Pushkin. So Congress has given you up to four hundred and twelve billion dollars to lend. Yeah, you have like a bank account you can log into to see what you got left? Do you log in? Like I log into my Chase account to see if I can whatever pay my credit?
There is there is a log in. It's very complicated and it requires multiple like you know those keys that two people have to turn at the same time.
Well, like the nuclear codes or something. I'm Jacob Goldstein and this is What's Your Problem? The show where I talk to people who are trying to make technological progress. My guest today is Jiggershaw. Jigger founded the solar power company son Edison and spent decades working in green energy, and then in twenty twenty one took a turn. It
became a government bureaucrat. Specifically, he took a job running the loan Program's office at the US Department of Energy, and then last year, as part of the Inflation Reduction Act, Congress allocated hundreds of billions of dollars for Jigger's office to lend out. The loans are supposed to go to companies that are helping the US economy move away from fossil fuels. That can mean everything from building new nuclear plants to creating a giant hydrogen battery in an underground
salt cap. Ultimately, jiggers problem is this, what's the best way to lend out all that money and do it fast enough for the US to meet its climate goals?
And you know, my feeling is is that for many years entrepreneurs have felt a lack of support from the US government. Right, there's tax credits which they've they've had access to, for sure, but when it comes to commercializing technology, that step is always risky, right, Like you've demonstrated the lab, you've done a full scale demonstration. Now you need a first of a kind facility, manufacturing facility. And many of those companies have gone to Europe or Asia to commercialize
those technologies and not stayed here. So what I think our job is is to make sure they all choose America for their commercialization and they tie that to the American worker and to American communities. We have for many years been the leaders in innovation, but not the leaders in commercialization. Like all the solar panel technology that China uses to manufacture solar panels were invented here in the United States, or by Martin Green at the University of
New South Wales in Australia. None of it was invented there. The same thing's true with lithium phosphate batteries, and so they are all these technologies where we're saying China's beating us, We're like, well, it's our technology. We decided not to commercialize it here. Now we're going to commercialize it here.
So in terms of how you decide what loans to make, is there some amount of money that you want to lend by some time?
Yeah, So to me, the goal is not the amount of money. Right. As a country, we want to hit certain targets, right the President has laid down decarbonization targets
by twenty thirty five and twenty fifty. But we also have national security concerns, like we want to make sure that if people are building new nuclear plants, they're building American nuclear plants, not Chinese, Russian, French, or Korean nuclear plants, right, And so we want to make sure that we're proving that technology here in this country so that folks in
other countries feel comfortable choosing our technology. And they have been choosing our technology, and so we want to win that national security battle too, and that's on hydrogen, that's on transmission, and so we want to make sure that we're winning. We want to meet the moment so that these sectors actually get fully commercialized and become low cost enough that countries around the world think that they can use them.
So one of the reasons I'm very happy to be talking to you is that your job gives you this really interesting big picture of what's happening right now in the sort of business of energy transition in America. Right where we are we need to get where we need to get, and maybe in particular, like what do you see as the key bottlenecks there where you're really eager to fund projects that will you know, kind of remove or or help expand what is now whatever is the rate limiting step.
What we've learned is Americans want more electricity, right. They want electric vehicles, they want new manufacturing plants, they want ai chat GBT alone is going to use ten thousand megawatts of new power, and so we need more bulk generation. We need nuclear power, right. I love solar and wind power, but we're not going to put all of our eggs
only in that basket. We need enhanced geothermal, we need a low IMPAC hydro and each one of those sectors has their own problems, Like geothermal basically is leveraging the fracking industry. It's all the innovations in the fracking industry, So the oil and gas sector actually has to lead that sector. The hydro sector, we have thirty seven gigawatts of old hydro dams We're built in the nineteen twenties, thirties, forties, fifties that need to be relicnsed and extended and a
lot of those owners are very conservative. How do you figure out a way to help them make that decision with next generation fish friendly technologies, right, So that's on that front. Then you've got the grid. We have a bunch of technologies that we invented twenty years ago that have been fully deployed in the UK and Belgium and Brazil and India, but haven't been deployed here. And so how do you align incentives to get the electric utilities
to use really cheap technologies. For three billion dollars, we could actually upgrade the existing grid by thirty percent just by basically changing the capacity of our line based on temperature outside. Right now, we rate all of our transmission lines to the worst possible day.
Uh huh, so you're saying so you're saying transmission lines on almost every day could carry way more power than they do. That's right, but we don't allow them to do that.
That's exactly right.
What do we need to do differently in order to do that? What's the problem?
You just clip a sensor onto the line. It's super cheap.
Is it really as dumb as that? And if so, why hasn't it already happened?
Because the utility companies in the past made money from deploying money, right, So that's how they like if they so, they're like, why do I want to solve that problem for one hundred thousand dollars when I can solve it for a fifty million.
Dollars by what building a new power plant instead of making the lines more efficient.
Or upgrading the entire distribution system?
Uh huh. So it's basically bad incentives in the in the utility.
Right, But today they feel like their back is up against a wall because so many new plants are coming online they can't keep up, and so they're like well, we may be forced to do this one hundred thousand dollars solution because it's the only one fast enough to meet our needs.
Okay, so that's a good one. You are in the middle of a list. I love a list.
Well, there's only three parts that we list.
So we were at part number two. What's part number three?
Part number three is demand flexibility, virtual power plants. Okay, So what you're finding is is that there's a lot of people buying electric vehicles, and it really is neighborhood by neighborhood. When one person gets when of a neighborhood, ten more people get it. And if everyone plugs in their EV at the exact same time, then you're basically
inefficiently using the grid. Today, our grid, which is one of the most expensive machines in the world, is used about fourty percent of the time, right, so sixty percent of the time it's actually underutilized, not used. And so so if everyone plugs in at the same time, then that peak becomes higher. So what you want to.
There is an incredible surge of demand for power, that's right. And the thing about power is you have to give everybody power at the exact second they want it, and that's the store. The supply demand balance with power is notoriously.
Difficult, but it turns out the vast majority of electric vehicle owners plug in their car and leave it plugged in for thirteen hours.
From when they get home from work in the evening till they leave the next day.
That's right. So then, and they only charge for about three hours of that thirteen so it doesn't matter which three hours they're charging.
Right, right, right, So you don't have to charge everybody's car at six point thirty when everybody gets home and plugs it.
You can plug in everybody's car at six thirty, but the power isn't to flow. So Duke Energy, for instance, just launched a plan. They give you a fifty percent discount on the electricity for you to be more flexible as to when you charge.
Huh, that's if you say, sure, as long as you charge my car between six at night and six in the morning, I don't care when you do it. If you give me a big discount, I'll charge it whenever you want in that.
Way, that's right. So, and then there's a lot of folks who have backup batteries because they chose to do a backup battery instead of diesel generator or a gas generator for their home, right, so that battery now can
be used to help manage the grid. Some folks want to opt in their thermostat and they don't really care when their house gets cool, as long as it's cool for when they get home, right, so that we can make it cool at two in the afternoon, where electricity is cheaper because there's so much solar power than at five o'clock.
So I like that you're sort of enumerating some of the easy ones, right, some of the relatively cheap, huge return, low hanging fruit, and I hope that we get all of those, and that we get them soon.
I wouldn't call nuclear easy.
No, okay, never mind nuclear. I like that those last couple ones you are enumerting, you know, demand flexibility and transmission flexibility at some level. Like those ones as you describe them, they're like, oh my god, it's so dumb that we're not doing that already. And that's great that those exist you mentioned nuclear. Obviously, nuclear is very hard along many dimensions, not least of which is the political dimension.
There are other things that have to happen that are hard as well, right, Like, what are some of the other hard ones?
Well, hydrogen is hard, right, figuring out whether you know there's all these colors of the rainbow. Right, So, green hydrogen comes from renewal energy. Blue hydrogen comes from natural gas with carbon sigustration storage paink hydrogen comes from nuclear power. But ultimately to me, it's just low carbon hydrogen. And each one of them has their own technology cost curve, and we're just at the beginning of that cost curve.
After the break the salt cavern in Utah that may soon become a gigantic hydrogen filled battery. That's the end of the ads. Now we're going back to the show. Let's talk about a few of the specific projects that a few of the specific loans you've made are about to make. I mean, are there some that are just fun or weird or cool or interesting for whatever reason.
Well, I'm a nerd, so they're all fun and interesting and cool. But I'll name a couple for you. So, Delta, Utah has one of the largest coal plants in the country and a straight transmission line from there to Los Angeles. And they also are on top of a bunch of salt caverns. It happens to me that these salt caverns are some of the best salt caverns in the world
at storing hydrogen. So one of the projects we just funded, called Delta Aces, had a big electrolyizer, one of the largest electrolyizers in the world when we announced it, and it's under construction and it will it will store one hundred and fifty gigawo hours of hydrogen in each salt cavern. To put that in perspective for you, the entirety of the United States doesn't have one hundred and fifty gigawe hours of battery lithium ion batteries in this country. Huh.
And one salt cavern is going to have it, and they've like seven salt caverns they could tap into if they wanted to.
Let's do a little more contextualizing, Like gigowot hours is one of those classics hard and that you're contextualizing is like lithium ion battery, Like that's like nerd on nerd action. So like, what's another way to think of you said one hundred and fifty gigawat hours, Like, how I don't know what's another way to think of how much that is.
So that could power the entire state of California for an entire day.
Okay, that sounds like a lot.
It's a lot, right, It's a lot. And so this is this is what I'm saying, is that, like, and we're going to need that much storage, right, and not just for solar and wind. Everybody wants to say, well, these intermittent technologies need a lot of storage, but also for nuclear, Like nuclear really wants to run twenty four x seven, even though you can turn it down, it wants to run all the time. And so when there's access nuclear power, you need to do something with it.
You can turn it into hydrogen, right, and so so like in general, storage makes everything better.
Yeah, and so is the idea. I want to talk more about storage broadly in a sect, but a giant salt cavern full of hydrogen is cool enough that I want to spend another minute on it. So is the idea that this project, this hydrogen in a giant salt cavern project will essentially be a way to take energy that's produced when there is not that much demand and essentially use the energy to separate the hydrogen out of water.
And then that's it's like a battery, it's like a hydrogen battery that's just sitting there.
For the entire Western grid for sure?
And is that going to like work for sure? Is it maybe not going to work? Like? How like? Is there technical risk? Is there execution risk? Or is that like, well, yeah, that's going to work.
Great question, Just need the money. So the loan Program's office never takes actual technology risk, Okay, right, not today. We may have in the past, but not today. So this will not have any technology risk associated. We know electoralizers work. For the cell caverns work, there will be execution risk. Can we take that risk all the time because we're doing first of a kind deployments?
So what could go wrong in this instance? In terms of execution risk?
In general, I would say very little can go wrong. What could go wrong is that it would be too expensive, that it costs them double what they think it's going to cost them to get it working right, and then they make a much lower rate of return and now they're less interested in keeping it going. But in general, the salt cavern concept has been tested and proven forever, and the electoralizers have been around since the nineteen fifties, although this version of it is far more advanced than
the old one. So I don't think anything will not work. I think what will not work is it could be two xover budget.
Right, and therefore not make economic sense.
Yeah, exactly.
So I want to go back to storage for a secon because you were starting to talk about storage in a bigger way, and storage is one of the things that smart people seem to worry about when they worry about the energy transition. So tell me more about storage.
So, in terms of storage, the electricity system, as I think you suggested earlier, is the largest commodity chain in the world that doesn't feature storage. Like every other commodity chain, like agriculture or transportation fuels, you have like tank farms right in like agriculture you have like grain silos.
Sure, perhaps the most ancient storage humanity has y is grand slamless.
Everyone feature storage, so electricity has some. So the vast majority of our storage in the US electricity grid and mostly around the world is pumped hydro. Right where you pump hydro uphill when you have access power, and you let it flow back downhill and generate power when you need power. So you start with that. So now what
you say is is storage valuable? Yes. When you have storage, the variables become a lot easier to manage because you have this built in capacity within the commodity supply chain. So everything doesn't have to work perfectly just in time, which we'd learned during COVID is not something you want to do anyway. Long supply chains just in time leads to all sorts of disruptions, right, and we're seeing those disruptions more acutely now when you have heat domes in
Texas or you know, winter storms in North Carolina, et cetera. Right, and so so storage is now being featured. Now, the question is how do you do storage. The utilities generally like to do things in big, big sections, right, So this is like Tesla mega packs in central locations. But it turns out there's a lot of people who want
to do distributed storage. So, for instance, in Puerto Rico, almost every solar system comes with batteries, and Luma, who's operating the grid now, has just launched a program to be able to unlock those three hundred megawatts of batteries in people's homes to act as a grid battery.
All these people who get a solar panel, who get solar panels on their house and like a battery wall to go with it, they can essentially sell the stored power in their battery wall back into the grid totally.
And in Texas they have launched this program to do that, and people who participate in that program got their entire summer electricity bill zeroed out because the electricity being sold by the battery back into the grid was so valuable that it zeroed out their whole summer electricity bill.
So I mean again, these are like the happy versions of the storage. People talk about there being hard technical problems to solve in terms of finding you know, utility scale, cheap enough storage.
So I don't think that's true. Right. So remember, like in the late seventies early eighties, we all decided as a country that we wanted air conditioning, so there was a lot of air conditioning added to the grid, and the way we solved it was through natural gas peaker plants.
So we built gigawatts and gigawatts over like three hundred gigawatts of natural gas peaker plants and more transmission distribution, and so that made the curve of how we use electricity a higher peak during sunny days right where it's hot, and then lower peaks at night. Right, So you can imagine, right, So that made our grid less efficient. So that is how we live today.
Cause those peaker plants are an inefficient way to generate power. They sit there all the time, they're kind and.
They run less than eight percent of the year.
Right, So giant, huge, expensive capital equipment just sitting there depreciate it.
That's exactly off. And so so that budget can be diverted to batteries, right, and today the technology that we have today can be fully paid for by that budget.
Good framing, good framing more generally, just to step back again, you know, beyond storage, sort of the big picture. What are you worried about?
What I worry about is that Americans don't believe that we can do this. Like, for instance, on critical minerals, people say, oh, jigger, you guys don't have critical minerals lined up. You're still getting it from China. That's because we weren't even playing in critical minerals for the last until two years ago, like we were not putting our
shoulder into it. Today we are, guess what we have more lithium than any other place on the planet, and we can get it out of the ground super cost effectively, and we are going to be self supplying ourselves within four years because it sort of takes that long to get a lithium mine up and running and the processing and all that stuff out of Nevada, et cetera. But we have all the resources, we just didn't choose to
prioritize it. But I just feel like sometimes like there's this woe is Me thing going on and I don't understand it. We have all the technologies, we have the ability to commercialize it. We just got to put our shoulder into it.
I like that. I don't want to bring you down, but I am interested. I'm interested in what you haven't figured out, or what you're uncertain about, or something you tried that didn't work.
Like, I appreciate your Oh that's a very long list.
Great, what's something now, what's high on it? What's the thing that week? I feel urgently.
I'll give you an example on nuclear right, I had a number of electric utilities that came to me and basically said we would love to build a nuclear power I was like, great, let's figure this out. We like, you know, got all these things together, et cetera, et cetera. And then they came back to us and said, oh, but you have to take one hundred percent of the risk away from us. And I was like, that's not how this works. I don't know what it is that
you think is happening. And so we have been working our butt off to like ask them questions because we're not allowed to force me to do something, but we do technical assistance, and so we're saying, is that really what you're solving for? Let's break that down into smaller chunks. Are you solving for this? Are you solving for this? And we have slowly been able to make the conversation
make more sense. Now. I don't know whether we're going to succeed in commercializing nuclear but without our intervention and our facilitating the conversation through the technical assistance that we can provide, I am one hundred percent sure that nuclear power would be nowhere.
Right. Your work may not be sufficient, but it is necessary. Yeah, we'll be back in a minute with the lightning round. Now back to the show. Okay, let's finish with the lightning round. Are you ready? Yes, what's one thing you learned from working with Richard Branson.
That it is better to be underestimated than overestimated. Say more, Richard Branson comes off as this sort of playboy, but having met him and worked with him, he is as smart as they come. But he doesn't allow people to write these big articles about how smart he is and how, you know, extraordinary he has a business, et cetera, because, like it is, one of his biggest things is to be underestimated.
You've worked in energy for a long time, right, for decades, and I'm curious at sort of big blue sky handwavy level, what do you feel like you understand and about energy that most people don't understand.
I think that fundamentally energy is innovation, economic growth, right. I mean people are talking about how AI is going to take over the world. It's not going to take over the world unless there's enough electricity to supply to AI. Right. When you think about all of the things that we're doing to live a modern lifestyle, it all comes from the premise that we have reliable, affordable, safe energy.
What's the Jiggershaw rule?
You shouldn't do dumb policy?
Great, thank you for your time. It was a delight to talk to you.
This was a great conversation. Thanks for letting it go in the ways that it went. It was fascinating for me as well.
Jiggershaw runs the Loan Program's office at the US our Men of Energy. Today's show was edited by Karen Chakerjee, produced by Edith Russolo, and engineered by Amanda K.
Wall.
You can email us at problem at Pushkin dot fm. We are always, always always trying to find interesting new guests for the show, so if there's somebody who think we should book, please let us know. I'm Jacob Goldstein and we'll be back next week with another episode of What's Your Problem.