Renewables and electric vehicles are on a tear, and they’ll soon likely attract $2 trillion in yearly investment. But global emissions have not yet peaked. So what are the new frontiers of technology that will make renewables and storage more valuable — and draw down emissions at the speed required?
This week, we’re going to reflect on that question coming out of RE+, a major American clean-energy conference where our editors were covering emerging tech. Then, we’ll discuss the battery recycling boom. It’s attracting billions of dollars in investment. Will it address supply-chain security and a looming waste problem?
Finally, we’ll talk about Hawaii’s difficult transition away from coal. Why wasn’t it able to build renewables and batteries fast enough to fill the gap?
Sign up for Latitude Media’s Frontier Forum on January 31, featuring Crux CEO Alfred Johnson, who will break down the budding market for clean energy tax credits. We’ll dissect current transactions and pricing, compare buyer and seller expectations, and look at where the market is headed in 2024.
Stephen Lacey: Now that people are going to hear you guys more regularly, they're going to get familiar with not just your voices, but your verbal tics. Anything you want to flag for us right now before we start?
Julian Spector: Maybe [inaudible 00:03:36].
Jeff St. John: Yeah...
Lisa Martine Jenkins: I think I tend to speak relatively low, and then when I get excited, go really high-pitched, which is a nightmare for audio editors.
Stephen Lacey: Well, that's what we have a good engineer for. Well, if you're not aware of them now, you soon will be.
Lisa Martine Jenkins: Oh, yeah.
Stephen Lacey: This is The Carbon Copy. I'm Stephen Lacey. Renewables and electric vehicles are on a tear. They'll soon likely attract $2 trillion in yearly investment, but global emissions have not peaked. What are the new frontiers of technologies that will make renewables more valuable and draw down emissions at the speed needed? This week, we're going to reflect on that question coming out of a major American conference, where our editors were covering emerging tech.
Then the battery recycling boom is on. It's attracting billions of dollars in investment. Will it address supply chain security and a looming waste problem? Finally, Hawaii's difficult transition away from coal, why couldn't it build renewables and batteries fast enough to fill the gap? That's coming right up. We're joined this week by Jeff St. John, Julian Spector, and Lisa Martine Jenkins. Jeff is the director of News and Special Projects at Canary Media. Hey, Jeff.
Jeff St. John: Hi, Stephen. Thanks for having me.
Stephen Lacey: Julian Spector is a senior reporter at Canary Media. Hey, Julian.
Julian Spector: How's it going?
Stephen Lacey: With us is a new voice in New York City. It's Lisa Martine Jenkins. She is editor of Latitude Media, the new B2B climate tech publication that we're launching in October, and she hopped into a studio between meetings at Climate Week. Hey, Lisa.
Lisa Martine Jenkins: Hey, Stephen. It's nice to be here.
Stephen Lacey: Our listeners are familiar with Jeff and Julian, and you're new to our listeners. I just want to start with where did you come from? What are you doing at the Latitude?
Lisa Martine Jenkins: Yeah, so I've been working as a climate journalist for several years now. I most recently covered climate tech for the late great protocol, may it rest in peace. I'm now going to be an editor for our new site, really excited about that. We'll be launching in about a month, so it's great to see you all. I'm really stoked to be here.
Stephen Lacey: Yeah, so you and Julian were over in Las Vegas at RE+, and that's what we're going to talk about first, because there are some really important takeaways that feed into what Canary is covering, and what we're covering, and what the next evolution of climate tech looks like. I was really interested in this report that came out from the International Energy Agency, or it was a preview of the report, this World Energy Outlook that comes out. It's this big annual assessment of the global energy system.
In this preview, IEA says that peak fossil fuels are coming by the end of the decade. That's thanks to the huge surge in renewables, and batteries, and EVs. Even with this trillion dollar level investment each year, we're nowhere near where we need to be for keeping temperatures at 1.5 degrees Celsius. It also gets us actually still dangerously close to two degrees Celsius warming. That really leads us to ask, what's the next gear of decarbonization?
We have to see massive investments in not just wind, solar, and batteries, but advanced grid tech to make them more valuable, long duration storage, carbon removal, other forms of materials innovation. That activity is really picking up, and it's why a conference like RE+, which has deep roots in the solar industry, has expanded to include these technologies. We just thought it would be interesting to recap that event, because it does tell us about where the industry is evolving to grapple with these commercial frontiers of clean energy.
Julian, over to you first, that you've attended a lot of these events. Have you seen this focus expand, and what do you think it says about how the industry's evolving?
Julian Spector: Totally. Well, it started as really a solar show, so Solar Power International, or SPI for many years, and gathering of rooftop installers, and people hocking different panels, and saying they got the most efficient panel, and all of that kind of thing. Now, it's really become just the full range of the clean energy industry. They changed it to RE+ to sort of signify it's renewable energy, plus I guess whatever else you can imagine.
The main thing that was most palpable is just the scale of it now. They were saying about 40,000 people, which there was already a surge last year. It came a few weeks after the Inflation Reduction Act passed, and you could feel that energy on the floor in Anaheim, which is a much tougher city to have to be in for work, in my opinion, than Las Vegas. I think it's roughly doubled now what it was, say, two shows ago. They had two entire expo halls full of people showing off their solar, and their batteries, and electric vehicle charging, and electric vehicles, and all those gadgets.
