Volts

One of the most devilish aspects of climate change is that it resists good art. But Adam McKay, director first of comedies like Anchorman and later of more serious fare like The Big Short, has cracked the code. Don’t Look Up (in theaters today; coming to Netflix on Dec. 24) is the first climate movie — the first work of art about climate change of any kind — to hold my rapt attention from start to finish. It is fantastic.One reason it’s so good is that it isn’t really about climate change at all. It’s about a pair of scientists, played by Leo DiCaprio and Jennifer Lawrence, who discover that a large comet is heading directly toward Earth and will strike, and wipe out all life on the planet, in just over six months. They try to tell people. It does not go well. Don’t Look Up attempts to capture, not so much climate change itself, but one of the most vertiginously weird aspects of understanding climate change: you know this terrible thing is coming and yet … no one’s acting like it. You end up feeling like the ranting guy on the street corner waving a sign about how the end is nigh. The movie is about having knowledge but being unable to make the knowledge matter, being unable to make anyone hear or act on it. By compressing the timeline to six months and making the threat a singular force, visible in the sky, it brings the absurdity of the situation to the surface. It’s hilarious, and if you’ve spent years banging your head against a wall trying to get people to pay attention to climate change, you will find a great deal of catharsis in the laughter. Before we get to the movie, a word on climate and art.Climate change makes for bad artBy its very nature, climate change is abstract, the sum of millions of observations and long chains of reasoning. It unfolds slowly, over the course of decades and centuries. Its effects are felt incrementally, across the globe, in disparate ways. In short, climate change isn’t a good villain. It has no plans or intentions. It’s not even a singular force, it is simply the descriptor we apply to the panoply of changes happening around us. The magic trick of good art is that it uses specificity — particular people, places, and relationships — to evoke universal human feelings. We have been designed by evolution to feel most intensely about things that are close to us, within spatial and temporal boundaries that are legible to us. We’re not designed to feel anything about a projected 50-year change in global average temperature.We can know and understand that forecast in an intellectual way, but to really feel it, to integrate it into one’s basic narratives and worldview, requires conscious cultivation. It does not come naturally; it is not universal.That makes climate change a lousy subject for art. Over the years that I have been writing about it I have been exposed to many, many songs, poems, documentaries, short stories, and novels about it. They are all like vegan food: the intentions are commendable, the spirit is good, it even looks on the outside like normal food, but the taste … let’s just say, it feels like I’m supposed to be eating it, and if I weren’t supposed to, I’d be eating something else that tastes better.(Vegans: I love you. Please do not write me angry emails.) So too with climate art. It runs into one or more of four main dangers. One, it can be treacly. This is most climate documentaries: swelling orchestral music beneath shot after shot of Natural Beauty Under Threat. Two, in order to compress climate change into something dramatic on a human time scale, it can mangle the science, as in 2004’s The Day After Tomorrow, wherein a key scene finds our heroes fleeing from an oncoming wall of, uh, freezing. It’s not that I’m a stickler for strict scientific accuracy in art, but once you make climate change into a disaster fit for a disaster movie, you’ve changed all the structural features that make the climate crisis what it is. You’re not illuminating anything about the reality.Three, it can be overly oblique, a metaphor for climate change that is so generic — “nature is good” (Avatar); “dystopia is bad” (Snowpiercer) — as to say nothing about climate change in particular. Fourth, it can end up being didactic or educational. Though it is by all accounts informed and magisterial, I could could not get through Kim Stanley Robinson’s The Ministry for the Future. After an intense first chapter, it became a series of white papers teaching me stuff I already know. If I wanted to read PDFs I’d just read PDFs. Climate is perilous territory for art. That brings us to Don’t Look Up.Don’t Look Up defies the trendI went into this film with extremely low expectations. I’ve seen the subject of climate change humble too many eager artists and storytellers to have much faith that anyone in Hollywood would get it right. When I heard the basic setup — an analogy that everyone in the climate world has pondered at some point — my expectations did not rise. There are so many ways a story like that could go wrong. It could be broad or ham-handed; it could be overly clever; it could be didactic and preachy. But somehow it’s great. I suppose that’s what happens when you get this idea in the hands of smart writers (politics’ own David Sirota helped with the story; McKay wrote the screenplay) and an unbelievably stacked cast. DiCaprio and Lawerence convincingly shrink into nebbishy scientists, he with a middle-aged gut, she with unfortunate bangs. The MAGA president and the boozy cable news host could easily have been caricatures, but Meryl Streep and Cate Blanchett are incapable of a false note. Every role down to the most incidental is played by marquee performers who fill their screen time with thoughtful choices. Every performance lands, keeping the proceedings grounded even as they grow more ridiculous. It’s extremely funny, but not with rat-a-tat jokes. These are recognizably human characters, not broad types, stuck in absurd situations; the laughs arise out of the structure. There’s an editing technique used again and again: just as a scene is in the midst of its manic peak, there will be a hard cut to a new, quiet scene, often characters trying to process what happened. It made me laugh every time. (Credit to the venerable Hank Corwin for editing.) Though it flirts with it at times, it never descends into farce. It’s just that everyone finds themselves lost in the same disorienting information environment, unable to connect. Also? About two-thirds of the way through the movie, Timothée Chalamet wanders in as a character with no obvious connection to the plot and no clear reason to be there, but who is nonetheless an absolute delight for every second he’s on screen. The film manages to be funny and allegorical and human all at once. But I think long-time climate hawks will take special pleasure in it.So many climate feels, captured for the first timeI have no idea how normal people — people who haven’t spent most of their adult lives immersed in the subject of climate change — will process this movie. Will they see the climate analogy at all? It could just as easily be read as an analogy for Covid, or biodiversity loss, or nuclear war.But if you’re a climate hawk, there’s no mistaking it: McKay has clearly been involved in this subject for a while. He captures a whole series of feelings and experiences that are painfully familiar.There’s the feeling of telling the government about a threat and having it shrugged off. There’s the feeling of telling the press about the threat and having it subsumed and lost in the flattening stream of 24-hour content. There’s the feeling of being mocked and memed for being alarmed. There’s the feeling of needing to prove people wrong on the internet. There’s the feeling of watching a body of science become the target of wild conspiracy theories and a partisan culture war. There’s the feeling of seeing the most obvious solutions to the problem delayed and deferred over corporate profits. There’s the feeling of seeing people jump straight from denial to nihilism, without any being-helpful stage in the middle. There’s the sinking feeling of watching people who have accepted the threat turning to glittery promises of future high-tech solutions.There’s the feeling — which DiCaprio captures in a mid-movie rant that I, at least, found incredibly emotional — of hoping against hope that someone in charge, despite all the appearance of venality and stupidity, knows what they’re doing, has a handle on this thing. And perhaps most acute of all, there’s the feeling that we simply can’t communicate any more, that there’s no way to establish a shared reality or shared priorities. Everything is absorbed by the information/media/entertainment machine, blasted out at the same volume as dozens of other daily clickbait outrages, and soon forgotten, like all the rest. Nothing lands, nothing sticks. There’s no way to cut through the noise.“If we can’t all agree at the bare minimum that a giant comet the size of Mt. Everest hurtling its way toward planet Earth is not a f*****g good thing,” DiCaprio cries, his voice cracking, “then what the hell happened to us? I mean, my God, how do we even talk to each other? What have we done to ourselves? How do we fix it?”The movie does not offer answers to these questions. Without any spoilers, I can say it’s a pretty pessimistic take on our capacity for collective action. But I found it incredibly cathartic just to see my specific brand of anguish portrayed with such insight, more than I ever expected from a big-budget Hollywood movie. Back here in the real world, climate remains stubbornly uncathartic. It has no six-month deadline; it will play out slowly over our whole lives and beyond. There will be no final moment of recognition and no clear line between success and failure. The result will be an unsatisfying muddle at every stage, with more suffering than there should have been but less than there could have been.Still, we know that, in some sense, the comet has already begun striking. We’ve already lost some stability, some biodiversity, some lands and lives, and we will lose more, no matter what we do. It’s baked in at this point. We are living in the most stable climate we will ever experience. Every decade from now on will get warmer — more of the comet will strike. We can only control the scale of the damage.After I watched Don’t Look Up (thank you Netflix), as I was eating dinner with my family, I couldn’t stop thinking about DiCaprio’s final words in the movie, as he is surrounded at the dinner table by family and friends: “We really did have everything, didn’t we?” This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

On Dec. 7, 2020, one year ago, I sent out the first Volts post. At the time, I was extremely nervous. I had left behind a stable job at Vox and had no idea if a newsletter dedicated to clean energy and politics would find any readers, much less readers who would pay. Over the last year I dug into carbon markets, transmission systems, lithium-ion batteries, and 24/7 carbon-free energy. I profiled new clean-energy legislation in Washington state, Colorado, and Illinois. There was a little philosophy and a lot of politics and policy. For the podcast, I talked to researchers, analysts, activists, and politicians. I have reason to believe Volts has reached the corridors of power, though Joe Manchin has by all accounts remained immune to its charms. I have a long list of topics for next year: clean-energy materials and recycling, embodied carbon, hydropower, hydrogen, and the possibilities for political progress under a dysfunctional (and possibly soon fascist) national government.Anyway, one year in is probably too soon to draw any definitive conclusions, but from what I can tell, it’s working. I am absurdly grateful. I try not to indulge in too much navel-gazing — mostly I keep that stuff confined to my neurotic inner monologue — but in this post I want to reflect a little bit on why I started Volts and what to expect from it in the coming year. And I want to ask you, if you haven’t already, to sign up for a paid subscription — or, if you have a subscription already, to purchase one for someone else, perhaps as a holiday gift. So: why did I start Volts? Two basic reasons.Writing for my people …One, although Vox gave me tons of latitude, there are limits to what you can do at a general-interest, ad-supported publication. You have to aim wide, to try to snare as many people as possible. Readers are likely to encounter your headline floating on Twitter or in their Facebook news feeds — you can not assume they know anything about you, your past work, or your subject matter. So every new piece has to be an introduction. You can’t use any allusions to your previous work. You can’t reference any inside jokes. You can’t take anything for granted. (I can’t count how any times I had to explain that renewable energy is good because it reduces carbon emissions, which is good because it slows climate change, which is bad.) And you can’t be too weird or idiosyncratic. Ultimately, though it is much more flexible than many publications, Vox needs every piece to be, at a basic level, a Vox piece. It has to represent the brand. That’s true for any publication or institution.There’s nothing wrong with that — Vox has a great brand! If you visit, as I regularly do, you’re guaranteed to find a bunch of good Voxy pieces. But I got tired of writing for everyone and no one in particular. I was ready to write for my people, to gather them up and take them with me so that we could learn together, follow ongoing themes and narratives, develop some in jokes, and shower the appropriate amount of love and attention on my dogs.I’m well aware that I reached more people at Vox than I ever will at Volts. My gamble was simply that there would be enough of my people, and that they would be generous enough, that I could make a living writing for them — just them, not any “average reader” or editor or boss or publication. I wanted to strip everything else away — the pressure to please higher-ups, the imperatives of attention-hunting in modern mass media — and focus purely on adding value, being of use.… rather than The ManThe second reason I started Volts is that I am, at heart, a child of Gen X: I don’t want to work for The Man. I don’t want to make money for Comcast, or any giant media company, or any company at all, really. I don’t want to feel beholden to any advertiser or sponsor. I don’t want to be a representative of any faction or institution.At Volts, I have only one incentive: to provide a service that you, my readers, find valuable enough to pay for. There’s no one here but you and me. That feels like an honest living. It feels like something solid I can hang on to in increasingly turbulent times. Volts survives entirely through subscriptionsI am editor-at-large for Canary Media, a relationship that allows my posts to be reprinted and reach more readers. But I live or die through paid subscriptions to Volts. There are certain things I could do to boost my revenue that I’m not willing to do. I don’t want to put content behind a paywall — I want to be as useful as possible to as many readers as possible, even those who can’t afford a paid subscription. And I don’t want to hassle my mailing list with reminders and special offers and fundraising drives and bonus content. That stuff feels squicky to me.But I do need to make enough money to live. And I’d like to make enough to be able to expand Volts and bring on new features and guest writers. So I’m asking you, if you value what I do here and are in a financial position to do so, to sign up for a paid subscription or buy one for someone else. For a year, you’ll pay about what you’d pay for one solo night out at a decent restaurant. You will get the ability to comment on posts and discussion threads, to be a part of the growing (and incredibly sharp and helpful) Volts community, but more than that, you will make it possible for me to keep doing this, to continue being of use.Volts is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.I’ll do this as long as I can survive doing it. I hope it’s of service to you and you’ll support it. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

When I first started looking into 24/7 carbon-free energy (CFE) — a company or city matching its electricity consumption with clean electricity production on an hourly basis, throughout the year — I intended to write a single post on it. That worked out about as well as usual.Below are summaries of and links to each of the 24/7 CFE posts. Above is a 24/7 CFE mega-pod, with the last three pods strung together into one podcast. * An introduction to energy's hottest new trend: 24/7 carbon-free electricityWhat it would mean to supply a company or city with clean energy for every hour of its electricity consumption, every day of the year; why a company or city would want to do that; what kind of technology could do it; what market reforms are required to enable it.* Is 24/7 carbon-free energy the right goal?Critics say that companies would be better off focusing solely on reductions in carbon emissions — after all, from the atmosphere’s perspective, no company’s emissions are more significant than any other’s. But proponents say 24/7 CFE accomplishes things beyond reducing carbon emissions.* The long-term promise of 24/7 carbon-free electricitySome new modeling of 24/7 procurement out of Princeton reveals what it will do to carbon emissions, how much more it will cost, and the innovation and development it could spark in clean energy. Volts is free of ads or sponsorships; it runs entirely on reader subscriptions. If you value this kind of explanatory journalism, please consider becoming a paid subscriber to Volts, or giving someone you know a subscription as a gift. I appreciate you all. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

