graph somewhere and I will drop it in the show notes if I can find it. I've Like physically, how many minutes does it take to go from, I have a nuclear reactor sitting here. It's currently cold. You know, if we needed like gigawatts more energy.

Making this not cold anymore is an option, but that is not a uh a thing that I can quickly action in the next minute. You know, how many hours does that take to spin up given that it is otherwise ready to spin up and then You know, how many minutes does it take to bring water to a boil in a peak peaker reactor given uh or peaker uh plant rather given the uh availability of, you know, staph and nut and uh liquid natural gas on site?

And then, you know, there's similar sort of tiering system of things available. And the more battery capacity we have, the more we can sort of buy some leeway for making decisions that are either costly or consequential or difficult to reverse with respect to usage. Yep. We can let the batteries do that work or fill in that role. Yeah. And you you mentioned this idea of baseload. So if you think about

how those waveforms that we were describing earlier, what they look like throughout the year, there's kind of a minimum load that we'll always need to serve in a particular grid. That's a great application for nuclear power plants. for coal power plants, for what we call combined cycle natural gas power plants, natural gas fired power plants. And

What they want to do, what those plants are really good at is running for a very long time, very consistently. They don't want to deviate from their run state and they're very efficient. They're they tend to be quite large, and so they're really costly to build. But once you get them in place, the marginal costs are quite low and they become an ideal solution for covering that base load. And then you have these plants that are just imagine again, you're looking at this.

year-long waveform and the baseload is kind of covering up to those lower troughs. And then you have a type of plant called a mid merit plant, which is meant to run somewhere between like half and three quarters of the year. And that plant is meant to cover a lot of the rest of that waveform. It's a slightly more flexible type of generating unit, but you know, has great economics and we want it to run for a long time.

And then those peakers are the last ones in the kind of stack, and they're covering all those highest peaks in that waveform. Now, what renewable assets are doing is their marginal costs are are effectively zero. So they're kind of the first to take. And states like California have created must-take policies where if there's energy that's being

Created by a solar panel or by a wind turbine. We have to make use of that first before we make use of anything else. And you can imagine as more and more solar is coming onto the grid in places like California, then The bottom of that kind of stack that I've just described is no longer the nuclear plant, uh, which we don't want to deviate from its run condition. It's now this like slug of renewables.

that is the must take. And then the nuclear plant is sitting on top of that. And if ever the waveform, you know, drops into the nuclear power plant's run condition, then the nuclear plant needs to turn down. And that's hard on the equipment and it's tough to do. So we're also having to figure out like, well, what do you do with all this excess power that's generated by the renewables when, you know, this nuclear plant is essentially satisfying all of the base load and

the issue we'd run into would mean turning down the nuke plant. So instead, these batteries become a great solution, like a just a a dump repository for putting all of that energy until we can use it later. Uh it's also fascinating to me is there are some novel uses of uh electric power which function as Something akin to a synthetic or a natural battery. And the classic example of this was uh aluminum smelting, where uh aluminum smelting is

a relatively simple process in terms of inputs, which uses a gargantuan amount of electricity. And so aluminum smelters end up located in the world in places which have sort of structurally low power costs, like there's a lot in Iceland, for example. And every user of electricity in the con we has the notional ability to do magic word for this conversation curtailed their usage. But most of us would find like going over to the fridge and unplugging it to be pretty inconvenient.

But if we were professional users of electricity, like if say we were the management of an aluminum smelter, we could like reasonably make the decision that, you know, from like four o'clock to six o'clock today, just shut it all down. We uh we don't want to do that for whatever reason. And it turns out that there are economic arrangements that say a grid operator could make with an aluminum smelter.

which turned the aluminum smelter from just a sort of like passive user of electricity into something akin to its own power generation apparatus. Do you wanna sketch out what some of those might look like? Yeah, so... Just to clarify, are you asking like about the onside generation or taking advantage of the inertia of like a really hot molten piece of aluminum that maybe doesn't need heat entered into it? I was thinking more along the lines of uh demand response.

Yeah. Yeah. So I you're totally right. Like demand response is definitely a technique that can be used. There it it tends to there's probably two primary signals.

that industrial facility or commercial building or even your home could use to make demand response like a feasible curtailment action. As you mentioned, like everyone kind of generally wants their refrigerators plugged in.

And all else equal, the aluminum smelting plant would much rather have its aluminum smelting production continue on. But if the utility is willing to make payments through these like demand response programs, um to basically ask the aluminum smelter to reduce their load and those payments feel attractive to the aluminum plant, then they'll take them up on it. And they'll do it. We have the option at like the residential level for those who have like different smart thermostats.

There's often programs that you can sign up for that aggregate all of, you know, the neighborhoods in together and can effectively act as like a virtual demand response.

asset for the utility and they'll collect a payment from the utility to curtail our, you know, air conditioning units in the peak hours of late afternoon. And what ends up happening and how the money flows through that is the orchestrator, this tech company that can coordinate all of the houses and all the smart thermostats, they take sort of a a premium or or a piece of the total payment.

that the utility provides. And then they pass on savings to the users as well. So with there needs to be something in it for us as the, you know, resident who doesn't want a really hot home and we like cure that through the economics of this kind of pass-through payment. The other signal that a utility might be able to send if they don't want to have a demand response program or the aluminum company is not interested in it is some utilities have um started to establish time of use rate.

