When 1,500 MW Vanished: Peter Kelly-Detwiler on the Hidden Crisis Breaking Our Grid

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Peter Kelly-Detwiler (00:00):
I think as more and more people become
aware of power, they become moreand more aware of some of the
nuances and how it works thatplays right into the hands of
microgrid developers. Becauselet's face it, at one level,
we're offering a really simplesolution, which is, we'll take
away your power, your concernsabout losing power, et cetera,
et cetera, you know, for aprice. But if someone wants to

(00:23):
know more, well, how do you dothat? What's the cost going to
be? What are the benefits? Andso on? The conversation is now
more prime for that than it hasbeen in the past, because people
are more aware. It's kind oflike back in the day before, er
and all the medical shows,nobody knew what an ACL was, or
this or that or the other. Nowhalf the people in the world can
tell you how to take yourgallbladder out, what to watch
out for, because they watchsurgery on TV shows all the

(00:46):
time. Same sort of thing, to alesser extent, with electricity
awareness, and I think that'sonly going to grow.

intro (00:54):
Are you speeding the energy transition here at the
Clean Power Hour, our host TimMontague, bring you the best in
solar batteries and cleantechnologies every week. Want to
go deeper into decarbonization.
We do too. We're here to helpyou understand and command the
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industries. So let's get to ittogether. We can speed the

(01:15):
energy transition

Tim Montague (01:21):
today on the Clean Power Hour micro grids. My guest
today is Peter Kelly Detweiler.
He's a returning guest. Checkout episode 207 where we geeked
out on the hydrogen economy, andthen before that, we geeked out
on his book, The Energy Switch.
But Peter is a well known gridexpert and the principal at
northbridge Energy Partners.
He's best known as PKD, and hedoes a Weekly News RoundUp on

(01:44):
YouTube and audio platforms.
Check it out. Welcome to theshow. Peter, thank you. It's a
pleasure to be here. Tim, I lovethis topic. It's very important,
both macro and micro grids. AndI want to really set the table a
little bit, though, right at thebeginning, like, where do you
decide? Or how do you decide,what is a micro grid and what is

(02:06):
a macro grid?

That's a really good question. But I
think, you know, most peoplejust talk about the grid in
general. And then, of course,micro grids are considered maybe
could be, like, 20 megawatts orless. I mean, some military
bases could be 15 or 20 megawattmicrogrids, for sure, yeah, from
the grid, but I guess you know,your typical microgrid has
multiple different types of enduses and then possibly multiple

(02:31):
different supply components toit all united by that
controller, right? So the supplycould be diesel and batteries
and solar, et cetera. Some ofthese so called macro grids are
like, for example, could be fora 200 or 500 megawatt data
center, where they have aconnection to the grid, but then
they have a backup generationresource that enables them to

(02:55):
island off from the grid andcontinue functioning for some
specific period of time. Now,with one of those macro grids
which are emerging in the datacenter space, they are in some
ways less sophisticated, becauseyou're just dealing with your
servers and the associatedequipment, and you're just
dealing with generally oneresource batteries switching

(03:18):
over a generation, like dieselOften, but now often gas too. So
I guess the distinction is sizeto some degree, but let's not
artificially try and constrainthat too much. And then what's,
what's the general nature of thebeast that we're talking about?

Yeah, and you know, with the advent of
community scale micro grids thatI learned about from Craig
Lewis, check out episode 160with Craig Lewis from a couple
of years ago. Now, he is the CEOof clean coalition in
California, and they'redeveloping literally micro grids

(03:54):
for 10s of 1000s of people. Andthis could be an entire small
city or a neighborhood. And, youknow, I think of micro grids
traditionally as powering afacility, like a factory or a
neighborhood or a home, yeah,yeah, but yeah. But in any case,

(04:14):
I think the lines do blur onceyou get into the hundreds of
megawatts or 1000s of megawatts.
I mean, some of these datacenters that we're developing
are five plus gigawatts. They'reginormous. And data center load,
we're going to talk talk a lotabout data centers today,
because data center load is oneof the major growth areas. And
data centers, I saw a storytoday that they're going to

(04:38):
triple the amount of electricitythat they consume in the next
five years. Today, it's like 4%of the grid. Tomorrow, it's 12%
of the grid, you know, andthat's that's a lot of growth.

