Climate change is one of the grimmest crises we as a civilization have ever faced. While the planet will continue to evolve with time, it’s us humans who are running out the clock as more and more places on Earth become uninhabitable. Shuli Goodman, Executive Director of LF Energy, compares it to the game of musical chairs where with every round a chair (a habitable place) is being removed, there are less chairs left for people to sit on. Consequently, a time will come when there will be a conflict between people to fight for the remaining chairs. Shuli believes cutting down on carbon emissions is one of the keys to addressing this urgent problem. I feel that LF Energy can play a very critical role here in driving that change and not only become a catalyst, but also a leader to bring those changes. “I believe that LF Energy has the ability to provide tremendous hope to people in terms of decarbonization and transforming our economies,” agrees Shuli.
- Impact of climate change on our world
- How is the energy sector contributing to the problem and how are they also going to become a part of the solution?
- Energy sector is going through its own digital transformation leveraging open source technologies. How is this going to help companies achieve their decarbonization goals?
- What role is LF Energy playing to bring different players of the energy sector together to help them with their digital transformation journey?
- This is not a US only problem, it’s a planet scale crisis. What positive changes are happening around the world that give us some hope?
- What are the things that Shuli and LF Energy are excited about in context of the upcoming COP 26?
Swapnil Bhartiya: Hi, this is your host, Swapnil Bhartiya. We are introducing a new series called Let’s Talk About the State of Energy presented by LF Energy. And today, for our first episode, we have with us, once again, Shuli Goodman, executive director of LF Energy. Shuli, it’s great to have you on the show.
Shuli Goodman: Oh, Swap. It’s really good to be here. Thank you.
Swapnil Bhartiya: COP26 is there, and I also want to talk a bit about that, but because this time the focus is on climate change. When we talk about climate change, it is much more than depending on your political leaning, it’s going to have a real impact on our world. It might have impact on immigration. People will have to move. It will have impact on wars, resource crunch. So if I ask you from visionary perspective, what impact… This climate changes, this crisis is going to have on the world, what exact crisis are we facing today?
Shuli Goodman: I think there’s a couple of different ways to look at it. And because I think for a lot of people, climate change is abstract. It… You have to bring it down into ways of thinking about it that make a lot of sense. Every year that we postpone actually addressing climate, we are, it’s almost like we’re doing a game and that one chair gets removed, another chair gets removed. And so, when people are circling around, there are less and less seats for people to sit down at. And when that happens, when you have… If you had 10 people and seven of the seats all of a sudden were gone and you have three people sitting and seven people looking at those seats, you’re going to end up with conflict.
You’re going to end up with a kind of stress on the environment, because people are going to do everything they can to ensure that their families are fed, that they have a future, that they have a roof over their heads. And so, because, in the musical chairs that we’re playing called climate collapse, we’re going to have to either figure out how to become radically effective in how we distribute resources. Or we are going to have to live in a persistent war, persistent zone of climate refugees, and kind of a persistent struggle between those people who have, and those who do not. I believe that LF Energy has the ability to provide tremendous hope to people in terms of decarbonization and transforming our economies.
Swapnil Bhartiya: There are a lot of industries, not only they contribute to the problem, but they also hold keys to the solution. So let’s have a myopic view and just focus on the energy sector. What role do you think energy sector can play in mitigating some of the challenges? As you said, we may have to cut down on the way we live life, but our reliance on energy is actually increasing, the way we are dependent on all those things. But energy sector itself is also changing with the emergence of solar, electric cars and all those things. So let’s talk about energy sector, how it’s contributing to the problem and how it can also be a part of the solution.
Shuli Goodman: It’s really important to recognize that decarbonization is essentially an economic event and that we have used rich fossil fuels to drive an expansion of gross domestic product. In other words, energy enables the creation of production. If what you’re doing is carrying water from a well, a mile to your field, then your effort, your energy has also gone to moving from the well to the field. If you are able to use a little bit of energy to move that water from the well to the field, you have then freed up your ability to do more.
