by Stephen Lacey
March 20, 2018

Stephen Lacey:  We're going to talk about some really important subjects. The first one being energy storage. It's a pretty big moment for energy storage in America right now. I think it's fair to argue, it's one of the biggest moments for the technology. That is because FERC, the Federal Energy Regulatory body, issued a powerful decree to all the wholesale markets in land find a way to value storage ... Put it on an even playing field with other technologies. As storage ... And really, we're mostly referring to batteries here ... Keeps showing very impressive cost and performance improvements. The markets constructs are not catching up. PJM in California are the exception of course. But progress is really lumpy in this country. And now, all of a sudden, everyone's saying, "Whoa. We've got a technology in our hands that we may not be able to control or we maybe stymieing because we just don't even know how to deal with it." So now, our federal regulators are saying, "Deal with it. Figure out a way. Come back with us with some rules, and put them in place."

So, let's take the opportunity to take stock of how markets treat storage, and why FERC's decision is a big deal. Katherine, what's FERC actually saying to market operators?

Katherine Hamilton: Yeah. And this is with a full 5-0 endorsement by all commissioners. And they all come from very different perspectives, but they agreed that the rules are broken, and they need the ISOs, the RTOs to fix those rules. So, they've really set up a framework for the energy storage industry. This is just, if you all want to look it up, Order 841. And they've really said, you need ... you, system operators to create participation models for greater than or equal to 100-kilowatt systems on the grid through a stakeholder process to make sure that you're able to compensate characteristics and attributes that energy storage can provide ... That is not getting compensated for. And it should be technology neutral. The whole of point of competitive markets is that you create a service that is needed, and whomever can provide that service should be able to participate.

Right now, storage just doesn't fit to any category. It does so many different things. The tariffs right now are structured so that you have to fit in to very specific categories, and you only get paid for various specific services. This is really going to force the ISOs to go back and rethink that and figure out what is going to be the right participation model, and how are we really going to open up the markets. This is deep tariff issues. This is going to be a very complicated process. But FERC has really teed it up.

Stephen Lacey: Well, let's talk about that complicated process. What happens next? It's going to take many years. It could vary depending on the regional market. What actually has to happen now to implement this?

Katherine Hamilton: So now, the ISOs go back, and they start a stakeholder process. They have nine months to submit their plan. Now, their plan could say, "Here's our timeline." So, the plan could definitely push it out. We're not going to implement for another year. And then, they still have to go through FERC approvals and comment periods from stakeholders.

But the key right now is that the ISOs go back and start a process internally, and that means all the stakeholders who are at the table ... All the participants in those markets have to be seated at the table to come up with ... What do we have to do to change all the handbooks, all the tariffs? Where are the places where storage has barriers ... or these characteristics have barriers, and how do we change those? And what is really important here is the stakeholder process. So, the people who are stakeholders are those who participate in those markets. And often, those are the incumbent generators. There aren't many people ... For example, I've been very involved in DR, demand response, and the distributed energy resource processes, and there just aren't that many participants. We have to gather as many people as possible ... As many allies possible to participate in those processes and become part of those markets, so that it can be done in a way that's very thoughtful and takes everybody's needs and characteristics into consideration.

Stephen Lacey: I'm struck by the Federal Energy Regulatory Commission doing its job, right? Actually taking into consideration this fast moving technology and saying, "Okay. We need to do our jobs and stay ahead of technology or at least keep with it." This is really a positive sign that FERC is doing its job at a time when, as Amy Harder described it in a previous interview, we come to expect the unexpected. We kind of assume that a lot of agencies in Washington are not going to do their jobs properly. This yet another case where regulators are taking a careful look at something that is going to have an explosive impact on markets.

With that said though, this is storage-specific, and FERC is now saying, "Hey, let's open up another docket to take a look at aggregating distributed energy resources." So, that is not part of this plan, but also interesting that they're now thinking about taking this more holistic look at a variety of distributed resources including storage could do in wholesale markets aggregated together.

