Energy Capital Podcast

AI data centers. Semiconductor fabs. Oil and gas electrification. Desalination. Rising population. Texas is booming and it needs massive amounts of electricity to fuel that growth.We’re already using more power than ever. ERCOT projects demand will grow by 60,000 megawatts in just five years. That would be like adding the current peak demand of California on top of Texas. But instead of clearing the path for new energy development, some would slow it down — and slow down the economy with it.This week, I spoke with Glenn Hamer, President and CEO of the Texas Association of Business, about why that’s such a dangerous idea and what we should be doing instead.We covered a lot: AI, nuclear, oil and gas, battery storage, export economics, and why Texas must build all forms of energy faster, not slower. But at the center of our conversation was this core truth: You can’t grow an economy if you’re starving it of power.Glenn made the case that Texas has always led on energy of all kinds. Republican leaders including George W. Bush and Rick Perry helped launch Texas’s wind and solar boom. Now we need to keep going with an all-of-the above strategy that includes solar, wind, gas, nuclear, geothermal, and batteries all playing a role.He also talked about the economic impact renewables have had in rural Texas, particularly in areas with no oil or gas, which now has another source of income: wind and solar leases. TAB’s study with Aurora Energy Research shows what’s at risk. Blocking new renewable projects would raise electricity prices and increase the chances of rolling outages.And it’s not just about supply. Texas is also leaving money on the table by underinvesting in demand-side innovation. In a second TAB study, Aurora found:* $87/year in savings per household, even for non-participants in demand response* Over $400/year in savings for households that switch from resistance heating to heat pumps* Significant peak reduction potential from data centers and other large energy usersThere’s a reason the oil and gas industry, manufacturers, chemical producers, and data centers are all calling for more supply and smarter policy. Texas doesn’t have a red-versus-blue energy divide, we have a build-versus-block problem.We also talked about the growing energy demands of artificial intelligence. Glenn made a powerful point: AI is a national security issue. If we want to win the AI race, and we must, we need to power that innovation here in the U.S., and especially in Texas. There are already grids in other states telling data centers “don’t come here.” If we pass restrictive energy bills, Texas could be next.AI data centers require massive, stable energy supplies. The only way to deliver that is through scale and speed. That means yes to an all-of-the-above energy strategy. Texas is one of the few states that can handle this level of growth. But only if we keep saying yes.Texas became the energy capital of the world by being the best place to build. Let’s not become the place that starts saying no.📩 If you liked the episode, share it and consider becoming a paid subscriber. You’ll get access to all full episodes, Grid Roundups, and more.Timestamps00:00 – Introduction02:45 – Start of interview: Glenn joins, overview of TAB03:30 – Texas energy leadership: oil, gas, wind, solar, batteries05:30 – Bipartisan legacy of renewables in Texas07:00 – Economic benefits of renewables for rural Texas09:00 – Energy for AI, semiconductors, and oil & gas electrification12:00 – Gas turbine shortage, and how batteries are changing the grid15:00 – Energy growth vs. Texas’ resistance to regulatory overreach17:00 – AI, national security & innovation as core drivers19:00 – Balanced advocacy: renewables, nuclear, batteries, geothermal20:00– Data center growth in Texas & energy infrastructure22:30– LNG exports & cost premiums for low-emission gas26:00 – Desalination & energy, innovation & leadership27:30 – Aurora studies on renewables and demand side management29:30 – Demand-side innovation & response31:30 – House Bill 14 & SMRs: nuclear development as opportunity33:00 – Geothermal innovation & bipartisan support34:00 – Demand-side efficiency and reducing energy waste36:00 – Tariffs, and economic ripple effects, need to lower energy costs37:30 – Support from industrial, tech & business groups38:30 – National security & AI race with China41:00 – Regulatory overreach risks & broad support for energy development 43:00 – Final thoughts: energy export & coalition buildingResourcesGlenn Hamer & TAB* Texas Association of Business* Glenn Hamer on LinkedIn* Glenn’s newsletter on Linkedin: Ham[m]er TimeReports & Studies* Aurora Energy Research – Impact of Restricting Renewables in Texas* Aurora Energy Research – Demand Flexibility and Energy Efficiency Study* Federal Reserve Energy Survey – First Quarter, 2025Related Energy Capital Podcasts* How Load Flexibility Could Unlock Energy Abundance (Tyler Norris Pod) * A Conservative Case for Clean Energy* Geothermal’s Moment with Jamie Beard* New Nuclear in Texas, with Doug Robison and Dr. Rusty Towell* Texas’ Energy Future: A Conversation with Jimmy GlotfeltyRelated Texas Energy & Power Newsletter Articles* A Time for Choosing (SB 819)* The Texas Senate Is a Threat to U.S. Energy Security (Senate Bill 388)* Another Anti-Energy, Anti-Growth Bill Looms (on Senate Bill 715)Media Coverage* Houston Chronicle – Texas Bills Could Shut Down Existing Wind, Solar* Utility Dive – Aurora Modeling on Renewables BanOther References from the Podcast* Remarks by the Vice President at the Artificial Intelligence Action Summit in Paris, France* EarthX Announces Winners of the 2025 EarthX Climate Tech PrizeTranscriptDoug Lewin (00:05.26) Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. Real treat this week, I got to talk to the president and CEO of the Texas Association of Business. That is a statewide chamber of commerce representing thousands of businesses all across the state of Texas. This was a conversation with just a lot of fun. We started all the way back with Texas Energy Legacy. And why there's really not a competition in Texas between oil and gas and renewables, how it really is an all of the above state because the economy is growing so fast. So many businesses are wanting to locate here, but we are seeing Texas become a hub for AI data centers and advanced manufacturing of all kinds. So Glenn makes a very clear case for adding energy resources, not subtracting. As you probably know, Texas Association of Business did a couple of very important studies with Aurora Energy Research. We just interviewed Olivier Beaufils for the podcast just last week from Aurora, talking about both of those studies. One of them looked at the impacts of limiting renewable development on Texas and showed we would have a higher likelihood of outages, higher costs for consumers if bills like Senate Bill 715, 819, Senate Bill 388, et cetera, if any of those bills were to pass. But Texas Association of Businesses also put an emphasis on demand side strategies and how those can help with reliability. Again, talk with that one about Olivier last week, but we got into all of that in this conversation. One of the things I liked most about this conversation with Glenn, there was a lot to like, but one of the things I really enjoyed was the discussion around the national security implications of winning the AI race. Whether you like it or not, we are in an AI race with China and we desperately need to win it. There are not that many places in the United States where you can develop enough energy to power AI data centers, but Texas is one of those. So long as we don't choke off the energy development that can actually power AI data centers. One final note, if you're listening to this, please also know you can watch it on our YouTube channel. We're starting to grow that channel. So we filmed this in high definition with multiple cameras. If you want to go check it out there, we'd be very grateful, but particularly be grateful if you would like the videos over there. But wherever you listen, please like and share, please leave a five star review. And this is a free episode of the Energy Capital Podcast. We do have paid only episodes for our paid subscribers. If you're already a paid subscriber, thank you, thank you, thank you. If you're not, please become one today at douglewin.com. You can access those paid episodes, but also all the archives of the Texas Energy and Power Newsletter, grid roundups, special presentations and chats, and much, much more. Thank you very much for listening. Let's dive into this episode with Glenn Hamer.Glenn Hamer, welcome to the Energy Capital Podcast. So glad we could make this happen. Been looking forward to doing this for a while. You are the CEO, President and CEO of Texas Association of Business, the statewide chamber. Tell us about TAB. And of course, this is the Energy Capital Podcast. Folks want to know about energy. Talk about Texas and energy. We're going to talk about a lot today, but let's start from a high level with Texas energy legacy and what energy means to this great state.Glenn Hamer (02:55.148) Great to be on the show.Glenn Hamer (03:18.808) Well, Doug, first, I want to thank you for everything you do. You get really important information out there to lawmakers, to the public, to the business community, and it's super helpful. And if I pick up the New York Times and there's a story on Texas and energy, you're going to be in it, or CBS News, or you name it. So at the state chamber, you know, we're very proud that Texas is the energy capital of the world. Doug, we lead in oil, we lead in natural gas, but a lot of people don't know we're number one by far in wind. We're probably now number one in deployed utility scale solar photovoltaic. We're climbing up the charts quickly in terms of battery storage. There's some great things we think being planned in nuclear. We're excited about what geothermal could bring. And Doug, you know, our bottom line is because the Texas economy is performing so well and we have so many businesses and people moving here and we'll I know we'll talk about AI later and Doug I just wanted the listeners to know my comments were not prepared by grok3 or chatgpt this is all human but we know that AI is going to require a tremendous amount of more energy new energy and ERCOT would back that up so Doug where we land is all the above and below whatever we think we need in terms of energy development and also say energy efficiency plays an important role here. We need to do it. And our members feel very strongly that we need to take that message to the state Capitol and retain Texas's place as the energy capital.Doug Lewin (04:56.918) Yeah, and the only way we do that, is by continuing to develop all the energy sources we have. Texas is blessed with resources and, like you said, oil and gas, but it's also very windy and sunny. Why not use all of it, right?Glenn Hamer (05:12.61) Well, I'll get in trouble to say this and obviously I'm kidding, but when I lived in really West Texas and I'm talking Arizona, far West Texas, I'll be careful there. But when I was in Arizona for many years, Arizona played a leading role in developing solar and it was bipartisan. But the state during that period of time was basically controlled by Republican governor and Republican legislature. At Texas at that same point, you had a very similar situation. You had governor George Bush and a Republican legislature that really developed the wind resource in Texas.Doug Lewin (05:48.322) Governor Perry as well. It went all the way through across deck.Glenn Hamer (05:51.378) Yeah, yeah, I mean, so, you know, wasn't considered, there was nothing partisan about it. It was simply develop the resources that make sense in your respective state. You know, Arizona, it's always sunny. Texas, a lot of sun, but also obviously a lot of wind. And so develop those resources.Doug Lewin (06:09.068) Yeah. And look, there's no red electrons, blue electrons, right? We need all of this, but we do see, interestingly, you know, I know you have made a real point with Texas Association of Business, obviously the statewide chamber, to visit a lot of local chambers. You've made that a real point of emphasis during your tenure. You know, in rural Texas, the renewable energy boom has really delivered a lot of value. There's a study you guys were involved with, right? What is it? Something like $20 billion over the life of the projects that are already in the ground, mostly in rural Texas.Glenn Hamer (06:45.694) It has been economically a boon to rural Texas. There's no doubt about it. We're not just talking about providing necessary electrons to keep the lights on, but there's been a huge financial impact across the state and particularly in the rural parts of Texas.Doug Lewin (07:01.016) Yeah, I posted a video on YouTube a while ago where I took some clips out of the hearing from Senate Bill 819. And one of them that really sticks with me is gentleman from Armstrong County, Armstrong County, just southeast of Amarillo, two or 3000 population. He's like, look, we're dry land farmers. We don't have oil and gas in our district. We got a lot of wind and sun. Why would you take this from us?Glenn Hamer (07:23.17) Well, we need it. I mean, again, you take a look at the state's forecast and our ambitions to be the AI capital of the United States. We're going to need a tremendous amount of new energy. And the energy that's already being produced is making our state more prosperous, particularly in rural Texas. We want to see more of that prosperity. I mean, when you're a chamber, you want to see more growth. Population, technologically, advanced manufacturing, AI, you name it, Doug. And we want to take advantage of the fact that we're the energy capital of world. And there's another point I just want to make. A big part of the Texas miracle is that this state has traditionally been about the easiest place to permit and build a business. I love when I talk about energy because everyone knows we're number one in oil and natural gas. But not everyone knows that we're number one overall in renewables. So we don't have the same number of people yet. I use yet as California, but we're producing more renewables. And why has that been the case? Because historically it's been a lot easier to permit and build energy facilities in Texas than other states. And again, we want to keep it that way. And it's a great talking point for other industries as well. I mean, I don't care what if you're manufacturing an automobile or any widget, when you're able to say that it's much easier to build and permit in Texas, it makes our state more competitive.Doug Lewin (08:56.77) Yeah. And look, I mean, it is AI. I always like to just point out to folks that like it's also semiconductors. It's also oil and gas itself is starting to electrify and use more and more, again, electrons. I don't think they'd necessarily really care whether they're green or brown or whatever, but like a lot of them are green. A lot of them are the wind and solar electrons and they're cheaper and they just like having access to that cheap power.Glenn Hamer (09:20.204) Well, those are two really important points. I mean, right now we export more semiconductors than any other state. And we're a huge semiconductor state with global wafers, Texas Instruments, Samsung and others, the birthplace. It requires a lot of juice. You know, so that's another industry where it's vitally important. And even you're talking about it's, yeah, the oil and gas industry. You think about the Permian Basin that is looking to electrify. Well, that's gonna require a lot of juice. So all of these things, in our opinion, work together. And I'm a big sports guy. This is the time you wanna add points. You don't wanna take points off the board.Doug Lewin (10:01.038) Well, I think even to go further with the sports analogy, I've been thinking about this lately, Glenn, the basketball playoffs are going on right now. You don't want to put five centers on the court. You don't want to put five point guards on the court. Wind, solar, gas, nuclear, they have different attributes. Wind is particularly great at helping to drive costs lower. Of course, you can't call on it when you need it. That's what you got your batteries or your gas peakers for. So just like a basketball team, you need five different guys with different skill sets complementing each other. A grid kinda needs that as well, right?Glenn Hamer (10:32.098) Well, absolutely. And you just even think of the investments. You want to diversify your investment portfolios. Texas is extremely lucky that for really all the major sources we're producing at top of the country levels, or we have the potential to really do a lot more. And I'm talking a lot more in battery technology. I'm talking a lot more in nuclear and a lot more in geothermal.Doug Lewin (10:59.596) Yeah. So another thing going on right now, I know you're, you're aware of is there is this gas turbine availability crisis, right? There's a, there's a supply chain crisis for gas turbine. So, so we're in a situation right now where Texas, because of the Texas energy fund, we are probably going to have some gas built here. It might be as much as 10,000 megawatts, but it's probably not going to be more than it might be a little bit less. Meanwhile, we have ERCOT giving us these demand projections all the way up to 150,000 megawatts, which would be 60,000 more than we use now. And that's within five years. I mean, it kind of scares me as a Texan. I would think it kind of terrifies you as the head of the chamber, the statewide chamber that like if some of these legislative proposals passed that would have the result, whatever the intention is, if the outcome is to limit the amount of energy supply that comes online, that then becomes a real just choke point for the Texas economy.Glenn Hamer (11:57.806) Right? I'm confident, and it's a little bit dangerous to do this before June 2nd, when the dust settles, we will still be a state where we will be encouraging all sorts of different energy resources and possibly, I would say, very likely juicing, so to speak, some different sources, including nuclear. But when you take a look at what ERCOT is forecasting, we absolutely need all of this new energy. And I think one of the things we need to do a better job in Chamberville is explaining what's going on. And part of what's going on is the battery storage issue is extremely exciting. And I'm talking about companies like Base Power. I'm talking about some of the things that are going on with Tesla. By the way, Texas companies too. And those certainly aren't the only ones, but what's going on in batteries is a game changer. And the fact that the grid is becoming more sophisticated and more resilient in terms of being able to handle and benefit resources that are more intermittent. So I think that there sometimes is a little bit of a lag in terms of just because some of these advances I think have been pretty sudden. They're really exciting. And in terms of, you know, Texas's pole position and energy production, really good for us and absolutely a prerequisite for us to be the AI capital of the United States. We need this energy. And Doug, that's why a lot of our tech members pay a lot of attention and want us at the Texas Association of Business to be very engaged to make sure that our energy policy is about all the above and below, is about addition and that we're very careful about any sort of proposals that could slow down the tremendous amount of energy we're going to need to economically function.Doug Lewin (13:59.47) Yeah, exactly. So, I mean, you mentioned permitting earlier, right? There's some deregulatory things happening at the Capitol trying to make it easier. You mentioned base. There's a bill that would make it easier. I know you've been supportive of this bill, make it easier for folks to get storage at their homes and businesses. You also mentioned, I just want to double click on this point just a little bit around batteries and how quick it's happened. The governor in his state of the state address right at the beginning of session said over the last four years, we have 35% more supply. That's a huge growth. That's over 40,000 megawatts. Of that 40,000, 10,000 is battery storage. The most dispatchable resource, I mean, like literally millisecond kind of response time. So this is a great story, but then at the same time we have these proposals. Senate Bill 819 is one of those. You got Senate Bill 715, Senate Bill 388. All of these would in different ways add all sorts of additional regulatory burden to energy developers that are trying to bring that resource to bear. So can you just talk a little bit about, I mean, it's almost like our dissonance, right? Because you have the legislature on the one hand, like trying to stand up a nuclear industry, helping geothermal, removing regulatory barriers for distributed batteries. And then on the other hand, you have these proposals that are just, at least in my view, just very heavy handed, that kind of big government approaches that don't really seem to fit with the Texas ethos, at least in my view.Glenn Hamer (15:25.688)Well, you know, whether it's energy or other areas, we almost always, if not always prefer the light regulatory touch. I mean, that is clearly part of the Texas miracle. Low tax environment, low regulatory regimes, as well as just ease of permitting so you can build stuff. Now we have spent, I mean, on my...Doug Lewin (15:38.254) Part of the recipe, right? It's the absolute formula.Glenn Hamer (15:51.106) ...going to divulge private conversations. But we have been making the rounds, talking to legislators that have sponsored or support these bills to explain where we're coming from and to also explain the awesome amount of new energy that is needed to power our economy. I mean, you take a look at, for example, how fast China is able to build certain things. I would argue, Doug, for national security, we have to, and I mean, Texas has to get energy policy right. And sometimes, look, I'm not saying everything that I say or do is 100% consistent. I always try to make sure it's consistent, but we're trying to respectfully point out that to achieve, you know, I think the greatest address in the history of vice presidents in our country's history was delivered by JD Vance on artificial intelligence in Paris.Doug Lewin (16:46.254) This was the Paris...Glenn Hamer (16:48.556) And the reason why Doug, he focused on three things, acceleration, innovation, and energy supplies.Doug Lewin (16:55.69) ...acceleration and innovation and adding energy.Glenn Hamer (16:58.794)Yeah. All three of those are the recipe for Texas to lead in that area. And so if we're stopping energy generation that will contribute to a more stable, a more resilient, a more affordable energy to homeowners and to businesses, we are going to respectfully say that's not the direction we want to go down. Now, I understand the issues. I mean, I used to in a past life, and Doug, anyone could Google my background. I've worked for conservative members of Congress, so like former US Senator John Kyle and Arizona Congressman Matt Salmon. Also ran the Solar Energy Industries Association. At a period of time where I joked, but I was sort of serious, I was more likely to see a UFO landing in Phoenix than a photovoltaic panel on a building. That's changed. And with that change, there have been some issues that are fair to be raised in terms of intermittency with solar and wind. The point we're making is that look at what's changed. You have batteries coming up, you have a more sophisticated grid, you have grid operators saying that this is good. I mean, I think, you know, we have very good leadership in my opinion at ERCOT. And it's very important to listen to what the experts are saying there. And as far as I can tell, our advocacy agenda is consistent with what the state needs to meet our dramatically increased energy needs in a very short period of time.Doug Lewin (18:30.41) Yeah, no, I mean, everything you're saying is consistent with what Pablo Vegas has been saying. The ERCOT CEO, he was in Houston Chronicle, Austin Statesman, Dallas Morning News at ERCOT Innovation Summit, of all things, just a week ago, talking about how we really do need every megawatt that we can possibly get. And of course, he'd be the first to tell you, there's challenges with intermittency. Nobody would deny it's challenging. Because it's challenging doesn't mean you just choke it out, right? Like that means you meet the challenge.Glenn Hamer (18:58.454) Yeah, because as you mentioned, there's challenges with every resource, every generating resource. It's not like I'm going to put up as much as I'd love to put up a small modular nuclear reactor at the chamber. It's not, you know, snap your fingers and it happens. So there's challenges with every energy resource. But what we try to do is just soberly say, okay, this is where things stand. And if we pursue these policies and we'll always listen, you know, there's, we want the grid to run effectively. And I also understand that sometimes there could be conservation issues, all can be addressed. We can balance all of those issues out. And we'd like to see to maintain and increase our supremacy and renewables. I'd love to see the state be number one in batteries. And Doug, I would love for us to lead in small modular reactors. I think that that's an area that the state is moving down the right road very quickly. My colleague and friend Reed Clay I think is doing a great job on nuclear advocacy. You know we really...Doug Lewin (20:03.266) He's the leader of the Texas Nuclear Alliance, right? Exactly. You need to get him on the podcast. Reed if you're listening.Glenn Hamer (20:06.476) He's a good guy.Glenn Hamer (20:08.333) Yeah, we'll read.Doug Lewin (20:11.116) I did add Doug Robinson and Rusty Towell from Abilene Christian and the tour resources talking about small modular. I've got another small modular one coming up. I think, so like this is really, I think kind of the rub here, Glenn, right? It's like we have some policies floating around that would really hurt some kinds of generation. And I don't want to attribute bad motives there. I think people are freaked out. Winter Storm Uri got people freaked out. There's a lot of fear out there, but I think when people act out of fear, they might end up enacting policies that have unintended consequences and really hurt the economy are positive things we could do. Right? Nuclear would be one of those, but there's a long list, right?Glenn Hamer (20:51.054) Well, absolutely. And I don't question the motive. I've met with a number of the members on these different bills. They're sincere in their beliefs. And again, we'll see in a few weeks really how it all plays out. I do think that the conversations and the coalition that's been building is helping to land this in the right place, meaning that we continue to be a state where we can more effectively and easier than any other state deploy energy resources. That is a big selling point if we're zooming out a little bit, when you take a look at all these data centers and AI. So there's been three, $500 billion announcements in the last six or seven months. So say during the first part of the Trump presidency that have involved data centers and AI. I think the first one was Stargate with OpenAI and Oracle, Abilene. I think the second one was in...Doug Lewin (21:43.831) ...in Abilene.Glenn Hamer (21:48.854) ...announcement with a big new manufacturing plant, think through Foxconn perhaps in the Houston area. The last one was connected to NVIDIA and maybe that's also Foxconn. I may be messing up some of the companies, but what do all three of those projects have in common? A couple of things. One is Texas is the center of a lot of the activity. And two, they all require a tremendous amount of energy.Doug Lewin (22:16.524) Yeah. And it's going to be a mix. It's going to be a mix. There will be gas that some of these data centers bring with them. We will have gas developed in the state, and they're going to want solar and wind and storage. It's going to be a mix.Glenn Hamer (22:29.25) And I'll just say, I'm getting, I'm no Daniel Yergin, I wanna be careful here. But to me, the more...Doug Lewin (22:34.574) No one is Daniel Yergin. No one except for Daniel Yergin. No, not even close.Glenn Hamer (22:37.026) Well, you're, you're, you're in his league. And well, when you think about the more we're doing wind, solar, battery, geothermal, the more opportunities we also have to export LNG. When you talk about the president wants to balance trade, one of the best goods we can trade is our natural gas, is LNG. So to me, this all really works together and plays into a strong United States economy and a strong Texas economy.Doug Lewin (23:11.566) Yeah, this is one of the things that is most fascinating to me about some of these bills, the 715 and 388 as examples where the authors mean it, I think, as a way to buttress the oil and gas industry, but the oil and gas industry itself doesn't want these bills. They don't like them because they actually see a higher value in exporting the gas. They get a higher price when they're selling it overseas than if they're burning it in power plants here in Texas.Glenn Hamer (23:37.038) Well, I think that those are the economics. Energy companies, they want to have the most profitable course. And absolutely, you know, these exports, there is a premium there. And to me, it's such a big win-win because it's also to me a big win, environmentally speaking. I mean, we're exporting our LNG. A lot of times it's displacing stuff that would...Doug Lewin (23:59.318) ...coal...Glenn Hamer (24:06.808) Texas LNG.Doug Lewin (24:08.28) One of the most fascinating things about that too, because a lot of the overseas buyers, whatever anybody thinks about it here, whether they like it or not, a lot of the overseas buyers want lower emission gas. So if you are actually powering your fracking operations with renewables, and then you can tell the Japanese, the Koreans, whoever you're selling it to, like, hey, this is low emission gas, now you're actually able to charge even a higher premium. Like this is why I sometimes, Glenn, want to hit my head against the wall. Some of these, what I just think are wrongheaded attacks against renewables, because people think they're doing it for the oil and gas industry. They're not actually helping the oil and gas industry with it at all.Glenn Hamer (24:44.098) Well, Doug, one of our top energy issues is to achieve Class 6 primacy from the EPA. Has that not happened yet? It's in process. So Administrator Reagan actually came out. We had a meeting with him. It was one of the top issues that I personally brought up with him. Nuclear being another, and I did of course say we're an all the above and below state. I mean, we just want to make it as easy to produce electrons. But the point there is carbon capture and sequestration obviously is to produce a lower carbon product for the reasons that you've said, a lot of the customers overseas, that is an important factor. It could be a deciding factor. So again, for all these pieces to work together, and Doug, this is also important, so I appreciate you bringing this up. Texas, of course, we're number one in terms of exporting. 23 straight years. We export twice as much stuff as California. So when we're getting energy policy right and the things that we've been talking about at TAB, we're running up the score for Texas being the country's top export state. So we're going to do that unapologetically and proudly.Doug Lewin (25:51.968) And by the way, all of these things, liquefaction of natural gas, carbon capture, even some things we haven't talked about, desalinating water, which is probably going to be increasingly important in our state, also take a lot of energy, right? Like a lot of energy for all of those things.Glenn Hamer (26:06.574) Well, that's a great point. I mean, we're going to have something pass and Senator Perry has been a great leader on this to have allocated dollars for water augmentation, new water. Desalination is absolutely going to be a part of that. And you're right. Put desalination in the data center category in the sense of it's going to require a lot of energy. So again, everything that we're talking about here, the common thread, more people, more industries that are energy intensive. We need more juice and we need it now.Doug Lewin (26:39.382) And... let's meet those challenges of intermittency and of integrating renewables with innovation. Because Texas, I would argue, and I know you agree with this, it's not just energy state, it's an energy innovation state. So a lot of the things you were talking about earlier with batteries and base power, like store it up when you got a lot of it, deploy it when you don't have a lot of it. Like we can solve these problems with innovation. We're Texas, damn.Glenn Hamer (27:00.29) Well...I mean, and you look at, you know, fracking was innovation. Innovation and energy is very important for the states and the national economy. But Doug, you're absolutely right. And we're blessed in this state with a terrific university system. You take a look at what's going on, UT Austin and Texas A&M and our other great universities. There's a lot of brain power that's being put into energy innovation. So let's take advantage of it.Doug Lewin (27:25.454) So I would be remiss if I didn't mention you guys put a couple of studies out there from Aurora, just recently put out a podcast with Olivier Beaufils where we talked through a lot of those slides. So people can check that out. We won't get into the great sort of gritty detail because Olivier and I have already done that. But on the restricting renewables one, what it finds, and I think again, where a lot of people come into this is like, hey, if we restrict renewables, we're automatically to get more gas, we'll have more reliable grid. A, there's the gas supply problem. We've talked about the turbine supply problem we've talked about. But B, when you start restricting renewable development and you also get retirements, you actually then increase the likelihood of rolling outages. The study you all put out there showed that. Happy for you to talk about that. I also want to talk also though about the study you guys did on demand side management, because this is an area, Glenn, that I think particularly with energy innovation. We are not yet a leader on the demand side. We're just not, just like objectively, it doesn't matter. There's a lot of down scorecards out there and none of them are we even in the top 10. This is an area where I would love for the legislature, for conservatives, liberals, moderates, whatever your way of thinking is, like think creatively about how to get the demand side more active. Is this something you're thinking about?Glenn Hamer (28:40.674) Well, absolutely. I'm going to touch that point and I just can't recall the company, but it's Waco based, I believe it's a Texas company. So I just was a judge at an EarthX event. Cool. And on the innovation, it's very interesting. I was invited as a judge. So was CS Freeland who runs the Texas Venture Alliance. So it was an innovation, which I chair, you're in that group. So it was innovation focused and it was a Texas company. It was actually a national or international competition. And this is a company I'm going to put you in touch with because it was very interesting. It was a demand side response company to more effectively and efficiently use renewable energy for the grid. They won. It helped that two out of the four judges perhaps were from Texas, but it was unanimous. There was no funny business. But so the demand side, I think is really super important. But when you talk about the other study, what we found, and I know you went into the details...Doug Lewin (29:22.495) Okay.Glenn Hamer (29:36.746) It was an energy reliability thing. Like literally, we don't want to have a situation where Texans during hot or cold times are going to have a tough time getting the energy they need to live. And the other piece of that was the cost. Renewables bring down the cost for homeowners, small businesses, and businesses. So, it's a reliability, it's a stability. And, you know, I also think it's sort of interesting that even on I'm not invested in Bitcoin or anything like that. But some of the Bitcoin mining stuff also presents an opportunity in terms of being able to quickly flip a switch and to provide extra electrons when it's most needed. You have some different things working in the right direction. Again, our point is let's make sure we're taking advantage and we're not doing anything that might have some unintended consequences that we would regret as a state.Doug Lewin (30:32.834) Yeah, no, I think that's super, super well said. A lot of potential on the demand side for innovation. Let's talk about a couple other areas of innovation. A couple times you've mentioned nuclear. I know you guys have supported House Bill 14. Do want to talk a little bit about that? And not just SMRs. Again, I've done a podcast on SMRs. You can talk about it all you want, of course. But I think what is really interesting about House Bill 14 and what came out of the Advanced Nuclear Working Group that Governor Abbott appointed and Commissioner Gladfelty so ably led, was this focus on building up an industry for it here. And this is again, where I just like, man, I wish people at the Capitol could spend less time punching down at renewables, because there is so much right there for us for the taking in Texas. And this is one of those areas, isn't it?Glenn Hamer (31:16.844) Well, it's an area that some state is going to take advantage. It's very clear. I mean, does a day go by where you don't read, you know, Three Mile Island's going to be reopened or, you know, it's every major tech company supports the development of SMRs. So, Doug, that's exactly right. That's where our energy, so to speak, should be put. Let's advance solar, renewables, batteries, SMRs, small modular reactors, geothermal. Let's do all those things. And ideally we do all these things right. We also, yeah, we do want to see more natural gas, but right now it's not as simple as snapping your fingers and those come up. And then we've talked about the export opportunities. But yeah, when you talk about SMRs, that to me is the type of thing that we should be focused on as a state. And it would be tens of billions of dollars of economic development over a period of years, not to mention to have great clean energy for the next 40, 50, 60, 70 years.Doug Lewin (32:18.35) And we've got a bunch of these nuclear startups located in Texas. I've already interviewed one. I'm going to interview more over the summer. I'm really looking forward to that. We could be not only powering our economy with that base load, clean firm power, but then exporting that all over the place too. It's pretty exciting. And you really start to see kind of the outlines of what the grid's going to look like. You've got these sort of clean firm sources like nuclear. I want to ask you about geothermal in a second. You got renewables that you're using to power industry and power up the batteries when you have an abundance of it. And then you've got gas peekers and batteries filling in those gaps. It's complicated for sure, but it's also like, it's not rocket science. Like the formula is there for us.Glenn Hamer (33:03.756) Well, and when you mentioned geothermal, that is one of the areas. You know, the federal administration has been, you know, more positive, it's fair to say, on certain sources than others, you know, to where they've been pretty darn positive, nuclear and geothermal. And geothermal, it seems that there's quite a bit that can be developed here in Texas. And that's part of our energy background makes us a natural leader. I listen to a pretty interesting podcast. I'm a pretty religious listener of the All In podcast. And the energy dominance, I can't recall exactly what they call it, but Doug Burgum was on. And he was talking about geothermal and nuclear.Doug Lewin (33:44.364) Secretary of Interior, right? Secretary of Interior. Head of the Energy Dominance Council, yeah.Glenn Hamer (33:48.79) Yeah. And he has a record as a governor of developing all sorts of different resources.Doug Lewin (33:53.614) North Dakota, right? So it's another kind of oil, a lot of oil.Glenn Hamer (33:56.334) Production there. But I think also pretty windy. And he was connecting dots to AI and the... it's a good one. Okay. I'm not going to say that you would love everything.Doug Lewin (33:58.83) Absolutely, they have a ton of wind absolutely.Doug Lewin (34:04.022) Ooh I need to listen to this one.Doug Lewin (34:09.485) Everything that he says, that's fair.Glenn Hamer (34:21.409) We're excited about geothermal as well, Doug. And again, I think if you're a Texan, you want to lead in all these different areas. It is in our DNA to be number one.Doug Lewin (34:31.853) Yeah, especially when it comes to energy. I'll just say, as far as like, you know, I gave a sports analogy earlier of like all these different resources working together as a team. One place where I think sports doesn't work well for this, I think what happens a lot of times, particularly at the Capitol, is people think, I'm wearing this jersey, somebody else is wearing it. I mean, that's of course what you get with like Republicans and Democrats, but on the energy side, like it should not be that way. And geothermal is one of those great examples because the oil and gas industry itself, Chris Wright, the Secretary of Energy, has invested in Fervo, a Houston-based company that is headed by a former oil and gas person using drilling technology, right? I mean, it effectively is all of the innovation that came from the shale revolution, helping us get to clean, firm power. If we can stop viewing the world as like renewables versus oil and gas and start to see how it all works together, we'll be so much.Glenn Hamer (35:25.056) Well, I love how you framed it. We're all on the same team. We all have a role. And if you look at all these different energy sources, it's the more the merrier. And again, it's a great thing that we're now at a point in time with, particularly what's going on with storage and batteries, that it makes it much easier for the whole team to play well together and contribute. And I'm glad you also mentioned the demand side, because I think that there's a lot that could be done there. And, you know, I think I remember a year or so ago where it got super hot and there was strong recommendations to businesses and homeowners, you know, lower the thermostat. That's positive. I mean, we should, everyone likes paying less and, we should do everything on the demand response side that we can do as well. In fact, in the olden days when I was running the Solar Energy Industries Association and I'd work with the Energy Efficiency Group, the point was, you have a solar panel, but you're leaving your refrigerator open. You're not accomplishing what you want. So all these different.Doug Lewin (36:29.838) Energy waste is never a good thing, right? You want to use whatever energy you're producing most product...Glenn Hamer (36:34.606) And Doug, for companies, that's so important as well. That's good for their bottom lines. And I'll also just say not to get too deep in the weeds on the tariff side, but some costs could and probably almost certainly will increase because of what's going on there. So it just, to me, makes it even more important to get our energy policy right on the state level to make it as easy and as cheap as possible while doing it safely to continue our drive towards energy abundance.Doug Lewin (37:05.496) Totally. And I think that's why you've seen so many folks like the manufacturers and industrial consumers and oil and gas association, chemical council, tech association of business, right? Like because you are in a situation where costs in different areas are going up, we've had inflation for several years. Now you've got tariffs on top of that. You look at like just the oil and gas producers, the cost of drilling a new well according to the federal reserve and the survey they do of energy executives, oil and gas executives, is somewhere in the low 60s, right? And the price right now is in the high 50s as costs of drilling are going up because of tariffs. If you start raising the cost of electricity too, that's just another layer on top of it that makes it harder for Texas oil and gas to be profitable. Again, this is just where we've got to see this more holistically and not see it as oil and gas versus... Right? It's time to get out of that.Glenn Hamer (37:55.638) Yeah, as I'll just say, at the Texas Association of Business, we look at all these different resources as complementing each other in some way and useful towards our goal of remaining the highest performing economy in the country.Doug Lewin (38:15.136) And before I want to ask you if there's anything else I should have asked you that I didn't, but before I do that, I just want to, we talked about this briefly, but I think it is just so critically important. I just want to go a little bit deeper on it, is the whole national security implications of AI. Again, you touched on it, but we are in a race. I don't know how much people understand this. I only barely understand it, but I understand it enough to know there's a race going on. And it is critical that we have AI data centers here in the United States of America. And there are only certain places around the country you can really do that. You have grids all over the country just telling AI data centers flat, do not come here. We cannot take you on our grid. I don't want to see that happen in Texas. And I'm really worried if some of these proposals pass, that is what's going to happen.Glenn Hamer (39:05.838) That is a real legitimate concern and you're right that it's not everywhere in the country in the United States where this is feasible. Virginia is one area that's a leader. Texas is another. And I do believe that the race for AI supremacy is for all the marbles. This is far more transformational than even the internet. And to me, it's critical that Texas paves the way. And that means getting the policy rights that we're not over-regulating and we're allowing for innovation. And I'm just going to quickly say the model was, and I'm going to give them tremendous credit, was President Bill Clinton got that with the internet. And you will hear US Senator Ted Cruz talk about the US got that right, Europe screwed it up, and take a look at the size of our economy compared to Europe's since that one decision by President Clinton. And if you want to give, you know, let's be bipartisan, Republican Congress made a huge difference. That same approach overall, in my opinion, from this administration, on getting the regulatory side right on AI, which I believe they have, if we get the energy side right, and we encourage all energy sources, the US will retain AI supremacy, and the 21st century will be ours. But if we get any of those levers wrong, there's incredible risk to our economic and national security.Doug Lewin (40:35.818) I completely agree. And I would say also on that sort of like getting the regulatory right. When I interviewed Rick Perry for this podcast, that was one of the things he said about his 14 years as governor that really he looked at as defining Texas's growth during that period. Yes, there's low taxes. There's also that lighter regulatory touch. It doesn't mean no regulation. When I talk about where energy system people call deregulation, it's restructuring, it's still highly regulated to protect the public. And sometimes we have to dial up that regulation, sometimes we dial it down. But I think there's a real danger right now, particularly because of some of the animus towards renewables, that there's this overreaction to overregulate, which really cuts against a quarter century of Republican leadership in Texas. And to your point, Bill Clinton, what really is kind of like Jimmy Carter deregulated the airlines, there's been kind of a broad bipartisan consensus in the country that we don't want to overregulate in a way that chokes out innovation. And I am really worried with some of the stuff I see under the dome that like there's kind of a movement away from that that is, I don't know, a little terrifying.Glenn Hamer (41:42.924) There's also a growing coalition to make the case that it's all the above and below. I mean, I think you see a lot of economic development groups and chambers and different business groups say, we are the energy capital. We need to develop all of these resources and we don't want roadblocks being put up that would endanger the need for additional energy.Doug Lewin (42:06.542) I appreciate you saying that. And I think actually, like, it is important to note that like out of 181 over there, there probably still is a very large majority that still favors that. Some of the louder ones don't, but I still think there's probably a pretty durable bipartisan consensus that like, who wants to strangle the life out of the economy? Nobody's for that.Glenn Hamer (42:25.262) And Doug, and I like how you frame certain things like the nuclear opportunities, huge economic development, some of the things going on in batteries with some of these great companies in Texas, huge economic development. It's not just energy, but it's developing these resources that you can export, whether it's around the country or around the globe. Texas is poised to lead. You know, there's some policies that I enjoy talking about a lot more are those such as the ones we were sort of talking about on nuclear that advance. Yeah. Don't enjoy talking as much about defense, but getting back to sports, look, the fact is there's offense and defense. We'll just continue to make the case and do everything we can to build a coalition of groups and companies that see the world our way.Doug Lewin (43:17.24) Glenn, appreciate everything you're doing. Always enjoy talking with you. We covered a lot of ground. I kept you longer than I said I would. And I know you're very busy, but I want to give you the opportunity to do anything I didn't ask you wish I would have, anything else you want to share with the audience.Glenn Hamer (43:29.848) Well, without getting into too many details, I'm pretty excited about what happened with the NBA draft.Doug Lewin (43:36.206) HaGlenn Hamer (43:38.626) Texas is going to have three really strong NBA clubs next year.Doug Lewin (43:42.798) All right, there you go. You heard it here first. So when we're talking about the team that is all the energy resources, and we talk about the basketball analogy, the actual basketball in Texas is also heading, trending in the right direction. So love to see it.Glenn Hamer (43:56.28) Thank you Doug. This was fun.Doug Lewin (43:57.863) Really appreciate you taking the time.Doug Lewin (44:01.56) Thank you for listening to the Energy Capital Podcast. I hope you enjoyed the episode. If you did, please like, rate, and review wherever you listen to your podcasts. Until next time, have a great day. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