Where at different parts of the day, the amount of money that they'll charge you for that electricity consumption varies. And tends to be the it tends to be the case that in the middle of the night when no one's using electricity and supply far exceeds the, you know, typical demand, the energy prices are quite low.

Whereas during that peak period and late afternoon, that's when energy prices tend to be quite high. So that's like another signal that the aluminum smelter can get from the market, so to speak, in order to curtail their load. And there's been like a weird artifact that's come out of that that l is layered in by all the electrification of vehicles.

because there's a lot of programs where you can basically you with these time of use rates, you avoid plugging in your electric vehicle at that time or the vehicle itself. can become aware or be made aware of those varying time of use rates and it will only charge when the time of use rate has, you know, when the when the electric rate has gone down quite a bit.

And it's all designed to save you money, but it's creating this really weird artifact in the grid where if the time of use rate, let's say it ends or it it trips from like a really high rate. to a really low rate at 7 p.m. then all of the electric vehicles in that area will suddenly flood into the you know flood in the market and demand a lot of electricity to start charging their cars.

And you get this weird like secondary spike because of all the electric vehicles that are beginning their charging process. So this is something that a lot of utilities are having to start thinking about is like. Okay, do we do tapered time of use rates? Do we require that electric vehicles

you know, be a little bit less aggressive about charging their vehicles right when it trigs trips over to the lower rate. What do we need to do to solve this problem? Cause this is not at all what we had intended when we set these time of use rates a c over the course of a day. This is something where the systems engineer is like, Finally I'm professionally relevant. We have so much prior art on this one. But uh it's

uh an eminently solvable engineering problem. The so quick reaction on demand response things. Back when I was living in Japan, they had a uh There's TEPCO, which is the grid operator and primary power generator in the Tokyo region. But there are a variety of companies which do some amount of generation and a large amount of wholesaling of Tepco energy to people.

And the one which I used had a demand response program where TEPGO would use them as essentially a vir virtual picker plant, make up a number, contractually promised that TEPGO can give you twenty-four hours of advanced notice and you will provide us fifty uh fifty megawatts or megawatts, as sometimes said, between the hours of six PM and seven PM tomorrow to cover air conditioners coming on as Salarmen get home for the day.

And their way of making that happen was to send out text messages and push notifications to all the customers who had opted into it and say, you know. We predict that tomorrow you will use four kilowatt hours over this interval. For each kilowatt hour less than four or fraction thereof, we will uh pay you three yen, three cents or so, and you know, multiply two.

relatively small individual uh decisions like, okay, maybe I should not be playing uh the video game on the uh power consumptive laptop right now because that is worth two cents of utility to me. Um uh aggregate that over several hundred thousand customers in parallel and then they could uh fairly reliable reliably promise to TEPCO, yep, we're we're good for for fifty megawatts anytime that you make that phone call.

Uh and it was typically arranged about a day in advance rather than at the moment. I assume at the moment when you're already looking at the falling signal on the oscilloscope, it's uh far too late to send out text messages but Yeah, there's this so there's this really great study that some academics pursued. I can't remember the year that it was. But

They essentially used a light in, I think it was in and around the Chicago area actually. And there was a light that you could plug into the kitchen outlet. It tended to be the kitchen, just some hub in your home. And The light would be red if power prices were quite high and they were wanted to encourage you to uh reduce your load, and green when power prices were, you know, fine. And they were hoping to observe a lot of response. to the light as a signal for what the market prices were.

But it turns out that we're not very sensitive to the price of electricity. We we just really like it as, you know, a modern amenity. And if the price is a little high, you know, you mentioned like you can save three cents times whatever your consumption is. It's just It ends up not being that much money and most people are willing to kind of pay the premium, but that contrasts quite a bit. All to say that residential users are not really great at

They're not great targets for demand response type programs and these sorts of mechanisms. But commercial and industrial users, they're often really, really narrowly focused on their bottom line and they can you know, if they can save two percent of their energy costs or whatever, that's a meaningful number for them and they're willing to engage in, you know, those sorts of behaviors. So

A lot of the demand response stuff has been much more effective. Actually at the commercial building level, even industrial facilities, they have to weigh the difference or kind of the the trade-offs of maybe having their aluminum melting. stop for a moment and their production kind of

slow down or come to a halt. And I don't know, there's a lot of revenue that they're leaving on the table there if they do that. So even industrial facilities tend to be a little bit less responsive to those price signals, whereas commercial buildings are Yeah, uh, more keenly willing to engage in that sort of behavior.

I think one thing we're seeing is uh, you know, simply the agglomeration uh effects of if there is plus or minus three cents of uh uh utility available to you but uh for making a decision they human cognitive cost of snatching that three cents will swamp it. And so residences are unlikely to make that for rational reasons. It seemed that most people like myself who opted into that, the push notifications were more doing it.

out of some sense of social concern or simply the gamification aspect of like, oh, you know, periodically I get a notification over my phone in two things'cause that it breaks up the monotony of the working day.