Julia Pyper: They also have that preceding on grid resilience that they opened in the wake of the DOE NOPR getting reject. It was interesting to see Commissioner Richard Glick and actually Powelson both note to how this energy storage ruling enhances grid reliability and resilience. The very words that we heard Secretary Perry mentioned in his NOPR. They seem to be playing with the same set of language in making this determination on energy storage. And then, of course, we'll see what happens in that other preceding on grid resilience that's going to holistically examine the resilience of the bulk power system. That will be an interesting when comments are due in the next ... I think 60 days after the announcement, which came on January 8th.

Katherine Hamilton: Yeah. The timeline is interesting because the resilience responses are due March 9th, as you mentioned. And the replies to those comments are due April 9th. And then, there is a distributed energy resource technical conference that will be on April 10th and 11th, and that's when they're going to go into ... Remember, it was the storage/DER NOPR that was out there, and they only did a rule making on storage. So, they deferred the distributed energy resources.

There just wasn't enough of discovery and a record built to really make do a rule-making on that. I think there' still a lot of state policy issues ... state-versus-wholesale market tension that needs to be resolved. I think it is absolutely solvable. We just need more time to do it. That technical conference happens in April. But all of these kind of build on each other, as you say. I think even on the distributed energy resource side, we will also see a lot of resilience built into those solutions.

Stephen Lacey: Okay. This is wonky as heck. There's a lot of stuff that needs to happen over the coming months and years. But, I'm really interested in end goal. An end goal to me feels like doomsday for natural gas peaker plants. Because if you look at the modeling of storage cost done by GTM Research, another leading research outfits ... It's going to be very hard for new peakers to compete in the coming years. I mean, it's already in select locations ... kinda hard for them to compete with lithium ion batteries, which are becoming more cost-competitive at an eight hour or longer duration.

What we have is ... Two years from now, or whenever the time frame is, a set of rules in markets that puts storage on an even playing field and cost that look extraordinarily good and make it very difficult for peakers to compete. I think the clock is ticking a little bit closer to midnight on the doomsday clock for gas peaker plants. What do you all think about that?

Katherine Hamilton: Remember the goal at FERC is just unreasonable rates. What they're looking at is making sure that the markets are competitive, and that they continue to move those forward, and that competition is able to be healthy. Remember, all of this also has to do with keeping prices low for consumers because consumers benefit in competitive markets. As long as you have that, uneconomic plants will not be able to survive. Whatever does survive, it's going to be the most economic. And we can kind of see where that's going.

Julia Pyper: I thought it was interesting on ... The sort of significance of this decision to see a Joel Eisen, a professor at the University of Richmond Law School, point out how this energy storage order is really the game-changer for the electric grid that we saw around the early regulations around the internet. He made this interesting comparison, talking about creating a level playing field for storage in other power plants, because the wholesale markets weren't really set up to handle battery storage that sometimes sells and sometimes buys power. So, it really required a paradigm shift in the sale of electricity.

And FERC has now opened that up, which is similar, you said, to what happened in the '60s and '70s, when folks are showing up on the telephone network with computers. They used the network but weren't offering the same thing. So, the FCC ... [made] decisions that basically also helped level the playing field there. Not a perfect comparison, but he basically said in 20 years we may look back on the FERC's storage order on storage and actually also demand response, and see them as watershed moments in the way the development of a two-way interactive, participatory electric grid. I thought that was an interesting comparison.

Katherine Hamilton: Yeah. I don't think that we can understate the importance of having a fully-staffed FERC. So, we have five commissioners. They all come with a slightly different perspective, but that actually makes for better outcomes and fuller decisions. So, I think that is all really important. I've met with all of them multiple times. Finally got in to see the chair, who is a very thoughtful person and is looking for solutions. They want to make sure that they uphold competitive markets and want to make sure that they get to a very thoughtful conclusion.