Note: The Podcast Recording with Graphs is Here.What would happen if Texas started turning away new wind and solar projects or even retiring some of the capacity we already have?That’s not merely a hypothetical. It’s what several bills that have passed the Texas Senate aim to do. And according to new modeling from Aurora Energy Research, the consequences could be severe: higher prices, increased risk of rolling outages, and weaker reliability at the very moment we need the grid to do more.I sat down with Olivier Beaufils, Head of US Central at Aurora, and a returning guest on the podcast, to walk through the results of their latest two studies. We discussed what it means for Texans: whether you’re a policymaker, utility, industrial operator, or just trying to keep your power bill manageable.In the first study, Aurora modeled scenarios where Texas slows or blocks the addition of new solar and wind. The findings are stark:* By 2035, power prices rise 14% compared to a business-as-usual scenario* By 2050, prices jump 38%* A conservative forecast still shows 400,000–600,000 homes losing power in summer peak conditions due to 2–3 gigawatts of load shed* Delays in thermal generation supply chains mean replacement capacity can’t come online fast enough to close the gapThese results don’t even account for the possible retirement of existing renewables, which SB 715 would accelerate. The second study focused on demand-side solutions like residential demand response, data center flexibility, and energy efficiency upgrades (especially replacing resistance heating with heat pumps). These are often overlooked, but for those looking to strengthen the grid they can dramatically reduce stress on the grid, while saving Texans money.Key findings:* Demand response could save every Texan household $87 per year in conservative estimates, even if they don’t participate* Industrial customers could save $2 million annually under a moderate demand response program* Replacing resistance heat with heat pumps could save households over $400/year * In a Winter Storm Elliott-style event, widespread heat pump adoption could eliminate up to 6 GW of potential load shed; the impact would be bigger in a Winter Storm Uri-like eventTaken together, these studies paint a clear picture: A more diverse, more flexible, and more efficient grid is also a more affordable and more reliable one. We need more of everything, but especially the resources that are fast and scalable.I’m grateful to Olivier and the Aurora team for bringing rigorous analysis to a debate too often shaped by ideology or misinformation. These are exactly the kinds of conversations we need to be having as Texas faces record-breaking load growth and increasingly extreme weather.If you enjoy the podcast, consider subscribing and sharing with a friend or colleague. It helps more people find these conversations and stay informed on what’s really happening with Texas energy.Timestamps00:00 – Introduction & guest reintroduction (Olivier Brochu, Aurora)02:04 – Start of Study 1: Limiting solar and wind in ERCOT06:00 – Supply chain risk & reliability impact of throttling renewables11:00 – Load shedding during heatwaves13:30 – Wholesale power prices and affordability under constraint scenarios16:30 – Impact on customer bills and total system costs20:30 – Clarification: this is not a bill analysis, but a scenario study21:30 – Start of Study 2: Demand-side flexibility & efficiency24:30 – Demand response from residential vs. commercial/industrial users29:00 – Data centers, system peaks & the synergy with residential flexibility32:00 – Price suppression benefits of demand response34:30 – Indirect savings: how even non-participants benefit37:00 – Addressing resistance heating and the efficiency potential41:00 – Heat pumps as a system reliability solution44:30 – System-wide benefits & mitigating winter risk46:30 – Efficiency = cost savings + resilience50:00 – Final thoughts: all-of-the-above strategy & public/private collaboration52:00 – Outro & where to find Aurora’s workResourcesAurora & Team* Aurora Website* Olivier Beaufils - Linkedin * Previous Podcast with Energy CapitalReports & Modeling* Aurora Energy Research: Restricting Renewables Study* Aurora Energy Research: Demand Flexibility Study* ERCOT’s Load Growth ForecastYouTube Channel for DougLewinEnergyMedia Coverage* Houston Chronicle on Anti-Renewables Legislation* Utility Dive on Aurora Modeling - Texas Renewables RestrictionRelated Posts on DougLewin.com* A Time for Choosing (on Senate Bill 819)* The Texas Senate Is a Threat to U.S. Energy Security (Senate Bill 388)* Another Anti-Energy, Anti-Growth Bill Looms (on Senate Bill 715 and House Bill 3356)* A Conservative Case for Clean Energy* How Load Flexibility Could Unlock Energy Abundance* Peak Performance: Grid Roundup #58* Record May Peak Demand Coming Wednesday: Grid Roundup #57* ERCOT CEO says "we need all resources": Grid Roundup #56TranscriptDoug Lewin (00:04.45)Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. This week I have with me Olivier Beaufils from Aurora Energy Research. Y'all have heard Olivier before on the podcast. I interviewed him last year when Aurora had done a fantastic study on battery energy storage in the ERCOT Market and some of the energy savings that battery storage brings during a winter storm. That was a great study. We'll put a link to that show and the study in the show notes.But today we're going to talk about two additional studies Aurora has come out with that are very, very relevant to what is going on in Texas right now. One looked at the impact of renewable energy development, if it were to be throttled by some of the proposals that are out there, what that would mean for prices and reliability in the market. And another one looks at demand side management, energy efficiency and demand response and its impacts. Doug Lewin (00:59.02)I'm thrilled, Olivier, you could make time to be with us. Thanks so much for being on the Energy Capital Podcast once again. Olivier Beaufils (01:05.4)Doug, it's a pleasure to be back. Thanks for having me. Doug Lewin (01:08.588)All right, great. Well, let's dive right in. As I said, just a second ago, Aurora Energy Research is doing great work. You guys are global. Folks are interested in anything going on in the energy space. I encourage them to go look at your website. But you guys have a presence here in Texas with a big office here and just been doing great work, really helping people understand some of these market dynamics that are going on. Doug Lewin (01:32.364)Let me also just say on the outset for those that are listening on the podcast, we are at a few points in this conversation going to reference some slides from these reports that Aurora has done. This podcast will also be posted on our YouTube channel, @DougLewinEnergy, so you can go there and if you can watch, you'll be able to see the slides, but we will make sure to describe, Olivier, you check me on this and make sure I'm doing it, that we are describing it so somebody that isn't. Doug Lewin (01:59.052)watching the podcast, but listening only will be able to follow along. Let's go ahead and start with the one that is called impact of limiting solar and wind development in the ERCOT market. So this is getting a lot of attention. Obviously it's being talked about a whole lot. News articles in one of those articles, or actually a couple of those articles, ERCOT CEO Pablo Vegas talked about how some of these bills that particularly those that would remove current generation or restrict Doug Lewin (02:28.174)future renewable energy development, throttle sort of the future development, particularly Senate Bill 819, Senate Bill 388, Senate Bill 715, and 3356. We'll talk about all of those as we go through. And you can find more of this at the Texas Energy and Power Newsletter and on previous podcasts. Any of those bills, the outcome would be less reliability and higher costs. Can you just, from the highest level, Olivier, Doug Lewin (02:54.99)Let's talk about why that is because it's counterintuitive to some people. They think that if you restricted renewables, you would automatically have some kind of increase in reliability. Just from the highest level, why would these different, why would the outcome of these proposals be lower reliability and higher costs? Olivier Beaufils (03:13.13)Absolutely. Yeah. I can talk about that. Maybe just a quick disclaimer before I dive into it. so, Aura is a power market analytics firm. and we don't have any specific agenda, right? Our job is to run power models and do analysis. we work with everyone. We worked with a lot of the larger thermal generators and air cot and other markets. we work with batteries. We worked with renewables. We work a lot with banks and investors. And so Olivier Beaufils (03:40.03)So our job is to do the analysis and figure out what it tells us and offer it to policymakers to, you know, to the public so that they can make more informed decisions. Right. So I think that's important to say before we dive in here, but on your question more specifically, why is this counterintuitive? Well, there's two aspects to it. I think there's one very simple aspect of, you know, we're seeing a lot of demand. And if we're about to remove some of the supply. Olivier Beaufils (04:08.61)that could come through either through solar generation, so wind generation, we're going to be in a position where there's just gonna be less supply on the supply curve and generally higher pricing because basic supply demand economics for anyone that's taken an Econ 101 class, you're gonna be higher on the supply curve that is going to result in more expensive generation. So that's the sort of very overarching point. Right now we need the megawatts we can get because of all this demand growth. And so when you remove that, Olivier Beaufils (04:38.55)It makes things more expensive. But the second piece that I think is maybe less well understood of renewables is that, you know, the cost of renewables is mostly in building the infrastructure. Once you've built it and in Texas, we do this with private capital, right? Ratepayers do not have to pay for any of this infrastructure being built. It's private capital taking risk. So once it's built, the wind is free. The sun is free, right? We know this. So operating it is virtually nothing. Olivier Beaufils (05:08.384)And so what happens is all these renewables, they sit at the very bottom of the supply curve. And so that means they're the one they're dispatched first, they're the least costly for the system. And then after those are dispatched, we then turn on or keep on more expensive generation, nuclear, coal, gas, and then increasing by order of more and more expensive. If you remove a big chunk of those less expensive renewables, Olivier Beaufils (05:35.608)then the system is going to become more costly because you will have to turn on older, less efficient plants more often. And so on average, we'll have higher costs for your system. Doug Lewin (05:47.266)Yeah. And then add to that and you guys reading directly from the report, restricting renewables while thermal supply chains are constrained leads to load shedding under summer heat wave conditions. So the other key piece of this is you're not restricting renewables or in the case of 715 and 3356 actually retiring existing renewables. You're doing it in a context of it's very hard to build Doug Lewin (06:15.95)replacement capacity right now because of supply chains. Can you talk about that? And then the second part of that leads to load shedding under summer heat wave conditions. You know, we're, recording on the afternoon of May 13th. It's 97 degrees right now. We don't know what the summer is going to be like, but it's Texas. know it's going to be hot. You guys calculated two or three gigawatts of potential rolling outages just based on restricting future growth. So maybe talk about those. Doug Lewin (06:44.898)those two aspects, the difficulties in the supply chain and what your modeling found that would mean for summer heat waves. Olivier Beaufils (06:50.946)Right, no, I think that's a key point. So we're not in a world where you can just decide that you're not going to build those solar or wind projects that are in the queue and suddenly you want to build gas generation and that's just going to show up tomorrow. Those projects take years to develop. We have some slides we put out. Typically a thermal project is three, three and a half years. A wind or solar project can be four or five years. And so if... Olivier Beaufils (07:17.454)Today, you decide that you suddenly want five gigawatts or so of more capacity, you're not necessarily going to be able to put that online until 2029, 2030, probably even later. Because also, the other part for people to understand is, five years ago, gas was in a really tough spot. You had gas turbine manufacturers, GE Mitsubishi scaling down capacity because demand for gas turbine was way down. Olivier Beaufils (07:45.654)And so they reduce their production capacity like any sensible, rational manufacturer. And so today suddenly we're asking them to double, triple their production and they can't do it instantaneously. Obviously they will adjust some of that production, but it will take time. And they're also wary of an oversupply situation. So you have limitations of how much you can build, how fast. Doug Lewin (08:05.153)Exactly. Olivier Beaufils (08:10.732)And so that means every gigawatt or megawatt you take out of the market between now and the moment where you can build that new generation effectively is a megawatt that you will not have in the summer when temperatures are really high. Because majority of those projects have been in development for years already. So they are getting close to ready to build. And so if you prevent them from building or if you make it more expensive, more difficult so that people have to make a different decisions, decide not to proceed. Olivier Beaufils (08:39.404)then effectively you will have less capacity to generate. And as much as renewables are intermittent, think something that's also really important to understand is the sun doesn't always shine, but it shines pretty predictably. It generally rises at known time and sets at known time as well. And there's a pretty predictable curve. And even if we have a set of clouds that go over the project at some point, generally we sort of know when they're to generate. Olivier Beaufils (09:08.294)And the same with wind. You you will have weather events where wind drops, but you also have a lot of weather events where wind production is high. And so those projects do help the system. They generate power, except obviously solar at night. And so they help the system during those hours. Particularly solar in the middle of the day, which is when the demand is highest in aircott, is extremely helpful to the system. And combined that with batteries, we're able to shift a lot of the energy when we need it. Doug Lewin (09:37.516)Yeah. I mean, all, all resources contribute to reliability. Some contribute more than others. Obviously batteries or gas peakers have certain flexible attributes. Demand response has that as well, but all resources contribute to reliability and they all have other things they contribute to, including some cost impacts. let's do go ahead for those that are watching on YouTube, I'm going to go ahead and pull up part of this presentation. Doug Lewin (10:06.594)that you guys put out. is the one that's the impact of renewables. And I did want to make one more point about that, Olivier. It's interesting because you mentioned like, it does take a while for the manufacturers, the OEMs to ramp up production. On GE Vernova's earnings call, it may not have been the most recent one, it may have been two ago, but they talked about, they were talking like a lot of the oil and gas producers talk about capital discipline, right? About like, they don't necessarily want to just ramp up production because like you said a minute ago, oversupply is then a risk. They actually kind of like these high prices, right? So anybody that thinks that like, hey, well, this is just a temporary thing and in two, three, four years, we're gonna have plenty of gas turbines. A, that next two to three to four years is really important and we have to be careful. And two, that probably isn't gonna happen. We're probably still gonna be in a constrained environment. So you guys referred to that in this slide. Doug Lewin (11:00.972)When accounting for thermal supply chain constraints, restricting renewables causes load shed between 1.8 and 3.1 gigawatts across cases. So anything you want to say about this slide in particular, or it just kind of speaks for itself. Olivier Beaufils (11:14.03)Well, I think it's a reflection of a point you just made and having less megawatt coming from solar and wind. So essentially at the times when you need more energy because demand is increasing and just for our listeners, our demand forecast is conservative. So we are not taking the ERCOT forecast at face value. We think there's obviously a lot that can be discussed on how much of it is real and how much of it will come through. We put together our own forecast that's a lot less aggressive. Olivier Beaufils (11:42.05)I think we're right above a hundred gigawatts of forecast by 2030 and then climbing from there. But even in this sort of more conservative forecast, if you take away a significant amount of wind and solar generation, you will see periods in the middle of the summer during those tightest hours, generally when the sun sets before the wind generation has picked up and you have effectively less solar, less wind generation. Olivier Beaufils (12:11.278)do see essentially two to three gigawatts and even a little bit more so if you look at extreme weather events, but even in sort of a standard weather year, two to three gigawatts of load shed, which represents about 400 to 600,000 homes that would lose power. obviously, know, aircraft would try to do rotating outages and for those volumes they could, but would lose power over the summer when, you know, it's 105. Olivier Beaufils (12:40.91)plus outside. Yep. Doug Lewin (12:42.134)And Doug Lewin (12:42.294)I appreciate the point you're making about the load forecast, because obviously if your load forecast is higher, and ERCOT thinks by 2030 we're going to be in a 135 gigawatt or so scenario, you guys were right around 100. If you're at 135 or even you're somewhere in between, then obviously these load shed numbers would be much higher. And I think you guys, correct me if I'm wrong, for this study, you guys looked at throttling future development, but didn't look at Olivier Beaufils (13:01.644)The problem is even bigger. Right. Doug Lewin (13:10.926)the impact that how some of the bills, particularly 715 and 3356 could cause retirement of existing assets, right? This is just looking, this is just forward looking, correct? Yeah. So again, Olivier Beaufils (13:20.792)That's right. That's Olivier Beaufils (13:22.295)right. So we didn't even include that at that impact of potential retirements, which would make the problem even worse. Doug Lewin (13:27.628)So yeah, as extreme as this is, 400,000- 600,000 homes losing power in a heat wave, that sounds really bad and it is really bad. It actually could be much worse depending on some of the assumptions. Okay. So the next slide I want to pull up, and again, we'll talk through this, is the slide that shows some of the cost savings. Cause that is while renewables contribute to reliability, they contribute even in a more kind of a fulsome, mighty way to Doug Lewin (13:56.654)cost reductions. So the title of this slide, limiting renewables cause power prices to rise. Prices in the fully restrictable renewable scenario increased by 38 % by 2050. So you've got kind of a midline here, a midline projection, and then a higher scenario, and you're looking out over 20, 25 years. Can you kind of talk through the findings of the cost impact of restricting renewables? Olivier Beaufils (14:22.414)Yes, definitely. as you restrict more and more renewables development, and so as you mentioned, we have these two scenarios, one that essentially is sort of a 50 % is a halfway and one that is more fully restricting development past the next few years. So we're still accounting that some of the developments that's very advanced late stage would go through, but then after that, a very severe slowdown in the amount of wind and solar that would come into the system. so, you know, comparatively, cause you still need to meet load, we do model. Olivier Beaufils (14:52.078)additional thermal generation coming online to support the system. And so as you see over time, as you have to add more and more thermal generation to support the system, but already you can see the effect pretty significantly by 2035, you see a divergence between our central case, which is sort of view of the future that we think is most realistic based on load growth, based on market economics, right? Under the current set of rule. So you could Olivier Beaufils (15:21.326)call this a business as usual scenario, if you will, maybe a little bit conservative on the load side, but business as usual. And then those restricted scenarios, by the time you hit 2035, which is very important timing in terms of planning horizon for a lot of investments, you're 14 % higher. Your power prices are 14 % higher, which is very significant for residential and industrial consumers as I think we'll dive into in a second. And that is primarily Olivier Beaufils (15:51.05)a function of that very cheap part of the supply curve that renewables would fulfill having shrunk or not having grown as much as it would have under a business as your scenario, which means more expensive units have to be turned on more often. And so on average, you see just higher power prices. Doug Lewin (16:11.374)Yeah, mean, we're, this is a pretty dramatic, mean, 14%, uh, it, it's hard to, it'd be hard to overstate like what that would actually mean to the business environment of Texas. I mean, that mean, that is the difference between a whole lot of businesses choosing to locate here or deciding to go somewhere else. So that is, that's a pretty dramatic. again, depending on how all of this actually plays out and how much load growth there actually is. Doug Lewin (16:38.092)with the actual price of gases, a whole lot of other variables like that, we could see an even more dramatic increase. So I want to talk next about what that actually means. You started to allude to this to industrial and to residential customers. Can you talk through the impact on households and on large manufacturers and the like in the state of Texas? Olivier Beaufils (17:00.93)That's right. So we wanted to translate that into more, I would say, tangible terms for people, right? Like, why do I care? And so we looked at what I would call a large or medium sized industrial consumers with a load of about hundred megawatts, sort of base load consumption in aircotts, and looked at how its retail rates would evolve based on the relationship between wholesale prices and retail rates. Obviously there's some assumptions around how that evolves over time. Olivier Beaufils (17:30.606)but there's a very strong correlation between the two. And so we found that their bill would increase by about $6 million, over $6 million actually, with that power price increase. And then for an average Texas household, and we took really the average consumption of two bedroom or three bedroom family home, that represents about $225 a year in terms of their power bill. So a very significant increase that's really just linked to this decision to not Olivier Beaufils (18:00.626)add or discourage additional investment in wind and solar generation, which is obviously indirectly what those bills are going to do. Maybe one thing to add to that, right? So you could look at the bills and say, well, the modeling that Aurora did is not really reflective of what the bills are doing. And in a way you would be right. We decided to not model the language of the bills specifically. One, because there is a number of those. And so you need, you would need to do things very differently from each. Olivier Beaufils (18:29.71)because they're still very much in flux, right? They're being discussed and it's very hard to pinpoint a specific version. And they're all at the end of the day going to do a similar thing, which is discourage investment, make it costlier to invest in wind and solar. And so we wanted to already look at the impact of this lower investment in wind and solar rather than spend too much time discussing the specific language of the bill in this case. Doug Lewin (18:32.661)over time. Olivier Beaufils (18:57.154)And obviously we can go back to the language of the bill and discuss more of that. But in a way, if you want to think about 388 to comply with 388, you would have to be in that fully restricted renewable scenario. That is the only scenario by 2035 that has more than 50 % dispatchable capacity. So you're already in that sort of more extreme scenario to comply with that SB 388. Doug Lewin (19:20.782)And if I remember from your footnotes and details on this study, cause I did get in the weeds on this one, obviously, I think you guys modeled like an 1800 square foot house if memory serves. So like if you had a bigger house, which a lot of people in Texas do, there's a lot of 2,500 and 3000 square foot houses. Frankly, like I don't think there's too many people that are only paying $2,200 a year, which is what the slide shows right now for their electric bills. Doug Lewin (19:45.782)If I could pay that, I'd take it in a heartbeat. So I would just make the point that, it's not to obviously, Olivier, you I think the world of what Aurora does, I read your studies about what's going on around the world. It's not to dog the study. It's just to say that like, I think you guys have done something very responsible here, but very measured and very conservative in the way you're analyzing it. I think there's a strong argument to be made $225 would be on the low end of the range of what households would see, but still it's a pretty eye popping number. There's not a lot of. Doug Lewin (20:14.702)folks that would love to pay $225 more for electricity every year. Olivier Beaufils (20:18.968)I mean, particularly if you have a home that's not very well insulated, maybe with an older AC that's consuming a lot of power, you could easily see much higher than that. Doug Lewin (20:27.554)Which is probably a great segue because you guys did a second study and I do not want to give short shrift to that study. Renewables are phenomenal in Texas. We've obviously seen tremendous growth, you know, up to 70 gigawatts of wind and solar and over 10 gigawatts of storage. Texas is still lagging on the demand side. And so you guys did a great study there too. There's, there's a whole lot more I want to say about the renewable study, but I, but I want to make sure we leap. Doug Lewin (20:55.982)plenty of time to talk about this too, because I think a lot of times Olivier, know, folks are like, look, you can't possibly say, Hey, the grid is the most reliable. It could possibly be like we've done everything we needed to fix after winter storm, Yuri. have minimized the risk to the system. There's a lot more to be done. And I think one of those areas is on the demand side. So before we get into some of the charts and the figures and all that, can you just from a high level talk about. Doug Lewin (21:24.268)demand side strategies, the difference between efficiency and demand response. and again, Aurora does work all over the world. know you're, mainly focused on the U S but you have background experience working other places, just a little bit of kind of where Texas is on the spectrum of different states or regions around the world in terms of our demand side achievements. Olivier Beaufils (21:48.854)Definitely. And maybe I'll start with the last part of your question first. You know, let's recognize this. I mean, I've lived in Texas for probably 12 years now. Texas is a supply state, right? We like to produce energy and focused on that more so than anything else. There's a lot of good historical reasons for it. And that's sort of, that's where we are on the spectrum of demand side views is we're sort of the extreme on the supply side. I'm sure you could find examples are even more extreme, right? So I'm not. Olivier Beaufils (22:18.158)I'm not claiming we're the most extreme, but we're definitely on one end. And then you have countries, historically, that haven't been energy producers, right? A lot of countries that have to import a lot of energy. Think about island nations in particular, but other countries in Europe that don't have a lot of oil and gas productions, for example, that are very much demand oriented and are trying to make sure they're not consuming more than they need because they have to pay for every single. Olivier Beaufils (22:45.73)gallon of oil or megawatt hour of electricity they consume. I think that's the overall spectrum. So what that means is there's a lot we could do that's already been done elsewhere that obviously we haven't really put in place in Texas. Now, why haven't we done it? Why should we do it? Well, energy has been cheap in Texas. And so it's obviously less of an incentive to consume less of it. But we're now facing a situation where demand's growing pretty rapidly from industrial load, right? Olivier Beaufils (23:15.098)We're building LNG on the coast. The oil and gas activities in the Permian Basin are electrifying. It's not just data centers, but it is also data centers. And so we need to bring a lot of supply on the grid. And right now we have a concern that we've had since Yuri that clearly highlighted that concerns that maybe we don't have enough, especially when the system is tight. And so think it's a great time to start looking at how much progress we can do on the demand side in a way to unlock some of the supply and Olivier Beaufils (23:42.892)that is going to be challenging to build when all this demand is going to show up. So now what can you do on the demand side? There's sort of two main approaches. One is what if we have more efficient appliances, more efficient homes, so we don't need as much energy to cool them or as much energy to heat them up, depending on which season you're in. And so the demand doesn't grow as much with population. Every time someone moves to Texas, maybe it doesn't add as much electricity demand. Olivier Beaufils (24:12.716)And so in this specific study, we analyze heat pumps in the winter and replacing resistance heat with heat pumps that are much more efficient. And we can dive into this in a second. The other side is demand response. So that's totally different. It's not about efficiency. It's about when the system is really tight or some, you know, demand some customers able to turn off, save on energy to reduce the demand of the overall system. And especially when you have large demands, you Olivier Beaufils (24:42.638)For example, data centers is obviously a big part of the discussion, but industrial has been doing that for decades in Texas, right? This is not new. have industrials that are able to disconnect from the grid when the prices are really high. But also why not residential customers, right? That would be able to turn up their thermostat or turn down their thermostat depending on the season again, when demand is high and so reduce their consumption. And so those are really the two mechanism. And so we've explored both on the study. Doug Lewin (25:10.126)Yeah, something I've been talking about for a long time is like the large customers in the state have the ability to save on their bills from demand response. We need to make those opportunities available to customers. And this is an area where ERCOT is really taking some strides. They're really, they've made in their own words, residential demand response, a corporate priority for 2025, which is good to see. So this is getting talked about a lot more and Olivia, think this is a really, really important point. Doug Lewin (25:38.126)I recorded a podcast a couple of weeks ago with Tyler Norris from Duke University. He and his colleagues at Duke had done a study that looked at data center flexibility. If 1 % of the energy use of data centers were to be flexible, then 15 gigawatts of data center capacity could come online, or demand rather, without adding additional supply capacity. And that's just looking at the data center flexibility. Doug Lewin (26:04.216)Then you start looking at if you could bring in residential flexibility as well, because for those that didn't listen to that Tyler Norris podcast, and you should go listen to it, it was a really, really good one. But 90 % of the hours of the year, we've got a 30 % buffer before you get to the ancillary services and the various backups that are there. So there's a lot of extra room in the system to increase the megawatt hours, the gigawatt hours, the actual energy consumption. Doug Lewin (26:33.524)If we can control that peak, that's really where like the cost of the system start to spiral is when you drive that peak number up. We could get into talking about the slides, but if you want to add anything or correct anything or whatever I just said, feel free. Olivier Beaufils (26:49.056)No, that study was very timely. I'd say it's the heart of the debate now of how we can accommodate all of these data centers' demand growth, right? And I think what we're hearing is data center developers, operators don't necessarily want to get in the business of having all this backup generation firing it on or the disruption that it would take to turn off the data centers so they generally don't want that. And so it's a complicated problem, but it is a big part of the... Olivier Beaufils (27:17.262)equation here, because if you cannot have any sort of response on that data center load, then the amount of capacity you have to build to serve that is really large and is probably not something we can do quickly. Right? That's the issue. Timing is of the essence here. And there is a big uncertainty about our ability to serve that much demand that quickly. So I say very timely conversation and so very, very helpful study to be part of the debate. Doug Lewin (27:45.75)Yeah. And so for those that are watching on YouTube, you're seeing a slide. Well, again, we'll describe it for the listeners, but what we're looking at is the growth rate. And the first thing I want to point out on this slide, Texas peak demand grew at about 1 % from 2010 through a little beyond 2020. think Olivia, that goes like 2021 maybe. And then the last three or four years, we've seen 5.2 % growth rate. Now, if that were to be sustained over a decade, Doug Lewin (28:15.33)That would make the 2020s the largest growth we have had since the 1960s. That's based on national. I should probably go back and look at the Texas, but nationally there hasn't been growth on the electric system of 5 % or higher since the 1960s. And again, that 5.2 % is historical. That is the last three or four years. So there's a lot of discussion around, my goodness, this load growth is coming or is it coming? There's a lot of debate about how much is coming and how much isn't. Doug Lewin (28:44.334)But we've already seen load growth within Texas, as you said, driven by economic development, increasing population, data centers, heat, a lot of different factors. You guys put a map on here that shows the top five areas in the country for data center load. And Texas is what, fourth of those. But as far as actual energy consumption. Doug Lewin (29:11.822)We're second in the country. And if I'm doing my math right, and I think I am, that's roughly 5 % of our energy consumption in the state already. Because we used in 2024, I think it was 460 terawatt hours. This is 2023 data you have on here. But whatever, call it something like 440, 450, and 22 terawatt hours used by data centers already. So Texas already has a lot of data center load. We know there is the potential of a lot more Doug Lewin (29:41.23)coming. This is kind of a context slide and discussion we're having right now to kind of set the stage for why this demand side management on the residential side is so important. Anything else you want to say as far as that contextual scene setting here as we get into talking about the demand side? Olivier Beaufils (29:57.804)No, no, I think maybe just a note, right? Like I don't want to repeat myself too much, but the Aura Central I would qualify maybe a bit conservative, but probably closer to reality than the blue line, which is the very bullish aircraft forecast. Reality is probably in between the two, but if I had to guess, I'll probably be closer to the orange line. Doug Lewin (30:16.066)I think I agree with that. I think part of that is because, and this is why it's like we get into these, it's a certain point, becomes a little bit angels dancing on it ahead of a pin discussion, you know, debate, but it's not because you have to make planning decisions. I understand the importance of it, but I think so much of this is it's impossible to answer because it depends on the decisions we make, right? Right. It depends on the decisions the policy makers make. It depends on program design of demand response and energy efficiency. If we actually Olivier Beaufils (30:36.579)That's Doug Lewin (30:44.888)do the things that you're talking about in this study and implement, and what Tyler Norris was talking about, if we have demand flexibility for data centers and we really go big on residential demand response, we might actually see a line much closer to the Aurora, but we will also see a lot more energy sales, which is kind of interesting because a lot of the folks in the Senate and a lot of other places that are so worried about thermal generation, the best thing you could probably do would be to increase Doug Lewin (31:14.798)energy sales from data