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The Energy Dispatch, Part One ⚡
🔌 "Homegrown energy could be the greatest peace plan the world has ever known"
Climate Solutions // I S S U E # 8 1 // E N E R G Y
Hello dear readers,
I’ve been busy digesting and decompressing following a demanding South by Southwest conference schedule mid-March.
Before departing for Austin, Texas, I asked you all to weigh in on which conference tracks you were most eager to hear me report back on, and you delivered. The Energy Track was a clear favorite, with 39 percent of the total votes, and, at 29 percent of votes, the Design Track came in second.
Throughout the conference, I let these two tracks—Energy and Design—guide me as I navigated the overwhelming onslaught of panels and events. So thank you, readers, for putting up some much-appreciated guardrails for my first SXSW.
In attempting to synthesize the sheer volume of ideas presented, it wasn’t long before I realized I would need to break this coverage into multiple parts. With that, welcome to The Energy Dispatch, Part One. ⚡
Happenings: Speaking of energy, when I am not working on this newsletter, you can sometimes find me making WhatsApp calls to sources internationally or digging through financial filings on behalf of Rolling Stone, oftentimes for their climate coverage. This was the case in February, where I contributed research to Jeff Goodell’s in-depth exposé published this week of ReconAfrica, a Canadian oil and gas company seeking to make a profit by exploiting one of the world’s most sensitive ecological systems of the Okavango Delta in Africa.
Housekeeping: Want to make my week even better? If just 12 readers converted to paying subscribers, Hothouse would hit its readership revenue goals for Quarter 1, 2023! You could also help make my week by forwarding this issue to a friend.
With that, let’s get to it.
The Energy Dispatch, Part One ⚡
As an event, South by Southwest is at the intersection of design, tech, music, and media. Twitter debuted at SXSW in 2007. Part conference, part music-festival, part-film marathon, the portion of SXSW that interested me most was the convergence of design and emerging technology.
I headed to Austin in an attempt to understand what the cultural and tech mainstay of SXSW deemed the most cutting edge in climate solutions. I was open to who I might meet and the story ideas I might come across. The conference sessions illuminated surprising gaps in my own knowledge, and left me with more ideas than I know what to do with.
As things would have it, 2023 was also the debut of SXSW’s Energy Track.
I was most struck by the way the momentum following passage of last September’s Inflation Reduction Act was palpable in almost every Energy Track session I attended. As some SXSW panelists would have it, the IRA’s incentive-driven approach has unlocked the business case for clean tech ventures dead in the water just six months ago. Other themes also repeatedly surfaced throughout the week: from the electric future bringing manufacturing—and jobs—home, to the U.S. finally tapping into the latent potential of its own unrivaled history of innovation to pursue bold climate solutions.
In this and Energy Dispatches to follow, I will attempt to distill these themes and other principles I saw underpinning our emerging electric future at SXSW. I expect these principles to be key to watch in the months and years to come as our electric future takes hold.
Our electric future 🔋
There is no doubt about it: the future is electric. Today, around 40 percent of U.S. grid capacity draws from nuclear and renewable energy sources.
The trick is, the future grid will not only need to be supplied by 100% clean energy, but will have to grow in capacity to absorb all of the appliances and applications coming online that have never before been electric. Think: heat pumps replacing all the oil boilers in basements around the country and electric stoves replacing their gas counterparts.
“It’s not just 100 percent clean electricity that we want to get to, it’s actually 150 percent,” says Leah Stokes, associate professor of political science at University of California, Santa Barbara, and author of Short Circuiting Policy. “Why? Because as we electrify our buildings and our transportation system, parts of heavy industry, we’re going to need more electricity, aren’t we? So we don’t just have to rebuild the electricity system at the size that it is today. We actually need to increase it, maybe by 50 percent or even more.”
Whatever the grid’s ultimate size, the Biden Administration has set an ambitious target: it must be 100% clean electricity by 2035. We’ve a long way to go. To hit this and other clean energy targets, the Department of Energy has launched a handful of “Energy Earthshot” initiatives to radically reduce the cost and increase efficiency of emerging energy alternatives and solutions, from battery storage to geothermal energy, and hydrogen energy to offshore wind.
There’s a lot at stake. The energy transition will create millions of jobs in the U.S. alone, while Secretary of Energy Jennifer Granholm bills the global economic opportunity at $23 trillion. There’s also a national security angle to electrifying everything.
“Homegrown energy, clean energy, could be the greatest peace plan the world has ever known,” says Secretary Granholm.
Bringing home the (energy) supply chain 🏭⛓️
Throughout the Energy Track, I found the most compelling speakers incorporated humor. Beyond scripted punchlines, Leah Stokes and Secretary Granholm seemed to banter with audience members during the Q&A portion of their talks with ease.
In her headlining session, I also found myself admiring Secretary Granholm’s blatant leaning into patriotism: returning manufacturing jobs to the United States to help electrify everything. Bringing home the energy supply chain, Granholm made clear, is a Biden Administration priority. This was poignant especially coming from Secretary Granholm, the former Governor of Michigan—a state long since hollowed out by the offshoring of the automotive industry.
Most of today’s battery components are produced and assembled in China, making the U.S. dependent on international trade to secure the basic supplies necessary for our proposed electric future.
To bring the supply chain home, the IRA heavily incentivizes manufacturers of electric vehicles battery supplies to re-shore to the U.S. To date, Granholm says over 100 manufacturers have already committed to returning or expanding their operations.
The federal support of domestic electric infrastructure also includes a consumer tax credit of up to $7,500 towards American-made EVs. Today, this federal tax credit can be put toward the 2023 Chevy Bolt, which begins retail at $26,500, bringing EVs into the realm of affordable for many for the first time.
The emphasis on domestic self-sufficiency also extends to scaling up and deploying wind and solar energy infrastructure. The U.S. is 15 years behind Europe when it comes to offshore wind development, which takes nearly a decade to deploy. In order to play catch up, the administration is incentivizing the development up of the domestic workforce required to man this nascent industry by spurring apprenticeship programs and coordinating with the Department of Education to build out a renewable energy workforce curriculum.
Oil and gas companies aren’t going anywhere 🌀
Whether we like it or not, oil and gas companies will have a massive role to play in the energy transition. They simply have much of the relevant expertise, not to mention resources, required to pursue renewable energy infrastructure and distribution at scale.
In fact, when it comes to scaling up offshore wind technology—the most mature offshore renewable energy technology available—the floating platforms that support offshore turbines is actually technology that comes from the oil and gas sector.
“As a climate activist, I think it’s a little ironic that the oil and gas industry helps drive the offshore wind sector, but that’s the truth of the matter,” says Jason Busch, Executive Director of the Pacific Ocean Energy Trust, an organization dedicated to deploying ocean-based climate solutions. “Their experience, knowledge, and balance sheets make a big difference and explains why many of the companies building offshore wind are oil and gas companies.”
And then there’s geothermal energy. Or, as Secretary Granholm liked to call it, “the heat beneath your feet.” Geothermal energy works by drawing on the heat below the Earth’s surface. Harness that energy, located about one to two miles underground, by adding water to make steam. The steam in turn powers a turbine, generating electricity.
But accessing this heat below the Earth’s surface requires drilling. As Secretary Granholm puts it, “Who’s got the skill set and the knowledge of how to deal with extracting energy from below the surface? It’s the oil and gas industry.”
Stay tuned for the next installment of The Energy Dispatch for more insights into our electric future.