Julia Pyper: Yeah, sounds like there's some little details to be worked out. The Energy Storage Association's Jason Burwen was pointing to certain minimum runtime requirements that could make it difficult for multiple-use storage. FERC also allows RTOs to offer alternatives to direct metering of energy storage to account for wholesale versus retail transactions. He said this is basically how RTOs will either enable distributed storage or burden it with high transaction costs. So, getting into the weeds here, but it sounds like there's still some details to be worked out that will affect the rule of storage at the end of the day.

Katherine Hamilton: Yeah. Metering and telemetry are huge expenses for anybody who's operating behind the meter. Those are definitely shoes that are going to have to be worked out. I think that through the DER technical conference, we're going to start to get to some of that, but those are ongoing processes. Remember, every single ISO is really different. So, PJM has very different rules and processes than MISO ... Even different stakeholder processes. SPP is so new to this. Theirs are really different. And so there are going to be different stakeholder processes to have to work through and different handbooks. It is going to require a lot of attention.

Stephen Lacey: Okay. Let's move on. Let's be real, folks. America's infrastructure sucks. Our roads, trains, bridges, water and electric systems ... They're aging. They're aging fast. And this is not my opinion. Once again, the American Society of Civil Engineers is rating this country's infrastructure a D+. That was the 2017 report card. They've had that rating for many years now.

So, the call in Washington, led by Trump, for more infrastructure. It's getting a lot of attention. And it's getting a lot of attention from folks in energy, both fossils and renewables, who are trying to convince the administration that they're the best candidates for boosting investment. We now have an infrastructure plan from the White House, and unsurprisingly, it does virtually nothing to address the fastest growing renewable industries or talking about climate change and infrastructure resilience. Instead, it focuses mostly on pipelines, and how to get fossil infrastructure on public lands. It does nothing to expand infrastructure-related tax breaks to the more cutting edge, clean tech industries.

Let's take some time to talk about what is or is not in the plant. And more importantly, how this will get paid for, and what are the political prospects.

Julia, what caught your eye about the infrastructure plan related to energy?

Julia Pyper: Yeah. As you mentioned, I think the fact that there wasn't much in there for clean energy and sort of the distribution and transmission projects that support the proliferation of clean energy ... There wasn't anything on climate resilience that people thought should really be in there. And then, as you mentioned, it's unclear how this would get paid for. It's being called a $1.5 trillion plan, but really, it's $200 billion of federal money hoping to catalyze that additional amount.

Democrats put out their own proposal around the same time that would've had five times the amount of federal funding. And it just comes at an awkward time. We have budget issues on Capitol Hill. Obviously, the tax plan was just approved. Trump did not offer a way for the infrastructure proposal. So, he really just sort of kicked it over to Congress. And both sides, both political parties have really had some pushback on this plan. Democrats obviously want to spend more. Republicans are hesitant to spend anymore and increase the deficit further. One republican friend told me though that the democrats are going to block this no matter what, even though they say they want to act on infrastructure, because they can't give Trump another win after having tax reform. Not totally sure how truthful that is. It seems like the republicans are also having some pushback on this proposal.

To go into some more details, it's worth noting half of the federal money, $100 billion, will be given out to local governments. $20 billion would go toward projects of national significance. Energy projects might be able to play in there, but not totally clear. Another $50 billion is earmarked for rural block grants. The rest of the money would go to other infrastructure-related undertakings, including existing loan programs.

Trump also proposed privatizing certain federally-owned assets like the Bonneville Power Authority's transmission assets, Tennessee Valley Authority's transmission assets, as well as the Reagan and Ellis Airports. You mentioned that there's widened eligibility for private activity bonds. Some clean energy advocates have pointed out this could increase energy efficiency through investments in the grid. Renewables do not qualify, though.

Then, there was the kind of permitting from five to ten years for certain projects down to two years. Sounds like wind is generally okay with that move, because they've had some problems permitting transmission projects. But others have pointed out, this would erode environmental protections for various infrastructure projects. And pipelines are a major concern there.