Over the course of the last few days … [checks calendar] … er, month, I’ve been digging into the new trend in voluntary climate action: procuring 24/7 carbon-free electricity (CFE), matching consumption with production every hour of every day.In my first post, I introduced the idea and explained what motivates it and what it entails. In my second, I puzzled through the biggest controversy around it, which is about whether it’s the right goal at all — whether companies and cities ought instead to focus solely on reducing emissions (with no regard to who produced them, or where). This post will make a great deal more sense to you if you’ve read those.Today, in the final post in this series (promise), we’re going to look at some new modeling of 24/7 procurement from Princeton’s ZERO Lab and see if it can shed some light on the trade-offs among different procurement strategies. Then we’ll wrap up with some provisional conclusions.The modelZERO Lab models three scenarios for voluntary corporate clean-energy procurement, with 10 percent participation from the commercial and industrial (C&I) sector: no procurement (as a baseline), procuring for 100 percent annual match on a volumetric basis, and procuring for 24/7 match. Each scenario is run in two separate markets, California and the PJM Interconnection (an electricity balancing area that covers 13 Northeastern states and DC). Modeling in two markets helps tease out how 24/7 could unfold differently depending on how clean a grid is to begin with — high penetration of variable renewables in California vs. a relatively dirty grid in the Northeast.The model is premised on the idea that participating C&I customers aggregate their demand and pool their purchasing power, effectively acting as a miniature balancing authority. This may or may not be how things play out in the real world. Customers could act on their own, disaggregated and uncoordinated. The lab’s going to model that kind of scenario soon.Note: The lab did not model a procurement strategy optimized to reduce maximum carbon emissions. (Jesse Jenkins, who leads the lab, refuses to use the word “emissionality.” He insists on “carbon-optimized procurement.” Don’t worry, he’ll crack like the rest of us.) Modeling carbon-optimized procurement would have been a lot of extra work and the funder of the research, Google, did not ask or pay them to do it, so if you’re a wealthy corporate or philanthropy out there reading this, pay the lab to model it!Let’s look at a few of the findings.24/7 procurement reduces the carbon intensity of a company’s energy portfolioAs companies push their CFE scores higher — meaning, as they match more and more of their hourly consumption with hourly production of CFE — they reduce the carbon intensity of their portfolio. At a certain level of CFE, they reduce it beyond what they would accomplish with 100 percent annual matching.Take California. It already has a fairly clean grid — every company starts with a minimum CFE score of 64 percent, just by being located there. If a company procures the cheapest clean energy to match 100 percent of its annual consumption, its CFE score gets to 75 percent. There are still 25 percent of hours in which it is drawing on at least some fossil energy. As a company’s CFE scores rise beyond 75 percent, the emissions rate of its portfolio falls further, steadily to zero at a CFE score of 100 percent.(Another note here: “Current technologies” means wind, solar, batteries, and, at least in California, conventional geothermal. “Advanced technologies, no combustion” includes advanced geothermal and nuclear, along with long-duration energy storage. “Advanced technologies, full portfolio” includes all of the above, plus natural gas with carbon capture and sequestration [CCS] and combustion turbines running on zero-carbon hydrogen fuels. The reason the green bar never fully reaches a zero emissions rate is that there are residual emissions associated with natural gas and CCS.)PJM is a different story. It’s pretty dirty — participants there start with a baseline CFE score of just 22 percent. So a simple strategy of 100 percent annual matching results in a huge drop in emissions rate, though it only gets participants to a CFE score of 62 percent. Once again, as participants raise their CFE scores beyond that, the emission rate declines to zero. However, 24/7 procurement does not just reduce participants’ own emissions rates.24/7 procurement drives more system-level carbon reductions In California, if 10 percent of the C&I sector participates, 24/7 procurement would reduce more system-level (as opposed to participant-level) emissions than a 100 percent annual matching strategy, starting at a collective CFE score of 88 percent. There are two explanations for this. The first is a volume effect — participants doing 24/7 matching simply have to buy more CFE, and with more CFE, more fossil generation is displaced. The second is a timing effect — participants doing 24/7 matching procure resources that better match demand patterns, thus displacing more fossil generation. Here’s PJM:PJM starts out with much less solar and wind. That means that, while the volume effect does advantage 24/7 once CFE scores reach 90 percent, the timing effect isn’t very pronounced (the marginal generator is basically always fossil), and the net difference doesn’t amount to much. So 24/7 procurement reduces more system-level emissions than 100 percent annual matching, but only at relatively high CFE scores and not by a huge amount. 24/7 procurement comes at a relatively steep cost premiumThere’s no two ways about it: 24/7 procurement costs more. And the costs rise as CFE scores get closer to 100 percent, especially if only current technologies are available. Here’s California.Note that covering that last 10 percent, getting from 90 to 100 percent CFE, sees costs rapidly escalate, especially for the last 2 percent. If only commercially available technologies are put to use, 24/7 CFE is 64 percent more expensive than 100 percent annual matching. If a full portfolio of technologies is available, it’s only 39 percent more expensive.The current technology costs are easy to explain: it’s extremely expensive to cover the last 10 percent of consumption with only wind, solar, batteries, and conventional geothermal. But why is the green line so much lower than the blue line?The difference between blue and green comes down to which clean-firm sources are available. The “no combustion” set — long-duration energy storage, advanced geothermal, and advanced nuclear — has high fixed costs (labor and construction) and low variable costs (operation and maintenance). But the “full portfolio” set includes combustion-based sources like natural gas with CCS and turbines running hydrogen fuels, which have lower fixed costs but higher variable costs, and that turns out to be much cheaper when the sources are run at low utilization rates, as these will be. In PJM, the cost differential is even greater:With only currently available technologies — which, remember, do not include geothermal in PJM — the cost of 24/7 procurement is 139 percent higher than the cost of 100 percent annual matching. Yikes. But with the full portfolio, 24/7 is only 54 percent more expensive. In PJM, “procuring clean firm generation or long duration energy storage technologies can significantly lower marginal abatement costs, particularly at higher CFE scores.” It really helps, on a dirty grid, to have some clean-firm sources that cover the last few percent.OK, let’s pause here and assess what we’ve learned. We know that 24/7 procurement can reduce and eventually zero out the carbon intensity of a participant’s own portfolio, though of course, from a climate perspective, that’s basically irrelevant. In system terms, 24/7 procurement reduces emissions more than 100 percent annual matching, but only a modest amount — and that modest amount comes at a substantial cost premium.Here the emissionality perspective taps us on the shoulder. It points out that, in either case (100 percent annual or 24/7) companies could reduce more emissions with the same amount of money by directing that money to dirtier grids. Companies are spending extra money to reduce “their own” emissions when the atmosphere doesn’t care whose emissions are whose. Emissionaries (ha ha, another new word!) might ask, what’s so great about 24/7 over and above 100 percent annual matching? Why are the companies procuring for 24/7 willing to spend so much more money for so little additional emission reduction? Why don’t they spend that money on dirty grids where it will reduce more emissions?The main answer from proponents is that 24/7 procurement will do more to prepare the way for, and reduce the cost of, full grid decarbonization. It is playing the long game. 24/7 procurement drives early deployment of clean-firm sourcesWhile procuring for 100 percent annual matching generally means buying only wind and solar, procuring for 24/7 matching will necessarily include, depending on local prices and technology availability, not only batteries but “conventional and advanced geothermal, advanced nuclear, natural gas power plants with CCS, gas plants using zero-carbon fuels, and/or long duration energy storage.”Here’s 24/7 procurement in California with 10 percent C&I participation in 2030 with current tech, advanced tech with no combustion, and the full portfolio:In the first and second cases, the story is about solar, geothermal, and batteries. But with the full portfolio, geothermal drops out almost entirely, replaced by natural gas with CCS (and a few zero-carbon-fuel turbines), which will be considerably cheaper. This is not likely to be a popular result — I can’t say I like it — but it looks like, on grids with high penetration of variable renewables that need some low-utilization clean-firm generation to fill the gaps, natural gas with CCS may be the cheapest option.Here’s PJM:In the current-technologies case, it’s all about solar and batteries — and as we saw above, it’s expensive AF. In the advanced-tech-no-combustion case, advanced nuclear steps in and vastly reduces the total amount of CFE required, thus shaving off a big chunk of the cost. In the full-portfolio case, natural gas with CCS once again replaces most other clean-firm generation, including nuclear, reducing costs further. Summing up: “If 10% of C&I customers participate and reach 100% CFE, 1.9-2.3 GW of clean firm generation and long-duration storage capacity is deployed in California and 5.9-7.1 GW in PJM by 2030.”That’s a lot! Enough to kickstart those markets. “Just as 100% annual matching helped transform wind and solar PV from expensive ‘alternative energy sources’ to mainstream, affordable options for the world,” the report says, “24/7 procurement is likely to have similar transformative impacts on clean firm resources.”Here’s a chart of what different procurement strategies can accomplish:What’s the right time horizon for voluntary climate policy?So where does this leave us on the debate between 24/7 and emissionality? Should companies reduce their own hour-to-hour emissions or should they just reduce the most emissions they can, regardless of location and timing? Of course, there’s no real reason to pit them against one another. Companies can do one or the other or a mix, depending on their particular values. Nonetheless, it’s an intriguing question, and I admit to remaining torn. I frequently argue that post-2030 decarbonization is, if anything, drawing too much attention from policymakers, corporates, and tech types, at least relative to the prime directive of climate policy: rapidly reducing emissions in the coming decade by driving fossil fuel power plants off the grid with cheap wind and solar. That core task is by no means accomplished. Most grids in the US remain much dirtier than California’s, with plenty of room for more wind and solar. Before they get too excited about advanced nuclear and CCS, everyone needs to make sure that wind and solar are growing fast enough to mostly decarbonize the grid by 2030. I worry that 24/7 procurement is part of this trend: turning our eyes to the 2040-2050 horizon, the last 10 to 20 percent of grid decarbonization, before we have the first 80 percent locked in.That said, I don’t worry about that too much. Getting to 24/7 CFE will involve buying plenty of wind and solar along the way. Long-term power purchase agreements will remain the gold standard; hourly trading of renewable energy certificates will be used to fill in the gaps with balancing resources. And all the companies pursuing 24/7 procurement will be invested in their local grids building more wind and solar — it raises their CFE baseline.What’s more, I think the socio-technological process of stimulating innovation and development in these gap-filling clean-energy technologies is going to turn over all kinds of rocks and uncover all kinds of insights. We’re still somewhat guessing about which technologies will best play the clean-firm role. Reality could surprise us. The sooner we run that investigation, the sooner we’ll have a better grasp of exactly what we need and how to craft policy around it.So for now, I remain excited about 24/7 CFE and I can’t wait to see more companies and cities jump on the bandwagon. People are beginning to think about full decarbonization now. The engineers and accountants are running the numbers. We’re going to see some really cool stuff happen soon. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

Last week, I wrote an introduction to the hot new trend in energy: 24/7 carbon-free energy (CFE), i.e., matching a company or city’s power consumption with production of clean electricity throughout the day, every hour of every day. If you haven’t read it yet, you’ll want to check it out before reading this post.Today, I want to talk about a big debate around 24/7 CFE, regarding whether it’s the right goal for companies and cities to adopt at all. Exploring that debate will help us get our heads around what 24/7 CFE can and can’t accomplish.But first, a quick refresher. Here’s the idea: right now, in addition to generating electricity, renewable energy projects generate renewable energy certificates (RECs), one for each megawatt-hour. They can sell the RECs to any entity looking to buy renewable energy. For instance, a company or city that wants to go “100 percent renewable” can simply buy enough RECs to cover its yearly electricity consumption.At least two changes would be required to make 24/7 CFE possible. First, “renewable energy” would expand to “carbon-free energy.” Any generator putting out electrons without carbon emissions, including nuclear or natural gas with carbon capture and sequestration (CCS), would qualify. And second, RECs, rather than coming in month- or year-long chunks, would be issued in time-stamped increments of an hour, so that buyers could target procurement at the particular hours of the day when they need CFE. Eventually, each hourly REC would contain information about avoided carbon emissions, so buyers could tally up the carbon impact of their purchases. That’s the vision.In this post, I’m going to discuss an objection to 24/7 and some counter-arguments to the objection. Then, in my next post (yes, this is turning into 24/7 Month), I’ll look at some new modeling of the impact of 24/7 procurement and try to draw some conclusions. We’re going to have a good time.Measuring carbon is mostly doableAn intrinsic part of the 24/7 CFE vision is that each hourly REC will be tagged with a certain amount of avoided carbon. This will allow buyers to make procurement decisions that take emissions into account.There are some issues and controversies around calculating avoided carbon, though they’re not the ones I’m going to focus on today. Some carbon counters have proprietary formulas (like WattTime) and some are trying to develop open-source methods (like EnergyTag). The numbers they produce are not radically different, but they do differ. They vary in how they calculate the marginal (most expensive) energy source on the grid at a given moment — the marginal generator is the one that will spin down to make room when the CFE is produced. They differ in how to draw the geographic boundary of analysis, which can affect results. And other stuff like that. “To go from the generation data to the local carbon emissions data is not trivial,” says Toby Ferenczi, founder of EnergyTag, “because you're trying to model the flow of electrons. Until you can track a single electron through the system, there will always be different types of approximations.” There’s also the question of how distributed energy resources (DERs) are treated. Right now, grid operators tend to have little visibility into or control over DERs; energy generated locally, on a distribution grid, is viewed by grid operators as reduced demand on that grid. Bringing DERs more fully into the picture as deployable resources is an important long-term challenge.There are data issues too. If you look at electricityMap, which seeks to track the carbon intensity of every grid in the world, at every hour, you will see that there are still big holes, areas where utilities have not made the data public. New regulations and laws requiring grid operators to make these numbers available is another priority.Anyway, I’m not going to dig into these technical issues. I have faith that, if an hourly REC market gets going, these kinds of questions will be ironed out. The general sentiment is that it is more important to have a common set of numbers than it is for those numbers to be accurate down to the decimal. Instead, let’s turn to the more fundamental challenge to 24/7 CFE.24/7 vs. emissionalityUnlike air pollution, which concentrates where it is emitted, carbon dioxide diffuses completely into the atmosphere. It doesn’t matter where it is emitted; all tons are the same, from a climate perspective. One company or city’s emissions are no different than any others. There’s nothing about your hourly emissions that make them special.It follows that, if you’re a company that wants to reduce carbon emissions, the thing to do is buy clean energy on the dirtiest grid possible, wherever it will displace the most carbon-intensive energy and thus prevent the most emissions. If you take an international perspective, that will probably be somewhere overseas, in Asia or Africa; if you take a US perspective, it will be in states like West Virginia, Wyoming, and Kentucky.The best way to do this is with bundled RECS — RECs purchased together with the energy that produced them, through long-term power purchase agreements (PPAs) — because that’s the approach most likely to actually lead to new clean energy projects being built. But “most organizations are not in a position to sign long term PPAs,” says Ferenczi. “All they know is: I want to buy good electricity, not bad electricity.” For them, unbundled RECs are the only option.Either way, if you want to reduce emissions with your CFE procurement, it must be guided not only by what’s most likely to lead to new projects (“additionality”), but also by what will reduce the most emissions (“emissionality”). This word emissionality is