But when you're a large commercial facility, you could reasonably have people or software working on your behalf which do nothing but, you know, power price optimization. And the this might not be Obvious to people who are not uh commercial real estate specialists, uh, but uh if you if you project out your power costs over the course of a year and they're relatively stable on a year to year basis. causing them to go lower does not merely save you, you know, an operating expense in your

That is effectively capitalized into the cost of the property. And therefore, um relatively small swings in the operating expenses of a building can cause large changes to the valuation of a building as a capital asset, which do a couple of things that we like. It causes uh real estate investors, landlords and similar to to capital investment in the present day to quickly

sort of structurally change the energy needs of their building. And we get to enjoy those new structural modifications over the course of the next twenty, thirty years. But it also says that, oh, to the extent that there is an obviously incentive compatible thing where all I have to do is install a piece of software and or you know, dial my thermostat better in certain hours of the day with someone who probably does not make like nuclear engineer money, I will do that immediately. Thank you.

And so market works there. I'd be remiss if I didn't uh discuss one interesting use for the economics of power because it's a sector of the economy I very rarely say positive things about. And I think this is one of the interesting things they've generally done. The cryptocurrency community is a large user of power essentially because they waste it to to produce random numbers that they have a particular like emotional or aesthetic attraction to.

But the interesting thing is they can titrate up or titrate down on the amount that they are using at any moment in response to demands from grid operators and similar. And so this got misreported, I think, with respect to some of Texas's grid issues in prior years where Texas was undergoing some amount of grid instability due to a variety of reasons.

and it became public knowledge that the grid operators were paying the uh Bitcoin miners to curtail their usage. Uh and this was like, why are we allowing

Bitcoin miners to to suck up valuable power while we can't necessarily keep the grid on, et cetera, et cetera. And In one of the few times in my life where I will uh defend the the honor of Bitcoin miners, what was actually happening there was that the Bitcoin miner was contracting up front to buy a large amount of committed power use at a uh a particular price.

Which is something that the grid and utility operators want because they have you know, that baseload of energy that they have to sell to someone. It's like a surety. Yep. Yep. And the Bitcoin miner was saying, like, yes, sticking my hand up. I am always good for my slug of that baseload. Unless you tell me you need it back. In which case, I will turn off my machines in seconds.

And you will like pay me for this service that I am providing in in smoothing out the amplitude of your demand curves and When this was reported, people who didn't have a great background in energy economics were saying, wait, this is the Bitcoin companies extracting money from the state of Texas, et cetera, et cetera. But I don't think people who had that perception of the issue understood the totality of the system, where

say what you will about Bitcoin mining and in other places I say quite a bit about Bitcoin mining, but in this one instance they were probably good for the economic viability and as system wide stability. Yeah, they were taking advantage of a program that was available. It's interesting, like when I think about tech kind of tech oriented consumers, Bitcoin, you know, often comes up.

And I think I've read in a few locations that these small modular reactors, which is this, you know, kind of nuclear power two point oh is becoming a feasible or there's there's interest from Bitcoin miners to maybe have an on site small mood modular reactor and SMR available to them to just have a little bit of, you know, that surety over the energy.

supply that they're looking for. But like you were mentioning, a Bitcoin miner has the ability to titrate. And it it seems like the trade offs are okay with them. And that I can't I can't think of that same sentence being said when it comes to data centers that are trying to support some of the AI work that is going on right now. Those jet those data centers want to run. They're more like

a manufacturing facility. They just want to run twenty four hours a day, seven days a week. And it would I would be surprised if like data centers would be taking the same sort of bargain with these grid operators because It's just so valuable for them to be up and running and they just want to run continuously throughout the day.

I think there are some interesting margins. So granted there are many engineers that have spent far longer than I have on this particular topic, but in a similar way to the the waveform of energy usage tracks humans over the course of their day, the waveform of data center usage Largely tracks humans interacting directly with computer systems. But much of the computation which is done on behalf of humans is not done in response to someone sitting at a keyboard.

it's done elsewhere in the economy. And some amount of that can be scheduled. And so there are programs at places like AWS and similar where um if you were to schedule computation that you have the luxury of scheduling. To the middle of the night locally, when we probistically think many less people will be watching Netflix than somewhere. We will sort of.

cut you in for a break on that computation. Similarly on AI, there's a difference between inference time compute, which is someone is interacting directly with an L LLM and or an LLM is being invoked on their behalf and the training cost. I think at a lot of margins it makes sense to run the chips that are doing the training a hundred percent of the time, but one can imagine perhaps that being other than the case at like certain margins, which we haven't quite reached yet.

And in those hypothetical futures where there is a bounded amount of need for training time, which people are saying might not arrive for a couple of years yet. You could hyp hypothetically do the training overnight. Turn off your ships during the middle during the middle of the day. They are quite, quite uh power hungry. You mentioned one topic which I think is fascinating, which is the co-location of energy production and individual energy users, because the

This grid gives gives us a model where energy just magically teleports from wherever wherever it is produced in the world to me. But that isn't actually true, right? There there is some loss over shipping the energy. tens or hundreds of miles or kilometers. So So many places to dig in here dig into here. One let's just establish at the outset, it's possible to to get electricity without getting it from the grid, right? Can we talk about so called behind the meter arrangements?