Katherine Hamilton: That was great summary, Julia. I had a meeting last week with Alex Herrgott, who's the Associate Director for Infrastructure for the Council of Environmental Quality, which is the White House entity that developed this proposal. He really did focus on bridges, roads, water sewer systems, and removing ... As they say making commonsense permitting changes, which, I believe, you can translate that into really removing barriers without consideration probably of environmental issues like the endangered species act. So, I think there are some permitting barriers that could be removed, but there would potentially be pushback because of environmental issues. But he did not mention the grid at all. He didn't even mention rural broadband. Although, I do think that is place where we could really see something happen.

This other areas, like sewers, you're not going to get private funding of the ... These are civic works projects. These are not investments. Where you could really investment ... I think broadband would be one of those areas. I think grid modernization could be one of those areas. But that is not in the president's proposal at all. If you think this going to be like the Stimulus bill, which is 50-50 ... The government gives you 50 percent. If you can raise 50 percent ... And of course, the levels here, as Julia mentioned, are lower. It's 20 percent. That's not what this is going to happen in. I do not think Congress on either side of the aisle has the appetite to spend more money. They just spent upwards of $2 trillion on the tax break. Whether or not the Democrats put their feet down ... Guess what? The Democrats are not in charge. This is going to have to be run by the Republicans. I don't see if they're going to have an appetite at all to spend more money.

That said, you could do some things. You've seen Cantwell and Heinrich introduce legislation that would look at energy efficiency and smart grid. And you can call that infrastructure. That really is what that is. I think we could do some tweaks around the edges. Hopefully, maybe get more transmission projects done. I just don't think that the president's plan necessarily to use that up. At the same time, if we do get something done, he could probably claim a win.

Stephen Lacey: Yeah. I'm trying to wrap my head around the funding mechanism here. In theory, it would be great to get all this private investment. Why have the government do it, when you can have private actors finance infrastructure projects? The most the analysis I've seen though, seems to imply that a lot of the spending and management of projects gets forced down to states that are already cash trapped. There's just not a clear way, like a clear mechanism for states to work with private actors to develop infrastructure projects. I find myself a little confused as to how this model works. I suspect that maybe there are probably others out there as well. Do you have any more clarity on why this approach was taken, and what the limitations are?

Katherine Hamilton: I can't see JP Morgan saying, "We'll build a bunch of box culverts." That's not something that they would invest in. And I don't imagine ... And you're totally right that local and state governments are not flush enough to pony up 80 percent, and they, if they can leverage some private equity, that would be great. But 80 percent for these major projects ... These to me feel like real federal projects that if we could some money into and then get them done, that would be the way that we would do it.

Stephen Lacey: Interestingly, I am now an investor in JP Morgan's box culvert business.

Katherine Hamilton: It's going to boom.

Julia Pyper: Yeah. I'm always confused by the line in empowering local and state governments versus ... Does it really just pass the buck onto them and the political risk. They have to raise local taxes and state taxes now to pay for these plans. It doesn't seem super empowering to me, if I'm understanding it correctly. The control would be great, but trying to find the way to pay for it is no fun. And even the federal side, trying to find that $200 billion ... As I mentioned, Trump did not offer a way to pay for that, which really shifts the discussion over to spending cuts, which is going to come up in general as we look at how the tax plan rolls out, and how the government pays for everything. That's going to be a total gridlock on Capitol Hill as finding pay force for everything right now.

Stephen Lacey: And where is that money going to come from? Well, part of it is going to come from the Department of Energy. We saw recently under the proposed Trump budget, they slashed EERE funding by, I think, 75 percent. Now, a lot of that money was pushed over to the Office of Fossil Energy and Office of Nuclear, so it may not net out a lot of money to pay for this infrastructure bill. But that is one place, where you could imagine the administration targeting in order to get money to pay for this.

Julia Pyper: They also proposed to cut the Department of Transportation's budget by 19 percent, including acts in grant programs for transit and other competitive projects proposed by local governments. It seems to be a little at odds with the broader idea of trying to boost infrastructure spending while proposing to cut the DOT's budget.