a terrible neologism — the latest of many out of the energy world — but I’m living with it, because it’s a helpful way to refer to the quantification of carbon emission reductions.Now, take note: optimizing your clean-energy procurement for emissionality is different from optimizing it for your own 24/7 consumption. The former strategy maximizes emission reductions. The latter does not. In some cases, optimizing around your own consumption could fail to reduce emissions or even increase net emissions, despite increasing your share of CFE. One simple example: imagine one company has signed a bunch of solar PPAs and thus has more hourly RECs during the day than it needs to cover its consumption, but it has a shortage at night; another company has signed a bunch of wind PPAs and thus has excess hourly RECs at night, but a shortage during the day. The companies can simply trade hourly RECs. Each has increased its CFE score, but no new clean energy was built and no carbon emissions were reduced. Another example is how companies choose to deploy batteries. Mark Dyson, an energy analyst at RMI, explained it to me this way:A battery optimized for 24/7 would charge when a buyer has procured “excess” renewable energy in a particular hour, but in most grids, for the foreseeable future, a fossil generator will usually be the marginal unit at the system level — so charging storage increases carbon emissions in that hour. Discharging the battery later would offset generation from another fossil generator and reduce emissions, but there’s no guarantee the difference in efficiency of those power plants is greater than the round-trip-efficiency penalty of using the battery, and thus total emissions can actually increase.In other words, optimizing battery deployment to cover 24/7 consumption will be different from, in some cases contrary to, deploying them to optimize emission reductions. Nobody has yet modeled exactly how much these two strategies would diverge, or how frequent cases like the ones above might be, but no one disputes that they would diverge. A strategy built around emissionality would, by definition, reduce more emissions than any alternative strategy built around any other goal.And this is the critique of 24/7 CFE: emissions are emissions. Reducing any one company’s emissions is of no particular benefit to the climate. Just reduce emissions wherever you can — that’s the climate imperative.This same debate expresses itself in several different forms. One way to think of the distinction is between “attributional” and “consequential” carbon accounting. Critics (see, e.g., this paper from WattTime) say attributional accounting — purchasing energy with a REC attached — is fine for statutory or voluntary clean-energy requirements. But when it comes to reducing carbon emissions, companies should use consequential accounting, i.e., purchasing energy that has the most short-term emission-reduction impact. The same debate crops up again between “hourly average” and “marginal” carbon measurement. One can either assess a unit of CFE based on its effect on the hourly average emissions on the grid in the hour it is produced or based on the carbon intensity of the marginal generator it displaces. Hourly averages are, for a variety of reasons, easier to determine, and can be used to boost your own CFE score, but a marginal approach (measuring “nodal marginal emissions”) will tell you which energy purchase will maximize short-term emission reductions.All these debates are forms of the same question: why not focus on carbon emissions? As Henry Richardson of WattTime put it to me, “measure emissions, not megawatt hours.”The emissionality critique — that emissions, not any company’s particular emissions, are the proper target for procurement strategies — is worth taking seriously. Everyone in the space has wrestled with it. Let’s run through a few possible responses and counter-arguments.Volts is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.Industrial policy vs. carbon policyWhen I talked to Princeton energy modeler Jesse Jenkins — who contributed to the modeling of 24/7 CFE we’ll look at in the next post — he suggested a helpful analogy to the debate between emissionality and 24/7: the debate between a carbon tax and more sector-specific standards and investments, i.e., industrial policy.A carbon tax is the most economically efficient way to reduce emissions — it will go after the cheapest emissions first. But by doing so, it will leave untouched many sectors of the economy that we will eventually need to decarbonize to get to 100 percent net-zero.If we leave them untouched for too long, we’ll run into a wall. “We need to be thinking about the total solution,” says Melissa Lott, research director at the Center on Global Energy Policy. “Otherwise we're going to get halfway down the road, have to take a hard left, and it's going to be painful and expensive.”The emissionality vs. 24/7 debate takes the same form. An emissionality approach would reduce emissions at a lower per-ton cost — it would go after the cheapest reductions first, usually by adding wind and solar to dirty grids. But a 24/7 approach will direct investment toward technologies that fill the gaps left by wind and solar. “And there are gaps,” says Lott. “These gaps aren't eight or even 100 hours, which can be solved with different battery technologies. They're eight to 14 days.”To cover those gaps will require “clean firm” generation, many sources of which are still in nascent forms of development. The pursuit of 24/7 CFE will stimulate innovation and growth in the entire suite of technologies needed to smooth out variable renewables — sources all grids will eventually need and many already do. (California power providers are already putting out solicitations for clean-firm projects.) In fact, says Brian Janous, Microsoft’s director of energy and renewables, even the early talk of 24/7 CFE has gotten people thinking about solutions. “We're seeing more and more utilities, and more and more energy service providers, come to us and say, hey, we think we can solve this problem for you,” he says.Companies pursuing 24/7 CFE are undertaking voluntary industrial policy, channeling attention and investment to gaps in current clean-energy technology, bringing down the costs so that other companies can use them more easily. That could have impacts well beyond their own emissions. Here’s how Jenkins put it to me:The heart of 24/7 carbon-free procurement is the pursuit of transformative impact on electricity systems via accelerated innovation. Think about the indirect emissions impacts from helping accelerate the time to maturity (or enable in the first place) one or more clean firm technologies or long-duration energy storage technologies that can go on to widespread adoption and make reaching 100 percent carbon-free electricity easier for the world. Leadership isn't just about doing one's part. It is about making it easier for others to follow. For a company, even one as large as Google, this impact is likely to far outpace any direct emissions reductions they achieve via procurement.24/7 CFE needs to be seen in its full contextNone of the entities pursuing 24/7 CFE today see their own achievement of 24/7 CFE as the ultimate end goal. The goal is grid decarbonization.“We break it into three pillars,” says Michael Terrell, Google’s director of energy. “First is transacting,” i.e., contracting with developers to ensure Google’s own 24/7 supply of CFE. “Second is advancing technology, both on the demand side and the supply side,” i.e., the industrial-policy piece. “Lastly is policy and grid decarbonization,” i.e., advocating for clean-energy policies before state public utility commissions (PUCs) and legislatures, to hasten decarbonization of the grids in which it operates.“For us, it's not a win if the only way we get to 24/7 in each place is by transacting,” he says. “We want to get the grids moving in that direction, too.”When it comes to the standard way of getting to “100 percent clean energy,” companies can just buy cheap RECs from distant grids. They don’t need to get involved beyond that. “That was a concern of ours,” Terrell says. “Companies were getting to 100 percent without having to consider the future of the grids where they were operating or do any policy.” In contrast, if a company is trying to cobble together a 24/7 supply of CFE on its local grid, it becomes much more invested in the state of that grid. The more CFE is on the grid, the higher the baseline from which it begins transacting for its own CFE. That will get companies involved in pushing utilities to make clean-energy commitments, pushing PUCs to clear away anachronistic regulations, and pushing legislatures to pass clean-energy policy.“We are trying to drive massive system change well beyond Google,” says Terrell. “The idea behind 24/7 is, you want corporates to have a stake in every grid where they operate. You want them to be banging the table, driving system change on these grids, getting these grids to carbon-free as fast as possible.”Janous says that Microsoft also wrestled with the 24/7 vs. emissionality debate as it determined its next steps. “Ultimately, we determined that local influence is still important,” he says. “Our ability to influence PUCs and local utilities, and do that worldwide across dozens and dozens of different markets, was more important than taking a pure-play emissionality approach in one market.”Time will tell how strong that local influence proves to be. What happens if progress on local grids is slow? Lott thinks the pursuit of 24/7 will move forward some tough calls. Entities pursuing 24/7 “are going to have to make a decision here in the next few years,” she says. “Do we keep our data center in this location where we don't see a clear path to [24/7], or do we move it? Do we shift investment somewhere else? This is going to be an interesting tension that will play out around 2025, ‘26.”This is an aspect I think critics of 24/7 CFE tend to miss: the social dynamics. If it becomes the new standard for climate-conscious companies and cities, there will be dozens, maybe hundreds of them doing it, spread out across all of America’s many balkanized grids. Each will have reason to serve as a local clean-energy emissary. Each will be invested in the others’ success — one company’s PPA boosts the grid mix for every other company on that grid. Companies will be incentivized to pool their resources for greater impact, as many are already doing through the Clean Energy Buyers Association (CEBA), which organizes and accelerates voluntary clean energy procurement. (A telling tidbit: until quite recently, CEBA was REBA, but “renewables” have given way to “clean.”)In short, the movement to 24/7 has the potential to drive social and political change in a way that traditional REC markets never could and arguably a pure emissionality approach couldn’t either.Emissionality can inform a hybrid approachThe choice between 24/7 and emissionality does not have to be a stark either/or. It is possible to use both perspectives for different jobs, or to blend them.Take the hourly-average vs. marginal debate. “All of these accounting systems have their advantages,” says Terrell. If you’re thinking about offsetting the consumption of a large facility, “you want to be looking long term, at the 10-to-15-year roadmap of that grid, and average emissions is fine for that,” he says. On the other hand, if you’re thinking about offsetting the emissions of product supply chains and product use — which are spread out across the country — there are no local consumption concentrations to target, so you might take a marginal approach to seek the cheapest, fastest emission reductions. Put another way: you can use hourly averages to offset your scope 2 emissions and marginal to offset your scope 3 emissions.Microsoft, Janous says, takes emissionality very seriously:The way I think about it is, there are three stages of impact. The first one is attribution — it's just buying RECS. Then, five years in, we moved to we would call additionality — it's not good enough for me to have this attribute, I need to have an attribute tied to something that I actually did. We're now getting into this third era, which is what I would deem consequential — not only do I need to say that I caused it, I need to be able to demonstrate that I'm materially changing the makeup of carbon on the grid.With that in mind, he says, Microsoft has developed a “hybrid form.” By pursuing 24/7, “we are going to look at each grid where we operate and we're going solve for that,” he says. “If we can achieve 100 percent decarbonization of our energy supply across our portfolio, we've demonstrated that you can do it just about anywhere.”“By virtue of taking that grid-level approach, we are not going to have perfect optimization for emissionality,” he says, “but we're going to apply [emissionality] within that grid context.” In other words, within the grids containing Microsoft’s local loads, Microsoft will purchase the CFE that reduces the maximum emissions.In this hybrid approach, neither 24/7 CFE nor emissionality is perfectly optimized, but both are pushed forward together.“We feel like the principle [of emissionality] is still extraordinarily valuable,” Janous says, “even when you do it in this hybrid way.”Other values could supplement 24/7 as wellJanous, Terrell, and pretty much everyone else I spoke to emphasized that there are other values beyond emission reduction that are important to integrate into procurement decisions as well, most notably environmental justice.Last year, Salesforce released a white paper, “More Than a Megawatt,” explaining its evolving view on large-scale corporate procurement. It wants to go beyond emissionality to assess potential clean-energy projects based on a whole range of criteria, from equity to land use to impacts on wildlife. There are always trade-offs among these metrics, so Salesforce has developed a “procurement matrix” that will help weigh all these factors and determine which projects best optimize for multiple values. (A similar whitepaper was recently released by LevelTen Energy, a renewable energy procurement platform.)Notice that the more of these values enter your procurement matrix, the farther you are from a pure 24/7 play. Instead of optimizing for any single value, you are — as in life generally — trying to balance multiple competing values under time and resource constraints.That can be complicated. It will help if big players like Salesforce create some standardized tools and metrics that make it easier for mid-sized companies to follow suit. Individual companies and cities can decide for themselves how much weight they want to give to 24/7 CFE relative to other values. Anyway! This post, like the last one, has gotten way too long. If you’ve stayed with me this long, you are definitely a Volts reader and should purchase a subscription!In my next post, we’ll have a close look at some new modeling of 24/7 procurement from Princeton’s Zero Lab and then see, based on that and all that has come before, whether we can draw some provisional conclusions about 24/7 CFE.Notice that the more of these values enter your procurement matrix, the farther you are from a pure 24/7 play. Instead of optimizing for any single value, you are — as in life generally — trying to balance multiple competing values under time and resource constraints.That can be complicated. It will help if big players like Salesforce create some standardized tools and metrics that make it easier for mid-sized companies to follow suit. Individual companies and cities can decide for themselves how much weight they want to give to 24/7 CFE relative to other values. Anyway! This post, like the last one, has gotten way too long. If you’ve stayed with me this long, you are definitely a Volts reader and should purchase a subscription!In my next post, we’ll have a close look at some new modeling of 24/7 procurement from Princeton’s Zero Lab and then see, based on that and all that has come before, whether we can draw some provisional conclusions about 24/7 CFE. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

