Revisiting the Future of Energy with Lauren Azar
Lauren Azar
In Season One of 12 Geniuses, energy expert Lauren Azar joined the show to discuss trends in energy consumption. Those subjects included the viability of coal, where we can find long-term sources of energy and the impact of emerging technologies. Since that conversation in October 2018, there have been incredible advancements in energy production and storage. This week, Lauren and Don meet again to discuss those advancements, recent catastrophic events such as the 2021 Texas power crisis and what the current presidential administration has in store for the future of energy in the United States and abroad.
Over the course of her career, Lauren Azar has worked at the federal government level as senior advisor to the secretary of the Department of Energy, at the state government level as commissioner at the Public Service Commission of Wisconsin, and in the private sector as an attorney representing utilities and utility customers.
Resources From This Episode
Connect with Lauren on LinkedIn
Explore Lauren’s work on her website
Connect with Don on LinkedIn
Follow Don on Twitter
Read the Transcript:
Don MacPherson:
Hi, this is Don MacPherson, your host of 12 Geniuses. My first interview with energy expert Lauren Azar was in October 2018. Since then there have been incredible advancements in energy production and storage. In this update, Lauren talks about those advancements and we even touch on the security of our energy grid. This episode of 12 Geniuses is sponsored by the think2perform RESEARCH INSTITUTE, an organization committed to advancing moral, purposeful, and emotionally intelligent leadership.
Lauren, welcome back to 12 Geniuses.
Lauren Azar:
Thank you very much. How are you?
Don MacPherson:
I'm doing great. We originally recorded our first interview two and a half years ago. We talked about coal and we talked about solar and wind, hydro, biomass, geothermal. Let's start with coal because it was the second year of the Trump administration and we were talking about retiring coal plants, and I'm assuming that has happened. So can you give us a status on what coal is up to?
Lauren Azar:
Yes. Coal plants are continuing to retire both because of the market conditions. In other words, they are more expensive to run than other kinds of generation. As well as I think a number of utilities have established carbon goals between now and 2050 and therefore are slowly phasing out their high carbon emitters, which includes coal.
Don MacPherson:
And what's going on with solar and wind? I think I read recently that renewables have surpassed coal for the first time and that might've been in 2019. I'm assuming that they continue to be on the rise, solar and wind. So give us an update there.
Lauren Azar:
Yeah. Well, let me tell you about the cost of solar and wind. In the United States right now, it is cheaper to actually build new utility-scale solar or wind, depending on where you are, than it is to continue to run some of the older coal plants as well as natural gas plants. That is a pretty breathtaking development. As a consequence, we are seeing a lot more solar and wind coming online, both utility-scale, as well as smaller-scale residential. And the prices in both solar and wind continue to drop.
When technologies are new, prices drop more rapidly because the technologies are maturing more quickly. Wind is an old technology. And so I think most people thought that the price declines in wind were going to continue to slow down. I think the industry is quite surprised that the price declines in utility-scale wind continue to drop. And a lot of that is due to larger wind turbines. As far as solar goes, utility-scale solar, those prices continue to drop too. Though again, the rate of change, the rate of reduction in the cost of solar, the rate is slowing down. So the costs are continuing to drop. It's just they're not dropping quite as fast.
Of course, batteries, which are a relatively new technology. Those prices do continue to drop. From 2014 to 2019 they dropped between 28 and 36% worldwide.
Don MacPherson:
What sorts of innovations have happened in batteries. I've been following this a little bit since we originally talked and... Well, not just batteries, but storage in general because it doesn't necessarily mean just batteries. Can you talk about storage in general and the innovations that have been made there?
Lauren Azar:
Yeah, first I think you need to make the distinction between short-duration storage, which are normally batteries and long-duration storage. Mostly when people talk about storage right now, they are talking about short-duration storage and that's up to four hours worth of electricity storage. As far as research and development in that area, a lot of the research it's my understanding... And this is not my area of expertise, is that they're trying to get new materials to be used in the short duration storage so that we're moving away from earth materials. Also, to decrease the cost by increasing the efficiency of that storage. And of course, as you mentioned, besides batteries, there are different kinds of storage, including hydroelectric, for instance. As well as compressed air. So folks are looking into very creative ways to store electricity.
Don MacPherson:
Can you define what long-duration storage means?
Lauren Azar:
For me, it's over four hours worth of storage. And really to serve the purpose of replacing generators it will need to be able to provide electricity over numerous days.
Don MacPherson:
What other energy innovations are you following right now?
Lauren Azar:
Small modular nuclear reactors. There's a lot of R and D going into those right now. A number of folks are watching to see if those are going to number one, be fully licensed and number two, whether or not they are going to be commercially viable from a financial perspective. Hydrogen is probably, it's certainly not a new fuel in our world, but a lot of people are talking about green hydrogen right now. And actually using wind generation to develop hydrogen fuel for use in fuel cells or larger hydrogen generators. There's a lot of talk now about offshore wind for the United States, both off the East Coast. And just today, I saw a release about looking in the Gulf of Mexico.
The wind generation that you can develop offshore, actually those generators can be much larger than onshore generators. As a result, can be more cost-effective. Part of the challenge right now is figuring out how to design the transmission grid that would support those wind generators. For instance, off the East Coast. Carbon capture use and sequestration, there's a lot of R and D money going into that and whether or not that will become financially viable if it's used outside of oil enhancement. Right now, carbon capture is economic if we're using it for enhanced oil recovery.
Long duration storage, that is the holy grail of our industry. And the moment that long-duration storage becomes viable, this industry will be turned on its head. It's simply not cost-effective right now. The question is whether or not it can become cost-effective.
Don MacPherson:
One of our previous guests on the show is Dr. Leah Stokes. And we were talking about the future of climate change and she was saying, "Don one of the things you have to understand is that we don't need to replace a hundred percent of our electricity production with renewables. We need to replace 200%". We're going to have electric cars that are going to require electricity. We're going to have stoves that are going to be converted to electric versus natural gas. And I posed this to you and you said, "Well, maybe we need more". So could you talk just a little bit about that and how we are going to do that?
Lauren Azar:
Let me just frame it a little differently. If we electrify the economy, we're going to be having electrified transportation and buildings. There are a number of different estimates out there about what that means for increases in the demand for electricity. But folks are running on the doubling of demand. So we're going to be using twice as much electricity as we are right now. So that's the first component. The second component has to do with renewable generation, which as you know is intermittent. And so it won't just take twice the amount of renewable generators, but it's going to take more than that because the renewable generators are intermittent. That's assuming that we don't have long-duration storage. So folks are saying with regards to, if you're just looking at generation capacity and comparing it to today's capacity, we may need three or four times the amount of generation capacity than we have right now.
And some of it will not be located where our current generators are located. Over the years, over the last 120 years, we built our generators somewhat near where the customers were because you could convey the coal and the natural gas to the generators. The best solar and wind resources aren't necessarily near the customers. So as a consequence, you have to build the high capacity, renewable resources in different kinds of locations from where the natural gas and coal plants are built. And then you've got to build the transmission from those highly efficient, renewable generators to the customers.
Don MacPherson:
In February of this year, we learned that the United States has three power grids. That was news to me. We have an East Coast, a West Coast and Texas has its own power grid. Can you describe what happened to Texas in February? And what did we learn from it?
Lauren Azar:
I'm going to let the experts speak to precisely what happened in Texas, but I can give some generalities. A number of the generators in Texas were not winterized for the kind of polar vortex they experienced. And indeed it wasn't just in Texas, it was in the entire South. So utilities had to do the risk analysis of, are we going to spend the money to winterize these generators in the hundred-year chance that they're going to freeze up? And they decided not to spend that money and to save the consumers that money. As a result, when the polar vortex came down, those generators froze and the transmission was insufficient to essentially import electricity from other areas into Texas, into Louisiana that would have allowed them to keep their grip up.
We saw really pretty massive flows of electricity coming in from the East Coast into the Midwest, into the Texas Louisiana area. But a lot of that electricity just simply couldn't get down there. We all need to take the following message home, which is, transmission enables you to access power from areas that aren't being impacted by the same extreme weather event that you're experiencing. And that's what they were lacking. They weren't able to tap into areas with different weather systems. If they had been, they would not have had to what's called shed their load to go into rolling blackouts.
Don MacPherson:
We talked a little bit about cybersecurity the first time in 2018. And we've now heard about the colonial pipeline hack and JBS. When you think about these big, big hacks, what sort of vulnerabilities are being exposed related to electricity production and the way we run businesses and the way our homes receive electricity and power?
Lauren Azar:
Let me just say that the threats from cybersecurity to our electricity infrastructure, as well as our natural gas infrastructure, is quite serious. I know the utilities are taking it very seriously. That's what I can tell you.
Don MacPherson:
You worked in the Obama Biden administration. And we have a new administration that's four or five months old, President Biden's been in office. What sort of expectations do you have related to energy from this new administration? And then what have you seen in the first few months?
Lauren Azar:
I'm very excited about the new administration and how it will help us tackle climate change. Of course, rejoining the Paris Accord was a critical first step and really sent a message, not only worldwide, but to the United States. So I think we're going to see a lot of initiatives administration-wide helping with attacking climate change. Obviously, the Department of Energy is one of those agencies that can help quite a lot. And just looking at the DOE's announcements recently, they're putting a lot of their budget towards R and D, which they do. They often invest in very early kinds of technologies, the kind of R and D that the marketplace isn't going to conduct themselves. So instead government conducts it and then it slowly moves into places where the private sector can pick it up. And I just want to say, people don't like fracking necessarily, but fracking was indeed invented by the Department of Energy decades ago.
And then it was picked up by companies and moved along. And that's just one example. During the first Obama administration, they announced the SunShot, which was how much they were going to drive down the cost of solar electricity over a time period. And they met and exceeded that. The current Biden administration announced the following that by 2030, they were going to drive down the cost of solar electricity by 60%, green hydrogen by 80%. And they were going to cut the cost of battery cells in half. And those were for EVs. So with regards to the DOE, they're charging ahead with technology innovation work, and I'm sure they're going to be doing a lot more as well.
The Federal Energy Regulatory Commission or FERC, which oversees the electric and natural gas industries among others in the United States. President Biden, by the end of this month, will be able to appoint a third Democrat to the FERC, which will allow, I think some pretty aggressive moves, hopefully by FERC that are going to assist in this. And a lot of us are hopeful that the new FERC will be able to do a lot to help move forward initiatives that would increase the penetration of renewables in the United States, reliably.
Don MacPherson:
Anything you wanted to talk about? Any burning questions that you wanted to answer?
Lauren Azar:
I do want to talk about transmission and the importance of transmissions. We touched on it a bit, as we're talking about a build out of new generators that are not located where the old generators were. We are going to need to build some large interstate transmission line. Your raising the Texas polar vortex problem transmission is probably the most cost-effective way to boost the resilience of the electricity supply nationwide. There are a lot of people who don't like transmission, but it is absolutely critical to keep the lights on, to have transmission. And we're going to need to build out of it in order to reach the carbon goals that states and utilities established.
Don MacPherson:
Why are some people against it? I don't understand that.
Lauren Azar:
People are against transmission because they don't like how it looks, I assume. Ironically, I've done quite a lot of work in the development of transmission. And in all of the development of electricity infrastructure, I think the development of transmission is the most difficult because it is a long linear infrastructure. It impacts a lot of people because of that. And there are ways we can mitigate this through using existing [lights 00:15:24] away. Going along highways, things like that. But I radically people don't even want to see it along their highways, which makes it hard. If you want to actually convey electricity over long distances, you got to be able to put those holes in somewhere. A lot of people, obviously they want electricity, but they don't necessarily want the infrastructure that's necessary to deliver that electricity to their homes.
Don MacPherson:
Interesting. It's a fabulous conversation. And like I did the first time I researched this and I learned so much again, and it's remarkable the amount of innovation that's happening here. It's an exciting time to be following this field. I thank you for your time. And I thank you again for being a genius.
Lauren Azar:
My pleasure. And this is a breathtaking and fun time to be in this industry.
Don MacPherson:
Thanks for listening to 12 Geniuses. During next week's interview, we're going to check in with Ryan Estis. 2020 was supposed to be a banner year for Ryan's business, but the pandemic brought it to a screeching halt. We talk about how he was able to resurrect his business and make it stronger than ever in just a year. All as he was reinventing himself personally. That episode will be released August 3rd, 2021. Thanks for listening and thank you for being a genius.
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