I think it's also important to note that any time you talk about infrastructure, you have to talk about the gas tax 'cause that's traditionally always paid for infrastructure. Right now, the gas tax is at 18 cents per gallon ... Has not been raised since 1993, and it's not adjusted to inflation. I think the Chamber of Commerce has actually proposed raising this. Trump has said he's open to it. They haven't officially come out on that, but it is a proposal out there. And it's important to discuss because the budget office says that by 2021, the Highway Trust Fund could literally be out of money ... Be insufficient to meet the obligations.

To the idea of bipartisan solutions, we've had people come out proposing if vehicle miles traveled tax, which would actually make sure that electric vehicles and hybrids and more efficient cars are paying their fair share for infrastructure into the Highways Trust Fund. I remember covering in 2012, Congressman Blumenauer's proposal on that. But it was funny. It still got pushed back. You have a Democrat proposing a VMT, which would affect clean energy vehicles, but he did it as sort of this bipartisan way of coming up with this sustainable long-term solution, and that got pushed back. The Gas Tax doesn't seem to be going anywhere right now, even though it seems like everyone agrees it needs to be raised.

And then, you have other newer solutions like vehicle miles traveled tax that are out there, but we'll see if they get any pickup. Probably not.

Katherine Hamilton: Yes. I do think we need to figure out how to pay for the roads. But I'll tell you who gets hit with the gas tax -- it's people in rural communities who drive more. A lot of those areas are red states. I would not say that this is limited to Democratic opposition. This is not a winning topic for Republicans. If the narrative is we just gave a big tax cut to corporations, but we're going to raise your cost of driving, that's not going to help folks in rural communities.

Stephen Lacey: Who knew infrastructure could be so complicated? Who knew?

While both of those other stories broke last week, I was in Mexico. Luckily, I barely missed that earthquake that came through. We got a nice text from Katherine, following up, asking me if everything was okay. I didn't get one from my parents. So, thanks Katherine for watching over me.

Katherine Hamilton: Happy to be your mom for a day.

Stephen Lacey: Another tremor is coming to Mexico though, but it's not coming from underneath the earth. It's coming from the sky in the form of photons. That country, Mexico, is emerging as one of the hottest solar markets in the world. And if current trends persist, GTM Research forecast it could install 20 cumulative gigawatts by 2022. And that could represent 20 percent of total capacity by then. It's a big deal.

Katherine Hamilton: Yeah. So one of the things I was wondering about is that they have upcoming elections. I'm just curious how you think those elections might influence what has been a really strong policy on renewable energy.

Stephen Lacey: Everyone was asking about that. I think that's the big unknown at this point. But what I did hear from government officials and developers alike is that we're past the point of no return. We're five years into the market transition. Enrique Pena Nieto can't run for another term. He's been very supportive of the market transition. But even if someone like a very left-leaning candidate like Andres Manuel Lopez Obrador comes in ... He claims high support for renewable energy and the market transition. I doubt that we're going to see any extremes swings in how this moves forward. So, as far as solar and wind are concerned, you probably won't see any dramatic twist and turns. Really, the changes will be related to tariff design, the net metering cap, some of the more granular decision making that comes at the agency level that's probably outside of presidential politics.

Generally, I found that they were tempered fears, but most people, including the folks actually implementing the market transition, don't believe there will be a significant impact.

Katherine Hamilton: And Stephen, aren't the auctions and bidding prices ... That whole construct, isn't it extremely complex? Do you think maybe it could be simplified?

Stephen Lacey: Oh, god. I don't know the answer to whether it can be simplified. There's definitely a lot of complexity in factoring in wholesale market prices at different nodes. Mexico has a lot of different nodal pricing structures, and they're pretty volatile. The PPAs that we've seen factor in long-term ... The pricing that we've seen under the auctions factor in long-term PPAs, and there's questions about whether off takers are willing to sign a 10- or 15-year PPA in Mexico.