centers and reduce the peaks. So they're actually selling more power throughout the year. And I think that which of these lines are we going to go all the way up to 150 gigawatts, we're going to stay around 100, really kind of depends on some of the policy decisions that are made from here, right? Olivier Beaufils (31:33.27)That's right. I think that's a really important component of this equation is all the decisions we make, all the decisions the legislature makes are going to impact the demand forecast, the supply, the economics of those projects. so, all of these are moving targets. Doug Lewin (31:48.876)All right, I want to look at the impact of demand response on prices. So similarly to the way renewables put downward pressure on prices, demand response can too. Do you want to just talk through the slide I've got on the screen right now about the downward pressure demand response can put on prices? Olivier Beaufils (32:08.568)So we ran the model similar to what we've done on the solar and wind side, but instead this time we focused on demand responding to high prices. And we made, again, we made conservative assumptions on how much residential response we would get, how much data center sort of large industrial load response we would get. And all the assumptions are in previous slides in the study. And so look that when those assets would decide to Olivier Beaufils (32:38.166)essentially turn off, which is not really what happens, right? People don't just turn off facilities. They're generally firing up their backup generation. Or in the case of residential consumers, they might be not running their dishwasher or increasing their thermostat by a few degrees. So we looked at these responses and then we rerun the model with those price responsive demand and looked at how prices would settle according to me. And what happens is because you are saving Olivier Beaufils (33:08.014)hundreds of dollars by demand being lower during the tightest hours of the year, mostly over the summer. You are in effect saving a significant amount of money on average. And you can see on the slide, you know, two to $3 per megawatt hour, which is significant, right? And in a market that's clearing at 30, $40 per megawatt hour on average. most of the savings happen when prices are four or $5,000 per megawatt hour. So you're. Olivier Beaufils (33:37.898)essentially hedging against those most expensive hours. Doug Lewin (33:41.12)And then again, just like you did on the renewables, when you looked at what does this actually mean for individual customers? And one of my favorite things about this, I know you're going to talk about it, but I'm just going to call it out because I really, think this result is kind of amazing. And I talk about this all the time, but I think it's hard for people to understand. It's just like adding any resource to the market. Demand response is a resource. And even if you as a consumer are like, don't touch my thermostat, I'm not volunteering for any of this, I'm out. I don't want to. Doug Lewin (34:10.19)deal with this in the summertime, even if you're one of those customers and that's okay, I don't judge you, right? It's fine. It's okay. If even a subset of customers participates and you don't, your bills go down too. Now, the person that participates is gonna get more bill savings because they're participating, but you found based on the level of demand response you modeled that even if you don't participate, you would get $87 a year in savings on your electric bill Doug Lewin (34:39.853)from increased levels of demand response. That's kind of amazing. So speak to that, but talk about some of the broader results that you found as well from demand response. Olivier Beaufils (34:48.237)That's exactly right. And maybe we're not very used to collective, you know, sort of impact in this state sometimes. Right. Right. But yeah, exactly. Is the fact that other people are doing it is a benefit to the system. And so it saves on, on your bill, even if you like your house to stay at 68 throughout the summer and not increase your term with that at all. Right. But if you do, if you do increase it, maybe from 68 to, to 74 or 76, then you're going to save even more money. Olivier Beaufils (35:15.654)So there's still very much a component of individual choice. Some people just don't want to do it. But if enough people do it, the overall system benefits. Doug Lewin (35:24.96)And you found the cost for industrial customers reduce $2 million, roughly 5%. That's again using that example of kind of 100 megabyte industrial customers. So savings across all kinds of different classes of consumers as well. Olivier Beaufils (35:40.372)Exactly. And that would be true for a small business as well that's running their AC in a shopping mall. Doug Lewin (35:46.36)So let's shift and talk about energy efficiency, something near and dear to my heart. I talk about it all the time. I have, for those that might be confused of what resistance heating is, I'll give the most basic definition right now. But the very first article I ever wrote on Substack, was during or maybe just after, I think it was actually during Winter Storm Elliot, was about resistance heat. I've done a couple of different podcasts on it as well. We'll link to all those in the show notes. Doug Lewin (36:11.726)But resistance heat is literally the same technology as what is in a hairdryer or a toaster oven. It's a coil that heats up and it is sized for a home or an apartment. And so you guys looked at this heat pumps require 64 % less energy to heat a home during the winter relative to traditional resistance heat. So heat pumps are technology that can replace resistance heat and have really large impacts for grid reliability and for savings for customers. Doug Lewin (36:40.984)So before we get into the reliability and savings, do you want to just talk through this slide of what the actual impact in demand and load are when you shift from resistance heat to heat pumps? Olivier Beaufils (36:53.484)Yeah, absolutely. essentially you are requiring less electricity to heat up your home at different temperatures and the curves sort of the results are not exactly the same depending on what is the outside temperature, right? And I think maybe this is a good opportunity to dispel a sort of a myth that people have about heat pumps. think a lot of people will tell you, yeah, heat pumps are great, but you know, but when it's too cold outside, it doesn't really work really well and, and resistance heat is better. Olivier Beaufils (37:23.32)I think that might've been true at some point in time. This is definitely not true anymore. We've done a lot of research on it. These heat pumps are being installed in New England where it definitely gets cold for an extended period of time. Colder than in Texas for sure. And so those heat pumps do perform well, including when it's cold outside, including when it's 10 degrees outside and they perform better than resistance heat. There's a little bit of a curve, but essentially what we're showing on the slide here is that Olivier Beaufils (37:52.462)heat pump are about 64 % more efficient than resistance heat when it's 30 degrees outside, which is most of the time in Texas, and the gap's even bigger when the temperature is lower. Doug Lewin (38:05.518)That is the key here, right? Because at 30 degrees, like our system probably, we're not going to have big problems on the system. At 11 degrees, you might. And of course, during winter storm Uri in the Dallas-Fort Worth area, the temperature was like negative 2. And so what you start to see is this really, really big gap as the temperature decreases. The percent might not be as much, but the gross amount is still extremely large. And so at a 50 building apartment, you guys were looking at something like an Doug Lewin (38:33.998)80 kW reduction. And I can't emphasize this enough. I didn't realize this when I wrote that first column in late 2022. I was mostly talking about homes and you've got on your slide a home that has resistance heat will see a reduction of four or five kW. So I wasn't wrong to talk about homes, but I had a few different folks that work in the energy efficiency industry sort of like literally physically stopped me at a conference and say, you're missing this. Doug Lewin (39:03.018)It's the apartments and we're still building apartments with resistance heat. Basically 80 % as my understanding of new apartments that are going in are built with resistance heat as the only heat as the primary heat. they are, they are just using a massive amount of power and the winter is the biggest risk to our system. Doug Lewin (39:27.436)So I really appreciate that you guys did this and that you've got this. encourage folks again, if you're watching on YouTube, you're seeing it. If you're listening to the podcast, do go to Aurora's website, download this research and look at it because it really does tell a story. Like we are not going to get out of our winter problems. This is my view until we address the demand side. There's just, you're not going to build your way out of the winter problems. Efficiency is not a nice to have. It's, it is essential. It is a prerequisite for reliability. Doug Lewin (39:57.846)Anything you want to add to that or disagree with me, you can. Olivier Beaufils (40:00.782)No, I think, I think that was, that was well said. mean, particularly in a system that's growing. think if you were in a situation where you have an oversupply and you have plenty of energy and everything is cheap, maybe you wouldn't be as hard pressed to do it. But in a system that's looking to add gigawatts of data center load, that is growing, where the population is growing quite rapidly and is, is having challenges, maintaining reliability. mean, we've seen under winter storm, Yuri, obviously aircocks. Olivier Beaufils (40:30.914)been a lot better since Yuri, we haven't had another episode of Load Shed, but the risk is there. And so I think you should use all of the resources at your disposal. You should build more generation of all the different technologies, but you should also explore what you can do on the demand side to reduce the risk for those tightest system hours. Doug Lewin (40:48.59)Yep. And you guys did find some significant cost savings. We're running out of time. We could talk about that briefly, but I do just want to just keeping with that point about winter and what we might see in winter. What you guys found was that if we got to 50 % heat pump adoption and to be clear, that is a big goal. That would take some time to achieve, but you've got this in 2030. So if we really got started in earnest four or five years to rep... Doug Lewin (41:16.6)place 50 % of these heat pumps, of the resistance heat with heat pumps, and to really stop digging ourselves deeper into a hole, to stop having apartments that have resistance heat. If we were to get to that 50 % where we might end up in a load shed situation, even in a winter storm Elliott type event, not even winter storm Uri, but in 2030, we could find ourselves if we had an Elliott style event, that was December, 2022. Doug Lewin (41:44.386)We could find ourselves in load shed and you found that you could actually reduce that load shed by what about about six gigawatts. Talk through the findings about heat pumps and what they would mean during a winter storm Elliott type of event in 2030. Olivier Beaufils (42:02.008)That's right. So it's very important for reliability for a couple of reasons. One is it gives you more flexibility on the demand side. And so this is what you show in what we show in the graph here where you have a situation and this is very much what happened during Elliott's the first day. There was a lot of wind on the system. mean, think about it. You you had a cold front coming in tons of wind works really well and helps the system a lot during the day. Now that we've built all this solar, you also have a lot of solar. Olivier Beaufils (42:31.554)You have the batteries, they're able to shift quite a large amount of the solar into the early evening hours. But at some point, you know, the sun sets, the battery capacity is exhausted, right? You've discharged everything you had. And then now the depression is set. So the wind is actually quite low. And so you're in a situation where you have to rely primarily on your thermal generation. And that's also why thermal generation is a key component, a key part of a reliability, right? Olivier Beaufils (43:01.58)Certainly I don't want people to take away from this conversation that this is all about renewables. Thermal generation is important and there's a whole conversation on how to make sure we get enough thermal generation on the system that we're having. Doug Lewin (43:14.004)It's a system, right? And all the different resources bring different attributes and they all, they all have their place for sure. Olivier Beaufils (43:20.654)Exactly. And that thermal generation needs to be there. But this additional lever you can use, right, is if the system is more efficient, if you've looked at more efficient heating appliances, right, so in this case, heat pumps, you can lower your demand to the point where you would avoid Lodgehead even in this really tight system situation. So here it would be overnight when solar generation is not present and wind generation is very low. Olivier Beaufils (43:50.05)in that specific event. And so you would really be able to avoid low chat. Doug Lewin (43:55.052)Yeah. Doug Lewin (43:55.322)And look, I think the other key piece of this is, depending on how cold those temperatures get, you also end up with freeze-offs in the gas fields, right? So gas supply can be a big problem, like during winter storm Uri. So with this scenario, looks like you guys are assuming you do have that thermal generation there. And definitely there have been improvements made on power plant weatherization. So we've seen improvements over the years as the PUC and ERCOT have implemented that. Doug Lewin (44:24.622)power plant weatherization, but still there's some level of power plants that drop off of all kinds. Some wind freezes up, gas supply freezes up. And then again, you have the problems in the Permian with freezing. This ends up acting as a kind of a hedge against that, right? It could be low wind. It could be thermal plants going offline. It could be gas supply freezing up. It could be a combination of all those things, but every increment of energy efficiency you have, Doug Lewin (44:52.27)either gets you closer to avoiding load shed altogether, or if God forbid, there is load shed minimizing the impact of how long that lasts and how many people it impacts. And this slide really does kind of tell that story. again, pictures worth a thousand words. I encourage folks to go check this one out. Anything else you want to say about this one, Olivier? Olivier Beaufils (45:14.528)I think the only thing I would add is just basically every technology has a role to play here and they all play, they all have different attributes and bring something different to the system. And I think something that's probably important to even from just an economic theory standpoint, right? Is that it is better to incentivize and reward the attributes we that are desirable in the system rather than try to punish certain technologies for having attributes that we don't like. Olivier Beaufils (45:44.236)Right. So it's, think this is how we create the incentives for a new generation to come in. so for example, if we want more demand response, we should find a way to reward industrial for having that demand response. Historically, it was for CP, right? What was rewarding demand from, from not showing up in the title system hours. You know, that program might need to be modified now to encourage the right kind of behavior. But again, you need to find a way to reward. Olivier Beaufils (46:11.608)the behavior you want in the market and then let the market decide what is the best solution, what is the best way to respond to that. I think it's the same story for energy efficiency. And there's a personal incentive of you see of saving money, but right now, sometimes it's difficult to justify the investment. So there's additional levers that could be pulled, but it's also the same story for thermal generation. If we want to have thermal generation with certain characteristics, we should Olivier Beaufils (46:37.09)find a mechanism to reward that to the point where we have the system we want. Doug Lewin (46:41.942)Yep. Okay. Very last one, because I know we're over time here, but I just want to make the point that like one of the beautiful things about energy efficiency is that it is a way to increase system reliability and resiliency and all those things. There aren't many ways you can do that that also save consumers money. So we talked about how demand response does that. And again, if folks go to Aurora's website, get the study, you can see there's a very similar graph for the demand response impacts on reliability. Doug Lewin (47:11.064)check that out for sure. On the energy efficiency side, you found that heat pumps actually can save the average household just about what, 50 % on their heating costs over $400 a year. So not only, I mean, it's just, it's still just baffles me Olivier that we have not as a state four years after Yuri really leaned into this. again, it's a short list of things that you can implement that. Doug Lewin (47:38.794)increase reliability by this much and put money back into consumers' pockets. Just give us the takeaway on the dollar savings to consumers from energy efficiency, and then I'll give you a chance to share any final thoughts, and we'll end there. Olivier Beaufils (47:52.974)Yeah. I mean, it's the same logic as, what we've seen before, but I think the number here is pretty striking, right? It's $400 a year you're saving. Right. Before we were talking about $200 increase in the case of wind and solar or $200 decrease in the case of demand response. But here you were at double the impact. So this is very impactful. If you're switching from resistance heating to heat pumps. Olivier Beaufils (48:19.0)for an average house, your energy consumption will decrease significantly and you'll save a lot of money, especially during those winter storm conditions. And so I think it's something that it will pay off pretty quickly, especially if you can get some tax credits on installing the equipment. But even if we can't, there's really an economic proposition there. But then on top of that, you do generate indirect savings for everyone else and for other customers. So people will benefit from these. Olivier Beaufils (48:46.872)programs from higher adoption of these technologies in general. Doug Lewin (48:50.702)The 424 is for somebody that takes resistance heat out of their house and replaces it with a heat pump, right? This is for the family. That's not the indirect, right? Okay, okay. Yeah, yeah. So look, if you've got resistance heat in your house, particularly if your central AC, gas furnace, whatever kind of system you have is nearing the end of its life and you're looking at a replacement, look at these heat pumps because there are significant energy savings associated with that. And... Doug Lewin (49:18.016)If this is the kind of thing that makes you feel good, you'll also be doing a really good thing for the grid. Olivier, again, can't thank you enough for the research you guys have done. Like you said at the beginning, it's not about an agenda. It's making sure that people have the information so they can make good decisions. You've made a great contribution here. Is there anything else you want to add? Anything I didn't ask that I should have asked you? Olivier Beaufils (49:40.558)No, I mean, obviously there's a broader context with the number of bills that are being discussed in the legislature. And I think we could probably spend another entire podcast session discussing the merits and the pros and cons of each of these proposals. But I would say in general, what we tend to see in the modeling is that a solution with more of everything tends to be both cheaper and more reliable. Olivier Beaufils (50:07.426)than trying to favor certain technologies over others or impose costs on existing technologies to make them pay for certain attributes that we think are not desirable in general. And so, so I think it may be, it's a bit cliche, but like when we run the modeling, we tend to see that an all of the above approach is a beneficial for reliability and it is also a benefit to consumers. So there's a lot of work that still needs to be done around the Texas power market, particularly around Olivier Beaufils (50:36.2)Texas Energy Fund, some of the dispositions are already in DRRS is another one that needs to come in and ERCOT needs to design. I think thinking about it in that way is definitely yielding better outcomes when we run the modeling and the analysis than some of these bills are trying to impose more costs on certain technologies. Doug Lewin (50:57.218)Yeah, I think thinking about it from a frame of like, want to have abundant and reliable and affordable power. Texas is the economic engine of the United States and in many cases of the world, we have to have more power to fuel our economy. So I think that's well said, like more of everything. And I think for folks, there's some folks that don't want to see more gas peekers, we're going to get more gas peekers. There's some folks that don't want to see solar and storage. We need that solar and storage. Doug Lewin (51:26.818)wind as well. These are all resources that contribute to reliability. They keep costs lower than they otherwise would be. And I certainly hope that's the direction policymakers and stakeholders and regulators and grid operators and everybody wants to go. I agree. Sort of more of everything is I think we're hopefully where we're headed, including more energy efficiency and more demand response. It's a, you know, kind of an irony or something, more of less. Doug Lewin (51:56.398)If that makes any sense. All right, Olivia. Olivier Beaufils (51:58.574)Right, exactly. Olivier Beaufils (52:01.174)really appreciate you. for taking the time. I encourage everybody to check out. Doug Lewin (52:03.246)time, do encourage you to check out the Doug Lewin (52:05.366)studies. We'll have links to them in the show notes. And Aurora also has, by the way, a great podcast, which I've learned a lot from over the years. It's called, is it Aurora Unplugged or something? Olivier Beaufils (52:15.064)like that I think is the name. Energy and plagues almost. Yeah. Aura energy and plagues and thanks for mentioning it. Doug Lewin (52:21.55)put a Doug Lewin (52:21.71)link to that as well. I mean, you guys, again, you guys kind of cover the world. it's fascinating to compare and contrast. My head's always kind of in ERCOT, but to listen to some of the stuff you've done in Europe and Australia, different markets around the world has been a great learning experience for me. Thanks, Olivier. Appreciate you. Olivier Beaufils (52:38.136)For sure. Well, thank you, Doug, for having me and for being able to discuss these topics with you. And we're all big fan of your work in AirCut as well. And always great to read your posts and follow exactly what's happening and live in the market. Thank you. Doug Lewin (52:51.47)Appreciate it. Thanks, Olivier. Doug Lewin (52:55.298)Thank you for listening to the Energy Capital Podcast. I hope you enjoyed the episode. If you did, please like, rate and review wherever you listen to your podcasts. Until next time, have a great day. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

Texas has added more new power supply over the last four years than any other state and over 90% of it has been wind, solar, and storage. Today, renewable energy is no longer "alternative" in Texas. It is the backbone of our power grid.At this year’s Intersolar North America conference, I sat down with Nico Johnson, host of the excellent Suncast podcast, for a conversation about how the Texas energy market got here, where it’s headed, and what it means for the future of clean energy across the country.We talked about how Texas’s energy-only market, where the lowest-cost resource gets dispatched without preference for technology, has been critical to the rise of wind, solar, and storage. This growth has helped make electricity cheaper in Texas, helping attract manufacturers and data centers to locate here. And as I discussed recently with Tyler Norris on the pod, if we can successfully tap into flexible demand from these large new loads, we can go even further, helping to integrate more clean energy, strengthen reliability, and lower system costs over time.But Texas’ success is not guaranteed. I shared my concerns about Senate Bill 819, which I discussed in more detail in A Conservative Case for Clean Energy and wrote about in A Time for Choosing. If passed, this bill could impose some of the strictest permitting requirements for renewables in the country, putting future projects and billions in investment at risk. A strong Texas grid depends on continuing to build low-cost, homegrown energy resources, not restricting them.We also explored the rise of distributed energy and microgrids, including a new $1.8 billion program Texas passed to support critical facilities like hospitals and water treatment plants with backup power packages that combine solar, storage, and gas.Throughout our conversation, Nico and I talked about the outdated "us vs. them" framing between oil and gas and clean energy. That divide is breaking down. Oil and gas companies are major consumers of solar and wind, and increasingly storage. They are increasingly players in hydrogen and geothermal projects. As I explored in Geothermal’s Moment with Jamie Beard, technologies like next-generation geothermal could bridge traditional and emerging energy sectors, creating opportunities that expand energy production, not replace it.We also covered:* How battery storage is reshaping ancillary services and market dynamics in ERCOT* Why Texas’s merchant market structure creates both risks and big opportunities for developers* The rapid rise of large-scale rooftop solar and distributed generation* How the Inflation Reduction Act is driving a resurgence in domestic manufacturing* Why Texas’s unprecedented load growth from data centers and factories may help sustain the solar and storage boom, even as arbitrage opportunities tightenThere’s a lot to be excited about and a lot we still need to get right.There is no question that Texas is at an energy crossroads. With smart policies, continued market innovation, and a focus on resilience, we have an opportunity to lead the nation in building an abundant, affordable, and reliable clean energy future.Timestamps* 00:00 – Intro: Doug’s background, Nico’s role, and setting the stage at Intersolar* 05:00 – How oil & gas are embracing renewables and the grid* 06:45 – The market structure that supported robust solar & storage* 8:30 - The second mouse gets the cheese (sorry, California)* 10:30 – Merchant risk & developer incentives in Texas* 13:00 – Can batteries keep winning in ERCOT?* 14:00 – Load growth, data centers & electrification* 16:00 – Policy threats: SB 819 & permitting crackdowns* 20:05 – Vernacular shift: energy expansion vs. transition* 25:00 – Domestic manufacturing & the IRA’s lasting impact* 31:00 – The rise of distributed energy & microgrids* 36:00 – Final reflections & event promotionShow NotesNico Johnson and Suncast* Subscribe to the Suncast Podcast! Great interviews and insights from clean energy leaders across the solar, storage, and renewable energy sectors.* Youtube Channel, Spotify, Apple Podcast* Nico Johnson on Linkedin, Twitter* Profile at Solar Head of StateFurther Reading and Listening* Annual Solar and Storage Installations – SEIA Data – National trends in solar and storage deployments, including Texas’s leadership in new capacity.* How Load Flexibility Could Unlock Energy Abundance (Doug Lewin’s Substack) – Deep dive into why flexible loads and lowest-cost dispatch are key to grid reliability and affordability.* A Conservative Case for Clean Energy (Doug Lewin’s Substack) – Why conservative principles support clean energy expansion in Texas’s competitive market.* Geothermal’s Moment with Jamie Beard (Doug Lewin’s Substack) – How geothermal fits into an all-of-the-above approach to Texas’s energy future.* How Load Flexibility Could Unlock Energy Abundance (Doug Lewin’s Substack) – Deep dive into why flexible loads and lowest-cost dispatch are key to grid reliability and affordability.* A Conservative Case for Clean Energy (Doug Lewin’s Substack) – Why conservative principles support clean energy expansion in Texas’s competitive market.TranscriptDoug Lewin (00:07.598)Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. This week's episode is a little bit different. I had the pleasure of recording a podcast with Nico Johnson of Suncast, the podcast on solar that is over 800 episodes strong. Nico is the best in the business and has created a just treasure trove of podcasts going back a decade.That get into every aspect of solar and renewables. And I was honored to be on that podcast. We recorded it a couple of months ago at InterSolar, their flagship event in San Diego. Definitely want to mention to you to mark your calendar because they do one in the fall in Texas. This is obviously reflective of Texas massive solar boom. So the InterSolar and Storage North America Conference and Expo will be in Grapevine, Texas, November 18 and 19.Be sure to be there. It was a great event and I really appreciate Inner Solar making the space available to Nico and to me to have this conversation called Inside Texas's Renewable Energy Boom and the Policy Risks. So yeah, this one is less specific about particular bills that we did get into a couple of them because it was kind of early in the session, but great discussion, if I may say so, about the growth of renewables in Texas and the directions it may be headed.Really want to thank Nico and the whole Suncast team. Really enjoyed this conversation. I hope you do too. As always, please leave us a five-star review wherever you listen. Please share the podcast with friends, family, colleagues. And thanks so much for listening. Let's dive in. All right. Welcome to the Energy Capital podcast. I'm your host, Doug Lewin. Today, I'm very excited to be with Nico Johnson, who is the host of Suncast, the podcast covering solar. For how long now, Nico?Nico Johnson (02:03.212)A decade.Doug Lewin (02:04.174)Decade over 700 almost 800.Nico Johnson (02:07.022)790, I think 792 this morning.Doug Lewin (02:09.55)I mean, if there's anybody in the world that knows more about solar, I probably haven't met them yet, but we are going to talk about Texas mostly today. We're going to kind of turn the tables. Nico's going to ask me some questions about Texas and Nico, if you're okay with it, I might ask you a couple of questions too, because we're recording live at Inner Solar where you've been the last three days talking to guests from around the industry. And I want to hear a little bit about what your takeaways from this great event are. So if that's all right, we'll do that too.Nico Johnson (02:34.19)Happy to do it, my friend. I am looking forward to it. We're to turn the tables on Doug today since I, a podcast host, rarely get a chance to speak as an authority on my own podcast. And so know what it's like when your audience, you know, doesn't get to fully appreciate your genius or your specialty because you are so different as the host to the guest. Ideally, ideally, that's how it should be, right?Doug Lewin (02:57.87)You're kind to say genius. There's probably other words a lot of people would choose, but you're kind, Nico.Nico Johnson (03:03.342)Well, Doug, because I'd like to cross-post this over on Suncast. Yeah, absolutely. I would love to give folks, even folks who are perhaps new to Energy Capital Podcast, a bit of background on how you've become a specialist on the Texas energy market, particularly, and why folks across the spectrum, especially in nonprofits, come to you for strategy around how to approach policy, how to understand it, and what the development cycle or development market looks like in Texas. So why don't you give us a little bit of background on how you've developed that expertise.Doug Lewin (03:34.86)Yeah, appreciate that. So I've been working on this in this area now for 20 years. Started as a staffer at the Capitol, worked for three different members, both House and Senate side. And it was a really interesting era. It was 2005 to 2009. So you had like, Inconvenient Truth came out. You had Governor Perry fast tracking 11 coal plants. Had the, not the beginnings, kind of well maybe end of the beginning stage of the initial build out of wind in Texas. Wind was really taken off during that period. You had the legislature actually expanding the renewable portfolio standard, passing in SB 20, the CREZ, the competitive renewable energy zone transmission build out. They really enabled that next wave, energy efficiency expansion, all these things were going on during that period while I was there. And I really got bit by the bug. Was like, this is a lot of fun. This is interesting. And I was just like,This is what I'm gonna do. This is one of those things where you like knew it was gonna happen. I went on to lead a nonprofit focused on energy efficiency for five years. It just, you know, basically over these last 20 years as the ERCOT market has become more and more dynamic and as renewables have taken off, demand side starting to get more interesting, I've just continued to just kind of double down and double down again on this line of work.Nico Johnson (04:52.46)So Doug, I have to ask in a market where I imagine 99.9% of your friends are in energy, is in Texas for fossil fuels. Are you seen as a bit of an outsider in any way for that portion of your career where you really focused on energy, what has now become energy transition, energy efficiency?Doug Lewin (05:01.582)Professional friends. Sure. Yeah. Yeah. Which is using less fossil fuels.Nico Johnson (05:21.749)Using less fossil fuels.Doug Lewin (05:23.814)You know, it's funny, like we used to, you when I was kind of starting out in this area, we would talk about solar and wind as being alternative energies, right? And like now, you know, 90%, as a matter of fact, the governor in his State of the State address a couple of weeks ago said Texas has added 35% power supply over the last four years. Since Winter Storm, we've added 35%. And-Nico Johnson (05:48.704)In a new generation.Doug Lewin (05:49.806)Two generations, like 125 gigawatts nameplate all the way up to 170. And so I was like, that's really interesting. I wonder if that's right, first of all, and it was. And where that's coming from, 93% of it is wind solar storage. 75% of it is solar and storage. So those aren't alternatives anymore. And I say that because I think it's way to answer that question is there are very few people I talk to in the oil and gas industry. And I talk to a lot of them. There's very few people that sort of now view all of this as just a silo.Texas is the energy capital. It's not the oil and gas capital, it's not the solar capital, it's energy. And one of the things we've really seen, Nico, that is so fascinating in Texas is oil and gas companies scrambling to connect to the grid for their fracking operations. Why? Not because of some ideology, because it's cheaper than running a diesel gen set out in the Permian, right? So I think we're seeing this kind of permeability between the different energy companies that is really fascinating and kind of fun.Nico Johnson (06:49.452)Yeah, so the Texas market for anybody who is unfamiliar is an island for all purposes from an electrical perspective. It has its own operating grid effectively. And the way that that market operates is unique in many ways. It is an unregulated market. There are many folks that sell, that generate and sell power, unlike the investor owned or regulated utilities across most of our continental United States. Could you talk about the evolution of the energy market in Texas with regards to the adoption of renewables, what the driver was? Because for those who were paying attention to solar and battery energy storage, there was the logical California and New York markets and some of the Midwest markets for community solar. And then around 2020, 2021,Texas very quietly and quickly became categorically the leader in new solar project development, say, and then new solar project interconnections, and then seemingly overnight battery energy storage. And it feels like to folks watching, not to those of us who were sort of seeing how it was being done, it felt to folks like, well, batteries sort of came out of nowhere, but it's like...It was a little bit of like tail wagging the dog. Can you talk about the market structure that incentivized such a pivot of the industry towards solar and battery energy storage?Doug Lewin (08:24.686)For sure. You know, think California, New York, and like you mentioned, the Midwest markets are kind of, they've been more policy driven. So Texas, be clear, in the early days, it was policy driven. It was a renewable portfolio standard in 99, expanded in 2005. But over the last 15 years, really haven't been as many policy drivers. So I would characterize what's happening in Texas a little bit like...Nico Johnson (08:32.813)Yep.Doug Lewin (08:45.102)Second Mouse Gets the Cheese, this will anger a lot of my California friends, right? They kind of overpaid for that first wave of solar. That's not fair, like they didn't overpay. They paid a lot. But it was important to stimulate a market when California did. That's a major contribution and people in Texas frankly should be thankful for that. But in a sense, that Second Mouse Gets the Cheese, like once that cost curve had come down and to your question about the Texas market, it is a market that is economic dispatch only. No like loading order.Nico Johnson (08:54.616)That's they're-Nico Johnson (09:18.291)Best to find that. What's economic dispatch for those who don't understand that?Doug Lewin (09:20.888)Economic dispatch just means the lowest cost resource is dispatched. That's all it means. And so, and the lowest cost resource over the last several years has been wind and solar. Obviously there's a high upfront capital cost, but once you get that on the grid, there's not a fuel cost. So they're bidding in quite low. That is having a downward pressure on prices, which is one of the reasons why a lot of manufacturers are coming to Texas, why a lot of data centers are looking at Texas. It's been really good for the economy, but what you started to see, like you said, around 2020,2020, 2021, right in there, maybe even a little bit before like 2018, 2019 was solar really starting to come up that curve at the time of Uri. So very beginning of 21, we had like 6,000 megawatts of solar. We're up to about 30,000 within our cotton. So just a meteoric rise in storage, you kind of saw the same thing. Uri, we had like 200 megawatts of storage up to 10,000 now. We doubled just in 2024 from five to 10,000. So, and that again really kind of comes to like,The other side of that economic dispatch is when you don't have enough of the low cost resources, prices can go very, very high in the market. That's a big inducement to the batteries to come.Nico Johnson (10:30.156)And this is the secret for those who are doing project development in other markets where you don't get the kinds of incentives that you get in tech. So I want you to unpack a little bit what developers are betting on or banking on. Traditionally, the banks would never give you financing, certainly non-recourse financing, on a project that had anything that looked like a merchant tale, anything that had market pricing risk. They wanted firm offtake. However, my understanding at least is that the majority of folks that are prospecting into the Texas market with battery energy storage and solar are considering that the merchant tale is where the upside is in the market. So could you talk a bit about the dynamic of what people are betting on in the market that makes it so appealing from a developer perspective, especially with regards to storage?Doug Lewin (11:21.58)Yeah, so I think with storage, it's probably more true on the merchant side than it is on solar. Solar, you'll see a lot of bilaterals and people really wanting that off take. Certainly there's some of that in storage, but in storage, you are looking at those high price intervals, A market cap of $5,000 a megawatt hour, no other market in the US, I think in North America, maybe Alberta, but it has higher than like a thousand, right? So that's a...Nico Johnson (11:28.59)Think that's right.Doug Lewin (11:49.07)Very, very rich incentive to bring fast acting generation because it might only last for five minutes. Five minutes at $5,000 megawatt are still a lot of money. So that is a big inducement to batteries to come into the market. Then I think the other part.Nico Johnson (12:04.73)And it's so quickly dispatchable. It's instant on. It's not spinning reserves. There's almost no standby cost relative to the standby cost for other types of generators.Doug Lewin (12:17.442)Well, and that's the other part of this that is like really kind of amazing what's happened in Texas is the much of the ancillary service markets. That's the backup reserves, which those are pretty rich markets because you have to have those backup reserves around. Energy storage has really kind of taken them over. And in 2024, they were a lot less rich because batteries were so effective at driving prices down. This is so, yeah, I mean.Nico Johnson (12:43.214)This is the question I have for you actually, someone who's been watching the market evolve. I said it in a podcast maybe two years ago, I said, here's what I think is gonna happen, because arbitrage is a moment in time, it is not a market. Arbitrage in the Texas market that drove a gigantic leap in battery energy storage deployment is going to eat its own lunch, right? The question, do you see a long-term play for battery energy storage in the Texas market that looks like the kind of upside we see today when if you flood that much batteries into the market, it has to necessarily reduce the economics.Doug Lewin (13:20.078)So I do think in the very short term, might see, I wouldn't say a slow down, but maybe a less rapid rate of growth. Some of the projections out there I think might be a little bit overheated right now because of what you're saying, right? That like 2024, ERCOT has said was the lowest priced year in the market in a decade. Out of the last 10 years, and it was, a lot of people in Texas say, it wasn't so hot. And that's the reason.People in Texas say it wasn't hot in 2024, it's because 2023 was hellacious, but it was the second hottest ever, almost in a tie with 2011, but 2024 was the sixth hottest summer in recorded history. I think you are starting to see some of that happen, but I think the counter to that is this whole phenomenon of large loads, right? Which is like you can't, so how far can you make it into any conversation? Yeah, exactly. You know, and in Texas it's a big deal.Nico Johnson (14:12.309)Loads I love it.Doug Lewin (14:13.08)Yeah, and it's data centers for sure. But it's also, and you've covered this, the manufacturing boom in solar in Texas, right? So even like manufacturing of solar, but of all kinds of different things, the industrial electrification that's starting to happen, both in oil and gas, like we were just talking about, but even petrochemicals and refineries, we have an electric steel manufacturing facility in Texas now. One of the LNG export facilities is grid connected.700 megawatts. So we're seeing all this load growth. And I think that's the counter to sort of solar and storage kind of eating their own lunch, cannibalizing.Nico Johnson (14:50.702)Is there any, what research organizations do you see providing the best focus or data on this kind of sort of backend project analysis that developers who maybe are thinking about is there still opportunity in Texas should be looking at? Are there free resources, paid resources that you feel like get overlooked?Doug Lewin (15:12.686)I mean, there's a ton of great resources out there. One that I would highlight would be Aurora Energy Research. I don't know if you're familiar with them, but they've done some fantastic studies, including one looking at, I don't know if they've analyzed the latest winter storm yet, but the winter storm in 2024 known as Heather, and they