It was almost too big to really navigate. I kept hearing, I heard Tesla was in there somewhere, and I went looking for Tesla. I could never find it. It's big enough to get lost in. If that's some sort of leading indicator, it's just showing that the central industry conference for clean energy is taking off, and there's more companies participating, more products, more people working on it than we've ever seen before.
Lisa Martine Jenkins: Yeah. First of all, I've never been to Vegas before. I've never been to RE+ before, so I was totally overwhelmed, totally lost most of the conference. I mean, I heard just anecdotally of so many people just missing meetings because it was impossible to navigate between just the sheer number of people that were there, which was, again, a leading indicator, and pretty exciting. It's funny to recall the fact that it used to be a solar trade show, because I had, I think, one conversation about solar the whole time I was there.
I actually ended up doing a bit of a crash course accidentally in batteries and long duration energy storage specifically. Stephen, I think it was you who wrote in 2014, storage is the new solar. We've talked about that concept in the last couple of months. Based on what I saw at RE+, it seems like that assessment just rings truer than ever. There was just a lot of conversation about how different storage technologies are vying to prove their worth right now.
I spoke with Julia Souder, she's the CEO of the Long-Duration Energy Storage Council. She said that she's just anticipating that their number of members will peak shortly, because right now they have many, many members. She anticipates that as the industry matures, battery companies start merging, buying one another out, there'll just be this air of consolidation, and it's seemingly just around the corner, which I think is what happened in solar about a decade ago.
Julian, you moderated a great panel on long-duration energy storage specifically. Was that your impression as well, that there's just a ton of these companies that are really excited about this technology?
Julian Spector: Yeah, and that was where you sort of emerged from the crowd and found me afterwards, which is good, because otherwise there's no way to really track anyone down in the masses there. Yeah, I ended up moderating a couple different panels that were fairly technical presentations from seven or eight different long-duration energy storage companies. For a technical thing, it was standing room only in that room. I was not expecting people to be cramming in and standing up against all the walls to hear the latest info on these fairly obscure technologies.
These are the companies trying to make some sort of battery or storage device that can cheaply, very, very cheaply store clean energy for hours and hours, which is way beyond what is economical with lithium-ion batteries right now, which can do generally four hours. They could go more, but people don't tend to build them for super long use cases because of the cost. This has been a long simmering section of the clean energy industry, in part because it's hardware. It takes years to really take an idea from the lab, and then turn it into a product, and then get it out in the field operating.
Then there hasn't really been a market for it, because it's kind of anticipating this future state where the grid is 70, 80% renewable, and then you really need some way to store all that and shift it into the nighttime or times when the renewables aren't happening. The key distinction I saw this year is like, all these companies actually have real utility contracts to talk about now, and that's huge. For a while, it was always, "Oh, we got this tiny little pilot, and then this utility is going to study it for five years. It's going to be awesome."
That's just so far removed from any real commercial traction that it was hard to judge who was legit and stuff. Now, I was writing about ESS with this iron flow technology is delivering to Sacramento's municipal utility, something on the order of two gigawatt hours over a course of several years. They've started the initial installations there. There's an Italian company called Energy Dome that has a big balloon of carbon dioxide to store energy, and they're already operating a megawatt scale project, and at work on a much bigger one for utility customers.
The story was not, "Hey, we're going to test this out and prove it." It's like, "Oh, we did that. We got a utility to say yes, and now we're actually working on constructing pretty large scale projects going forward."
Stephen Lacey: Yeah, I can remember in the mid-2000s when some of the first large utility scale projects, of the scale that we know today were getting signed. When those contracts started to come in, it just felt like, "Oh, my gosh, solar is hitting this new inflection point," and it feels like we're getting there with some of these more emerging technologies.
Jeff, you weren't at RE+. You were in Vegas, which is probably why you look freshest among all of us, but you've...
Julian Spector: Hey, don't give me away to the listeners. They can't see.
Lisa Martine Jenkins: Yeah. God, Stephen.
Jeff St. John: You all look great.
Stephen Lacey: Yes, you all do look fantastic. What's your perspective on where these frontiers are emerging?
Jeff St. John: Well, thanks, Stephen. Julian and Lisa have covered what's on the table in RE+ and how it's really expanded. I think the overarching logic here is to make carbon-free electricity as cheaply and ubiquitously as possible, and then electrify absolutely everything we can to reduce the carbon impact of everything from transport to building heating, obviously, electrifying transport cars, vans, buses, trucks.
There's a really interesting test run going on of a bunch of freight hauls running on electric trucks happening in California and New York. They're getting up to 400 miles per delivery on a single charge. This is possible, and it's happening, building heating homes, apartments, office buildings, even lower temperature industrial process heat, maybe even higher temperature industrial process heat can be electrified.
Julian's covered a couple companies that are working on that, like Antora and Rondo Energy, and of course, the grid to get there, we're going to have to build out enormous amounts of new high-voltage transmission, but we're also going to have to beef up the low-voltage distribution grids that carry power to end consumers, and get all the interconnection, and interplay of all that distributed solar, and batteries, and electric vehicles.