There's the clean energy certificate program that developers are factoring in ... These wreck-like certificates, the value of the clean energy generated ... And that market is still really not come together yet. There are definitely a lot of factors that make these prices more complicated. I don't know that I have the answer whether it can be simplified, the auctions themselves. We've had a couple hiccups in interpreting the numbers ourselves and how you model out the different ways you get to certain price.

I think we're probably looking at the same system we have now. They're changing hands with how they run the auctions. But ultimately, you're looking at prices that factor in a lot of different market constructs in Mexico, and that's largely going to stay the same.

Julia Pyper: Yeah. It was interesting to see the conversation around the clean energy certificates because those are factored into the PPA prices we saw, the really rock bottom ones. But we don't know what the value of those certificates yet. So, a lot of the people were pointing out that the record-breaking prices that we're seeing aren't quite what they seem. That'll be interesting to see how it plays out.

Stephen Lacey: Yeah. I mean, these low prices are extraordinary though. The certificates are one factor that people are eyeing to see if these projects pencil out. I mean, the margins are extraordinarily thin, if not, nonexistent. There was skepticism in the conference about whether projects will get built. Some people believe that developers are just going to build them and then flip them. Others think that there might be other revenue streams that solar can take advantage of, which are still kind of uncertain.

I think everyone's trying to figure this out in real time. To use a really tired analogy, they are building the car as they're driving it. But look -- there's a couple of big factors that are bringing in these low prices as well that are just fundamentals in Mexico, and that is they have some of the best solar radiance in the world. Hands down, they just have one of the best solar resources, and they have low labor costs as well. And you have big developers ... Big, experienced developers partnering with local developers. They know how to keep costs low.

Right now, project costs, according to GTM Research, are coming in at an average of 85 cents a watt. That's some of the lowest costs in the world. We see like 65 cents a watt in India and so forth. But 85 cents a watt is really good. Those costs are headed downward. Of course, they depend on a lot of factors. They assume continued reductions in cost of equipment. They assume continued low labor costs, as we talked about the certificates and other market constructs. They rely on low-cost financing, probably from government banks. Institutional lenders are still circling the market, unsure about currency risk and the coming elections. There's a little bit of hesitancy here. But whether the cheapest products get built, the ultra low 1.9, 2 cent a kilowatt hour projects get built, there's still going to be a lot of solar built. It's going to be between 15 and 20 cumulative gigawatts over the next few years. That could be anywhere from 14 percent to 20 percent of total capacity in Mexico. Pretty extraordinary.

Julia Pyper: I thought it was interesting to see how distributed solar's also expected to grow pretty significantly in Mexico. GTM has the pricing by 2022 for residential PV around $1.30 per watt, which is far more competitive than the U.S., where homeowners are paying $2.90 per watt or almost $3. Which reminds of an article Andrew Birch, former head of Sungevity wrote for us about the red tape issue that we have here in the U.S. that's really keeping distributed solar prices so much higher than virtually everywhere else in the world.

Stephen Lacey: Yeah, that's right. Mexico also has a really generous net metering policy. 500 kilowatts is the cap. You can have huge behind-the-meter systems that qualify for net metering. We've seen steadily rising tariff levels for commercial customers over the years. Uncertain whether those tariff levels would drop under a new presidency for political reasons. Regardless, we've seen a trend upward in rates and a very solid net metering cap, which cumulatively has made behind the meter systems more attractive.

Quite frankly, corporate offtakers are becoming a big piece of the utility-scale market in Mexico as well. We're seeing independent power producers increasingly stream into Mexico and seek out single corporate players that want to invest in a lot of wind and solar. And so, that trend that we see in the United States and other markets firm ... These big tech and industrial companies are certainly coming to Mexico. That we expect to be a significant portion of the market.

Katherine Hamilton: Last September, I attended and spoke at a conference in Mexico City. I was on a panel on energy storage. With this type growth in wind and solar, you would expect that energy storage would also potentially have market opportunities. But the way the rules currently define it is a limits storage to being a generating resource. Because storage can be both load and generator and also a host of other things, TND deferral ... There really hasn't been a market there yet. So, I'm interested to see how those rules might change for storage.