said batteries saved the market 750 million. Then they're producing a whole lot of good research that they cover all over the place, but they have a-There are American headquarters in Austin and they've got 80 people there. So they're really kind of all over.Nico Johnson (15:45.614)Yeah, I know them one of our customers Amperon works a lot with Aurora and produces some a lot of data driven Insights that I've had not come across them before that. Yeah Doug Because folks come to you for essentially advice strategy consulting on how the markets working and where it's going I thought it'd be prudent to askEveryone sort of looks at Texas as this perpetual motion machine, right? Like we can go there, it's gonna keep growing. Like we just talked about, what do you see happening in a policy level or at a local level that maybe folks outside of the market aren't necessarily seeing yet or paying attention to that could upend this whole thing, right?Doug Lewin (16:27.566)Yeah. So there's a couple of things, but I think number one, the far biggest threat is there is a bill in the Senate called Senate Bill 819, which would put into place if it were to pass as it is drafted, probably the most restrictive onerous permitting requirements for both wind and solar in the country. Mean, developers have really struggled in Ohio and Michigan and some other places with their permitting regimes. This, I think, from what I've heard,Talking to people would actually be worse in a world where we need to be freeing up permitting.Nico Johnson (16:58.174)Worse in a world where we need to be freeing up permitting.Doug Lewin (17:01.486)And it's kind of wild too, right? Because you have this kind of, this is playing out at the state level and at the federal level, Is this sort of like, on the one hand, if you want energy dominance, but you want to like squash renewables, like you can have one or the other, you can't have both.Nico Johnson (17:18.574)I mean, for us, the foregone conclusion is great. We're going to have energy dominance. We're going to focus on energy being a US superpower. Then if you're going to free up, that means you implicitly are trying to remove bureaucracy for, let's face it, natural gas, fracking and oil and gas, which by the way, exploration, like more exploration to get to drill, baby drill. We're years away from being able to actually exploit that promise. So it's naturally going to have to come from the fracking fields.And that that's naturally gonna have to come from reducing bureaucracy that was put in place to help us avoid continuing to extract fossil fuels. How does that not benefit the renewables industry? Well, if the explicit instruction is also, by the way, don't let renewables win.Doug Lewin (18:04.078)Yeah, mean, when you're talking about permitting reform, it needs to be across the board and not just sort of picking certain technologies. Really again, I mean, that's what like most, I would say that, you know, the folks that are supporting 819 or more, Senate bill 819 are more the exception of role. Most people in Texas from, know, the statewide, you know, chamber of commerce to oil and gas companies that want to buy renewable energy. Most people understand that this is more of an all of the above energy system and that these,These different energy resources compliment each other. I was really fascinated by, was a report. So last session, the 2023 session, there was a bill that required the railroad commission to set up a hydrogen production council and produce a report. And their report was actually pretty good. And it said, hey, we've got all this low cost electricity from wind and solar. That may help us produce hydrogen and actually be good for the fossil fuel industry.And so, I think you're starting to see things like that. The Railroad Commission has never been a big cheerleader for renewable energy, but they are also starting to understand that, this is a system and these things actually.Nico Johnson (19:08.334)You can understand why they transport a lot of fossil fuels.Doug Lewin (19:12.104)They do and the fossil fuel industry is really interested in hydrogen as a potentialNico Johnson (19:16.428)Yeah, I think what you understand and this is a big transformation for me as a someone who's kind of born and raised in the solar industry I had not spent much time in traditional energy and the sort of the shift in thinking for me was starting to think well, I'm familiar with electrons Fossil industry is all talks about molecules molecules. You knew exactly where I was going right? And if you can understand wellWhat is not just the language of the business model around molecules, you can quickly see which of the, I'm gonna do air quotes for those who can't see us, like the renewable technologies that will allow for fewer stranded assets for the fossil fuel industry. You can see where lobby interests, et cetera, align, things like carbon capture, things like geothermal, which I'm a huge fan of. I'm curious, as a local in the Texas market in the energy capital of the world,Doug Lewin (20:04.289)Absolutely.Nico Johnson (20:11.67)I've heard you use two in particular sort of key words. We used to call it alternative power. Yeah. You just said renewable energy. In Texas right now, what is solar wind, the clean energy spectrum, how's it referred to? Are there any sort of key words that...Doug Lewin (20:34.254)I mean, people talk about it all kinds of different ways here, all kinds of different language, but I think at this point, clean energy is energy at this point. Look, last year on the grid, were about 45% carbon-free, about 35% renewable, 10% nuclear. In Texas. So I mean, at this point, it is a misnomer to call it alternative. I think people still refer to it as renewable energy. When I say it's no longer alternative, like...Gas, as far as new capacity, gas is a little bit of an alternative energy right now, right? I mean, just kind of is, right? It takes longer, it's more expensive. Really, like the state is actually, Texas is actually trying to subsidize new gas plants. Like it's just the speed and scale and cost of solar and storage is just so dominant to use that phrase, right? Like that is what's being deployed.Nico Johnson (21:26.094)Had a really interesting conversation with the guy who runs the predominant think tank for the propane industry. I had him on the show and it was entirely because he proffers a word that I disagree with fundamentally and that is, well, of a phrase, renewable natural gas. And so I had him on to sort of go back and forth. Have a conversation about the reality of renewable natural gas. Are there phrases like that that you also hear where the industry, see it sort of adopting this language that is effectively, and where I wanna go with this is actually, I think that there is no us versus them. I've said this since 2020. I'm like, guys, we can't have a fight with oil and gas. Unless you, in case you haven't noticed,Two of the largest solar developers in the United States, actually much more than that, but we'll just focus on LightSource and SiliconRange. Their majority investors are oil and gas companies, right? And if you go look at Energy Toolbase, you look at Fraxon, I can name a dozen companies off the top of my head where the private equity money behind them is oil and gas. Like there is no us versus them. It's only us figuring out our energy future. How do you see the vernacular evolving and we talk about this a lot here because like we're considered a solar podcast, but I say we're a clean energy podcast. We can't actually have solar without batteries. Texas is the perfect example of that.Doug Lewin (22:56.066)Yeah, yeah, yeah. So, you you were talking earlier about molecules and electrons, right? So like today, you know, something like of global energy use, % is molecules, 20% is electrons. IEA thinks to get to net zero by 2050, it's gonna be like 50-50. There's still gonna be a whole lot of molecules out there. Yes, that's And they need to be as clean of molecules as possible, right? And so, and the balance sheets.The engineering expertise, the financial expertise of oil and gas companies is going to be needed in the transition. Just is. I just don't think we can reach the speed or scale without it. You mentioned geothermal. That's a perfect example, right? I mean, they're drilling. They're literally drilling and in some cases fracking to try to get heat out of the ground. And you have seen Schlumberger, which is now SLB, and all these different oil and gas oil and fuel services companies, even Halliburton companies like that getting into geothermal.So this, I agree with you. Think that this, if it is us versus them, it's possible that we could decarbonize. It's gonna be a hell of a lot harder, slower, more painful. This really needs to be everybody kind of pulling together. And I think that those, I think my experience with folks in the oil and gas industry is they are, to put a word on it, pragmatic. Yes, that's right. And they see the opportunities in clean energy and in this.Nico Johnson (24:24.762)There you go.Doug Lewin (24:18.786)Transition a lot of them. I'll tell you about vernacular. One of the things I hear a lot in Texas is energy expansion Some people don't like energy transition though, like the greater Houston partnership the chamber for the Houston area They talk about the Houston energy transition They call it use an energy transition initiative, but a lot of other folks get sort of spooked by those words They talk about energy expansion and I'm kind of like whatever whatever words you want to use as long as we're talking about Making energy more abundant and affordable safe, reliable, and clean. All of those things. They're all important goals. We gotta balance them, but they're all important.Nico Johnson (24:55.534)Love thatDoug Lewin (24:57.582)I ask you a quick question. Know I have. So you have been talking to people the last couple of days here. There something you can share with the listeners that you're, and I know this is hard, it's like asking you to pick which of your children is your favorite, but like something you're really excited about right now within the solar industry. Could be utility side, could be distributed side, could be a new technology.Nico Johnson (25:19.81)Yeah, there's two things and I'll give you some stories around it. So when I started in this industry, 2006, companies like BP, Mitsubishi, Shell, Shot were global name brand manufacturing organizations with factories here in the US. Were buying.You know, we're building and buying panels in Maryland, in Mississippi, in Oregon. And I watched in the course of five of the, like maybe five, six of the first years I was in this industry, that industry wither away as we had a tacit handshake with Asia to produce it at a lower cost. And by the way, there was a very intentional, very strategic government decision.In China specifically to throw as much money at the technology problem as possible to get the technology to the place where it would become economically viable. Through a series of administrations now, we've seen an increasing call for domestic manufacturing, something that I never thought I would see in my career again on US soil. I calledBS on it the first time I saw it, I was like, this is never gonna make financial sense. 2019, 2020. And I was like, this is never gonna make any sense. Back in the first Trump administration, was like, this is never gonna happen.Doug Lewin (26:43.714)When was China's just gonna help compete us because it's just too dominant.Nico Johnson (26:57.492)And I was wrong. And as I have watched now, when I first came in the industry and was working at Trina and like just had one of the leaders of one of the largest solar manufacturers in the world on our stage. And another gentleman that he and I worked with is running another, one of their competitors. I've watched my friends become owners and managers of these large module manufacturing businesses.And I've gone to them and said, help me understand the economics. Is this durable? Like I've asked them on our podcast, please explain to me why this is not another flash in the pan. Please explain to the American people why this is going to be here for 10, 20, 30 years. Yeah. And they have solid answers. Mark Sokolov at Qcells has a solid answer for why Qcells is going to be around, why they're not just going to be around, but why they're doubling down on further vertically integrating on US soil.Doug Lewin (27:54.646)And is that policy? Is it economics? Is it the technology? Is it all that?Nico Johnson (28:01.294)It is, so I think it's a change in the tide of the sentiment of the buyers, one, and it is a realignment of policy, like what we've seen in various iterations in the past, at a state level to compete on a regional basis. Like how are we going to attract tax dollars, tax revenue? How are we going to attract jobs? And it's all built in almost entirely on the back of this need, this desire for jobs at a local level to revive the Rust Belt, to bring jobs back to the South and to restore, I'll use the word for the current, to restore dominance globally of the American brand. So I think it's at least 10, 15 years durable, which actually is fine. That's a great cycle. Powerful. That's a great cycle for our industry. So I sat down yesterday.A major Asian battery manufacturer and I said, they want to work with us and advertise on our platform. And I said, look, what's your domestic plan?Crickets. I pressed and I said, how are people going to buy domestic content from this company? You are a world leader, well established, they want to buy from you. You're the market leader in, you know, in adjacent countries. Well, we have a JV in Europe and we're going to sell through that. And I was like, I hate to burst your bubble, but not only are you not going to be able to advertise on our platform, but I don't want to waste that money just to take it.To for self preservation when I know that in the end, you're going to get zero orders because your answer is we don't have a domestic plan. And every buyer now is going to require you to have a domestic plan because that's the plan. And if you don't have a domestic plan, I'm not going to allow my reputation to be on the line for my listeners to go, why is Nico sort of lobbying for this brand that is not committing to our local economy?Right? It's that it is, so we are seeing this globally, this resurgence of domestic, that sort of reshoring. Yeah. Right? And this domestic supply.Doug Lewin (30:18.222)I think it's really fascinating because it is a convergence of the clean energy industry and a major part of what Trump and the Republican party seem to really want right now, this energy dominance, America first. It's like we should be making things here in the United States. So maybe there's this weird sort of like left and right like meeting up. It's gonna be fascinating to see what happens with so many parts of the IRA, but like 45X manufacturing incentives. How do you take those away when you're building factories?Nico Johnson (30:46.414)I've been good authority from more than a handful of sources that 45X seems very secure.Doug Lewin (30:54.444)Yeah, it'd be hard to imagine a bunch of voting against their district after he's out of their districts that are builtNico Johnson (30:57.88)Cannot fathom right there right now. And then the second is, I've been sort of informally and through this show formally polling what sector is finally poised for growth. What do you think it is? Let's just focus on the solar industry.Doug Lewin (31:15.15)Solar industry, which sector is posed?Nico Johnson (31:18.166)It's traditionally sort of broken into three and a half, four sectors like Rezzi, commercial, utility, community solar.Doug Lewin (31:25.294)I mean, so I always think about Texas, right? So like, so sorry to be annoying and give you the Texas answer, but I actually think there's a huge amount of growth that will likely happen on the more distributed side. Residential, but also some, whether you call it community solar or just like the, you know, there's a certain level of interconnection if you're above 10 megawatts. So you can do 9.9s at congested areas around like, I think we're gonna see a lot of that. And Texas is...While we've been great on the utility scale side and 30 gigawatts and that's awesome, we're way behind on the distributed side.Nico Johnson (32:01.006) Not just Texas, the rest of the country as well. So as long as I've been in the solar industry, I sold what was at the time the first 100% solar powered newspaper in the country, the Monterey County Weekly in 2006, 33 kilowatts. All these people will tell you I the first X, was peanuts compared to what we're doing today. But I've watched the commercial sector be the next big sector for 18, 19 years that I've been in the industry. It is inevitable that code will get cracked. And I think that 2025 will be the tipping point, what I'm seeing, and I'll call it here. I think that 2025 is going to be the first year where we actually see distributed generation, in particular, focused on commercial industrial, large scale rooftops, not Rezzy. I think Rezzy is going to continue to suffer. I'm sorry to hear say that. It'll be the first time that we see the C&I sector at scale, see a tipping point and start a run towards velocity in that market that we've not experienced in the last 20 years.And I see it in companies like I just had Jorge Vargas from Aspen Power, the guys from Encore Renewables, Chad, those guys up in Vermont. Like the Northeast in particular are a great bellwether for what's happening. There's a flight to quality with capital, but there is an enormous amount of capital funneling into the distributed energy market.Very interesting. And I'm very bullish on the distributed energy market, in particular, large-scale rooftops.Doug Lewin (33:32.322) I'll just say one more thing. I think there's good market reasons to put distributed energy. Look at Houston, something like 60 to 70% of the power coming into Houston is coming in from other parts of the state. Obviously, Herrickot's this closed system, but it's coming in from West Texas. There are constraints along the transmission line. So putting generation locally makes a ton of sense. The other sort of important thing in Texas, I mentioned earlier that the state was subsidizing large gas plants. Part of that bill, was putting $1.8 billion towards micro grids that the law mandates must be a mix of solar storage and gas at critical facilities like hospitals, water treatment plants. You think of winter storm, Uri, like what kind of infrastructure do you absolutely need to have? Like not even five nines, but just like 100% uptime, right? Hospitals, nursing homes, water treatment facilities, stations, fire departments. Those kinds of that, 1.8 billion is a $500,000 a megawatt subsidy specifically for these microgrids at critical facilities, backup power packages, they call it, maybe not technically microgrids. But I think that's gonna be a big inducement to distributed solar. That's a really interesting.Nico Johnson (34:40.641) Completely agree with you and I'll note that microgrid for me is a subset of distributed generation, particularly the CNI sector. And you'll hear a lot of buzz around microgrid this year. And one of the big sponsors for InterSolar over here is this company Zendi right here on San Diego. They've basically become the de facto sort of operating software for determining what a microgrid should look like. And this blending of the various forms of energy generation, the various loads, at a local level has like microgrids are not a new thing, right? Submarine's a microgrid. We've been powering microgrids with renewable energy for a long time. And I completely agree with you. I didn't know that about Texas. And that's one of the reasons I'm really glad to have this conversation with you is there are pockets in the United States right now that are investing big time into microgrids. It's as a subset, it is effectively distributed generation. A local load and it is a very local problem to solve. It's not going to be solved by major national companies like Honeywell. They will invest in it, right? They'll be there, but it's going to be solved at a local level. And that's one of the things I'm also really bullish about is that we're going to see a return instead of major national brands to local, maybe even super regional brands that dominate the industry moving forward in the next two, three years.Doug Lewin (36:03.982) Very interesting. A lot to watch for, a lot to be excited and interested about. Yeah, I'll just say kind of in closing, Nico, I really appreciate you making the space available. As you said, we're here at Innersolar. There's gonna be an Innersolar later in 2025 in Texas. That's right. I don't know if you're coming. I hope you will. Because there's great, great. Because there's so much happening in Texas and I'm really glad Innersolar did one in Austin last year will be in the DFW area next year. It's a great event and I encourage people to, to mark their calendars for November, 2025 for Anderson. Yeah, great. Fine. There you go.Nico Johnson (36:40.79) Well, I have enjoyed co-hosting the Energy Capital podcast with you today. Thanks, Really a lot of fun. I look forward to it. I hope we do more collaboration in the future and have you on our Suncast podcast. Let's do more about Texas specifics because we got to help folks know where to point their resources. And this is one of ways we do it.Doug Lewin (37:04.534) Anytime, just ask, I'll be there. You do a great job covering the solar industry. There's nobody better. So thanks so much, Nico. Appreciate it. Thank you for listening to the Energy Capital Podcast. I hope you enjoyed the episode. If you did, please like, rate, and review wherever you listen to your podcasts. Until next time, have a great day. This is a public episode. 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Arushi Sharma Frank, an energy policy expert and consultant, dives into Texas' pressing load growth challenges. She discusses the soaring demand from data centers and electrified operations on the ERCOT grid. Key topics include the vital four pillars of large load flexibility, such as defensive flexibility and self-limiting interconnection rights, to enhance grid resilience. Arushi highlights the importance of effective load forecasting and flexible systems as crucial solutions for balancing reliability and affordability in the rapidly evolving energy landscape.

This is a free preview of a paid episode. To hear more, visit www.douglewin.comBattery technology continues to improve and costs continue to drop, opening up new opportunities and reshaping the grid. And at a time of rapid load growth and massive constraints on natural gas turbine availability, storage is surgingIn this episode, I talk with Suzanne Leta, VP of Policy at Fluence, one of the world’s largest energy storage developers…

Last year, ERCOT stunned observers when it projected that electricity demand in Texas could double within five years. That announcement kicked off a wave of meetings, legislative hearings, and proposals. But now?ERCOT’s latest projections say we might need to triple our electric supply.The Texas Energy and Power Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a paid subscriber.The driver? A massive wave of industrial electrification and data centers, including artificial intelligence and crypto operations.This is unprecedented growth. And with it comes an urgent question:Can the ERCOT market keep up, or will policymakers get in the way?“I DO think the market structure today is very well suited…”That was ERCOT CEO Pablo Vegas testifying before the Texas House State Affairs Committee on April 9.In response to a question from Rep. Rafael Anchía about whether the market can meet rising demand without heavy government involvement, Vegas was clear:“I do. I think the market structure today is very well suited to support the growth trajectories that we're seeing...”Vegas emphasized that Texas’ light regulatory touch allows capital to flow, deals to be made, and new generation to come online quickly.But at the very same time, lawmakers are advancing bills that directly undermine that market structure, including SB 819, SB 715, HB 3356, and SB 388.These bills would make it harder for new energy generation to come online, just when we need it the most.We need every electronRep. Anchía put it bluntly:“It sounds like we're going to need every electron… from new generation, from conservation or energy efficiency... We need all of it.”Vegas agreed. Yet the legislation moving through the Capitol would limit the very resources that are fastest and cheapest to deploy.Natural gas, for instance, takes years to bring online. Vegas estimated that even under the best conditions, new thermal generation won’t show up until 2029 or 2030.Meanwhile, ERCOT’s mid-range forecast calls for 44 gigawatts of new demand in that same timeframe.If 10 gigawatts of gas shows up by 2030 — an optimistic outlook — where’s the other 34 gigawatts coming from? If you don’t have enough power, your economy can not grow.The answer is already in the marketVegas pointed to a real solution—bilateral contracts between data centers and power developers:“They have the money… they want speed to market… it makes sense that we would see supply develop through that too.”This is market design 101. Buyers and sellers can find each other, strike deals, and build what they need—without governmental interventions into the market and costly mandates.Companies like Meta, Google, Amazon, and OpenAI, and many more, are ready to pay their own way. And if they can be flexible, we can accommodate a whole lot more demand.The solution is baked into the problem.Let the market do what it’s built to do.Do Texas lawmakers still trust markets?This is the core question.If we really believe in competition, then we must resist the urge to rewrite market rules just because some outcomes are inconvenient. In fact, many of the state’s largest generators and industry groups oppose further changes to ERCOT’s structure this session.The more policymakers try to force outcomes, the more they’ll delay them.We’re in a pivotal moment. The ERCOT CEO, the industry, and basic economic logic all point to a clear path: let the market respond to rising demand.That doesn’t mean doing nothing. It means:* Preserving a stable and predictable market environment* Supporting all-of-the-above resource development* Investing in efficiency, transmission, and demand-side solutions to free up headroom on the gridIt also mean rejecting bills that slow progress, raise costs, and create massive regulatory uncertainty.Show Notes: ERCOT Load Growth & Forecasts* ERCOT Presentation to the Board of Directors (also presented to House Committee on State Affairs) - this was the presentation Chairman Anchia and ERCOT CEO were looking at as they talked.* ERCOT 2025 Long-Term Load Forecast Report - Details projections of electricity demand growth, highlighting the impact of data centers and industrial electrification.​* ERCOT Load Forecast Overview - Provides access to ERCOT's long-term and mid-term load forecasts, including methodology and historical data.Bills Impacting the ERCOT Market* Senate Bill 819 (SB 819) - Requires wind and solar projects to undergo burdensome new permitting and siting restrictions. This bill would stifle economic growth in rural Texas, where renewables are a key driver of tax revenue and jobs. More on that bill here and here.* Senate Bill 715 (same as House Bill 3356) - Would require generators to procure their own firming capacity, forcing inefficient redundancies and discouraging investment.This bill undermines ERCOT’s competitive market design and adds massive costs to consumers of all kinds.* Senate Bill 388 (SB 388) - Mandates that 50% of new capacity be “dispatchable,” but excludes battery storage. This bill could raise energy costs and mean the economy could grow only as fast as gas turbines are available.Legislative Hearings* Texas House State Affairs Committee – April 9, 2025 Hearing - Access video recording of the committee hearing where ERCOT CEO Pablo Vegas testified on market readiness. He starts right at about 1:00:00, or one hour in.Thank you for being a subscriber. If you’re already a paid subscriber, thank you! If you’re not, please become one today. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

Everyone’s talking about the rise in electricity demand, especially from data centers. However, far too few are talking about what to do about it. In this episode of the Energy Capital Podcast, I sat down with Tyler Norris, a fellow at Duke University’s Nicholas Institute and co-author of a recent study Rethinking Load Growth.What Tyler and his team found is extraordinary: by curtailing just 0.25% to 1% of a data center’s annual load—primarily during the most stressed hours—Texas could add up to 15 gigawatts of new data center load in ERCOT without adding any new capacity. That’s nearly the total demand of the entire city of Houston.Even more striking: 90% of the time, at least half the load would still be retained. It’s not about shutting everything off, it’s about smarter operations during a handful of peak hours. This is exactly what we need as we try to integrate unprecedented load growth. Tyler’s research offers a better way forward.We dove into the details:* The difference between legacy 24/7 data centers and newer AI-focused facilities, which offer greater flexibility.* How heating and cooling loads vary seasonally, and why winter peaks—not summer—are currently the biggest challenge in Texas.* What load factor really tells us about underutilized grid capacity and how ERCOT compares to other U.S. markets.Tyler also explained how even small changes in behavior or technology, just 0.25% to 1% shifts in demand, can unlock massive headroom, especially during those critical winter mornings and summer evenings.We talked policy, too. From ERCOT’s Controllable Load Resource program to proposed emergency response products with 24-hour notice, there’s momentum to better align incentives for large loads that can respond during grid emergencies. Tyler called this “speed-to-power” a key motivator, if data centers can get online faster by offering flexibility, that’s a win for them and the grid.But it’s not just about data centers.Tyler and I also explored how residential winter weatherization, efficient heating upgrades, and demand response on the household level could free up even more capacity for Texas’ growing electricity needs. This builds on ideas I explored in “Texas Needs a Vision for Customer-Side Solutions” where I argued that the most affordable path to reliability includes smarter demand-side management. We will need demand and supply side resources. We also talked about a novel idea in Texas: whether data center operators could pay into programs that reduce peak demand systemwide, benefiting all consumers.Finally, we discussed ERCOT’s national leadership in interconnection performance, outpacing other U.S. grid operators by a wide margin, and why other states should take notice.Tyler’s work is a big deal. It challenges some major assumptions in energy policy and offers a roadmap for smarter, more flexible load integration. As electricity demand soars, this kind of thinking is going to be critical not just for Texas, but across the country.Read the report: Rethinking Load Growth – Nicholas InstituteAs always, thanks for listening and please share this episode if it helps you understand this moment a little more clearly. We’re going to need every tool on the table to build a cleaner, more resilient grid.Timestamps* 00:00 – Introduction & why this matters* 02:00 – Tyler’s background & origin of the study* 04:00 – Takeaways from Rethinking Load Growth* 07:30 – Exactly how much capacity could be freed up in ERCOT * 09:00 – Does flexibility mean complete shut down or something else?* 11:30 – Are data centers truly inflexible?* 16:15 – The ERCOT grid is vastly underutilized in the vast majority of hours in the year* 22:30 – Grid is more underutilized in winter, but peaks could be higher* 25:00 – Residential demand flexibility could free up even more headroom, data centers that are inflexible could pay for residential demand reductions* 30:00 – Solar creating more headroom, reducing loss of load expectation (LOLE) in summer; winter is bigger problem, particularly in the South* 35:00 – Why demand response stalled in the 2010’s* 36:30 – Policy solutions: speed-to-power / speed-to-interconnect for flexible loads and Controllable Load Resources (CLRs) in Texas* 39:00 – “All-of-the-above” for demand side resources* 42:00 – Differentiating types of large loads* 46:00 – Can residential customers benefit from large load growth?* 50:00 – ERCOT’s interconnection success story * 55:00 – DeepSeek & the future of AI efficiency* 58:00 – Final thoughts and what’s next for Tyler’s researchShow NotesResearch & Reports* Rethinking Load Growth (Tyler Norris, Duke University Nicholas Institute)The foundational report explored in this episode. Quantifies how much flexible load (like AI data centers) could be integrated into U.S. power systems.* EPRI Data Center Load Flexibility Initiative - Ongoing research effort exploring demand-side solutions and flexible operation strategies in data centers.Grid & Flexibility Context* Overview of Demand Response in ERCOT - summary presentation detailing ERCOT’s demand response programs, including the role of CLRs and their impact on the Texas grid.* Load Resource Participation in the ERCOT Markets - outlines how load resources, including Controllable Load Resources (CLRs), participate in the ERCOT markets, providing ancillary services and contributing to grid reliability* NERC Reliability Risk Priorities Report 2023 - Cited in the episode as identifying controllable loads as a key reliability solution. Reinforces ERCOT’s perspective that CLR participation is an optimal reliability pathway.Legislation & Policy* Texas Senate Bill 6 (2025) - Referenced in the conversation as a bill addressing data center interconnection and demand-side solutions, including a 24-hour emergency response service.* Tyler Norris Congressional Testimony (2025) - Tyler’s formal testimony on interconnection delays, praising ERCOT’s “connect and manage” model and calling for structural reforms nationally.* FERC Order No. 2023 - National interconnection reform discussed indirectly in the conversation, setting new timelines and process changes to address backlogs.Also Mentioned…* Abundance by Ezra Klein and Derek Thompson - Referenced as part of the broader national conversation about energy abundance, demand growth, and large flexible loads.* SPEER Incremental Demand Response Report (May 2015* Toward a More Efficient Electric Market (June 2013)TranscriptDoug Lewin (00:03.938):Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. My guest this week is Tyler Norris, a researcher at Duke University, who, along with a team of researchers at Duke, produced an impactful report called Rethinking Load Growth. What they looked at here is what everybody in the energy world is talking about these days: how are we going to accommodate all of these data centers that are coming?And Texas is likely going to get more than its share of data centers than a lot of other places for a variety of reasons. It's easier to interconnect here. There's a lot of low-cost renewables available. There’s a lot of things that Texas has going for it. But how can we accommodate all that load without causing grid reliability problems or raising costs?Tyler and his team in Rethinking Load Growth talked about one of the ways to do that: if these data centers have even a small amount of load flexibility, it frees up large amounts of capacity. We talked about how even a quarter of 1% or half of 1% could free up many gigawatts of space. The same holds true when you get down to the residential side—if we could do some things there to reduce demand, we can also free up space for data centers.This is an active conversation right now at the legislature Senate Bill 6, House Bill 3970. These are bills that include different concepts for how to integrate large loads. It was a very timely conversation. I hope you enjoy it. I learned a lot from Tyler and from the paper. We'll put a link to that in the show notes. And as always, please give us a five-star rating. It really does help people find the podcast.This is a free episode, but it is not free to produce. We have both the Texas Energy and Power Newsletter and paid episodes of Energy Capital Podcast available to you if you subscribe at douglewin.com. And thank you so much for listening, and thanks for your support. Let's dive in.Tyler Norris, welcome to the Energy Capital Podcast.Tyler Norris (02:00.768):It's great to be here thanks so much, Doug.Doug Lewin:Yeah, thanks for doing this. Excited to talk to you. This report that you’ve put out—Rethinking Load Growth: Assessing the Potential for Integration of Large Flexible Loads in U.S. Power Systems—obviously got a lot of attention, lots of folks talking about it all around the industry.Before we jump into that, just very briefly, tell the audience a little bit about yourself and what your focus is there at Duke, at the Nicholas Institute.Tyler Norris:Yeah, sure thing. I'm a fellow and pursuing my PhD in electric power systems at Duke University's Nicholas School. I'm a somewhat non-traditional PhD student in that I came into the program with about 12 years of experience in the energy sector. I started at the Department of Energy working on tech commercialization programs, spent a couple of years at SMB Global doing their North American electricity market outlook, and then spent about five and a half years in large-scale solar and solar-plus-storage development at Cypress Creek Renewables.There, I ended up doing a lot of work in front of public utility commissions, working with consultants on electricity simulation models, and trying to get better outcomes for resource planning and interconnection. That was the part of the job I loved the most. I figured if I could go deeper in a PhD program, I could be of greater service.Just briefly—a lot of interest has been on grid interconnection, especially for large generators. But it turns out that a lot of the study methods for large generators are similar for large loads from an interconnection standpoint. So that's why we’ve gotten into the large load interconnection side of this too.Doug Lewin (03:37.782):Yeah, it’s really fascinating. For the longest time, nobody really talked about large load interconnection it wasn’t a thing that came up much unless you were way, way in the weeds in some technical forum. And now it is the topic du jour, which brings us to your study Rethinking Load Growth really getting into large flexible loads.Why don’t we start at the highest level? What are some of the main takeaways? What do you want people to know about this report, some of the key findings?Tyler Norris:Sure. Maybe I’ll just give a quick backdrop. This emerged from conversations with state utility regulators and other state-level regulators last year through the Nicholas Institute, which is a think tank at Duke University. Everyone's talking about how to accommodate load growth. What the regulators were saying is that we’re hearing the new data centers are 100% inflexible, that we have to treat them as firm loads.But at the same time, we were seeing EPRI launch its data center flexibility initiative, and other announcements—including from the Secretary of Energy’s advisory board—recommending progress on data center flexibility. So there was kind of this juxtaposition. That was the prompt for us: dig into this and figure out what the potential might be from a technical standpoint.We do a qualitative characterization of why there’s a thesis right now that AI-specialized data centers can be more flexible than the sort of legacy computational loads. We also did some modeling, which I think caught people’s attention primarily. We looked at how much new load you could add to any given electricity market or balancing authority if the load was able to be flexible—or more specifically, curtailable, for a limited number of hours in the year during the most stressed grid conditions.Tyler Norris:In traditional demand response programs for peak shaving, they’re typically in the range of 1 to 2% of the max uptime of the new load. We’ve seen that in a couple key demand response programs. So we ran it initially assuming the new loads—hypothetically—could be flexible for 1% of their maximum uptime in a given year.The numbers were so substantial in terms of how much new load you could add to a variety of balancing authorities that we decided to run it at 0.5% of the max potential uptime, and then again at 0.25%. And it turns out we were quite surprised by the volume.Just to put numbers on it at 0.5% curtailment, we looked at 95% of the country’s load across 22 balancing authorities. It aggregated to about 98 gigawatts of new load you could add. At the 0.25% level, it aggregated to 76 gigawatts.As people are probably aware, that exceeds even the upper-end forecasts for data center load growth we expect over the next five to seven years.We want to be clear—this is a first-order technical potential assessment. There are various limitations to it that we talk about in detail, including that we didn’t account for transmission constraints. That would require a much more extensive and longer-term study. And you couldn’t even do it for 22 balancing authorities because it would take so much time. But the headline is sort of… yeah, go ahead. Doug Lewin:Yeah, yeah, no, you're all good. This is the Energy Capital Podcast. We talk about Texas and ERCOT, and I know you've been on a bunch of podcasts talking about the national picture. We're going to really drill into Texas and ERCOT here.So at that 0.25% level, 6.5 gigawatts of data centers could come online without any new capacity needed. At a 0.5% reduction, 10 gigawatts, and at 1%, 15 gigawatts.Those are pretty extraordinary findings. Can you talk a little about what that 0.25%, 0.5%, and 1% actually mean? Like, 1% of the hours out of the year—there’s 8,760 hours so you’re talking about 87 hours.But is that 87 hours of the data center being shut off completely? Or is it maybe the data center running at 50% for 100-and-something hours? What exactly does that look like?And I also just want to make sure I’ve got this right—that basically, you wouldn’t need to add new capacity to bring on 6.5, 10, or 15 gigawatts at those curtailment levels. You're not saying we don’t need new generation, of course we do, but that with load flexibility, we can accommodate a significant amount of data center growth more efficiently. Is that the right way to look at it?Tyler Norris: (9:57.078)Yeah, thanks Doug. Great prompt there.So first, yes it's a percent of the maximum possible uptime. One of the surprising findings was we assumed you’d have to shut off the new load entirely during a number of hours. But what we found is that we’re primarily talking about partial curtailment events. At the 0.25% level, that translates to about 85 hours on average in which some amount of curtailment would occur. But in about 90% of those hours, at least half of the new load is retained. And that 90% figure actually held pretty consistent across the different curtailment limits. In many cases, 75% of the load is retained even during curtailment events. So it's rare that you're talking about going all the way to zero, or even anywhere close to zero. This is interesting because it opens the door to partial flexibility. For example, if you were using battery storage, instead of sizing it at 100% of the max draw of the load, even 20 to 25% could give you a lot of flexibility. And the duration of these events on average is relatively short, three to five hours. Of course, it varies from balancing authority to balancing authority. And yes, that’s an average—so extreme weather events might push it higher. But overall, that average is informative.Doug Lewin:Yeah, that’s super interesting. Batteries would be one way to do it—putting batteries onsite. You could also have other types of onsite generation.What I found especially interesting in your paper was the discussion of different kinds of data center load. You started this by saying everyone’s been saying data centers are flat, 24/7, 365. I hear that all the time too “they can't be moved around.” But in your paper you get into the differences between inference and learning, and also the huge cooling loads, which I don’t think are talked about enough.So