Yeah, of course. Yeah. I mean you said it well. The The transmission system is excellent at conveying electricity from the generator to the end user, but if the end user decides that they want generation on site, then you know you bypass that transmission component. And so what the utility, a great example of this before we get into some of the bigger applications would just be someone has some solar panels on the rooftop. And if I'm

You know, if I'm sitting, the solar panels sit behind the meter per se. So the meter is, I don't know, out at the street and my solar panels are on my rooftop and they're connected to my house loads. So what the utility observes in my consumption is something less than my true consumption as long as the solar panels are taking some amount of that load off of the grid.

And that's what we mean by behind the meter. As far as the utility is concerned, if I had a big enough solar panel array on my rooftop and maybe even batteries to backstop it, I would maybe have no demand as far as the utility was concerned. What you get out of that is, I mean, the point you're making.

You're avoiding some of the transmission losses. So as like a total grid and evaluating grid efficiency, you you're no longer having to count those losses when you're tabbing up the pros and cons, but you're also like

the you're avoiding this effect that's becoming more prevalent on the grid was which is this idea of congestion. And what happens in these transmission lines is they were built kind of fit to purpose for some amount of energy usage. But with a timeline of like a lifeline, a lifetime of maybe 30 years or 50 years or something like that. And the energy consumption that's happening 50 years from today.

may, and I mean, all odds suggest it will be far higher than the energy consumption that we're currently experiencing when we build this transmission line. And that transmission line is a lot like, I don't know, it's think of it as like a pipe. that's conveying water and it has some diameter and there's only so much throughput that you can put through that transmission line. And then at some point you're gonna just need to build another pipe. You're gonna need to build another transmission line.

So We're kind of facing, we're fast approaching, and it's being compounded by all of the j uh data center demand that's starting to jump onto the grid. But we're we're fast approaching this point where kind of our aging transmission infrastructure is not able to keep up with the amount of throughput that we need to put through those lines. And we either need we, you know, our choices are build more transmission lines, which are incredibly expensive, or start.

Taking, like make it so that the utility doesn't think there's load at the end of that transmission line. And that's that whole behind the meter solution that we're talking about. Mm-hmm. So frequent listeners of complex systems can probably predict a bit of the answer here, but the physical reality of transmission equipment has not evolved radically since the invention of electricity, or maybe it has. Well, it certainly has since the invention of electricity.

But ticking as writ that like the the physical artifact being shipped out and installed in central Illinois is very similar to the one that we did in nineteen seventy five. I would expect that the cost of actually installing it on an inflation adjusted basis is much higher than it was in 1975. Why is that? You know, the there's I guess land, probably one of the drivers. I don't know what the mix in terms of like what percent each of these drivers is, but one of the drivers is

like these transmission lines have to span a finite and unchanging amount of land. And that land continues to be more and more expensive. And so as you're trying to get easements through some, you know, like farmlands property. They, you know, have more negotiation capability there and can drive the prices up. I think we've got to be able to do that. We generally tried to get higher throughput lines, especially compared to, you know, the lines of the early 1900s. And so there's like,

inevitably more material that we're putting into it. And there's more safety mechanisms that we're building in. So I think a combination of those things are making like the per unit mile price increase at rates faster than you know you would expect if you were just tracking inflation. We're continuing to innovate here though. The you know I uh I think

There's a couple of things that we're starting to pursue. There's conductoring material that You know, historically we've used alternating current to transmit over these really long distances because we'll step up the voltage to really, really high voltages, which draws the current, you know, there's like some kind of inverse relationship between voltage and current. And so we can keep our currents a lot lower if we get to really, really high voltages.

And that means that there's like less resistance in the in the line, there's less heat. I may be getting some of the specific details slightly off, but the point is like the higher the voltage, the easier it is to transmit over long distances. And so we have these really big step-up transformers that take

the voltage that's coming out of the generator and step that voltage up to really, really high levels and then send it along the line. That has been the most effective way to move power historically, but with some of the new conductoring materials and new material innovations.

We've been able to start doing that with DC lines, which has been direct current lines instead of these alternating current lines, which allows us to uh harvest that electricity that's coming out of like really big solar fields.

Which are generating electricity as a direct current and then kind of directly inject that into the grid by making use of these high voltage DC lines. So I don't want to say And I think you know, any transmission operators would find it unfair to characterize them as kind of this stagnant

group of technologists, but it's really the case that they, you know, they tend to be behind the generating assets in the sort of leaps and bounds that they've made. But they they continue to try to find ways to improve their transmission. The other piece that they're engaging in when it comes to transmission is the the lines tend to be rated for a certain amount of throughput, like the the pipe diameter, so to speak, to borrow that metaphor again.

And that pipe diameter like rating is set based on kind of that really, really hot day when the lines tend to sag a bit more and there's um more resistance in those lines. And what they're realizing is that Actually the pipe diameter kind of changes depending on the weather and some other factors. And so what we've usually said is a throughput line of, let's say, one gigawatt.

