Jigar Shah on the Pathway to Clean, Cheap, and Abundant Energy
Oct 6, 2023
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Jigar Shah, Head of the Loan Programs Office at the Department of Energy, is championing the accelerated commercialization of clean energy technologies through significant funding from the Inflation Reduction Act. He shares insights on innovative financing for energy projects and the challenges of navigating risk and profit. The discussion highlights Texas's renewable energy advancements, the potential revival of nuclear power through small modular reactors, and the urgent need for infrastructure development to support a sustainable energy future.
The Loan Program Office at the Department of Energy has a loan authority of around $400 billion to invest in clean energy projects and accelerate their commercialization.
Efforts are needed to expedite the building of transmission infrastructure and reform the permitting process to accommodate the increasing demand from renewable energy sources.
A focus on technical education and development of domestic supply chains for electrical components is crucial to support the transition to cleaner and cheaper energy.
Deep dives
The Loan Program Office and its Expanded Remit
The Loan Program Office was created in 2005 to provide commercial debt for innovative projects that the DOE invents but cannot get commercial financing for. The office's focus has expanded to include tribal energy programs and energy infrastructure refurbishment. They now have a loan authority of around $400 billion, and there's already significant interest in the refurbishment program, with billions of dollars in loans being prepared.
Jigger Shah's Role in Decarbonizing the Energy System
Jigger Shah, head of the Loan Program Office, plays a crucial role in the Biden administration's efforts to decarbonize the energy system. His office has billions of dollars to invest in various projects, from green cement and steel to next-generation transmission lines and hydrogen facilities. Shah's goal is to convince companies to use these resources to stay and innovate in the US, rather than sending their technologies overseas. He believes that by connecting technological innovations with American workers, the US can dominate emerging industries and ensure a cleaner, more sustainable future.
Challenges in the Energy Grid and the Need for Transmission Expansion
One of the major challenges in the energy grid is the need for transmission expansion to accommodate the increasing demand from renewable energy sources. The transmission grid, which transports power long distances, faces issues of congestion and curtailment due to limited capacity. The process of applying for permission to interconnect with the grid can be time-consuming, with long wait times in certain regions. The inflation reduction act brought attention to the lack of transmission capacity, and there is a growing need for permitting reform to expedite the building of transmission infrastructure. Efforts are being made to check environmental regulations and find ways to streamline the process while ensuring proper standards are met. Texas, in particular, is leading the way in transmission innovation and grid transformation.
Grid Enhancing Technologies Can Boost Transmission Capacity
The podcast episode highlights the potential of grid enhancing technologies to increase transmission capacity. These technologies, already implemented in various countries like the UK, Belgium, Brazil, and India, can optimize the grid's capacity by considering factors such as temperature. By incorporating dynamic load ratings, the US could unlock 30% more transmission capacity, at a cost of $3 billion. Despite the benefits and cost savings demonstrated by utilities like PPL, who saved $50 million by investing $900,000 in dynamic load ratings, the US has been slower to adopt these innovations compared to other countries. However, the need to accommodate load growth and the recognition of outdated infrastructure is driving a shift in perspective, leading to increased interest in adopting grid enhancing technologies.
Building a Skilled Workforce and Sourcing Electrical Components
The podcast episode also addresses two challenges: building a skilled workforce and addressing shortages of electrical components. In order to support the transition to cleaner and cheaper energy, it is crucial to have a trained workforce. The conversation highlights the importance of technical education and the potential for two-year degrees to provide lucrative opportunities for individuals. Additionally, the episode discusses the ongoing shortage of electrical components, which has impacted manufacturing industries. The host and guest emphasize the need for proactive steps, such as long-term orders and strategic partnerships between utilities and manufacturers, to incentivize the development of domestic supply chains and ensure a steady supply of electrical components.
Jigar Shah is the head of the Loan Programs Office at the Department of Energy and thanks to the Inflation Reduction Act, he has hundreds of billions of dollars to lend to companies to accelerate the commercialization of clean energy technologies. The office has already been extremely active over the past year, and there's lots more to come. In this special episode of the podcast that was recorded live at the Texas Tribune Festival in Austin, Texas, we discuss his office's strategy and what it will take to achieve the clean, cheap energy system that so many people want. We also discuss specific industries, including nuclear power, and what it will take to build momentum towards more deployment.