Stephen Lacey: That's going to change for sure, but it's probably on a similar pathway to those FERC rules that we talked about at the top of the show. I did host a panel discussion with CENER and CFE. CFE is basically like the market regulator, and CENER is the energy secretariat. Both of them work closely together on creating the rules for the wholesale market design. Both of the officials said that storage is really important. They want to create dispatchable renewables. They know that there's going to be a lot of renewables saturating the grid. They know they need rules, and they haven't quite figured it out yet. But that's a process that is imminent that will take a couple years. But we can expect to see some results and more public talking about storage for sure.

Now we'll give you some nuggets of information that are maybe good for your brain ... To tell you something you don't know, and ... Julia, you got the first go-round.

Julia Pyper: All right. You may or may not know that there's a clean energy startup called Inspire, based here in LA, where I'm based. They recently secured a multi-year strategic partnership with Shell Energy North America. Inspire's interesting. They basically started selling RECs from wind projects, so people could buy clean energy effectively. But now they're transitioning with Shell's help ... And I understand, it's a substantial financial commitment on Shell's part, although they did not release the number.

So, they're transitioning to this sort of Netflix-style subscription for clean energy, where you sign up, and they'll eventually deliver you a smart meter, LED lights, along with potentially solar batteries one day. They're going to be this subscription service ... You pay a flat fee to have these various resources added on to your monthly program. And so, it really takes any of the monitoring or individual relationships with different vendors out of the equation. You just sort of sign up and have this buffet of clean energy technology, which I think will be interesting. It's sort of a ... I spoke with their CEO this week. He sort of described it as a continuation of David Crane at NRG's vision for the smart home, but they're taking out the individual elements making it a one-stop shop. Early stages now ... But the fact that they've got Shell backing them, I thought was pretty interesting. So, the company to watch.

Stephen Lacey: Clean energy buffet. It's like the Golden Corral of home energy management.

Julia Pyper: That's my term, not theirs.

Stephen Lacey: Can we stop calling it "energy as a service" or "efficiency as a service," and just call it an energy buffet? I like that.

Katherine Hamilton: I like that.

Stephen Lacey: Katherine, what do you got this week?

Katherine Hamilton: Yeah. I have a couple of things to mention. One is just to everybody know that the Solar Foundation just released the solar job census. And for the first time, the first year jobs have decreased since the census was released in 2010. But the long-term trend continues to show significant jobs growth and a diversity of the industry. It's interesting, worth looking at, and worth digging down to see how specific states have changed ... Which ones are growing the most and which ones have lost jobs in solar.

The second thing I would point folks to is that Dawn Lippert of the ... It was called the Energy Excelerator. It's now called the Elemental Excelerator. It's based in Hawaii, but they're doing projects in California as well. They are now adding a new track called Equity and Access to their funding resources, which provides opportunities in constrained communities in California. That should be really helpful for low-income communities. They've also added, not just energy sector, but water policy, mobility, and agriculture sectors to what they're funding. Applications are due March 30th. So, it would be good for folks who are interested in accessing some of this funding, which tries to address several different valleys of death is out there.

The third story I wanted to point folks to, because Jigar and I were out in Ypsilanti, Michigan last week with Consumers Energy, is that Consumers, whose CEO used to run a coal plant, Patty Poppe, has announced that Consumers is going to stop using coal by 2040 and have 40 percent renewables. They're going to cut their emissions by 80 percent, and over the next five years, save a billion gallons of water, reduce landfill waste 35 percent, and protect or restore 5,000 acres of land in Michigan. So, they are moving ahead. And this is based on climate change. They are internalizing, as a company, climate change. And while there's still a utility and they oppose this ballot initiative on mandating renewables, they are still internally trying to make a difference.

Stephen Lacey: You pulled a Jigar there. He usually brings two stories, and you brought three --

Katherine Hamilton: Sorry about that.