And so when we talk about decarbonization, what we’re talking about at its essence is about transformation of our economy so that what we produce is actually coming from variable or intermittent or green energies. And, so that’s really at the heart of it. So about 75% of decarbonization will occur through electrification of our energy systems, decarbonization of transportation and decarbonization of our built environment. And that’s 75% and the 25% are in agriculture, which will absolutely be transformed if we move more towards regenerative agriculture, or the ways that we make cement and plastics and the ways that we actually enable air travel. So, that’s it, in a snapshot. And so at the heart of it, really power system transformation is going to create the coattails for the rest of it to happen.
Swapnil Bhartiya: And what kind of changes are you seeing within the energy segment or power companies where they are going through their own digital transformation, using a lot of open source technologies to speed up this process to help companies achieve their decarbonization goals?
Shuli Goodman: In the previous system, what we used was the internal combustion engine, and then we were able to use fossil fuels to spin great big turbines that produced electrons that we then sent over hundreds of miles, and those things were then transformed, and then they were… So we turned a switch on and we had electricity and it’s all really rather magical to us as human beings. We… For those of us who have electricity and consume electricity, we don’t really think much where does that thing come from?
So when things were relatively centralized, really the electron, you could just sort of throw it at a plug. So you’d have a light that would come on or off. And in the United States, we have a lot of what’s called vampire electrons, where we are basically always on, always ready to go. And maybe 20% of the electrons that are spent in a home, are spent on vampire electrons, electrons that are just waiting to be used.
So we haven’t necessarily designed a system that was very efficient in its distribution of electrons. As we move to renewable energy and distributed energy, we are talking about creating devices like solar panels. I have solar panels on my home or batteries for storage, and we’re fundamentally shifting the electronics of our homes in order to be able to generate energy. And that’s in the home environment, there was this centralized form of electricity that was going from a generator over distribution, and then it drops into our houses.
Now what we’re talking about is really much more like a network of networks. And so when you think about the future of energy and the future of power, what you’re really thinking about is something that is much more close to the internet. There is this assumption that it’s a web and that there are hubs and networks, and there’s enormous redundancy. If you had an internet, not only had 900 nodes, let’s say, and some of the nodes went down, then the whole system would go down. And so what we’re talking about is a kind of unparalleled redundancy and kind of networked version of energy. And that requires digitalization. And that’s at the heart of what we’re trying to do.
Swapnil Bhartiya: If you just look at the energy sector, it’s literally the companies are large, massive. But the energy sector is… So there are few big players. What role is LF Energy playing to bring these players together? Because they’re always scattered and they’re also a smaller number. So that, to help them with this digital transformation journey that you talked about, but also to enable them to collaborate on technologies.
Shuli Goodman: So utilities are natural monopolies. And what that means is that the amount of investment that goes into creating a utility… There is not enough competition to allow multiple versions of those monopolies to exist in a small area. With the world that we’re shifting towards, there’s going to be an increasing amount of distributed energy. And the question then becomes, what is actually the role of those monopolies in the future. For the most part, I think many of those monopolies have a limited view of how it is that they best operate and they really want to continue with this winner take all world. I think it is incumbent upon all of us to imagine what would happen if we ended up in a more distributed world in which there were many players. And for the most part, because of the infrastructure of substations, polls, wires, meters, that’s probably always going to be managed by one company and it’s going to be quite local.
But when you start talking about how those things are networked together, and the relationship, for instance, in my state between PG&E and the North and Southern Consolidated Edison in LA and San Diego gas and electric, when you start talking about the relationships between all those utilities and the boundaries between them, the ability to actually balance their system back and forth by developing interdependency is critical. So the software that we’re developing allows, for instance, our two strategic members right now, are Alliander in the Netherlands and RTE in France. And RTE is a transmission system operator and Alliander is the largest distribution system operator. So the partnership that they have formed with each other is to develop software that actually allows a TSO and a DSO, a transmission system operator, and a distribution system operator, to communicate more effectively with each other in managing network operations.
