Good Disruption: Distributed Energy Resources (DERs)

The Disruption, a lively discussion between UVA Darden School of Business professors Yael Grushka Cocaine and Mike Lennox on cutting edge technologies and practices that are challenging the status quo.

Hello Yael.

Hey Mike, how's it going?

It's going really well.

I have a question for you.

Yes, shoot.

When, uh, the hot days of summer hit, what, what do you do to stay cool during the hot days of summer?

Um, either I, uh, stay inside where there's AC, or I go to the swimming pool, or I go to the cinema, which is one of my favorite ways of avoiding heat.

Oh, and what makes the cinema a way to avoid the heat?

Uh, the air conditioning and the darkness.

All right, all right, so you could probably guess by now.

I'm, I'm fishing a little bit. this idea that when it gets hot out, man, thank goodness for air conditioning, right?

And, uh, especially down here in the South where we are at UVA, uh, I don't know if we could survive without air conditioning, not in the height of the summer, that's for sure.

Absolutely, absolutely.

So, so today we're gonna talk about where does that energy come.

Come from that gives us all these wonderful things like electricity and in particular, I want to talk about a phenomenon, if you will, called distributed energy.

Have, have you heard this term at all?

I have, but maybe you can tell us a little bit about what is it, um, that specifically you're referring to in terms of distributed and why is this a disruption.

Yeah, well, we got to determine whether it's a disruption.

I mean, who knows, maybe we'll decide it's not a disruption.

Fair enough, fair enough.

But, but basically, uh, if you think about the way our electricity historically has been generated, you would have an electric utility, uh, that electric utility, uh, would generate electricity.

Maybe it's through a coal-fired plant, maybe it's through a natural gas plant, maybe it's something new, like, uh, put in a bunch of wind farms and the like.

They generate that electricity, they distribute it across the electrical grid, and then eventually those wires go to your home and fire up the air conditioner that provides you your, uh, um, you know, air conditioning.

And so, when you think about that process, it's a very vertically integrated process where the utility is the generator, distributor, and then you're the customer of that utility.

When you say vertically integrated, what specifically do you mean?

Meaning one company that controls all the different touch points?

Exactly.

They own the relationship with the customer.

They own the distribution lines.

They own the generation sources there.

So what what distributed energy is referring to is the increased number of sources of electricity that could be plugged into the grid.

And so while historically there might be a few 1000 sources of electricity generation in the United States, again, different power plants and the like, we're increasingly now seeing solar installations on people's homes or wind installations that are small scale, commercial development that's using some of these technologies, battery technologies on the grid, even things like electric vehicles which could be obviously both consuming electricity but also a source of electricity.

And as a result, what was not a simple system, actually a pretty complex system, is getting even more complex now with millions of different point sources of electrical generation in a distributed fashion on the grid.

In a way, is it not like going back to the world before the utilities where every little, you know, village and every little consumer would make their own fire and have their own mill and have their own local kind of way to generate energy for their community in some way, shape or form.

We're going back to the fact that the people are generating the electricity themselves in other ways.

Is that another way to think about it?

I think it depends on the community.

I mean, I think what what.

The US story, there was just a lot of communities that didn't have electricity at all until there was things like the big push for electrification during the Great Depression and the New Deal.

But I think that's right.

I mean, I think this idea of kind of large utility scale generation has been with us now for a good amount of time, and this represents a change in that approach.

Let me, let me just help you put some numbers on it here.

Yeah.

Give us a scale here.

The the amount of capacity in this, what we call distributed energy resource market is expected to double over the next 5 years.

And to put that into perspective, it will almost be matching the amount of new utility scale generation put on the grid.

So we're, we're basically now beginning to generate almost as much new capacity through these distributed sources.

As opposed to kind of the traditional uh utility scale, and as a result, the forecast for this industry is that it's going to well eclipse $100 billion as an industry here in the next year or so.

And when you say the the the industry, you mean the places where I can store that energy, like that's what's going to double the units, the, uh, solar panels or the, the storage units, that's what's going to grow in.

Size, right?

Yeah, exactly.

All of these different pieces that are on the grid.

Another way to talk about, we talk about like edge technologies, which is a term we often use for the internet as well, this idea that you have this network, you have this system, and then you have all of these different technologies that might be on the grid here, on the edge here, uh, that support the overall generation here.

OK.

Let you know, this is not, uh, without some challenges.

Um, you know, one, we, we have a very old infrastructure for our electrical grid, uh, in the United States in particular, but it's also a problem, uh, we see kind of over the world as well.

Um, the technology that's been around for a while now being disrupted by this, uh, kind of new source here.

And one of the reasons it creates challenges, is if you think about it from a business standpoint, the utilities again would be selling you electricity and you'd be paying for it.

Now, you potentially could become a generator yourself, right?

You've got solar panels on your home, you maybe produce more electricity than you can consume at a time, and you start to sell back to the grid.

So you start getting these bidirectional flows of electrons, um, that can really, you know, make some complexity on the, on the grid there.

So I see that as a comp as a physical like complexity, how do you actually navigate and control the network, but it's also a business model complexity because now you have a different pricing mechanism and a different structure for the relationship between the consumers or the individual nodes on this network generating the electricity and the utility phone.

Exactly.

And you know, one of the big challenges. is pricing, right?

Because you have this dynamic market here where supply and demand are varying across the course of the day and across the different seasons and the like.

And so the price is varying, and those prices might make you motivated to sell back rather than consume.

Maybe you even like turn off your AC for a little while because it's so expensive right then and there, and you could actually use some net generation to sell back to the grid.

And so that requires dynamic pricing models.

That are being updated in real time given the vast amount of of again different sources that are generating there and I and I think that is also one of the problems here is do we have the data necessary to be able to solve what is a massively complex problem because to be clear, if people aren't aware, when you think about the electrical grid, it's important to recognize that all electricity consumed or generated needs to be consumed in that moment or you have to kind of defer it a little bit.

And so, uh, because we cannot, because we don't have good ways to store it or there's no ways to really capture it and then use it in a future date, like we can't put it in the freezer or anything like the like, yeah, exactly.

So you know, if, if, if demand goes up over the grid, we need to ramp up. to meet that demand, uh, in the moment there.

Um, and again, it's complex enough to do where you have a limited number of generation sources.

Now you add, you know, what could be millions of point sources on the grid, um, it becomes very, very complex.

And, and I think part of this is just so disruptive to the traditional utility business model, um, who used to be more worried about kind of expanding sales to individual customers, and now they have to be worried about, hey, maybe my customer is actually in some ways a competitor of ours because they're now generating their own electricity.

And I think what a lot of utilities worry about is that these customers are going to be able to kind of not use them anymore, right?

They're going to generate their own power, uh, and how is that going to affect their sales.

And we can see that already more and more, at least in the US and my next question would for you would be about.

The global impact here, but we do here in the US more and more about individuals who are living on their own grid and their own electricity, and they don't require the connectivity in the same way that you and I have our own well and then we don't require connection to the water resources of the city or of the of the county.

Yeah, you think about the terminology, you know, off the grid.

It used to be when you were off the grid, right?

You didn't have, you didn't have your cell phone with you.

You didn't have, now you can live off the grid and have all those modern amenities that we, uh, so, so dear to us here.

Um, and so it is, it is kind of fundamentally changing that.

And I think what, what's really, uh, maybe exciting is this is creating a whole new market.

New technologies that help manage some of these flows.

If you think about a company like Google, uh, who owns a Nest, um, these are control systems for your home that allows, because they're digitally enabled and tied into Wi Fi, for some creative ways to manage your electrical usage in your home to meet some of these kind of evolving needs on the, in the overall grid.

Yeah, yeah, tell me about the, the international kind of perspective here.

Is it mostly in the US or, or in Europe and the US?

Are we seeing pockets of activity?

I mean, you mentioned solar as a good source of energy.

Is this something that countries with a lot of sun, um, exposure.

Benefit from and can actually capitalize on more than some other countries?

Is it, is there a strategic or geographical advantage for certain places?

Well, it's absolutely true that like solar is more useful in certain areas than it is in others based on the intensity of the sun or even the angle of the sun.

But it's interesting, I don't know if it necessarily maps onto what we've seen.

So for example, Germany, uh, which created what we call a feed-in tariff, which created incentives to put solar on people's homes, has been a big adopter of solar.

Um, uh, it distributed solar.

Uh, California, um, has a number of incentives to encourage homeowners to put solar panels on their roofs and adopt batteries and, uh, for backup storage and the like.

So, some of it's driven as much by policy as it is by necessarily the the conditions in the world.

I, I, I think there's also interesting opportunities in certain parts of the world, um, who maybe don't have as advanced systems as we see in Western Europe and the US, um, where maybe electrical, electricity isn't this 100% reliable source that we kind of come to.

Depend on here now these distributed sources could be ways of building resilience into your electrical system, right?

I, I spent some time, um, this past year, I think I told you I was in South Africa for a while and um in South Africa they have very serious problems with load shedding and and inability to meet the demand.

So I can imagine that a place like South Africa that does have.

Does have access to some other natural resources might benefit from this tremendously once this technology is made available.

Yeah, and look, even here in the United States, um, there's such an increased demand for things like data centers, um, that, you know, will that cause some issues here about who gets electricity and when, and again, distributed might be a way to help, help manage again those kind of loads and the like.

Yeah, um, what is the relationship here?

Is this a private sector act?

Is this mostly companies and companies trying to kind of, uh, experiment?

Is this again all roots lead to Elon Musk with the innovation, or is this a, or is this a governmental kind of push, uh, um, to kind of free the reliance on the utility companies?

How do you see it?

Well, I think it's the, you know, the answer is, uh, you know, all of the.

Above, but I think that's actually a great opportunity and segue for us to bring in an expert because I think we need some expertise as always on our, on our podcast, right, Ya?

Yes, always.

So what I'm gonna do is I'm gonna bring in Adam Sled, who's the executive director of Dominion Energy's Innovation Center.

Uh, Adam is a serial entrepreneur, angel investor, startup advisor.

He has led Multi-million dollar grant projects for the US DOE and national labs, and his organization is often, uh, bringing in companies, investing in them, bringing them to their accelerator and supporting them who are on the edge, who are, who are dealing with and trying to solve some of these challenges with distributed energy.

So, let me bring in Adam.

Adam, how are you doing today?

Good.

Hi, how are y'all doing?

Hey, Adam, nice to meet you.

Thank you for joining us.

Absolutely.

Thanks for having me.

So, Adam, really excited to have you with us.

And I, I wanna go to the question Yael asked about, hey, what, what companies, what, what types of technologies are we seeing in this, uh, kind of distributed energy, uh, future that we're talking about here?

And I'd be curious from your perspective within the innovation center, what, what are you seeing?

I mean, that's a pretty broad question to start with, Mike.

So, um, so, so I'll say, I'll say, um, look, right, so we have this purview of, you know, we're a, we're a nonprofit.

Our goal is to decarbonize, uh, Virginia's economy, working with the entrepreneurs who are doing these things, right?

Um.

But because we have this relationship uh with Dominion as our, our lead sponsor, we get to see a lot of what happens inside the utility, um, and we also get to work with some of the co-ops and the other utilities, uh, both in Virginia and we talked to a lot of other utility innovation folks around the country.

Um, so it's a.

You know, distributed energy means a lot of different things.

So that can mean everything from, um, you know, hydrogen being, being pulled out of an industrial waste process and turned into hydrogen that can be used on site in an industrial facility, or that could mean something like a weave grid, which is a charging telematic software that allows the Uh, the utility to help manage when a car charges, uh, in somebody's garage, uh, with them, them signed up for it.

So, so we've got a really, really broad spectrum of things and it's kind of like everything in between.

Um, but it, I would say it comes back to your earlier point, this sort of push and pull between what is centrally planned.

By the utility and the regulatory scheme and what is like almost, uh, you know, consumer driven, right?

What the consumer is OK with, what the consumer wants to do in their own home.

Um, and so there's, I would say there's a stack of technologies that are more utility led and then there's a stack of technologies that are more kind of consumer led.

So this is more like what we call behind the meter.

So these would be technologies you adopt in your home, not necessarily in concert with the utility.

Right.

So there's, yeah, there's behind the meter.

So behind the meter is what we call, yeah, something that's happening in your home, or if you're a, like a commercial or industrial company, what's happening on your, on your location, right?

So like doing, doing energy storage, right?

Whether you put a battery pack in your home, or whether you put a battery of some sort in your industrial facility, that would be considered behind the meter.

And are you seeing some of this push being innovation that is uh for sustainability's sake just to become more sustainable and use uh a more renewable energy in, in where it's possible, or are there big changes in terms of how people are living their lives and, and their habits like telling me a little bit from your experience where the, the push is coming from.

Yeah, that's a really good question, and I think that helps sort of, sort of frame what's happening in a macro level.

So, so, um.

Say over the last 30 years, if you, if you go talk to someone who's worked in utility for the last 30 years, what they'll tell you is almost all of their career you were seeing maybe at most, like 1% load growth a year.

Right, so, so generally speaking, like the demand at the utility level was flat for most of somebody's career.

And now what we're looking at, uh, is, is low growth that's suddenly spiking up to like 5, 7% a year, right?

So there's huge demand increase, and that demand increase is sort of related to two things.

Um, one in Virginia, especially.

Uh, is data center growth, right?

So data centers are this huge economic driver, um, but they, they also use a lot, a lot, a lot of electricity.

And so the growth in data centers is leading to an obvious sort of corresponding growth in electricity demand.

And then the second is the push for electrification.

Right?

So that's, that's your sustainability driven focus, right?

We want, we want cleaner, cleaner power.

Well, cleaner power generally means using electricity as much as possible.

Um, and so that's where we transition to EVs, we transition to heat pumps, we transition to, you know, your electric stove versus your gas stove, which is its own sort of policy fight happening right now.

Um.

But, but so it's this combination of things, right?

One of them, I think, is sort of sustainability driven around electrification, and the other is, is data center growth.

And while data center growth might be like in Virginia, data center growth is the primary focus, but if you go somewhere like Massachusetts, right, it's probably more like electrification.

Interesting.

And it's interesting to think about um the way the grid works, right?

Over the course of a day, um, the demand for electricity is, is ebbing and flowing.

You know, I started with our discussion about air conditioning.

So you can imagine during the summer months here in the South, air conditioning usage goes up during the course of the day when it's hot out, and then of course in the evening it goes down, uh, partly because it cools and, and partly because we don't need it as quite as cold.

That creates the need for different types of generation.

So we have kind of baseline generation, um, maybe something like a nuclear power plant or even a coal-fired power plant, and then we have those that we can kind of scale quickly, which historically has been things like natural gas.

Um, and now we've got these things called renewables, which we have some limited control over because the sun only shines during parts of the day, the wind doesn't always blow.

Adam, can you talk a little bit about maybe some of these edge technologies, how they're helping with um load balancing and dealing with these spikes in demand that we see over, you know, the course of a day.

Yeah, absolutely.

And so that's, that's really one of the big issues as we see the growth of renewables.

Um, are you familiar with the duck curve?

I am, but maybe you could share it to our listeners.

Yeah, tell us, tell us for the benefit of the listeners.

OK.

So the duck curve, right?

So Mike, you were just describing sort of like how renewables, right, in the middle of the day, if you're in California, especially California is sort of where this is going, um, in the middle of the day.

Suddenly you have like this huge spike in renewable power generation, and then it shifts, you know, to nighttime and the spike goes back down.

Um, and it's sort of like when you graph the renewable generation with the demand, you wind up with a curve that supposedly looks kind of like a duck.

I I think that's a very interpretive of you.

I, but, but that's, that's why it's called the duck curve.

And so we're in Virginia.

I it looks more like a turkey on its back, right, right.

And Virginia, like we're, you know, we're doing a good job of ramping up our renewables, but thankfully we're not, we're not there yet.

Um, but so what happens is you wind up with certain times of day where you have too much power on the grid, and that's when we start really talking about these sort of distributed resources, right, that those distributed resources are actually overloading the grid or capable of overloading the grid.

And so now we have to create more resources to manage our distributed resources.

So that's where we talk about the need for storage.

Um, when you hear people talking about running hydrogen electrolyzers at 4 p.m. so that we can create hydrogen with the excess renewable power and then we can store that hydrogen and use it later at different times.

Um, this is, that's sort of like the next phase of, of demand response or not demand response, but distributed resources.

Traditionally, when we talked about distributed resources, it was just You would hit 6 p.m. on a hot summer day and the utility would hit its peak, it's peak load, and you would need to do some basic peak load shaving and so you would have demand response where like a signal, a call would go out to industrial facilities and ask them to turn off certain pieces of equipment and like demand response is the most basic form of distributed resource and that's really like all we had for a long time.

But, but now we're talking about.

You know, it's going to be 6 o'clock and you're curtailing certain power sources and turning on storage, um, and then getting ready to, to, um, yeah, pull all these other resources.

I mean, it can mean hot water heaters, uh, it can mean home thermostats.

So, so it does get, it gets very broad and a lot of different types of resources, uh, that we didn't used to have available.

And if somebody is interested in the duck curve, they can Google it and see really great pictures of uh uh of this and the ducks are kind of superimposed to be clear where the duck comes into play. um, but let me ask you, Adam, there's always a downside, right?

Like it sounds like there's so much benefit for.

Having this kind of more interesting distributed more complex and more capable uh uh grid and network and, and alternative sources and so many contributors, but there must be downsides.

What are some things that keep you up at night that you're worried about when you think about the distributed energy resources?

Well, I mean, again, it's, it's central planning versus distributed, right?

So, so that if you want to attach a whole bunch of nodes to a network, like thousands and thousands of nodes that aren't owned by a utility, right, that are owned by all these different providers, then you have to create systems to attach them.

Those systems all have to work and function all of the time.

They have to have cybersecurity measures.

They have to have physical security measures, um.

If some of those systems, if we're talking about people's home water heaters or their EV charging, right, you, you have to make sure that the, the system has to work because if, if a customer has opted into a program, but they forgot that they opted into a program and suddenly they find that their air conditioning isn't working the way they thought it would, they're going to be upset.

Um, so, so it's just the sort of, there are, there are a lot of potential issues that come up with, with many and To talk about the scale of this, I'll give you one quick example.

Well, as quick as I can make it.

All right.

Have, have either of you heard of the Bass County, um, pumped hydrogen storage facility?

No, I have not.

OK, so in Bath County, Virginia, we have, I believe it's still the world's largest pumped hydrogen storage facility, and what that is is essentially a mountain with a with a reservoir, and, um, and when we have excess power or not excess necessarily, but adequate power on the grid, um, the, the water gets pumped to the top of the mountain.

And when we need power on the grid, they open up the dam and the water rushes back down the mountain and spins the, you know, spins the flywheel and we get the turbines going and it, and it creates power.

It is essentially a mountain-sized battery, OK.

Um, we, we have the largest in the world here in Virginia and that battery powers about can power about 750,000 homes.

For a short time period is needed, right?

It is, it is marvel, but they're really hard to, to build anything at scale like this, right?

But it is, um, Dominion is sort of the main, main owner of it and operator of it.

Um, it's centrally located, right, so you can power a huge amount of customers at once.

Um, the distributed equivalent of this, when we talk about like vehicle to grid or, you know, using your, your car to charge your house, um, you would need.

Uh, the equivalent of 250,000 cars to do the same thing as bath count.

I'm curious, you know, when we think about this issue, I think it's easy for all of us to gravitate to hardware, right?

Like we're just saying a damn, uh, we're talking about a battery, we're talking about an EV, we're talking about a water heater.

You, you've hinted at this.

Can you talk a little bit more about the software needs that we have in this, in this space?

Yeah, absolutely.

I, I mean, it's At this point, I, I think, right, software runs our world.

So, um, so the software needs are, are multiple, right?

You, you need software at the home level.

To, to sort of interact, right?

The, our new meters and our new metering capabilities allow the, the home meter and, and the home equipment, right?

Your water heater, your, your electric car, your stove, potentially if you're using the, the really cool newest electric stoves to sort of interact with the grid, right?

Software is making that happen.

Um, there is a company that came out of UVA alumni, Lumen, that is a smart home meter, right?

Um, and, and that's one of the things that Lumen is now letting you, you do, right?

If you have a Lumen smart panel, um, it is letting you do this software that is, is letting you sort of manage your home electricity use through your battery, through your solar, through the grid interconnection in ways that you couldn't before, like a dynamic way, right?

Now, if you expand that up to the grid level, the kind of software we're talking about is Um, one, just, just at its most basic level, understanding what's happening, uh, at the in the grid, uh, in a, in a much deeper level.

I mean, the, the types of data, uh, the frequency of data, the, the just the sheer amount of data that that a utility like, um, like a Dominion or an Appco or even like a Rappahannock co op is getting on a second by second basis is enormous.

So.

That new, new data analysis tools are being created kind of every day to try and figure out how to manage that flow of data and optimize what's happening on the grid, but it It's a slow process, just, just because kind of the sheer amount of stuff that has to be understood.

And Adam, just for our listeners, you know, the, when you think about the problem that that Adam is laying out here, um, this is probably gonna require an AI solution.

So, you know, for those of you who are continuing to think of AI is just like chat DPT, AI has many different applications.

This is another one in which we will, will probably have some form of AI to be able to manage in real time that amount of data in a complex system like this.

Yeah, and it, it's, we'll get there, but I think it's gonna be a while before people get comfortable with it.

And Adam, um, I'm gonna segue us a little bit, um, just to understand also, I brought it up before when Mike and I were talking, and I keep going to, to the communities that don't have much access to energy now, meaning communities.

Areas with extreme poverty potentially that have little energy at the best of times and you know one lamp per family, will our innovation around distributed energy resources, will they change some of the ways that we globally try to tackle some of these societal problems?

The hope is yes, right.

Can we make it, can we make it cheap enough, or is this just for people who have, you know, electric vehicle access, right?

Um, can, can these distributed energy resources be such that can be deployed to places that don't have a grid already?

So I, I think that's the big question.

And, and I think in, in certain places, um, yeah, look, like the panels are cheap enough.

Um, if you're, if you're in a remote location, you know, yeah, I think that's a really good way to talk about it.

So some of these resources, I think are better suited to remote locations.

Or, you know, uh, there are a lot of people doing interesting things with like improving, improving the system in remote locations.

And, and the simple reason is like if you talk to somebody who works at a rural electric co op, um, they have a completely different problem from a Dominion, right?

The Dominion, most of their customers are in urban settings.

So you like the poles are very close together, the equipment's all pretty close together.

Um, when you get out to rural areas or areas that that aren't as well serviced.

Um, you might have like, you have much longer spaces between poles, you have fewer customers between, between, uh, with infrastructure.

And so that's where I think the hope for more of this distributed stuff is, is how do we locate.

Um, infrastructure like smaller, cheaper, faster infrastructure, um, in, in those more remote areas and say, uh, add some resilience layers like hard in it.

Um, so it's sort of more wildfire proof or things like that.

And, and that's where I think we are going to see more interesting things.

There are a lot of people who are kind of proposing distributed.

Uh, resources for urban areas that I think probably won't make sense from a business model perspective, but might make sense in a more rural or or developing area.

It's interesting because when I think about, you know, the history of solar energy, um, some of the earliest applications of solar were in essence to deal with the types of problems you were just laying out there, right?

Like, uh, um, marine solar, right?

Like the use of solar for, for, uh, for, for, for boating, um, goes back for, for decades and decades.

So we see a lot of the stuff that we see, um, this isn't necessarily a distributed resource, but like working on hardening power lines, making power lines more conductive, reducing line loss, reducing.

Um, or like sensors that can tell us what's happening with the power line at any given moment, moment to moment, uh, that takes on extra importance in a rural setting because it's harder to send a truck out, right?

It's harder to send a person to go fix a thing if it's 50 miles outside the city.

So, so the, the more we can get sort of sensors and other kinds of information to help us understand what's happening, say, those last mile locations, um, the better we can, we can help the people who, who aren't in a developed, you know, highly, highly concentrated urban spot.

It makes me think of what's happened with um telecommunications in places like Africa, where they, they basically just leapfrog the traditional landline uh infrastructure and went right to cellular.

Do you think, Adam, there's like a similar analogy here that there'll be um places in the world where they kind of bypass the traditional, as I was calling it, vertically integrated type of production and and just jump to designing systems to work for distributed resources.

Yeah, I mean, look, somewhere like Puerto Rico, that makes a ton of sense, right?

You don't have a ton of land mass, um, you know, where you don't, you don't have a ton of land mass, and look, OK, closer to home, um, there's a lot more rooftop solar in DC than there is in, say, Richmond.

And why is that, right?

Because in DC they want to have renewable energy, they have a lot of roof space, but they don't have a lot of uh geographic area.

So you're going to get more distributed resource there.

In Virginia, we have way more space to do utility scale implementations, right?

So 5 megawatt plus solar farms.

Um, and so it's, it's uh less of an issue here, right?

We can, we can put way more renewables on our grid here in Virginia, broadly speaking, because we have space, we have coastline to do offshore wind, um, and in in Washington DC you don't have the same, so you're more likely to do solar on every roof to get where you want to go.

Great.

Well, Adam, I really appreciate you spending some time with us here.

This has been incredibly helpful for us, um, and, and again, uh, good luck with the work you're doing, and I'm excited to see some of the ventures that, uh, that are coming out of your, out of your programs.

Yeah, Adam, thank you, thank you so much, Adam.

It was very helpful to hear you talk about it and to think about it, and it's exciting to know that the utilities are, uh, collaborating in such an entrepreneurial way with, uh, with the private sector as well.

Absolutely, Yale, Mike, thanks for having me.

All right, it's that time in our podcast, you know, we, we get to assess good, bad, or no disruption.

What do you, what do you think?

I'm, I'm too deep in this.

You know, yeah, well, no, right, nobody needs to guess too hard, uh, where you're gonna come down at it.

Well, it's interesting.

I was gonna ask you, you know, reflecting on our conversation with Adam and in general just what we've talked about today.

I I do worry a little bit that it's, it's still focused on, on the haves and haves not, meaning people are excited about this and, and, you know, exciting new technology and capabilities, people can do more by themselves at their homes and contribute back and generate electricity in this way and um the distributed energy.

The phenomenon, is it going to be limited to certain regions of the world?

Are we, are we addressing the big problems of society this way, or is it going to be focal?

Like that's, that's still top of mind for me, and I know that you're going to take us down in a positive way, but I, it's, I, it just, it just disturbs me a little bit, yeah, maybe because of my experience in South Africa and seeing that.

You know, the whole country has to shut down every day like they just don't have enough electricity to power the entire uh uh um country and it's a big problem for productivity at a very, very basic, basic kind of level and to, to think that.

We're so, you know, leaps and bounds ahead of that, and we have so many more capabilities that somehow are not reaching globally to places that need it is, is a little bit, um, uh, frustrating.

And I, I'll I'll answer your, your question here in kind of two ways.

I mean, I think one, is there a risk that those are the means to, you know, buy these types of systems and they are expensive, um, especially for like the individual consumer, um, is going to create more inequality.

I, I, I think that that's a valid question.

I think where where we get a, you know, hopefully more towards a solution is the network piece of this.

So like what we don't want to happen is everybody putting on solar and putting batteries on their home and then basically disconnecting from the grid, right?

Because that then does, I think, go directly to what you're saying that there'll be haves and have-nots, and those who can afford it, we can have great electricity and cheap electricity and others might not.

I think when we then maybe require it or it is tied into the grid, then these efficiency uh issues that we were talking about come into play here, and it can actually help everyone.

Like, so if you have a solar panel in your home and batteries in your home, and you're generating excess energy.

You could actually be solving someone else's electrical needs.

And so in that way, it it it could be a rising tide, uh, rises all boats here, um, but it would require that everybody is connecting to the grid and we solve this distributed, uh, energy coordination problem.

And so maybe, and this is maybe where Adam comes in specifically or examples of Adam's kind of function in organizations like Dominion Energy where it is the utility companies and the grid and access to the network that is already there that's trying to embrace this uh new innovation and learn how to push its capabilities that maybe can then bring that to other places around the world.

Yeah, and and I always say, you know, I think the utility of the future will be a two-sided market maker, whereas historically they've generated and then sold, as I've mentioned before.

Now they're going to be constantly mediating relationships between individual users and generators of electricity, and the same user might be a generator at certain points of the day and vices. versa.

So, so, yeah, not, not surprisingly, I'm gonna come down on good disruption, uh, and I'm even gonna go stronger, uh, to say this is kind of a necessary disruption if we're going to make greater impact in terms of decarbonizing our electrical generation.

So we've talked about renewables before, solar and wind.

The intermittency issue is huge.

We talked about this on a previous podcast.

This in essence is a way to begin to solve some of those issues with renewable energy.

So I think if we, if we want to try to decarbonize, This distributed energy resources is going to be critically important to do so.

Maya, well, you're almost describing it as a necessary condition, you know, thinking about it as a sufficient and necessary condition like, uh, uh, you're, you're saying this has to happen.

We have to figure this out.

We have to learn how to expand our capability and, and what our, our grid can and cannot do in order to really get to a point where we are, um, are, are protecting our environment for the longer term of humanity.

Exactly.

So, so where, where do you stand?

I, I don't, I don't think I can say bad.

I, I have to say good.

Um, I think 11 piece that maybe I'm, I'm debating is around the disruption aspect, meaning typically when we talk about disruption, something else disappears.

Um, what is it that we're disruption, we're disrupting, um, is, is it.

Coal, is it, is it the carbon use?

Is it, what is it?

What is that?

What are we disrupting completely?

Yeah, that's a great point because I, I, I've made this observation that utilities, you know, they're, they're quasi monopolies, they, they're natural monopolies, they, they, they aren't really at threat of going away here.

They're actually critically necessary in the transition.

Um, I think you're absolutely right.

Like, yeah, you know, coal producers, others, they, they, they might be disrupted here.

Um, and in a way that that's already happened.

I feel like some of that potentially has already happened.

That's right, it's happened on the utility scale here.

I think the other interesting disruption is what's happening like in the home, uh, the way you think about your home and what it is, uh, how it is a consumer of electricity, but a generator as well.

Creates all these kind of interesting opportunities that that are already disrupting things like the uh home control market, HVAC market, even things like uh um just the the um control systems in general in your home, like your, your devices, as we were saying, your dishwasher, your refrigerator, all of that could be integrated into a network, um, to kind of help solve some of these problems.

Yeah, and for me that's a disruption in the sense of awareness and, and just the way that individuals take ownership and, and keep and care about their choices and so from that perspective the individual behavior cha changes that we already are seeing and we'll see as folks generate the electricity, monitor it, care about it, contribute, and, and raise their awareness, I think is, is a good thing.

Yeah.

Well, I think it's a good note to end on there.

As always, thank you to our producer Gary, and to our uh lead researcher Becky, uh, who is an expert in this area herself.

So thank you, Becky, for all your work and uh making us sound smart here.

Uh, thank you for joining us on Good Disruption.

And go and generate some energy in some way, shape or form.

Disruption is a podcast from the University of Virginia Darden School of Business.