yes, batteries. But there’s also some load onsite that could be shifted. Can you talk a bit about that?Tyler Norris: (12:07.298)Yeah, sure. Maybe we can take that in a couple parts.First, I want to say that data is still limited. This is just a feature of the industry right now, and a constraint facing all independent researchers. Lawrence Berkeley National Lab recently did a congressionally mandated data center energy usage report it’s probably the best public analysis we have.But even they prominently state that there are a lot of limitations because we just don’t have good hour-by-hour, season-by-season usage data for data centers.That said, let’s start with cooling loads. Because in some ways, it’s fair to say these are 24/7, 365 constant loads, but even that starts to break down a little when you look at interseasonal variation.It’s kind of intuitive put a data center in the South Pole versus the Sahara Desert, they’ll have different cooling needs. And this extends to other geographies.You can go right now Google, to their credit, publishes the Power Usage Effectiveness (PUE) of all their data centers around the world each quarter. In their North Carolina facility, for example, PUE is around 1.06 in winter versus 1.25 in summer.Doug Lewin:Which means that in the winter, they're getting much more efficient use of the energy they're using more of the energy per unit of computing power than in summer, right?Tyler Norris: (14:05.026)Yeah that’s right. There could be other contributing factors, but presumably the difference in cooling needs is a big one. So we can see some variation.Then, with legacy computational loads—CPU-dominated, real-time cloud services, especially global data centers—you got constant flat loads. But with AI-specialized data centers that are GPU-heavy, that picture starts to change.Some are used entirely for training workloads; some are a mix of training and inference; others might be all inference. It’s still a bit unclear. For training—like neural nets and foundational models—power usage can vary dramatically, even sub-minute. It can jump from max draw down to zero. With inference loads, they also vary, and demand is still uncertain. I don’t think even the hyperscalers fully know what global inference demand will look like.There’s also cooling load, batchable workloads, and other flexible components. So bottom line: not all of these are 100% flat, around-the-clock loads.Doug Lewin: (16:14.422)Yeah. So this brings me to the next point here, which you make really well in the study—this key metric of load factor.I think we’re at a moment right now where everyone’s talking about abundance—Ezra Klein’s book is out, I’m going to an event tonight with the Abundance Institute, which is a right-of-center think tank. There’s this question of: how do you do abundance if you have scarcity on your grid at some times?But the fundamental point is—we actually do have an abundance of energy for the vast majority of the hours in the year. It’s really about managing the peak.You put some great numbers and graphics on this in the report. Load factor is basically how much energy is used compared to the overall functional capacity of the grid—not nameplate, but usable. And you show the load factor for ERCOT at 53%, which turns out is right at the median or mean, can’t remember which.So our grid is vastly underutilized. You write in the report:"A system's potential to serve new electricity demand without capacity expansion is determined primarily by the system's load factor—a measure of the level of use of system capacity—and grows in proportion to the flexibility of such load, i.e., what percentage of its maximal potential annual consumption can be curtailed."So basically, we are in a situation where ERCOT could take on a lot more data centers, using the slack that’s there—as long as they come in with some amount of flexibility.Can you talk a little about ERCOT’s potential relative to this load factor metric?Tyler Norris:Yeah, sure. I appreciate you walking through that, because I think intuitively we all know the grid is built around peak, but when you sit with the numbers, it’s kind of extraordinary. So, to put it another way: more than 10% of the system is built to serve about 35 hours a year of extreme peak load. That means there is headroom—it’s just outside those rare extreme swings, like heat waves and cold snaps.ERCOT’s load factor landed at 53%, and just to define it: it’s the average demand over the maximum peak demand, based on nine years of hourly load data. That 53% was both the average and median. ERCOT actually has a higher load factor in the summer—around 65% on average. But what’s interesting is ERCOT is one of the few systems where the winter load factor is actually just below that average, which means more headroom is available in the wintertime.That’s partly because you do get those occasional polar vortex-style cold snaps—Winter Storm Uri being the most dramatic example—but outside of those, there’s a lot of unused capacity. So yeah, we could peel back more ERCOT-specific metrics. But the takeaway is: if a new load can be flexible for even a small amount of time, you can add a meaningful amount of demand to the system. Now again, as I mentioned earlier, the numbers we quote—6.5, 10, 15 gigawatts—those should be viewed as first-order technical potential estimates. When you layer in transmission constraints and intertemporal generation constraints, some of that potential gets eaten away.But even if it’s only half of those numbers, that’s still substantial. Also worth noting: our headroom estimates do not include the reserve margin. So in some cases, if you did factor that in, the true headroom could be even higher.Doug Lewin: (20:34.774)Yeah the load duration curve you included in the paper is really amazing. It reminded me of when I worked at SPEER (South-central Partnership for Energy Efficiency as a Resource). We did reports on demand response potential and I remember being struck by those curves.For listeners, I’ll include a screenshot and a link to the paper in the show notes. But it looks like a skateboard ramp—or a hockey stick, but flipped. On the left side, for a few percent of hours each year, you get these huge peaks. Then it quickly drops off, and for the vast majority of hours, there's massive headroom.ERCOT has more room than most other systems. And like you said, utilization is even lower in the winter, which suggests something for future research: it would be useful to break this out by season, because I imagine that ramp gets even steeper in the winter.That brings us back to the question of: how do you manage those peak hours? So if you want to say anything more about winter vs. summer, go for it. But I want to layer in another question for you to take after that…Tyler Norris: (22:58.336)Yeah, really quickly on the winter vs. summer comparison: we didn’t include this in the report, but we did look at the average duration of extreme peaks and of curtailment events.We found that the average duration is substantially lower in the winter than in the summer. That tells us the nature of the peaks in winter is spikier—you get a cold snap for a few days, and especially in the mornings (6–9 a.m.) when everyone wakes up and turns on heating, you get this quick spike—but then it dissipates fast.In contrast, summer peaks are more sustained—they extend from mid-afternoon to the middle of the evening. So the loss of load expectation is increasingly shifting to winter mornings.But the good news is that a little bit of flexibility in the wintertime gets you a long way.Doug Lewin:Yeah. What I’m wondering, Tyler—and I don’t know if you guys looked at this for the report—is whether there’s potential for load flexibility throughout the system, not just at the data center level. Could there be some kind of fund, for example, where data centers help reduce residential peak load, which would free up even more headroom for them?And then there’s also the broader question of what AI itself could do—optimizing loads in ways that don’t reduce comfort, and might even improve it. Like pre-cooling, for instance. I mean, you could imagine a future where AI is kind of self-aware of its energy use and shifts its own cooling load. The potential is huge.But the main question I want to ask out of all this is:Isn’t there real potential for residential load flexibility to help free up space for data centers?Tyler Norris:Yeah, I love that question because you can start to think about flexibility in a variety of ways. Why are we focusing on the large loads right now? Partly because so much of the near- and medium-term load growth appears to be coming from these very large commercial customers.Some of the numbers are eye-popping—up to 50% of U.S. electricity load growth over the next five to seven years could come from AI-specialized data centers, according to some forecasts. So this growth is coming fast, and we need to plan for it better. But the opportunity it presents is that these loads are so large-scale and under the control of sophisticated operators—who also have a high willingness to pay. They can incorporate new technologies and systems more easily. So from a bang-for-your-buck standpoint, if you can get one 200-megawatt data center to be flexible, that might be a better return than signing up thousands of residential customers for demand response.That said, if data centers are unwilling or unable to offer any flexibility themselves, one option is for them to procure flexibility from others—like a virtual power plant or distributed capacity procurement.So maybe they pay customers to install smart thermostats or smart water heaters, right? Those water heaters could pre-heat two hours earlier before that 6 a.m. winter peak instead of coming on when everyone wakes up. Even weatherizing homes would help—anything that puts downward pressure on peak demand creates system headroom. And again, we should emphasize—part of why AI-specialized data centers could be more flexible is because training workloads are significantly more batchable and deferrable than real-time inference or cloud services.There’s solid literature on this—it’s proven that in a lot of cases, you can front-load or defer computational training loads by a few hours and reduce demand during peak.Doug Lewin:Yeah, yeah. That’s exactly the point I was getting at—training vs. inference vs. cooling, etc.Before we move on, I just want to circle back to something you said about weatherization and resistance heating. I loved this study—it answered a lot of my questions but raised like 50 more. So for researchers listening—and Tyler, maybe for a future paper—I'm especially curious about ERCOT, where we’re adding huge amounts of solar and storage.We’re at over 30 gigawatts now, on our way to 40 or 45 GW in the next 18 months or so. It seems like winter is now becoming the real problem, not summer. With all that solar/storage coming online, the summer risk is going down, but the winter spikes—especially early morning—are getting more prominent.We’ve got some demand flexibility on the residential side, but it really comes down to heating loads. Can we replace inefficient resistance heat? Because if we can, we create more headroom. I’ve even started talking to data center folks about this. If they really want to interconnect in ERCOT, we need to be talking about winter nights and mornings.Did this show up in your study? Or does this suggest that we may need to reassess how we’re looking at seasonality as this resource mix shifts?Tyler Norris: (31:51.038)Yeah, absolutely. This is a critical aspect—this shift in loss of load expectation from summer afternoons to winter mornings is now happening in a growing number of jurisdictions.The Southeast has seen it too. It’s partly because solar and storage are victims of their own success—they’re reducing summer peak risk, which is great. But what’s left now is those rare, intense winter spikes. And like you said, those resistance heaters—there’s a big opportunity there, but they are inefficient. And when they all come on at once, it creates a challenge. We all know: solar doesn’t produce much from 6 to 9 a.m. in winter. Maybe if we changed time zones… but I doubt that’s catching on.The good news is those morning peaks are short—in some systems, even 2-hour battery storage can make a meaningful dent. And definitely 4-hour storage can help. It’s not sexy, but just getting people off those strip heaters—honestly, I think people would be surprised how much progress we could make with that alone. Also, a quick example from here in the South: Winter Storm Elliott a couple years ago was the largest rolling blackout event Duke Energy has seen.The primary cause? Thermal unit failures, mostly gas and coal—similar to Winter Storm Uri in Texas. But there was also a big morning spike because of that polar vortex. So, even though solar doesn’t produce during winter mornings, it could help charge batteries the day before—or even save fuel in the hours leading up to an event, which helps with reliability. We need to get better at analyzing the synergistic capacity value of different resources. Groups like E3 have done some great work on this, but we still don’t fully account for the interactions between solar, storage, thermal, demand flexibility, etc.Doug Lewin: (34:17.206)Yeah, completely. And I think one of the big takeaways for people listening is that even small, incremental changes—a half-percent here, 1% there—can free up significant headroom, as long as they are timed correctly.It doesn’t matter what the measure is—energy efficiency, demand response, batteries if it matches the time of system need, it adds real value.You wrote in the paper that demand response participation stalled in the mid-2010s. Can you talk about why that happened?Tyler Norris: Yeah. From an academic standpoint, you’d want to isolate all the variables. But I think the overarching trends were pretty clear.First, we became long on capacity in a lot of markets. That drove capacity prices down. At the same time, we were in a low-growth environment. So when capacity market prices decline, there’s less incentive for demand response participation. There were also new restrictions on participation from aggregated DERs in some markets, which had an effect. But the biggest macro factor was just low growth and low prices. That’s all changing now, though. Just look at PJM—huge increase in capacity market prices in the past couple years. Even aside from price spikes or supply chain issues, we’d expect more participation. But more significantly, we’re seeing more interest in load flexibility because of the speed to power advantage—getting online faster. So let’s talk about that. Is that kind of a core policy solution?If you’re talking to a policymaker trying to figure this out—someone who wants these data centers because of the economic development, national security, and tax base benefits—but who’s also very worried about another Winter Storm Uri or Winter Storm Elliott, what do you tell them?What are the policy mechanisms that can help us manage this responsibly? Is offering faster interconnection in exchange for some load flexibility one of them?Tyler Norris:I think so. That’s one of the conversations we’re hearing, and ERCOT, as is often the case, is out on the leading edge here in terms of creating service constructs.So the Controllable Load Resource (CLR) product—that’s a service ERCOT created. They improved it a couple of years ago to more explicitly quantify and characterize the trade-off between flexibility and faster interconnection.And I think in that case, they were trying to design a product that could allow new large loads to get online within two years.That’s meaningful. I’m sure there are ways that product can be improved or optimized, and there are always challenges with real-time control. But maybe there are variations we could develop that still preserve the core idea: faster interconnection in exchange for measurable flexibility.Just one more thing—back to the winter conversation. With polar vortex-style events, we can often forecast them days in advance. Sometimes even a week or more. Forecasting is getting better, especially with the help of AI.So, for those events, we may not need fully real-time controllable loads. Even day-ahead or multi-day-ahead flexibility could add a lot of headroom.Doug Lewin: (39:50.742)Totally. And I think this is where we need to talk about all of the above on the demand side, just like we do on the supply side.There are controllable loads—and those are great—but there are also other forms of demand flexibility. You actually quote ERCOT in the paper, this was from a NERC presentation I think. and they say:“The optimal solution for grid reliability is more loads to participate in economic dispatch of Controllable Load Resources.”That’s a strong statement: optimal solution for grid reliability. But of course, there are other approaches too. In Texas, we’ve got Senate Bill 6 on the table right now. (We’re recording this on April 3rd, and I might already have articles out by the time this episode airs.)I think that bill is mainly focused on large loads and their integration. I don’t think it fully does what we need, but there’s one part I do like: it creates a new emergency response product with 24-hour notice. Today, Texas has about a gigawatt of emergency response service—about half of that is demand-based—and the current notice periods are 10 minutes and 30 minutes.But with these winter storms, like we were just saying, you see them coming. A 24-hour notice product could open up participation from loads that aren’t suitable for real-time dispatch but are willing to cut usage in an extreme circumstance. That’s a form of flexibility, too. So I think the main point is that there are many different kinds of demand flexibility. They each have different value and should be valued accordingly. But we need all of it—or else we’re going to be very limited in the amount of load we can add.Tyler Norris: (41:47.798)Yeah, I think that’s really well said.And to your point about the 24-hour notice product—look, we probably shouldn’t expect AI-specialized data centers to participate in demand response just based on economic incentives alone.Unless prices go extremely high—which could happen in submarkets—or unless we redesign price signals, it’s unlikely that price alone will drive widespread participation.That said, there’s some interesting research potential around that. If the addition of a large load increases the loss of load expectation for everyone else, you could argue for a price signal or fee on that new load, based on the burden it imposes on system reliability.That would be a shift in how demand response pricing works, but it's worth exploring.Still, I think the main driver of flexibility in these cases isn’t going to be price—it’s going to be faster interconnection, and participation in emergency programs to mitigate blackouts.Doug Lewin:Yeah. And this brings up another issue I wanted to ask you about.As we talk about new loads trying to come onto the grid—whether just normally or through some expedited process—should we start distinguishing between different types of large loads?Because not all large loads are created equal. Within data centers, there’s a huge difference between those doing cloud, inference, or training work.But also, outside of data centers, we’ve got big new loads from industrial electrification—fracking operations electrifying, steel mills, semiconductor manufacturing, etc.Do we need to start classifying loads differently in policy, rate design, or demand response program eligibility?Because if the only criterion is flexibility, well… crypto miners are extremely flexible. But if it’s crypto mining vs. a Samsung chip plant, most people would probably choose the chip plant.Did this come up in your work? Or maybe this is an idea for future research?Tyler Norris:Yeah, absolutely. We were focused here on AI-specialized data centers, because this is such a big, fast-moving trend that everyone’s trying to get their arms around.But you’re right—flexibility could apply more broadly. We often shy away from the idea of industrial facilities offering flexibility because no one wants to interrupt a manufacturing line. which also gets really expensive. But look, if these large factories have their own onsite power options or onsite batteries, I mean, it's the exact same principle. So let's not discount that some of them might have an interest in doing that. may not. I think the other thing is, yes, of course they also want to interconnect quickly, but it's just not the same like breakneck speed to market and also this global like, you know competition that has major national security implications in terms of the AI race. So that's a little different, I suppose. But ideally, should, for any large load or small load for that matter, that could offer flexibility that creates a value for the broader grid, we should be making sure that there are service contracts that acknowledge and enable that. Let's not discount it. There is something about just the scale of the day. actually this is a good question. So how many of the non data center loads are like over a hundred megawatts and I don't have a good data sheet in front of me. My sense is that even some of the largest factories we're talking about, like not a lot of them go beyond, you know, the hundred to 200 megawatt range. So like in Duke Energy's case, they've rolled out all these new sort of guardrails to require like more upfront security and guarantees from new large loads, but the threshold they established was over 100 megawatts. And there's probably always going to be some degree of an arbitrary threshold there. But you can also think about in terms of the number of upgrades to the system that are being triggered by it. So maybe you do it, and there's a dollar threshold cut off. But I think it is probably useful to think about this when we are talking about truly quote unquote hyperscale facilities. And you're talking about billions of dollars potentially of system upgrades and new generation resources that may be required.Doug Lewin: (45:55.714)Yeah. You write in the paper about the potential for lower ratepayer costs from load flexibility. And I think about this a lot—affordability has to be front and center. It needs to ride sidecar with reliability. I don’t care which one is A or B—they’re tied together.But I’ll be honest: I’m worried that these big, sophisticated customers are going to work the system to lower their costs, and everyone else is going to end up paying more. Sure, they have a high willingness to pay now, but as competition ramps up and margins tighten, they’ll have more pressure to control their costs.So is it really feasible that residential and small commercial customers could actually benefit from this growth? I want to believe the answer is yes—tell me it’s yes.Tyler Norris:I think the answer is yes—but it depends on smart policy and regulatory oversight.We’ve already seen, in just the last 6 to 12 months, multiple jurisdictions—at least in the Eastern Interconnect—starting to put meaningful guardrails in place. It starts with more upfront security posting, so that if a large customer backs out, ratepayers aren’t left holding the bag.Doug Lewin: (47:38.606)Yeah—that’s also part of Senate Bill 6 here in Texas.Tyler Norris:Exactly. And that’s sort of the basic first step. I imagine we’ll see more jurisdictions follow suit.But there are more ambitious ideas, too. In Indiana, for example, after seeing massive forecasts for data center load, there were proposals to fully firewall the costs—like, assign 100% of any triggered system upgrades (whether for generation or transmission) to the new load, not existing ratepayers.We used to have a paradigm of “meet any new load at any cost.” That just doesn’t hold anymore when growth is this large and fast—and when the willingness to pay from these customers is so high.If you start sending the full price signal—in this current environment—it seems like they’re willing to pay it. But obviously they’ll try to reduce costs over time, so now’s the moment to get the policy structure right.Doug Lewin:Yeah. I think the piece you put your finger on in this paper—load flexibility—is the key to that affordability piece. Because if we can actually control those peaks, that helps with reliability, and it helps with prices, because that’s when prices are highest.So I think the potential is there. If we get the policymaking construct and the pricing construct right—if—then I think large loads could bring in new resources, offer flexibility, and maybe even pay into a fund to help reduce residential peaks and create more headroom.I can see that scenario. But I don’t know if that’s the most likely one to play out. That “if” is doing a lot of work.Tyler Norris:Yeah, agreed. This is why we need regulators to take this moment seriously and get as smart as possible, as fast as possible.That was one of our goals with the paper—to provide some technical framing. But all of us need to be helping regulators and stakeholders level up their understanding. We’re all learning this in real time.Doug Lewin: (49:28.268)The learning curve is almost as steep as your load duration curve.Before we end, Tyler—this has been fantastic—I just want to ask you one more thing.You’ve done a lot of work on interconnection, and you recently testified to Congress on this. I’m going to read a quote from your testimony earlier this year:“While load flexibility can help, interconnection delays remain a major obstacle to deploying new generation. The volume of projects stuck in interconnection queues has quadrupled. However, one market—the Electric Reliability Council of Texas (ERCOT)—has taken a different approach and is achieving significantly greater interconnection performance than other U.S. markets. Between 2021 and 2023, ERCOT interconnected at least 70% more generation capacity than any other organized market, despite serving a load that is half the size of PJM.”I’m often critical of ERCOT, but I also want to give credit where it’s due—and this seems like a major success story. Can you talk about what ERCOT does differently, why it works, and what the rest of the country might learn from it?Tyler Norris: (51:23.042)Yeah, I don’t think you can overstate the significance of what ERCOT has accomplished over the past five years.It didn’t become clear just how different ERCOT’s performance was until the other queues melted down—and that’s only become obvious in the last three to four years.It’s rare that you have one market that is so fundamentally different in performance—and where that performance is clearly attributable to a different set of rules.ERCOT is an energy-only market. It doesn’t study and assign costs to new generators based on deliverability studies, which are essentially used to determine whether they can qualify as designated capacity resources.Doug Lewin:So it’s a more administrative process elsewhere—someone decides what’s “deliverable” and assigns cost accordingly. But in ERCOT, that step isn’t necessary?Tyler Norris:Exactly. In all the other organized markets, interconnection and capacity eligibility are tightly linked. So when a new generator comes in, they usually request Network Resource Interconnection Service—the type that allows them to participate in the capacity market.That triggers a very rigorous set of study criteria, and any upgrades that are identified get assigned 100% of the cost to the contributing generator. This creates a huge bottleneck.Now, there are other factors behind the queue problems, but the most fundamental one is this rigid linkage between interconnection and capacity eligibility. It creates a binary outcome—you’re either fully capacity-eligible or not.But we should be clear: this is a policy decision, and what it’s done is create a high barrier to entry for new generation. And in a constrained environment, that leads to price spikes—which is exactly what we’re seeing in PJM.Now, we probably can’t just copy-paste ERCOT’s model into the rest of the country, but we should be figuring out how to adapt its efficiencies. That’s going to be a major task going forward.Doug Lewin:Yeah. There’s no pure energy-only or capacity market. They all have pieces of both. It’s really a question of where you set the dial.But I really appreciate you highlighting that. I think it’s underappreciated. There’s definitely a negativity bias in this space—we talk more about what’s going wrong than what’s going right.And this is something ERCOT is doing right—Connect and Manage has worked. It’s put more generation on the grid than any other market. So thank you for pointing that out in your congressional testimony.All right, I’ve got one final question, and then we’ll wrap.You mentioned it earlier, but I want to circle back to it: DeepSeek.How does DeepSeek change your outlook on load growth, if at all? Just for folks listening: DeepSeek is a Chinese AI model that surprised a lot of people. And part of the conversation was: are GPUs getting so efficient that maybe we won’t see as much load growth?Has that shifted your thinking?Tyler Norris:Yeah, so some quick background:Before DeepSeek, the consensus was that the U.S. was about three to five years ahead of China in developing large foundational models.So when DeepSeek launched—and showed comparable performance to our most advanced public large language models—it was a shock. Especially given all the efforts to restrict China’s access to cutting-edge GPUs.Now, it turns out DeepSeek wasn’t a new foundational model. They built on open-source U.S. models and used clever engineering to optimize efficiency.We don’t know what they spent—it’s not publicly available—so it’s hard to judge. But it does highlight that efficiency gains are possible through optimization.That said, the initial reaction created a bit of a lull in projections. But within a few weeks, things were back in full swing. The forecasts for data center load growth are still massive. Hyperscalers are continuing their investment. OpenAI is full steam ahead on Stargate.So for now, it looks like we’re still on the high-growth trajectory.But what DeepSeek did do was inject more uncertainty, especially around inference loads. Some of this work can now be done locally, which is what Apple has been pushing.So it’s not just a question of “how much energy?” but where and when it’s being consumed.Doug Lewin:Yeah, so interesting. There’s so much more to explore.Tyler, this has been great. Your report is a huge contribution to this conversation—Rethinking Load Growth. We’ll include a link in the show notes.Before we close, tell listeners where they can find you online—and is there anything I didn’t ask that you wish I had?Tyler Norris:You can find me on LinkedIn and follow some of the work through Duke University’s Nicholas Institute. And no, this was terrific really enjoyed the conversation, Doug.Doug Lewin (59:37.748):Awesome. Tyler, thanks so much. Really appreciate it.Thank you for listening to the Energy Capital Podcast. I hope you enjoyed the episode. If you did, please like, rate, and review wherever you listen to your podcasts.Until next time, have a great day. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

If it passed, Senate Bill 819 would be one of the most damaging energy bills we’ve seen in years. It would slow down Texas’ economy, hitting rural areas the hardest. It’s a direct attack on Texas energy producers and a threat to consumers, landowners, and communities across the state. But don’t take it from me, listen to the witnesses from Armstrong, Nacogdoches, Schleicher, and Tom Green Counties.Two weeks ago, the Senate Business & Commerce Committee held a public hearing on the bill. I’ve watched hearings at the Texas Capitol for more than 20 years, and I’ve never seen this level of public opposition to an energy bill. Over 100 Texans registered their opposition and 50 Texans, from every corner of the state, waited all day to testify in person against the bill. They spoke clearly and urgently: SB 819 is a mistake.This post is free but it’s not free to produce it. Please support the Texas Energy & Power Newsletter with a paid subscription. You’ll get access to the full archives, the Grid Roundups, and select Energy Capital Podcasts, including this one with Jane Stricker of the Houston Energy Transition Initiative. Thank you!The witnesses included ranchers, veterans, landowners, farmers, and local Chamber of Commerce leaders. These are people who live where these projects are actually built and they don’t, as one of the witnesses put it, want Austin to tell them what they can and can’t do with their land. As I wrote in A Time For Choosing, this bill doesn’t just target renewables. It threatens core principles like private property rights, economic freedom, and private investment in Texas infrastructure.Take Armstrong County, a rural region with fewer than 2,000 people. Over the life of its two wind farms and new projects, more than $100 million in revenue will flow to local landowners and school districts. And 90% of the county voted for Donald Trump. In Schleicher County, a county that’s lost more population than almost any other in the U.S., wind and solar have stepped in as oil and gas declined.In Nacogdoches County, a solar lease is helping one family hold onto their land and send their kids to college; it also funds local schools for the whole community. In San Angelo, oil and gas companies are collaborating with renewable developers to build new projects and attract manufacturers and data centers. Michael Looney from the San Angelo Chamber talked about how he was surprised oil and gas companies were working with solar energy developers. This is becoming even more common.These aren’t fringe cases. As I’ve written in Clean Energy Boom Is Already Great for Texas, clean energy projects are already creating jobs, tax revenue, and manufacturing growth across the state.And then there was former Texas Land Commissioner Jerry Patterson. A Republican, veteran, and longtime advocate for gun rights who reminded the committee that renewables have helped keep electricity prices lower in Texas. He warned that bills like SB 819 will drive prices up for consumers and businesses at the exact moment we need more affordable, reliable power.We’ve already seen what happens when we over-rely on volatile gas markets. In Grid Roundup #47, I wrote about how gas price spikes drove up electricity costs for families and businesses—and why renewable energy is one of the best tools we have to stabilize prices.We’re at a crossroads. The state needs more electricity. ERCOT has warned of reliability challenges. Data centers, manufacturers, and residents alike are demanding low-cost power. And yet, instead of focusing on transmission, energy efficiency, and modernizing the grid, we’re wasting precious time on bills that would limit development, raise costs, and hurt the very communities they claim to protect.🎧 I’ll share more audio clips and analysis on the podcast feed, and we’ll also be releasing one-off videos and testimony breakdowns over on our YouTube channel. In the meantime, please share this post, subscribe to the newsletter, and help spread the word about what’s really at stake.As always, thanks for listening and let’s keep working for a better Texas energy future.Timestamps:01:26 - Sen. Menendez & Sen Kolkhorst Exchange02:19 - Navy Veteran: Sean Salas05:53 - Rancher & Farmer: Mike Ollinger (Armstrong County) 07:51 - Farmer Brian Zbylot (Nacogdoches County)10:21 - Conon Emmons, Sen. Sparks, El Dorado (Schleicher County)14:28 - VP Chamber of Commerce, Michael Looney, San Angelo 17:47 - Former Land Commissioner Jerry Patterson Show Notes:Further Reading & Related Posts: * Senate to Hear Another Anti-Energy, Anti-Growth Bill – My preview of the SB 819 hearing, outlining what was at stake before testimony began.* A Free Market, If You Can Keep It – How these proposals conflict with conservative economic principles and market freedom.* To Avoid Power Outages, We Need to Diversify Supply – Why limiting renewable development undermines grid resilience.* More Gas Plants Withdraw From Texas Energy Fund – Notes from the same legislative cycle showing the fragility of supply-side-only strategies.* Clean Energy and Grid Reliability: February 21 Reading Picks – A curated list of articles and podcasts discussing clean energy’s role in supporting grid stability.* Texas Energy Fund and Data Centers: April 2 Roundup – Explores the intersection of energy policy and large-scale electricity demand growth from data centers.Transcript:Doug Lewin (00:00) Two weeks ago, there was an incredible hearing at the Senate Business and Commerce Committee. They heard Senate Bill 819, a bill that would greatly restrict the ability to develop renewable energy in Texas and restrict private property rights—and thus also hurt economic development, particularly in rural areas, drive up energy bills, harm grid reliability. The list of damage from that bill is quite long.I'm Doug Lewin, host of the Energy Capital Podcast, author of the Texas Energy and Power Newsletter, and today we're going to take you through some of the extraordinary testimonies and moments that were discussed during that hearing.It really was extraordinary. I've been watching hearings at the Capitol now for over 20 years, and I can't ever remember seeing a bill on anything energy related with half this many witnesses opposed. They registered 100 people opposed to the bill—50 of them testified in person to the committee about their opposition to the bill and anything like it at all. Those stayed around all day waiting for their turn to speak. Again, never seen anything like it.I want to start with a little exchange between Senator Kolkhorst, the author, and one of her colleagues, Senator Jose Menendez, who's on the committee. Let's take a listen.Sen. Menendez and Sen Kolkhorst (01:26)Senator Menendez: "You know, the fact is what makes this country great is we have property rights. And my concern is that some of your setbacks, particularly the 3000 foot setback, that's almost a taking in a sense."Senator Kolkhorst: "I think 3000 feet is strident. Like when I first did SB2 last session, I didn't even like it when we filed it, but we filed it."Doug Lewin (01:45)Pretty extraordinary, right? She filed a bill that she wasn't sure about. She then was thinking that the numbers in her own bill were too strident. Why file it? The whole thing is kind of bizarre and begs a whole lot of questions, but let's hear from the folks who took time out of their lives to come to testify on this outrageous bill.Let's start with a veteran, a renewable energy worker, and a constituent of Senator Kolkhorst's.Sean Salas (02:19)"Chairman, members of the committee, my name is Sean Salas. I represent myself and I'm a constituent of Senator Kolkhorst. And I'm here to oppose Senate Bill 819. I'm a six-year veteran of the United States Navy Special Operations Community from Richmond, Texas, not the city. During my service, like my fellow veteran here, I operated in some of the most challenging environments where energy reliability and security were critical to mission success.The experience has given me a deep appreciation for the importance of a stable, diverse, and resilient energy grid, something that, in my opinion, SB 819 threatens to undermine. Texas has been a long leader in energy innovation, embracing wind and solar alongside traditional sources to strengthen our grid and create jobs. I've been privileged to work in this industry since getting out of the military to support and raise my family. To that end, I brought my daughter here to show her what it means to be a voice, to fight for something that's important and something that you care about.This bill places unnecessary barriers on renewable energy development, discouraging investment and slowing progress at a time where energy independence is more critical than ever. The additional permit requirements and fees will stifle economic growth, particularly in rural communities where renewable projects have provided jobs and financial security for landowners and for people like me.During my time in the Navy, I saw firsthand how dependence on limited energy sources could create vulnerabilities. A strong, self-sufficient Texas should embrace energy diversification, not legislate against it. I urge you to oppose SB 819 and stand for an energy future that is strong, independent, and built on innovation. Let Texas lead, as we always have. Thank you."Doug Lewin (04:09)Let Texas lead indeed. Very compelling testimony there from that constituent.We're going to take a little tour around rural Texas. The next several witnesses you're going to hear from are from rural counties throughout the state, counties that very much rely on the income from renewable energy.This next gentleman is from Armstrong County. If you probably don't know where Armstrong County is, I'll confess—preparing to record this, I didn't know where it was till I looked it up. But it was the home of one Charles Goodnight, and you'll hear this man say he manages the Goodnight Ranch Wind Farm. Charles Goodnight was a Texas legend cattle rancher. He was actually the inspiration for Woodrow Call in Lonesome Dove. Taylor Sheridan played him on an episode in the series 1883 in the first year of the first season of that series.In Armstrong County, there are less than 2,000 people. There are less than 400 registered voters. Of those that voted in the last election, over 90% voted for Donald Trump. In that county, over the life of the projects of the two wind farms they have now, there will be over $50 million in payments made to landowners, made to local governments. Another farm under development would add even more money, $120 million combined in tax payments and payments to landowners in a county of less than 2,000 people.Let's hear from this next witness from Armstrong County.Mike Olinger (05:53)"Yes, my name is Mike Olinger. I'm from Armstrong County. I'm a rancher, farmer. I was on the school board for two terms, county commissioner for two terms. We got clean energy. We got schools that need help. We got counties that need it. Y'all don't realize what small counties need. We don't need to be punishing the small counties because we don't have oil and gas. This is the only revenue we've got since 1900, and that was the railroad track. We're strictly ranch land and dry land farm ground. I invite anybody to come to our county and I can show them around."Doug Lewin (06:32)Again, really compelling testimony. You heard Mr. Olinger say there, they do not have oil and gas in that region of the state. They do have a lot of wind and sun. And it is very important that they be able to develop that, as he said, for the schools, local governments, the landowners—really vital to the lifeblood of rural communities in Texas.So that was one of the smallest counties in Texas. Let's switch now to a county in the eastern half of the state that's actually one of the larger rural counties. It's about somewhere around 50 or 60 in rank and population out of the 254 counties in Texas—talking about Nacogdoches County. It is, interestingly, not a particularly sunny part of the state. Again, in the eastern part of the state, not like desert out in West Texas. But you're going to hear this next witness talk about what a solar farm development means for him and for his community, for the schools. This gentleman is a constituent of Senator Nichols, who is on the committee and subsequently voted for the bill coming out of committee, kind of shockingly, against the interests of his own district and constituents, like the one you're going to hear from right now.Sen. Nichols Constituent (07:51)"I'm a landowner here. I appreciate you giving me the opportunity. I'm speaking against this bill. I'm a constituent of Mr. Nichols. So this project that you see here is Elia Springs. That was my family farm. Like you, Senator, my kids learned how to work hard there, farming watermelons, 40,000 a summer. That's the reason why I ran out of child labor and they all ran off to college. I'm happy to say I'm still paying for their college with the revenues that we produce from the solar farm.Nacogdoches County used to be the number one county for dairy production. And then we put it into pine trees and we made money off of natural gas. So I'm here because as landowners, I don't want somebody from Austin—the last time I was here was 25 years ago—I'm here because I don't want people in Austin telling me and George and other rural landowners what we can do with our land. That's why I'm here, because it dramatically impacted our