Stephen Lacey: No. That's okay. They're interesting stories. The Consumers one is really interesting too. The Sierra Club Beyond Coal Campaign came out with some numbers on Monday showing that there have been more coal retirements in the first 45 days or so in 2018 than the first three years of the Obama administration, coal capacity retirements ... Not individual plants but capacity ... Pretty extraordinary numbers.

And speaking of that ... Speaking the transition away from fossil fuels and some these market dynamics that are calcifying, GE ... Obviously a major wind leader, a real technology leader in wind turbine manufacturing and project development and investment ... Has faced some real hard troubles recently. And part of it is because their power-generation business is struggling, and they put so much investment into the gas generation business. They're one of the biggest makers of gas turbines in the world. I think, maybe, they are the biggest gas turbine maker in the world. Around 2011, 2012, they doubled down on the smart gas turbine. They wanted to put sensors in every gas plant around the world. Of course, this is important. They're extraordinarily efficient. They built some of the biggest turbines. They're a real technology leader. But what they've seen is that their business has not just stagnated but dropped. So, they've seen a 50 percent drop in their stock price in the last year. And much of that is due to the struggles in the power generation because people aren't ordering as many gas turbines.

Luckily, they have a significant renewable energy business that's evolved considerably in recent years, but not enough to make up for the thousands and thousands of jobs lost in the power generation business. It's getting restructured. Their investors are putting the pressure on them. I tweeted this out right before we started recording today because ... It captured my attention, simply because a company like GE has been so forward thinking about renewables, and they're even caught in the crossfire. And what happens to the biggest multinational energy companies that are banking all on fossil fuel extraction or fossil fuel generation, and they don't have that exit strategy? Well, they are going to be screwed. This sign at GE is indicative of some other problems we'll see at major companies around the world.

Julia Pyper: The very first headline I wrote for GTM in 2014 was from a GE executive saying grid-scale energy storage can't compete with "low-cost" gas in the pipeline. My, have the times have changed.

Stephen Lacey: Yeah. I remember that story. That was right when GE was figuring out their Durathon business. They had the sodium sulfur battery. They made a significant investment, and then, they didn't think lithium ion was the future. To be fair, a lot of people thought that lithium ion wouldn't compete at that point. But of course, three years later, four years, cost reduction have surpassed everyone's wild expectations. Lithium ion has hardened its lead as battery storage technology on the grid. And so, GE, of course, has reinvested in lithium ion storage. It has entered partnerships with folks. They now see storage as a major piece of everything that they're doing.

And these are just the first steps, folks. When a big company makes this ... These are smaller partnerships. They're one off projects. But when you see these structural changes, investment pressure, investor pressure, and big decision to enter into greater partnership, that's the sign that there is huge technology shift underway.

Katherine Hamilton: Well, there's also a policy shift. So remember, a bunch of states have also taken pretty strong policy positions on storage that have helped scale and drive down cost.

Stephen Lacey: Indeed. Okay. We'll leave it at that. That was a fun conversation. Thanks, Julia, for joining us. Hey, folks, as I mentioned at the beginning of the show, if you want to support us, go to Apple Podcast and give a rating and review. Of course, you can give us a rating and review on any Podcast app, but the Apple ecosystem is really important to us in helping us boost up the ranking. So, your help is greatly appreciated. We love your support. Give us your feedback at PodcastAtGreentechMedia.com. Follow us social media. Follow Julia. Follow Katherine Hamilton. Give Jigar a shout out. We're all there, and The Energy Gang is there as well. Make sure to check out The Interchange, our other long-form Podcast, where we talk to energy leaders who are thinking about the cutting edge of energy and Climate.

I am Stephen Lacey with Julia Pyper and Katherine Hamilton. Julia, thanks for joining us.

Julia Pyper: Thank you.

Stephen Lacey: Katherine, good to talk to you. Happy belated.

Katherine Hamilton: Thank you.

Stephen Lacey: This is The Energy Gang, a production of GreentechMedia.com