Yeah, there's a really great report
that came out last week fromEpic AI, and every looking at
what that future consumptioncould. Be by 2030 and the drive,
the underlying drivers, thegraphics processing units that
are the chips, and then what'shappening with the large
language models, and whathappens when we move over to
inference and all that? I spenda stupid amount of time now

(05:13):
trying to figure out the datacenter space and the emerging
technologies and where it'smigrating to, because it has
such a critically importantimpact on the future grid

for sure, and you know, fundamentally, micro grids
are potentially very good forthe grid and good for consumers
and good for business owners,because everybody wants
electricity when they need it.
Nobody likes power outages. Andso whether you're at the
facility level or the communitylevel, being able to micro grid

(05:46):
from the greater grid, if thegreater grid goes down, is a
huge asset. And as we werediscussing in the pre show, the
NERC, the National ElectricReliability Council, North
American Electric ReliabilityCorporation, North North
American Electric ReliabilityCorporation is the the entity

(06:08):
that is responsible forreliability of the grid. Why
don't you tell us a little bitabout what's going on there and
what's on their radar?

Yeah, so they're always looking at the
supply demand balance amongother things, and and they have
standards, these criticalinfrastructure protection
protection standards, andthey're everything from, how do
we keep terrorists fromattacking Transformers or large
power stations, to how do wemake it all cyber secure to do
we have the adequate reservemargins, you know, the surplus
of supply over demand, so thatif you lose a large generator or

(06:42):
power line, you still keep thegrid up and running. Well, they
look at all those issues, andone of the things they're now
starting to look at are theselarge data centers. Because
what's happening in that largedata center space, and you
correctly articulated, some ofthese are going to be like the
Stargate. One that complex is5000 megawatts, plus there's
another one. Meta is building inEntergy in northeast Louisiana.

(07:04):
That's a 2000 megawatt systemand so on. Well, what happens if
these things that, I mean,they're the they're the
opposite. They're like theinverse of a large Generation
Station, right? It's a singleasset connected to the grid,
just like a nuclear plant is,except on the demand side. So if
they go on or off, they impactpower quality and reliability

(07:24):
just the same way that a largenuke or coal plant or gas plant
does. So they're looking atthese issues, and how are they
connecting to the grid, and how,how do they interact with the
grid? If you think about it, alarge data center, any data
center, is essentially a microgrid or a macro grid, in the
sense that it has, by design, anuninterrupted power supply and

(07:49):
backup generation. In fact, Iwas writing a blog for one of my
clients, and I was talking tothe chief technology officer,
and he said, the way we thinkabout it, our backup generation
is our primary source of power.
I said, What? What do you mean?
You take all your power from theutility. Goes, Yeah, but our
backup generation is the primarysource of power. The utility
powers happens to be cheaper,but when we design it, our first

(08:13):
line of defense is backup Gen.
We just don't happen to use itthat often, but it always has to
be in working condition. So byso they're already macro grids
right now, what's interestingabout them is they because their
chips are so valuable. Now, anNVIDIA chip, a GPU Graphics
Processing Unit, could cost upto $30,000 so each one of these

(08:34):
is a car in terms of its cost,and some of these data centers
have 10s of 1000s or more ofthese chips in them, so they're
super valuable, super expensive.
Those data centers are designedthat if there's a disturbance in
the force, to use Star Warsterm, if there's some frequency
or voltage issue that couldcause damage to the chips,

(08:57):
they're designed to trip offlineand immediately go over to UPS,
to the uninterrupted powersystem, and then to backup
generation. That wouldn't be aproblem if these were small, if
they were micro grids, but oncethey're macro grids, this
becomes an issue. Let me giveyou an example last year in
Dominion, service territory inVirginia. Dominion, by the way,

(09:17):
has it hosts enough data centersthat 70% of the world's email
traffic moves through Virginia,through a couple counties. They
have, they have 40,000 megawattsof potential data center demand,
and about 5000 energy serviceagreements signed, like another
8000 where data centers arecommitted to building

(09:37):
infrastructure well last yearand they served last year, only
17,300 megawatts of peak demand,so data center load dwarfs all
of the load in the system, andthey already had some data
centers in their system lastyear. So what happens in August?
Lightning strikes, a lightningfault arrest, are meant to
protect the grid fails andthere's a voltage and frequency

(09:58):
disturbance. Data centers in thegrid. Sense this problem with
voltage and frequency, and whatdo they want to do? They want to
protect their equipment, so theyimmediately island off from the
grid. So now the rest of thegrid still generating.
Everything's still running. Nowthey run into an over, over
frequency situation and avoltage disturbance issue,
because they have 1500 megawattsless load than they had seconds

(10:20):
ago. And so it's like theinverse of ripping a power plant
out of the grid. They almost hada grid failure. So the North
American Electric ReliabilityCorporation NERC says we're
going to solve this ride throughissue and make sure that as the
population of data centersgrows, we don't have these
situations where something failsand all of a sudden these huge

(10:44):
macro grids pull away from thecentralized power grid, so
places like ERCOT, Texas,they're now saying in ERCOT to
the utilities there, you guyshave to solve this issue with
your data centers that sign upso that they create buffers that
don't cause this potentialproblem for the grid. So it's a
fascinating issue, and one thatactually has really significant

(11:07):
implications for the futurepower system that we're all
building, and indeed, ourability to keep the lights on.

Yeah, I feel for these grid operators who have an
onerous task of keeping the gridrunning, 99.999% of the time,
and it is truly a very dynamictime for the grid. Now there's

(11:35):
so many different things goingon. We've talked about the
increased load of data centers.
We also have electrification oftransportation and the
electrification of HVAC andindustrial processes
simultaneously. So there isgrowing load. We had a plethora
of solar, wind and batteriescoming onto the grid. We still
are in that boom, right? We'reabout to see that flat, you

(11:57):
know, go flat for a little whilebecause of the BBB, right? I
think the latest stat from Enverus I saw, is that only 30% of
solar wind projects are going tosurvive the BBB in the next five
years, something like that. Butthe grid operators are going

(12:17):
okay, well, guys, what are wegoing to do? And because you
can't just snap your fingers andbuild coal and natural gas
plants or turn them back on,what do you think about that?
Like, how does that play outwith all of this big extra load
on the grid? How do the gridoperators respond to that?

Yeah, so you're right about that. You can
extend some coal plants. You canrevitalize a few nuclear plants,
like, you know, constellations,doing with Three Mile Island for
$1.6 billion NextEra is bringingDwayne Arnold back in Iowa.
That's 600 megs there. And thenthere's Palisades in Michigan.
But after that, you kind of runout of retired nukes to

(13:02):
resuscitate, and there's only somuch coal you keep around, and
gas the real issue there. Scottstrazik, the other day, CEO of
GE vernova, says, you know,we're sold out now. We're back
order through 2028, 2029, so nota lot of supply relief coming
from your traditionalhydrocarbon based, dispatchable
resources, and the nukes, theywon't come on till 2030 and

(13:23):
later, the modular nuclear andadvanced geothermal, yeah, it'll
grow, but nothing reasonable. Sowhat you're up against is a
capacity constraint, because youhave all this demand on the
supply side coming in, and mostof it is data central load.
Yeah, there's going to be someEV load and some other but most
of it's going to be data load,and you got so lots of more

(13:43):
demand, very little supply. Andthe real critical issue isn't
really the terawatt hours asmuch as it is the terawatts.
It's a capacity based issue.
It's serving. It's solving forthose 20 or 30 or 40 critical
hours in the year. So that'swhere storage can really help,
and microgrids can really help,because if you can essentially
take pressure off of thoselimited numbers of hours in the

(14:04):
year, you could continue to addmore demand. So you're starting
to see in places like SouthwestPower Pool recently, SPP
approved. It needs still to goto the Board of Governors there,
but they basically said, if youbring your own capacity as large
loads. That is, bring your ownbackup generation and commit to
turning that Gen on when we callyou, so that we essentially

(14:27):
don't see any load on our gridbecause you've displaced it with
generation. We'll let youconnect within three months,
instead of a typical longer termsituation. So I think we're
going to see, well, I'm prettyconfident we're going to see
more and more grid operatorssaying, okay, look, if you want
to come onto our grid, you gotto bring capacity with it as

(14:48):
well. In places like Ireland,they're now approving data
centers with self gem like notjust bring your own capacity,
but bring your own energy. Buildyour own macro grid. They. That
may or may not be connected tothe centralized power grid. So
you know, this whole new dynamicevolving

Yes, and I've noticed that even these data
centers, some of them are takingan off grid approach, or a
hybrid approach, where theymight initially develop the
facility as an off gridoperation, so they don't deal so
much with the longinterconnection queue. They

(15:28):
build a solar farm, a batteryfarm, and prop up their data
center. It includes some naturalgas generation and then
eventually a grid connection.
And it's the best of bothworlds. So a micro grid can be
wind, solar, batteries, naturalgas, any you know, any other

(15:48):
sources where, you know, I'mprimarily interested in battery
and renewables micro grids, butthey're going to be all kinds of
hybrid micro grids. And sotruly, we're kind of entering
the age of micro grids for thegrid, and they're and they're
going to vary in size from very,very big to reasonably small.
And you know, it's like, yeah,why not? It's the best of both

(16:14):
worlds if you truly wantresilience and and up time. I
guess it's, it's like a both andand then there are companies we
discussed a project with, withChick fil A. There are companies
that are that are doing thisenergy as a service right where

(16:36):
they're providing micro gridservices to larger entities or
fleets of entities, like Chickfil A. And maybe you can tell us
a little bit about the Chick filA story. And I can't remember
the name of that developer, butthat's a new phenomenon.

Yeah, that's in stone California. That
first one, they cut the ribbon acouple of years ago. And the
idea was, they wanted to providea refuge, if you will, to their
customers when there were poweroutages. And as you as we all
know, California has a lot ofthose public safety power shut
off outages, and sometimes theyhave unplanned outages because
of transformers are overheating.
They weren't designed for hotterweather, and now we're getting
that hotter weather. So therewas an outage like that around

(17:19):
Stockton a couple years ago too.
So what they did in thatparticular instance is they put
a solar carport, and, you know,you drive underneath and do your
order for your food or pick upyour food, and then they added
storage to the solar and thenthey have gas fire generation as
well. So they bring in a bunchof resources, and then they have
that point of common couplingwith the grid so that they can

(17:40):
island off and so, you know, toyour point, I think we're going
to see a future gridarchitecture where used to be
five years ago. You'd say, Oh,if you've seen one micro grid,
you've seen one micro grid. Theyused to be to Peter as missus,
you know, famous joke when hewas a kite guy, pointing that
every single one of them wasdifferent. But now, now that
we've been at this long enough,yes, there's going to be a lot

(18:02):
of different types, but there'salso a lot more expertise in
that space. They're able to bedeveloped more quickly. There's
still art involved, but there'sa lot more repetitive practice
involved. It's more more Legopiece than it used to be. And so
I think, on a go forward basis,we may well see the emergence of
a somewhat fractal grid wherethere are a lot of different

(18:24):
pieces of that, you know, fernleaf, if you will, that are able
to isolate off at any time, andthey're part of that larger
corpus, that larger body, andprovide that resilience. So that
if you did have a situationlike, say, winter storm Yuri,
where you had to have theserotating outages that ended up
not rotating because they didn'thave enough capacity. You can

(18:45):
actually activate a whole bunchof different microgrids, Section
those off and keep the remainingpart of the grid whole or
certainly under a lot lessstress, but other than would
otherwise be the case. And thecool thing about artificial
intelligence, Tim is that thisis a big data play. It's really
about the what, the where, thewhen, the how much, for how

(19:06):
long, and also at what price.
And this is something that, upuntil now, you mentioned the
grid operator. Up until now, wehaven't had the grid
architecture and datamanipulation and management
capabilities to do that sort offractal grid approach, where you
have all these interactivedevices and little pieces
happening and being interactiveall over the place. When you

(19:26):
bring AI into the game, and thegrid could be one of the largest
data plays in the history ofhumanity. You actually would
have the capability to figureout how to do this. And what you
got to do, among other things,is aggregate the information at
the right places, so that thegrid operator doesn't get
overloaded with data. But ifsomething goes wrong, we

(19:49):
forensically have the capabilityto go back and interrogate and
find out, well, what brokewhere, so we can fix it for the
next go round. So it's not goingto be easy grid operators and.
Tilde is going to have to investbillions of dollars in this. If
you look at something like, youknow, someone like SoCal ed in
Southern California, they have a20 year roadmap for IT
investments. I I warned it'sgoing to have to be accelerated

(20:10):
well, well beyond 20 years,because the future is coming at
us faster than we imagined a fewyears ago. But the pieces are
there. You can see them on theboard. Now the question is, how
do we assemble them and at whatcost relative to the benefits?

So you're referring to AI driven controls,
right of grid services,

not the load side. But now, what can we
do with AI? Yeah, we're buildingout the grid is in a way. We're
building out a second centralnervous system for the planet.
Right? Each one of us is a microgrid. As a human being, we have
an electrical system that runsthrough our whole body, and our
hands and feet and skin are thesensors. Our tongues are
sensors, etc. We pull all thisinformation, and then our

(20:52):
central controller makes thedecisions. Our brain Well, we're
kind of building a decentralizedcentral nervous system for the
planet right now, and a piece ofthat is the power system,
because just like our centralnervous system, we're building
out the electrical system. Ithas to support it all. But the
cool thing about that is, withAI, we can create a better

(21:14):
nervous system that pullsinformation more quickly into
that central computer, if youwill, to make the right
decisions.

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(22:04):
call 855-584-7168, to find outmore. Yeah, I love this, and I
am a big believer that AI canbenefit grid operators and the
grid, and ultimately, consumers.
It also, you know, I thinkraises the bar for the

(22:25):
importance of things likevirtual power plants. You can
imagine at the at theneighborhood level, right? You
have a bunch of homes andbusinesses with batteries. They
range from 10k w, H to hundredsor 1000s of kWh, right? For a
commercial. And if you're anoperator, you can then, on

(22:47):
demand, leverage thoseresources. And that is the
essence of a VPP, yeah.

In fact, California just did it on the
29th of July, the three IOUinvestor owned utilities,
working with sun run and Tesladispatched 535 megawatts of
batteries from over 100,000customers, homes, wow, for two
hours, you know, from seven tonine in the evening. So that's
still only part way there,because it's still not a fully

(23:18):
elastic response where thedevices are interacting with the
grid on their own, but we'regetting there, and you can see a
future state where you couldhave a transactive environment
where, let's say your microgrid. Tim says, okay, every time
the price of electricity isunder 10 cents, I'm going to
pull it from the grid. And everytime it's more than that, I know

(23:38):
what my cost of generation is. Iknow my storage, my solar, and
whatever my other fuels mightbe, I'll generate on site if
it's more expensive than that.
And so you could have a highlyelastic, price responsive and
diverse ecosystem of multiplemicro grids all interacting with
the central price formationfunction and thereby create grid
efficiencies as well.

And this can benefit the hosts of these
facilities, right? They can bepaid for grid services. Is the
technology that good now that wecan reliably know that our
battery is properly beingmonetized.

He we see signs of it. So for example,
companies like stem, right? Theyhave, stem has an Athena
platform that they call an AIplatform, who's machine
learning. It's not fullgenerative AI like the ability
to think sort of thing and comeup with new ideas, but it had if
then statements all over theplace, so it could look at

(24:41):
across its 1000s of batteries,what's the state of charge,
what's the heat, you know,what's the what's the local grid
condition, etc, and then decideacross that whole fleet which
ones to dispatch and or charge,and how fast, because it's a big
numbers game. Now, the otherthing about. The way, once
you're starting to deal with bidirectional flows, a grid was

(25:04):
designed to be a one way, youknow, bulk power system, one
direction down to yourdistribution utilities. One way
becomes sort of a one way cartpath. Now you're going to be
pulling energy from the grid anddelivering energy back to the
grid. So now with not justhundreds of devices, but
potentially 1000s and 10s of1000s, your water heaters, your

(25:24):
batteries, your electricvehicles, your air conditioning
switches, some are just shuttingoff, but some are
bidirectionally flowing power.
Now you need to know thingslike, well, what's the voltage
and the frequency down at thedistribution level in ways you
didn't have to before. So again,it becomes a very big data play,
requiring the application ofartificial intelligence to make
sure that the grid is healthyand all the conditions are met

(25:44):
before you can exercise thesepotential options.

So what else should our listeners know in
terms of where do you see thereal opportunities for
developers, EPCs, asset owners,companies like Seoul micro grid
that are asset owners anddevelopers. But where do you
think the real opportunity lies?
And I'm sure it's regional, likeeverything in energy kind of got

(26:12):
the California world, you've gotTexas, you've got PJM, but paint
a picture for us. Where do youthink energy professionals need
to shine a light?

Sure. So what I typically do when I think
about this for clients is I say,well, let's put together a
matrix. In fact, I did somethinglike this for a client about
five years ago and said, Allright, let's look at two things.
Let's look, look at physicalrisk. Where have we seen the
most expensive weather relatedor other related issues that
compromise the grid and causeloss of power? These are areas

(26:48):
you might want to think aboutmicro grids. And then where do
we see the highest energy pricesor capacity prices? These are
areas you might want to thinkabout micro grids, where you can
either avoid costs from the gridat certain times, or export
value back to the grid. And so,you know, places like cat like
Florida, for any place with ahigh Waffle House index, you

(27:10):
know where they shut down theWaffle House during storms,
right the there was a famousFEMA Director that put that a
Cray. I can't remember his lastname, but you look for places
where high avoided costs. So onearea that unfortunately, costs
have gone up a lot, but I'mpretty excited, from a micro
grid perspective, is PJM, theMid Atlantic Power Pool. 21% of

(27:32):
us, GDP, 13 states, they justsaw their capacity prices go
from the high $20 range. This iscapacity dollars per megawatt
day. It's essentially, what doyou pay for the ability to
consume power? And it's, it'syour contribution to the five
system peak hours in that grid.
So they have this auction, andfor all the steel on the ground,

(27:53):
the generators or demandresponse providers, they say,
okay, who's bidding in at whatprice for us to get the ability
to instantaneously supply power.
And so for years, these pricescleared at $30 per megawatt day,
$28 then last year, the auctionfor 2025, 2026, delivery year
cleared at 260 $9 and changealmost 270 and everybody freaked

(28:17):
out. So Pennsylvania,Pennsylvania Governor Josh
Shapiro went to PGM and said,Okay, we don't want that to
happen again. Let's set a floorand a ceiling. Floor, 175
ceiling, 325, okay, and 175 thefloor was higher than any year
that had previously occurred,except the one just happened. So
it was a high floor. So thenthey just have the next auction

(28:39):
prices, this time cleared at320, 9.173 2917 now that's more
than two hours. Actually 325 isabove the cap because they
adjusted the cap a little. Okay,so then they simulated and said,
what if the cap weren't there,the price would have been at 388
Okay, so now that's more than25% of somebody's power bill on

(29:01):
the wholesale you know whenyou're buying from retail. Okay,
so now they have the cap onemore year for next year. The
auction is going to happen inDecember for the 2027 2028 year.
And then they have, like, acouple more options every six
months apart with no cap on themright now. And meanwhile,
nothing's being built in PGM,and PGM is one of the epicenters

(29:23):
in the country for data centerload. So we're looking at an
inflationary price environmentfor capacity and probably energy
as well, because there's nosupply relief coming into the
picture, and there's going to bemore demand. So if I'm looking
all across the US and trying tofigure out, well, where do I
have the highest avoided cost,where I can provide the most
relief to customers and avoidedcost value. I'm going right at

(29:46):
PJM, because that's a really bigEpicenter right now.

Yeah, when you look at the PJM map, it covers
Virginia, West Virginia, Ohio,Pennsylvania, New Jersey,
Maryland, Delaware. Area, yeah,the Washington, DC metro area.
It's big, and Virginia is theepicenter, as you pointed out of
data center, traffic and well,infrastructure.

So then you look, you know, it's not,
it's no surprise that, forexample, Hawaii was the first
place we had lots of solar andbatteries because their
electricity avoided. Costs werehigh because they imported oil
and coal to generate theirelectricity. Now you have places
like California where people arepaying 40 cents a kilowatt hour
more. Also a good place to putmicrogrids, because your avoided
cost environment is really,really high. So if solar and

(30:36):
batteries can get you cheaperpower, then go places like that.
So look for physicaldisturbances and look for high
avoided cost environments. Thoseare the two major overlays,
yeah.

Now the other thing I think that's going on is
states are leaning in with theirstate leavers and programs,
right? These are programs thatincentivize the installation of
batteries. This is happening inCalifornia, in Massachusetts, in
New York, in Illinois, and Ithink the state programs are

(31:08):
becoming more important becauseof what's going on with the
federal landscape. Any thoughtsabout that? Do you see when you
see the when you read the tealeaves are, is there going to be
a cascade of more states gettingin that game? Yeah?

You know that probably ends up being a
red state, blue state thing,because mostly it comes down to
what are the articulated climategoals that come from the
legislature and then flow intothe public utilities commission
then get turned into policy?
Yeah? So like New York, aclassic case where they have
6000 megawatt target forstorage, right? California,
obviously, Massachusetts, placeslike that. They tend to be

(31:47):
those, if you want to call themthat, progressive states that
are pushing those kind ofagendas. But yes, I should have
mentioned the incentives forstorage because, and yes, the
ITC still stays in place forstorage as well, so that
certainly is another thing thatI would look for as a developer
say, Okay, where are the dots onthe map? Which states have those
beneficial subsidy environmentsas well? Yeah.

And then from the utility perspective, I'm curious
if you were advising bothinvestor owned utilities, so
called private power and publicutilities. These are rural co
ops and Munis. What is youradvice to utilities about this
modernization? How can they leanin and benefit themselves and

(32:38):
their constituents?

You know, it's interesting. So Xcel
Energy, northern states powerright in Michigan, they have a
program there. They've proposeda tariff that's been approved
where they're going to putbatteries and solar in people's
homes, but they're not owned bythe residences there. It's a
distributed capacity programwhere they're basically locating
many power plants all over theplace. They're not even macro

(33:03):
grids, because it's not likerooftop solar right now, where
it's meant to sort of feed thehome. And you know, you're
building these little nanogrids. This is more about a
distributed power plant thatthey're putting in. And there's
some people saying, well, whyshould the utility be able to do
that and rate base? And theanswer is because maybe they can
do it faster with the lower costof capital. And ultimately, if

(33:24):
one is concerned about climate,I tend to be saying, well,
whatever's the fastest way youcan get it done, who cares? Who
owns it? Right? That's a littlebit of a broad brush, but yeah.
So certainly that for that itmatters. But also, Tim, if you
look at avoided costs. So Kavaladid a study for the California
Public Utilities Commissionabout four years ago where they

(33:44):
said, What if we fullyelectrified all transportation
in the state of California? Whatwould that cost in terms of the
upgrades for substations andfeeder lines and transformers
down to the little trash cantransformers outside of people's
homes? And they said, if wedidn't do anything, if we didn't
manage charging or do anything,the cost could be up to $50
billion and what you're reallytalking about are thermal

(34:07):
violations when equipmentoverheats a certain number of
times of the year, when it's hotoutside and you're pushing a lot
of electrons through thatequipment. And so if you can
change when you're moving theelectricity through the
equipment, you don't have toreplace the equipment as quickly
could push it out for a numberof years. And the best poster
child for that is BrooklynQueens demand management

(34:27):
project, which started in 2016 Iwant to say, in New York,
Consolidated Edison. So BrooklynQueens, they had an influx of
young people, drove up demand inthat area, and they were going
to have to replace a substationand feeder lines costing about
$1.2 billion and instead, I justlooked at the report the other
day for a client, they ended upspending about $150 million and

(34:52):
they put in some voltagemanagement equipment, but most
of what they put in was fuelcells, batteries, solar and a
lot of energy efficiency anddemand response. Process right
that whole grid edge side, andso for about an eighth the cost
of building centralinfrastructure, they were able
to do something a lot more costeffective, to lower rates for
everybody. So in a future, stateutilities are going to have to

(35:14):
look at stress systems withadditional load growth and water
hotter climate, more equipmentreaches thermal violations
faster. So now you say, okay,all things being equal, if I'm
going to put a micro grid inhere here, where would I put it?
Oh, if I'm new to it, I'm goingto put it over here. Why?
Because this piece of equipmentI won't have to replace. If I

(35:36):
can activate that micro grid 10times a year, right? And have
them island off from the gridand pay them for that. It's
better to lower voided cost thanme upgrading this equipment. So
in a really smart future statesystem, you could, in theory,
have every single piece ofequipment know when it's going
to be in thermal violation andknow what the avoided cost is of

(35:57):
that. What's it going to costme? How might, how long might I
be able to forestall replacingthat? And what's it worth to me
to do that? So now again, withAI, you could create a system
with hourly or 15 minute avoidedcost for every single piece of
equipment on your entire powergrid. Not happening today, but
it's conceptually feasible, andwith AI in the future, it's

(36:20):
entirely possible to at leastmap that and model it. And you'd
start, obviously, with thehigher, most expensive
equipment, further along on themargin, needing to replace, and
then you'd ripple down to less.
But it's doable.

So back to that study that you referenced, where
they concluded that electrifyingtransportation in California was
going to cost $50 billion isthat right? And a an ideal
scenario where they're alsoinstalling more storage, for
example? Right? Thatinfrastructure upgrade is

(36:54):
lesser. But what does the dollarfigure turn translate

into? No, it depends a lot on the
assumptions. I think they ransome numbers on that, the cost
thing that stuck in my head. Youcan find the study if you just
Google California PublicUtilities Commission, Kavala,
you'll find

it's K V A L A, E v a l a, yep. K e V, E, A L A,
yeah. Kevala sounds like, Yeah,okay. Kavala, got it cool? Yeah.
I want to geek out on thatreport for sure in our last
couple minutes together. Peter,what else should our listeners
know about micro grids? I loveit that you have coined this

(37:33):
phrase, yeah, the fractal thefractal grid. I love that the
fractal grid. That reallyresonates. But what else is on
your mind about the future ofmicro grids and the future of
the grid?

You know, I think because we are now
further along in the digitalage, and the digital age needs
electricity. And, you know,because now every time I jump in
my car, I'm aware that it'sdriven by electrons. In fact, my
wife the other day said, Isn'tit cool? We're driving around on
batteries. And I said, and I'vegot a Hyundai IONIQ five, which
is a really great upgrade fromthe last Hyundai i had. But

(38:10):
people are becoming way moreaware of the fact that
electricity makes our societyrun, whether it's because
they're complaining about thepower bill, or they've got an
EV, you go to a cocktail party.
Now, I'm sure this happens toyou. Tim, and someone asks you,
what you do before, you know,the eyes glaze over and they
wouldn't have the intelligentquestion. Now, half the time,

(38:32):
they'll ask you a pertinentquestion about the power grid,
which is when my wife says, Areyou sure you want him to answer
and because she wants to pull meaway, because they're going to
get the sermon on the mount forthe next half hour for me. But
my point being, I think as moreand more people become aware of
power, they become more and moreaware of some of the nuances and

(38:53):
how it works that plays rightinto the hands of micro grid
developers. Because let's faceit, at one level, we're offering
a really simple solution, whichis, we'll take away your power,
your concerns about losingpower, etc, etc, you know, for a
price. But if someone wants toknow more, well, how do you do
that? What's the cost going tobe? What are the benefits and so

(39:14):
on? The conversation is now moreprime for that than it has been
in the past, because people aremore aware. It's kind of like
back in the day before, er andall the medical shows, nobody
knew what an ACL was, or this orthat or the other. Now, half the
people in the world can tell youhow to take your gallbladder
out, what to watch out for,because they watch surgery on TV
shows all the time. Same sort ofthing, to a lesser extent, with

(39:36):
electricity awareness. And Ithink that's only going to grow?

I mean, it is kind of amazing how little most
people know about where theirpower comes from. Like, when I
tell people that 40% of theirelectrons come from nuclear in
Illinois, they're like, whatreally, I had no idea. And it's
so important, right? Because of.
Uh, computers, the internet. Imean, we freak out when we don't

(40:01):
have the internet. If you're aknowledge worker, like, forget
about it, right? You got to haveinternet access. And luckily, in
most places, the grid is veryreliable. But the challenges are
mounting, right? The climatechallenges and now the load
challenges with the explosion ofAI, and we're just seeing that

(40:22):
it's going to, it's going to geteven more intense, even though
this tripling sounds like a lot,the tripling of the AI demand
sounds like a lot. I could seeit going tenfold. You know, in
the following five years.

It's moving so fast. But, you know, I
think in some ways, the industryis a victim of its own success.
The same way, you know, waterutilities like, we turn on our
water, or we flip a switch andthe stuff comes out of the
faucet, or the lights go on, andthen the bill comes at the end
of the month, and we treat itlike it's a tax, like, god damn
it. Why do I have to pay thisthing? Right? That's what we do.

(41:00):
I mean, we take it as a given,almost like it's a natural
right, like the sun should risein the morning without any
awareness of the sophistication,from the linemen climbing the
poles in a storm to inertia to,you know, all the physics that
govern what that thing is. Andmy my career is basically

(41:20):
predicated on educating peoplearound how this super complex
machine works. Because I find itto be, yeah, it's a fragile
Marvel, but it is an incrediblymarvelous thing, and I'm hopeful
that as we move forward in yourworld, educating people about
micro grids and more and moredata centers come in, that we
will create more of an energyliteracy within our society, so

(41:43):
that we actually do come toappreciate the value that we're
getting for the Electron. If wedidn't have it, we'd all flop
over dead within a short periodof time, right? So for me, it's
like All hail the electron. Itkeeps us alive.

Hey guys, are you a residential solar installer
doing light commercial butwanting to scale into large C&I
solar. I'm Tim Montague. I'vedeveloped over 150 megawatts of
commercial solar, and I'vesolved the problem that you're
having you don't know what toolsand technologies you need in
order to successfully close 100KW to megawatt scale projects,

(42:24):
I've developed a commercialsolar accelerator to help
installers exactly like you.
Just go to cleanpowerhour.comclick on strategy and book a
call today. It's totally freewith no obligation. Thanks for
being a listener. I reallyappreciate you listening to the
pod, and I'm Tim Montague, let'sgrow solar and storage. Go to
clean power hour and clickstrategy today. Thanks so much.

(42:46):
Well, if you're listening tothis, the takeaway is that
batteries and micro grids are ahuge opportunity, whether you're
a energy professional oraspiring energy professional or
a prosumer. Batteries and microgrids are the future. Check out
all of our content atcleanpowerhour.com. Please give
us a rating and a review onApple or Spotify. Follow us on

(43:10):
YouTube, reach out to me onLinkedIn. Tell a friend about
the show and Peter KellyDetweiler, where can our
listeners find you?

Best way to find me is
peterkellydetweiler.com. Ourwebsite.

Very good. Well.
Thank you so much. Peter KellyDetweiler, author of Energy
Switch and regular news updatescoming out of his mouth every
week on YouTube. Find him onLinkedIn. You can't miss Peter
Kelly Detweiler. He is atremendous voice for the
industry. So with that, I'llsay, let's grow solar and
storage. I'm Tim Montague, thankyou so much. Thank you, Tim.

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