Well, that's like the safest version of throughput. We could expect it every minute of any given year, we will still be able to move one gigawatt through that transmission line. But by being a bit more dynamic in that line rating, dynamic line rating, we are able to say, like, oh, well, when it's cold and it's winter, we can actually move, I don't know, 1.2 gigawatts through that transmission line. And that those choices, those kind of

reckoning with those sort of policy choices has allowed us to delay some of the transmission upgrades. You know, the whole idea is like these are really expensive, these transmission lines, and we don't want to build them unless we absolutely have to. So let's Let's pull out every stop and try to make it so that

We don't have to spend those dollars yet. And let's do dynamic line rating. Let's do behind the meter. Let's talk about demand response and battery storage and some of these other tech techniques and technologies and let them avoid these major investments.

dynamic line rating is fascinating to be because presumably that's some combination of uh work happening in the lab, some combination of uh regulatory or regulatory adjacent uh approval getting and some combination of uh abundant cognition available due to the use of software.

math on a day to day or a minute to minute basis much more retractable than it was in those days where we did have electricity but didn't have widely distributed uh thinking machines and where calculator was a person's job title.

Uh I we we stand on the shoulders of giants in so many ways. I I I can't imagine doing all this work back in the day. The And again, part of the economic logic here is that there are some margins we are talking about that are effectively continuous, but there are some margins where there are great step changes around.

You know, let's say hypothetically we can only buy pipes in units of one gigawatt at a time. So, you know, we might buy 10 years of leeway in figuring out is there like really continuous

Is there frequently enough a need to ship electricity between location A and location B such that we need to provision one more gigawatt of times a hundred miles at a cost of tens of millions of dollars? Or Can we install a software upgrade at a cost of hundreds of thousands of dollars and uh, you know, kick that down the line 10 years to see whether demand actually moves in that direction or not? Yeah, grid planners have

incredible models that try to incorporate like population migration. They try to incorporate how much usage is going to happen in a in a typical household in the future. What about the fact that All the new windows that we're installing in new build homes are much more energy efficient than they used to be. There's like a put and take to everything in the models that they develop.

to try to understand what those investment needs are today to satisfy the demand in the future are so intricate and deep and you've you're crossing so many different disciplines to try to understand what it might look like 10 years from now. And so what do we need to do today?

And you know, like a transmission line, for instance, it might take eight to ten years to get one approved. So we might sit here and and kind of mark a line in the sand and say, all right, let's start this whole process of getting a new transmission line.

But that transmission line won't be installed for let's say a decade. We want it to last for another decade or two after that. So we're kind of modeling out 30 years or more to try to understand what what the infrastructure need is for, you know, this particular investment.

Yeah. And there's a fascinating amount of economics and culture and predictions about constantly moving targets that one has to make to do that. You there's a line I like to use about Christmas trees of all things. You need to predict whether children who aren't born yet will believe in Santa Claus in nine years to make Christmas trees and similarly to model the amount of electricity transfer between

Chicago and the various places that supply Chicago, you need to have a prediction in advance of like the family sizes of Chicago thirty years from now. And You know, what's the changing mix of demographics and American culture and is there a resurgence in getting married earlier and having children earlier, or do we see the continuation of current trends, yada yada, to have an estimate of that number to inform

things that you really need to put in the pipeline now such that they are available in time to meet the demand that uh you are are not forecasting. It's fascinatingly cross-functional work. There's some directionally similar work that gets done with respect to data center planning and siting. And indeed I think the data center folks, because they have a somewhat direct ability to observe what are the sources of demand in a way that electricity might not have quite as much, I get to

Evaluate that at a a faster cycle time than the grid operators historically have. the thing that is really throwing that industry up for its own mini uproar is that uh we many people perceive we're on the uh edge of a discontinuity with respect to the services that people can be getting from artificial sources of cognition. And pass that discontinuity is tough to model. Like, are you going to use like, you know, a standard iPhone and Netflix plus like 20% of compute demand in the future? Or are

are you gonna need like 10 times that provision in maybe like a three-year window. And so that is partly causing the great build-out of data centers and also partly causing them to get very creative about energy sources they're tapping. Yeah, there's this essay that was written called The Bitter Lesson or something like that. And you know, the the takeaway that at least I drew from it was

there might be more efficient algorithms that we develop and, you know, we can find ways to kind of get per unit usage per inference to be a little bit lower. But Really, it seems like the most effective ways to move us along this path is to brute force a lot of things, which kind of leads to a bit more of that kind of growing, spiking demand that we're starting to see today.

My gut tells me that edge data centers would be align a bit more with what you're describing as really difficult to predict, but maybe you'd argue all data centers are pretty hard to model. It depends and I'm talking a little bit outside of my uh direct professional experience here.

So there've been a number of changes in data center economics over the course of the last few decades. One is the emergence of hyperscalers like Amazon, Google, Microsoft. There's there that's all the them that matter.

But they are increasing a share of like all the load for compute and related services in the economy. Uh and partly it's Simply that at the scales that they operate and the sophistication that they operate, they can throw better mines and better data at the question of modeling the like predictive usage uh patterns.

where historically data center was as a fascinating business. We'll probably have an episode entirely on it at some point. But historically like data center was run as a subset of real estate where instead of selling people like relatively large amounts of square feet, you were subdividing that square feet to, you know, like rack size or blade size, and then providing some ancillary power and cooling services along with the real estate that you were fundamentally subdividing.

And so the sophistication level of data center capacity planning approached the sophistication levels of the rest of the commercial real estate industry, which as someone who grew up hearing a lot of stories from the dinner table, there are some very smart people involved, but they're not the team of PhDs that Google would put on the problem. And so Google like has multiple teams of PhDs on the modeling problem.

However, the much like there's curves for electricity where we keep finding new things to spend it on as the the price goes lower and it gets more abundant, we keep finding things to spend bandwidth. near compute and similar on as uh they become more available. Uh the existence of uh video streaming as a service, for example, is um almost unthinkable from like the you know information superhighway days where uh uh a web page using one megabyte

of data uh of data transfers would be crazy. And now people routinely blow through a uh multiple gigabytes per month of their residential allocation. Um multiple tenths of gigabytes now, I suppose, uh due to Essentially Netflix and YouTube and all the other things that people don't really think of as engineering marvels. And, you know, throw AI on top of this, uh I okay.

Netflix is very bandwidth hungry, but you can like probably predict that there is some There is some asympto for like the how many hours per day humans can possibly spend of watching video and how beautifully 4K those videos can possibly get. And so there's some asymptote for like the bandwidth and compute needed by Netflix.

Yeah, but there is not necessarily an asymptote for how man how much human cognition you could use on behalf of one person if the cost of that cognition was low enough. And so, you know.

Can you imagine a world where there are like a thousand PhD equivalents working twenty four hours a day, seven days a week on behalf of every fourth grader at my children's school? Yeah, you can imagine that world. Like it the the the goods and services they would be providing are weird ones to describe in the language we have currently, but and if if we find a world where the economics pencil at a thousand, do the economics pencil at three thousand?

Seven thousand? Two hundred thousand, like very plausibly. And then that implies some like kind of crazy amount of dynamic range in okay, so how many data centers need to be within a quick hop of Chicago? Anyhow, we'll refocusing on uh the grid topic. So a thing that I understand exists in the world is so we have these industrial users of electricity to avoid the cost and lossage of transmission and to ensure the availability of electricity. Sometimes they have co-located energy assets.

Sometimes the original user of the electricity, the you know, the plant out perhaps somewhere in the rust belt goes away, but the electricity asset is still there. Do you want to talk about the downstream economic consequences of that? Because they've been fascinating occasionally.

Yeah, I think I might be oversimplifying a little bit to just like kick us off, but really it becomes like a strictly economic question. But you know, the work of it is sunk, like building that facility. And so what we really want to know is Suppose it was strictly behind the meter, so it wasn't really connected to the grid in like a meaningful way. The question at hand is what will it take from a financial standpoint to connect this?

asset that's a little bit stranded to the grid. And how does that weigh against, you know, the potential revenue upside that we get from starting to sell the power to the grid instead of to this like immediate neighbor off taker. So I think like the choice that ends up being made becomes a relatively simple one where becomes for for the user or or or the owner of that plant.

where it becomes a bit more complicated is on the utility side because they may not have, you know, as I mentioned, this is behind the meter, they may not have really ever observed in a, you know, meaningful way what that generation was from that plant. or the the true load from that plant. And maybe the grid in that area is is simply not robust enough to take that full power that's coming out of that plant or there needs to be some upgrades that

the utility will need to make. And, you know, the question that's on the top of everyone's mind in that instance is like, who pays for it? I think like the owner of the power plant would say, well, You, the utility, you need to pay for it. And the utility's going, hold on, wait a second. Like this isn't our this isn't our bag to hold. And

that that kind of back and forth can create problems. So what the utilities will often require, and this isn't unique to this behind the meter scenario, but it it applies for all generation that's trying to come onto the grid. is they'll mandate what's called an interconnect study to understand how that generating unit will interact with the current topology that they have on the grid.

And these studies can take a really long time. They need to be sure it's a it's a lot about safety and making sure that the grid doesn't become unstable by the introduction of this new, you know, player on the grid.

And the other challenge that the interconnection connection studies have created is There's this queue, this interconnection queue, they call it, that can be quite long with a bunch of people saying, Hey, I want to put a generator over here. I want, I want one over here. And there may be dozens and dozens. And I think last study I saw was that something like 20% of

The actual assets that go enter the queue actually come out of the queue as real generating plants. So there's this like spamming mentality from those independent power producers to just, well, let's Tell the utility that we've got six different locations. We really only have financing for one. But one of these will probably make it through the interconnection. And that's the one that of course we'll go and invest in when it finally gets the approvals. And so this.

you know, behind the meter installation that is trying to connect to the grid will need to enter the queue, maybe sit there for several years waiting for their turn. And then, you know, hopefully through that study. be deemed a worthy asset to add to the grid and then they can join. But all of those different kind of steps need to be followed to, you know, and it's in the name of

grid security, grid reliability, grid safety. So it's a good reason to have it. It's just that this interconnection queue policy that we've tended to use has has gotten a little distorted. You might hear a lot of people talk about it lately. It's definitely been the thing that the energy industry talks a lot about is interconnection reform. And they're trying to find ways to, you know, reduce the cue. There's different methods that they're proposing to make that happen.