community. We have $30 million worth of revenue coming into our school district now. It changed our community and it changed my family. And I'm thankful that I don't live in California where I couldn't have done this project."Doug Lewin (09:07)No one should tell us what to do with our land. Indeed, very compelling testimony there from the gentleman from Nacogdoches County.We're now going to move over to the western part of the state, to Schleicher County. This county is actually in Senator Sparks' district. Senator Sparks is not on the Senate Business and Commerce Committee, but he is carrying Senate Bill 715, which would be equally damaging to Senate Bill 819 if passed.Mr. Emmons from Schleicher County talks about how important renewables are to that county—a county of less than 2,000 people out near San Angelo. It is one of the counties that has experienced the most population loss of any county in the entire United States. The renewable projects there have delivered over $100 million in tax payments to local governments and payments to landowners. And there are more renewable projects under development, which would be under threat from Senate Bill 819, but also Senate Bill 715, Senate Bill 388. This whole parade of terrible bills coming from the Senate would put counties like Schleicher County in dire straits. Let's hear from Mr. Emmons.Conan Emmons (10:21)“Chairman Schwertner and members of the committee, thank you for the opportunity to speak today. My name is Conan Emmons and I'm a constituent in Senator Sparks' District 31, although I realize he's not on this panel. I'm here to strongly urge you to oppose Senate Bill 819. I'm a resident of El Dorado in Schleicher County, speaking for myself today. I am a landowner and rancher, even though I'm wearing a suit because I thought it was appropriate, and very involved in our community.In the last 10 years, El Dorado has closed five major oil field support companies. That's a rate of one every two years. The largest remaining one just closed its doors last month. In the same 10 years, my very modest oil royalty check has been cut 95%. Fossil fuel production and supporting companies used to be thriving in our community, but it is a fading resource. And as it fades, so does our community, our population, and our employment.When an American owned and run company like Apex comes into our community and wants to use wind as a resource, something we have a lot of in Edwards Plateau, it offers hope to our community, not only to the landowners, but to the school districts, the county, the hospital districts, and anyone hoping to stay in El Dorado to find good employment. Senate Bill 819 is a threat to the possibility of a thriving economy and industry in and around communities like ours.As a landowner, I should have the right to negotiate a lease on my land for hunting, grazing, electricity production, or whatever else I want. ERCOT warns us we must add affordable power quickly to meet rising demands. So I can think of no reason to tie the hands of a company trying to use an abundant resource to fill a much needed demand. And again, I urge you to vote in opposition to Senate Bill 819 and protect landowners' rights and rural economic growth. Thank you for your time."Doug Lewin (12:14)That was really compelling to me, particularly talking about the decline of oil and gas in Schleicher County. We're going to hear this story more and more in coming years. It's not that oil and gas aren't tapped out. There's still probably oil and gas down there, but the easy stuff that could be had is had, and we start to see these declines and Schleicher County is kind of a poster child for that. The wind is going to continue to blow and the sun is going to continue to shine. And as Mr. Emmons said, in a place like El Dorado, you need whatever kind of opportunities you have. And why would the legislature try to limit those kinds of economic opportunities in counties that are 80, 90% Republican and desperately need these opportunities?From there, we're going to move just next door to a nearby county, Tom Green County, where San Angelo is. We'll hear from Michael Looney, who's the head of the Chamber of Commerce in San Angelo. San Angelo has well over a hundred million dollars worth of tax payments, royalty payments from renewable energy. And what you're going to hear that I think is really compelling here is how in places like San Angelo, there is no sense of oil and gas pitted against renewables.It's all energy. It's all economic opportunity. And I think what happens, unfortunately, in the minds of some politicians in Austin is they think they're doing some solid for oil and gas by attacking renewables. When in fact, a lot of folks in the oil and gas industry work in renewables or work across them. We're seeing this a lot with land men working in both renewables and oil and gas. We're seeing it in the geothermal industry. We're seeing it from landowners who may or may not have had oil and gas royalties but want renewables royalties either on top of the oil and gas royalties or because they don't have oil and gas there.And so really what you see in most of the state is not this kind of competition, but more of this kind of true "all of the above"—not like when some politicians say it and they really mean to disadvantage one thing or the other, but really truly all of the above. So let's hear about that from Mr. Looney from the San Angelo Chamber of Commerce.Michael Looney (14:28)"Thank you. Michael Looney, vice president of economic development with the San Angelo Chamber of Commerce, speaking to oppose this bill. For some perspective, San Angelo is a West Texas city of 100,000 population with a diverse economy relying heavily on agriculture, steel manufacturing, renewable energy, data centers, technology, hardware manufacturing, medical device manufacturing, oil and gas companies, and O&G component manufacturing. We're a quickly growing city with an increasing attraction of new businesses to our region. Kind of an isolated city, so we're kind of designed to self-rescue and self-preserve.San Angelo and Tom Green County, especially our rural school districts, have greatly benefited from the presence of wind and solar power plants, of which we have three solar power plants and two wind fields in our county. The San Angelo Chamber of Commerce represents the economic development efforts of both the city and the county. And we have been engaged by ranchers and farmers that have benefited from the long-term leases offered by renewable projects. They have demonstrated to us that the land that they lease is surplus, unproductive land. And the renewables developments require no water consumption. They offer an alternative income source for the ranching and farming, cow-calf operations, and they allow the benefit of a backstop source of funding for them from the renewables projects, which keeps the family operations going.Interestingly, with such a high percentage of our economic horsepower derived from the O&G sector, we have been involved with solar plant projects that were in actual collaboration between the solar developers and O&G companies, which we found intriguing because we'd always presumed that there was opposition to one another, the two different sectors. The presence of our local solar and wind power projects has served to attract several new manufacturers that now have operations in San Angelo and several large-scale data centers."Doug Lewin (16:31)Mr. Looney made some really good points there, right? A lot of times renewables are being developed, as he said, on unproductive land, doesn't take water, it still just helps the economy. It baffles me that the legislature is trying to stifle this industry that has meant so much to so many.We're going to end with testimony from former Texas Land Commissioner and state senator, Republican Jerry Patterson. Commissioner Patterson is well known throughout Texas political circles. He carried the first open carry, not concealed carry, handgun law in the state of Texas and was involved when he went to the land commission office in some of the early renewable deals. He really deserves a whole lot of credit for the development of the renewable industry. And he makes a point that was made throughout the day, but we haven't had a clip on it yet. It's about the reduction in cost for consumers that comes from renewable energy and the increase in bills that are headed your way if Senate Bill 819 or any these other anti-renewable bills pass. Let's hear from Commissioner Patterson.Jerry Patterson (17:47)"I'm Jerry Patterson, I represent myself and I oppose Senate Bill 819. So the question is, why should we encourage instead of discourage wind and solar development? And the answer is because we can't afford not to. And when I say afford not to, I mean the positive effects of zero fuel cost generation against the retail price of the commodity to the consumer."Doug Lewin (18:17)Commissioner Patterson makes such an important point. Energy bills have gone up in recent years. That's mostly because of increased spending on the distribution grid, but also because of increased cost of natural gas. In 2022, gas was between six and eight dollars. This year, it was two dollars the last year or two, and we saw prices go lower. Gas is back around four dollars, and with some of President Trump's tariff announcements, it's come down a little bit, but we're still seeing relatively elevated prices for gas. It's a volatile fuel. We don't know where its cost is going to go. And we know that having a zero marginal fuel cost, a fuel that literally costs nothing, that bids into the market does have a price-suppressive effect. This is extremely important for businesses that want to come to Texas where energy is one of the biggest inputs, whether you're talking about chip manufacturing, steel mills, petrochemical facilities, data centers—these folks want low cost power.And by the way, so do residential and small commercial consumers. They need low cost power. In the state of Texas, 35 to 40% of residential consumers self-report choosing between power, medicine, and food. That is unconscionable and unacceptable. And if bills like this were to pass, we would see a rise in energy costs as renewables were, as it were, disadvantaged.On top of that, we would start to see more energy shortages. We have seen over the last summer or two, and you don't have to take my word for it, ERCOT CEO Pablo Vegas, PUC Chairman Thomas Gleason, talking about how solar and storage in the summertime have kept us out of energy emergencies and conservation alerts. So price suppression, economic development, grid reliability, all of these things are very much at risk with these bills.Since the hearing occurred, and again, 100 people testified against—50 in-person folks from every corner of the state talking about how this bill would hurt them—the committee passed it out anyway, seven to three. And it will pass on the Senate floor. There's no drama or doubt about that whatsoever. We don't know what the House will choose to do with it. The Senate will pass it. It would be really damaging to the state as you heard from a lot of the witnesses that we played today.We'll keep track of this. We'll bring you some clips from the Senate floor debate if there even is one. Often in the Senate, there's not because the votes are all there anyway. But if there is, we'll bring that to you. And we'll continue to monitor other energy bills. House Bill 14, which would accelerate nuclear in the state. There are all sorts of energy efficiency bills, transmission bills, distributed energy resource bills. There's so much that legislators could do to make the grid stronger, to lower costs for their consumers and to stimulate economic development. It's sad that they want to spend precious hours of their very short legislative session on bills like these. But here we are.To follow along, please go to douglewin.com and subscribe to the Texas Energy and Power Newsletter and the Energy Capital Podcast. You can follow me on Twitter, BlueSky, LinkedIn—easy to find on all of those social media channels, but please do go to douglewin.com. It is a reader-supported publication, and if you can purchase a subscription, that would be greatly appreciated and help support the podcast. Thanks for listening. See you next time. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

We recorded this episode in front of a packed room at Geothermal House during SXSW, and it couldn’t have been more timely. Energy demand is rising fast. Energy policy is fraught. And into this moment comes geothermal — a resource that’s clean, always-on, right beneath our feet, and dare I say, bipartisan.I sat down with Jamie Beard, the founder of Project InnerSpace, to talk about the opportunity geothermal represents and the unique chance we have to get it right from the start. Jamie is one of the most compelling voices in the energy space, and her message is clear: if we want to move fast on clean energy, we need to recruit the people who know how to drill.That means engaging the oil and gas industry — not as an opponent, but as a partner. As Jamie puts it, “If you want to turn the ship, recruit the sailors.” And in Texas, where drilling is the culture, we have a huge advantage. The workforce is here, the infrastructure is here, and the resource is far better than most people realize.Geothermal is often assumed to be limited to places like California, Kenya, or Iceland. But thanks to recent mapping work, we now know that Texas has significant geothermal potential across much of the state. Texas is also leading on policy, with the best geothermal legislation in the country, according to Beard.We talked about how this industry is being built from the ground up, with oil and gas veterans, startup founders, and policymakers all playing a role to start the Texas Geothermal Energy Alliance (TxGEA), build a legislative agenda, and pass a suite of bills all in under 18 months. That kind of speed is rare in energy and it shows what’s possible when there’s alignment.Jamie and I also talked about something deeper: how geothermal might be one of the few energy solutions that brings people together. It appeals to climate hawks on the left and oil-and-gas energy dominance advocates on the right. It can be described in the language of abundance, emissions-free power, energy security, or innovation — and all of those frames are true.The message is simple: no purity tests — just shared goals. As Jamie said, “If we could just get over ourselves. I get that you're calling this energy security. I call it renewable and emission-free. We both love it… We should do this.”And right now, there’s a window of opportunity. Demand from data centers and AI is skyrocketing, and the companies behind them care more about speed and scalability than price. That makes geothermal’s unique attributes — 24/7 power, co-location potential — especially valuable.If we move quickly, geothermal can scale up during this inflection point and ride its own learning curve, just like shale did a generation ago. But it will take investment, supply chain support, and a lot of new people entering the space.Jamie’s closing message is one I’ll echo: Geothermal needs you. Whether you’re an engineer, entrepreneur, creative, or just curious — this is the time to get involved.In this conversation we cover:* Why geothermal is uniquely suited to meet demand growth* How bipartisan policy wins are accelerating deployment* The intersection of AI, data centers, and dispatchable clean power* How Texas became a testbed for the next generation of geothermalAs always, please like, share, and leave a five-star review wherever you listen to podcasts. Your support helps bring these critical energy conversations to more people.Timestamps:3:00 - How Jamie came to work on geothermal9:00 - Oil and gas industry connections to geothermal15:00 - Geothermal in Texas22:00 - Working across partisan divides27:00 - Learning curves for geothermal are similar to shale drilling30:30 - Data centers and demand33:30 - National security imperatives for geothermal 38:00 - The cost of geothermal power compared to gas40:30 - The turbine crisis and the entrepreneurial opportunity in turbines43:00 - Geothermal needs YOU! “Jump in and try”Shownotes:Project InnerSpace: Pioneering Geothermal InnovationTexas Geothermal Energy Alliance (TexGEA)* Project Innerspace on Twitter, YouTube, and Linkedin* Jamie Beard on LinkedIn* Jamie’s viral TED Talk: The untapped energy source that could power the planet* Wired’s feature on Jamie: To Save the Planet, Start Digging (Wired) * GeoMap™ Beta Release: Project InnerSpace released this interactive tool to serve as a pivotal resource for geothermal prospecting, providing comprehensive data on geothermal resources. ​Other Podcast Episodes:Drilling for Geothermal Power and Storage with Cindy Taff, Energy Capital Podcast.Catching up with enhanced geothermal. Volts Podcast.The Potential for Geothermal Energy to Meet Growing Data Center Electricity Demand. Rhodium Group.The Future of Geothermal Energy. IEA.Mapping Texas' Geothermal Potential* Geothermal Play Fairway Analysis (GPFA): A Texas/Gulf Coast Case Study: A study conducted in early 2024 applied GPFA methodologies to assess geothermal resources in the Texas Gulf Coast region. The analysis integrates critical risk elements to enhance exploration success rates.* Presidio County Geothermal Assessment: Published in May 2024, this assessment identified substantial undeveloped geothermal resources in Presidio County, highlighting the potential to meet local energy needs and contribute to the broader grid. (presidio)* The Future of Geothermal in Texas Report: A collaborative effort by researchers from five Texas universities, this comprehensive study evaluates the state's geothermal resources, technological developments, and the role of the oil and gas industry in scaling geothermal energy. ​Regulatory Framework and Policy Updates* Senate Bill 786 (2023): This bill amended the Texas Water Code to transfer regulatory authority of closed-loop geothermal injection wells to the Railroad Commission, streamlining the permitting process for geothermal projects. ​* Railroad Commission's Proposed Rules: In October 2024, the Railroad Commission proposed new rules to implement SB 786, outlining operational standards and enforcement measures for geothermal wells. Technological Innovations in Geothermal Energy* Quaise Energy's Deep Drilling Technology: A Houston startup, Quaise Energy, is developing technology to drill deeper into the earth than ever before to access "superhot" rock for geothermal energy, harnessing it without drill bits by using electromagnetic waves to melt or vaporize rock. ​(Houston Chronicle)* Sage Geosystems' Energy Storage Solutions: Led by former Shell VP Cindy Taff, Sage Geosystems is developing innovative methods to produce and store geothermal energy, contributing to a more stable and sustainable electrical grid. ​(AP News)Educational and Collaborative Initiatives* Geothermal Events and Forums: Various events, such as the "Future of Geothermal in Texas" forum held on March 26, 2024, provide platforms for discussing technological breakthroughs and policy solutions in the geothermal sector. ​(Geothermal Rising)Industry Perspectives and Media Coverage* Geothermal Everywhere: An article discussing the vast potential for geothermal energy beneath the entire U.S., with a focus on Texas' unique geothermal resources. (​C3 Solutions)* Geothermal's Breakout Year: An article published on January 2, 2025, discusses how geothermal startups achieved significant funding and project milestones in 2024, driven by increasing demand for carbon-free energy from data centers and industrial sectors. ​Texas Geothermal* Geothermal Energy in Texas: The University of Texas Energy Institute's comprehensive report on the future of geothermal energy in the state, including analyses of resources, technology, and policy recommendations.* Austin Energy's Advanced Geothermal Pilot: Announced on November 14, 2024, Austin Energy partnered with Exceed Energy Inc. to develop a pioneering geothermal project near its Nacogdoches facility. Expected to be operational in 2025, this project could signal a new era of green energy innovation in Texas. ​(Energy News)Transcript:Doug Lewin (00:07.342)Hello and welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. My guest this week is Jamie Beard, the founder and executive director of Project Innerspace, an organization devoted to advancing geothermal technologies. Look, we talk about a lot of different technologies on this podcast, talk a lot about distributed energy resources, nuclear. There is little that I'm more bullish on than geothermal particularly in Texas, because it leverages the skills of the oil and gas industry. You're going to hear all about that in this podcast. And let me just say about Jamie, she's got an amazing bio. We're going to link to that. You can read about it. There was an amazing article Wired did on her, a feature. She's given a TED Talk that is one of the most watched of any energy talk on TED Talks ever. You can learn a lot about her from the show notes, but let me just say this about her there are are a lot of people that know a lot about the technical aspects of geothermal. There are a lot of people that are very networked within both the oil and gas space and the renewable space, policy space, et cetera. I don't think there's anybody that has those two things sort of in the quantities and qualities that she does. TXGea being the Texas combination of technical expertise and really understanding how these different geothermal technologies work, as well as the sort of social capital she has of kind of knowing everybody in the geothermal space.Jamie is absolutely amazing an inspiration and this conversation was so much fun to record. We did it live on the sidelines of South by Southwest in downtown Austin in mid March. At Geothermal House was what Project Innerspace called it. It was a great conversation. I'm looking forward to listening to it again once we put it out there. I learned so much from Jamie. I hope you enjoy it. This is a free episode, but it is not free to produce.We have both the Texas Energy and Power newsletter and paid episodes of Energy Capital podcast that are available to you if you subscribe at douglouin.com, D-O-U-G-L-E-W-I-N.com. We are also really putting a focus on our YouTube channel where you can see the video for this if you're listening to it right now. You can see the video at our YouTube channel, so go find that as well. Thank you so much for listening and thanks for your support.Doug Lewin (02:27.042)I've been looking forward to this for a while. We've been talking about doing this for a while. Jamie, having kind of a fanboy moment because you are like, there is so much happening in geothermal and as much as anybody, I know it's you're going to say, and it's true, it takes a village and there's thousands of people involved, but as much as any one person is responsible, you are, you have been incredible. Can we just start, just tell people a little bit about yourself and about Project Innerspace and what is going on here at South By what you did last week in DC which are about to do it CERAWeek?Jamie Beard (04:23.342)Yes, yes. That's a lot. Let me break it down. How did I get into geothermal? Back in the day, in the early 2000s, I was actually, well, even before that, I was a energy and regulatory attorney at a big law firm. And I was an environmental activist and a climate activist. And I was certain that if I joined a law firm, I would be able tochanged the world from the inside out and that was a very wrong assumption. I was defending the worst behaviors and not getting what I wanted to get done in the world. So I moved into entrepreneurship and joined a startup company that was working in the energy space and this was early 2000s. So this was like early shale boom. This was boom times in oil and gas.You know, as a climate activist, I hated oil and gas back then. I mean, it was a visceral reaction for me in oil and gas. I just assumed there would never be a place for me to collaborate at all with industry. And in fact, the opposite, that I was going to work to bring the industry down with my professional career. then in our startup, we started having some really interestinghigh temperature results in our technology. We were doing an energy storage technology and we started to sell that technology into defense space and oil and gas. And so all of a sudden I found myself deploying prototypes on rigs in oil and gas. And I was forced through osmosis meeting people and talking to people in industry who were by the way in the middle of the shale boom.I mean, so they were doing amazing s**t. Like they were going out, doing something, maybe it didn't turn out perfectly in the field that day. So they would get together in their trailer that night and like, what do we do different? How do we try it differently? What should we change? And then they'd go out and do it again and like hit it out of the park. And they were doing this every day.I don't think people appreciate how innovative the oil and gas industry has been over the lastRight? so for me, all of a sudden oil and gas changed from this monolith evil I want to bring them down to holy s**t. These people are amazing and fast and there's serious grit and there's a ton of technological talent and innovation and iteration. And wow, what an asset. They're getting s**t done about the same time. And a lot of people in this room were inspired by this report as well.And they're getting s**t done.Jamie Beard (05:46.958)this report called the Future of Geothermal Energy came out. was an MIT, an MIT publication. And that report was like, wow, so geothermal is this thing. It's this huge resource. It's thousands of times everything we'd ever need. But there's these pesky engineering and technological challenges. And they're mostly about drilling in the subsurface. And man, how are we going to solve those? And for me, it was just like, You know, it was just this moment where it was like, well, that's oil and gas. I just saw it. So that's how I, know, and you know, I spent some years saying, God, somebody should do this. Somebody should go do geothermal. We should get geothermal going. And finally, I just decided, if no, I'll just do it. So we'll start some s**t. Let's go start some s**t.So you did this TED Talk that really kind of went viral, just a ton of views called TXGea being the Texas Untapped Energy Source That Could Power the Planet. I encourage folks to go watch it. on YouTube in 15 minutes and it's fantastic. After this podcast, go watch it. I want to ask you a question about that. What do you think, looking back, because it was almost four years ago, what did you most get right and what if you were going to do that again? What might you change about what you said during that attainment?And just some background for you all, David Biello, RNC, was my curator for my talk. So that's how we know each other. And he really ran me through the ringers on my script.I've probably watched it four or five times because I've done a few podcasts in geothermal and I go back and like refresh my it's really fantastic.Jamie Beard (07:20.034)Well, thank you. That's awesome. I think so one thing that I underestimated back then that's still, it's probably gonna be more of a thing now in the Trump administration as geothermal becomes kind of a Republican charge increasingly, which I don't think is bad. But back in the geothermal, back in the Ted Talk days, I underestimated how hard a conversationThis was for a far left room, a very liberal audience, particularly the argument that oil and gas could save the day for geothermal. I went through this personal journey over many years of seeing oil and gas and learning the value of oil and gas and realizing there was this awesome potential. And I underestimated that most people in the world who are thinking about climate and energy and tend left probably haven't been on that journey. And they wouldn't have instantly the perspective that this was gonna be awesome. So like the Ted Talk, the room was very cold. Like so you can't see it in the video, but the audience was very cold, particularly when I got to the part where like, how are we gonna do this? Well, it's gonna be Exxon got, you know, that was a hard sell and it's still a hard sell.And I think now that you know we had Secretary Wright at MAGMA, you mentioned MAGMA, that was amazing. You've got the Trump Administration coming out for geothermal. That was awesome, that is awesoe that will probably be awesome for geothermal. At the same time. At the same time there is the risk of tipping geothermal into a massive amount of polarization and drama and there is a risk there.Doug Lewin (09:35.854)I want to talk more about the oil and gas connection here because I think it is so important to talk about. one of the folks you had speaking here earlier today, I recorded a podcast with Cindy Taft of Sage Geosystem. She was 35 years in Shell. I interviewed for a previous podcast. did Tim Latimer with Fervo, former oil and gas person. And I think that there is really something here because you have these two things happening at once. Well, there's a lot of things happening at once, but let's consider these two. A lot of automation happening in the oil and gas space and less jobs per barrel produced. I mean, like significantly less jobs needed per barrel produced. As a matter of fact, compared to 2014 to today, oil and gas jobs in Texas according to the Federal Reserve of Dallas, about 300,000 10 years ago, about 200,000 now there's an energy expansion and transition happening. Transitions can be kind of painful to existing workforce. And here you have this renewable emission-free power source, not just power source, but heating and cooling as was talked about a lot today. we'll talk about that as we go through this as well, that involves drilling and skill sets related to drilling. So I'm a big fan of this concept in life of pivot, right? It's like, if you think of basketball, the player keeps one foot where they are and one foot kind of moves around. Isn't that what's happening here? Can you talk more about the oil and gas industry and what it means for geothermal and what geothermal might mean for the oil and gas industry?Jamie Beard (10:02.034)Yeah, I mean pivot is a great word and we actually had a conference for oil and gas called pivot that many folks like kind of that was their entry into geothermal from oil and gas. And I think the word pivot is great because it's faster than a transition. I don't know if you all know Bob Metcalfe, he coined that term years ago about geothermal. Pivots are easy for oil and gas. And if you think about it for geothermal, we've heard it on all the panels today, there's so much skill set overlap, 80, 90 % skill set overlap across industry. So there's really not a whole lot that you need to do to do geothermal. You can do oil and gas, you can do geothermal, minimal training changes, minimal effort to make that switch. If you look at trying to switch oil and gas from oil and gas into solar, you run into.Doug Lewin (11:38.296)That's not a pivotJamie Beard (11:40.034)That's like a completely different. Something completely different, right? I think the avalanche that we're seeing in all of this infusion of oil and gas brains into the space is because it's so easy to transition their skill set and they're doing it en masse right? So it's like the barrier for entry is so low. There's so much overlap that they realize in engaging a little bit in sessions like this and they're like, wow, no, I can contribute to this conversation right now.with what I know and I might be able to make a difference. And so along that vein, we need to flood the space with more of that, right? So geothermal right now in my view suffers a little bit from not enough innovation, not enough growth mindset, not too much incremental thinking and not enough exponential thinking. And a lot of that type of brain power is coming out of entrepreneurs that are jumping out of oil and gas and seeing these massive 100X opportunities. So like we need more of that, 100X more. So there are awesome startups out there, let's do that 100X. There's awesome Cindy Tafts and Tim Latimer's, let's do that 100, 1000X. And the more brains and the more ideas and the more energy we infuse into geothermal, the more growth mindset, I think the faster we go, the bigger we are, the way, you know, it's the way to put geothermal on the map.Doug Lewin (13:12.054)Yeah, you said, I think it was in the TED Talk, I wrote down a quote, I think it was from there, where you said, if you want to turn the ship, recruit the sailors, right? In the energy world, the sailors are people in oil and gas space. It's where the money is, it's where the technical expertise is. I also, my company, I named my company Stoic Energy, because I'm a big fan of the Stoics, and Ryan Holiday and his books, and he wrote a book called The Obstacle is the Way, right? What stands in the way to progress is the way to progress. This is like a real tangible, example of that. can fight the oil and gas industry all day long, or you can figure out ways to actually work together, which is what you're doing.Yeah, and I think it's important also to note that oil and gas is not a monolith. So in the us and them mentality of the world where everybody's polarized and there's the pure and the good and the evil and the villains, and often oil and gas, unless you're in Texas, oil and gas gets thrown into the villain pile, I think we need to pause and say, wait a minute, we're talking about an industry that's made up of literally millions of individuals globally.And those individuals are truly individual, right? So within oil and gas, you have an enormous amount, a huge amount of disciplines and cultures and viewpoints and politics. And so, you know, it's hard once you start meeting people in oil and gas to start to say you're a bad, you're evil because you're, know, and so it, for me,It was about engaging with the people and then realizing, wow, these folks wanna be champions within their industry. They want to help the industry into new things and into pivots. And so many of the oil and gas entities that are engaging in the geothermal space now are doing that because of internal champions, like really bad-ass oil and gas employees that were like, we want to help do this. I'm gonna start organizing luncheons.Jamie Beard (15:11.31)And then we're gonna start having group sessions and then they'd move it up the chain and then they'd pitch it to their C suites. And then all of a sudden we have $100 million investments and Ken Wisian mentioned some of them have departments now. That's absolutely right. That's all happened in the last three, four years. And it's because of internal champions in these entities. That's awesome.It really is awesome. Keep it going. It's one of the reasons I love working in Texas because you do get this. If you're in the energy space in Texas, you're working with people in renewables, you're working with people in oil and gas, you're working with people in energy efficiency. It's all happening here. Let's talk a little bit about Texas because there is a lot happening on geothermal in Texas. Where are you seeing geothermal?We mentioned, I just mentioned earlier a couple of the companies that are headquartered in Houston, but there's also some projects on the ground that are getting going. Talk about Texas and its sort of role in the geothermal space and ecosystem.So, you know, back in the day when we started rabble rousing in Texas a little bit, it was really about it being the epicenter of the oil and gas industry. So if you've got the entities and the people here, we can get something started. Since then, though, with some of the mapping that's been done, the Geomap project and others, we've come to realize that Texas is actually massively resourced as well for geothermal and not just along the Gulf Coast, which was previously understood, but like massively resourced across the state for things like data centers and that's that's kind of the rhodium report.Doug Lewin (16:45.538)Can you talk about that? Because I'm still under the impression that it's kind of more of that like Eagleford kind of bend along the coast where the best, that's still the best resource. Okay, so you've actually found through research over the last year or two that the resource is better than we understood before in Texas?Jamie Beard (17:04.876)Yeah, and broader in more parts of the state. And I think what that means is that because Texas is a friendly regulatory environment, it's used to drilling, the culture is drilling, oil and gas is here, it's easy to permit projects. And we heard that from, in our past panels, including Representative Darby's comments, there's a lot legislatively that's been happening in Texas. And it is, let's be clear, legislatively, Texas has absolutely hit it out of the park.It is by far the fastest and most aggressive geothermal legislation that has been passed in any state. And let's be clear, they did it in a year, start to finish, right? So, TXGea gets off the ground, builds a legislative agenda, and gets it passed and signed by the governor within 18 months.TXGea being the Texas Geothermal Energy Alliance. But I want folks on the podcast to know so they can go find a great organization. Matt Welch, Barry Smitherman, Jade, yeah, they're doing great work.Yeah, and so if you look at that and you look at that track record and you've yes, pilot projects, yes, the geothermal startups are, this is literally the epicenter of most startups. So there are more startups in Texas than the rest of the states combined. This is becoming an epicenter of innovation as well and that's largely because the entrepreneurs are coming out of industry. They're already here and they just set up shop in Houston.So if you look at it, Texas is this kind of epicenter that I think we need to make a model for other states, really easily other oil and gas states, right? Because there's similar regulatory environments, similar cultural acceptances of drilling, but really all states. How do we make geothermal easier to produce? How do we go fast, you know, et cetera? So Texas is kind of the place to be for geothermal right now, but let's not keep it there. Like this is like where do we go next?Doug Lewin (20:13.538)What starts here changes the world. Isn't that what the university down the street says? Yeah. Yeah. So I also want to kind of go a little deeper into the kind of the polarization and the kind of overcoming of polarization. We've talked some about the oil and gas industry and getting involved. And you mentioned earlier you had Secretary Wright at your event. You've talked about how the left may be a little apprehensive about geothermal. But it does seem to me like that's you, too.This is a technology that can be a place, kind of a water's edge, where people kind of come together. Can you talk about the support you've seen in DC from both Republicans and Democrats? I mean I so, you know, in Texas right now, as we're recording here on what is today, March 11th, there are bills at the legislature that seemed very designed to hurt renewable energy, particularly wind and solar. My fervent hope is that both in Austin and in Washington DC, legislators will focus on what they want more of, right? If you want dispatchability ability, if you want flexibility, if you want base load power, like do the things you need to do to get more of that rather than punching down at certain energy resources. And I think there's hope that that could happen. It's gonna take building a lot of consensus, talking to people across divides on things like nuclear power, energy efficiency. And again, I think geothermal is one of those that because it's emission free kind of appeals to a lot of folks on the left and Democrats, not that they're the only ones that care about emission free, there are others, of course. And on the right, because it is using a lot of the oil and gas technology. And again, not to stereotype, there are people on the right who care deeply about emissions too, but that's the way people can kind of get together, have conversations across divides and hopefully build some consensus. Do you see that happening with geothermal?Jamie Beard (21:17.312)No, this is a good question. So, and we've actually seen this in throwing these events. The two different groups of people, left and right, use very different sets of terminology to describe why they love geothermal.And so the challenge we have in events like this is you have to pick a terminology to use in a single event and use it. Like you gotta make signs and stuff. And so when you have a, and like you said, on the right, at MAGMA in DC, it was aimed at the right because we need to get the right up to speed about what geothermal is, because it's showing up in executive orders. And it's catching people off guard. They don't know what it is, right?If we lean right, but we adopted terminology for that, which was all about oil and gas workforce, it was about energy security, it was about dominance, it was about abundance, it was about drill baby drill. We're gonna go to San Francisco and do San Francisco Climate Week in a month. And I guarantee you, none of those terms are gonna show up in any signs because they don't speak to that demographic, right? But what does is climate change. climate mitigation, energy transition, right? But they're all the same thing. I mean, so the thing is, if we could just get over ourselves and realize that like, look, I get that you're calling this energy security, I call it renewable and emission free. We both love it, holy s**t, we should do this, right? But here's the problem. It's the purity test, right? So. Yes so you mentioned like, with the Trump administration, it looks like maybe there's gonna be some punching down on renewables, solar and wind may suffer, et cetera. You're right. There's a reality with the Trump administration that some winners and some losers, this is gonna happen. And when you approach that with a purity test like I have to agree with every single thing that administration does and says in order to get behind geothermal and get behind the administration's support of geothermal. It's just not gonna happen, right? So the way we thread the needle is where can we agree? Like is there a path, like purity test aside, I don't care what you think about social issues, I don't care what you think, whatever. Geothermal, what do you think? And if we can just do that as humans we might be able to fix our s**t, right? But the purity tests, it's really hard, right? And there were, you know, there was even pushback on magma from the left because it was called magma. Now y'all, I think it was, I think it's really fricking funny that we call it, we made the red hats and all that stuff. And at MAGMA there was an audience full of MAGMA hats listening to Chris Wright talk about geothermal. That was awesome but there was pushback like, no, that sounds like MAGA, you're clearly playing off this thing that we hate. We need to get over ourselves. And if we can't get over ourselves, we're not gonna make progress.I actually think if I can get, you know, even higher level here for a minute, like beyond energy, our whole democracy depends on our ability to do exactly what you're saying, right? It's just like you were saying with oil and gas where there's too much sometimes a caricature of who is in oil and gas. And when you actually talk to people in oil and gas they're a lot more complicated and complex than you thought they were. Doug Lewin (23:17.312)Right. And so one of my favorite podcasts I ever recorded was with David Spence. He wrote this book called Climate of Contempt about how like we're not going to be able to deal with climate change unless we can talk across divides. And I struggle with this too, because a lot of times I'm like, what do mean you don't believe in climate change? Like it's of course it's happening. It's science. But like you said, you have to sometimes get over yourself in order…Jamie Beard (24:55.822)Does it matter that you, does it matter if we're gonna work together and we both like geothermal, does it matter what you think about climate change? No.Doug Lewin (25:02.452)No, no, and, and if I say that it does and I just shut down having a conversation, then there's no chance of us understanding each other and both of us changing. He actually, David Spence in his book, Climate of Contempt has this quote from Ted Lasso that is be curious, not judgmental. And