Hey y’all, just a quick thing today (as I work on my follow-up to Friday’s post).I was on Pod Save America last week:One of the things I talked about is the COP26 climate summit in Glasgow, Scotland, which wrapped up last week with a final agreement that … say it with me … represented real progress but fell short of what’s needed. Just like all the other COP agreements.I had a pretty deflationary take on the whole thing on the pod. Given the melodramatic rhetoric around COP26 — the same rhetoric that attends every international climate summit — I thought I’d briefly explain why I don’t think COP26 is worth getting down about. By way of background, remember that there were effectively two climate events at the COP, as there always are. One was the COP itself, the business of the United Nations Framework Convention on Climate Change (UNFCCC). The other was a kind of climate festival-cum-trade-show, featuring governments, nonprofits, and private-sector actors announcing all kinds of new campaigns and initiatives alongside the UNFCCC process — and protestors marching outside.First event first. The Paris Agreement continues to play outThe actual business of COP26 mostly involved negotiators from various countries in cramped conference rooms hashing out technical details of elements of the Paris Agreement — about monitoring and verification, about who is contributing how much to the climate fund for poorer countries, about how often countries will report new targets, and so forth. None of that stuff was particularly dramatic; it was all the usual incremental, too-slow movement forward. There was some drama at the last minute when India — which had started COP26 with a bang, promising to hit net-zero emissions by 2070 — demanded that a provision on a global coal “phase-out” be rewritten to say “phase-down.” (This was disappointing, but keep in mind this is the first time fossil fuels have been specifically mentioned in a COP agreement at all.)Much was made of this and other shortcomings of the final agreement, but there’s a weird kind of disconnect around this commentary. What people seem to forget is that the UNFCCC has no real power to enforce anything and there isn’t the unity needed among participating countries to create a binding target with real consequences. This was the origin of the Paris Agreement: the realization that the best the UNFCCC could do is structure and publicize voluntary national goals and commitments. The idea was to do with transparency and peer pressure what decades of adversarial negotiations couldn’t: steadily increase ambition.A shorter way of saying this is that a COP agreement can’t make a country do anything. Whether and how fast India phases out coal has nothing at all to do with what its diplomat says in Glasgow and everything to do with domestic Indian politics, which have their own logic and are only faintly affected by international politics. The utility of the Paris process is that every few years it provides the equivalent of a giant camera flash, revealing where everyone stands. That is useful. International transparency and peer pressure can sometimes move national governments. But it is a mistake to invest any particular hopes for change in the UNFCCC process — it can’t really do anything. It can only illuminate what is being done.What is being doneThe good news is, we’re making progress. A decade ago, we were on track for 4° to 6° Celsius average warming by the end of the century, which would have been species-threatening.As this report from Climate Action Tracker shows, thanks to actions taken by national governments since then, we have “bent the curve” on climate change, as it were, and brought the average expected warming down to 2.7°C. That would still be devastating. But we’re not going to stop there. Progress is only accelerating. If every country that has submitted a 2030 carbon target in the Paris process — an NDC, or nationally determined contribution — hits that target, average warming will be 2.4°C.If all short- and long-term targets submitted thus far are achieved, it’s down to 2.1°C. In CAT’s “optimistic scenario” — in which all targets announced by anyone anywhere are met — the average is 1.8°C. As the CAT report emphasizes, that’s still short of the Paris goal. There’s still a credibility gap between what countries say they want to achieve and what they are willing to offer. There’s certainly no reason for complacency. But the trajectory is in the right direction. There’s still plenty of reason to fear where we are currently headed, but at the same time, there’s no reason to think that five years from now, at the next major Paris “stocktake,” we’ll still be headed there. We’re bending the curve and lots of forces and institutions are lining up behind the effort. Speaking of which …Climate WoodstockAlongside every official COP is a kind of international festival where everyone who’s doing anything on climate goes to talk about it. Bi- and multi-lateral coalitions, states, cities, nonprofits, corporations — everyone gravitates to the moment when media attention will be most intense. There was a bit of a sour taste at the festival this year, given that fossil fuels were abundantly represented and the poorest and most vulnerable were, thanks to Covid, unusually under-represented. Nonetheless, amidst the unsavory optics came all kinds of heartening news. There was a global treaty on methane, brokered by the US and the UK, which has been signed by more than 100 countries. A group of renewable energy players created the 24/7 Carbon-free Energy Compact in partnership with Sustainable Energy for All and UN Energy (see my explainer on 24/7 clean energy).A group of governments and private funders pledged to spend a total of $1.7 billion on Indigenous peoples and local communities (IPLCs) protecting local biodiversity. Over 100 countries pledged to stop deforestation by 2030. A group of philanthropic and development organizations and governments called the Global Energy Alliance for People and Planet (GEAPP) pledged $10.5 billion toward helping emerging economies transition from fossil fuels. Similarly, the Glasgow Financial Alliance for Net Zero (GFANZ) pledged over $130 trillion of private capital to the energy transition. And so on. What this shows is an immense amount of will in the world to address this problem, struggling to organize. There’s so much going on.Another thing I said on Pod Save America is that national governments are often going to be in the caboose of this train — civic groups, the private sector, and subnational governments are leading the way. That’s distributed all over the world, less easy to see and sum up, but it shows that the caution and intransigence of national governments are not the whole story.COP26 was a snapshot of a world — agonizingly slowly but with gathering speed — moving to address a crisis. There’s no reason for anyone to stop pushing, but there’s also nothing wrong with acknowledging and celebrating the progress that’s been achieved by all the pushing so far. Things are moving! This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

When a company or city claims to be “100 percent powered by clean energy,” what it typically means is that it has tallied up its electricity consumption, purchased an equal amount of carbon-free energy (CFE), and called it even.That’s fine, as far as it goes. But now, the next horizon of voluntary climate action has come into view: a brave few companies and cities aspire, not just to offset their consumption with CFE on a yearly basis, but to match their consumption with CFE production every hour of every day, all year long. Running on clean energy 24/7 — that’s new hotness. The list of entities in the US that have committed to 24/7 CFE is short: Peninsula Clean Energy (a community choice aggregator in California) has committed to it by 2025; Google, Microsoft, and the Sacramento Municipal Utility District have targeted 2030; the Los Angeles Department of Water and Power and, somewhat anomalously for this California-heavy list, the city of Des Moines, Iowa, have targeted 2035. Ithaca, New York, is rumored to be contemplating something similar.That’s it for now. But the idea is catching on quickly and drawing tons of attention. In September, a broad international group of more than 40 energy suppliers, buyers, and governments launched the 24/7 Carbon-free Energy Compact, “a set of principles and actions that stakeholders across the energy ecosystem can commit to in order to drive systemic change.” Biden’s original American Jobs Plan contained a promise to pursue “24/7 clean power for federal buildings.” That language has fallen out of the Build Back Better budget reconciliation bill in Congress, but rumor has it Biden may issue an executive order on the subject soon.There are already efforts afoot to standardize hourly tracking of clean energy and build it into markets, as well as numerous active discussions about how to update markets and policy to accommodate it. Anyway, it’s getting to be a big deal. It’s time to wrap our heads around what’s going on. Happily, it turns out to be a fascinating story with all kinds of twists and turns. Let’s dive in!A history of “powered by clean energy”To understand what “100 percent powered by clean electricity” has meant to date, you have to understand at least the basics of renewable energy certificates, or RECs.Originally, RECs were a mechanism that utilities used to comply with statutory requirements for deploying renewable energy. A wind or solar farm that generated 1 megawatt-hour of renewable energy also generated 1 REC, which was submitted to regulators as proof of compliance. Then voluntary REC markets came along. In a voluntary REC market, a power generator can “unbundle” its REC from the megawatt-hour of energy it generates and sell it into a market where it could be traded numerous times before being retired, or taken off the market. (For accounting purposes, whoever retires the REC gets to claim the environmental benefits.) Corporate, institutional, and government entities could purchase, trade, and retire RECS. The idea was that the ability to sell RECs as a second income stream would induce developers to build more clean energy projects. And it worked for a while, as long as solar and wind came at a cost premium and RECS were relatively expensive.But then, wind and solar started getting super-cheap: the cost of an unbundled REC went from $5 in 2008 to under $1 in 2010 (where it stayed through 2019, though it has risen back up to $3-$5 in the last couple years). Voluntary REC markets became quite robust but it became clear at a certain point that all these unbundled RECs were not actually driving many new renewable energy projects. A 2013 study found that “the investment decisions of wind power project developers in the United States are unlikely to have been altered by the voluntary REC market.” To their credit, corporate and industrial (C&I) buyers took notice. In 2014, Walmart stated that it would no longer offset its energy use with unbundled RECs, and many other buyers followed suit. The market began to trend toward long-term contracts — power purchase agreements (PPAs) — through which a buyer pledged to buy both the energy and the RECs (“bundled” RECs) from a prospective project for 10 to 25 years. That gave developers more confidence and has prompted a surge of building of clean energy projects. In 2020 alone, C&I buyers in the US procured 10.6 gigawatts of renewable energy, which represents a third of all renewables capacity added in the country. Voluntary procurement by the C&I sector has become a major driver of the energy transition.There are still plenty of entities buying cheap unbundled RECs and claiming carbon neutrality, but the leaders in the space are generally bundling them under PPAs. But there is still a problem with RECs, even the good ones.Volts is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.The problem with RECSWhen a C&I buyer purchases a REC, whether bundled or unbundled, it knows how much renewable energy was generated (a megawatt-hour), but not when it was generated. But it turns out that, when it comes to energy sources that come and go with the weather like wind and solar, the timing of generation matters quite a bit. If participants in voluntary REC markets continue to buy the cheapest wind and solar RECs, sooner or later, the grid will become imbalanced. During periods of high sunlight or heavy wind, there will be too much renewable energy, pushing prices down. But in periods when the sun is down or the wind flags, there isn’t enough renewable energy, so demand must be covered by expensive natural gas peaker plants. Prices and supplies swing wildly. Markets don’t like it. And more wind and solar only exacerbate the effect.What’s needed is CFE that’s available when sun and wind fall short. A megawatt-hour of additional CFE is much more valuable during those times than it is during times of high solar and wind output. The timing matters.But right now, RECs contain no information about the time of generation. It is impossible for buyers to know if any particular generator covered or will cover any particular hour of consumption. Buyers have no way of buying CFE specifically in the hours that they most need it. Think of a monthly REC as an extremely low-resolution image of renewable energy production. In temporal terms, it’s one giant month-sized pixel. C&I buyers purchase these low-resolution images, overlay them on their consumption, and hope for the best.But when you look at a higher resolution image of renewable energy production, one with hour-sized pixels, you see that it does not overlap perfectly with consumption. Not even close. The mismatch between “100% CFE” and “100% CFE 24/7”Google broke ground in this area with a 2018 white paper called “The Internet is 24x7. Carbon-free energy should be too.” (See also this 2020 white paper and this April blog post from Google CEO Sundar Pichai.) It has produced some visuals that allow us to clearly see the mismatch between renewable energy supply and demand.Google has dozens of data centers. It tracks energy supply and demand by the hour and gives each data center a CFE score: how many hours of its operations were powered, in real time, by renewable energy. A quick word about how the CFE score is calculated. For each hour, the baseline CFE score is the grid mix. So if the data center is drawing on a grid with 20 percent CFE (wind, solar, nuclear, whatever) and 80 percent fossil, it begins with a CFE score of 20 percent for that hour. Google then adds any energy being produced during that hour by projects with which it has signed PPAs on the same grid. That can push the CFE score up, theoretically to 100 percent. Anyway, with that in mind, let’s check out some data centers and their CFE scores. The first is from the company’s data center in Iowa. Google buys more than enough wind power in Iowa to offset the data center’s consumption in volumetric terms. But is the data center actually running on wind power, from hour to hour? Not entirely. To be precise, 74 percent of its demand was matched, on an hourly basis, by CFE. It has a CFE score of 74. Below is a stripe representing the data center’s consumption for every hour of the year. Each column is a day (there are 365). Each row is an hour, beginning with midnight at the top. The shade of the square represents the amount of CFE powering it during that hour.In most hours, there’s enough Google-contracted wind power coming onto the Iowa grid to cover the data center’s consumption. However, for a period in late summer, wind speeds decline, wind power drops, and fossil fuels step in to provide the power. How can Google get this data center’s CFE score up to 100 percent? The first thing to note is that it can not simply buy more Iowa wind power. It is already getting all it can get out of wind. It doesn’t matter how many wind farms it has contracted with if the wind isn’t blowing in a given hour. In Iowa, Google is going to have to procure something else — something that can fill in the gaps left by wind.One way to do that is by buying both wind and solar, which tend to have complementary profiles. Below is a similar stripe representing Google’s Netherlands data center. On July 1, a bunch of new Google-contracted solar came online; from that point on, the middle of the stripe — daytime — is much greener. Solar fills in some of the gaps left by wind. Unfortunately, solar leaves gaps too. It doesn’t matter how many solar farms you’ve contracted with if the sun is behind clouds or, you know, down. In the Netherlands, Google is going to have to procure something else — something to fill the remaining gaps left by solar and wind. In some sense, these are nice problems to have. Here’s the Taiwan data center:Oof. What little CFE there is on Taiwan’s grid comes from nuclear power plants — when they go out, it’s all fossils.Google has given all of its data centers CFE scores (which was no mean feat, since in many cases this data was not easily available). Here they are:These graphics help illustrate Google’s 24/7 CFE challenge, which isn’t just one challenge but a slightly different challenge in each of the dozens of grids in which it operates. At each of those data centers (except maybe Oklahoma and Oregon) it needs to buy a bunch more wind and solar. But it will also need to buy something else — something to fill the gaps.What might that something else be? The technology needed to fill the gapsPart of the great promise of the movement to 24/7 CFE is it will draw attention and investment to all those things needed to balance out cheap wind and solar. For big consumers like Google, there are, roughly speaking, three ways to smooth out the fluctuations in wind and solar and maintain a steady hourly supply of CFE. They are, from least to most expensive: demand management, energy storage, and clean-firm generation. Demand managementDemand management begins with load reduction through efficiency. Google has aggressively pursued energy efficiency at its data centers, with dramatic results: “Compared with five years ago,” the company said in 2018, “we now deliver more than 3.5 times as much computing power with the same amount of electrical power.”After load reduction comes load shaping — managing daily operations to push more consumption into high-CFE hours — and load shifting, which refers to moving consumption around in smaller increments, responding to hour-to-hour fluctuations in CFE. “We got our start by looking out over a 24-hour period, getting a forecast of what the grid CFE would be, and then shifting compute loads back in time during that period, things like feature upgrades or backups,” Michael Terrell, Google’s director of energy (and the author of the 2018 white paper), told me. “Now what we started doing is shifting loads spatially, from one data center to the other. Theoretically you could envision compute following the sun [around the globe], if you took it all the way.”Adapting demand to supply rather than vice versa — load reduction, shaping, and shifting — is almost always the least expensive way of accommodating variable renewables. There is still a ton of innovation to come in this area. “It's a space where we haven't even really gotten started,” Terrell says. Energy storageStorage, currently dominated by lithium-ion batteries, is great for smoothing out the day-to-day supply curve, taking some excess wind from windy hours and saving it for lulls, or saving excess solar from the daytime for nighttime. However, while batteries are a good balance for renewables’ variability, their hour-to-hour fluctuations, they aren’t as good for balancing its intermittency, the occasional days, weeks, months, even years of unusually low wind or sunlight. Germans call a period like this a Dunkelflaute. It is extremely difficult and expensive to cover one with only batteries to supplement wind and solar. Clean-firm generationThe third option is “clean firm” generation, i.e., energy sources that can be turned on at will and run for days or weeks on end, but emit no carbon. The two big conventional examples here are hydro and nuclear power, but there isn’t a ton of new hydro available to most buyers and new nuclear (at least in the absence of next-gen nuclear tech) is prohibitively expensive.There’s also geothermal, which (as I wrote here) is getting a lot of interest and active development. The first bit of clean-firm that Google plans to acquire is geothermal, from a company called Fervo. For now, affordable geothermal is only available in certain areas of the country, but technological advances are close to changing that.Other clean-firm sources include:* long-duration energy storage, which is technically a form of storage, but competes directly with other clean-firm sources;* advanced nuclear, which has been just over