And you want to reduce the size of the queue and then increase the kind of success of units that are in the queue, those become good reforms for us to pursue, but it it just means like more policy, more sausage making, so to speak, and some of the challenges that come. I mean, it's a political economy problem almost at that point. Yep. And clearly one reason why the queue is serialized is because

If there are four hundred people attempting to add locations to the to the grid, they're not hermetically isolated from each other. Which group you accept determines the the dynamic process of what the grid will look like for the the marginal person you accept. And so

uh it ends up being exactly a political economy process where you're prioritizing uh different users' needs against each other, prioritizing locations against each other, probably doing some of the, you know, classic work of politics in a democracy of uh attempting to make the process predictable and transparent and correspond in some way to our intuitions about values and similar.

And they get and they'll take like it's almost in addition to everything you're describing, it's it's quite literally serial. Like there is one unit that will get evaluated. And so a lot of the new and then once they've evaluated it for the grid and if they approve it, they'll incorporate that new unit into their models and then they'll go and you know, they'll call the next number and you know.

Number one oh one, come on up. And then they'll do their interconnection study. What I think the coolest innovation that the interconnection reform is proposing is that we're now gonna do cluster studies. And we'll maybe take like a dozen generating units in different locations and we'll evaluate them wholesale and that I think that'll, you know, increase the throughput considerably.

And it also just it like it rightly acknowledges that the grid is complicated and there are like interdependencies between generators. So let's like study them all together. and then bring them in as like one big tranche and then we'll go to the next tranche and do it again. That that feels right to me. And I'm glad that that's the sort of um policies that are being considered right now.

Yep. It also seems to be more robust against the statistical realities where not a hundred percent of uh uh people who attempt to reserve a position in the queue will physically deliver electricity two years after being approved for it.

And so presumably if you're underwriting on the basis of tranches, you can have things like a a statistical model where okay, recent experience has been that, you know, sixty percent plus or minus twenty percent of the people in similarly situated tranches actually deliver on the following timelines.

we can incorporate that into our models versus well, you know, since we are doing each application serially, we have to assume that they will actually use the effectively scarce limited resource we are approving them for. And there's so many ways we could that we could continue discussing this. One question for you. We have grids plural in the United States. Why is that? Yeah, we do. Go at the highest level first. If if we just surveyed the whole United States

There's three different what they call interconnects. There's the Eastern Interconnect, the Western Interconnect, and then there's ERCOT, which is the Electric Reliability Council of Texas. That is just Texas. So you've got like Eastern US, Western US, and Texas.

And there's a pretty bright demarcation line between these interconnects. So bright in fact that like if I'm on a grid, if I'm operating on a grid in the Eastern Interconnect, I can't actually export my power directly to someone in the Western Interconnect because we're out of phase. Well I'm

You know, I mentioned before that we have this 60 hertz frequency that we're operating at, but not all the troughs and the peaks are kind of in sync between those three different major interconnects. They're out of sync. And so you have to kind of transfer the power to this way station, convert it to the right phase, and then inject it into the Western Interconnect, for instance, if I was moving from east to west.

The line of demarcation is essentially the Rocky Mountains are kind of in that area. And then as I mentioned, Texas. Why I think it formed in the way it did, my gut tells me it has a lot to do with just kind of how difficult it is to move transmission over the Rocky Mountains. And so it's like, we're gonna do our thing on the west side, you guys do your thing on the east side. And then Texas is like, we're gonna do our own thing. And so

That's kind of how it came together. And then within those interconnects, there's different transmission organizations that can oversee like that local grid. But I just want to make it very clear. That grid is like all connected to each other. It's much easier to move power from like one of these regional subcomponents of the Eastern Interconnect to another regional subcomponent because they're sharing that same phase. But what ends up happening in

the Eastern Interconnect, for instance, let's let's like look at where I live here in Atlanta. I'm in a regulated utility geography. I am, you know, I pay my Georgia Power bill. Georgia Power is owned by Southern Company. And Southern Company owns, you know, three or four different generating companies, utilities that are vertically integrated. They own generating assets, they own transmission, they own distribution. And the kind of regulatory compact that we've made with

Georgia Power is that that's fine. You can we'll let you be a monopoly, but In return for that monopoly and the monopoly power, we're going to put a little bit of uh oversight on it and we're going to use a public utility commission or here in Georgia, it's called the Public Service Commission. To basically oversee the utility and its operations to authorize the prices that utilities are able to charge me when I consume electricity and charge industrial users and commercial users.

and then authorize the amount of capital expenditures that a utility that Georgia Power wants to spend and then authorize a rate of return that Georgia Power can enjoy beyond their op, you know, the cost of their operations. Why they, you know, so that's like one type of grid that's within these interconnects, another type of grid or kind of regionality. are these regional transmission organizations. We call them RTOs for short. And they have

By contrast with the, you know, regulated utilities, these are deregulated markets. The transmission and distribution tends to be regulated. But the generation is a competitive environment and they participate in energy auctions in order to sell their wares to the market, which is of course those these electrons.

Why different regions kind of form the way they did, I think ends up becoming a bit of a political economy a question again, you know, maybe here in the southeast, which tends to have more regulated utilities. individuals and, you know, legislatures are comfortable with the arrangement and it there's some stickiness that's been involved. And then in other areas, you know, one of the downfalls of a regulated utility.

The good thing is it tends to be really consistent in its power delivery. It's often the case that they're doing an excellent job of predicting their supply and then like overbuilding because they get a return on the assets that they have. So there's this, they call it like gold plating, but it tends to be the case that like a regulated utility plays it safe. You can expect that like the utility wants to play it safe. They certainly want like more assets in the ground, but also

the public service commission, they want to play it safe too, because if they try to like thread that needle too closely, they're gonna, you know, get yelled at and voted out of office and and, you know, or or replaced or whatever. So everyone has a tendency to like play it safe.

The trouble with that is it gets in the way of maybe some more innovative technologies that might be out there. They're not gonna be the first to adopt like the newest and latest generating technologies and transmission technologies. That feels too risky.

But in these regional transmission organizations with these, you know, competitive markets, I think that it it can encourage a bit more competition. And so maybe there's some sentiment at the public level or at the state legislator level that says

Hey, here in New York that is under an RTO, we would really like to have a bit more of a competitive marketplace for this energy generation. Let's move in that direction. Let's go the deregulation path. So The way that you might think about the geography breaking up is starting at these big interconnect. That may basically make it easy to share power between these subsector geographies. And then those sub-sector geographies have some autonomy, a fair amount, in fact, over.

what sort of utility system they want to have. Do they want like the competitive markets of an RTO? Or would they prefer the regulated, you know, compact that is arranged between a public service commission and a vertically integrated utility?

This has been a fascinating topic for me for the last uh two years. I've been doing a bit of um Pro Bonan advice uh advisory work with a geothermal nonprofit, which is a focused resource or organization that is attempting to get geothermal energy used for a wide variety of uses with the You know, ultimate end goal being to make it available for baseload power generation. And one sort of like shadow purpose of

Any sort of system that regulates the energy market is to function as n effectively industrial policy for power generation. And so we've had some amount of industrial pro policy, which was pro solar, pro wind. We've had Effectively an industrial policy which was heavily against nuclear for a variety of reasons for a number of decades, probably to the world's regret, but no

coalition of political interests arose to fix that problem over the course of a couple of decades. And so we made the choices we made. But you know, you can an individual polity could choose, like stability is the only thing that I want for my energy generation policy, subject to it being on one hundred percent of the time, keep the rates as low as feasible, and that is all I want. And a different poly policy, well, okay.

There are margins to trade off with here. Like I'm okay with paying like a little bit more and maybe accepting. You know, I won't accept. seven nines of availability of power, I'll accept six nines and then get X more impact against, you know, new technology generation for the purpose of achieving carbon targets or somewhere. So

fascinating multi-layered problems, which I imagine we could talk about for another hundred hours, but we are coming up on what is usually people's lengths of time and attention that they have to devote to a similar single podcast. So Travis, where people find you around the internet. Yeah, you can find me on LinkedIn. I'm, you know, Travis Dewalter. I also have a Twitter handle at Travis Dewalter. And those are probably the two uh easiest channels to find me.

And if uh folks are coming to electricity grids for the first time, do you have a a book or similar that you would point to them as this is the thing that I would give to a young cousin who was getting into the field? Yeah. My my favorite resource actually is an online resource called Utility Dive, which does it

short, you know, articles, they tend to not be more than about a seven minute read that gives you a sense of like what's happening on the grid and the sort of puts and takes that people are considering as they're going through it. I would say like

My best advice for everyone is to just like jump in. I would strongly encourage you not to read some like one oh one primer on the energy grid and instead just like start reading and seeing the language that utility dive, you know, articles are using and then make heavy use of some large language model to let you know fill in the gaps of your understanding. And I think the combination of those two is a really, really effective way to uh get up to speed quickly on the grid.

I would uh echo that from my own experience as being an engineer in a field that doesn't really have to deal with power draw as a major engineering constraint, uh at least not in my neck of neck of the woods. simply like reading the work of actual professionals gets you up to speed a lot faster than reading regurgitations in The variety of places in the economy that don't work with people who need to like actually care about the thing being on.

Um so uh A plus plus and LLMs are a wonderful tool for uh getting up to speed on Delingo and similar in a way that uh repeated Google searches uh could duplicate, but not nearly as efficiently a few years ago. Travis, thanks so much for coming on. Thanks a lot, Patrick. It was great to be here. Can I I just wanna say one more thing, which is Oh yes.

Today is my daughter's birthday. Her name's Madeline and she turned five and I just want to wish her happy birthday. We love you very much. You're the best. Happy birthday, Madeline. Thanks, Patrick. And for the rest of you, we'll see you next week on Complex Systems.

Thanks for tuning in to this week's episode of Complex Systems. If you have comments, drop me an email or hit me up at Patty11 on Twitter. Ratings and reviews are the lifeblood of new podcasts for SEO reasons, and also because they let me know what you like. Complex Systems is produced by Tripentine. Podcast Network behind Econ 102, Riff with Burn Hobart, Tripenti. And more shows for experts by experts and teaching.