I just love that. That's like a great way to enter these conversations in order to try to get over some of these divides. So I really appreciate what you're doing. And I, and I think what you're describing as some of the things that are happening internal to those companies, those things don't happen, right? Unless the initial conversation happens and somebody sees, this isn't a threat. Maybe this is an opportunity. And just think about how you react differently if there's a threat in front of you versus an opportunity in front. Jamie Beard (26:01.388)Right. And look, there and right now we're in this environment of agitation politically where everybody's scared and nobody really knows what's going on. And there's there's all of this angst and the angst is starting to come out with statements about geothermal like, well, you know, because the Trump administration looks like they're going to support it, maybe we should be really concerned. Maybe we should be skeptical. And these are entities that in the Biden administration had been really excited. And I think when you start mixing visceral emotional reaction about politics generally with a concept like geothermal, we lose, right? Yeah, for sure. So, I mean, we just, need to find a way to narrow path, agree, no purity tests, agree on this one thing and go. And if we did that for geothermal over the next two, four years we could run really fricking fast.Doug Lewin (27:39.452)Yes, we could. And look, and I understand the concerns that a lot of folks, including Secretary Wright, have over intermittency of renewables. So again, if you want to deal with that, develop these other sources. So it does look like DOE is going to put some significant support behind geothermal. That's really exciting. I want to ask you about learning curves, because this is obviously a big thing in everything going on with energy transition and energy expansion, right? We have seen a huge drop in the cost of solar, 90 % and a huge drop in the cost of batteries, again, 90%. I don't even think this story has gotten enough play yet, but batteries in 2024, 20 % price reduction just in 2024. This is the big question around nuclear. Can small modular reactors actually have a learning curve? Because nuclear has not had a learning curve. It's gone up.What do learning curves look like on geothermal? Where are we at as far as cost? And how does that compare to other resources? And are we starting to see declines? Are they rapid? Are they incremental?Jamie Beard (28:29.388)Yeah, so the oil and gas entrepreneurs that get into the field and do geothermal stuff, Tim and Fervo is one example, Cindy in Sage is another, within a well or two are seeing massive reductions in cost, 50 % cost reductions, et cetera, right? All of this though is expected because remember, geothermal has not benefited before this kind of rush of innovation and technological innovation from the oil and gas industry.Geothermal had not benefited from new or even recent drilling technologies. I mean, the industry was drilling decades behind oil and gas in terms of capabilities.Doug Lewin (29:29.329)And because of a lack of investment or lack of people or all the above?Jamie Beard (30:17.138)That's actually a complicated question. is a squeeze in capital in geothermal. Geothermal is massively undercapitalized. Undercapitalization does not help when you're trying to innovate. So you actually get risk adverse when you're undercapitalized. So you cannot fail. Therefore, you should not try anything that might fail. So that crushes innovation.And when you're dealing with innovating drill bits that are going miles below into high temperature, have to, like you're gonna fail sometimes.And when you fail with drilling, it's often expensive failure. So the industry has not been incentivized to try new big bold things. And because of that, there's not been a whole lot of technological progress in terms of trying new things, bigger, bolder, faster, deeper and cheaper. But we're starting to see that now in the startups. And I think, when I mentioned the shale boom in my open, I mean that as the analogy. I mean it in a lot of different ways. Cost scale industry are iterating very fast in the field to make changes to drive costs down and doing it really fast. like zero to six, 10 year span going from zero to world changing geopolitics completely scrambled, right? Geothermal's right there in that early curve. And I think that's really, it's something that we need to remember. Like we've done, this is not impossible. We've done it before.It's shale. We've got the model and we know the curves of shale. Let's do it again because it's the same technology but for a different purpose.Doug Lewin (31:49.148)Yeah, and those curves for the shale boom were awesome. Yes, yes. All right. So we cannot have any conversation about energy going more than what have we been about 30 minutes without bringing up data centers. Data centers have changed the whole conversation in the energy landscape to demand projections now, particularly, by the way, within ERCOT, even where I've seen independent analyses where they kind of take a haircut to all of the demand projections that the regional transmission operators and independent system operators are putting out themselves. still looking at eight, nine percent annual growth rates. That is so some people will say that's unprecedented. It's not unprecedented. We experienced that in the 50s and 60s when we were just still like electrifying homes period and adding air conditioning in the state of Texas. So that is the kind of growth rate we're talking about.You also have, obviously, customers with large balance sheets that desperately need power. And you guys have just put out a report today that geothermal can meet a very large portion of the data center demand. So can you talk a little bit about the, the report you all put out, and the sort of accelerant that this data center demand might be for this nascent industry?Jamies Beard (32:17.138)Yeah, for sure. So that report was really cool in that it put a number on an opportunity. And the number is, look, two thirds of data center demand growth could be economically serviced by geothermal and 100 % could be serviced hard stops, meaning it'd be more expensive to do it, but we could do it. And here's the thing about data centers right now. Economics don't really matter. So like that makes this report even cooler because we could do two thirds economically, but data center developers and the Open AIs of the world don't give a s**t how much it costs right now. They just want it done. And that makes it a perfect pivotal opportunity for geothermal to jump in and get on the learning curve in an environment where cost is not the driver, speed and scale is. And again, like back that up with the oil and gas industry, you know speed and scale, speed and scale.They're going to do the natural gas developments for data centers anyway. Let's slip geothermal in here. Let's do some co-production. Let's build hybrid systems. Let's get geothermal cooling in. Let's do the 50 % efficiency reductions with geothermal cooling. Like now is the moment over the next five years to get all of the different ways geothermal can apply to data centers done in pilot projects. And then it's just a matter of scaling. I think that here's the quiet part on the data center thing. Yes, demand growth, yes, that's scary, potentially unprecedented. Yes, it's probably gonna be a big piece of the US grid in almost no time. And yes, that's interesting. But there is a really potentially more interesting kind of national security angle to data center development and AI growth that many of the tech majors, it's actually driving their decisions about growth and building data centers. And really what this is is geopolitical. This is about war and this is about competition with China and this is about being afraid that rogue actors will be the first to achieve AGI, artificial general intelligence or super intelligence.And if that were to occur, essentially apocalypse now, the world ends, it's scary. And there's an amazing paper called Situational Awareness. If you want some very disturbing bedtime reading, that's a good one to read. It's one of those things that you read it and you realize how far ahead of the curve China is on investment in almost every way in geothermal and AI and also in building out energy capabilities, right? So when you look at this from a US perspective and know, Innerspace is global and we don't take nationalistic positions, but if you're a US hyperscaler and you are paying attention to these national security implications and this race to AGI and super intelligence for AI this is driving a lot of the urgency, right? It's competition with other actors and achieving this. And how do you power that growth? Well, you gotta get it from somewhere really fricking fast. And that's what's kind of contributing to this price insensitivity. It's like, we don't just how fast can you build it? We'll pay it.Doug Lewin (35:01.76)Yeah, I mean, this is another place where I think Republican, Democrat, anything in between or to the side of that, if you're an American, you have an interest in making sure that we have enough power to meet these data center loads, that there is AI development in this country. There is a race going on. And that should be another kind of a water's edge kind of a space, I think. You said a minute ago, China is developing as China, did you say it? Maybe I misheard you. Is China ahead of us in geothermal?Jamies Beard (35:49.76)Yeah, in terms of investment massively ahead.Doug Lewin (36:01.76)In terms of investment… but they don't have, there's not shale formations?Jamies Beard (36:17.24)China has drilled the deepest geothermal well in the world now. mean, it's a government research program. But the important part about China is this, when China decides they wanna do something and own something, they just do it. And about five or so...Doug Lewin (36:28.19)Is it Sinopec or like who's? I mean, it all is government. There's not a lot of hearings and buy-in and all that. It's just like somebody decides.Jamies Beard (37:13.24)And there's no protests and slowness and what, right? You just go. And about five or so years ago, China decided to dump a billion dollars into geothermal. And so like, if you look at US investment, I mean add up all investment and startups plus government investment, we need to hurry up, right? Because that, it's a pole position. China's learning a lot of stuff and they're on the bleeding edge of, and again, there's not a whole lot of information sharing about these research programs. So we don't entirely know, but we do know that there's investment in a race. And so like from my perspective, that's awesome. Like drill the deepest well, how did that turn out, right? But again, if you're looking at it from a US national security perspective, who's gonna own, I mean, taking on the Trump administration talking points of energy dominance and AI.If you look at it from that perspective, we are in a race and have to hurry up.And it just seems like one of those areas where we should have every advantage because of what you were talking about. We have industry. this should be a race that we win. Doug Lewin (38:00.206)I do want to come back to a minute to the I don't think I followed up properly on the question around like learning curves and all that. Like where are we right now if you're to line up? Like we are seeing very large numbers for just gas turbines for combined cycle plants. We're seeing now IRPs around the country, prices that are in the $2,200 a kilowatt, $2,400, $2,500 a kilowatt kind of a range. And to put that in perspective, like just a couple of years ago, we were looking at like $1,000. So we've just seen this way beyond any sort of inflation kind of a trajectory. Those are really high numbers. Like how far away are we from actually like crossing this? I know you can't say.Like, because there's so many different companies, different technologies, and it's a little opaque because people don't always say, but like, are we in a $3,000 $4,000, $5,000? Like, how far off are we for geothermal, for KW? How far away are we to where like the lines might actually cross?Jamie Beard (39:02.136)Yeah, so this is another thing and one day, Tag, try to nail a geothermal startup down on what they've signed on their PPAs. Most of this is not publicly available, But the best I can guess is they probably signed at $100 per megawatt hour for these.Doug Lewin (39:07.206)That's what Jigar Shah now says, it's like everything's $100 a megawatt hour, everybody needs to their head around.Jamie Beard (39:08.136)It's a fair guess yeah, but I don't know for sure like get him Tim or Cindy to tell you okay But but like that but I think there's a consensus amongst startups that are doing bold things in the field that they can get it down aggressively so like within a short number of years and a couple of wells down to 80 and then potentially 60. And you start over a five year period taking huge chunks out, right? As you iterate in the field. But again, like this is Jamie guessing. I think Cindy actually, y'all might be able to back me up. Cindy actually may have said 80 and 60 on her panel today.Doug Lewin (40:02.139)Yeah, and of course you can't forget that there's not the cost of gas, right? Which now is up over four bucks, which is kind of shocking. One more question before we kind of move to close here. There is, as I was just talking about, the capital cost of turbines has really kind of gone through the roof. There's Heatmap News called the gas turbine crisis. Geothermal needs turbines too so this is a problem in the geothermal space I take it.Jamies Beard (41:01.206)Yeah, so the trend has been forward-looking entities in the space have locked up the so so geothermal uses different types of turbine technologies a little bit different than natural gas and there's very few suppliers of those technologies and you know forward-looking entities over the last few years have actually moved to to lock in those supplies in case they have rights of first refusal and things on supplies. And what we're looking at in terms of a geothermal boom is the potential of actually hitting a ceiling because we can't build the surface equipment because there's no supply chain and there is no supply. And so, you know, I look again at this administration that's really all about breaking rules and doing really big, bold things that have never been done before.I mean, you can look at that catastrophically and a lot of people are feeling that way. I look at it and think, well, hell, then let's go ahead and, you know, Defense Production Act, turbo machinery and surface equipment. Like that may have never been done before at a time that we're not in war, but maybe we try that now because we already know that there's a shortage. And if we keep going over the next few years, there's going to be a massive shortage and we're going to hit a ceiling.So there's some opportunity to do some pretty big, bold things on behalf of executive order style fast moves. And the turbo machinery and surface equipment piece of geothermal is going to be a pain point. It's a pain point for natural gas for sure. Geothermal is probably worse because there's even fewer suppliers that have locked up the chains.Doug Lewin (41:19.495)I am also hearing there's big opportunity there. Obviously, there's a really steep capital cost and all of that to actually be able to manufacture rank and cycle engines. if somebody can get it together, there's a huge opportunity.Jamies Beard (41:39.495)God, like if you're an entrepreneur looking for a way to get into geothermal turbine machinist surface equipment, figure out how to make turbines work better, so more efficiently. I mean, there's so much, everybody's focused on the subsurface piece and nobody is paying attention to the surface. The surface is where all the entrepreneurship needs to happen now.Doug Lewin (41:19.495)VCs and investors that are listening pay attention to that as well. Jamie, I can't thank you enough for doing this, not only the podcast, but the event you're doing here in Austin, the one you're about to do in Houston, the one you did in DC for bringing people together and having these important conversations, supporting this industry, bringing people together, really like making it happen. We'll put a link in the show notes to your TED Talk, to the Wired piece about you. I hope everybody.Jamie Beard (42:35.719)People look into being entrepreneurs in this field.Doug Lewin (42:59.758)Anyone who knows who Jamie is and knows what Project Innerspace is, just a fantastic organization. I want to ask you though, before we close with anything that I didn't ask you that I should have, anything else you'd like to add before we end?Jamies Beard (43:01.495)I always want to make a pitch in every, whenever there's any demographic we can reach, I always want to make a pitch, a closing pitch to people who are looking for something new, entrepreneurs or people in oil and gas, anybody. And we're at South South by Southwest, so it's creatives and artists and filmmakers and everybody in between musicians. Geothermal needs you. There needs to be new talent, new brains, new energy, big thinking into the space.So if you're excited about anything you've heard today at Geothermal House or anything, jump in and try. I mean, this is blue sky territory, it's frontier land, there's massive opportunities and geothermal needs, a lot of excited, interesting, interested people. Doug Lewin (42:48.438)Jamie, where do they go if they want to learn more? Where would you direct people? Obviously, Project Innerspace's website, we'll put a link to that in the show notes. Where else should people go?Jamie Beard (43:39.395)Yeah, I think, you know, there's a lot of startups right now that are hiring. So like you should Google, you should Google geothermal startups and look at their look at their their personnel pages. I mean, there are there are startups out there that have 20, 30 openings right now on their teams. So if you're looking to jump into a to a startup, geothermal is hiring. If you're looking for more of the nonprofit space, Project Innerspace is hiring. So yeah, I mean, figure out what, if you want to start a company, ping us and we can give you some advice in the space. But there's room everywhere in geothermal for all types of people. So if you've got the interest, give it a shot.Doug Lewin (44:19.495)You're an amazing resource and inspiration. Let's all give a round of applause for Jamie.Thanks, y'all.Thank you for listening to the Energy Capital Podcast. I hope you enjoyed the episode. If you did, please like, rate and review wherever you listen to your podcasts. Until next time, have a great day. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

For this episode, I talked with former North Carolina Representative and CEO of the Conservative Energy Network John Szoka. John’s a veteran, a conservative Republican, and businessman. He’s committed to clean energy not despite his conservative principles, but because of them.John is focused on helping policymakers and business leaders understand the economic and national security benefits of clean energy. John talks about renewable energy, batteries, and distributed energy resources in terms of competition, innovation, affordability, security, and local empowerment.We talked about how the United States needs to learn to build again. One major obstacle we kept coming back to was permitting reform. While often overlooked, it’s one of the biggest barriers to building the energy infrastructure we need. Even when there’s alignment on transmission planning and market coordination, projects still get stuck in years-long approval processes. Szoka makes a compelling case that these delays hurt both the economy and the environment—and that streamlining permitting can, and should, be a bipartisan priority.Szoka also shared his perspective on how the U.S. can lead globally by accelerating the deployment of advanced technologies—like next-generation nuclear and high-voltage transmission—while supporting domestic manufacturing and workforce development. It’s a vision grounded in John’s conservative values, aimed at national competitiveness and long-term reliability.We also touched on the Inflation Reduction Act, the growing demand from data centers, and how America can maintain and extend its energy leadership while bolstering its commitment to resilience and innovation. John brings a clear-eyed view of what it means to balance innovation with practicality and how conservative leadership can play a key role in making the energy transition work.At a time when energy debates often get stuck in zero-sum framing, this conversation is a reminder that clean, reliable, and affordable energy isn’t a partisan goal—it’s a national one. We need more people like John: grounded in experience, open to evidence, and focused on what works.As always, thank you for listening, and please share the episode and/or leave us a 5-star review wherever you listen to podcasts. Thank you!Timestamps* 00:00 – Introduction* 02:54 – Szoka’s energy journey * 07:10 – Conservative principles and energy policy* 09:08 – Senate Bill 819 & private property rights* 17:57 – Fighting misinformation in energy policy* 24:07 – Texas vs. other states* 27:30 – All-of-the-above strategy: gas, nuclear, geothermal* 30:45 – Transmission as a national priority * 31:39 - Are we still a nation of builders?* 37:16 – The demand side and energy efficiency* 42:04 – Energy policy & national security overlap* 45:15 – Microgrids & resilience for military bases* 48:35 – Texas’ unique energy landscape* 50:29 – Bipartisanship in action: North Carolina House Bill 951* 57:16 – The Inflation Reduction Act (IRA): a conservative take* 1:03:25 – Final thoughtsShownotesGuest Background* John Szoka – LinkedIn* CEO of Conservative Energy Network * Conservative Texans for Energy Innovation* NC General Assembly - Bills introduced as a Representative Key Legislation & Governance Structures* House Bill 951 (NC): Passed in 2021, this bipartisan legislation required Duke Energy to reduce carbon emissions 70% by 2030 and reach net-zero by 2050. Read the full text of HB 951.Military’s Role in Energy Innovation* Military Microgrids. Microgrid Knowledge.* Joint Base San Antonio: Assuring Energy Security at the Largest Base Organization in the Department of Defense. Ameresco.* U.S. Army Improves Resilience at Fort Cavazos with New Microgrid. Microgrid Knowledge.* Fort Bragg (now Fort Liberty) was cited by Szoka as a leader in adopting energy efficiency and microgrid solutions. Read more about Fort Liberty’s Energy Security Initiatives.* Army’s Net Zero InitiativeBooks and Reports* SUN SHIELD: How Clean Tech & America’s Energy Expansion Can Stop Chinese Cyber Threats. Carnegie Mellon Institute for Strategy & Technology* Superpower: One Man's Quest to Transform American Energy by Russell Gold* Climate of Contempt: How to Rescue the U.S. Energy Transition from Voter Partisanship by David Spence * Podcast: How to Overcome Ideological Divides and the Climate of ContemptTranscriptDoug Lewin (00:00.0)Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. Today, I'm joined by someone who brings both deep policy and political experience to the energy conversation, the CEO of the conservative energy network, John Soka. He's a rare voice in today's political landscape, committed to clean energy, not in spite of his conservative principles and values, but because of them. John served 10 years in the North Carolina House of Representatives, Doug Lewin (00:35.726)In many different leadership positions, including as the House Republican Conference Leader, Chairman of the Energy and Public Utilities Committee, Chairman of the Joint Legislative Commission on Energy Policy, he sponsored a number of major bills that passed and became law to take advantage of low cost clean energy and help rate payers. John is also a veteran, graduated from the United States Military Academy, served for 20 years, and after he retired as a Lieutenant Colonel from Fort Doug Lewin (01:03.234)Bragg, he has owned several businesses, including a manufacturing business, has two US patents. I would be remiss if I didn't say he earned his master's degree from the University of Texas at Austin, Hook'em. John is now leading the conservative energy network, which is active in 25 states, including Texas, operating as the conservative Texans for energy innovation. They see firsthand what happens when bills like Senate Bill 819, which I've been covering a lot at the Texas Energy and Power Newsletter, Doug Lewin (01:32.472)get enacted in other states. What happens when the heavy hand of government starts to regulate private property rights, limit the ability of rural landowners and communities to earn revenues from renewable energy and battery storage? We talked about all those things. We talked also critically about how the ability to build things in the United States. John called us a nation of builders, has kind of gotten away from us a little bit recently in the United States and how we need to get it back. Doug Lewin (02:00.504)We need to build new generating sources, new transmission, and much, much more. We talked about what it looks like when Republicans take the lead on clean energy. What's the conservative vision for an energy future that includes renewables, batteries, energy efficiency, gas, nuclear, a true all of the above vision? This is a timely conversation with everything happening in the United States. We talked about the Inflation Reduction Act and what to expect out of Congress. We talked about what's happening in Texas right now. Doug Lewin (02:30.146)Very timely conversation. hope you enjoy it. And as always, please like, rate, and review the Energy Capital Podcast. Please send a note to friends and colleagues to listen to the Energy Capital Podcast. Your word of mouth is really making a difference. This podcast is really catching on and your support is absolutely vital for that. Thank you for listening and I hope you enjoy the show. John Soka, welcome to the Energy Capital Podcast. John Szoka (02:52.558)Well, thanks for having me. Doug Lewin (02:54.478)It's great to be talking with you today. I've been looking forward to this. Obviously CEO of conservative energy network. I have so many questions for you, John, but let's, let's just go ahead and start with just a brief bit of your background to start the conversation. I want to start with your, your time in the North Carolina legislature. You were an elected official, obviously Republican elected official and shared the energy and public utilities committee, the joint legislative commission on energy policy. Doug Lewin (03:23.736)Can you talk about that experience, what you learned there that you bring to this position in the conservative energy network? It probably helps also to help our listeners just understand what the conservative energy network is real briefly, if you don't mind. John Szoka (03:36.382)Absolutely. Well, briefly, the conservative energy network is a network of state organizations under the umbrella of CEN. We operate in 26 states and we do two major things. One, we have people that work in each one of the 26 state capitals that mainly educate state legislators on energy issues, solar, entre-wind, batteries, nuke, geothermal. John Szoka (04:02.028)Any kind energy you can think of, they educate them on it. And one of the main things that's needed is education, because there's a lot of miss and disinformation. And let me use myself as an example, kind of tying into how I became the energy chair in North Carolina. When I first got to North Carolina legislature, here's what I knew about energy. When you go to the wall switch and you flick the switch up, lights go on, and when you push it down, the lights go off. And I had a lobbyist come to my... John Szoka (04:30.286)office who represented North Carolina Sustainable Energy Association. She asked me, what do you think about solar? And I said, it's just a bunch of garbage and it wouldn't exist without massive solar or federal subsidies. And she said, oh, that's interesting. We have a different viewpoint. And I go, oh, what's that? So she told me what their viewpoint was. And the two points here was one, I knew that she was a Republican representing this solar association. So she was already kind of the trusted John Szoka (04:58.86)messenger of information. And then two, she told me something that went against what I thought I knew. And because it was from a trusted messenger, thought maybe I need to examine what I'm thinking. Long story short, I did went on this six month journey of investigating solar and onshore wind and found out that what I thought was true was not true. So I went from being a skeptic of renewable energy to the champion of it in the legislature. John Szoka (05:28.498)And second term there, I did a lot of things and really got involved. And eventually I was the chair of the energy committee, the co-chair. Doug Lewin (05:38.232)John, real quick, what year was that when you had that conversation with? John Szoka (05:42.222)That was John Szoka (05:42.682)in 2013. I was elected in 2012, took office 2013. So it's a little bit different today. There's a lot more people who know more about renewable, but there's still a lot of folks who go on to public service with the same attitude I did when I was first elected. Doug Lewin (05:57.792)No, look, and I think that that perspective of like, you know, what I know is when you flip to switch the lights come on, like that is the vast majority of people, right? I mean, I, you know, I haven't worked on energy forever. And there's just certain thing is kind of what do they say about a technology you don't understand? It's like magic. It's electricity still a little bit like magic to me. Right. And I think it's really important to understand that people, particularly policymakers, but it's true for the general public if they want to get involved in public policy, which which I'm hopeful. Doug Lewin (06:27.136)a large number of people do, they may just not understand that. I think, really anything about energy, and that's okay, right? As long as you know you don't know and you ask questions, right? You learned, you became an expert over your years there. John Szoka (06:41.614)And you're absolutely right. It's okay not to know. And it's okay to have wrong ideas that you firmly believe in. What's not okay is to be so secure in your ignorance that you make bad decisions. That's not okay. Doug Lewin (06:57.89)Yep. Yep. So, so talk to me about, mean, as you're going through that process and like you said, you come in with this perspective that solar is just heavily subsidized. It's not really worth that much. You, you obviously have enough of an open mind that you can, you can learn about this stuff, but you also have conservative principles, right? That, that can you talk about how conservative principles, overlap with this area of Doug Lewin (07:27.778)you sort of clean energy, energy, you know, it's called a lot of different things, energy expansion, a lot of people in Texas call it and some people call it energy transition, some don't like that. But but whatever you call it there, we're in a moment in energy, right? Things are changing. And so even as your viewpoint is changing, you have principles that aren't changing. Can you talk about what those are and how those interact with your work on energy? John Szoka (07:42.776)Fast. John Szoka (07:51.786)Absolutely, John Szoka (07:52.446)because conservatives believe in a number of principles that don't change. We believe in free markets. I think markets, generally speaking, are better than directives from government in figuring out what the public wants and how they're going to pay for it. I think that as a legislator, constituents come first. And with energy, affordability is a big issue. You might have the best John Szoka (08:18.132)idea in the world, but if it's going to cost a gazillion dollars, why would you push that just for the sake of whatever? So affordability is obviously something that's, you know, we talk about clean energy, land, you know, do you get to tell me what I get to do on my land? Shouldn't be like that. And yet there's a lot of people who think that because they don't like fill in the blank, whatever form of energy it is. John Szoka (08:45.826)that they can tell me what I can do on my land. I can't put solar on there. I can't put wind. I can't put a nuclear station, you know. It's like, you know, we have property rights in this country and people should be able to use their own land for whatever they decide is the best use of it. I mean, I can start from there and continue on down, but those are kind of like really underpinning ones. Doug Lewin (09:08.386)Yeah, yeah, free markets, private property rights. mean, so one of things I definitely want to ask you about, and that's a good segue right into it is we're obviously recording here at a time when Senate Bill 819 is about to be considered in the Senate. We're recording the day before the hearing. We're recording on March 26. The hearing will be on March 27th. This is a bill that it's very interesting, you know, in Texas, I think if any legislator of either party. Doug Lewin (09:35.704)put forward a bill that really restricted oil and gas development on private property and said, as a, you know, there's a whole organization, right, in Texas called TIPRO, the Independent Producers and Royalty Association, right? There's a long history of people making money off of oil and gas wells on their land or oil and gas deposits, you know, beneath their surface. And the Texas legislature, Doug Lewin (10:01.752)barely regulates that at all, very, very lightly. And if anybody put forward a bill and said, you've got to ask anybody within 20 miles if you can earn money from a gas well on your land, whether they're a Democrat or Republican, they'd be in a lot of trouble. And yet here we are with a bill very similar to one that passed last session. So you could certainly talk about that bill. But I know this is something that you guys work on around the country. We keep seeing these different siting proposals. Doug Lewin (10:30.488)come up, tell me a little bit about your work there, what you think of some of these proposals. And again, kind of how, how does that, how do those conversations go when you're talking to a, a, a self-described conservative Republican who wants to limit what somebody can do on their own private property? Like how do they even defend that? John Szoka (10:50.278)That's a great question. And the way I talk to him is I don't do that initially. The first thing I do when I'm talking to a state legislator or a congressman or a US Senator whoever is I show them a copy of our mission and our goals and our principles and, you know, private property rights is on there, free markets is on all these things. So I start with an initial like we agree that we as conservatives believe in all these things, right? John Szoka (11:16.942)And I say, yeah, of course we do. We believe in all that. And then I kind of explain the issue on energy and increasing demand all across the nation. We have to meet this somehow. So how are we going to do it? And then they say, yeah, we need to do that. And I say, well, look at your state of Texas, for example, you're leading the country in solar and wind. And they look at me and I pull up the ERCOT Alert app, which I love that. I keep it on my phone. I think I showed it to you last week. John Szoka (11:46.99)I say, if solar and onshore wind are so bad, why is it that right now, as we're talking at 11 a.m. or 3 p.m. or whatever it is, that 75 % of the energy going into ERCOT grid right now is things that you say you really don't like? And they go, well, pump, pump, pump, pump, pump. I say, I can answer what it is. It's because it's the lowest cost at this time of day for the 12 hours when the sun is shining. So. John Szoka (12:16.28)People don't do it in Texas. The ERCOT doesn't put it on the grid to satisfy some liberal mandate from Washington, D.C. or from anywhere else. Doug Lewin (12:25.29)No, we're a market that's yeah, it's economic dispatch. It's whatever the lowest cost is against dispatch. John Szoka (12:31.022)And then if nothing else, sometimes, usually the light goes on and people start thinking about it and they kind of fall off their hard held false beliefs that it's just a bunch of liberal gobbledygook. You know, they say, I didn't know that. And it's like, that's why I'm here. that scene is repeated day in and day out in all the 26 states we work in, not only at the federal level, but at the state level. John Szoka (12:58.7)And I've got people down at the local level that deal with siting. People just don't know because energy is so incredibly complex, they need to be educated. Doug Lewin (13:10.254)Yeah, I think, you know, on the, on the private property rights, I was, uh, as I was researching to write an article about Senate bill eight 19, I found this quote from Ronald Reagan where he says, I'm quoting this is from, is a time for choosing speech. said, what does it mean whether you hold the deed or the title to your business or the, or property, if the government holds the power of life and death over that business or property. Doug Lewin (13:35.374)I don't know if you've seen this lot in North Carolina. I've talked to a lot of people in Texas who have ranches and farms and say, but for the wind and solar on my land, I wouldn't have been able to keep it. John Davis, a former Texas legislator has had a, I put a picture of him and his ranch in that same article. The ranch's been in his family since the 1880s and he didn't think they were going to be able to hold onto it till he got some wind turbines. Like what gives the government the right to tell you, you can't, you know, earn some money from your land. John Szoka (14:05.134)100 % dead on. There's two farmers I'm aware of in my own county that leased out their land for utility scale solar. I remember one, he's passed now, but he was kind of a cantankerous old cuss, just to say. And if he was sitting here, he would say, you're damn right I am, I love it. Doug Lewin (14:26.794)You John Szoka (14:28.686)But I, what Joe ran as they're putting things in, I said, I asked him a question, said, what do you say to people, because there are some in the legislature, not me, because I knew what it was like, said, what do you say to people who say that they should have a say on what you do on your property? And he went off. I couldn't stop him for about six or seven minutes. It's my land. John Szoka (14:52.064)Over here I cut the trees 50 years ago and I did this over here and I improved the drainage. And by the way, I don't like the Corp of Engineers. And he went on and on and on. He said, I'm leaving this for my kids because none of them want to farm, but the land is important to me and needs to make money. This is the best way to do it. And that is that type of story, the one you just said, the one I just said, is repeated time after time after time all across rural America. And yet. John Szoka (15:21.07)There are people who are maybe this guy's neighbors or somebody else's neighbors who say, can't do what you want to on your land. And it baffles me how they can really think that when they're conservatives and they're tied to the land. it's not like you're having a subdivision. mean, you build a subdivision with houses. It's not going away. know, mean, solar. could lease this up. You could take it all out and farm the land. John Szoka (15:51.222)Wind, yeah, it takes up a little bit of land, but you farm around it. Doug Lewin (15:55.724)Yep. And even solar, right? We're starting to see a lot of agri-volt takes too, which I'm really excited about because we, you know, like there's, the ability to do certain kinds of farming. can't do everything when there's solar panels for sure, but some kinds of farming and agriculture work, work quite well with it. Yeah. And we're, you know, we're the, stories are important because it's important to really like understand that there's people behind the numbers, but in Texas, the numbers are pretty staggering too, right? Something on the order of a little more than $20 billion. Doug Lewin (16:24.908)in landowner payments, local government tax payments, with a line of sight to about 50 billion. That's just within the state of Texas. I it's been pretty transformative to rural Texas and I think large parts of rural America, right? John Szoka (16:38.99)It John Szoka (16:39.59)is and it baffles me particularly in the great state of Texas why somebody would put this bill forward and why anybody else would think it's a good idea. mean, you know, most conservatives say we're for all of the above and then the ones who don't like something except fill in the blank, except solar, except wind, except geothermal, except, you're there for all of the above and let marketplace forces work. John Szoka (17:08.018)Or you're really not and you're just trying to pick a winner or loser, which we all say we don't pick winners or losers. So yeah. Doug Lewin (17:14.828)And look, think, you know, there, there are certainly some, you know, stories out there of developers who did things the wrong way, whether it be solar, but that is not like, can't, you know, that's sort of throwing a baby out with the bath water, you know, like you, you, gotta make sure that like, I don't know if this has ever come up in it. Have you seen any good examples of where, like, I don't know if you guys did this in North Carolina or maybe in other States where like, Doug Lewin (17:42.622)There's got to be a way to, you know, deal with the really bad ones without doing like Senate Bill 819 does, which painting with this really broad brush and making it that almost, you know, no renewables can be developed. You can answer that one. I actually what I really want to get to next. And you can you can put that answer in there if you want to really want to get to is what I think is causing these bills more than the few bad cases. I really think there's just. Doug Lewin (18:10.2)there's so much misinformation rolling around the particularly the internet, Facebook posts, and then you know, somebody looks at it the algorithm drives them 10 more stories about, you know, like solar panels polluting water or something like as if solar panels are like worse for water than, you know, can find animal feeding operations or oil and gas operations, like there's a million things that cause environmental harm. Doug Lewin (18:37.974)And if you're stacking them in a list like solar and wind are somewhere on the list, but they're not near the top. But I think the misinformation just bounces around so much, all these different stories of all the negatives. And that's the way the algorithms work, right? You click on that, then you're not going to get a positive story about a farmer or rancher who now has his farm or ranch because he's got solar with that story never appears in your algorithm. How, how, how did you combat that when you were at the legislature? How do you deal with that at? Doug Lewin (19:07.906)conservative energy network. know I know I'm asking a really big question here. John Szoka (19:11.502)That is a big question. And how long do we have? 45 minutes now. John Szoka (19:18.574)In North Carolina, once I finally understood how solar worked and how onshore wind worked and what they did or didn't do to the environment, it was like we get in closed caucuses, you know, and we'd have these arguments. And I had somebody tell me, well, that's all great. But did you know that solar panels leach cadmium and other heavy metals into the ground? And it's like. I've heard people say that, that's really not true. And then. John Szoka (19:47.682)I'd have to reference to do something. Too many of these arguments that are on Facebook and the internet, they're all based on emotions because it's much easier to kill an idea than it is to support it. So the only real answer to that is you have to have enough of the facts behind you to recognize when they're saying something that's completely bogus. Wind turbines, for example. Wind turbines kill all the birds. OK, I've heard that one a lot. I was a meeting of various states. John Szoka (20:19.714)Republican energy chairs. And I threw the question out there, I was talking about energy, obviously, and said, what's the biggest killer of birds in the country? Yeah, biggest killer of birds. Is it wind turbines? Like half the hands went up. Yeah. So I threw the chart up there that showed, well, if