the horizon for years but might finally be getting close;* biomass, some versions of which may qualify as zero-carbon; * power plants running on hydrogen (or hydrogen-based fuels), which are currently being tested in the UK and elsewhere; and* natural gas plants with carbon capture and sequestration (CCS), which are currently both nonexistent and wildly expensive, but may (with the help of a boosted 45Q tax rebate in the Build Back Better bill) become more cost-effective soon. One reason energy nerds are excited about the 24/7 trend is that it’s going to pull forward in time a bunch of questions (and investment decisions) that were going to face grids trying to reach 100 percent CFE anyway. Perhaps the biggest and most important of those questions is: how far will we be able to get with demand response and batteries? How much clean-firm will we need in the end? With a bunch of companies and cities competing to reach 24/7 CFE, we’ll find out sooner than we otherwise would have. And the clean-firm sources that are necessary will receive much-needed investment, bringing their costs down and benefiting other decarbonizing grids across the world.The market products needed to fill the gapsIf companies and cities want to fill in their hourly gaps, they need access to time-stamped CFE. As previously mentioned, current RECs only come in low-resolution form, in chunks of a month or year. They aren’t precise enough to target specific hours. The answer — simple to propose but devilishly difficult in practice — is to supplement and eventually replace current RECs with some kind of hourly RECs. As it happens, there’s a bunch of work going on to figure out how that would work. If you’re interested, the place to begin exploring is this white paper from M-RETS, a nonprofit organization devoted to the tracking and trading of renewable energy.Working with Google, M-RETS is pioneering and testing a product called Time-based Energy Attribute Certificates (T-EACs), which are effectively hourly RECs. One monthly REC would be replaced (for a 31-day month) with 744 T-EACs, each representing one hour of the month, each encoding exactly how much CFE was generated in that hour. For now, in the Midwest, T-EACs are being offered alongside RECs and Google is buying and retiring them. But there’s a long way to go between that test and a fundamental restructuring of REC markets. Says Google:For T-EACs to be adopted worldwide, we’ll need to standardize the certificates and integrate them into existing tracking systems and carbon accounting programs. Also, grid operators will need to enable customers to access and understand their hourly energy data. That’s why we support policies that mandate publication of grid data, and why we serve on the Advisory Board for EnergyTag, an independent non-profit pioneering a global tracking standard for T-EACs.This is a big task, which amounts to rebuilding a rather large plane (REC markets) while it is in flight. But the information necessary to do it exists. That’s phase one of M-RETS’ plan: make hourly RECS available and reliable. Phase two is a little trickier.Measuring the carbon impact of renewable energy procurement is vexed but vitalPhase two is to integrate carbon information and accounting into T-EACs, to reveal precisely how much carbon was avoided by the clean energy. This information can help buyers prioritize the T-EACs likely to displace the most emissions. It can also allow companies to more precisely track their scope 2 emissions. For those who don’t remember this bit of jargon: scope 1 emissions are from direct, on-site combustion of fossil fuels; scope 2 are the off-site emissions represented by on-site consumption of electricity; scope 3 (a much broader category) are all the emissions caused by a company’s supply chain and products. To date, companies have been able to offset their scope 2 emissions with REC purchases. But as we’ve seen, RECs are almost always mismatched to actual hourly consumption, and a company that relies on RECs to offset its scope 2 emissions is likely exaggerating its actual reductions. Hourly carbon-emissions data attached to T-EACs would allow a company to precisely measure the amount of emissions it reduces through its contracts and thus precisely offset its scope 2 emissions. There are technical issues around how to properly measure avoided carbon, but we’re going to pass those by for now. There’s a ton of work going on in this area: for companies trying to provide reliable hourly emissions data, see Singularity Energy, electricityMap (formerly Tomorrow), WattTime, and Kevala. In partnership with several energy companies, Kevala recently released a white paper proposing “a methodology for measuring carbon intensity on the electric grid.”In addition, there are organizations working to develop standards and common definitions, including the aforementioned EnergyTag, “an independent, non-profit, industry-led initiative to define and build a market for hourly electricity certificates that enables energy users to verify the source of their electricity and carbon emissions in real-time,” and LF Energy (the energy division of the Linux Foundation). The ultimate vision: electricity markets in which each hour of CFE is available as a discrete product, with reliable carbon data attached to it. Within such markets, any buyer — a building, a data center, a city — would be able to know precisely what its real-world carbon footprint is and exactly how much progress it has made in reducing it.Is 24/7 CFE the next step in carbon commitments … or a distraction? Let’s be honest: governments ought to be doing this, through policy. The federal government should pass a clean energy standard (or, ahem, a CEPP) targeting a net-zero electricity sector by 2035, like Biden wanted. On some level, all of this voluntary stuff is a suboptimal response to government failure. Nonetheless, the C&I sector deserves credit for pushing things forward even when governments won’t. It is responsible for enormous amounts of new renewable energy on the grid over the last decade.Now it is trying to focus attention on filling the gaps left by wind and solar, to achieve full, around-the-clock clean energy. This is a challenge every decarbonizing grid will face eventually. Google et al. are effectively volunteering to explore and chart it in advance. Nevertheless, there are real questions about whether this is the best climate strategy. A company procuring CFE to raise its own 24/7 CFE score is not necessarily going to procure in a way that maximizes carbon reductions; those two goals rarely overlap perfectly. Critics of the 24/7 trend say that companies ought to be focused on reducing the most carbon possible as quickly as possible, and that hourly T-EACs are in some ways a return to unbundled RECs, with all the same risks that accounting gimmicks will substitute for real emission reductions. These are complicated disputes that are worth spending some time on. And this post has already gone on for too long! So for now, I will leave it here, with the introduction I promised. In my next post, I’ll get into the questions around whether 24/7 is the right goal and how it might actually affect emissions. It only gets nerdier from here on out, y’all! This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

Amy Westervelt, an award-winning environmental journalist and host of "Drilled," dives into the intricate history of disinformation and propaganda in shaping public perception about climate change. She reveals how fossil fuel companies have masterfully manipulated narratives to protect their interests. Westervelt discusses the evolution of PR tactics, highlights the contrast between aggressive messaging from the right and the left's hesitance, and underscores the urgent need for media literacy in an age of misinformation. A thought-provoking journey into climate advocacy awaits!

Last week, Sen. Joe Manchin (D-WV) finally stopped playing games and said that he will not vote for a budget reconciliation bill that contains the Clean Electricity Performance Program (CEPP).You can read my interview with Sen. Tina Smith (D-MN) for more on the CEPP and this post to understand why it is so centrally important to serious climate policy. I won’t get into all those arguments again. Suffice it to say, it’s a good policy and losing it is bummer.Insofar as Manchin has offered any reason for killing the CEPP, it is an alleged concern over “using taxpayer dollars to pay private companies to do things they’re already doing.”But that is just incorrect. Utilities are not “already doing” what the CEPP requires, i.e., increasing their share of clean energy 4 percentage points year-on-year, every year. Only a tiny handful of the nation’s thousands of utilities are on that trajectory.The sector as a whole is slowly decarbonizing, but the whole point of the policy is to accelerate the process to meet US carbon targets. Manchin knows that. It’s precisely what he’s trying to prevent. He told CNN flat out, “I'm not going to sit back and let anyone accelerate whatever the market's changes are doing.”Why not? Well, he wants to keep fossil fuel power plants open, which is incompatible with Biden’s publicly stated goal of 50 to 52 percent carbon reductions from 2005 levels by 2030. Manchin is standing up for local fossil fuel interests (including his own) against the president, 49 of his colleagues in the Democratic caucus, a majority of legislators in the House, a majority of voters, and even a majority of West Virginia voters.He also wants to slash the child tax credit. He’s just a jerk. It is what it is.At this point, it’s unclear what will and won’t survive into the final Build Back Better Act (or whether there will be a final bill at all). Reports are that staffers are scrambling to find ways to make up the lost emission reductions through other policies.The question is, how big of a hole are they trying to fill? How big a hit is it to lose the CEPP?A few analyses released in the past week are helpful in getting our heads around this.Energy Innovation says the loss of CEPP could cost the bill up to 35% of its emission reductionsThe first is from research firm Energy Innovation, which uses its Energy Policy Simulator to determine how much emissions would be reduced by the policies in the House Democrats’ version of the Build Back Better Act and the bipartisan infrastructure bill that was passed by the Senate over the summer. Obviously, predicting circumstances a decade hence is a fraught undertaking. Energy Innovation ran four scenarios: a business-as-usual scenario, with only existing policies, and low, moderate, and high emission-reduction scenarios based on different assumptions about the price of energy and the efficacy of various provisions in the bills. They didn’t model all the policies in the bills, just the ones that are relatively easy to quantify. Some emission reductions have gone uncounted, so the estimates Energy Innovation produced are almost certainly a lower bound. Here are the topline results:In the high scenario, clean energy reaches an 85 percent share of US electricity by 2030; in the moderate scenario, it’s 80 percent; in the low scenario, about 70 percent. As you can see in the moderate scenario below, by far the biggest tranche of emission reductions (about half) would come from the combination of the CEPP and clean-energy tax credits:The good news is that passing both bills could, “with supporting state and regulatory policy,” at the high end of the high emission reduction scenario, just barely get the US to its 2030 target. That’s if everything is included in the bills. The question now is, what do those numbers look like without the CEPP? Luckily, Energy Innovation ran a couple of variations of its moderate scenario with no CEPP (a high one, which assumes tax credits are maximally effective, and a low one, with lower take-up of tax credits).Long story short, “emissions are likely to be 250 to 700 MMT higher per year in 2030” than they would be with the CEPP, “which could eliminate more than a third of the total emissions reductions under the Infrastructure Bills.”As the scenarios show, a great deal depends on factors that can’t be precisely predicted: the price of fossil fuels, the cost curves of clean technologies, and the efficacy and impact of the clean-energy tax credits and other BBB policies. The loss of the CEPP could reduce the emissions impact of the bill anywhere from 20 to 35 percent. Resources For the Future agrees but says a carbon fee could make up for itEnergy Innovations’ findings jibe with the second analysis, from Resources for the Future (RFF). RFF modeled three policies, in various combinations: * the clean-energy tax credits, which it calls CEAA for the “Clean Energy for America Act,” a bill from Sen. Ron Wyden (D-OR) that is largely included in the BBB Act;* the Clean Electricity Performance Program (CEPP); and * a carbon tax (er, fee) — the “central” carbon fee “starts at 15 $/metric ton and increases gradually to 30 $/metric ton by 2028, followed by a $10 annual increase through the end of the modeling period (2045).”The CEAA tax credits alone, without the CEPP, gets the electricity sector to a 69 percent clean energy share by 2030. That is roughly in line with Energy Innovations’ high-end estimation of the tax credits’ impact.The CEAA plus the CEPP gets the sector to 78 percent clean energy — a 9 point bump. The CEAA, CEPP, and the central carbon fee together get to 91 percent. RFF’s model, like Energy Innovations’, shows that the tax credits are doing the bulk of the work. From a baseline (no policy) scenario, the tax credits take the clean-energy share in 2030 from 46 to 69 percent (+23); with the CEPP, it goes from 69 to 78 percent (+9). Notably, in RFF’s modeling, the tax credits plus a central carbon fee get the number to 79 percent — in other words, a carbon fee pretty neatly substitutes for the CEPP, emissions-wise. Nonetheless, despite some recent chatter, Manchin has already put the kibosh on the prospect of a carbon fee as well.Rhodium Group says the US climate target is still within reach Can the US get on track to its 2030 target without the CEPP? For some insight on that we turn to the other recently released analysis, from the research firm Rhodium Group. It sets out to determine whether the US can hit its target (again, 50 to 52 percent reductions from 2005 levels by 2030) with what it calls a “joint action scenario,” which includes “actions by all key actors in the US federal system, including legislation under construction in Congress, regulations and other actions that can be taken by the Biden administration and key departments, as well as actions by climate-leading states and corporations.”Importantly, though it is capacious, the joint action scenario is deliberately conservative about policy out of Congress, given Manchin’s well-known Manchinness: “We include tax credit extensions, clean energy grant programs, and spending on agricultural programs, but do not include a carbon or methane fee or the CEPP [my emphasis].”The good news is that the CEPP-less joint action scenario gets the US to its goal, or at least close to it. Even without the CEPP, it is the electricity sector that provides most of the reductions:One reason there are so many reductions in the electricity sector — and this brings us to what I suppose is the bad news — is that the joint action scenario includes a lot of policies, including standards on new and existing power plants from EPA. Getting to the US target requires all levels of government and the private sector to act with immediate ambition. This is the action required by Congress: This is the action required by the executive branch:And this is what’s required of “subnational groups,” i.e., states, cities, and companies:If all of that comes together, then the US can hit its 2030 climate target without the CEPP. Rhodium stresses that the joint action scenario is not the only path to that goal — the final section of its analysis suggests a range of other policies that could also help — but any path to the goal involves coordinated action taken on numerous fronts at once … and a lot of luck.Where does this leave us? For years now, it’s been one of the climate world’s great rituals: after every new setback, delay, or disappointment, there’s a rush of articles and models showing, “We can still do it! It’s not impossible yet!”I suppose this is another one of those posts. Even without the CEPP, the two infrastructure bills passed together would reduce emissions considerably. The loss of the CEPP would take a big chunk out of those emission reductions — more than a third, if things go poorly — but there’s a chance some of that can be made up with other policies. This is assuming the BBB bill doesn’t get worse. Manchin may not be done screwing it up yet. The top priority now should be protecting the full range of clean-energy tax credits and ensuring that a) they extend at least 10 years and b) they are fully refundable. And other policies must be protected as well. Here, according to Energy Innovation, are the next most effective policies after the CEPP + tax credits. The second strongest provision is the fee on oil and gas methane emissions, which contributes about 12 percent of total reductions, or 165 MMT in 2030. Incentives for electric vehicles (EVs) and charging equipment are next, at 115 MMT in 2030, or 9 percent of total reductions.I tend to doubt Congressional staffers will be able to find anything new that’s big enough to compensate for the loss of the CEPP, but Biden can also gain back some of those reductions through aggressive use of the EPA and other agencies. We’ll see if he has the moxie to do that.The US doesn’t need to worry that hitting its target is unaffordable. All three analyses show that decarbonizing the electricity sector will reduce consumer energy costs, and that’s not even including the enormous benefits of reduced air pollution, which themselves would easily pay for the transition. Nonetheless, rapid decarbonization is a huge, wrenching socioeconomic transformation. Hitting our target would be a heroic feat. The fastest the US has ever reduced emissions, outside of a recession, is 4.1 percent in 2012. To get to 50 percent reductions by 2030, Rhodium says, “requires a 5.2-5.6 percent year-on-year cut in emissions every year.” We have to go faster than we’ve ever gone, every year from now through 2030. And that’s only the first, and arguably easiest, step. The first 50 percent of reductions will be easier than the last 50 percent, which we need to eliminate by 2050. That will require new policies, technologies, and industries.In the grand scheme of things, the loss of the CEPP is not the end of the world, as irritating and indefensible as it is. As long as Manchin doesn’t do any more damage, as long as staffers scrabble together a few compensatory policies, as long as Biden uses executive agencies aggressively, as long as states, cities, and businesses continue acting ambitiously … well, as long as all of that happens, we still have a shot. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

In this episode, longtime carbon market analyst and strategist Kingsmill Bond explains why he is so optimistic about the future of renewable energy. Though it remains a small portion of total global energy, its rate of growth and declining costs indicate that it is on the precipice of enormous, rapid expansion. Markets and geopolitics will be transformed by it. (There is also an abridged version of our conversation available on Canary.) Full transcript of Volts podcast featuring Kingsmill Bond, October 11, 2021(PDF version)David Roberts:It seems like good news is difficult to come by in the US these days, what with democracy on the verge of crumbling and the last big chance to address climate change held in the fickle and ill-informed hands of the Senate’s most conservative Democrat, who lives on a yacht and literally makes money off of coal plants. As it happens, I have a stash of good news I’ve holding in reserve — a guest I’ve been meaning to talk to forever, but have been treating like a break-glass-in-case-of-emergency thing. I felt grim enough this week that I finally called him up.His name is Bond. Kingsmill Bond. (Sorry, had to do it.) He’s an energy strategist at the think tank Carbon Tracker, where he arrived after decades of doing market analysis and strategy for big financial institutions like Deutsche Bank and Citibank. Bond’s experience and research have led him to the conclusion that the shift to clean energy has become unstoppable and that it will be the dominant force shaping financial markets and geopolitics in the 21st century. He argues that we are on the front end of a massive, precipitous wave of change to rival the industrial revolution — one that will unfold even if policy support is weak and erratic, purely on the strengths of economics and innovation.We need to update our mental model of climate mitigation, he says. It’s not about pain, about how to distribute extra costs and who will be the most altruistic. It’s about gain, about which countries will benefit most and fastest from the tapping of almost limitless new markets and opportunities for growth. There are no fundamental limits to the spread of zero-carbon energy. There’s more than enough renewable energy, accessible with today’s technology, to supply the world’s energy needs. Not only do we know how to get there, it is where we are headed, based on current market and technology trends. The key to succeeding on climate change is simply accelerating what is already underway, pushing a rolling boulder a little faster. Like I said, I’m in need of good news like this, so I was excited to talk to Bond about the cost of renewable energy, the peak in fossil fuel demand, and the inevitability of a 100 percent clean-energy system.Without further ado, Kingsmill Bond, welcome to Volts.Kingsmill Bond:  Thank you for having me on the show, David.David Roberts:   Kingsmill, I've been following you for years and you've been a reliable source of good news. You recently published an article arguing that we need to flip our story on climate change mitigation: It's not one of pain, about distributing costs and sacrifice and who's going to be more altruistic; it's about gain, about who's going to claim the giant rewards that are waiting. So before we dive into the specifics, give me the elevator-pitch version of why people confronting the daunting task of addressing climate change should feel better than they generally do.Kingsmill Bond:  Well, thanks very much for putting it in those terms. The point here simply is that we have got this new, enormous, cheap energy resource in solar and wind that we've unlocked with technology, and we're just starting to be able to apply it. As we apply it, it gets cheaper, because it's on learning curves. Therefore, we've unlocked an enormous cheap source of energy that can be used to provide all of our current energy demands and, indeed, the energy demands of those who have very limited amounts of energy. It's an exciting opportunity and moment to do that.David Roberts:   The center of that story is the learning curves for renewable energy. You single out four different technologies on steep learning curves that, if we project them continuing, bear all kinds of good news. Tell us what those technologies are and what the curves look like right now.Kingsmill Bond:  The four most clear technologies which are on established learning curves are solar PV for producing electricity; wind for producing electricity; batteries for storage; and electrolyzers to convert that electricity into hydrogen. All four of them have been the subject of a recent paper by Oxford University looking at their learning curves, that is to say, the amount that their costs drop for every doubling in deployment. All of their learning curves are between 16 and 34 percent, which was already fairly well known. But the additional point that's being made by this paper is that when technologies get onto learning curves, they tend to stay on them for very long periods. When you're trying to project future costs of these technologies, the most logical assumption is that those learning curves will continue. This is extremely significant, because we all know that they are growing very quickly, and if you assume that that growth continues — and there's no reason why it shouldn't — these technologies will get incredibly cheap. This is kind of an academic debate, because you're already getting solar PV being produced between $10 and $20 per megawatt hour in certain favored locations, so it is, in fact, already incredibly cheap. That cheap energy source is a) going to get cheaper, b) going to spread globally, and then c) be followed up by these other technologies, also on learning curves, which will then provide us with the energy that we need at much lower cost.David Roberts:   The electrolyzers seem like the newest of those four technologies. Solar and wind and batteries are pretty established, but electrolyzers have just recently come in for a lot of innovation. How confident are we in that particular learning curve? What's the state of our knowledge there?Kingsmill Bond:  In the paper that the Oxford team did, they looked at about 500 or 600 different technologies over long periods and they noted that, actually, very few of them get onto learning curves. As you say, the electrolyzer data set is shorter, but it still goes back a couple of decades, I believe. This is, from their analysis, another technology also on learning curves, and it seems to be already exhibiting the same learning characteristics that we've witnessed in solar, wind, and batteries. First of all, in order to make green hydrogen, you need solar or wind electricity, so half the story is already on learning curves. Then the question simply is, can you get the electrolyzer itself onto learning curves? What's special about this technology is that it's also what they call granular and discrete. That is to say, you can have very small pieces of equipment, they're easily replicated, and they can be built at any size. Many people can innovate, and that's indeed what they're now doing, as we now see huge amounts of capital flowing into hydrogen strategies across the world, from Chile to China to Morocco to the United States. It seems extremely reasonable to imagine that the costs of electrolyzers will also continue to fall.David Roberts:   As a snapshot of the present, where is clean energy relative to fossil fuels? Is it still too glib to say clean energy is cheaper than fossil fuels? How nuanced is that story right now?Kingsmill Bond:  The debate goes like this: Advocates of clean energy such as myself say, look, it's incredibly cheap, its price is down to $10 or $20 per megawatt hour; the global average, depending how you calculate, is between $40 and $50. This is the LCOE we're talking about. And this is a great story. The counterargument is, people say, well, you're only talking about the LCOE, you’re not thinking about intermittency. OK, it's cheap in certain locations, but there are other locations, most notably parts of sub-Saharan Africa, where it remains extremely expensive, because the cost of capital is high. Therefore it's not a fair comparison and it's not a substitute for fossil fuels. The way to reconcile those two perspectives, I would suggest, is this point about learning curves. As the costs get lower and lower, this debate kind of fades away. It is fair to say that LCOE is not necessarily the best way to calculate costs, and there are other issues to account for in intermittency, but when costs get incredibly low and you can overbuild, then that debate becomes much less significant. Furthermore, as this Oxford paper points out, the country on the 10th percentile of cost today — that is to say, the most expensive countries today — will have the same price solar and wind electricity as the cheapest countries today in 10 years, because they're on these learning curves. So I would suggest that these learning curves solve the problem.David Roberts:   They brute force it, in other words. It gets so cheap that you can start being profligate with it.Kingsmill Bond:  You can be profligate with it, but in fairness, there are also other solutions. There are certain countries and regions which today have penetration of variable renewables of over 50 percent — most notably Denmark, South Australia, and northern Germany — and are aspiring, as in the case of California, to 100 percent renewable energy-based systems. What's been notable throughout this debate, for the last 20 years, is that the ceiling of the possible is constantly rising. If you go back to how the debate was being held about 20 years ago, you'll see these very fancy letters from the Irish and German grid operators saying that variable renewables could never be more than 2 percent of the system, for a whole series of technical reasons which are beyond me. But what's happened continuously is that people have come up with new solutions, be they demand-side management, supply-side management, bigger grids, batteries, interconnectors, better software, digitalization, smart meters, so on and so forth. There have been a whole series of different solutions. The point we really want to make is that that ceiling is a rising ceiling.David Roberts:   Intermittency is the number one mental block people have about this, in my experience. So you're right: one obvious point is that the amount we're allegedly going to be able to integrate onto the grid keeps rising. People set these very confident limits, and the limits get busted through. But looking out, the conventional wisdom is that the closer you get to variable energy providing the majority of your energy, the higher the cost of that variability, and the more difficult it is to address. How confident are you that that gap from 80 to 100 percent is bridgeable at reasonable cost?Kingsmill Bond:  There are two answers to this. The first is that this is an absolutely academic debate, because today, solar and wind are 10 percent of the global electricity supply. To worry in 2021 about how we go from 80 percent to 100 percent is completely academic. I often use the analogy that it's like sending my daughter to kindergarten, aged five, and worrying about how she's going to pass her university maths finals. Sure, she's going to have to get there eventually, but there's an awfully long way between now and then. History suggests that we will keep on coming up with ways of solving this. So I think the first answer is, it's not a fair question. The second point is that, if you assume these learning curves continue and we do get incredibly cheap sources of renewable electricity, then it's absolutely inevitable that we will find ways of using it. Perhaps I can step back for a second. It's often worthwhile going back a century and asking yourself: Had you been trying to think about the future in 1921, when we were on the cusp of a quadrupling of global population and a 10-fold increase in energy development and so on and so forth, could you ever have predicted all of the new technology innovation that was going to come? People sit in darkened rooms in Paris in 2021 and seriously think they can forecast the innovation genius.David Roberts:   But in fairness, we're a lot farther away from 1920 than 2050 is from us. We definitely need to compress the amount of time in which we have to do this. You might say that the solutions ought to at least be visible by now. Kingsmill Bond:  Actually, that’s the point: the solutions are visible. You do have detailed plans being made in Australia and California, in Northern Europe, for electricity systems based on 100 percent renewable electricity. You also have work done by people like the great Mark Jacobson: he's basically tried to figure out the solution for every single country in the world. So it's not like there are no solutions ahead of us; there are plenty of solutions, at different levels of granularity.David Roberts:   This story depends on the cost curves continuing, as you’ve said. On the one hand, you can look at history and say, cost curves tend to continue once they start. But you can come up with all kinds of stories about things that might impede or slow these cost curves: materials shortages, lithium becoming problematic, mining becoming more problematic, supply chain problems (maybe even caused by climate change), space constraints, NIMBYs who want to stop construction. How confident are you that none of those will gain enough purchase to slow things on a macro level?Kingsmill Bond:  I always smile when people talk to me about limits to growth, because renewable energies are essentially, by definition, limitless, absolutely enormous. The real limits to growth are to the fossil fuel system, which is constrained in terms of the amount that we have, and incredibly constrained in terms of our capacity to burn it. So it's worth standing back for a moment and recognizing that the real limits to growth are with the current system, not with the new system. The second question is, well, are there limits that are insurmountable, that the talent and capital of the world cannot handle? I think the answer to that one is absolutely, obviously no, because we have continuously solved each of these problems as we have encountered them. Then, if I can answer this very specific question about mineral shortage: it's an absolutely bogus problem. You need, for example, 200 kilograms extra of minerals in order to have an electric vehicle, which is more than an ICE car. That sounds quite scary until you think, well actually, an average ICE car uses 15,000 kilograms of oil over its lifetime. Those 200 kilograms extra that you require of minerals by definition can be recycled, whilst fossil fuels, obviously, you burn them once and you never use them again. Let me give you a couple more stats. There is enough lithium, for example, in known reserves today to be able to satisfy more than a century of current demand. There's enough cobalt in the world for 1,000 million cars. If the answer is, that's really scary because we might need 2,000 million cars, then again, it’s an absolutely fake debate. First of all, we can and are engineering technologies to reduce cobalt, as Elon Musk is doing. But even if we weren't, we build the mines as demand increases. Prices go up a bit and people build new mines and reserves increase. These are absolutely fake problems.David Roberts:   Are there no social or moral aspects to this, though, in expansion of mining?Kingsmill Bond:  Undoubtedly. This is why people are saying, I think quite rightly, that we shouldn't make the same mistakes this time as we made last time. In our expansion of these mines to build out the new renewables world, we shouldn't be trashing nature with impunity the way we have done in the past. We should be recycling this stuff in order to minimize our impact on the planet. But let me just come back to the main point, which is that it's a question of degree, right? If you require 100 — or in the case of coal-fired generation versus a solar panel, 1000 — times less stuff in order to generate your electricity, by definition, you're going to be having a dramatically lower impact on the planet.David Roberts:   In your discussion of S curves, you mention something about a 5 percent “salience threshold.” When a product reaches 5 percent market penetration, certain dynamics take hold. Can you say more about that?Kingsmill Bond:  This is actually quite an intuitive observation. We see it, all of us, in our own lives. If you think back to when you got your first smartphone, or the internet, or your first mobile phone, what happens is that, as new technologies get adopted, they move up these S curves. It takes a long time to get the technology good enough for people to adopt it, so to go from 0 percent penetration to around 5 percent takes a long time. But then, when it gets good enough, everyone wants it, demand goes through the roof, learning curves start driving costs down further, it goes very, very quickly from about 5 percent market share to about 80 percent market share. That's the nature of S curves. This is something that is very well documented for many technologies over the course of a century or more. It goes all the way back to cars and electricity in the United States in the early 20th century, and then all the great stuff we've had since then: microwaves and toasters and TVs and now the internet. It's a well-appreciated observation that stuff moves very, very quickly from low penetration to high penetration — when it's cheap enough and when it's good enough. Therein lies the debate.David Roberts:   So where is renewable energy? Do you think it's crossed that threshold? You think we're on that S curve now?Kingsmill Bond:  If you look at the history of deployment of, for example, solar panels, what you will see if you chart it is exponential growth taking place: high growth of between 25 percent and 40 percent growth