You are listening to Redefining Energy. Your co hosts from Berlin Gerard Reid and from London Laurent.
Segalam today on Realdefriending Energy. We're going to talk about the book.
We sure are. The book is called Our Renewable Energy Future, the remarkable story of how renewable energy will become the basis for our lives.
But first the word from our.
Partner, Redefining Energy sponsored by a Mundi, the leading European asset manager, your trusted partner to accelerate the transition to a low carbon future. Leading asset manager based on the IPE ranking. Investing involves risk, consult your financial advisor.
And we are really really happy to have Doug Arndt from the National Renewable Labs in the United States on to talk about the future of our energy world.
And let's just say that Dougarrant is one of the most respected Opini energy expert and he's been working for decades strategic thinking and he really has a three sixty view of all the technologies which are being developed right now.
Larn me add something which I thought was a little bit funny, which was at the back of the book, what Doug has done as he's published an article he wrote in nineteen seventy six, and it was the article that inspired and really to focus on renewables, and it was called solar energy. Can I be used effectively? Right?
Yeah?
And if you actually look at the base of what he's actually saying, is he saying, listen, solar is going to be the heart of our energy system going forward.
Let's listen to the interview. Doug, Welcome to the show. Thanks for having me.
Well, Doug, let me just jump right in. What we're going to do. Is we going to talk about the future renewables. But before we talk about the future renew of us, I'd really like you to talk to our listeners about the organization you work for, which is called ENREL. What ENRAL is, what they do, what the history is, and why ENRAL is important.
I was a teenager when what was then ENREL, which was the Solar Energy Research Institute, was founded by President Carter in nineteen seventy six, so it's been around since then. It's been the only national research organization globally focused on the renewable mission space. But that mission space has changed dramatically since the nineteen seventies, when it frankly was a science set of experiments to today where it's mainstream markets. Enrel is part of the DOE National AB Complex. We're
located in Colorado. It's about four thousand researchers, about a billion dollars a year, and we cover everything from renewable power to clean fuels, fuels and chemicals, carbon management, hydrogen of course, smart buildings, electric mobility, sustainable aviation, fuels, and maybe more importantly, integrated systems. We work in about forty countries around the world, but predominantly based in the United States.
And Doug just following on on ed while they're talk about the impact that they've had. As a guy like me who's been financing solo wind, whatever do I say, so, Wash or you tell me why it is important.
Enrail feels a really interesting space in the research, development, demonstration, deployment, and market ecosystem. Our mission is to innovate solutions, and here I say not specifically just technologies, but solutions, and to partner with companies to take those solutions to commercial scale. And so you can look in the history of enrol a ton of history in the fundamentals of solar foldovoltaics, concentrating song or power, wind technologies, electric and hybrid mobility,
et cetera. And that the work with now more than one thousand commercial partners is really the gotcha of how ENRAL operates in the marketplace. And there are probably many investments that you make that actually have a connection back to NRAL science that is now buried in the commercial world.
Kelly, and ask you talk a little bit about yourself and the reason I want to do this. We don't normally do this in the podcast, but the reason I want to do this in this case here is because we're going to talk about your latest book on the future renewables, and I just want to give the readers a sense of your knowledge, where you come from and why you decided to write a book about the future renewables.
It's an interesting journey for me. I was a teenager in nineteen seventy six when they launched the Solar Energy Research Institute and I wrote a paper on the future of solar energy. I still have a copy. It's actually in the appendix of the book. It's cool, it's not so well written, but I was sixteen and I dedicated myself to a career in clean energy transition and energy access,
energy development. Since that point in time, I went on did a technical degree, did a PhD, did an MBA, and I've been at ENRAL for what I call a career. And what motivated me to write the book was that there are so many people excited about the energy transition and the space and the opportunity who are new and young, who don't have a concrete understanding of where it came from and the journey that has brought us to this point where solar is the technology of the decade and
there are many others in that pipeline. And so for me it was a passion of trying to capture succinctly, because it's only a couple hundred pages long, what is that journey and maybe more importantly, what are the factors that are affecting the future of ignoble energy and what our energy ecosystem will look like going forward.
Thank you, thank you. You are in tune with my big theory, my theory of the one new tech per decade. John knows that by heart, but I like to repeat it because that's my only theory. So the seventies is nuclear R. The eighties is c CGTS, the nineties is wind. The two thousand is solar. Tennis batteries takes one decade to develop, one decade to roll out, and then they dominate.
And before you answered that, I think he's wrong.
I think it's two decades, okay, and I think solars only decade.
That we're only going into second decade solar.
Now I will reflect as well. So one, I think it's got to be faster than two decades to move through from idea to commercialization. That's one really important point. We need more innovation to commercialization faster. And secondly, maybe you've forgot natural gas in there in the fracking boom at some point in time in the two thousands twenty ten,
but okay, we'll debate that later. More importantly, what I will also argue is that, and what I argue in the book is that the coming decades are about systems integration, and they're about integrated systems. And so now you see batteries, but maybe batteries are standalone, but most batteries are hybridized with solar or otherwise. And you're seeing even new nuclear come out hybridized with thermal storage for arbitraging the revenue streams depending on how you use that thermal energy from
a nuclear plant. Great opportunities. I think to think about it as an investor, but also as a technology innovator.
Good we can debate as far as I'm consoled till twenties because I forgot to talk about that. Great technology are interconnectors, That's the one. And that's something that in Europe we know because we've got you know, the valtic seat, the nos CIVI talrency, so you know, we know that. In the US it's lamb, you know, so you don't really know what is the subscencta connector. It's a beauty. But anyway, let's dive in into your books, because I
think solar when the thick of it. But you know, there are other things which you have pinpointed, and I'll be curious to see your nuclear or carbon management, you know, Adan Joe Tummer, which one you don't want to pick first?
Actually I want to stick with solar, but I want to go beyond technology because I think that's a really important story that people don't understand, is that many of us who live and eat and breathe and invest in the energy sector think about it as technology. Only solutions.
The most important element to think through is how do those technologies get priced in a market are either responding to a policy in regulatory framework, and who's willing to pay for them, whether or not that's a company striving for twenty four to seven power or frankly individuals throughout Europe or elsewhere who want self determined power shall we call it I E. Rooftop solar, PV batteries, et cetera. All of those factors have come to play in a
very unique way in the last few years. And it's the combination of those factors which is bringing an incredibly unique opportunity of what is the next few decades maybe a solar decade, solar plus battery decade, et cetera, But it is the decades of renewables moving from what was called alternative energy to effectively mainstream energy to what I think will be renewable dominant energy systems. And this is a fundamental change in paradigm that we are in the middle of right now.
I love the phrase that you use, which is renewable dominance. So just I'd love you to build me a picture of how that renewable dominant power system looks.
Like there's a lot of conversation about electrify as much as possible, principally because people understand that renewable power is the least cost set of options in nearly every country of the world, and of course you've got the overlay of decarbonization, so you've got to push for electrification of end uses, be that in the building, emobility, power to X. You then have the broader thinking of electricity derived chemicals and fuels being the dominant source of global trade of
what we consider energy products. Think of green ammonia, green hydrogen being a fuel product now being shipped around the world in order to provide decarbonized power. Again, power as the backbone of a clean energy economy going forward. Even if it's a chemical being used let's say in Korea or Japan where they don't have huge amounts of renewables, that chemical has its history in an electrified dominant and a renewable electrified dominant energy system.
On a follow up in.
It where I'm trying to actually come from, I'm coming from the economic side, because the reality is the more and more win solar we build, the more that at certain parts of the day we have too much power, which actually disincentivizes me to build that renewables. And so what your vision is is one hundred percent where we should go. What I'm trying to get my head around is how do you move from financing a solar project
to financing that integrated solution that you're talking about. How do we do that or do you have any thoughts of that? The answer actually is a heterogeneous pathway, and
let me explain that to you. A lot of power to X configurations, solutions, plants, et cetera, may be in fact dedicated I either going to have their own dedicated power systems, hybrid power systems, some combination of wind, solar, potentially geothermal, potentially nuclear, other low carbon technologies, and they're going to be predominantly dedicated to that electoralizer plus ongoing conversion technology, whether or not that's Sabatier to methanol or
Haberbasche to tsu ammonia, et cetera. What your question presumed was that the whole system is interconnected and that you had to take a price, that you were not a price maker in the market. And I think that there is.
Money to be made if one thinks much more creatively about what the configurations are, what your business proposition is, whether or not you play in the market or you use that power yourself, if that makes sense to you. It's more complicated than current structures today. But then again, you're a financial whiz, so I think you're going to figure it out.
I'm not being to wrong.
How are we going to sort it out?
The way?
I see the technologies now, who have a wonderful toolkit, whether it's batteries, digital interconnections, whatever. There are incubans, there is inertia, There are people protecting their market share, regardless of the economics and trench interest. I do think that what's slowing the energy transition are more the people than the technologies. Those people, you know, whatever you say you're going to put all the formula in front of them, they say, look, I'm paid to sell gas. That's my job.
Regardless of whatever you can demonstrate from a scientific point of view, I'm just going to continue to sell gas. And by the way, that's the only thing I know. So you can have a perfect design system and then you will have the entrance reality that people are protecting their cake. Or is it just me babbling?
You actually spot on. I lay out six factors in the book, and all of them are based upon people and knowledge. I call out specifically knowledge. But people are the core of social willingness and acceptance. They're the core of institutional willingness and acceptance. They're the core of change in policy and regulation. And you know, there's been a phrase for many decades that regulators are slower than the utilities in making change, and it's that inhibition to change
which is really going to slow us down. And so while and I think we're all enthusiastic for this energy transition to an electro and a clean electro renewable dominant future, I'm also skeptical that it's going to happen at the speed and the scale that is called for, certainly for the Paris Agreement. If you're going to limit at one point five, it's likely much more likely to get into an overshoot and then capture scenario going forward. That's a different conversation.
Can I then just follow up on that, because I have one concern, but the positive on the other side think that weighs my concern. So my concern is large scale renewables just building that whether that's going to happen in time. I doubt this, and also I doubt the economics, and there's a whole pile of issues there. But what really excites me is behind the substation and behind the meter, because what you've definitely seen is the customers saying, I'm
fed up with this price volatility. I want to have resilience, I want to have clean power. I'm going to do it myself, and it's cheap. That's the revolution that I see, and that lends itself into a lot of very interesting integration issues in and around digitalization, connecting everything together that pushes us forward very quickly. Would you share that view or how do you see that?
Yeah?
I hate to be one hundred percent in alignment with you, but it's absolutely fundamental to embrace what I call the heterogeneity of the power system. Power systems were designed for big, huge plants and one way powerflow all the way out to what they called meters, not even people or thinking
of the end users. Today, you're seeing a plethora of digitization opportunities, self generation opportunities, desire for resiliency in places where there are lots of outages, and desire for control of or surety of pricing and so that's your point, which is, if I buy a solar system and a battery and maybe an EV charger, I know what my price is and how long it goes. Now I may have to pay depending if I'm still connected to the grid for I'll call it reliability services unless I've completely
designed an off grid system. But I know the bulk of what my costs look like now for many years, decades in the future. That gives folks a sense of comfort, which is back to Lawrence people point, which is it's a people decision. And in fact, even if you look at further than that, go down that digitization pathway. I think just a little bit more fascinating set of conversations
of what's happening with aggregators. These are folks that have digital control, visibility and control, are marrying sensing, AI, cloud computing and financial modeling to provide both better services behind the meter at the building level, be that either residential or commercial, and also services into the wholesale market. And they make money doing that and people get better service, more reliable service, and cheaper service.
I'm going to be to kill joy as usual in Australia. I want to put some out on my roof. It's going to cost me ten thousand dollars the same system in California thirty thousand dollars. What is the problem. It's the same technology. Now, I can't understand that for geopoliticular reason. Everything that out of China is China, China, China. We can't accept anything from China. We've done episode on China
and our vision is a bit. Look, it's going to be we solve climations with China or we solve it ten years down the line, and it's going to cost us double Is it just me around ting.
As you real it's not urranting. The US has had a three times to four times price differential from Europe or Australia for decades and it's persistent. Sadly, what's behind it? It's not technology costs. Frankly, it's back to your point on people. It's labor costs. Sometimes it's permitting and the
process itself. Sometimes it's cost of money and margins. But those pieces, the soft costs add up considerably in the United States, and it's a real price differential and a barrier for low and middle income communities, which is why you're seeing alternatives being pushed out like community solar, where people can buy a portion of a bigger unit that has economy of scale, or buy solar products from their
serving utility. There are lots of options on that, but that fundamental piece of an installed solar system on your roof still sits at that three x price differential.
You're going to see what we've seen yop, which is something crazy. It's called balcony, So there's no installation. People buy in the supermarket to just put them on the balcony, plug it and that's it.
Done.
Now, it's not perfect, but it works pretty well.
John, don't give you an idea that the fully installed costs fifty cents a lot.
It's mind boggling.
You just plug it in.
That's it, and you can actually put it in your garden and just put it up into the external socket. And if you do it fifty cents, like if you're on Californe, you've got a payback period of like a year.
Incredible opportunity.
You know.
I was talking to a colleague at the Department of Energy yesterday and he remembered that they had put out a solicitation for plug and play solar modules ten years ago. And it was ahead of the curve. The technologies weren't there, the visibility wasn't there, et.
Cetera, et cetera.
Today, I think you're absolutely right that the US in particular is ripe for disruptive innovation like that, along with all the challenges that will come with it. So cost of your poor system operator who's got no visibility or controllability, of your bounty fuller and the grid is overloaded, there are going to be some interesting issues coming up.
Yeah, that's why when I asked the question earlier on about the future the power system, not I'm trying to get my head around, is how does it look like with these two way power flows and grid operators not being able to see everything that's going on and on? And I think that's the big technical challenge? Or am I seeing that wrong?
You're not seeing the challenge wrong. But let me describe to you a potential solution. Colleagues at ENROL about five years ago saw this future coming and we invested a whole bunch of resources into thinking about self healing, self controlling, distributed heterogeneous grids. So what we call autonomous energy systems.
Think of the autonomous driving car, equivalent for autonomous energy systems cool so okay, self aware, self coordinating or coordinating in micro hierarchical structures where you could get visibility to your balcony system and your neighbors by the way, coordinate a little micro cell in your community, potentially aggregate or control that power up. Or your balcony is getting more sun and your neighbor needs ev charging and they don't have a battery, and so you're doing that arbitrage even
within the community. These possibilities actually offer an incredible solutions suite. Can we get there?
Yes?
Will it be this decade? Likely? Not so, Laurent. Back to your point, that's probably a twenty thirties decadal piece, which is to see software enabled controlled solutions roll out at scale.
In the US, you are blessed by gods. You've got coll for five hundred years. You get oil number one producer. You've had gas gas at two dollars and BTU it's crazy cheap. It's power at ten dollars O MAGA what hour. It's a luxury that pretty much the rest of the world doesn't have. I can understand that all that fossil fuel ecosystem wants to stay alive, and they're living pretty well around that. And the utilities they like their little monopolies.
If you look in Europe the shock word with you know, putting invasion of Ukraine and the price going like the equivalent of three hundred four hundred barrel. We didn't have any choice. We had to do those things. I give you a simple example of great technologies invented in the US, the prot in Europe, great hand and seeing technologies, everything about dynamic like creating topographic reconductor in Europe. With all of them in the US. Now people are fine. So
I go back. It's to people, it's not the tech. The tech we have them. Sometimes, you know, I want to bang heads together and say are you already serious about the energy transition? But again that's just me talking. I'm just a talking head here. Yeah.
Interesting part of the US is that it's it's a very heterogeneous energy system. It's very competitive. There are more than a thousand equivalent what you call utilities. They're vertically integrated investor on utilities. There's munis and other public power utilities. There are rural co ops. Some markets are restructured or deregulated.
Other markets remain regulated. Now, the interesting part is that with federal legislation that has been passed, there's an incredible number of incentives for investing, not only in manufacturing, but deployment of grid technologies, new generation hydrogen.
Et cetera.
But more importantly, because it's a democracy and it's a federal system, the states actually control a lot of oversight in terms of what's happening in the power system. And more than thirty of the fifty states have clean energy or carbon goals or renewable goals covers more than two hundred and fifty million people of the United States. And then you lay on top of that what's happening with the big tech companies or other companies. There's a ground swell.
I use the terms you're thinking about institutional social drivers. Those drivers are on the demand side are significant. Where you're seeing barriers on slowness to implement is in the regulation in the utilities and currently today with higher interest rates, little bit of stress around financeability and investability.
Dog just maybe the last question I go back to Lauren said at the beginning, which is this whole thing about the technology of the decade. So if we look forward, just talk about any sort of surprises that are out there that might come away that we're not thinking about.
There are two surprises that we have yet to see breakthrough in terms of major market opportunities. One is what we talked a little bit about in terms of innovation at the grid edge. The combination of clean technologies along with sensing AI aggregation will unlock flexibility. I'll use this term flexibility. I talked about it before, but it's this whole idea of controllability to match supply and demand and do that in a very financially attractive way that's coming
at scale that we've never imagined before. That's one. The second one is the inventiveness of integrated systems. A little bit goes back to the comment that Laurent made about ah the importance of grids and interconnectivity. Well, the electric curate is a large interconnected hybrid system. If one thinks about it, it's just different supply, different demands, and the
grids are what controls it together. There is opportunity late twenty twenties, probably more into the twenty thirties of what I call mindfully crafted, developed and managed integrated energy systems. So this is a combination of power, power to fuels, hydrogens in the middle of it, emobility, the distributed energy pieces all coming together in a much more integrated way.
I am so happy you.
Didn't mention Geotma.
Yeah, didn't mention SMRs. Somebody's gonna hate me for not mentioning one.
I hate you. I hate you for not mentioning your film mode.
You can add that, you can say edit that later. You know you're The list really wasn't very long, so that's a lot of other things to.
Think, Doug. It was a real pleasure aven on the show. Thank you very much.
Thank you you thugs a lot dog, good funds.
Good funds. Great.
I'll make sure you have a copy of the book and we'll bring it along shortly.
So, joh, did you enjoy the conversation.
I did, and I sort of I go along with his vision. I really do. I think it's just about removing roadblocks to enable it to happen, and I think it's imperative that we do it off one obviously from a climate perspective, but also two from a geopolitical perspective, because if we don't do it, China and other countries will do it, and they'll leap FROGUS. But anyway, what's your thoughts?
Well, it's totally above my pay grade. Doug is a strategic thinker, you're as strategic thinker and me it's like, I don't know, But what I will say is, somebody needs to tell him that the nrub is a two dollar and mbtu, which means if fuels are going nowhere, Yeah, that's that's okay. Number two, somebody needs to tell him that it's the Chinese company's not the US company. You brought solar panel to tens and sow and batteries to fifty US dot R Pokuto what I wan?
So?
I mean, what's the point doing all those research if it ends up promoting the Chinese industry.
The good news is he had an impact because the Chinese read as reports. The Americans maybe didn't.
When I'm then there are some oddities. I heard green hydrogen shipped around the world. Really job really.
Yeah, listen, I'll watch on this. You're going to use green hydrogen. We have to use green hydrogen, and that is to clean up existing hydrogen production, right, which simples that you're using it in chemical industry, using and steel industry.
And okay, and then you and Doug at that great conversation where you're ask him about curtailment capture prices, and I quote this answer, there is money to be made if one think more creatively, your financial whiz, so you will figure it out. And then you turn to me and you asked me, La, how are we going to figure it out? So now I'm.
When is it? By the way, the reason I go to you it is because it's also at the heart of it is the power market, which is is a trading thing and you're a trader. So I'm start of going to around. How do you practically sort this out?
Well, look, I've said it over and over again. It's space and time, space interconnect dos time batteries. That's it. Yeah, that's it.
Okay.
And also about my favorite new motto stumps. Look, you must have been happy. We talked about BALCONICLA, which is one of your two obsessions this year with alongside Transformer. We talk a bit about Joe Thermal not enough, but look overall, well, it's great that you have great thinkers like Dug around and you know the published book and they've been passionate for ages. Just saying the bit above my pay grade.
Actually I don't agree with that last statement because we need you to think about these things as well, because actually what you just said, actually I like it. Space and time. I like that. That's a good answer. That's a very good act.
We thank Doug for coming on the show. We thank our sponsor a Mundi for continuing to support the show. And Joah, I'll talk to you next week.
Look forward to us. Thank you for listening to Redefining Energy. Don't forget to rate the show and subscribe on Apple, Podcast, Spotify, or the platform of your choice.