You can maybe do bi-directional charging to get those what could add up to be hundreds of gigawatts of behind-the-meter, customer-connected resources up and running, to balance all that big green stuff that's being hooked up. You can do that a lot more cheaply, it turns out, when you're tapping into stuff that people are buying anyway. That's a major trend, a number of trends that are kind of intersecting. Of course, where you don't have green electrons, you're going to need green molecules of some kind, and this means primarily green hydrogen.
Of course, at Canary, we've been doing our best to cover this hydrogen economy that seems to be emerging, trying to separate the hydrogen hype cycle from the kind of bonafide needs for some kind of energy carrier to replace the fossil fuels that we use for so much activity today. There's a lot of risk here in creating kind of perverse incentives for green-washing fossil fuels, but there's also clear and consistent evidence that we definitely need something.
Hydrogen is the thing at present for high temperature heat for making cement, making steel, to replace fossil fuels for chemicals and fertilizer, and to provide some kind of carbon-free fuel for heavy transport shipping, aviation. This is the kind of scope of activity that we're trying to cover, and it's pretty daunting.
Stephen Lacey: For sure. A lot of these technology and integration challenges, these are live wire challenges now. These are not challenges that are coming a decade from now. These are things that we have to figure out right away, as the grids get saturated with renewables, as we have to figure out more valuable ways to turn that renewable electricity into usable energy.
It's like these are conversations that are live and happening right now. Lisa and Julian, are there any areas that feel coming out of the event like they have the most momentum? Were there any kind of emerging sectors that you outlined that felt the most pressing?
Lisa Martine Jenkins: Yeah. Well, I also wanted to flag that VPPs just seemed like the word on everyone's lips.
Stephen Lacey: Yeah, virtual power plants.
Lisa Martine Jenkins: Yes, virtual power plants, and honestly maybe in competition for the title of the next solar. I went to the unveiling of the DOE's Pathway to Commercial Lift-Off for Virtual Power Plants Report, which I think has been long awaited. The people were really loving it. I was waiting out, I arrived kind of uncharacteristically like 20 minutes early, ended up being the best thing I could have done. There was this line that stretched all the way down the hall and around the corner of people trying to get into this 30-minute presentation that was in a small conference room.
People kept coming up to those of us who were at the front of the line and saying, "Wait, this is for the VPP report, really?" The room ended up being totally packed. They just kind of went over the executive summary of the report. It was Jen Downing of the DOE who did the presentation. It was fairly technical. It outlined how tripling the current rate of VPPs could, and I quote, "Support rapid electrification, while redirecting grid spending from peaker plants to participants, and reducing overall grid costs."
It's a great report. Would recommend people read it, but I think just the sheer enthusiasm of the participants was really, my main takeaway was just... It was like there was a rock star in the room. People were really lining up.
Julian Spector: I was going to say, that sounds like a concert, rock concert, but it's a technical report on virtual power plant scaling.
Lisa Martine Jenkins: Exactly.
Stephen Lacey: Well, and frankly, that's why we're talking about this. I think that when you go to in-person events like this, particularly with tens of thousands of people, and you see where people's attention is getting directed, it does tell you something about where the interest and where potential money is moving in the industry. Jigar Shah, former co-host of the Energy Gang, a friend of the pod who runs the DOE's Loan Programs Office, told Nico Johnson of Suncast, I saw this quote, that the solar industry is now the VPP industry.
Going back to your point about that 2014 story that I wrote about storage being the new solar, that was the beginning of the era where everybody was thinking about how do we attach batteries to as much as possible? Now we are at the stage where batteries are getting attached to a ton of solar, both residential and utility scale. The question is, what do you do with that? We are now squarely in the virtual power plant era of the solar industry. Julian, why don't you close it out?
Julian Spector: Yeah. Well, actually, my answer is very much tied to this. I just saw this total proliferation of residential energy storage product options, which not every virtual power plant needs a battery, but they're certainly much more effective and powerful if they have a battery to store solar power from the roof and then be able to use it really whenever it's most valuable.
For a while, this was kind of Tesla's market. Everyone knew what the power wall was, and then there were a few other companies really chipping away at it over the years who also had good products, but just never had that kind of scale. Now, walking through those two massive expo halls, it just seemed like every other booth had some sort of box of residential batteries that they were selling. Some of them were actually brands like people know, which is different.
There's the very anonymous ones that have something like energy or grid in their name, and they all blend together. Then we saw Duracell, there was now a home battery that looks like a big Duracell battery, and then the Energizer, and then a newer company, Anker, which is hugely popular for the sort of mobile battery packs to charge your phone and stuff. They have a lot of experience making consumer-facing products with batteries. Now, they've designed their own home battery.
It's just kind of a whole new world, where instead of having that whole market dependent on how many units Tesla feels like shipping this quarter, there's now seemingly not going to be any real constraint on the supply of battery packs to homes. Then it just becomes a question of, do all of these companies thrive? Why would you pick a random brand out there when you could get a Duracell or an Energizer? How much does the brand name really matter?
It turns out that the Duracell and the Energizer are actually kind of licensed, so it's not directly those companies manufacturing it, but they have to maintain a level of quality to keep that license. Maybe that's going to excite people who didn't otherwise really care about the home battery sector.
Stephen Lacey: All right. Let's turn our attention to the battery recycling boom. America's seen about $50 billion of battery manufacturing announcements in the last year, and that could amount to around a thousand gigawatt hours of production of lithium ion capacity by the end of the decade. Battery recyclers are getting in on the action increasingly. They're riding this wave of concern about security of supply chains, about the environmental cost of end-of-life batteries, and the spike in commodity prices that we saw after Russia's invasion of Ukraine.
In the last few weeks, we've seen some pretty big investments in this space. Jeff and Julian have both been reporting on this. Redwood Materials, the battery recycling company founded by former Tesla CTO, JB Straubel, pulled in a billion dollars in venture funding. That brings the company's total fund raised to $2 billion. They've got a supplemental $2 billion conditional loan guarantee from the Department of Energy.
Ascend Elements, another recycling company, that won a $480 million grant to construct a factory in Kentucky, just pulled in more than half a billion dollars in venture investment. This combination of private investment and government backing is suddenly making battery recycling very hot climate tech sector. I want to figure out, where's this going to fit into the overall set of investments in domestic battery production?
Jeff, you covered both the Redwood and Ascend funding stories. What are those companies uniquely doing?
Jeff St. John: Yeah. Well, Stephen, I think there are two key factors to consider here. There's circularity and there's scale. In terms of circularity, both Redwood and Ascend are committed not just to cost-effectively breaking down spent batteries to their constituent minerals and materials, but also cost-effectively converting those to the precursor and drop in engineered components that make up batteries, things like anode foil or cathode active materials.
This requires this increasingly tight integration with the battery manufacturers they're working with, but it's also a necessary link in the chain of making battery recycling a fully integrated part of the process by which batteries themselves can scale up in terms of their capacity. Then in terms of scale, we can't have recycling without batteries, but I guess the question everyone's asking is, "Can we have batteries without recycling?"
We're talking about billions and billions of dollars of capital investment in recycling capacity to match tens of billions of dollars of capital investment in battery production capacity. You can only recycle as many batteries as are getting reused. Right now, Redwood and the Center, recycling a lot of the scrap that comes out of factories, the stuff that doesn't get turned into batteries for one reason or another, and they can recycle from a multitude of sources.
The amount of material, primary material or engineered material that can go into new batteries is limited, obviously, by the input stream of spent batteries you're getting. I think estimates of that range from a relatively low percentage of the total that you're going to need to make batteries by 2030, 2040, to some folks are saying they're higher. I think it's important to remember that the marginal value of this recycled material chain is pretty important.
If you can lock down a certain amount of stuff that's coming in from the recycling players into your supply, that's going to cushion you against the price spikes and supply uncertainties that come from trying to source stuff that's being mined around the world, and perhaps being mined and processed in countries that have problematic trade relations with the United States.
Stephen Lacey: Julian, so this is an area you've focused extensively on, and you've covered both of these companies. Why so much attention on this space suddenly? What are the factors contributing to the surge of investment?
Julian Spector: Yeah. I think the surge of investment into battery recycling is very much tied up in this whole broader industrial planning and strategy that's unfurled since the Inflation Reduction Act, and the infrastructure bill had some battery critical materials provisions in it. Basically, as we've covered, there's this boom of battery factories popping up at scale, Gigafactories just all across the US, or rather, they're really clustered in the Southeast, and in the kind of Rust Belt areas, and some in Arizona.
Now that we're actually switching from importing almost all our battery cells that we use to making a substantial chunk of them, suddenly, the scrap is flowing already. There's kind of the cliche about, "Oh, recycling is hard because you got to wait the 10 or 15 years for the car batteries to actually deplete enough to need to be recycled." That's really not the case. When you're setting up a factory, you're producing all kinds of scrap while you calibrate the line. That's battery metals and materials that need to go somewhere first, and then it would just be a total waste to not take them and turn them back into new batteries.
You're seeing the recyclers cluster very close to the manufacturers for the large part, like Redwood going into, they started in Nevada near the Gigafactory from Tesla, now they're going into South Carolina to be near all the new battery factories and EV factories over there. Ascend, I've visited their facility outside of Atlanta, and got to see them take in battery packs, and reduce them to this pulverized black powder called the black mass that goes on to be processed at a different facility that's being built.
Yeah, it's part of this new flourishing of American clean energy manufacturing, and industrial clusters where that's happening. Then just overall, I think there is this kind of persistent myth that electric vehicles are a problem, because you can't recycle the battery. You hear people say that, and no, we can. It's just one of these low-hanging fruits where no one really bothered to do it 10 or 20 years ago, because there wasn't this intense demand for battery materials.
Now, as we've seen, there's huge demand for battery materials, and consequently, billions of dollars are flowing into recycling. I think that's a trend I see over and over again in the climate solutions world, as some problem that seems big and intractable is actually just viewed that way because no one took a serious swing at it yet. Then once you actually try, suddenly, the traction can show up pretty quickly.
Lisa Martine Jenkins: Well, coming off of our conversation about startups in the long-duration storage space, I'm wondering if these huge investments feel like they're also kind of a symptom of the desire to reduce our reliance on foreign sources of lithium and other battery materials. Obviously, we're going to still need to be relying on foreign sources of lithium. The US is just not equipped to produce as much as we will need to kind of sate the appetite for EV batteries.
Do you think that the COVID pandemic, the supply chain problems, the invasion of Ukraine, and just the way that geopolitics have informed our ability to procure lithium for these batteries, do you think that has informed innovation in recycling, or was this kind of surge in investment inevitable regardless?
Julian Spector: I think there's definitely a geopolitical component to it, and for all our success in spinning up new battery factories, so far, we've done very little to spin up new US-based mining of the raw minerals there. Yeah, there is this element of if we're getting batteries from overseas in most of our cars now, and then able to recycle those locally in the US, it's kind of like pulling in the minerals from around the world. Then they keep recirculating within the US for as long as we keep recycling them.
All the recyclers are very explicit about their desire to reduce the need for the original mining for new batteries. It'll be a long time before we're able to recycle enough to actually fully meet our demand, which is growing precipitously at the same time. Yeah, in theoretical terms, every battery made out of recycled materials is a battery you didn't need to go out in mine somewhere in the world, and much better for carbon emissions too.
It's a lot cleaner to get a recycled battery than to go out and dig something out of the earth, and refine it, and do all those processes. Yeah, it's definitely kind of nudging us in a more self-sufficient direction as a country, but it'll be a long slog before it's ever competing with mining as the feed source for the new battery construction.
Jeff St. John: Yeah, there are some statistics on this. The Resell Center is a battery recycling consortium led by the US Department of Energy. They did some research that says you can get a ton of battery-grade lithium out of 750 tons of lithium brine, 250 tons of lithium ore, or 28 tons of recycled lithium ion batteries. Think about 10X the scale if you can mine the batteries, so to speak, rather than mining the earth. The real trick is, how are you going to get everyone involved in the process of taking a spent battery out of a car and putting it in a landfill somewhere, to see that it's worth their while to turn it around and get it to the recycling center instead?
The economics are one thing, but the regulations are another. I think there's a lot of agreement in the environmental and economic analyst community that we need to make regulations that make trashing batteries, or sending them to China to be recycled, which is where a lot of recycling happens today, much less attractive than spending what it takes to collect and transport them to where they can be recycled and then reprocessed.
Stephen Lacey: How solvable is this problem? You guys talked about the scale, so we need to 10X the scale to match mining if we're mining battery waste, but do you think that the problem of battery waste is solvable?
Julian Spector: Yeah, I guess I don't see why not. I think one thing to watch out for is there's a whole bunch of different technical processes for recycling. Some of them produce their own byproducts, like sodium sulfate is this byproduct that comes from some of the recycling, which is just like an inert thing that you have to dispose of, but others are a little cleaner and get the metals without producing too much pollution.
The old version of battery recycling was you chuck it in a furnace, and burn off most of the ingredients, and get some nickel slag out of there, and that was really bad for the environment. You want to do the work and make sure you're not creating any sort of new, unintended environmental byproducts by your recycling technique. I think we're seeing batteries being recycled. It's not a impossible physical feat to do.
The scale of the billions of dollars going into it means this is definitely one of the most well-resourced sectors in the clean tech area right now. Yeah, I'd say there's a lot of momentum, and huge factories already opening up, so it seems to be doing the right things that you'd want to see.
Jeff St. John: Yeah. I think it's also important to make it more profitable to do the right thing than to do the wrong thing, and to set up the structures that will allow companies to verify those actions. A lot of folks say that the European Union's battery passport concept of having essentially a digitally trackable bill of goods for every single piece of material that's going into a battery, I think that starts in 2026, is a policy that the US could emulate as well.
Then of course, getting the money in upfront to invest in the capital plant that you're going to need to recycle a volume of batteries, that just isn't there yet. That's why LPO, I think, is putting so much money behind some of these battery recyclers, including Redwood Materials and Li-Cycle for its New York recycling facility. You got to get these things "bankable" by private investors by priming the pump and providing some early support.
Stephen Lacey: All right, let's move on to our third story. It's been about six weeks since surprise wildfires devastated Lahaina, Maui, and local officials are still working to identify all the dead in the city. Hawaiian Electric is also facing lawsuits for keeping the power on during dry, windy conditions. It's an echo of the PG&E fiasco after the 2018 campfire. It has overshadowed another big energy story in Hawaii.
A year ago, Hawaii closed its largest source of generation, this coal plant on Oahu that provided 11% of the state's electricity. The goal was to replace all that generation with solar and batteries as part of this overall statewide effort to get 100% renewables on the grid by 2045. Julian was on this show talking about his trip to Oahu. He was there last year to witness the transition and tackle the big questions it raised.
The big question wasn't necessarily, can renewables and batteries fill in the gap? It's can they do it fast enough? All these other concerns about execution, timing, land use, community engagement, how would they impact what's going to happen there? It turns out that the worst case scenario didn't play out, but close to the worst case scenario. There were no outages or anything, but prices went up, and there were challenges, and there still are challenges.
Julian, why don't you give us a sense of what has happened over the last year? You traveled to Hawaii, you witnessed this phase out, there was a lot of celebration and trepidation from local officials. What happened?
Julian Spector: Yeah, the reason that I was so fascinated by this story is everywhere else in the US, when we shut down coal plants, we spun up fossil gas plants, and just burned a different, slightly cleaner fossil fuel, but Hawaii doesn't have a supply of natural gas for the power sector there. This, as far as I know, is the only state in the country where they were attempting to jump from coal power to purely new, clean, solar batteries, renewables.
That's hugely important as a proof point for the world, because there's a ton of coal out there still. If everywhere in the world decides they need to spin up a ton of gas capacity to replace their coal, we're going to have too many fossil fuels being burned in the coming decades. I went to Oahu, Honolulu, and it's been a few trips now. I was there last year, saw them shut down the coal plant, flipped on my lights in the morning, and they came on. There was no loss of power or anything.
Then I went back this summer to see what had changed in the year since, because when the power did go off, they actually didn't have most of the solar plants built yet that were supposed to replace it. In a year, not a ton had changed. This developer, Clearway, was able to get, they got one solar battery project up before the coal plant shut down. They got another one a few months later. All the other ones that Hawaiian Electric had contracted for are still being built. Some have just been canceled entirely.
It's a bit messy, because generally, if you're trying to replace your largest source of power, you want to have a replacement before you lose the one you have. It didn't quite work out that way. Now, granted, there were a few probably factors no one could have predicted, namely the COVID pandemic. That really screwed up supply chains for solar and batteries. A lot of the projects got delayed just because they literally couldn't get their hands on the batteries they had ordered and put down money for.
That's not on the developers per se. Nothing they could have done about that. The other big global event was Russia's invasion of Ukraine, which sent oil prices spiking. The majority of power in Hawaii is still from burning oil, actually, because that's what you can ship in. It's kind of this perfect storm of Hawaiian Electric gave out the contracts for these clean energy ones in the summer of 2020. They knew the coal plant had to shut down September of last year, so 2022.
Just in that interval, too many of those projects slipped their schedules or realized they couldn't actually deliver the thing they promised. I think there's a few lessons. One is, I guess you got to just expect the unexpected when you're planning for the energy transition. The world's crazy. There's unexpected things happening all the time now. Having too tight a timeline to build a large and wide-ranging portfolio of renewables and storage is probably risky.
It's like, build in extra. Then there's some other lessons on centralized versus distributed energy that we could get into too, if you're into that.
Lisa Martine Jenkins: Yeah. I'm really interested in the use of DER, Distributed Energy Resources, especially you wrote in these great pieces that one of the reasons Hawaii avoided outages was because there were 100,000 rooftop solar systems in Hawaii. When these big solar and big renewables projects were off schedule, Hawaii and the utility could rely on the energy from the rooftop solar systems and the batteries that they've been paired with.
Can you talk a little bit about how DER has proved valuable during this transition from coal to renewables in Hawaii?
Julian Spector: Yeah, the distributed solar ended up being one of the heroes of this story. It's very sunny in Hawaii. I don't know if you've heard that. They were really an early leader in getting rooftop solar installed, and it went so fast. It was such a vibrant market that the utility had to come for it. They were one of the first states to strip away net metering back in 2015 and make it much harder for people to go solar.
Now, there's been kind of a swing back, where when the large scale renewables were not coming through, because all the issues you face in the mainland too, of land constraints, and getting community buy-in, and then it's just tougher to build big things than to build little things on someone's roof, so the regulators and the state energy leaders, when they saw where things were headed going into the coal shutdown, ended up activating the distributed solar sector. They spun up very, very quickly, super fast as far as utility regulations go, this thing called Battery Bonus.
The idea is all the people who already had solar and net metering could just buy a battery, and install it, and promise to send power back to the grid for two hours every night during the evening peak window, and they would get paid thousands of dollars. It's a real bonus. You get cash in your pocket, you get rewarded for adding this battery, and now instead of the solar being something you might consider a nuisance, because it's just flooding the grid at noon, it's shifting it to the hours when they desperately need additional power and clean power, specifically.
Yeah. Within a year, they got close to 30 megawatts of capacity out of all this, which makes it definitely one of the largest aggregations of home battery capacity in the country. It's just pretty impressive. It was this all hands on deck push from the policy sector. They created this very, very quickly. Then when the money's right and people see the value of participating, they responded. It's just been a year, really, since that went live, and they're trying to get a bit more by this fall. I think 40 megawatts is the goal.
Yeah, that's definitely been playing a role in the lights staying on, and there not actually being any bad things happening on the grid.
Stephen Lacey: Speaking of the surprising and non-linear nature of the energy transition, Hawaii going from really concerned about solar overloading the grid, to using that in a pinch to prevent outages when shutting down this coal plant. Most people have said in the solar industry for the last 15 years, that solar can be a really valuable resource, but properly managing that solar is critical. We're now in a place where we have the battery and the control systems to make them super valuable on the grid.
What a transition that's been, huh, Jeff? I remember you were covering the Hawaii solar story when there were concerns about it completely overloading the grid.
Jeff St. John: Well, I remember there was a presentation that Dora Nakafuji at Hawaiian Electric put out. You know how California is the duck curve, where all that rooftop solar brings down the net demand on the grid real low, and then it spikes in the evening when solar goes away? In Hawaii, they had the Nessie curve, which is like the duck curve, except it goes underwater, per se. That midday solar is actually exporting more power than the grid as a whole might need.
That's a big problem for utilities who are trying to manage those distribution circuits. They weren't made to take power going the other direction. You got to reconfigure a bunch of equipment there. If you can just shift that production from that belly to that neck, that time in the evening when all the solar's going away, all the load remains, you got this enormously valuable resource. Necessity is the mother of invention. Hawaii has to deal with this on its own. It's a bunch of islands. They can't get power from anywhere else, and land is limited.
That's a lot different from continental grids, but the same logic is driving changes on the mainland. California has changed from a net metering system to a net billing system, which really radically reduced the value of solar that's fed back onto the grid is definitely a controversial policy, but its primary idea of getting people to add batteries to their solar systems, and save that power for when California's grid really needs it, usually like seven to nine PM on hot summer evenings, is something that the grid needs.
Right now, California is looking at instituting community solar, and one of the ideas is putting a bunch of community solar plus batteries, or as one developer told me, community storage plus solar, since you need batteries to make this pencil out, you put that on a bunch of rooftops and warehouses in West LA, and you could have enough peak grid capacity to solve the problem that California has where they have been unable to shut down these coastal gas-fired power plants, which they're supposed to shut down for a number of reasons, having to do with ocean water and local pollution.
You can fit this stuff in and get it interconnected in the places you need it and on the timelines you need it. It's really getting increasingly hard to get big utility scale stuff interconnected to the transmission grid in California and around the country. Yeah, you got to look everywhere you can. There's room for and a need for solutions of every scale.
Julian Spector: I think what Oahu did so successfully was show what can happen if you switch from looking at rooftop solar as a problem or as obstacle, and instead, look at as a tool to achieve your clean energy goals. There's more solar capacity on rooftops in Hawaii than in utility scale projects. That was sitting there, but it hadn't been fully optimized for the highest need on the grid, but now everyone's winning. I think that's something you would hope that California policy makers are thinking, "Huh, we have the biggest rooftop solar market. How can we make that as useful for achieving our peak demand as possible?"
I don't think you can really make an argument that the policy they came up with to replace net metering foregrounds, that, it seemed like it was more how do you solve the problem of solar customers saving too much money? They solved that problem, if you think that's a problem, but there's so much more that you could do if you were able to leverage really all the megawatts that are sitting there, not being directed, and turn it into more of a evening post-sunset resource.
Stephen Lacey: All right, we're going to close out the show now with a segment that we are calling The Forecast. We're going to take a brief look at some stories that give us a preview of the future. Lisa, what's your story? What's your forecast?
Lisa Martine Jenkins: Yeah, so I was really interested to see that Amazon has finally made a carbon removal commitment. This news came out last week. The company is investing in direct air capture from an occidental subsidiary project called 1PointFive. Amazon is committing to purchase 250,000 tons of removal credits over 10 years, which is honestly a fairly standard amount as far as these commitments go, and is just a drop in the bucket, to be clear, compared to what's needed.
What's really interesting to me is the fact that it took this long. Most of Amazon's competitors, companies like Shopify, and Stripe, and Meta, and Alphabet, and hugely Microsoft, which made a very comparable but even larger commitment also just two weeks ago, they've made much more significant commitments. They started making those commitments over a year ago. A year is actually just a really long time in terms of climate action by these big corporations.
On the one hand, I'm thinking, what took so long? On the other hand, I feel like carbon removal is maybe entering a new and more mainstream phase if Amazon is finally getting on board. There's also the fact that this partnership is between Amazon and an occidental subsidiary.
I think there's this real tension in carbon removal right now, where the companies that can actually afford to invest in this technology, and the companies that have the technical know-how to manage carbon, to develop the technology, are also some of the world's biggest emitters. They've emitted this carbon, and now they're paying to remove it. It's kind of this self-perpetuating cycle.
Stephen Lacey: Yeah. Ultimately, though, I think it's a positive development that these large corporates are committing to buying credits from these carbon removal projects. It probably says that Amazon hasn't stepped in. There are probably a couple reasons for this. One is that it takes team of people who can evaluate these projects appropriately, and there are just not that many projects.
There are not that many credits on the market. I think that the engineered carbon removal space is still so tiny relative to the amount of carbon credits that are on the market. It's a good development, certainly, with a number of contradictions and challenges, but that's a good story. Julian, what do you got?
Julian Spector: Yeah, so my forecast, it's actually an old article that has to do with the future. Do you know how old the oldest tree living in the world is?
Stephen Lacey: I'm going to say a thousand years old.
Julian Spector: Okay. I went to see it over the weekend outside of Las Vegas, 4,800 years old.
Stephen Lacey: Whoa.
Julian Spector: There's a grove of, they're called Bristlecone pine trees on the White Mountains, which is kind of like between the Eastern Sierra and then the Nevada Basin and Range Desert. Yeah, I needed a little change of pace after the craziness of the conference we were talking about. I'd read this article called The Vanishing Groves by Ross Anderson, and this actually came out over a decade ago, but I knew him when he came to The Atlantic as the science health technology editor.