you want to save birds, get rid of cats. Because by far and away, cats kill more birds than any wind turbines. And actually, a couple more from oil producing states. John Szoka (20:45.23)The amount of birds killed by wind turbines are less than birds that are killed in oil on the surface near oil wells when it escapes. So you have to have facts, but you can't go like, got a fact I'm going to shove it in your face. I mean, that doesn't do it. You got to say it with a little bit of love, maybe a little bit of lightness and humor, and then tell a story about John Szoka (21:11.562)something that happened in a meeting you were at or whatever and we don't make up stories, God knows, we're 26 states, I've got a gazillion stories to tell. But it's just the education or I should say the lack of education about the admittedly complex subject of energy that it just it's a never-ending struggle. Doug Lewin (21:33.58)Yeah. Well, and, and I appreciate the way you, you, you put that, right. That you can't just sort of like put it right in somebody's face. You have to kind of like listen a little bit and, and, and absorb not be super judgmental of where I mean that, that, that approach is, I think, you know, I don't know 80 % of it, right. Cause you have to be able to like establish some kind of a Doug Lewin (21:57.698)bond with somebody before they can actually learn anything from you. And that takes patience, a lot of patience. John Szoka (22:03.694)You know what one of the most powerful questions in a conversation like that is that you ask whoever you're talking to? It's interesting. Why do you think that? Because there's a lot of assertions out there and then I have to come back and tell you, well, I saw it on Facebook. And then I try not to laugh out too. Did you look any further than Facebook? Right. Right. Because it's easy to repeat talking points. John Szoka (22:32.824)but it's much more difficult to have the facts behind it. And usually people don't have the facts, they're just parroting what they heard. So if you, as the educator, know the facts, it's much easier to combat these firmly held wrong beliefs. Doug Lewin (22:52.62)Yeah. And I guess there's even some opportunity to try to like replace those falsehoods and misinformation with, you know, fact based information on the other side too. Right. I mean, it's really hard because you're, these algorithms are so powerful. to try to inject some truth in there is really tough, but I assume you're trying to do that too. Right. John Szoka (23:16.942)just try and do that through our organization and we post on Twitter and Facebook and try and amplify things. But the sheer amount of negative, it's difficult to overcome. I mean, what do you see on the news every day? Negative, pick a topic, it's never positive, it's always negative. Doug Lewin (23:38.534)I know it's a well-documented human thing, right? Negativity bias is a real thing. People are likely to click on the, you know, what is it? If bleeds, it leads. They've said in the news for generations, right? And people are going to click on the negative stories. It's just kind of the way it goes. So I want to ask you, you mentioned you work in 25 states. Texas is obviously one of those. You've been head of the organization for what, just about two years? John Szoka (24:06.094)Going on two years, yeah. Doug Lewin (24:07.694)So can you talk to a little compare and contrast like some of the other states you work in, what's different about Texas? What do you like about Texas that you've seen so far? Where do you think Texas has something to teach other states and where is Texas maybe behind a little bit where Texas could learn from some pure science? John Szoka (24:24.738)Well, since I live in North Carolina, let me establish my Texas creds, I may. was stationed there at Fort Hood for three years and then the Army, well, the Army, then the Army sent me. Doug Lewin (24:35.201)The great place. Isn't that what they call it? The good place? The great place? John Szoka (24:37.71)Look, love Fort Hood. Now, Fort Kavassos, I knew General Kavassos. He was there. He's a great American. When I was there, was Fort Hood. And then I got my master's degree in operations research from UT Austin, looking for horns. So sorry for any Aggies listening. Doug Lewin (24:56.558)I had Governor Perry on so the Aggie hit a big Aggie flag behind him for anybody that watched the video so if Aggies are feeling upset go look at the Perry video. John Szoka (25:07.025)I didn't John Szoka (25:07.746)want to offend any of your listening audience. And I own property in Texas. I was there for like six years. I got a good feeling. I love the state of Texas. But to your answer or to your question is, frankly, what the Texas legislature did last session and this session, I can't really explain why they're going off on a tangent to do some of the things they're doing. But what they're doing, we see that in other states as well. John Szoka (25:35.694)There's a bill about to be filed in North Carolina that talks about onshore wind and you have to notify everybody within 20 miles of where it's going to be because somebody doesn't like the flashing lights on top of the wind turbines because sometimes you have some Air Force jets flying around there as a training area. I mean, they don't even care about the flight paths, but you got to have that. FAA says you have to have it. I mean, people glom onto the little issues that they think John Szoka (26:06.094)are like really, really important and they might be to 20 constituents in their district, but in the overall scheme of things, it's not. So this stuff's popping up all over the country and actually in my opinion, it's been getting worse over the last four or five years. We went from, I don't know, like 200 county moratoriums and really restrictive ordinances five years ago to there's over a thousand today. John Szoka (26:32.398)what we do and what you do on your podcast, and what a number of other groups do too, is try and stamp out the missing disinformation. I think it's, I always use the analogy, if you're gonna fight a forest fire, would you rather stomp on the match that some evil guy just threw in the pine straw before it spreads? Or do you wanna come in three days later when you got 100,000 acres burning? Pick one, which one you want. And there's not enough people doing what we do. John Szoka (27:01.398)and I'm including you in that and other groups as well, to actually educate people about the truth of energy. Doug Lewin (27:08.46)Yeah. And I think, you know, in relation to the things you're talking about, the Texas has done, or in some cases, like almost done, right? Some of these bad proposals did not pass last session, thankfully, because of a lot of the good work in the House. And hopefully that'll happen again this time. But what I often say on these things is like, and I'm curious your perspective on this. A lot of times I think what's going on with sort of the anti-renewable bills is what Doug Lewin (27:36.718)They're really they think that they want more gas plants or they want more nuclear plants or they want more geothermal or they want more whatever. And they think that if you stop wind and solar batteries, then you'll get more of these other things. Senate Bill 388 that just passed this one. I've written about it a lot on the the newsletter. It says you have to have a megawatt of gas for every megawatt wind and solar. That really slows down wind and solar. There's another approach, which is like legislate for the things you want. Doug Lewin (28:05.25)like build those up. Texas legislature passed the Texas energy fund last time the Senate and House governor all got together on that passed it, we're going to get some more gas in the state. There's a nuclear bill that is moving through the house. The day we're recording again, March 26, it just passed committee. It would put $2 billion towards new nuclear in the state of Texas passed on a 10 to one vote bipartisan support, like Doug Lewin (28:30.21)do those things. You only have so many legislative days. You only have so many priorities you could actually move, right? Focus on the things you want. So I'm curious what you think of that kind of approach. And then also, you know, nuclear, geothermal, are you guys working on those things at conservative energy network? Are there other technologies generating resources that that you're excited about and are sort of sort of within your purview or prioritized in your work? John Szoka (28:56.846)Well, to your first point, I do agree that it's always better and usually a better vote getter. If you're for something, I mean, if you're a negative Nellie and you're against everything, pretty soon people don't listen to you and that clues your constituents. It's better to be for something. So if you want to incentivize A over B, okay, go incentivize it. But still, there's some element of the free market that has to go in there. As far as incentivizing nuke, John Szoka (29:27.552)I'm not necessarily against that. I'm kind of for it because we as a country allowed it to die out. The supply chains, the knowledge base of people who actually know what to do in a nuclear power plant. So there is a role for government to incentivize certain technologies. But at some point in time, incentives need to go away and things need to compete on their own. If you incentivize John Szoka (29:56.618)option C, whatever it might be, and it comes to fruition and start building it and it's costing $200 a megawatt hour, you know, it's probably time to pull the plugs on that one and let solar wind, nuke or geothermal, whatever it's going to be. the answer to the rest of your question is yes, we do work in geothermal. Most of that work is in the West and in Texas. Now, there's just not the hot rocks close enough to the surface to do it on the East Coast. North Carolina. John Szoka (30:25.72)Makes me particularly sad that you got to drill like so far down that it's just not economical. Nuclear, yeah, we'll work for that. But it's not to replace anything we currently have. And the one thing you didn't mention was transmission. We do a lot of work in transmission because that's important. You can generate all electrons you want, but if you can't get them from where they're generated to where they're needed, and there's a heck of a lot of work needs to be done in that. John Szoka (30:55.535)not only at FARC at the national level, but within certain states too. And some states are further along and spurring new transmission lines than others. Doug Lewin (31:04.854)Yep, Texas has a big decision ahead of it. The Public Utility Commission sometime in the next month or so is going to decide on a 765 kilovolts or 345 kilovolt, what they're calling backbone for the state. And we don't have any 765. I don't know if you guys have any that's like extra high voltage. don't know you guys have any. don't think. I don't know. Yeah, we don't have any here yet. But I think I think it's time. It's like for for a modern economy. I mean, that John Szoka (31:25.08)We have any North Carolina, but I'm not. Doug Lewin (31:33.586)the Chinese are putting up 765 like, like it's going out of style and we don't have any yet. It's like we, we, we are in a race, you know, particularly on, on AI and meeting this kind of load growth and where it's harder here, right? It's a democracy. We argue over stuff. and, that, and that's proper. We should have a democracy. We should argue over stuff and we should build to like, we need to, we got to figure out how to, how to, you know, make sure that we make sure that we build. John Szoka (32:02.446)We are nation builders to your point. If you go back 100, 200 years, we've always been building things. We make stuff and we're pretty doggone good at it. China wouldn't be where it is if they didn't steal most of our plans and technology. I mean, seriously. So, yeah, we need to be able to Doug Lewin (32:21.292)Yeah, there's all kinds of IP that is, if you know, everybody kind of knows if you take your IP over there, it's probably going to get stolen. But yeah, we I think John, though, like, to a certain extent, it's gotten away from us a little bit. I'm not sure we are right now in 2025. And nation of builders is in our DNA. It's in our history. I don't know that we're really living up to that right now. John Szoka (32:44.91)And I'd agree with that too. think we've at the state level and pretty much every state, even the great state of Texas and at the national level, we've made things so complex to protect the one person or the one child or the one puppy from potential injury on a one in 10 gazillion chances that we over legislate this stuff. We over protect ourselves. You cannot. John Szoka (33:12.93)I got this theory and it has to do with liberalism is that if you pass a bill to do protection and then it goes for a year or two, my liberal friends will come back because there's always a failure on it. No matter what the topic is. It's like, you know, we passed this bill two years ago and it was a good thought, but it just wasn't tight enough. We need to put more on and more. And all of a sudden, I mean, I think that's what happened to EPA. Hell, I grew up in Cleveland, Ohio, where the where the river burned. OK, I know what bad pollution looks like. John Szoka (33:41.752)Yeah, I can breathe on some days because there's so much crap in the air from the coal plants. There's a boy scout I saw the forest in northern Ohio and eastern or western Pennsylvania dying. You need regulation to protect people, but you can't protect anybody from every possible bad thing that might happen in the world. And I think that's where we are now. We need to loosen some of that stuff up. Doug Lewin (34:04.94)Yeah, I mean, like so much else in life, right? It's like the extremes and the polls typically don't work. It's really about sort of where do you turn that dial to the optimal point where there is protection of the public. Like you said, some regulation is obviously needed. Nobody wants the river to be on fire. I think everybody can agree on that. But but if it does go too far, you do slow down building of things and we need to build that we need we need to manufacture in this country. We need to build transmission. Doug Lewin (34:34.178)lines, we need to build power plants of lots of different varieties. And that's all so it really is that question about so you think, and this is probably obvious, because you're a self described conservative, but like the dial has been turned too far towards sort of regulation, and it's become too heavy handed, and we need to kind of turn that John Szoka (34:53.454)I agree. And I think there's too many reviews of reviews of reviews. mean, take transmission line, for example, I was at a conference about a year ago and there was a major utility in PJM that talked about how it took 19 years to build a nine mile stretch of high voltage transmission line because of all the hoops they had to jump through. That's just ridiculous. I mean, John Szoka (35:22.126)Even today, in the best of circumstances, it's going to take 10 years to do all this. We don't have 10 years to wait to build more transition. We don't have 10 years to wait to build more generation. We got a huge issue and we got it right now, today. What are we going to do now? Doug Lewin (35:37.336)Yeah. Somewhere behind me, I've got that book, super power by Russell Gold, where he's talking about the effort to build a major transmission line. and, it not only wasn't done in 19 years, it was never completed because every state had veto power over it. And like, those are lines that really would have helped the country at, at multiple points over the last, you know, many years. It is something that I, that I think is, is valuable about Texas's independence from. Doug Lewin (36:07.03)FERC and why I'm somewhat defensive of it is that we don't have to go through some of those federal, there's of course still state processes and there's due process and that needs to still be there. We can build transmission faster in the state and that's going to be put to the test. That's the claim everybody in Texas makes. We're about to find out with this high voltage project, so we'll see. John Szoka (36:31.566)I hope so. know the capabilities there because I've talked to some of the largest private builders of transmission in the country and they tell me that they can. But the expense just continues to skyrocket because of all the hoops they have to jump through. And again, I don't want burning rivers. I don't want air. can't breathe and I don't want to kill all the wildlife because wildlife is basically a trust. They're in trust. They belong to everybody. We don't want to kill them. But you know what? John Szoka (37:02.133)I think humans are at the top of the food chain and we need to build stuff to make everybody's life better no matter income level, matter race, gender, whatever, whatever, whatever. I don't care. We need to build stuff. Doug Lewin (37:16.27)Let me also ask you, just shifting gears just a little bit, but kind of staying in this realm of different technologies and solutions that help with our energy challenges. I have spent a large part of my career and talk a lot on this podcast about demand side solutions, energy efficiency, demand responses, distributed solar and storage, all these kinds of things. I am hopeful, because I think there's different ways to go about Doug Lewin (37:45.954)getting an active demand side, getting more participation from the demand side, like reducing peak demand to increase reliability, paying people to participate in programs, all voluntary, if they want to put money back in their pockets. Those programs are most prominent, not exclusively at all, because Arkansas, Oklahoma, a lot of red states have really good energy efficiency programs. But it's more associated with like California and Massachusetts. Doug Lewin (38:13.782)Right. I think that there's opportunities for conservatives to really figure out how to kind of bring a market lens to that demand side. This is sort of something I think about a lot and I think might actually work in Texas. But if you had, did you, did you work on energy efficiency at the North Carolina legislature? John Szoka (38:31.736)I personally did. Yeah, I did. As a matter of fact, I had a bill that passed the House almost unanimously and died and my friends in the Senate. And basically it was just, it was looking at the inventory of state-owned buildings and categorizing them by age and size. If you got a 50,000 square foot warehouse and it's 20 years old and we're going to keep it, we probably have to update HVAC and whatever else we got. John Szoka (38:59.968)So let's do a study of those and use performance contracting to figure out when we do it, how do we save money on energy costs? Because you can build all the buildings you want, but if they leak heat and air, I mean, you're just going to pay, pay, pay. I thought it was a great bill. So did a lot of contractors. My friends in the Senate, thought their exact quote was, well, if the Department of Administration wanted to do it, they can already do it. Well, they could. John Szoka (39:29.538)But a legislature exists to provide direction to different parts of the government. So I was trying to do is say, you guys do this and we'll end up saving money. Some of the universities in North Carolina actually did it on their own. And guess what? They saved hundreds of thousands of dollars from campus to campus of their own energy costs. Then it just went back to the state budget. John Szoka (39:54.968)because they weren't incentivized to do it. Like if you save a million dollars, you get to keep 50 grand or a hundred grand, which was another part of the thing. it, Doug Lewin (40:04.312)That's a great way to do it, John, too, because you do you not only incentivize them, but then you can actually use those dollars from the savings to go to the deferred maintenance, right, which if you talk to anybody. There, yeah, there's so much deferred maintenance, which basically just means you got people in public schools and, you know, county building, state buildings, all that stuff, just like using. Doug Lewin (40:26.274)duct tape and whatever they can to like keep stuff running along rather than upgrading. So give them some incentive to save money and then let them keep a portion of that to knock out that deferred maintenance. John Szoka (40:36.366)And here's why those kind of ideas don't get traction for the most part. Because they're boring. Doug Lewin (40:43.31)maintenance is boring John that's exciting come on I know I know John Szoka (40:48.93)to John Szoka (40:49.11)you and me. But maybe money is boring unless it's some large muscle action where I'm going to cut the Department of whatever at the state. That's exciting. The things that are simple, that can save taxpayers literally millions and tens of millions of dollars, they're boring. And you have to get people excited about voting for a boring bill. And it's hard. Doug Lewin (41:17.005)Yeah. John Szoka (41:18.894)I wish it were easier to get people excited about that kind of stuff. You you talk about energy efficiency too. We could build a heck of a lot more energy efficient houses and buildings and everything else. Usually it costs five to 10 % more when you design it to be more energy efficient. And because governments usually force lowest bidder awards on the contracts, we don't do it. so to state government. Doug Lewin (41:43.934)the Doug Lewin (41:44.125)life cycle right when yeah John Szoka (41:46.414)Exactly, John Szoka (41:47.114)man. So you're going to spend $10 million on a building and spend five times as much on the energy if you spend $11 million, you'd save money in long run. But we don't do that. Doug Lewin (41:56.91)Yeah, a lot of progress to be made, a lot of potential on the demand side. So I want to ask you also, I should have asked earlier, it's obviously a big part of who you are. You're a veteran with a long distinguished service in the US Army. For those that are listening and not seeing the video, you've got a I want you for the US Army with Uncle Sam right behind you. You retired as a Lieutenant Colonel. Doug Lewin (42:26.062)Can you talk a little bit about how energy policy and national security overlap and where your military experience has informed your work at any part of your career, whether it's a legislator or now it's CEN? John Szoka (42:41.966)John Szoka (42:42.587)Well, energy is national security. I mean, we could talk about foreign players trying to come into the grid and all that kind of stuff. But if you look at a military base, you have to have a secure, reliable, unattackable, if that's a word, energy source. I go back to when I was still on active duty here at Fort Bragg. John Szoka (43:06.926)There was a major Corps command post exercise. They were all off in Kansas doing this thing and I wasn't there. I was a staff officer at Corps, but as myself and a brigadier general, we were staging out hurricane relief to, was a hurricane that hit the US Virgin Islands. And the Army has one of the, it's got these specialized battalions of nothing but generators that can generate untold amounts of energy, bigger than anything you've ever seen. John Szoka (43:36.782)We're air shipping this stuff out and shipping some of it by sea to get down to the Virgin Islands. Now, like two in the morning when planes are going out on time and we're looking at each other, instead of playing cards, we were talking about this very thing, energy. Well before I got in the legislature, and it was like, what would happen right now if all the energy to Fort Bragg went out? How are we going to get this stuff out of here? I it'd be crippling. At the time, it only had one main line in and John Szoka (44:05.208)The major utility provider around 2004 or 2005 actually put another two redundant lines in there. John Szoka (44:13.486)Just imagine where, I mean, it was bad enough if energy would have been interrupted shipping supplies and energy generation equipment down to St. Thomas. What about if you're shipping out ammunition to a war front or you're sending soldiers somewhere? You could be literally crippled at home. know, Norfolk, largest naval base in the world. You know, not every ship is at sea all the time. These are national security issues to make sure John Szoka (44:43.522)that all elements of the military and the command structure has enough energy in the event of a natural disaster or a national disaster that comes from some foreign ill-intentioned agents. John Szoka (45:03.534)I'm going to loss for words about how important it is, but it's extremely important. Doug Lewin (45:07.628)Yeah, I mean, you can't you can't overstate how important that is, right? mean, having having that reliable power on site, this is another place, John, where I think so we were just talking about energy efficiency and saying it's not sexy. think something that kind of is sexy. Well, you saying it was it was boring. You didn't say not. That's what that's what way it gets referred to all the time is like, energy efficiency is not sexy. It's boring. Nobody wants to talk about it. But when you expand the aperture a little bit and you look at the demand side and energy efficiency is part of it, but you also get into, for instance, micro Doug Lewin (45:36.16)which I think are very exciting, sexy, whatever word you want to put on it. Everybody wants to talk about these, you know, these days. There was a great report, we'll put it in the show notes, it was out of Carnegie Mellon that talked about how microgrids and distributed energy resources are fantastic for national security because they can be islanded and detected from the rest of the grid. So if you had the kind of malicious attack you're talking about, which would usually be some flavor of cyber attack, Doug Lewin (46:05.89)that could cripple the grid. These are nightmare scenarios, and they're sort of like what you call a tail risk. It's not super high probability, but it's not zero. And we've got to be prepared for those kinds of things, just like you're saying. This is one of the areas where the military, and I would hope that this would spread across a Democratic or Republican administration, having that power on site. And that could be a mix. Again, it's not. Doug Lewin (46:31.566)It's not about any one source. It's about just like on the bulk grid. It's about having that mix. You have some solar, you have some storage, you have some gas, you have some diesel. I give all those things because the redundancy is good. And solar and storage is part of that because you can have outages of your natural gas system. New York without natural gas. Just at one point in the last couple of years when we were in a winter storm and gas supplies, that was more a natural disaster, obviously, than a malicious actor. Doug Lewin (47:01.71)So I think there's huge potential for that kind of thing. I don't know. It might have been you you were out of the military in the 90s that may have been like before right before Those kinds of solutions if you talk to your counterparts of the military about things like micro grids or on-site John Szoka (47:18.958)Yeah, and I'm going to tell you the problem with that is. It's not the concept of it. It's the fact that the Department of Defense, whether it's the Democrat administration or Republican administration, on federal land, state of North Carolina, one the first bills I filed in 2013 was called the Energy Freedom Act that was going to allow Fort Bragg to have on-site generation for that exact reason that we've been talking about. And the monopoly utility here, because the law John Szoka (47:49.384)North Carolina said then and still says if you generate electricity and put it on the grid, your utility had to be treated like that. Department of Defense recognized that. So they weren't going to go go against state law, even though it's federal land. I had a major blow up with our utility in North Carolina. John Szoka (48:13.518)If I were Secretary Hedgepeth, I would say, you know what? Defense overrides your state law on federal property. I'm going to do exactly what you just suggested. I'm going to have our own generation. And if you don't like it, well, too bad. But that's not the policy of do you do then or now. I think it'd be a great policy change. Doug Lewin (48:35.874)Yeah, you know, it's, it's interesting, obviously in Texas, in most parts of the state, some parts of the state, we do have monopoly utilities, but in most of the states, of course, and within within ERCOT, outside of the municipals, there, there is the ability for a customer to cite their own energy without having to, you know, go through that tortuous utility process and the whole mother may I associated with all of that. So we do have at a lot of the military bases, there's a actually Doug Lewin (49:04.526)One of them in San Antonio is within a municipal utility, but CPS Energy worked with, I believe that's Fort Sam Houston has a pretty major microgrid. I'll put it in the show notes. If I get it wrong, whatever the right base is will be in the show notes. And then, you you mentioned Fort Cavazos where you said you spent several years, they have a microgrid up there. And as a matter of fact, during Winterstrom URI, they credited that for saving some tens of millions of dollars to Doug Lewin (49:32.48)US taxpayers because they were able to generate some of their own power on site. John Szoka (49:36.462)And that, Doug, is why I like living in Texas, why I like Texas so much and why I still like Texas, even though I don't live there anymore. But, you know, you asked me the question, different states across the nation. mean, Texas is really unique in the way that it handles energy. And there's going to be some oddball bills that come by every once in a while, and hopefully people do the right thing and vote them down. But the rest of the country, by and large, does not John Szoka (50:04.224)treat energy like Texas does. Whether in an RTO structure, whether in a vertically integrated monopoly utility, it ain't like Texas. Doug Lewin (50:15.756)Yeah. Well, you know, you're, you're welcome here anytime. Come back to, to Texas early and, and often, keep visiting here. we, we, we need your voice in the state. want to ask you just another question or two before we wrap. I'm also curious again, from a legislator perspective, you know, how and when, under what circumstances you would work across the aisle. I, we talk about principles earlier. I can tell Doug Lewin (50:42.104)I haven't known you a long time, but I could tell even as long as I've known you, you're, you're a principled guy. You're never going to compromise on your principles. Compromise is kind of like not compromising principles, but compromising on, policy is kind of like the heart of our system. If it doesn't, if it doesn't happen, things kind of break down. I think it's part of what we're experiencing as a country is everybody's kind of run to the polls on, both sides and, and the center. Doug Lewin (51:07.918)maybe isn't holding. hope that's wrong. I hope the center does kind of hold and we can work across. How and when can you give examples of when you worked across the aisle, you know, still staying true to your conservative principles? John Szoka (51:19.182)Yeah, I mean the last big bill that I was a primary sponsor of was House Bill 951 passed in 2021, right? It's the, at the time, majority Republican House, majority Republican Senate, and Democrat governor who were about like, if you watch me, it's like my fingers going way apart. Most things were like really far apart. So the utility... John Szoka (51:48.558)on a performance-based rate making. We worked on that. And then... John Szoka (51:56.398)past, but the one mistake that we put in there, it was at the discretion of the utility. And as of yet, they haven't used it, which is a little surprising to me because I think they could use it. And for listeners who don't know what that is, instead of being paid on capital improvements, it's there are other goals that can be set that the utility can be paid their rate of return on, which is kind of thinking outside the box. There have been a couple of states that have done that. John Szoka (52:24.34)None really have used it that much to my surprise. Anyway, they wanted Doug Lewin (52:28.366)Doug Lewin (52:28.706)that. well, before before you move on, I want to just I want to double click on that just for a second. Because this is something that has come up a lot in Texas, particularly after Hurricane Barrel. There were some hearings in the Senate that there were discussions where legislators Senator Cole Coors, Chairman Schwartner, they were asking questions of the PUC chairman about Doug Lewin (52:51.398)are customers incentives aligned with the utility incentives because as the utility business model may be broken where your incentive is to deploy capital and make a return and there aren't really a very clear performance metric, not even much less an incentive, just a metric. Like what are you, what are you judged on? And so if we, if you don't define that, Doug Lewin (53:17.742)What are you doing as as right. mean, you're, basically like trying to spend money. And so I think probably the reason why in North Carolina, it's not being used. was less to the discretion of the utility is it's sort of the burden to hand, right. Or, you know, like you. Yeah. John Szoka (53:32.174)It is. John Szoka (53:34.615)I mean, the utility model worked great from the 1920s, 30s and the electrification of America. I mean, we saved tens of billions of dollars doing it the way we did. Today, is it the right model? I don't know. I don't know what to replace it with, but I don't think it really serves the needs of rate payers as well as a different model could. John Szoka (53:58.904)But working across the aisle, so that was a piece of it. And the other piece of it, well, North Carolina showcased the case against coal ash. Remember back to the Dan River coal ash spill. So we passed legislation, made the utility, excavate millions of tons of this stuff and bury it in line. Anyway, so part of that is part of the fallback from or fallout from that was. John Szoka (54:25.582)shutting down coal plants and yeah, you got CO2 reduction. So we went back and forth and how many are gonna shut down the utility, utilities, the stranded asset, blah, blah, blah, all this stuff, very complicated. So basically what we said was we set in the statute, this is a Republican House and Senate, mind you, reduction based on the 2005 standard of carbon, % reduction by 2030 and carbon neutral by 2050 at least cost. John Szoka (54:54.514)And we said, and we kicked it to the utilities commission, be the arbiter of this. And North Carolina is called the carbon plan. And the utility has to come in every so often and say, here's how we're going to meet that at least cost. And we talk about that. Now, first of all, usually the enemy, if you want to say, isn't really the other party, it's the other chamber. When you're both of the same party, it's... John Szoka (55:23.854)I mean, this thing, we all worked on it in the House and the Senate for just under a year. And somebody asked me what it was like doing that. And I said, it's like this. It's like, imagine going to work every day and in your office, there's a dentist chair and the dentist comes in and pulls every one of your teeth and you have no novocaine while he does that. And then the next day you come in and do the same thing. It was painful. then it's not just chambers and parties. Then you have Doug Lewin (55:46.689)Yeah. John Szoka (55:51.744)all the other interest groups and you got utilities want something, the people who own industry want something, business owners want something, everybody wants something and trying to get all that in one big plan. I mean, if you don't work with the other party, with other people, you're never going to get anything done. Doug Lewin (56:09.102)So that bill, it was 951, it was the Energy Solutions for North Carolina Act or something along those lines that did pass and it had bipartisan support. John Szoka (56:17.678)on the back right now. John Szoka (56:21.198)I did parsing John Szoka (56:21.809)support, great votes in both chambers. The governor had a big signing ceremony at the mansion where Republicans and Democrats, I love that line from Ghostbusters, you when they're talking to the mayor, I don't know, maybe it's too old for most, but it's like cats and dogs living together, you know, it's like those Republicans and Democrats all in one place, a big kumbaya moment. then we went back to our corners after that ceremony. But live parsing, I mean, my experience. Doug Lewin (56:45.89)Yeah, yeah, yeah. John Szoka (56:50.478)Most enduring bills, maybe not the best, but enduring are ones that have bipartisan support. When you ram something through just because you can, when the pendulum goes the other way, it gets undone. Doug Lewin (57:06.318)Yep. Uh, one last question and then I'll, I'll, I'll ask you, you know, what I forgot to ask you, what you want to add to it. But one more before I do that. Um, the, got to ask you about the inflation reduction act as well. So like we, we talked about the United States being, you know, we're, we're, we're a nation of builders. We've always built, we've always invented all that kind of stuff. We have seen a huge increase in manufacturing, a lot of it in North Carolina, a lot of it in Texas, a lot of it throughout the South. Doug Lewin (57:34.058)Obviously, you know, President Trump ran on repealing at least parts of it. He was never like super well, maybe not never. He was usually not super specific about that. And now there's, course, the 21 House Republicans sent a letter to the speaker and said, we want to be careful with that. What are your thoughts on the IRA? What's your thoughts on what's what's specifically worth keeping needs to be kept? Maybe what shouldn't be kept? Doug Lewin (58:00.906)I, know, any, any thoughts on, on the IRA? I'm not asking you to make a prognostication because nobody could figure out what's going on right Right. But, but if you want to prognosticate, feel free, but more kind of, yeah, where, where do you think, you can take any part of that you want, but particularly like which, which aspects of it you think are most important to protect. John Szoka (58:21.539)high end my policy people and CEN took a really deep dive into the IRA last May before we knew who was going to win the election. Because at the time, if you go back to last May, nobody even knew it was run on a Democrat side. At least they thought that didn't change. But look into the future. It's like what things in the IRA are good policy and should be kept? What things in the IRA are they John Szoka (58:49.966)probably could work if they had some tweaks because there's a little too much, maybe too many Christmas ornaments on there. It's just not structured right. And then which things from a conservative viewpoint should, you know, they should never been in there in the first place. They never had bipartisan support in the entire history of whatever idea it was. So you get rid of that. So we did this, came up with a big report that we did not make public, but I share with congressional members and US Senate members. John Szoka (59:19.766)on occasion, going to say who or where, but through a conservative lens, and we've made some very specific recommendations. then overall, I think when you break down those three things, there are things in there that even though no Republicans voted on it, are really Republican and Democrat shared ideas from previous bills that had great bipartisan support. I don't think anybody's going to argue against creating jobs. John Szoka (59:46.642)in bringing industry back to the United States and supporting new industries, which is a part of it, which that's part of this picking winners and losers thing that I don't like to pick winners and losers. John Szoka (59:59.886)The other big failing, I think, was when you say we're going to run incentives for 10 years, you can never control how much money you're going to spend. For example, when the IRA is passed, the CBO graded it like it was going to cost $280 billion. The latest grading of the CBO, I think, is over a trillion. So, you know, you got our friend inflation, you got this, you mean everything costs more. So now you go from John Szoka (01:00:30.03)280 billion dollars, roughly whatever the number was around there, and you go to a trillion dollars. In congressional speak, I think now they're talking real money. the problem with the 10 years is some of these things when you're trying to build an industry, like the supply chain for offshore wind, the supply chain for advanced nuclear, it's going to take that long to do it. Doug Lewin (01:00:58.508)Yeah. John Szoka (01:00:59.278)All energy is subsidized in the US. Nobody can prove to me that oil and gas is not subsidized. It's just buried in the tax code and it's been there forever. And you know what? Doug Lewin (01:01:10.702)mean, it's, it's right? Yeah. It's, yeah, it's intangible drilling costs. It's oil depletion allowance. And is, I have this conversation all the time. People like wind and solar so heavily subsidized, like oil and gas has been subsidized for its whole existence. And look, if you want to get rid of all the subsidies, get rid of all the subsidies, get rid of all the oil and gas subsidies, all the nuclear subsidies, all the wind and solar subsidies. Guess what you're going to do? You're going to make power a lot more expensive for everybody. Nobody's getting reelected. Good luck. John Szoka (01:01:39.502)And the next people just go back to the way it was. So it's okay to subsidize energy because it's a national priority. America runs on good, inexpensive energy. If we don't have that, I guess I can say this, we're screwed as a nation. But again, conservative principles, don't pick winners and losers. Let's recognize, that everything is subsidized and then try and balance those and then let John Szoka (01:02:09.206)Markets do what markets are going to do if you got balanced subsidies. Everybody's kind of playing on the same level playing field and then let markets do it. If technology A ends up with dismal failure, well, you know what? Stop subsidizing it and reinforce success where you got things that are worth. Doug Lewin (01:02:26.764)Yeah, yeah, yeah. I'm particularly interested in what happens with the provisions that are related to manufacturing, because I, you know, we're seeing these plants. There was just another announcement just last week of an eight hundred and fifty million dollar plant over a thousand permanent jobs in Rockdale, Texas, about 50, 60 miles north of where I'm sitting right now in Austin. Like, you know, those kinds of plants probably don't stick around if the IRA provisions that pay the incentive based on Doug Lewin (01:02:56.771)manufactured components in the United States. So it's going to be interesting to see how, how and which parts they go out. John Szoka (01:03:03.788)Yeah, it is. the problem that they have is on the campaign trail, know, no tax on tips, no tax on social security. We're going to do this. We're going to do that. You got to have a bill pair somewhere. I guess I just say I'm glad I'm not a congressman right now. Doug Lewin (01:03:25.981)John, I have thoroughly enjoyed this conversation. I do want to ask you, I always do this at the end. there anything I didn't ask you that you wish that I had or anything else you'd like to add before we end? John Szoka (01:03:37.614)Man, I don't know about that. You've done a pretty good job of grilling me here this afternoon. I think he asked all the pertinent points because we've talked about generation, we talked about transmission, we've talked about conservative principles and how those should be applied to generation, distribution, transmission. Look, I'm always available. Any of your listeners want to talk to me, they can just look up a conservative energy network. It's all spelled out, .org. Learn more about us. John Szoka (01:04:07.79)get in contact with me and it's really been a pleasure to talk to this afternoon. I really appreciate it. Doug Lewin (01:04:13.218)Thanks, John. Yeah, we'll put a link to all your social handles and the website and all that so folks can find you real easy. And yeah, it's been a pleasure, John. Thank you so much. Thank you for listening to the Energy Capital Podcast. I hope you enjoyed the episode. If you did, please like, rate, and review wherever you listen to your podcasts. Until next time, have a great day. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe