Future Forward

Reza (00:01)
Hello, hello, hello everyone. This is Reza on Future Forward. Welcome to our listeners. Shay isn't here with me today, but I have a special guest, Doug Lewin. We go back a long way and I'm excited to have him talk about the future of the grid. But before we jump in, I'm gonna do a quick intro to our listeners and then Doug, I'll let you introduce yourself before we jump in.

So Future Forward is a conversation that Shae and I have been having for many years, where we talk about sustainable cities and thriving communities. And what we do in our episodes is, you know, take some historical perspective and provide some strategic foresight on these topics. But we also invite experts to our show. And today we have Doug Lewin and Doug and I worked

many, many years ago at a company called Clear Result. It was an energy efficiency consulting firm. And we've stayed in touch and you've done some very interesting things since then, Doug. But go ahead and introduce yourself and tell us a little bit about you and the story of how you became an expert on the Texas grid.

Doug Lewin (01:11)
Yeah. So, um, it's kind of a, uh, long and twisted journey, but I'll give you the short version. Cause I know we want to get into all these topics about the grid and all that, uh, uh, grew up in St. Louis, Missouri, came to university, Texas at Austin, like at least half the population in this town looked around and was like, yeah, I could live here. This is great. Never left. Um, and, uh, I actually was a teacher for the first five, six years of my career. I actually think the skills that I learned there have served me very well throughout my.

career. I actually had a master's in education and curriculum studies. So I've actually gone back to teaching a little bit where I taught a class last semester at the LBJ School of Public Affairs, which was ton of fun. So things kind of come full circle.

But when I was teaching, kind of like a lot of young teachers got burnt out on teaching and really wanted to change. And I got an internship at the Texas legislature working actually on education policy and just really fell in love with the policy making process. As weird as that is, I'm probably sick and need help, but I really liked it. just, I, you know, it's really just a fascinating process and you meet a lot of really interesting people get to dive deep into.

variety of different issues. So I did that first session working on education issues. This was 2005. So education issues are front and center because the Supreme Court had said that our school finance system was unconstitutional. So there was just a lot of things going on related to education. Really got to build up a bit of an expertise pretty quick. And one of the things you learn, think, rather than a role like that is like

There the you can with diligence and hard work and networking and meeting the right people and asking good questions. You can actually become an expert pretty quick. And I knew something about education. I know anything about school finance, but I came up the learning curve very fast and I really loved that experience. The I that I got hired by the next job I had at the capital.

Um, that member was like, education's great, but I really need you to learn energy and environment, air quality issues. Great. Happy to do that. Came up to learning curve on that one and was like, this is really interesting. This was 2006. Um, governor period fast track, the building of new coal plants, uh, Al Gore's inconvenient truth had come out in 2005. So there was this rising awareness around climate change. It was just a fascinating time to kind of be in the mix of all of that. The.

Reza (03:30)
Thank

Doug Lewin (03:36)
competition in the ERCOP market. just started a few years before. There was a lot of ferment in the competitive market. Just a great time to do that kind of work. Actually went over to the Senate for my last session there where I was just exclusively working on energy, environment, and climate issues.

That was 2009. I actually was hired in that office in 2008. And that was during an election. People don't remember this. It seems like so long ago where both a Republican and a Democratic candidate had pretty extensive plans to deal with climate change, both Barack Obama and John McCain. So was just an interesting time where there was just a lot of policy making related to energy going on at the Capitol. I loved being in the mix of that. Left there, went to small consulting company focused on clean energy. There we started a nonprofit called Spear. It's still going strong. Great organization.

Organization called South Central Partnership for energy efficiency as a resource or spear I was the founding director was director of that fantastic nonprofit for five years When I left there I went to work for a member company of spear called clear result where I met you Reza We may have met before that but we definitely we got to work together at clear results Loved that experience. That was very different two and a half years Heading up regulatory affairs for a company with several thousand people

Reza (04:39)
Yeah.

Yeah.

Thank you.

Doug Lewin (04:53)
and having to cover regulation and policy in 40 states and provinces, because Clear Result had programs in 40 states and provinces. So that was no longer like a Texas thing. After that, I decided I would start my own consulting company and really focus on Texas. And that's really what I've been doing the last six years. That's sort of morphed and changed. I've worked for different folks. But really sort of central to what I do now is the Texas Energy and Power Newsletter.

Reza (04:58)
Mm.

Doug Lewin (05:21)
the energy capital podcast, which I've been able to grow over the last couple of years. And those have been a lot of fun. So I could say more, but that was probably too long already. So I'll stop there.

Reza (05:30)
That was

great. That was great. So Doug, where I'd like to start is sort of a broader question. You know, we talk about sustainability cities on future forward, and I'd like our listeners to understand, you know, why are transmission grids critical for building a more sustainable energy future?

Doug Lewin (05:52)
Yeah. So look, electricity, it would be hard to overstate. It's hard to find the words, right? I think everybody's aware of this, but it's good to like take a second and double click and go a little deeper into this, right? Pretty much every, not only modern convenience, but just like, just things we take for granted for survivability, the, the, you know, your hospitals, this is what, this is what was so interesting about winter storm Uri, right? Cause in Texas we had a very visceral

understanding of like, yeah, if you don't have electricity, like the quality of life deteriorates very quickly, right? You don't have refrigerated food. You're not able to store medicines. Your hospitals have a tough time functioning. Half of the dialysis centers in the state, right? You don't, there's no dialysis center without electricity, right? You can't, somebody who has kidney failure, before electricity was dead. That was it. You just didn't live more than a couple of weeks. Of course, people

With it with kidney problems can live for years and decades now, right? I mean The the list is too long, but but grids are Absolutely essential for modern life. There's just no other way about it this is you know, one of the things I think is one of the things I love about podcasting right being being a guest on podcast. I mean my own podcast is that too often today

Things are just too reductive in social media, right? It's like you got 280 characters and people are yelling at each other This is a very complicated, you know set of issues and even for like, know with oil and gas and coal people want to sort of villainize people or say, know that the industry is we have to understand that those industries actually created modern life created the the the conveniences the quality of life

healthcare, all of these things that we kind of just in a lot of sense really just kind of take for granted. So transmission grids are fundamental for cities and of course beyond cities, right? Rural communities just anywhere you could possibly go. One of the things I'm most excited about Reza is the expansion of the grid that I think is happening. This is still happening in real time.

Reza (08:12)
Really?

Doug Lewin (08:13)
But

as we record here in early February, grid operator in Texas, ERCOT, and the Public Utility Commission, and the legislature are considering a great big build out of transmission to put in place high voltage lines, 765 kilovolts. We don't have any of that right now. The highest we have is 500. This would be a major expansion. And that allows more of the good things that we have in society. Energy is...

necessary for those things. So yeah, and then I guess the other sort of thing I would say about that too is that we're in this fascinating time where transmission grids, as you asked the question about transmission grids, you think of the big towers, the extra high voltage lines that are connecting our cities and connecting them out to areas where power is produced and all that.

are meeting up with, so you could call that the macro grid, are meeting up with micro grids, right? The very small stuff, solar on rooftops, batteries in garages, whether on the wall of the garage or in the car that's in the garage, right? All of these kinds of technologies, and now those things are starting to meet and to mesh. And sometimes people in the energy space get into arguments about this. Should we?

Reza (09:12)
Mm-hmm.

Doug Lewin (09:35)
Should we have more high transmission lines? Should we do more micro grids, solar and storage, and even gas backup and things like that? And the answer is, of course, both. Like both of these things. And they're very complementary to each other. It's really not an either or. It's a both and. And I'm just really excited about this next phase of electricity and of grids. The International Energy Agency, in their latest world energy outlook just out a couple months ago,

you know, said we are entering what they called the age of electricity, which is fascinating because like you would think, well, haven't we been there? Right. It's been going on a hundred years. The the the National Association of Engineers named the grid the greatest invention of the 20th century, which is phenomenal when you think about it. Right. Like computers and like all the things that were created in the 20th century. They named the grid the greatest invention. But I understand what IEA says when they mean that because we haven't seen anything yet.

Reza (10:10)
Yeah.

Really?

Yeah.

Doug Lewin (10:31)
Electricity is going to unlock so much more for humanity. I'm really excited for this next phase.

Reza (10:37)
Yeah,

that's fascinating. I love that answer, especially because Doug, it's like the transmission grid is like this friend that you don't think about that often, pretty quiet, just sort of does their thing, hard work. Or maybe a team member, at least in soccer, maybe a defensive midfielder. They don't seem to do much, but man, they're a critical part of the game. So you and I are big soccer fans, so we love talking about soccer on our show.

Doug Lewin (11:06)
If that defensive

midfielder gets hurt and you put the sub in, who's not as good, you notice real fast, right? It's the same with the grid. may not notice it, but when it's not there, you notice. Yeah.

Reza (11:09)
Yes.

Very powerful. Yes. Yes. Yes. And I love

how you describe that, you know, that snowpocalypse, the, you know, that storm that we had and where we lost power and life just seemed so hard. We can't imagine how difficult life is without this incredible piece of infrastructure that we've built. And I love how you described how the IEA

Doug Lewin (11:29)
Yes.

Reza (11:39)
talked about it being the greatest invention of the 20th century. And it's fascinating to think that there's so much more to come because we are electrifying more and more. And that electrification brings up the quality of life and the standard of living, not just for us, which we're already far ahead, but in other parts of the world as well. So that's a really good

overview and grounds us in why this is so important. Now I want to segue into something that you wrote about in your newsletter because this has kind of become topical and this is touching on that this age of electricity that we live in. And I'm going to quote from your newsletter. It says, a new ERCOT report, ERCOT's the regulator for the grid here in Texas, says that AI data centers

electrified oil and gas operations and other load growth could require three times the current amount of power. Now imagine this is not just in Texas, this is probably in other states as well. And so the question that I have for you, which you asked in your newsletter, which is how do we meet this moment?

Doug Lewin (12:56)
Great question. And when I obviously think about a lot, and when you say it applies to other places, of course it does. Data centers can be cited anywhere. But if you talk to folks in that world, which I often do, Texas is one of the only places they think that they can scale quickly. And they need to scale quickly, yes. And there's a couple of reasons for that. One, a lot of the country has what are just sort of like monopoly utilities in order to...

Reza (12:57)
Ha

Really? Yeah.

Doug Lewin (13:24)
connected. It's all it's all mother may I like it's all completely controlled by one entity. The southeast largely has that kind of system. A lot of other places and in PJM and MISO the Midwest the Northeast it's just much much harder to build things in the West for that matter as well. Texas has a competitive electricity market with a ton of market dynamism in it. It's a much easier place to build which is a double edged sword right. I mean like you can end up

with, you know, we have, you know, oil and gas drilling in the Dallas Fort Worth Metroplex, sometimes very, very close to childcare centers and schools because the state doesn't regulate very well. It also means that, you know, if you want to bring solar or storage to the grid in, a lot of most parts of the country, that'll take four to five years. In Texas, 12 to 18 months.

Reza (14:19)
Wow.

Doug Lewin (14:20)
So, you know, it's definitely a double-edged sword. It's complicated. Something we could certainly...

You know talk about more but if there is this and I think or caught, know Sometimes when you're looking out they're looking out when they did that study that showed we would need Between in a high load growth scenario. We would need between 425,000 megawatts and 500,000 megawatts. have about 170,000 megawatts of capacity. That's all of it That's wind solar gas coal nuclear about 170,000 now they said we might need up to about 500,000 and I think that

that

study was only looking out to like 2039. Yeah, it was a it was a 15 year lookout. That's just so so when when you know, the IEA says age of electrification, like this is what they mean. Like we are we're looking at growth rates that would rival the growth rates of the post World War Two era. Right. So, you know, what do we need to see us? What do we need to do to meet this moment? There's I think there's a lot of things we have to do. One, we're going to need a better

Reza (15:14)
Wow.

Doug Lewin (15:25)
transmission system to we're going to lots of renewable energy. There are different reasons why I think we need more renewable energy. And for, you know, anybody listening, who, you know, I think everybody cares about the environment on some level, right? I had nobody wants to breathe dirty air. But if that's a lower priority for you, just the affordability of renewable energy.

should be a reason to support it. is, again, according to the International Energy Agency, in 2022, they declared solar power to be the cheapest form of power ever invented. It is the cheapest form of power. It is highly reliable, predictable. You know when the sun's gonna come up. You know when it's gonna go down. We're gonna need a lot more renewable energy. We're gonna need to figure out how to have

what I would call clean firm. This is not, come up with that. should give credit. Jesse Jenkins out of Princeton. Look at all his stuff. He's brilliant. But I think he was maybe the one that coined this term. Maybe somebody else did. But clean firm, those would be things like nuclear, like geothermal, like gas with carbon capture. There's a lot of different ways that you can generate clean firm. Solar storage paired together.

We've seen internationally an announcement in the Middle East actually of a solar and storage system co-located with enough storage to go all the way through the night. Batteries continue to get cheaper. Batteries will continue to get cheaper mostly because they're driven by consumer electronics, right? Like the, you remember how bad the battery quality was in your phone five or six years ago, right? It's much better now and it's going to continue to get better because everybody around the world will

Reza (17:05)
Yes.

Yes. Yes.

Doug Lewin (17:16)
demand that. So, clean firm is another one. And I'll just, I'll, I'll end with one more thing we're going to have to do to kind of meet that moment to, to allow for this growth of AI, which I think really that's really much of the demand is being driven by AI. It's not all AI in the article. And you quoted it. I referred to industrial electrification, the electrification of oil and gas electrification again, according to the IAs and even bigger source of

Reza (17:40)
Mm.

Doug Lewin (17:44)
demand growth in AI, but AI will also be a very large demand growth. So what we'll be able to do is have more manufacturing at lower costs, AI to hopefully if we use it for good, humanity's got a big question in front of it as to how we use AI. But my hope is we use it to solve things like cancer and Parkinson's disease and Alzheimer's and to actually create the ability

Reza (17:58)
Yeah. Yeah.

Doug Lewin (18:10)
I think AI will actually help with grid operations too. AI has so many different applications, but I think one of those, and this is where the sort of fourth one I'd put on this list, is having a more dynamic demand side of the grid. So if you have, the easiest example, there are dozens of examples, but the easiest example I think is an electric vehicle, because you don't really care when that vehicle charges.

Reza (18:15)
Yes.

Mm-hmm.

Mm-hmm.

Doug Lewin (18:37)
You

just want to charge to the level you need at the time you're ready to drive. So if you plug that in and you get a quick prompt that's like, when are you going to drive next? it's tomorrow morning. Now AI finds the time, not only when the power is the cleanest, but when it's the cheapest. And those two things now, the beauty is those are the same, right? That wind energy generated overnight, that solar power generated at the middle of the day, those two things are the same. And so you can see where we might start doing that with

Reza (18:41)
Yeah.

Interesting.

Doug Lewin (19:05)
and electric hot water heaters and air, even air conditioning, pre-cooling when we have, or preheating when we have plenty of power. So those, those would be, I think the four things transmission, more renewable energy, like wind and solar, more, clean firm, kind of what you'd call base load. And then a much more active demand side, which, which includes energy efficiency, wasting less energy.

Reza (19:10)
Really.

Yeah.

Doug Lewin (19:32)
using more energy when we have plenty of it, that's a form of energy efficiency and using less when we're in times of scarcity and prices are high.

Reza (19:40)
Yeah, that's a great answer. it brought up another question for me that she and I have talked about, which is this idea of more decentralized energy sources. I know you talked about sort of more renewables. You did touch on sort of demand side. But what are your thoughts on microgeneration and nanogrid? Are those viable? Can they make cities more resilient, the grid more resilient?

you know, us as citizens, you know, live in a better way.

Doug Lewin (20:15)
Yes, that's the short answer. Obviously, I have a longer answer. I am who I am. So I like to talk. So yes, but the short answer is yes, there is no doubt that micro grids can improve quality of life, can make the grid, the overall grid, the transmission grid, much more reliable by adding supply. But also you get into this notion of resilience, right? What happens when a hurricane hits the Gulf Coast?

Reza (20:16)
That's really it.

Doug Lewin (20:44)
And maybe you have plenty of supply, right? I this happened in July, right? Houston was hit with a, with a major tragedy when hundreds of thousands of Houstonians did not have power for a full week. That was not a problem of supply and demand. There was plenty of supply. You just couldn't get it where it needed to be because the poles and wires were down. Right? So it's very interesting. Actually, I write about this a lot at my newsletter and talk about it a lot at the, at the podcast. The.

Reza (20:54)
Yeah. Yeah.

No.

Doug Lewin (21:11)
The legislature actually did a really interesting thing last session in the 2023 session. They passed something called the Texas energy fund. Most of that, and what gets most of the headlines and most of the press is most of the, and most of the money is going to large centralized central station gas plants. This is the old way of doing things. And I'm not even saying it's necessarily a bad thing. Most of them are going to be peakers. They're going to run it very, very few hours out of the year. Peaker plant just means right when

You have peak demand and you have scarcity. turn them on. They're off most of the rest of the time. but there was actually what I think is a much more important part of that bill, which was $1.8 billion. It has not yet been appropriated. It's in the bill. It's it passed as law, but you can't appropriate money through a bill. can't make law through the budget. You can't appropriate the money through a bill. So the bill says the money should be there, but it hasn't been appropriated yet.

But it would be $1.8 billion for what they call backup power packages. These would basically be some people will say they're not exactly micro grids. There's, different terminology around this, but basically you're talking about a combination of solar storage and gas on site at critical facilities, hospitals, nursing homes, water treatment facilities, police stations, fire stations. I think we ought to have a broader conversation about this too.

What about the individuals living in our communities who rely on medical equipment to stay alive? I think those folks should also have 100 % reliable backup on site at their homes. So once we start to roll those out, assuming the legislature appropriates the money, and I think they're gonna do this, they passed the bill, I think there's an awareness, particularly after Hurricane Barrel, something like.

Reza (22:41)
Mm-hmm. Mm-hmm. Mm-hmm.

Doug Lewin (23:05)
40, 50 legislators in the legislature in Houston, including Lieutenant Governor Dan Patrick and Senator Betancourt, Senator Alvarado, lot of leaders in the legislature live there and experienced these outages during barrel. And so I think there is this growing awareness that, these distributed energy resources really have a lot of value. And why would we at a point in time when those technologies have come so far down the cost curve

Reza (23:20)
Yeah.

Mm-hmm.

Doug Lewin (23:35)
that

they actually make a ton of sense. There are problems, there's market failures that keep them from getting to people, and we can talk about those if you like, but there is no doubt the technology is here, they are affordable, you get into this situation where they're high capital costs, so how do you make that more affordable for folks to sort of get over that hump and adopt those technologies? And what they do, Reza, is they...

You know, I like to say like when you're, when you're looking at the grid, kind of have these four problems you need to address and people put these in different priorities depending on who they are and how they grew up. But I don't judge anybody for which one you put. They're all really important. And whichever one you put at the top of the stack is fine. Reliability, which again is like having enough supply to meet demand resiliency, which I define as like when you take a punch from a hurricane or a wildfire or heat wave or drought or whatever, you're to be able to keep that power running.

Affordability right that's absolutely key not only because we don't want people we don't want I don't think anybody wants to live in a society where a lot of our neighbors are having their power shut off because they can't pay for it we have a lot of that in Texas we have a lot of folks that are struggling to pay their bills and it's a drag on the economy if you have high power prices right we've seen a Manufacturing renaissance in this country, and I think we want to keep that going we don't want to send all we know all of our ability to make stuff

over to China, like we need to make stuff here in the United States. So affordability is really important for a number of reasons. And then sustainability, right? Do you have a system that is creating a lot of pollution, you know, like coal plants are creating all this coal ash that what are you actually going to do with that? You need a sustainable system too, that has that has less emissions. And when you look at these distributed energy resources, you look at energy efficiency, you look at solar and storage located at homes and buildings, you

Reza (25:01)
Yes.

Doug Lewin (25:27)
You're actually checking every single one of those boxes, right? You're, you're making it more likely that we're not going to have a supply demand imbalance in the wintertime. Cause you're, if you're doing microgrids, you're adding resources. If you're doing energy efficiency, you're reducing that demand. Both of those are positive. You're putting the power source where it's needed. So if the bulk grid is down for whatever reason, it could be a cyber attack. You know, that's another reason why DERs are great. It could be a lack of.

Reza (25:30)
Mmm, yeah.

Doug Lewin (25:54)
Supply to meet demand could be a hurricane could be a wildfire We have to shut the grid down in advance of wildfire conditions to keep the wildfires from happening Those are gonna solve that affordability when you're generating power closer to where it's used You're actually bringing prices down and they're sustainable because there's no emissions associated with that. So I Think that the technology is here. I think this is going to be a mega trend over the next 10 20 years

I think we're at the other, I'll say one more thing on this. other thing I'm really excited about for micro grids is the ability to electrify the parts of the world that still aren't a lot of times in these conversations, we forget that with 8 billion people on this planet, 1 billion of them do not have access to electricity. One out of eight people alive in the year of our Lord, 2025 don't have access to electricity. That is unconscionable.

Reza (26:39)
Wow.

Yeah.

is.

Doug Lewin (26:48)
And a lot of times you'll hear folks, I won't name names, but there's some pretty prominent folks out there that'll say, this is why we have to continue using fossil fuels because it's not fair to the, to the parts of the world that don't have electricity to use less fossil fuels because they haven't had access to them yet. They're not going to get you. are not going to string high voltage transmission lines across the continent of Africa and build big central station power plants to serve.

Reza (27:04)
Yeah.

Doug Lewin (27:16)
All of these villages spread out across the, you know, this massive continent, right? But what you are starting to see, and again, I think is a mega trend, we'll see a lot more of is think of how modular solar and storage and led lights are, right? You can start with one panel and one battery and one led light, and then you can add to it. Here's another panel. Here's another battery. And, and we are starting to see this. It's slow.

Reza (27:22)
Thank

Yeah. Yeah. Yes. I love her. Yes.

Doug Lewin (27:43)
But this is why the International Energy Agency believes that if we reach net zero by 2050, nobody will be without access to electricity. It's because those distributed technologies, they're literally that's in the name, they're distributed. It's easier to distribute them than it would be to string a high voltage transmission line and connect it to a remote African village. So I am super bullish on microgrids and distributed energy resources.

Reza (27:59)
Yeah. Yeah.

Yeah,

that's fascinating. really like how, you know, it sounds like at least in Texas, it's a matter of political will to push this forward. But our, you know, our political leaders have experienced what it was like not to have electricity. And so there's probably more enthusiasm for trying to push this forward. And their benefits not just, you know, for resilience, but just it's better for the grid overall.

And then more importantly, you're talking about how this trend, this set of technologies can drive electrification in parts of the world where it's difficult to drive it, to bring that quality of life to places that don't have it yet. And I especially love how you describe the modularity of these decentralized resources like the solar power.

Doug Lewin (28:59)
Exactly.

Reza (29:08)
battery and LED light, you can do one of each and then just keep adding to it as opposed to having to spend all this money on a huge power plan, string these transmission lines, which are probably overly expensive with too much investment for the capacity in those areas. So just a fantastic answer. I love that. I learned so much through it. I Shane, I've talked about it, but this is a really good way of bringing to light why this

is not just a good thing, but a possible thing as well.

Doug Lewin (29:43)
Yeah, yeah, it is. It's very possible. It'd be hard to overstate how much of a difference solar.

has already made and we're just at the very beginning, like solar really is one of those things that it's a technology that really just fundamentally changes so much, opens up so much possibility. And by the way, that age of electrification thing IEA was talking about, this is part of what they mean too. IEA is very focused on, it is not acceptable to have a billion people in the world that don't have

access to electricity. it's not just me saying this, like folks at the IEA are looking at the cost declines happening from solar and going, wow, this really opens up literally a world of possibilities.

Reza (30:22)
Yes.

Yeah, yeah, it's amazing. know, Shay wanted me ask this question, which is, you know, let's touch on a couple companies that are trying to do things, you know, innovatively and base energy and octopus energy, maybe give you your thoughts on, you know, what's working, like what's happening out there, you know, at the forefront of some of these companies trying to change the way, you know, we tackle some of these issues.

Doug Lewin (30:53)
Yeah, so it's funny you asked that. Zach Dell, who is the founder and CEO of Base Power, I did a podcast with him. I don't think I've told Zach this. Zach, I'll have to send you this podcast, but it is it is that is the most listened to podcast I've done on the energy capital podcast. Obviously, people are very, very interested in base power company. It's a very innovative company. I think what they're doing

Reza (31:13)
really?

Doug Lewin (31:23)
is really interesting. Basically what they're doing is they are making it affordable. So like I was just talking about earlier, like DERs are great, but there is this barrier of it like costs a lot of money, right? A solar installation could be 20, $25,000. A power wall costs about $10,000 give or take. And a power wall is 13 kilowatt hours, which is a lot, but like, you know,

My electric vehicle has 91 kilowatt hours in it. So 13 isn't a ton for a $10,000 battery. So how do you get over that hump? And what they've come up with is they became a retail electric provider. So Texas has this, this is what I was talking about also about the dynamism in the market here and the ability for Texas to do things other places can't do because...

Basically, if you want to compete in Texas, if you want to provide power to people, the barrier to entry is pretty low to become a retail electric provider. And so they they've they're a retail electric provider and they're saying, hey, if you sign up with us, you will pay and you'll have to go to their website or ask them or whatever for the specifics. But going on memory on what what Zach told me and what I what I've kind of heard in the intervening months since something around like three thousand dollars is what you need to pay out of pocket for a battery that would otherwise cost

10 to 15,000. They're going to pay the rest and in exchange for that, you're going to be their customer and they're going to use that battery to actually sell power into the market. so, yeah, so that's where like they're buying down the cost. But if the grid goes down, right, there's they don't have the ability to sell that power into the market anymore. So the battery is yours at your house. So like that's what you get with that three thousand dollars is

Reza (32:59)
interesting.

Yeah. Yeah. Yeah.

Doug Lewin (33:17)
You don't have to futz around with the, you know, gas or a diesel generator and trying to maintain it. Is it really going to work? And how do I hook it up? Like, no, they're going to send somebody, you know, licensed electrician is going to come and set that up. You're going to, you're going to have a fully functional battery at, you know, 70 to 80 % less than if you were just going to pay it out of pocket. Their power prices are again, you got to go look at like what they're publishing. So take everything I say, all, all the legal disclaimers go.

Go check out whatever's on their site. This is just a guy talking, but their power prices are basically the same or maybe even a smidge lower than what you would get if you just went and shopped on the state's Power to Choose website. So yeah, and Octopus similarly, just very innovative company, signing people up, paying them for what's called demand response. So if you can actually use less power,

Reza (33:45)
Thank

interesting.

Doug Lewin (34:12)
during they do something that I think is really funny where like when it's really hot outside if it's going to be a day where it looks like power prices are going to go really high they'll say hey all our customers come to this bar we'll buy everybody a drink set your thermostat up to 80 or whatever before you leave and then they will not only buy them a drink but they actually pay them for that reduction so if they set their thermostat higher of course they're the retail electric provider they're measuring how much you use every retailer every

power company does that because that's how you bill you have to know how much they're using. They can see oh these folks use less they will sometimes give them a gift card a bill credit like they're doing innovative things to get people to use less and just like to help people understand why a company would do that. In Texas the maximum power price when when we reach the max in the market which rarely happens but does happen sometimes is $5,000 a megawatt hour.

Reza (34:52)
Thank you.

Doug Lewin (35:11)
So that would be, you you normally pay like 10, 12, 15 cents, whatever, for a kilowatt hour. That would be five bucks per kilowatt hour. So if you can reduce your usage, that retail electric provider is benefiting a lot from that. Right. And so what an octopus and, and, and, base, even Tesla has a retail electric provider with those companies are doing is trying to make money off of that and share some of that benefit.

Reza (35:18)
you.

Yes.

Hmm.

Doug Lewin (35:40)
with the customer. And this is the beauty

of a competitive market. You don't like what they're offering you. You don't like octopus's offer. You don't like base's offer. There's other companies and there's going to be more, right? There's a lot of innovation happening in the market. So, you know, not to fixate too much on any one of those companies, there's other really good ones. David energy is a great one. We're starting to see the really big ones. The incumbent retail electric providers, Reliant, TXU, the big names that

You know, they're big enough that their names are on sports stadiums and stuff like that, right? They're starting to innovate. So Reliant actually announced a big project with Google Nest and what used to be called Home Connect now is called Renew Home. They're going to try to get to a gigawatt scale, a thousand megawatts of energy reductions with their customers. That's as much as the largest power plant we have in the state. Our largest nuclear plants are a thousand megawatts each. I mean, this is

Reza (36:10)
Yeah.

Doug Lewin (36:35)
huge scale. And so we're really starting to see a lot of innovation there. And this is great for the grid. It's great for grid reliability, because you want to be able to reduce demand and those times when there's scarcity. And this this next phase, I think we're just getting into now. It's great for customers to because it allows those customers to be paid for their reductions, right? No more. We just get a conservation alert from ERCOT and pretty please would you

Reza (37:00)
Yeah.

Doug Lewin (37:00)
Be

a good citizen. We're not going to give you anything for it, but would you please just like sweat in your house a little bit? And now we're moving into this phase where, and I'll just end with this because I do think a lot of people, when they think of those kinds of things, they think of sweating in their houses. They think of being uncomfortable. This is again, is where I'm so excited about the potential of AI with smart thermostats, with solar power, right? That basically at noon at two, even to three or

Reza (37:06)
Yeah.

Doug Lewin (37:29)
Four o'clock, we used to really worry about was the grid gonna hold up at four o'clock. We have so much solar, that's not a problem anymore. The new era of demand response is going to be, but I'll just ask you a question. Reza, how in the heat of the summer, how high would you allow the temperature? No judgment here. I like my house cold, so how high would you let the temperature go in your home?

Reza (37:49)
No.

In the summer 78, I think.

Doug Lewin (37:59)
78 okay

great so so if you're so your energy company would say to you Reza you want it to be 78 great Would you allow us to pay you to make your house? 73 in the middle of the day, but we'll never let it get above 78 would you would you take would you take money for that?

Reza (38:17)
Hell yeah.

You're cooling me down early so that it's not paying me for it. Hell yeah. Yeah. Yes. Yes.

Doug Lewin (38:21)
and paying you for it. Would you accept a payment to be colder inside your house? I

don't think there's many Texans that would say no to that. Right? And so, but if you're using AI, you're optimizing, right, to like pre-cool that home and then let that temperature drift up to 78, but never get beyond it as the sun is going down. Right? So in the middle of day, it's 105 degrees, it's three o'clock. We don't really have any problems on our grid anymore.

Reza (38:31)
Ha ha ha ha.

Doug Lewin (38:50)
There's so much solar power. have 30,000 megawatts of solar in ERCOT right now. I'm not talking about a five-year projection. Today, we have 30,000 megawatts. The peak load for the entire Dallas-Fort Worth area is less than that. So we have a Dallas-Fort Worth area, which is, by the way, like for those that maybe don't know, that's like the size of Maryland or Colorado as far as the population and the energy use.

Reza (38:54)
Yeah.

Doug Lewin (39:18)
We have that much solar already. So yeah, pre-cool that home, pay the customer for it. Don't let it get above their set point. That's where I think we're headed. And I think that these retail electric providers are going to have to, to compete against each other to make the best offer to the customer. Right? I mean, this, this could be a lot of fun for consumers over the next 10 years.

Reza (39:25)
Yeah.

Interesting.

Yeah.

Yeah, this is really interesting.

mean, because you're talking about sort of the intersection of, you know, being able to use these newer technologies, thinking about using AI to make smarter choices, smarter predictive choices, as well as like all the things that we've learned from behavioral economics to see what would motivate customers to do X, Y or Z, because we've seen a lot of that. You know, so it's fascinating that we now have the opportunity to

to do this in a more targeted, smarter ways where we did in the future. We had these blunt instruments in the future, but we now have these better things. This has all been fantastic, Doug. I want to give you a chance to kind of wrap up, like, what would you like to share with our audience, sort of thinking about the future of the grid? And then also, you know, after you do that, just share.

with our audience, how they can find you, how they can support you, anything that, know, any asks that you have for them, anything that they can help you with.

Doug Lewin (40:47)
Yeah, I appreciate that. mean, I think we've covered so much of it. You know, there's a few things we didn't talk about that I'll just sort of throw out there and again.

There there's, this is sort of a combined answer because they can find more information on all this stuff at my newsletter. I've recorded podcasts on each of these topics, but heat pumps are another technology I'm super excited about fits exactly with what we were just talking about because most ACs are on or off, right? But a heat pump will have a, an inverter in it and variable speeds. So you can actually get an, signal again with AI involved, like it can go, you know, infinite

number of speeds, right? So you can bring it down to 20 % of its capacity, ramp it up to 80%, everything in between. Whereas the old technology is like two speeds on off zero, 100. That's it. Heat pumps, I think are a fantastic technology that is

Reza (41:36)
Yeah.

Doug Lewin (41:42)
vastly underappreciated. I'm very very excited about geothermal power. Geothermal for heating and cooling is interesting too. I'm excited about that as well, but much more excited about geothermal for power. One of the things that I love about it Reza is that it is like you hear these stories all the time of like, you know people are too simplistic about you know how our oil and gas workers gonna you know deal with an energy transition. Geothermal is using the technology

Reza (42:07)
you

Doug Lewin (42:12)
that was developed by fracking, right? It's like you're drilling down, you're going horizontal, but instead of pulling oil and gas out of the ground, you're getting heat out of the ground that creates completely emission-free, baseload clean firm power. whether or not, who knows what's gonna happen with oil and gas, whether it's gonna continue to go along at 100 million barrels a day or reduce or go up, who knows? But what we do know,

Reza (42:13)
Yes. Yes.

Doug Lewin (42:42)
is that oil and gas employment is going down over time.

Reza (42:46)
It is.

Doug Lewin (42:47)
Texas

in 2014 had 300,000 workers in oil and gas. Today we have 200,000 workers in oil and gas. 10 years later, and more efficiency, automation as AI becomes a bigger thing, those numbers are going to go down more. I think geothermal, nuclear, these are industries. I don't want to go too much into it, but there's a lot of oil and gas folks that are working on this new wave of nuclear, small modular reactors, obviously like geothermal I was just talking about. So those are just a few things we get into a lot all throughout.

Reza (42:52)
Yeah, more efficiency in that way. Yeah.

Doug Lewin (43:17)
And then, yes, I would love for folks to, if they're not already, to become a subscriber.

to Texas energy and power newsletter. Most of the, well, not most of stuff, maybe half the stuff I do is free. So if you, if you want to sign up for free, you'll get most of it. I do have some stuff for paid subscribers. I do these, what I call grid roundups where I kind of like what, what's new and interesting that's happening at ERCOT. do chats for paid subscribers. do special presentations. Some of the podcasts I do are paid only. Most of them are free. The podcast called energy capital podcast. can find that on apple.com.

Spotify or Substack wherever you like to listen. And yeah, I'm on Twitter, Blue Sky, LinkedIn, all that stuff. Find me, connect, let me know what you're up to. I love to hear from people in the energy space. I read a lot and that's a great way to learn, but I think an even better way to learn is networking and social connections. So encourage people to.

Reza (44:03)
Yeah.

Doug Lewin (44:19)
to reach out may take me a while to get back to you. Cause you know, like everybody else in the modern age, I'm busy, but, but I do love hearing from people and connecting, but yeah, the, the most, think the best way for people to connect is, is to become a subscriber and, hopefully read the stuff I'm putting out and listen to the podcast and Reza. is, this has been fun. It's great to great, great to reconnect with you. hadn't seen you in a minute, so it's great to see you again and look forward to getting a beer with you or something sometime soon.

Reza (44:44)
Yeah, this has been so good. I just love all the expertise that you brought to it, but not just the expertise, but a broad understanding of the trends that are going on, not just about the grid, but the other things that are happening in our society. I just love that broader perspective. We'll include the link to your newsletter and podcast in our show notes. And then I will close by saying what we always, what Shay and I always say is,

please rate and review our podcasts. It helps other listeners find us. Please like and subscribe. Be one of, are now, we now have 6,300 subscribers on our YouTube channel, so become one of those. And, you know, if you could share it with someone in your life that would enjoy this, especially on this particular topic, and if you have feedback for us, we always ask, please let us know. Hello at

Doug Lewin (45:26)
Amazing.

Reza (45:44)
futureforward.fm. We always have mail bags where we talk about what our listeners are sharing with us. But with that Doug, so good talking to you. Thank you so much and thank you everyone for listening. Bye.