Sustainable energy is a wicked problem. As we solve one aspect of the challenge, others arise—and the very definition of the problem evolves over time. Yet admitting uncertainty is unpopular. No one is holding a picket sign that reads, “It depends on a number of factors that are mutually interdependent.” So, what should we be thinking about as we work toward a sustainable energy future?
Full Transcript
Alexsandra Guerra: You’re listening to the Reversing Climate Change podcast by Nori, the world’s first carbon removal marketplace. Here are your hosts, Ross Kenyon and Christophe Jospe.
Ross Kenyon: Hello and welcome to the Reversing Climate Change podcast with Nori. I am Ross Kenyon here with Paul Gamble and Christophe Jospe. Today we are having a dedicated podcast to energy. We have not nearly delved into energy as much as we would like. Today is the day. If you like what we’re doing here at Reversing Climate Change, please tell your friends, give us a good review in your podcast app, rate us highly, share our content, help us get the word out about Nori and Reversing Climate Change. Christophe, over to you. Thank you, Ross.
Christophe Jospe: Well, it is a delight to have sitting across from us, Jimmy Jia. He is a professor at Presidio Graduate School. He’s also an author. We’ve actually got his book, Driven by Demand, sitting on our table. He’s also an entrepreneur in clean tech, etc. , etc. And I, as an energy wonk or energy nerd or someone who likes to geek out about energy, actually really enjoyed this book. It’s one of those books that I think students will say, oh, I have to read this for my introduction to energy class and they might be really bored, but I actually loved it.
And the fact that we like to read our podcast guests’ books meant that I read it in about four days. So it was like a whole semester of all this amazing knowledge that at one time or another I picked up or I never picked up. So I’m just a more well-versed...
Ross Kenyon: He’s not blowing smoke. He authentically told me he really liked this.
Christophe Jospe: Yeah, I really liked it. And I just like to have enough knowledge to be dangerous at cocktail parties so I can like show up and pretend like I’m an engineer when I’m really not. But I can say things that people might think, are you an engineer? They would be none the wiser. There’s a couple of nuggets in there, yes. So Jimmy, welcome. As you may know, because you listened to a couple of our episodes, we like to start with people’s story, how they got to where they are, really what motivates them, why they might be sitting on the Reversing Climate Change podcast.
So how did it all get started for you? When did you realize that you’d be doing what you are with your career?
Jimmy Jia: When did I realize I would be doing what I do with my career? Probably yesterday or two days ago. I mean, it just keeps evolving every single day, every single time I get up and I have an idea. If I’m to talk specifically about how I came upon this energy journey, it really starts. I started 10 years ago or so when I finished my MBA program, or really during my MBA program, and I was trying to figure out what I wanted to do next. I started off my career in material science.
I went from material science into doing some materials research. From there, I went off into microscopy sales. And from microscopy sales, I went off to do my MBA and tried to figure out, well, how do you bring Basic research and capital equipment sales together into a single career.
Unknown speaker: You’re talking about microscopes though, right?
Jimmy Jia: Yeah, exactly. I was selling microscopes in New England for Olympus microimaging.
Unknown speaker: You’re the first microscope salesman I’ve met.
Jimmy Jia: Probably the last one you will ever meet as well. But a lot of what I did in my research was laser physics, which is optics. So it translated very nicely into microscopes, which translated very nicely. And then when I sat down to try to figure out what I want to do next, energy came up as one of those topic areas that seemed interesting, that seemed like it could last an entire career. And there was a lot of different options of different ways to spin it. And I got my start doing an internship as an analyst at the MIT Technology Licensing Office.
So basically my job was to read every patent MIT ever published in energy and try to quantify how much in licensing revenue it made for the university. And so when you spend a summer doing that, you kind of feel like you know something about energy. And I went off to do my program, my MBA. And just kept reading and kept diving and kept learning about the sector, but still always trying to say, I’m just learning about this. How can I justify that I know something about or I have something unique to say?
And that’s when I realized that almost all of my undergraduate professors in material science went off to start battery companies. And the connection between what I learned in materials to what was out there in the market in energy finally started to make sense because everything we studied in material science was based on an energy balance. And really all you have to do is take the concepts of an energy balance from the equations and the thermodynamics and then say, well, surely it has to apply to business in one way or another.
There are Integrated systems, but how and why? And that’s when I started exploring this notion of the physics of energy and then its applicability and how it permeates and how it reveals itself within the business realm.
Ross Kenyon: You set up Kristoff very nicely. He wants to talk about thermodynamics. And I’m always a little bit hesitant when someone tries to apply insights from one field to another. There’s this great joke in a show I love called Peep Show, where one of the characters writes a book called Business Secrets of the Pharaohs. And he compares the Nile to the tech boom of the 90s and stuff. And you’re just like, some of these connections are a little tenuous. But why don’t you tell us about the laws of thermodynamics and how might they apply to business?
Jimmy Jia: Well, you know, David Mitchell and Robert Webb from Peep Show are some of my favorite people.
Unknown speaker: I love this guy already.
Jimmy Jia: Yeah, I’m a big fan of their shows. I think where the, yeah, some analogies can be tenuous, but some analogies I think can be very appropriate if you dive down further enough. But if we start looking at an energy, you know, just the laws of thermodynamics, the energy balance, you have energy and energy transformation. And then on the other side, you have energy out. And energy out is wasted energy and used energy. And first law of thermodynamics, energy cannot be created nor wasted. And so the energy in has to equal energy out.
Okay, that’s fine. But what does energy out mean? Well, wasted energy is kind of easy. It’s waste heat, it’s pollution, it’s things that we’re not using for economic good. Useful energy is Basically, the fact that we can drive to work, the fact that we can sit here and be warm in cold Seattle, the fact that we can have the electricity to run this podcast session, those are the useful energy out. But yet, when we start looking at energy, most people talk about it from a fuels point of view. How much do we hear out there in the market of renewable energy, solar, wind, hydro, fossil fuels, natural gas, nuclear, all these other things?
And one of the earliest things I realized was that you can’t have a sustainable system if 90% of the conversation is about the supply. And that if we wanted to look at energy in a cohesive and holistic manner, you had to look at all four of those boxes, the energy and the energy transformation being the equipment, the wasted energy out being the pollution, but also the useful energy out, which is The value proposition, using business terms. It’s why we consumed the resource in the first place.
Christophe Jospe: And I love everything you’re saying. I just want to pull a couple definitions from your book. First, an equation. Efficiency is useful energy out divided by energy in. That makes sense. First of all, what is energy in the first place? It’s the capacity to do work. And there are many different forms of energy. You talked about thermal energy. We’ve got electric energy. We’ve got chemical energy. We’ve got electromagnetic energy. Paul’s giving off a very purple aura right now and I can totally sense it and the electromagnetic aura that is neither lost.
And I’m going to take some of that.
Unknown speaker: Christophe got a magnet installed in his hand for Christmas. Exactly.
Ross Kenyon: Is that a Gwyneth Paltrow thing?
Christophe Jospe: Yeah. What else? Mechanical energy, kinetic energy, all of these different forms of energy and the idea around we need to convert energy. The energy from one form into another, we don’t want to lose too much along the way. I was really glad to see that you threw in a Lawrence Livermore National Academy energy flow diagram, which just reminds you how much wasted energy actually comes out in the form of waste heat that we don’t use sometimes because it’s not hot enough, sometimes because it’s too hot or we just can’t get it in the right place at the right time.
All of these really complex dynamics that people don’t always think about when we’re considering energy transitions, which is where renewable energy gets really sexy because we gloss our eyes over. We say, oh yeah, carbon dioxide is bad. It causes climate change. More carbon dioxide in the atmosphere exacerbates the greenhouse effect. Well, let’s just create energy that doesn’t emit that. And let’s put it everywhere, 100% renewables. But it’s not always that easy. Energy transitions are tough. So Jimmy, can you take us into some of the Are there any considerations that people need to think about when transitioning from what we have today in an energy system to what we’d hope to have in the future?
Jimmy Jia: Yeah, that’s a really good question. And there’s a couple of ways I’d like to break that down and focus in on... I think the key word there, which is transition between. And what transition between implies is that there’s a starting point, there’s an ending point. And one thing that we have to keep in mind about, I’m going to go a little bit on the theory side, energy exists only between two reference points, a before and an after. So when we talk about going to a cleaner energy future, we’re really saying as compared to today.
We’re not saying as compared to a thousand years ago before we really used fossil fuels, right? So understanding exactly where you’re starting from and where you’re wanting to go is a really important part of that definition. And I think where a lot of the confusions come in is people use different definitions of what that means. So when some people say, let’s go to 100% solar panel, that sounds great, right? You’ll get your critics coming in and saying, but what about the embodied cost of making those solar panels? Well, the first group was just thinking about it from a fuel’s point of view of replacing coal or natural gas power plants, but they weren’t thinking about it from the lens of the embodied energy of manufacturing.
Well, then you got the people going and saying, yeah, but solar panels, you have to put energy in to be able to build them. Then someone else will say, but then, yeah, you also have to put energy in to build a factory. But each one of those changes the starting condition of what you’re trying to compare between and compare against. And so I think it’s very important, just straight off the bat, to start with the definitions of where am I going, what am I comparing to, and why is this new option better than the previous option based on that choice?
It’s really easy to get into the, well, let’s include everything category. Let’s include the embodied energy, the manufacturing, the life cycle energy, the this, the that, and all these other things. And then you have something that is so large that it’s unmeasurable. And if it’s unmeasurable, it’s also not useful. And so there is, unfortunately, a human choice that we have to make of where to draw the boundary. And once you draw the boundary, that defines the world that you’re going to view this energy from. And that will, by definition, include some options and exclude other options based on your definition of that problem.
Ross Kenyon: Yeah, I often get quite tripped out by this. There’s a famous essay they use to introduce people to economics called iPencil. Have you ever read that? I haven’t read that one, no. It’s a classic, but the point of it is that this is like scope four, scope 10. I don’t know where exactly this is, but basically to make a pencil, it involves the entire world economy. Once you involve all the metals that were mined to make the equipment and to feed the people who did that and Basically, every act of production is the entire world.
But if we treated it like that, would that be a useful way to talk about energy transition? It’d probably make it impossible.
Jimmy Jia: It would make it impossible, right. And if it becomes impossible, then it’s no longer useful. And so there has to be some way of understanding where do you draw that boundary, right? So when we start looking about it from a sustainable energy future, the way I like to look at it is we actually have to start from the value proposition and then build backwards from there. That’s the entire thesis of business. You start with a value proposition, you build backwards from there. Well, what’s the value proposition of consuming energy? Tell me, tell me.
Christophe Jospe: Capacity to do work.
Jimmy Jia: Great. Someone read the book here. So what’s the work that you would like to do? But what I mean is we don’t actually ask that question. We don’t think about that question. In the consciousness of energy, we just talk about let’s just get a cleaner electron and then argue about how clean that electron actually happens to be. We don’t really ask ourselves, could I accomplish what I want to accomplish without using an electron?
Christophe Jospe: If you could, why not? Yeah, those are some feisty questions. But it’s so much fun to argue about how clean that electron actually is. And I kind of want to poke at those who look at solar and say it’s 100% clean and say, well, you’re using steel, and the only way to use steel is to burn, what is it, metallurgical coal?
Jimmy Jia: Metallurgical coal, yeah.
Christophe Jospe: And you can’t get around that. And so that is embedded within it. And so I just want to say, just be honest in your carbon footprint, because I want to sell you CRCs. Right. But to your sort of absolute versus relative trade-offs idea here, I mean, I think, so how do we begin to frame that value proposition in a way that’s actually useful?
Jimmy Jia: So I think we have to start with what are the societal benefits that we care about and want to achieve. And that’s where you start getting into GDP. That’s where you get into economy, into society, into wealth and inequalities and those types of topics. From there, you can start breaking them down into, well, what does that mean from a service level point of view? What does the government provide? What does business provide? What does all these various different things provide? And then the next level is... What’s the cheapest way to achieve that?
And when I say cheap, an economical way to achieve that, I mean financially economical, but also from an energy point of view, cheap in energy, which just simply means just like any resource, you want to consume the least amount to maximize your good. So by definition, if you’re trying to maximize value proposition with minimum energy, you’re by definition energy efficient. You’re by definition right sizing your consumption. You’re by definition using the appropriate energy that’s coming from the supply side. So rather than look at energy as a supply side issue, I like looking at energy as a demand side issue.
Ross Kenyon: Is there certain things that we can do as consumers that make sense or do you actually think it is going to be more on the supply side?
Jimmy Jia: So what’s funny is when I was doing research for my book and research for the class that I ended up putting together on sustainable energy, Was the number of times the most energy efficient solution also happened to be the best practice operations of that particular industry in that sector. So in essence, if you’re doing the right thing, you’re doing the most energy efficient thing by definition, by default. So walking is better than driving. Duh. You know, buying grass-fed beef is far less carbon intensive than buying just regular beef because you don’t have to put, if it’s grass-fed, you’re not putting in fertilizer and agriculture into the crops that’s going in to feed the animals.
Animals are just free to do whatever they want. So when you start breaking down energy, energy is just an outcome of good lean manufacturing practices, for instance. So instead of trying to think of, I have to keep new concepts in my head for how to consume sustainably, just consume well and adopt best practices. And when you do that, by definition, you’re being energy efficient.
Christophe Jospe: So you mentioned a really important word, which is demand. And demand kind of drives everything. We’re talking about consumer behavior. And to point at one of the darker sides in the blockchain industry is that proof of work, which is basically computational ways to achieve consensus of blockchains for Bitcoin, for instance, consumes a lot of energy. And people who want to mine Bitcoin are going to go to places where energy is cheap. So where’s energy cheap? Eastern Washington. So the demand for power is going to say, I’m going to go to these places where it’s cheap and I’m going to just fill it up.
And so as humans, we’re always going to figure out ways to use energy if it’s cheap and available. Is that necessarily a good thing? If we’re talking about changing behavior, we’d like people to walk instead of drive. It would be better if the price were more expensive. So you would incentivize people to drive, right? Or do we want people to be able to drive? Because maybe You can get from point A to point B and it saves you time. And then with that extra time, you can work on a side business and make more money.
So there’s like all these trade-offs, I guess. And a lot of it factors into price. So I’m not exactly sure. Maybe there was a question in my sort of verbal diarrhea there. Yeah.
Jimmy Jia: Well, if I were to unpack that, it’s basically trying to understand how, yeah, let me try to think about it a little, give me a moment.
Unknown speaker: Solve all blockchains for us.
Christophe Jospe: Well, I mean, look, I guess I want to go into, you brought up a term that I love, which is wicked problems. And wicked problems have competing stakeholders who are not all on the same page. And there’s no one central authority to manage this. And sometimes solving one piece of the problem creates 10 more somewhere else. And it’s not always clear that there’s a set path forward. And sometimes the answer is to do less, not to do more. But nevertheless, you call energy a wicked problem. So let me put the question this way.
Why is energy a wicked problem?
Jimmy Jia: So a wicked problem is a formal problem type coined many years ago. And there’s 10 properties to what a wicked problem is. And the first one is the fact that you can’t define a wicked problem. By definition, it is undefinable. But one of the best ways I like to talk about wicked problems is that it’s opposite to what’s a tame problem. And a tame problem is one where the problem just simply disappears Or is no longer relevant when there’s a solution. So the classic one is a game of chess. When you checkmate an opponent, even if you tried to continue playing, you can’t.
There’s no mechanism to continue playing. And the same thing with a math problem. Once you solve a math problem, You cannot continue solving the math problem by definition. And so those are known as tame problems. Whereas wicked problems, when you apply a solution to it or you try to solve it, the problem definition itself changes. And so if you go back a thousand years ago, there was an energy crisis. When there was a major deforestation going on. And you know what saved the forests? It was fossil fuels. Same thing with the energy crisis of whale blubber.
Running all the candles and lights in the world. You know what saved the whales? It was gasoline. And so what was back then considered a savior is today considered the problem. And so the definition of the energy problem evolves over time as we keep trying to address it. So rather than going out there and saying there’s a solution and there’s an approach that will work, it is much more of a balance of approaches of how do you stay within the And so to address your earlier point of energy supply and cheapness and economy and all these different flows, I think the economy becomes a way that we see these forces moving backwards and forwards against each other.
And one of the classic problems, I think, or one of the outcomes that we see is every time there is a cheap energy source in societal history, We’ve always found a way to consume it and consume it faster, right? But in many cases, consume it better and for a better outcome. And so when they built the chapter on Niagara Falls, looking at the Niagara Falls power plant, when they constructed the first central power plant in the world in 1890, it was to generate 10% of the US’s electricity and light up the entire eastern seaboard.
Instead, only 5% ever left Niagara Falls because it spawned the new petrochemical industry because power became so cheap. And so sometimes a friend will ask me, hey, what would happen if fusion became prevalent and we had free energy? And I’m scratching my head going, well, that will launch Bitcoin. Because that’s cheap power. And that’ll launch 3D printing. Because why would I go to Home Depot if I could just have a 3D printer, which is today expensive from an energy point of view, materials point of view. But if energy was free...
Well, why don’t I just have a 3D printer and print everything I need?
Unknown speaker: Is that why that hasn’t taken off? Is because it’s just too energy intensive?
Jimmy Jia: Yeah, it’s energy intensive. Same thing with nanotech. It’s energy intensive. So there are new industries that are just waiting for price to drop. So yeah, we can fill the entire world with fusion power generators and we’ll find a way to use it.
Ross Kenyon: Yeah, we’ve seen this criticism. I was reading some Wendell Berry the other day and he made a comment kind of like this. And Bill McKibben has also said that if we had cheap, clean energy, this might not even be a good thing because humans would just figure out a way to destroy the world faster. Right.
Jimmy Jia: I’m sure you come across this. Yeah. And so that’s why, you know, but just coming at it from a let’s come up with clean, cheap energy is a supply side argument and supply side viewpoint. But looking at it from demand side of what do I actually want? Then you can start going backwards and saying, well, what’s the right What’s the cheapest way to supply that? Do I need a nuclear power plant in order to supply laundry detergent?
Ross Kenyon: I don’t know if that sentence has ever been said in the English language nor any other.
Jimmy Jia: Yeah, neither do I. It just popped up into my mind.
Christophe Jospe: I think it’s really interesting because so often it’s true. We do talk about energy generation, not energy consumption. And it brings up all sorts of great terms that your book is packed full of, of, you know, demand response, talking about... Work that can be done in front of the meter, behind the meter. You can have smart grids where you have different devices which are in this bi-directional way talking to each other. So the fridge knows the certain times to turn off and on. The toaster, which surprisingly consumes a lot of energy, also knows maybe when to...
Do things or maybe you can sort of have these devices to talk to the grid to more efficiently manage resources. I’ve always been keen to understand what a microgrid is or how that functions and why that is a buzzword and energy today. Maybe you can tell us.
Jimmy Jia: Yeah, so a microgrid is a generic general word, I would say, that tends to describe a small grid. But again, this is where definitions and boundary comes into play. No one really says how small. Is your home a microgrid, right? Or does it have to be a neighborhood? And could that neighborhood be the entire city of San Francisco? Would that still be considered microgrid? No one actually goes in and makes a formal definition of that. But conceptually, a microgrid is smaller than Puget Sound Energy, but probably larger than your own home.
But is it five homes? Is it 10 homes? Is it a cul-de-sac? Do they have to be connected? No one actually really knows that. So it’s just, or at least there’s no formal definition of that or in a formal agreed upon definitions that I have run across.
Ross Kenyon: So a grid is just like that power infrastructure that gets people power. Yeah. Right. And then a microgrid might be something like a neighborhood generates and consumes its own electricity.
Jimmy Jia: So then within a microgrid, the concept is generally used to describe self-sustaining areas of a neighborhood.
Ross Kenyon: So I see your boundary problem then.
Jimmy Jia: Right, exactly. So now they’re starting to say, okay, well, within this microgrid that we are conceptually defining, we’re going to put our own generation, we’re going to put our own consumption, we’re going to balance everything out, and that’ll make us more resilient, that’ll be cheaper, that’ll be cost effective, and they start putting all those benefit names around it, which is fine. Then again, you have to look at the boundaries of how they define this microgrid of, in order for that microgrid to function, do they need to be plugged into a larger grid?
Well, if they do need that larger grid in order to back things up essentially and be that emergency power, then are they truly a microgrid? From an energy point of view, yes, conceptually, physically, economically, they could be a microgrid, but it’s just like calling your local neighborhood a neighborhood, which makes perfect sense. You know, this is Ballard. We’re sitting in Ballard right now. We would not consider Ballard part of Capitol Hill. That’s its own neighborhood way over there. That’s another microgrid way over there. But we’re all part of Seattle, you know, and we’re all part of Washington State.
And so where do you draw that boundary of that microgrid and what becomes the sustainable essence of that grid, right? And I think that part, we never talk about that.
Ross Kenyon: What about the smart grid? I guess so the way it works now is that the grid, I don’t even know to what degree it does communicate with your devices and like single family homes and lets you know like pricing or anything like that. But the way that a smart grid would work makes more sense to me in that the devices are able to send information back to the grid and somehow coordinate as opposed to just receiving power and information from the grid centrally. Is that broadly right?
Jimmy Jia: Well, so smart grid is also another one of those words that I kind of...
Ross Kenyon: Is this field entirely vacuous, just a bunch of term generators running around?
Jimmy Jia: Well, it depends on it. The terms usually have meaning until the marketing people get involved and they kind of lose all their meaning. Understood. No, but Smart Grid itself also conceptually, you know, today we call it Smart Grid and we’re in some ways moving beyond Smart Grid. Smart cities is kind of the term of art these days. But either way, the notion of putting smart Is just saying, hey, there’s now internet-enabled data. There’s more data available to manage the grid, manage the city, manage whatever else. If you look at the history of the grid, though, go back 100 years, every generation of the grid has gotten more data accessible and more data and more sensors just simply as computers evolved over time.
And so if you go and look at the entire... Does having the first IBM machine running your utility back in the 1940s make you a smart grid because before then there was no data?
Ross Kenyon: But the nature of these questions change and evolve over time. Exactly.
Jimmy Jia: So that’s the wicked problem, right? And so some of the engineers, especially the people at the forefront of what is now called the smart grid, this is back in the early 2000s, actually stayed away from using smart grid as the term of art because in some ways it was insulting to the engineers to claim that they weren’t being smart beforehand when in fact they were just being smart with the tools that they had. They didn’t have the internet back then. And so the smart grid is only just going to get more smart if I’m using smart as proliferation of devices and proliferation of data.
So yeah, that will always happen. They’ll just get more granular. We’ll have sensors in our toasters. We already do. That will just simply get exponentially more and more.
Unknown speaker: It’s like the fridge in Silicon Valley.
Jimmy Jia: The fridge in Silicon Valley, right. The big question is what can you do about it, right? And I think not that many people have found the right application for it yet. You know, there’s the Nest thermostat, which is very well known. You can do something with that for demand response and to interact with price signals, those sorts of things. But those are to this day still the exception versus the rule. And there’s a lot of barriers for why that exists or maybe they shouldn’t exist or maybe they’re just no entrepreneur has actually solved the problem yet or found a right application for it.
But I would argue that there is far more energy data out there that people know how to analyze it.
Christophe Jospe: I think that’s a really interesting point. It’s also very important because in your book you talk about sort of fusing historical data with analytical models that enable better predictions and just a more efficient marketplace. It’s kind of similar to how Nori thinks about the world because we’re talking about taking historical data Enabling farmers to make projections on carbon removal certificates that they might be able to earn. And so using models and using historical data in an intelligent way. I want to try to see if I can draw parallels or maybe pull out from you.
So we’re talking about creating a new digital commodity that represents environmental activity. A REC is representing a... What is it? One megawatt hour produced from renewable energy. What can we learn from the rec market?
Ross Kenyon: Just so I’m clear. So it’s some power generation facility will be using something dirtier, maybe their coal or natural gas or something like that. And then they’re switching to something cleaner and then they’re getting a credit that they can sell into a market.
Christophe Jospe: That’s You’re basically able to sell two things as a rec generator. One is still the power, and then the second is the attribute of that clean power. Yes, exactly.
Jimmy Jia: So it’s an additional revenue for, let’s just use a wind farm or a solar farm. Let’s just use wind as the example. So when a wind farm generates, they get paid for the... Energy, the electrons that are produced, but then they also get paid for the fact that they’re green electrons. And so there’s two different commodities that get sold into the market, and then you can buy one or the other. So on one case, if you’re buying the electrons, you’re buying electrons. And if you’re buying the renewable energy certificate or credit, you’re buying the fact that those electrons were green.
So a company that has a renewable energy standard or a state that has a renewable energy portfolio, the utilities can go and buy those credits. And certify that a percentage of their power came from a renewable source, right? So in essence, what renewable energy credits RECS tried to do was disintermediate, disaggregate. So that has the benefit of giving that power producer more revenue, but it has a disadvantage of now as the consumer I’m buying the name associated with renewable energy, but I have no idea if that electron I consumed was the green one.
Because an electron’s electron’s electron, you can’t tell the difference between them.
Christophe Jospe: Right. It’s unbundled.
Jimmy Jia: It’s unbundled, right. So the unbundling of it created the financial incentives. What it has done on the other side was created the question of, is this doing any good? Because after all, the wreck could have been generated at midnight when I’m in bed in Iowa. Does that help me at two o’clock in the afternoon in Seattle? Maybe, maybe not. So that’s where some of the questioning of Rex as a mechanism comes into play. Now, I think it’s an important financial mechanism because it helps build more solar panels, build more wind farms.
Question becomes, it always comes down to marginal benefits, marginal returns, right? Everything’s relative based on where you are. So when you go from zero to 1%, yeah, good. But if you’re going from 50% to 51%, is that the best use of your dollar in terms of getting more sustainable electrons, renewable electrons, carbon-free electrons? And that math becomes horrifically difficult because of all these economical concerns and other societal factors that tie into it.
Christophe Jospe: One of my challenges with the REC as being used for claiming carbon neutrality is that the exact point that you might be drawing from a not carbon free grid. And if the total energy consumption goes up to outpace the clean energy generation, well, it’s still not carbon neutral. It’s like You’re paying to add this thing, but the carbon is still going into the atmosphere. It hasn’t been neutralized or negated, which is what carbon removal enables. And that kind of, there’s so many questions. We could take this in so many directions.
Ross Kenyon: I wrote down a few myself, but I’ll leave it to you.
Christophe Jospe: I was curious to go back to this transition question and all these things that need to happen for a world that wants to address climate change. We are big sticklers to say a ton of CO2 avoided is quite different from a ton of CO2 removed. We don’t think the world yet sees it that way. We really want the world to see it that way to differentiate the CRC or the product that we’re putting out there. But I’m just kind of curious from your perspective of how you see the various pieces of what Nori is doing, of what the transition to clean energy is enabling, and all of these pieces kind of fitting into this point you brought up earlier, which is a value proposition that is actually going to get people to do things.
Yeah. So I guess it’s like, figure it out for us in two minutes, Jimmy. Yeah, sure.
Jimmy Jia: Well, I always go back to the energy balance as the key frame of thought, framework, way of looking at this problem, right? So when I think of Nori, what you guys are doing within the carbon markets and trying to tie things together, I think, well, that’s in the waste box, right? Because that’s the box that you’re playing in. That’s where all the carbon is. Obviously, in order to have carbon there, you have to have the fuel on one side and you have to have the consumption on the other side. And the value proposition of how we’re consuming on the other side.
So they’re all interrelated based on that energy balance, but where are you playing and what are you trying to Turn in terms of your levers and dials and knobs to be able to get that carbon outcome over there. And so first of all, that’s how I look at how these concepts are tied together. Second of all, then, is the question of, well, if I’m playing in this space, which is the carbon space or the pollution space, and I’m trying to sell something into the value proposition space, What’s my justification for doing that?
Or what’s the justification of trying to shift behavior over in the fuel side in order to sell this carbon side over here? Because again, they’re all related, right? And earlier we were talking about taxes. And one of the ways that I like talking about different tax policies that can affect the carbon equation is obviously carbon pricing because that’s putting a price on tax, the carbon on the pollution side. But something like excise tax, which is a fuel tax, is doing the exact same thing, but that just happens to be on the supply side energy in bucket.
That’s going to have the exact same effect on this entire equation because everything’s interconnected. And at the same time, having a use tax, which is something like a sales tax, right? Increasing your sales tax by definition will decrease consumption. And that will also have some effect on carbon. It’ll have an effect on fuel consumed as well, right? So we can even use that energy balance as a way of looking at the different ways that taxes can affect carbon and different tax mechanisms that can affect these systems. Now, obviously, some of them are more coupled, and the more coupled they are, the more direct effect you will have.
So a carbon tax will have a direct, ideally, a direct effect on carbon. But to demonstrate an increase in sales tax having an effect on carbon, that’s going to be a lot harder to be able to justify. But they’re all part of that same system.
Christophe Jospe: I’m really glad you went there with the taxes. You knew it was coming. This is the only thing certain, right? Death and taxes.
Unknown speaker: Death and taxes, yes.
Christophe Jospe: Yeah. I mean, I think it’s interesting and there are so many different ways to come up with revenue generating schemes. Sometimes we come up with schemes and don’t anticipate the way that things might be going in the And so how do you assign a tax in that space? And so all these complexities... Ross, I don’t know if you wanted to throw your questions out there.
Ross Kenyon: I was thinking of kind of doing a little bit of a speed round because they’re all questions that I’m sure you could dive into really hard. Some of them are sillier than others. Maybe I could just blast you. Give me 30 seconds. How do you feel about nuclear energy?
Jimmy Jia: I think nuclear energy is carbon free.
Ross Kenyon: Yeah. So your priority is you’d rather have a nuclear waste problem than a climate change problem?
Jimmy Jia: Well, um, That is priming, Ross.
Ross Kenyon: That is priming.
Jimmy Jia: It’s called a forking in chess, right? Yeah, that’ll be an hour-long lecture right there. No, I mean, nuclear energy, you got to look at the history, you got to look at the technology, the technology today for nuclear energy. Is not the technology from 30 years ago of all the US power plants, nuclear plants. You got companies like TerraPower, you got companies like Helion working on brand new next generation, what do you call them? Reactors, thank you. Small SNRs. Yeah, small nuclear reactors. They’re completely different technologies, and some of them don’t generate waste.
And actually, one thing that I...
Ross Kenyon: Some of them use waste.
Jimmy Jia: Yeah, some of them use waste. And one of the interesting things I’ve noticed, and I don’t know what this means, it’s just an observation, is that every other form of energy that we use... We call it by the fuel, meaning a diesel car is completely different than a gasoline-driven car. We would never confuse those two, even though they both look like cars. But yet, a uranium-235 reactor is very different than the thorium reactor. It’s very different, and yet we just all clump it together into nuclear. And they all have their different fuels that they use, different wastes, different risks, different benefits and whatnot.
And some of the newer nuclear technologies come out are completely, it’s like comparing, you know, the car running on champagne built in, you know, Germany as a demonstration project to the Ford Focus that’s driving down the street and saying that exactly the same technology. Maybe they’re just too complex for the layman to understand. Very science-y. Like we don’t distinguish typically when talking about different solar technologies, concentrated solar versus PV and that sort of thing. Or even solar thermal. Yeah. Right. Yeah, it’s just considered... Solar, you know, but there are incredibly important nuances between them that makes them different.
And so, yeah, nuclear technology and using today’s state of the art, what’s out there done properly, fine.
Ross Kenyon: That was pretty good. Wait, am I allowed to keep going? You want to jump in?
Christophe Jospe: You are. Just small addendum on nuclear. Just an idea that I heard that I thought was really good. I’m neither endorsing nor saying this is a bad idea, but if it worked, that would be cool, is to have a thorium molten salt reactor actually placed inside of an old coal-fired power plant, which can handle the heat and already is plugged into a large centralized grid and doesn’t take up that much space. So if you’re working on thorium molten salt reactors and you can make that happen, that would be amazing. Yep.
Ross Kenyon: I want to do the Good Burger Kel. I know some of those words. The next one I wanted to ask you about, as I saw, I think it was in Germany, they have energy co-ops where people are now owning their own grids and generation facilities. Do you know much about that? Could you tell us about it?
Jimmy Jia: I’m not as specific with that example in Germany. What I do know is that in California there’s been a move to go to community choice aggregation, which is the local community purchasing their distribution system from the utility essentially and then running it. As their own municipal run utility. In places like Texas and Pennsylvania, as part of the UK, Germany, companies can sell retail power so they don’t have to own the infrastructure, the assets, but they can sell power to the homeowner and to the consumers and whatnot. So that’s more like the consumers getting together and forming entities to be able to buy their own power.
So yeah, that’s a Is that similar to how there are a number of different cellular phone networks like Cricut Wireless and Virgin Wireless that buy infrastructure off of the major networks? Yeah, absolutely right. That’s just what it is. And so on the retail side, in some places, you have a lot more options and choices of who you could buy from, even though it’s coming to you, being delivered to you using the exact same infrastructure. Right. Now, that’s what it is. Now, your next question is, is that better or worse than the current system that we have?
Unknown speaker: It was not. You can just skip that one.
Jimmy Jia: And that, it is much harder to say. Because, again, what you’re doing is you’re disaggregating. The financial reconciliation of consuming energy to the physical delivery of the electron. And does it make sense to put another retail layer that’s separate from the utility in order to make that transaction happen? In some cases, yes. In some cases, no. But is that the universal answer? I don’t know.
Ross Kenyon: Okay, that’s a fair answer, I surmise. Okay, last question. I dedicate this one to Paul. How far away are we from Dyson spheres? Explain what that is.
Jimmy Jia: There’s a couple of great video blogs I can point you to over there. So a Dyson sphere is the concept. It’s really a Dyson swarm. It’s not a sphere.
Unknown speaker: That’s the most pedantic moment I think you’ve ever. All right, Jimmy.
Jimmy Jia: Because, I mean, when I think of Dyson Sphere, I think of the Star Trek episode where there was the world that was completely encased, the star. And it actually mathematically works out that if you take all of the mass in the solar system and turn it into a sheet, you can build a sphere that is at Earth distance away from the sun. So therefore, you could... Gigantically blow up the amount of land mass, essentially surface area, and harvest the entire energy output of a single star. And I think that’s a Kardashev II civilization is when you’re harvesting the energy of a single star.
Unknown speaker: Paul is nodding in the affirmative, so you’re cleared to go.
Jimmy Jia: Okay. But that is actually technically very difficult to do. And the reason why it’s technically difficult to do is because if there’s any gravitational shift or any disturbance, the entire thing will fall in on itself. So instead, a better way to do it is Actually to build a bunch of smaller units, more like a swarm, right? And each unit could still house 10,000 people. It’s not like these are small ISS space station type things. These could be large asteroids with people living on them. And just simply put them at the same distance as Earth or even a little bit above or a little below or whatever like that.
You can have this gigantic swarm that is also a Kardashev II civilization harvesting the energy of that sun. But that does not depend on gravitational, you know, it’s not sensitive to that, right? Because each one is in its own orbit. So that’s what a Dyson sphere is in a Dyson swarm. The Dyson swarm is much more possible. How far are we away from it? I don’t know. I see that as really far away. The people in space probably think that it’s a lot closer than I do.
Ross Kenyon: I should ask David Grinspoon when he was here. Yeah.
Jimmy Jia: Yeah, I know a couple of those folks and they’re super optimistic about what they can do within the next 10, 20, 30 years. And I think there’s going to be some pretty cool innovations and pretty cool breakthroughs that happen within the space technology world within our lifespan. But are we going to get a habitat of 10,000 people orbiting the earth? I’m not putting my bets on that. Maybe, but I’m not putting my bets on that.
Ross Kenyon: That’s my series that I jotted down there, Christophe. So back to your regularly scheduled programming over there.
Christophe Jospe: Well, I think that’s just about a wrap. This has been a lot of fun. Hopefully you got something out of this and learned something about energy that you did not know before or maybe thought about it in a different way. The TLDR energy, it matters. We need a whole lot more of it and we need cleaner electrons. And if we can’t make clean electrons, we’ll need more CRCs.
Ross Kenyon: And the details matter. It seems like that’s something that I could pin on you, right? It isn’t so clear to just say one thing is always better than another. The details of these things matter quite a lot.
Jimmy Jia: Absolutely. Yeah. It’s the dreaded it depends answer.
Ross Kenyon: Yeah. It’s not always that common, especially in circles like this that have a political component where admitting uncertainty or nuance is not really like if you had a picket sign and said, it depends on a number of factors that are mutually interdependent. Yeah.
Unknown speaker: That would be a great picket site. I love it. It’s great.
Ross Kenyon: I’ve seen stuff like that. And it’s always a joke, even though you’re like, yeah, it’s kind of true for a lot of these issues. They’re complicated. Maybe that’s what makes it a wicked problem is that even if people did share all the same information, they still might disagree over the values and how we rank these things. That’s what makes it fun. If it wasn’t like that, I think we’d all get bored and it wouldn’t be nearly as fun anymore. But thanks for being here with us. That was very illuminating. Thanks for letting me ask you all my dumb questions.
I’m an energy rookie compared to you guys. So thank you.
Jimmy Jia: All right. Thank you.
