[Scott] Next on "Energy Switch," we'll hear from two of the leading voices in US electricity today.

- California wants to be carbon neutral in 2045.

We know that means a whole lot of electrification.

We expect about a 60% increase in load in our service territory.

So, there's a lot of infrastructure investment that's going to need to happen to meet all of that.

- Texas has been on an extraordinary large load growth for a number of years.

In fact, this year, our peak load is seven percent higher.

We know we have an issue, relative to these new resources we're turning to.

That doesn't mean that when you have a problem that we should move away from that technology.

What it means is we need to address the problem.

[Scott] Coming up on "Energy Switch," Understanding the Electric Grid Part One.

[Announcer] Funding for "Energy Switch" was provided in part by The University of Texas at Austin, leading research in energy and the environment for a better tomorrow.

What starts here changes the world.

And by EarthX, an international nonprofit working towards a more sustainable future.

See more at earthx.org.

- I'm Scott Tinker and I'm an energy scientist.

I work in the field, lead research, speak around the world, write articles and make films about energy.

This show brings together leading experts on vital topics in energy and climate.

They may have different perspectives, but my goal is to learn and illuminate and bring diverging views together towards solutions.

Welcome to the "Energy Switch."

Electricity makes our modern world possible.

It lights and cools our homes and buildings.

It powers our manufacturing, communication, technology and is beginning to run our cars.

And all that electricity is delivered by the grid.

So, you could say the grid makes the modern world possible.

In Part One, we'll talk mostly about the generation mix that supplies the grid with electricity with my guests, Brad Jones.

At the time of this interview, he was acting CEO of ERCOT, who operates the Texas grid to bring electricity to 25 million people.

Before that, he led the electricity operator from New York State.

Steve Powell is the president and CEO of Southern California Edison, the utility that provides electricity to 15 million consumers in one of the most dynamic power markets in the country.

Next on "Energy Switch," Understanding the Electric Grid Part One.

Looking forward to learning your insights.

There's a lot to talk about.

How do we use electricity across the day?

I mean, what does it look like?

- Very simply put, in the morning, you've got people at home, they're getting ready.

That's when electricity usage begins to pick up.

They go to work.

During the day is when you have your highest energy usage.

And it doesn't really begin to drop off until late in the evening because businesses don't, you know, they run through the evening.

These days, we're actually often less concerned about the regular demand curve and we're more concerned what we call the net curve.

The generation mix in California is changing.

We're becoming more and more dependent on solar for example.

So, the issues aren't right smack in the middle of the day, they're in the evening.

You still have commercial and industrial load on, people are coming home, they might be plugging their electric vehicles in.

And that generation that we're depending upon, that solar, it's coming off.

We get to this period where you need to quickly bring on a whole lot of other resources and it's that gap that we're looking to solve.

- Yeah, and in Texas, a little different from the sun.

- We do have quite a bit of differences in our two regions.

And so during the summer, we have a very similar load shape and that would have high air conditioning load in the middle of days, including businesses and industries here in the state.

But in the winter, our load shape changes.

We have two peaks in the winter, we have a very early morning peak as everyone wakes up, turns up their heat a little bit and then it troughs during the day and it picks up after the sun goes down again in the evening.

So, we have two peaks across the winter and just a single high peak in the summer.

- Interesting, interesting.

What's the general mix of fuels for electricity in California?

- So, California, biggest driver is natural gas still.

40-plus percent of the generation is coming from natural gas.

You've got a mix in there of large hydro.

So, hydro might be about 10%.

Renewables are increasing.

More than about a third now of energy in California is coming from solar, wind, geothermal, biomass and those technologies.

We also import a fair amount into California.

You don't always know what the sources are there.

So, you've got another mix that adds on top and then you've got some nuclear still in California as well.

- How about Texas?

What's our mix look like?

- So just this year, from January to May, roughly about 36% of the total energy consumed was provided by renewables.

Most of our other generation comes from natural gas.

We do have still quite a bit of coal in Texas and we have two very large nuclear facilities as well.

But the largest portion of our energy is provided by natural gas.

- Natural gas.

- Texas and California, there's some similarities in there, but we're different in some ways from the rest of the nation, particularly around renewables.

So, over the last 10 years, renewables have increased across the US.

But they still only make up something like 14% of the energy mix.

They used to be- - Generation.

- Generation, exactly.

They used to be five, 10 years ago.

Coal nationally is now down around 22% of generation.

It was 42% just 10 years ago.

So a rapid decline.

And you've seen an increase in natural gas from about, I think it's 25% to 38% increase over a 10-year period.

So, pretty dramatic shifts in the national view around picture, but the local levels are unique.

- If we add a lot more electricity demand through electric vehicles, what does that do?

I mean, how do we manage that?

- There's a question of when that occurs.

When does the pickup happen?

Probably a little bit earlier in California.

We love California going first, because we learn by their both their success and their failures, and then we come second.

We believe that in about seven years, we see that curve begin to really pick up.

When I mean that, I mean, that load expectation due to these transportation resources now becoming electrified.

- In California, it's happening now.

Right now, we've got about 15 million people that live in our service territory.

We've got over 350,000 electric vehicles in our territory already.

In California this year, more than 15% of new vehicle sales are electric.

[Scott] 15?

- Wow, wow.

- Yeah, one five.

And so, it's really starting to accelerate.

And it's not just light duty.

It'll be the heavy and medium duty will begin to come along as well.

We're seeing a lot of interest, and we've got to have a grid that helps serve that.

Now, in terms of load growth, California load growth has been relatively flat for a while.

We still anticipate it being relatively flat for a number of years, probably until you get around 2030.

- And it's not because the electrification isn't accelerating.

We still have a lot of rooftop solar and energy efficiency that's happening.

But you get about six, seven years out and that electrification is going to start to overwhelm all of those efficiencies.

Project forward, so relatively flat until 2030, One, two percent maybe at most a year.

Project out to 2045, we expect about a 60% increase in load in our service territory by 2045.

So, there's a lot of infrastructure investment that's going to need to happen to all of that.

- So, to give you a counterpoint to what Steve was just saying, Scott, he talked about fairly flat load growth.

Texas has been on an extraordinary large load growth for a number of years.

In fact, this year, our peak load compared to last year is seven percent higher than what we saw last year.

[Scott] In a year.

- Across the past 10 years or so, our load growth is somewhere close to two percent.

So just below two percent.

You can see across the rest of the nation right now, New York and New England are both flat to declining.

California is at slight growth.

PJM is at slight growth.

That covers the Pennsylvania up through the midwest portion.

Steve and everyone in California is expecting this transition to electrification, which we also expect.

That will be on top of our already rather significant load growth.

We have to be ready at that point in time to make sure that we're getting the type of generation that we need, demand response, generation, batteries, those types of resources that we need to accommodate that growth.

One of the things we discussed is that putting several vehicles on a distribution circuit very quickly taps out what we have and so we'll have to build more distribution to accommodate multiple vehicles.

So, that transition will not be without a cost.

I'd say that today, electricity is pretty good value to drive your car as opposed to gas prices.

So today, I believe there's still significant value for conversion.

- Yeah, interesting.

What does baseload mean and load following?

What does that mean?

- Baseload generation is that generation that you would expect once it starts, it will continue to operate at that same high level for many hours.

It could be days, could be weeks, in fact.

- Does baseload basically meet the minimum demand of the grid at any time?

[Brad] That's correct.

- Okay.

- That's the way you want to plan it.

You don't want to have a bunch of extra baseload generation, because then you got to figure out what to do with that energy.

- Got you.

- The next level of generation is what we do call cycling, units that will operate during the day, but will turn off at night and then we'll start up the next day.

And then the third level, we call peaking units, those will just come on for a few hours a day.

- What's thermal generation?

- Thermal generation is something that's going to create heat, that drives a generator, that produces the electricity.

And so coal is thermal generation, natural gas is thermal gener-- nuclear is thermal generation.

They can be baseload.

They can be that intermediate type.

They can be peaking.

- Most people don't understand, I don't think, the interplay between firm power or baseload.

The ability to deliver electricity always and the ability to deliver the sun and the wind when they're good resources, and then when they're not, something else needs to be there.

You've got to have that partnership.

From both of your perspectives, how do you make this reliability work and still keep price reasonable?

- I'd like Steve to start, and then I can pick apart his answer.

- Sure, that's good.

There you go and you could say, no, I'll pass it back.

- So, Scott, when I think about what resources are needed, what's the right mix to do it affordably and reliably, it depends on where you're at and what's available to start with, right?

Not everybody has the same mix of resources.

Who's got access to natural gas versus what's the wind and solar profile look like?

California wants to be carbon neutral in 2045.

We know that means a whole lot of electrification.

Three-quarters of vehicles electrified, two-thirds to three-quarters of buildings electrified.

We need 100% carbon-free electricity.

California, it is going to be a whole lot of solar and wind that has to be backed by storage as well.

So, we expect 80 gigawatts of solar and wind to be built by 2045 in California, backed by 30 gigawatts of energy storage, plus all the stuff we'll call it behind customers meters, the stuff that customers have, which would be batteries in homes and rooftop solar.

That's a whole lot of what we expect to be built.

The planning has to look very differently as we adapt to the changes in the climate as well as the changes on our grid.

- Right.

- We believe there's still some use for natural gas on the system from a capacity factor.

Today, they might run it 20% capacity factor.

And we expect in the future, it may only make up five to 10% of the support for electricity.

- Not because they couldn't do 80, just because you don't need them, except for fiber.

- They still emit carbon and you want to remove carbon from the system.

So, they essentially are that flexible peaking resource that are in those backup conditions.

[Scott] To follow the load.

- Exactly.

- That's not cheap.

I mean, if I have my Ferrari sitting in my garage and I only use it once a year.

- Let me flip to affordability of all of this.

We really have to think about affordability of the electric bill differently in the future.

- Okay.

- So, we have to recognize first that all this electrification is the lowest-cost way to decarbonize society.

When you look at customers' total energy costs, their electricity, their natural gas, their gasoline, we expect as we work through this, if you get all that electrification, you do it with clean electricity.

- We expect that customer energy bills could be down by about a third that total energy bill by 2045.

The electric bill is going to be bigger, but you're not going to be paying the same in gas or natural gas.

And so that's where we have to reframe how we think about our energy costs.

It's not just about an electric bill.

It's about when you look at your electricity, plus your natural gas and your gasoline.

- Interesting.

Is the electric bill bigger, not just because it's 50% of what I use now instead of 20, but also because the cost per kilowatt hour of electricity is also more?

- Most likely, there's going to be a cost per kilowatt hour that's going to be higher because of the investments that need to happen to, we talked about before, ensure better reliability.

We can't have the reliability we have today.

So, we're going to have to be not just making sure the grid can accommodate the renewables and deliver clean energy.

We have to harden it so it can survive all of the hazards that are out there.

So, how do you harden the grid, again California, against wildfires, in the east, against hurricanes?

That reliability has to be something that's critical.

- Let's come back to now Texas.

Pick him apart if you want.

- That's a good opportunity.

- What are Texas equivalent challenges to make things reliable and affordable?

- Texas has been the focus of renewable industry, so a lot of wind has come to Texas and a lot of solar has come to Texas.

The reason why is not only do we have a good business environment, low taxes, we got low-cost labor, but we also have the most abundant resources for renewables.

Our solar power, we operated roughly about 90% capacity during the day, 90% capacity because if you look outside of day, there's not a cloud in the sky.

So, solar operates fantastic here in this state.

Wind out west is an enormous resource and blows rather consistently.

We can predict wind.

We have a very good capability to forecast wind and solar.

So, we can track them, we can plan for around them.

But we also know that sometimes wind has a bad day.

- Or a week.

- Or week.

And during those times, we have to have those other resources available to us.

And so we're including demand response, new gas generation and batteries.

We can even include geothermal looking at our state.

Geothermal in Texas has, there's still some economic issues with making them a viable resource to compete.

But we have such great opportunity in Texas again, because we've got the oil fields, we've got the technology, we've got the trained staff, we know how to punch a hole in the ground.

Geothermal, I believe, in the future, near future, could become quite a great resource for us.

[Scott] You just need that gradient, heat gradient.

- We have mapped out the entire state.

We've punched holes throughout the entire state.

So, we know where that heat is.

Now, let me tell you where California and New York and New England are in a better situation than us.

Each of those states has the capability to tap into hydro from the northern part of their state.

For New York, there's hydro within the state, but there's also a lot of hydro up in Canada, they can tap into hydro at Quebec, which is roughly about 95% of the energy comes from hydro generation.

- Yep.

- Hydro creates this perfect balancing act with wind and solar.

So, they've got that opportunity.

California has the same advantage.

- Little drought going on in California.

- That's true.

- Hydro, is it renewable when it's a 20-year drought?

- It's pretty tough.

A lot of the hydro plants though, even when you don't have a whole lot of water, when there's a drought, you've got reservoirs, you use it when you need it.

[Scott] You can follow the load.

- And so you can still follow the load.

While you don't produce as much energy throughout the year, it's still a great peaking resource.

- Yeah, yeah, it's a nice battery.

- So, we can't rely upon the snows in Oklahoma to operate our system.

It just doesn't happen.

There's not enough elevation change.

It doesn't snow enough in Oklahoma to operate our system.

So, we need to rely upon some of that thermal generation, some of our demand response, some of those batteries in order to make our fleet balance out those renewables.

- So, I'm hearing it's not this big war between solar and wind and gas and hydro, batteries, maybe nuclear.

We need them.

[Steve] We need both.

- Different components in different places, create a reliable secure grid.

- You've said it perfectly.

We need both.

You've heard folks say it's a matter of we need all of it.

And yes, we need all of it.

- I think the amount of each is what ultimately everyone's going to have to decide.

Economics are going to have to decide.

Objectives around carbon and land and water, et cetera are going to have to decide.

But they all play a role, right?

We've talked about the baseload.

You need some sort of baseload generation and so that has to be there.

Renewables, as we term them renewables, but the solar, the wind, it's relatively low-cost energy that comes onto the system.

And so there's things you have to do to help integrate it like get storage or have demand flexibility, but that's a low-cost energy to get in.

You need some of the peaking resources or the flexible resources to help integrate.

And so natural gas or some biofuels can help play a role.

So, you need that mix.

It's really about how do I optimize, based on what my objectives are.

- Right, right, I need vitamins and minerals and everything in my diet.

- Yep.

- My perspective is most people don't process also the fact you need to collect them.

I don't use the sun directly.

I have to convert it into an electron.

That takes a panel, a turbine for the wind, batteries back them up.

Those we mine and manufacture and dump, those aren't renewable.

- Right.

- So, there's not really a renewable energy.

There's renewable sources of motion or heat or light.

But you still have to have earth resources to do all these things.

Let's talk about batteries for a second storage.

When you talk grid scale, 30,000 megawatts, is that all chemical batteries or are you looking at some other things?

- It's a great question and a lot of it could depend on how the technologies evolve.

We know that pumped hydro works.

It's the biggest battery storage in the nation today.

We've got pumped hydro on our system as well.

- People know when we have extra energy, we pump water up a hill.

- That's right.

- Fill up a reservoir like a dam.

We're using energy to do that.

But it's extra energy and then slow it down when you need it, right?

- That's exactly right.

One of our plants has been in operation since the mid-1980s and so we know that works.

There's a lot of challenges in building new pumped hydro.

Expensive, a lot of environmental issues.

But if you find the right places, it can be a valuable resource.

Compressed air energy storage, needs to be proven out at commercial scale cost.

Maybe that can be part of the solution.

We're filling up some kind of a tank with air.

- Yep.

- Real tight and we release it when we need it and it spins.

- Exactly.

- Turbine and off we go.

- Exactly.

There's all sorts of forms that people look at-- rock queries, pulling rocks up a hill and letting them come down the hill when they're done.

- Flintstones.

- Yeah.

Today, a lot of the growth is with lithium-ion batteries.

This year on our system, we plan and we're expecting still to put 1,000 megawatts of lithium-ion batteries into service to meet the grid needs.

- Okay.

- We've either have already put in the ground or contracted for more than 3,000 megawatts of battery storage to be online over the next couple of years.

- So, 3,000 megawatts, that's three pretty big gas plants that are coming online over a few years.

I'd expect in California, just from the utilities and what we've been ordered to go by and bring online, more than 10,000 megawatts in total by 2026.

That's a lot of battery storage.

[Scott] That's a lot.

That's a lot of lithium.

- It is.

- So, let me ask, how long do those batteries last or are expected?

What's the typical life of a big lithium-ion battery?

- Right, I'd say right now, the guess is that they'll be really good for 10 years.

They could be good for 20 years.

- A lot better than my cell phone.

- Exactly.

Over time, just like your cell phone, they lose the energy that they're able to hold, but they can still deliver that peak.

They're a good resource.

You get to 15, 20 years, how well do they really last?

And then it becomes questions of recycling, reuse, how do you extend them or use them in different ways?

There's other technologies that could work.

There's these things called flow batteries.

You have a big pool of electrolytes and you use different chemicals that in a lot of cases can be inert much safer.

Those have to be proven out at scale and they're not ones that you're ever going to put in a vehicle, but they're a great application for large grid.

And so, there's a whole lot of work around other battery storage.

Whether it's chemical, electrochemical, et cetera, we've got to make sure that those are advancing because I think that there is going to need to be different alternatives just to the lithium-ion batteries to support the grid over time.

[Scott] I agree.

- To drive this point, where our real concern right now is operationally on batteries is the duration of those batteries.

Steve just mentioned a type of battery that may have a longer duration, which is very helpful, a flow battery.

Where we want to see the research in batteries move toward is longer duration.

- Most of the batteries today will give you two to four hours somewhere in that range.

So, the battery is not going to be able to discharge and then recharge in the middle of a multi-day event.

Each of our summer peaks are about six hours in duration, four to six hours.

So, a battery will not be able to take us through a summer peak scenario across a summer peak day.

- Right now, the batteries that are developing in Texas, very similar to the story Steve just told us, we think we'll have about 3,000 megawatts in the next year or so.

Probably rising to five to 10 in about five years.

So, batteries coming on very strongly, but they're doing so for the purpose of balancing the solar ramp down, which is really a two-hour situation, so they can meet that solar ramp down capability and essentially extend those solar production through that ramp down.

- Into the evening.

- Into the evening.

But they're not meeting our need for real dispatchable capacity over a longer period of time.

We've got to move to that.

- I just worry the pace of some of this.

I worry that the climate driver, which is very important, is overshadowing the land, the air, and the water, the mining, the manufacturing and dumping.

Do you guys share that concern at all?

- I share those same level of concerns.

I share those same concerns with wind, for example.

The disposal of wind turbine blades is something that we will have to address.

We'll have to address the issue for solar panels as well.

As those solar panels are retired.

- It's expensive, though.

- It's expensive, but we know today that much of the mining for batteries and in fact, for solar panels as well, much of the mining that supports those industries are done in countries outside of the US.

- It's not just the mining, it's the processing.

China controls 80% of the world's processing of all of these metals.

Is the California public aware of these trade-offs?

Is the Texas public aware of these trade-offs?

- No, it's generally not well understood, because it is complicated.

- Are Texans any smarter than Californians on this?

- Well, yes.

- Sure, of course.

[all laughing] - But Steve said it very well.

We know we have an issue in this country relative to these new resources we're turning to.

We have to address that issue.

That doesn't mean that when you have a problem that we should move away from that technology.

What it means is we need to address the problem.

And that's what our nation is beginning to do.

- Right, let's take a break and we'll come back.

I rechecked the data to be sure and today, over one-half the electricity in California and Texas is generated by natural gas plants for baseload and load following.

As electricity demand rises during the day, over one-quarter of both states' electricity is generated by wind and solar.

But because they produce electricity intermittently, both guests agreed they need backup from other generation.

Today, that's also mostly natural gas.

But in the future, they hope that can be redundant wind and solar and batteries, if and when costs come down and performance increases.

We'll look more at the future of the electric system in Understanding the Electric Grid Part Two.

[dramatic music] ♪ ♪ ♪ ♪ [Announcer] Funding for "Energy Switch" was provided in part by The University of Texas at Austin, leading research in energy and the environment for a better tomorrow.

What starts here changes the world.

And by EarthX, an international nonprofit working towards a more sustainable future.

See more at earthx.org.