per annum over the last two decades. There are many other people, including the great Ray Kurzweil, who pointed this out: solar deployment’s been doubling every two years roughly for the last couple of decades, and that's an exponential growth curve. Just empirically, that's exactly what is happening. What's also notable is that some experts who try to forecast future solar deployment get it completely wrong, the way the IEA famously has done for the last 20 years. They imagine it's linear growth. If you go back 10 years, demand growth was at 10 gigawatts a year and the IEA was projecting forward growth of 10 gigawatts a year for the next 20 years. Then the next year it's 14 and the year after it’s 20, because we're on this exponential growth curve. David Roberts:   This is a subject of some fascination to me. Is this new Oxford paper really the first model that projected cost curves simply continuing in the shape that they currently exhibit? It's remarkable to me and everybody I know that the modelers have gotten these cost projections so wrong in such a consistent way over and over again for 20 years now. What are we to make of this? What's going on there?Kingsmill Bond: You're right. It’s absolutely shocking, and it's not just the IEA, it's almost all modeling of the future. It's interesting: I ask people about why they don’t do this. There’s a series of answers, but the first answer basically is well, it's too complicated. We can't put these learning curves into our models because it’s too complicated. OK, fine, why don’t you just get a bit more computing power, surely it can be done. But anyway, that seems to be one answer. The second answer, linked to that, is that these models are incredibly complex. If you're trying to forecast kerosene demand in Madagascar in 2070, you have to think a lot about that, and you're not necessarily thinking about what's possibly a little bit more important, which is the learning curve of the technology. So, they overcomplicate it. This is why, for me as a strategist, it’s second nature to simplify. That's what the Oxford paper’s done: they've got to the kernel of what's driving change, and it’s those learning curves.Then the third reason why incumbent models have been so reluctant to incorporate these learning curves is that so many of them are, in fact, made by fossil fuel incumbents, and turkeys don't vote for Christmas. That is to say, if you're working for Exxon or Shell or whoever it is, there's very little incentive for you to say, you know what, those battery costs might fall a little bit faster than we think, and EVs’ growth might be a lot faster than we think, and oil demand might be a lot lower than we think, and therefore, I might not have a job. People don't forecast that stuff. The final point is that — and I'd like to come back to this, because it's a completely fake argument — people say, “We want to be conservative. Solar costs have dropped 20 percent a year for the last 20 years, but in the future, we don't want to be too aggressive. We can't forecast the detailed solution, so we're going to be conservative and we're going to say they're going to fall at 2 percent a year.” This is just intellectually incoherent, because why would it suddenly stop falling? Just because you can't see in detail, why would you suddenly forecast a drop in cost declines? The other reason why it's intellectually incoherent is because, as a result of the failure to recognize reality in these fast-growing technologies, people have to make their models balance. They go, “Well, in order to make my model balance to 2050 net zero, I'm going to pop in CCS and BECCS, and Martians coming from space to take away our carbon” and other completely idiotic ideas, which have absolutely no basis in empirical fact. That's the point: You've got to try and rely as closely as you can on the facts.David Roberts:   It seems like, intellectually speaking, the most conservative thing you could do is assume that things are going to continue happening the way they're happening. That's almost by definition Occam’s Razor. And if the learning curves continue the way they're going, then all these forecasts are going to get blown away. It’s a bizarre situation. Kingsmill Bond:  Yeah, it is. Sorry to lean so heavily on Doyne Farmer and his Oxford paper, but it’s great work, and they make exactly this point. They say, look, mathematically, the future is unknown. There's a whole continuum of options between basically no change and incredibly fast change. But the business-as-usual scenario, which is central to so much current thinking, is mathematically a complete outlier. It might happen, but it's incredibly unlikely. We might suddenly stop innovating, costs might stop falling, deployment might stop happening, governments might give up, people and companies and the financial markets might stop trying to do anything, we might decide that we want to go over the cliff of catastrophic global warming — maybe we will, but that's pretty unlikely.David Roberts:   The other area that people tend to cite as a limit, or worry, or outstanding problem is these so-called difficult-to-abate sectors — heavy transportation, industrial processes, steel, concrete. Is the story there the same, that clean energy is going to get so cheap it's just going to bulldoze through those problems? What do you see happening in those sectors?Kingsmill Bond:  The hard-to-abate sectors have been a very loud debate for the last three years. The argument people make is, “Well, you can't get renewable energy into airplanes and cement and steel and shipping, and therefore there will be no energy transition.” There are two problems with this argument. The first one is the point I made earlier, which is that this is the final area that needs to be solved. Today, if we look at the entire energy system in terms of primary energy supply, solar and wind — these variable energy sources on these very fast growth rates — are only providing around 4-5 percent of global supply. These hard-to-solve sectors are about a quarter of global primary energy demand. So this is a very long-term problem which we will need to solve, but it's quite a long way in the future before we actually have to solve it. Then the second point — and this is an argument that we and many other people have been making for four or five years, actually a much more practical observation — is that solutions are already starting to materialize for these hard-to-solve sectors. You have organizations like the brilliant Energy Transitions Commission that identify prospective solutions for every single one of these hard-to-solve sectors. For example, the steel sector three years ago seemed to be a completely impossible-to-abate sector. Now you already have people like Andrew Forrest in Australia talking about taking his iron ore, putting up solar panels and wind turbines in the Australian desert, using that to create hydrogen, using the hydrogen to make steel out of the iron ore, and then shipping that steel all around the world. There are now lots of other companies talking about hydrogen-based steel in the same way. In the shipping industry, we have Maersk now talking about using ammonia as a shipping fuel, which is basically a hydrogen-based solution. This is why we're so excited about electrolyzers being on cost curves. Ultimately, the way that we, humanity, are going to solve this problem is we're going to decarbonize electricity. We have solutions for that. We're going to electrify whatever we can, and new solutions materialize every day. Then the stuff that we can't, we'll use some variant of hydrogen. That very clearly is becoming the answer. So when hydrogen also gets onto cost curves, and people are starting to think about how to put hydrogen into steel and shipping and indeed airlines and so on and so forth, you can see the contours of the new world that will emerge.David Roberts:   Let's shift to another source of good news. I'm not talking about national and international politics, which both seem dismal at the moment. But states and cities and corporations and financial institutions and other subnational entities seem to really be taking the lead in a way that gets more and more glaring every year. So let's talk about some of the things that you see happening at that level that give you hope. Kingsmill Bond:  I think the wider point is that we have to realize that politics follows technology. That is to say, as new technology solutions materialize, politicians use them. The best example of this, famously, is Boris Johnson in the UK, who 20 years ago was laughing at all this green technology and was extremely skeptical about it. Now that you can buy an EV in the UK for more or less the same price as a conventional car, he's already put into place the prospect of bans of the sale of conventional cars. He keeps on bringing forward the date by which, in the electricity sector, we're going to have a renewable system. So politicians will use the technologies that materialize. It's great that it's happening on a local level first, but it also does need to happen on a national level. This is the absolutely key point. When I attend conferences and talk to developers in the field, they don't talk about a lack of capital, they don't talk about technological problems — what they do talk about, all the time, is the fact that the policies are tooled up for the fossil fuel system, not for the renewable system. This is the key point that needs to get through to policymakers: Can they please stop fiddling around, talking about these wonderful strategic visions, and actually do their job, which is detailed amendment of policies, and detailed changes to support regimes for renewables? It's really hard, difficult stuff, and it's not happening. David Roberts:   One of the other perpetual debates in this area is how big the policy lever is, how necessary it is, and how much of the transition has a momentum of its own, just from economic development and technology innovation. I think you have claimed that this transition is inevitable, no matter what governments do at this point, so how big of a space is there for policy? How much can policy do to slow or speed it down? How much does it have a life of its own at this point?Kingsmill Bond:  We recently put out a report which tries to encapsulate this in a very simple framing. The first observation is that everywhere is different, and every sector and technology is a little bit different, right? To state the obvious. Then, secondly, you need different policies at different stages in the life cycle of change. At the start, you do need technological innovation, and government's very good at that. Then, after that, as costs start to fall, you do need government support to these growing industries, as the Germans very kindly did the solar industry 15 years ago. But then, as the costs start to fall towards price parity with the fossil fuel system, the role of government actually changes very significantly. Rather than, as it were, trying to push water uphill, they need to remove the blockages to allow it to fall downhill. That's, I think, where we've now got to, certainly in the electricity sector, and to a degree in the transportation sector: the role of government now is to remove the blockages which are stopping change. I'll give you a good example. I was talking to an incredibly frustrated wind developer in northern England a couple of months ago, and he was saying, I've got a huge offshore wind project I want to bring to bear but I can't do it, because there's one landowner who won't allow my cable onshore, and it's lasted for two years.David Roberts:   A very familiar story all across the world. Kingsmill Bond:  I mean, this is ridiculous. Are we really going to allow our future to be mortgaged for the sake of people who want to block it for whatever bizarre reason? That's exactly now the role of government. Before you accuse me of trying to trample over people's rights, it actually goes deep into the heart of many systems. For example, there was an extraordinary report written by the Institute of Fiscal Studies in the U two weeks ago about how the government taxes electricity at, I think, effective cost of about 100 pounds a ton of CO2, but subsidizes gas use to the tune of 20 pounds per ton. This is just idiotic. Why is it that we give $500 billion a year of subsidies to the fossil fuel industry? There's an awful lot of very detailed work that governments now need to do to remove these barriers to change, and I would suggest that's actually the cutting edge. That's what now needs to happen.David Roberts:   There's a lot of talk these days about financial institutions and the Fed pushing for more pricing of carbon risk, etc. How big of an influence do you think that's having, the discussion that's moved into the financial world?Kingsmill Bond:  The financial world somewhat belatedly is waking up to the systemic risk of carbon, and they should, because we did this study which suggests that about a quarter of equity markets and half of bond markets are in sectors which are either fossil fuel producers, or heavy fossil fuel users. So it's incredibly deeply ingrained inside financial markets. As change happens, as new technologies materialize, you're going to get disruption; you're already getting disruption right across these sectors, and that creates financial risk. So it's quite right, I would suggest, for financial market regulators and participants to look at this risk. What somewhat disappoints us thus far is that, like the IEA modeling we talked about earlier, they’re still fiddling around at the margin, they're not really getting to the heart of the risk. A good example is from the banks. If you talk to most global banks today, and we talked to a few, they will say, “We've got this covered, we totally believe in all this green stuff, we've decarbonized our head office, and we're getting renewable electricity — and furthermore, we continue to lend tens of billions to the coal center and the oil center for their expansion. But don't worry, we've got it covered, because our risk models tell us that there's no risk from this stuff.” You then probe a little bit and it turns out that they've got risk models built up over 40 years of ever-rising fossil fuel demand. So they're doing bad modeling. They don't understand where the risk is, they're not taking account of it. Ceres, for example, has analyzed the U.S. financial sector and figured out that half of the syndicated loans are to fossil fuel linked sectors. They figured out that actually, the banking capital of the US banking system would be wiped out in the event of a disruptive energy transition. So there's a lot of risk which is not necessarily being accounted for. It's great financial markets are starting to wake up to this, starting to think about pricing it in. But let's be clear, there's a very long way to go. David Roberts:   The world knows how to accommodate the rapid growth of a new industry, but it almost seems like the decline of fossil fuels is going to be more disruptive in a lot of ways. You talk about fossil fuel demand peaking in various places already and approaching peaks other places. Tell us a little bit about that: Where have you seen it? Where do you expect to see it? What can we expect those peaks to look like over the mid-term?Kingsmill Bond:  This looks like a very mad argument on our part. Here we are with fossil fuel demand booming, a shortage of coal in China, record high gas prices and coal prices, and so on and so forth. But I will nevertheless stick to my guns because, at the end of the day, this is just maths. What's happening is, you have an energy system which is growing and dominated by fossil fuels. Then you have this new kid on the block of these fast-growing renewable energy technologies. They're moving up the S curves, and, just mathematically, at some stage it will be conceded that the demand for the incumbent technology with 80 percent market share in a low-growth system inevitably must peak. As you get this fast-growing new challenger coming into the market, it must peak and then decline. Mathematically, it will and must happen. The question then is, well, how does this play out? We still argue that you got to peak fossil fuel demand for coal and oil and gas in 2019, and COVID has damaged them so significantly that by the time demand comes back, it won't go significantly beyond that 2019 peak. That's the overall argument. David Roberts:   You’re talking about global fossil fuel demand? You think it peaked in 2019?Kingsmill Bond:  We think it peaked in 2019. The reason why this is a credible argument: If you imagine a global energy system, growing at 1 percent a year, and the challenger of renewables is 5 percent of that system, growing at 20 percent a year — 5 percent times 20 percent is 1 percent. So the moment that solar and wind get to a 5 percent market share in a 1 percent growth system, they will take all of the growth. That's the moment for the peaking of the fossil fuel system. COVID basically brought that moment forward. We had forecast that moment for the mid-2020s; COVID brought it forward basically to 2019. So in 2021, in certain areas, you might get back close to where you were back in 2019. In 2022, 2023, two or three years of bouncing along the top; but as this stuff keeps on growing, you do inevitably get a peak and a decline. To put the current state of affairs into that context, you’ve got a crash, you’ve got a bounceback, and you’ve got lots of bottlenecks and this demand for stuff that people didn't buy that are suddenly twice as much, so you’re inevitably going to get spikes. We had exactly the same thing, famously, back in 2010. But that shouldn't detract from the wider observation that continued growth of this stuff is going to drive a peak. To try and make this more apparent as an argument, it's worth thinking about two mountains. So you've got the Matterhorn, which famously is a V-shaped peak; the Matterhorn’s what happens to discrete individual goods like mobile phones. Nokia's sales can fall off a cliff like the Matterhorn. However, when you think about systems, where you've got embedded demand in a billion cars, then your peaking is going to look a little bit more like Mount Fuji — that is to say, you've got a long, slow slope up; a plateau at the top, for, let's say, five to 10 years, depends a little bit on the detail; then you've got a long slope downwards. That roughly is the pattern for what you see in other technology shifts. If you go back to what data we have for the UK for the shift from coal to gas in heating, or the shift from steam to electricity in power generation back at the start of the 19th century, you see these plateaus. They last for a bit, because it takes time for the new technology to get big enough to really kill the old one. But that's nevertheless the pattern.David Roberts:   So you think we're on the bumpy plateau right now? Kingsmill Bond:  I think we're on the plateau at the top of Mount Fuji. (Although of course, having climbed it myself, I know perfectly well that it is in fact a volcano and you go down again, but let's not go into that.) It is a plateau at the top. The point to me is that people should not mistake a little hillock at the top of the plateau for another mountain ahead. That would be the error right now, to do that. This is one of the reasons why Carbon Tracker talks so much about stranded assets, because the fossil fuel system and its loyal attack dogs persist in seeing continuous growth, then build for that growth, and as the growth fails to materialize, they get stranded assets.David Roberts:   Along those lines, you make the point that you don't have to take substantial market share away from the incumbent to start hurting the incumbent. You just have to stop their growth, then that peak triggers all sorts of other market dynamics. So what happens once the peak sinks in and it's more widely realized what's happening?Kingsmill Bond:  Once you reach that peak, you kickstart a series of positive feedback loops for the challengers and negative feedback loops for the incumbents. We put out this paper where we run through seven areas and then delve into a couple of them in a bit more detail. So you see it happening in costs, technology, expectations, financial markets, society, politics, and geopolitics. Those are the seven. To focus on the first one, think about this. If you are making cars today, go back five years ago. You were sitting pretty. There's 1,000 million cars in the world, sales are $100 billion a year, you're expecting ever-rising growth, and what could possibly disturb that? What disturbs it is Elon Musk and Tesla. They come in and they don't have to replace the 1,000 million; they don't even have to replace the 100 million, because what's happening is that 100 million is growing at, let's say, 2 percent a year. So when Musk and the EV sector take that 2 million a year, you as a car manufacturer suddenly realize that your growth is over in the old system. You then look at the cost curves of the new stuff, and you realize that you're going to have to change. You have to reallocate your capital out of ICE cars and into electric vehicles. Meanwhile, you figure out that you've got continuous decline now coming for your ICE car sales, so suddenly, your ICE factory is a liability, not an asset. Furthermore, as your sales of ICE cars start to drop, you've got to allocate the same fixed-cost structure over a smaller number of cars, and your cost per unit increases. This is economics 101. That's what happens to the old people. What then happens to the new people, Tesla and BYD and the EV makers, is, as they produce more cars, the costs of the batteries fall because of these learning curves. As costs fall, demand increases, and as demand increases, they're taking more market share, and they can then go to the second feedback loop, which is the financial markets. Tesla can go to the financial markets and in an afternoon they can raise several billion dollars and build a new factory in Berlin, which increases their capacity to build at the same time the fossil fuel sector is finding it very difficult to raise capital, and is obliged by investors to change their strategic direction — as we saw, famously, with Engine No. 1.David Roberts:   When this dynamic is underway — when the large incumbent fossil fuel or car companies are dragging around this giant legacy system which can pretty rapidly become a liability — what can we learn from history about the chances that they successfully pivot vs. flame out? Kingsmill Bond:  We don't have to do any original thinking here. It's extremely well-documented analysis over decades. There's even a famous book about it by Christensen, The Innovator’s Dilemma, which says that incumbents struggle with disruptive change and few of them make it. There's another book that I often like to refer people to, by a very respectable financial analyst called Sandy Nairn, called Engines That Move Markets — recently re-released, but it's quite an old book. He looks back at technology shifts and what incumbents did. The answer is, incumbents, first of all, try and resist change. Then they struggle to put capital into these new technologies, because they're not sufficiently profitable. You saw lots of examples of the oil center saying that over the last decade: we're not going to put our money into solar and wind because we can get a 20 percent IRR on oil against a 5 percent IRR on solar. Why would we? The problem, then, is that by the time this stuff does get profitable and starts to eat into their old business, it's too late, and other people have moved into this area. That's exactly what's happening now in the energy system. It's the risk, of course. It's not just a question of solar, wind, and so on challenging the current enormous coal, gas, and oil system. It's also all of their users, don't forget. So we talked about the car companies, but it's the steel companies, the shipping companies, the airlines — they are going to get disrupted by new people coming in with new technology and new ways of doing stuff. They struggle because, precisely as you say, they have this enormous tail of legacy assets. But it's also a problem, as Christensen points out, of legacy thinking. When you've spent your entire life digging holes in the ground to hoik out stuff, you find it very difficult to do something new.David Roberts:   Mostly I'm pretty optimistic about the electricity sector, but one of the reasons I worry about it is that … car companies can flame out and EV companies can replace them; fossil fuel companies can flame out, clean energy companies can replace them; but in electricity, we’ve got these utilities that are basically stuck there by law and regulation that can't just flame out and go out of business. Any business that thought as slowly and conservatively as utilities would probably go out of business, but they can't. So it's hard to see how those dynamics bite as much in that sector.Kingsmill Bond:  I agree with you in theory, but what has been notable is that it's actually been the electricity sector which got disrupted first, most notably and famously in Europe. My former boss Martin Lewis tells a story about how he was working for one of these electricity companies in Europe back in the early 2000s, and they talked the talk and they put turbines on their annual reports, but in private they dismissed this as a threat. Lo and behold, you have the combination of the crisis and politicians putting increasing pressure on them and this new stuff materializing, driven by new players — then they found that they were indeed completely stuck with the old technologies and had to write down, famously, 150 billion euros of assets in the 2010s. So, somewhat to my surprise, it can happen and it is happening. What it does need is political push. Why would a politician push a conservative electricity company to change, and why would they change? The only reason why is if you have incredibly cheap alternatives, and your neighbors are deploying them, and you're starting to get rumblings from the people that not merely do they have polluted air and electricity outages, but they're also having to pay 25, 30 cents per kilowatt hour for their electricity, and their mate in the neighboring country’s getting it for 10. That's what forces change.David Roberts:   Let's talk about geopolitics. I think the line in international negotiations used to be between developing and developed countries, as they used to be called, but you draw this line between fossil fuel producers and consumers, and you say, per geopolitics, those are the two relevant groups. What's happening that's creating that divide?Kingsmill Bond:  When it comes to fossil fuels, you've basically got two groups of countries: 80 percent of the world lives in countries that import their fossil fuels, and 20 percent of the world lives in countries that export fossil fuels. It's actually even more concentrated than that — basically 10 percent of the world lives in countries that are very highly fossil fuel dependent. So the Middle East, Russia, Australia, which have got very large fossil fuel exports. It's a really, really small group of people, 10 percent of the world, living in these fossil fuel dependent countries. Then there's the rest of us who have to import the stuff. Furthermore, the geopolitical environment at the moment confers a lot of power upon the owners of the fossil fuel. There's this very significant geopolitical power conferred upon Russia and the Middle East as a result of their fossil fuel reserves. They’re generating these very large rents of roughly 2 percent of global GDP every year, and they're failing to pay for the externality cost of, call it $3 trillion a year that has been picked up by the poorest in society. So the current system we have is very unfair, and massively favors the fossil fuel producers.Lo and behold, the fossil fuel users — 80 percent of the world, and it’s all of the areas of growth: China and India, most of Southeast Asia, large chunks of Africa are major importers of fossil fuels — are almost all of the expected growth in demand over the next 40 years. They now suddenly have got their own domestic, eternal, clean resource, and it's cheap, so of course they're going to use it. They're going to be very delighted to use their own homegrown source, because what you're ultimately doing is trading rents paid to oligarchs and foreigners for local jobs. Of course they're going to do that. There are many other people writing about the geopolitics of this energy transition, but if you stand back for a second, it's pretty clear that it's going to benefit the big fossil fuel importers and damage the big fossil fuel exporters. The question then is, well, where does the power lie? Right now, in October 2021, the power clearly lies with the fossil fuel exporters, because not enough of this stuff has yet been built. Give it another five years, and the power is going to shift. That's, of course, another reason why people need to get on with building this new energy world, because otherwise, they're going to continue to be subject to the whims of the fossil fuel exporters.David Roberts:   Why do I hear all of this hand-wringing about a new wave of coal plants in China and Vietnam and in developing countries? I feel like I read this headline every few years: despite climate promises, there's a surge of coal plants. How real is that?Kingsmill Bond:  Don't worry too much. First of all — not to belittle the problem, because it is a bit of an issue — it's not as dramatic as it sounds in the headlines. In fact, in spite of these new coal plants which have been built, global coal demand peaked in 2013. So people have been building them and they haven't actually been using them. Global coal utilization rates have now fallen to about 50 percent. So the thing to focus on is not the new capex going on. The second point is that, thanks to the incredibly hard work of millions of people, this tail of new coal plants is constantly being reduced. It used to be hundreds of gigawatts, and now it's being reduced to dozens. So it has fallen a long way and it continues to fall. When it comes specifically to Vietnam, there are things changing literally as we speak, because of the incredible success of their deployment of solar and wind. They're already now canceling their coal plants and stopping their plans for expansion of coal. When it comes specifically to China, the rumor is at COP we might see a bringing forward of that 2030 peaking fossil fuel demand date, but the point nevertheless remains that China is very close to peak demand for fossil fuels. I hesitate to say it right now, but it is incredibly close. To give you a stat, Chinese demand for electricity today, per capita, is the same as Europe. So that incredible ramp of moving from very low demand to develop level demand, that's happened — that's not going to happen again. China is the world's largest producer of solar and wind and all these other new energy technologies, and they're still growing at 20 percent a year. You play with the maths a bit and it's clear that we're very, very close to peak fossil fuel demand in electricity generation in China. When I look at the rest of the world — we recently did a report on this — in 99 percent of developed markets, we've already seen peak coal demand in electricity. Interesting enough, in 63 percent of emerging markets, like China, we've seen peak demand for fossil fuels for electricity. It's not surprising, because there's a new opportunity in town. We have a lot of legacy problems, and we have some inertia, and we have systems which are tooled up for the past, not the future, and so on and so forth — I understand all of that. But as the financial analyst, you need to look forward and look at what's most likely. What’s most likely now, increasingly, is that people will be deploying these new technologies.David Roberts:   You describe the dynamic in financial markets where once you shave off the growth of an industry, it sets all these dynamics in motion. I wonder if there's an analogy in geopolitics. You think of Russia's power and African countries’ lack of power: How much would global energy have to shift away from Russia's natural gas to this plentiful solar that Africa has to set off these feedback loops in terms of geopolitical power and influence?Kingsmill Bond:  Therein lies a question beyond my level of expertise, but it certainly is worth noting that the year of the peak of the British Empire was just after the Treaty of Versailles in 1919, just before it collapsed. Things always look great at the top, and you don't need actually that much; what you need is people to realize that the future is different, and that they can get their own energy. I should have mentioned, incidentally, that one of the reasons we’re so enthusiastic about this story is that if you look at the technical potential of solar and wind, which has been a lot in the last five years, it's 100 times our global energy demand today. Africa, as you just mentioned, is an incredible renewable superpower; they've got 1,000 times as much supply from solar and wind as their current energy demand. When countries are looking for new development tools, rather than reaching to the old playbook of “we must have coal and gas and oil in order to get development,” it’s considerably simpler now. You've got this wonderful distribution system called the sun, which will get you this energy anywhere in the country, and you can harness it pretty cheaply. That, then, becomes the development tool. For me, this is another aspect of the incredibly powerful justice which is driving this energy transition: people who haven't had a lot of energy in the past now can have it and can harness it. That eventually will change the geopolitical calculus. But as I said earlier, we're at the top of Mount Fuji; we're bouncing around, the old is still powerful. The new is yet to be born in sufficient size to really challenge it. But we can't be long.David Roberts:   Biden's goal is to decarbonize electricity by 2035, and for the US to be net zero carbon by 2050. Do you think those are within reach given the amount of policy that's likely to be devoted to them? Kingsmill Bond:  If they're not achieved, the US will be buried by China. If the US wants to continue to be a serious player in the modern world, wants to remain a superpower, then it has to embrace superior, cheaper technologies. It's as simple as that. What's really shocking and embarrassing for me as a fellow Westerner is that for the last decade, China has leapt ahead and is dominating all of these new technologies. How can that be when the US has got all of that incredible industrial, intellectual base? It's pretty simple. If the country wishes to remain serious, then it has to do it. If not, then like the UK before it, it will descend into irrelevance.David Roberts:   How much of that is baked in? Are you willing to put any kind of numbers on how much you think is already inevitable, or how much requires more policy from Biden? I need faux precision here.Kingsmill Bond:  OK, I'll give you faux precision. It’s absolutely achievable. Again, as this Oxford paper points out, the more you do, the cheaper it gets. From their calculations, the cost of the transition, just in purely financial terms, is cheaper than the cost of business as usual. As they and many others have pointed out, technically all of this stuff is completely feasible, but you do need very powerful political action to break through the logjams of the incumbents and the inertia of the current system. I salute Biden and his team, because that seems to be exactly what they're now trying to do. You do need very powerful policy, because this ultimately will happen by 2100, but by 2100, it may well be too late. So in order to drive it faster, and for that to be cheaper and fairer and better distributed, you need to get on with it.David Roberts:   All right. That sounds like a great place to wrap up. Thanks for taking all this time, and for cheering me up.Kingsmill Bond:  Well, thanks, David. I hope I didn't overstate my brief there — it just seems pretty clear to me.David Roberts:   Well, you're making bold short-term predictions. Maybe in a decade, we can do another podcast and check your numbers.Kingsmill Bond:  It's funny because we put out this note in 2018, in a little conference room in San Francisco, talking about peaking fossil fuel demand coming in the 2020s. It got fairly well picked up, but it was one of those completely out-there ideas. Then lo and behold, you get COVID and it's starting to look like actually what is happening, notwithstanding what's happening right now. So, we'll see.David Roberts:   So far, so good. All right. Thanks so much for coming on.Kingsmill Bond:  Thanks so much for the call and for the opportunity. David Roberts:   All right. Bye now.  This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe