Two books that are essential reading for energy wonks give contrasting views on how to tackle climate change.

The hot book in the energy world right now is Brett Christophers’ The Price Is Wrong: Why Capitalism Won’t Save the Planet. It’s a detailed look at the structural issues in electricity markets and the challenges of generating returns on renewable investments, arguing that inadequate profitability is the key reason why the transition to low-carbon energy is not moving fast enough to address the threat of global warming.

It’s a provocative thesis that has sparked heated debate, on both sides of the debate. If you work in the energy business, you need to get to grips with the argument, even if you ultimately think it’s wrong.

In this episode, Ed Crooks is joined by Melissa Lott, Professor at Columbia University’s Climate School, and Joseph Majkut, director of the Energy Security and Climate Change Program at the Center for Strategic and International Studies, to discuss the question of whether private investment and market forces can bring about the reduction in emissions that the world needs.

They also review another important book that has broadly the opposite message: Akshat Rathi’s Climate Capitalism – Winning the Global Race to Zero Emissions. That book focuses on the real examples of progress in the energy transition.

At a time when the pace of the energy transition globally may be faltering, and the 1.5 degrees limit to global warming is getting further and further out of reach, Climate Capitalism shows just how much change and innovation there is in the industry. Bill Gates says it’s an important read for anyone in need of optimism.

In spirit, at least, it seems like a very different message from The Price Is Wrong. But are the fundamental conclusions of the two books really so different? Ed, Melissa and Joseph discuss whether there might be some common ground there after all.

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Regulators are trying to clear the path to the grid that clean energy needs.

To go from an electricity system based on coal and gas to one based on solar and wind, the US needs a very different power grid. On some estimates, annual installations of new transmission capacity need to double. To help build the grid that a new clean electricity system will need, the US Federal Energy Regulatory Commission has been working on regulatory reforms, intended to smooth the path for new investments in transmission lines. 

Ed Crooks is joined by Amy Myers-Jaffe of New York University and Shanu Mathew of Lazard Asset Management, to unpack the latest orders from FERC. What are the regulators trying to do, and why do some people object to their plans? And what will the proposed reforms mean for the energy transition in the electricity sector in the US? 

It has been a busy few weeks for big announcements in energy. A new round of tariffs on clean energy products from China was announced this month by President Biden, with rates of 100% on electric vehicles, 50% on solar modules, and 25% on lithium-ion batteries. The goal is to revive clean energy manufacturing in the US, but critics say the tariffs could be counter-productive, because they will drive up the cost of low-carbon technologies for American businesses and consumers.

One important gauge of the state of the energy transition is the health of investment in low-carbon stocks. The news on that over the past couple of years has not been great. So what are the markets telling us about the future of clean energy? Shanu gives us his analysis, and joins Amy and Ed to debate investor sentiment and what it means. 

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AI is driving up demand for electricity. How can we meet that demand with clean energy?

It has been a big theme on the Energy Gang this year: the massive additional demand for energy that could be created by data centers for artificial intelligence. It’s an emerging issue that threatens to cause new challenges for the world’s attempts to achieve net zero goals.

So it is a great opportunity for us to have on the show a representative from Google, a company that relies heavily on data centers and is at the forefront of the AI revolution. It also has some ambitious decarbonization goals: the aim is to power the company’s operations entirely with clean energy by 2030. 

 Maud Texier is the global director of clean energy and decarbonization development at Google. She joins Ed Crooks and Amy Myers-Jaffe to explain how she sees the path to achieving that goal by 2030. Google’s objective of 24/7 clean energy requires sourcing renewable power that aligns with its consumption patterns. That means not just buying enough renewable energy to match its usage over the course of a year: every kilowatt-hour consumed must be carbon-free. It’s a challenging goal that it driving Google, like other companies with similar objectives, to explore new ways to generate power, store energy and manage the grid. 

Google is looking at or already investing in a range of innovative energy technologies, including enhanced geothermal, hydrogen, long-duration storage and advanced nuclear. Big energy users such as Google can do a lot to shape the evolution of the energy industry. But policy support is, as ever, crucial to achieving net zero goals. How is Google engaging with policymakers and regulators to help support the deployment of clean energy? New standards in the European parliament, aimed at improving energy efficiency, include mandates for data centers to report their performance. Are we moving towards an era of more stringent regulation of energy use for data centers and other large loads?

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The Department of Energy’s Loan Programs Office has a grandstand view of the energy transition. Where is it going next?

Jigar Shah, one of the originators of the Energy Gang, now runs the Department of Energy’s Loan Programs Office, playing a key role in advancing clean energy projects. By helping to bridge the gap between R&D and large-scale deployment, it encourages private sector investment and supports the administration’s work to achieve its net zero goals.

Jigar was appointed Director of the LPO in March 2021 with a brief to “to rev those engines back up” after a quiet period under the Trump administration. He returns to the Energy Gang to discuss the progress he has made so far, and the goals he is working towards in the future. In particular, he talks about the hot topic of the moment in energy: how to meet increased demand for electricity driven by data centers for AI, new factories, and electric vehicles.

Much of the new load being added to the electricity system will not be flexible. Data centers mostly need to be available 24/7. So how is the grid going to manage these growing demands? Host Ed Crooks is also joined by Amy Myers-Jaffe, Director of NYU’s Energy, Climate Justice & Sustainability Lab, to discuss Jigar’s views on the solutions to these challenges.

Topics covered include Virtual Power Plants, enhanced geothermal and advanced nuclear. Those latter two are among the handful of sources of energy that we usually think about when we are discussing “clean firm power”. Geothermal in particular is generating a lot of buzz lately. What will it take to get it deployed at scale? Is it pulling ahead of advanced nuclear in the race to commerciality and large-scale deployment?

The Energy Gang will be recording live from the Global Energy Transition event in June in New York. To secure a discounted ticket, use the ENERGYGANG500 discount code. Visit https://events.reutersevents.com/energy-transition/global-energy-transition-new-york to book.

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Fossil fuels still dominate the world’s energy supplies. Do we need different terminology to talk about what’s happening?

We talk about “the energy transition” all the time. But is that language misleading? 20 years ago fossil fuels were 85% of the world’s energy, today they’re just a few percentage points less. If there is a transition to low-carbon energy, it is happening only slowly, and it needs to move much faster to achieve the climate goals of the Paris Agreement. The world has made huge strides in both the cost and deployment of renewable energy, but can we really say that we are in a transition away from fossil fuels?

Host Ed Crooks is joined by Melissa Lott, a professor at Columbia University’s Climate School, and Amy Myers Jaffe, director of NYU’s Energy, Climate Justice, and Sustainability Lab, to discuss the way the language we use shapes our ideas about energy policy. Amy quotes her Tufts University colleague (and previous guest on the show) Kelly Sims Gallagher: “climate doom and gloom really disregards the progress that's been made”. That progress includes 56 countries, between them responsible for over half of global emissions, passing direct climate mandates to limit greenhouse gases.

But despite all that action, we still get the great majority of our energy from fossil fuels. The gang debate whether the current global shift towards low-carbon energy represents a real "transition", or maybe even a “transformation”. Or is it merely an addition of new energy sources on top of the existing ones such as oil and gas.

Ed, Amy and Melissa debate the feasibility of achieving net zero by 2050, considering the political and economic hurdles ahead. Innovations including carbon pricing, electrification, and advances in renewable energy technologies will play prominent roles in shifting us towards cleaner energy systems. Will they be enough?

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Conversations from the Gulf Coast Power Association conference. 

This bonus episode of the Energy Gang was recorded live during the spring meeting of the Gulf Coast Power Association in Houston, Texas. Host Ed Crooks is joined by Beth Garza, President of the Gulf Coast Power Association, Frank O'Sullivan, Managing Director for Clean Energy at S2G Ventures, and Ken Medlock, Senior Director at the Center for Energy Studies at Rice University. The GCPA is a nonprofit organization dedicated to promoting a strong energy industry in the Texas and Gulf Coast region.

First up Ed speaks with Beth about the increase in electricity demand in the region. Unlike most of the US, the Gulf of Mexico coastal region has already been seeing growth in demand for electricity over past couple of decades. But now there are signs that this growth is being kicked into a higher gear as a result of a wave of new data centers, manufacturing facilities and LNG plants. We discuss the challenges and opportunities in this new era.

Increasing strain on the Texas grid is one problem. The catastrophic consequences of Winter Storm Uri in February 2021, in part caused by failures in natural gas supply and gas-fired generation, exposed how the system was unprepared for such an event. Beth Garza discusses the changes that have been made in the three years since then, and how the industry can tackle the new challenges facing the grid.

Plus, Frank O’Sullivan and Ken Medlock join Ed on stage for a panel discussion on strategies for integrating new technologies as the demand for power rises. They debate the key trends in electricity demand growth, and the ability of Texas as a deregulated competitive market to respond to these new opportunities and difficulties.

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As half the world heads to the polls, how important will the results be for efforts to cut emissions?

Over half the world lives in a country that will be holding an election this year. The votes come at a time when resistance to the energy transition is building in many parts of the world, as concerns around energy security grow and some of the challenges of decarbonization come into focus. In the US, a finely-balanced election offers voters two sharply differing visions of the energy future. But there are other places around the world where elections could also shape the direction of energy policy, including the EU, where parties that are skeptical of climate action are on course to win an increased number of seats in the European Parliament.

To explore the ramifications of these key elections around the world, host Ed Crooks is joined by Energy Gang regular Amy Myers Jaffe, director of New York University’s Energy, Climate Justice, and Sustainability Lab, and by Vijay Vaitheeswaran, global energy & climate innovation editor at The Economist. The show is recorded live from NYU, as the gang take part in discussions on the outlook for elections and energy policy in 2024.

Together they debate the potential consequences of the US election for issues including permitting reform clean energy tax credits, and look at some other significant votes around the world, in India, Mexico, the European parliament among others.

While other countries are arguing over the right course for energy policy, China is betting big on low-carbon technologies, adding a huge amount of manufacturing capacity in solar, EVs and lithium ion batteries. Those are what the Chinese government calls “the new three” sectors, intended to drive export growth, and they are having a far-reaching impacts on energy all around the world.

The Biden administration has pinned its climate policy on using support for low-carbon energy to incentivize manufacturing investment and create well-paying jobs. But with China adding so much capacity in key sectors, sending prices for products such as solar panels tumbling, the challenges facing that strategy are growing. That is an issue that will play out in elections in the US and elsewhere this year: what does it mean for clean energy globally if China continues to dominate the competition?

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Big power users are getting together to accelerate the development of advanced clean energy technologies.

The hottest topic in energy right now is the expected surge in demand for electricity. Data centers for AI, new factories, and electric vehicles are driving power consumption higher in the US, after about 15 years of stagnation. Solar and wind power can meet some of that increased demand, but many users, including data centers, want clean electricity round the clock. So there is a new urgency in the need for new clean energy technologies, including advanced nuclear, next-generation geothermal, low-carbon hydrogen, and long duration storage.

Unlike wind and solar, these emerging technologies have not yet been deployed at scale, and they are generally have much higher costs. There is a chicken-and-egg problem: costs will only come down as these technologies scale up, but companies are reluctant to deploy them because they are too expensive.

Now Google, Microsoft and Nucor have come up with an idea that could be at least part of the solution. They are collaborating on new commercial structures to help new clean energy technologies scale up and reduce the risk for investors.

To discuss that plan, host Ed Crooks is joined by regular guest Dr Melissa Lott, professor at the climate school at Columbia University, and Michael Webber of the University of Texas at Austin. Michael is also chief technology officer at Energy Impact Partners, which is a $3 billion venture fund that invests in some of these emerging technologies. Together they debate the consequences of that surging demand for electricity, and the role of new technologies in avoiding disastrous outcomes for our international climate goals.

They also talk about another promising source of clean energy: natural hydrogen, which is found in geologic reservoirs rather than being made from water or from methane. The US Geological Survey estimates there could be 5 trillion tons of natural hydrogen in rocks around the world; a vast, untapped energy reserve that could significantly contribute to meeting global low carbon hydrogen needs.

Given that a world with net zero emissions could use about 500 million tons of low-carbon hydrogen a year, that is a very exciting resource base. But is it really plausible that natural hydrogen could be viable as a significant contribution to clean energy supplies? The energy gang has some answers.

There’s an urgent need for innovative solutions to tackle rising energy demand. Join the discussion on X – we’re @theenergygang

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AI isn’t just threatening to take our jobs, it’s also draining our electricity.

Data centres centers used to have power demand measured in the tens of megawatts. Now they are in the hundreds of megawatts, and the new ones that are being proposed have demand in the thousands of megawatts: gigawatts. At the Distributech conference in Feburary, Harry Sideris of Duke Energy said it used to be a big deal when they had a customer wanting to add 10MW or 20MW of load. Now they have several planned data centers for AI needing 1000MW each. How is this additional demand being met?  

The good news, from a climate point of view, is that part of the answer is going to be a lot more solar and wind power, and energy storage. The bad news is that, according to the plans that US utilities are setting out, there are going to be more gas-fired power plants, too. US gas-fired generation capacity is on course to rise by 25% over the next 15 years, and although those plants will increasingly be used mainly to back up variable solar and wind power, they still mean that the chances of achieving net zero emissions from electricity by 2035 look slim. 

On this episode of Wood Mackenzie's The Energy Gang, Ed Crooks is joined by Amy Myers-Jaffe, Director of NYU’s Energy, Climate Justice and Sustainability Lab, who returns to the show to explore the feasible paths to net zero in light of increased energy demand. Also joining this week is Samantha Gross, Director of the Energy Security and Climate Initiative at the Brookings Institution. Together they debate the outlook for electricity demand, and take stock of the implications for theclimate goals of the Paris Agreement.

One big question: Is it time to give up on the objective of limiting global warming to 1.5 degrees C? The world looks like crossing that threshold soon. In fact, on one measure, we have already crossed it. The 1.5 degrees C limit has been seen as essential to avoid the worst effects of climate change. But John Kerry, who just stepped down as President Joe Biden’s climate envoy, said recently that the world was on course for more like 2.5 degrees of warming. Many businesses still have alignment with a 1.5 degree scenario as one of their climate goals. Ed, Amy and Samantha discuss whether it’s time to face reality and set new goals that are more likely to be achievable. 

And finally, more evidence that despite all the negative commentary around EVs, on a global scale the industry is doing just fine. In China, sales are surging and prices are falling. Sales of what China calls “new energy vehicles” – that is, battery electrics, plug-in hybrids, and fuel cell vehicles – were up 37.5% in the first two months of 2024 compared with the same period of 2023. In that period – January and February of 2024 – those New Energy Vehicles took 33.5% of the car market. The prices are on the way down too. Reuters has calculated that BYD has cut the prices of its EVs by an average of 17%. This seems like great news for cutting emissions and eventually decarbonizing road transport. But what does it mean for the car industries in other countries?

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This bonus episode of Wood Mackenzie’s The Energy Gang is our third from the Distributech conference in Orlando.

Distributech is the leading event for the electricity transmission and distribution industry in North America. It gave our host Ed Crooks a fantastic opportunity to talk to many of the leading figures from the industry, including those who provide technology for moving and managing electricity, and those who use that technology to serve their customers.

In this episode, Ed is joined by Ali Ipakchi, Executive VP of Smart Grids and Green Power at OATI, a grid technology company. Ali was at Dtech in 2014, and some of the issues he was talking about then seem familiar still today. So what has really changed in technology for the power industry since then? Ali talks about how ideas and technologies that were cutting-edge and radical a decade ago are now becoming mainstream.

Ed also sat down with Don McPhail, who’s Business Manager for energy and decarbonisation at Uplight, a software company that serves utilities. They talked about the importance of demand management, the integration of distributed energy resources, and the automation of customer engagement processes as examples of key factors for developing a more flexible and resilient power grid. 

Finally, Ed talked to two of Wood Mackensie’s delegates at Distributech: Fahimeh Kazempour, head of grid modernisation, and Elham Akhavan, senior research analyst specialising in grid edge and microgrids. They share their impressions of the events, highlight some of the ideas and innovations they found most interesting, and explore the implications for the wider questions of the energy transition. 

They also address a critical question in the hectic, exciting conversation about the power industry: how much of it is hype, and how much reflects real change? Fahimeh asks the question: whatever happened to the Blockchain?

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