I'd read it back then and was like, "I think I want to find these trees." They survive because they're up on this super high 10,000 foot mountain. It's super dry, it's windy, nothing else can live up there. They love it, because they're just heartier than everything else. No one else can compete up there, except now climate change, raise in temperatures, there's a real threat that it'll bring pests, and change the conditions that have sort of been this perfect spot for trees to live for 4,000 years. It's an amazing, really, really thoughtful article.
What it gets at is these trees have been living records of the climate for the past 4,000 years. Dendrochronology is the science of studying those tree rings to understand how the climate is progressing. In a way, they're like the original climate journalists. They've been observing and recording since the time that the pyramids were getting built. That basically just left me with this kind of mind-blowing question of like, "What happens if one of these saplings I walked by is alive in 4,000 years? What world are we giving those trees? Will we allow them to live to their fullest potential or not?"
I definitely found myself almost kind of trying to talk to the trees and be like, "Okay, we're working on it. I don't know yet if we've done what we need to do, but we're trying to make something happen so y'all can keep growing up here on this mountaintop."
Stephen Lacey: Wow, that's a good story. I think the only other thing that could last 4,000 years are the petroleum-based plastic palm trees that you see all over Las Vegas in the casinos. Sure you guys encountered many of those.
Julian Spector: They might, I don't know. Plastic falls apart too. I've seen that. Yeah. I don't know if those ones are as useful to science.
Stephen Lacey: Jeff, what's your forecast?
Jeff St. John: Well, I am going to talk about a story that I haven't written yet, but which is kind of taking place as we speak, which is this Run On Less Electric DEPOT project. It's by an outfit called the North American Council for Freight Efficiency. They basically study trucks and how you make them more efficient, and they're running a bunch of tests with a bunch of electric trucks, including the Tesla Semi, out of depots in California, New York, and Vancouver, British Columbia.
They're getting some really interesting data out of them, including showings of being able to run 400 miles on a single charge, delivering freight, and being able to run multiple routes a day with fairly short recharging needs, which is, I think, really important for folks to digest. All this data is available on the Run On Less Electric DEPOT page, and you can actually track individual trucks, and the distances they're running, and how their batteries are depleting, and how their charge cycles are going.
It's really interesting, and I think it does prove that short-haul run-and-return type trips are totally electrifiable now, and that maybe even some of the longer-haul freight routes are totally possible, in the realm of possibility. We're going to have to see how quickly the electric truck makers are going to be able to scale up production, and how quickly all these depots are going to be able to get the grid service they need to actually charge all these trucks.
Those are some key barriers, but right now, it's looking really promising, and I think it's a very good window into the future of electrifying some heavy transport on the roads.
Julian Spector: I think that's another case where people used to just say, "Oh, yeah, trucking. We can't do that with batteries. That's too hard." Then people start doing trucking with batteries. It's like, "Oh, well, actually, we're getting somewhere."
Stephen Lacey: The story that caught my attention was also a battery-based story. I saw the story in Canary Media, I think it was republished from the Energy News Network about the West Springfield Generating station, which is actually, I'm over in Western Massachusetts, it's probably 45 minutes away from where I am. If I'm driving toward Boston, I pass it. It's a power plant that was a coal power plant that started generating in the 1940s. It was eventually shut down in 2022. The local community saw a major loss of tax revenue.
There was a question about what to do with the plant. You can't really develop these power plant facilities into anything else but another kind of power plant or industrial facility. The company that operates it, Congentrix, a battery storage, a clean energy advocate within the company, started working on this project to create a massive battery storage, 45 megawatt, $80 million battery storage project to replace the coal plant on the facility, with the intention of building it out further.
Thanks to Massachusetts Clean Peak Standard here, it's financially supported that battery. Yet another large coal power plant will be replaced. It looks like it'll be a large battery storage system with a potential to expand further. I think, again, going back to our conversation about frontiers, we are squarely in the battery storage era. This may be an example of other kinds of peaker facilities or old power plants that get replaced with batteries, or some combination of batteries and renewables.
Julian Spector: It's happening from Hawaii to Massachusetts, in other words.
Stephen Lacey: Absolutely. Yes, yes. Very similar story to what's happening in Hawaii, although we didn't rely on that coal plant in the same way that Oahu did. All right, that's going to close out the show. Lisa Martine Jenkins, Jeff St. John, Julian Spector, thank you all so much. The Carbon Copy is a co-production of Postscript Media and Canary Media. You can find many of the stories that we discussed in our show notes.
This episode was produced by me, with help from [inaudible 01:02:15]. Sean Marquand is our engineer. Thanks to the folks at The Cutting Room for hosting Lisa Jenkins. Original music came from Echo, Finch, and Blue Dot Sessions, and Postscript Media, supported by Prelude Ventures: a venture capital firm that partners with entrepreneurs to address climate change across energy, food and ag, transportation, logistics, advanced materials manufacturing, and advanced computing.
Hook us up with a rating and review wherever you listen to this. Apple and Spotify are the place to do it, where it helps us get new listeners. Thanks for that. Of course, we would love to hear your opinions on our opinions and analysis. Hit us up on social media. I am Stephen Lacey. This is The Carbon Copy. Thanks for being here.