That is a fundamentally different way of operating than monopolies have operated in the past. And so for the most part, our monopolies are siloed. All energy is local. I think, we always talk about buy local, consume food local, all of those things in some ways the same is maybe most true with electrons, because electrons are the most perishable commodity on the planet. And so once they’re created, they have to be consumed and to run a network, you have to be absolutely certain that you are balancing supply and demand at any given time. So the software is very helpful to create new markets, to enable balancing between different utilities that enable asset management, being able to collect massive amounts of data.
One thing that I think for most people to understand about the importance of what digitalization means to the transformation of energy into a networked environment is the role of digitalization and of the role of data, because an electron needs a physical surface to travel on. What we have now, with the evolution of our data sciences and what we’ve learned in information and communication technology and 5G, is the ability to produce data or metadata about an electron, which then allows you to network that electron because you can network or choreograph the supply and demand, so that you always balance your networks.
Swapnil Bhartiya: This crisis is not limited to the USA, of course, it’s a planet scale crisis. So can you also talk about what is going on in other major economies, Asia or Europe?
Shuli Goodman: I think that this is a really important question right now and that all of us going to have really understand and begin to take some personal responsibility for. What we’re seeing are the very beginning stages of the energy transition. So when I was talking about the musical chairs, another analogy I give is, that we’re all on a plane and we’re all at a stratospheric height that has been driven by fossil fuel. And as we begin making those changes, there are going to be these moments when we’re going to feel like, “Whoa, we just dropped 10,000 feet” and it’s going to feel scary. And then we rise back up. And, we’re going to have events like this over the next 20 or 30 years as the geopolitics play out.
I find that it is going to be exceptionally important that while the world figures this out on the political stage and on an economic stage, that us humans, who feel our daily life is going through all kinds of fluctuations, that all of a sudden we have oil or gas price that is way beyond anything we’ve ever paid before. Or these kind of things happen, that we are going to have to be patient with it, because we have all achieved a level of wealth.
And we are now going to have to figure out how to transform that, in relationship to the natural laws of the universe. And in this case, if you have too much carbon on the planet, you actually shrink the amount of livable space on the planet. When I think about what’s happening in Europe and what is happening in China, in terms of closing plants and people having to choose between heating their homes or work, I think of a kind of patience that we, as humans are going to have to develop, to encourage each other, to make this change and to actually have some sort of trust that where we’re going is going to be better than where we are today.
Swapnil Bhartiya: COP26 is also coming up. Talk about what are the things that you are excited about this show?
Shuli Goodman: I think that in the long term, when the world goes future seeking and it begins looking for the places to build the future, doing it in an open governance environment. When you look at the Linux Kernel, it basically in 30 years, went from a dorm room to being the underlying operating system of the planet. And I believe that the same thing is true of LF Energy. That we can take that DNA and we can make this offering. We can provide a place that has governance, that has integrity, in which people can work together, and they don’t have to worry about the economics of working together, that somebody’s going to take something that they’re doing. And so it’s a platform for cooperation.
So my approach to COP26 has been, “We’re here. We’re working on this platform for cooperation”. When the world actually really begins looking for where to do this, hopefully there’ll be enough people who have heard this and have heard the other work that we’ve done in the last three or four years, that they recognize, “Oh, there’s something happening there that’s unique. They are slowly but surely building the future”. And, so that’s my message to COP is, “When you’re ready, look up. We’re here and we’re building a developer community that is slowly but surely growing in size and in capacity. And we’re here. We’re waiting for you”.
Swapnil Bhartiya: Shuli, thank you so much for taking time out and record the first episode of our State of Energy show. And I look forward to our next shows and episodes. Thank you for your time today.
Shuli Goodman: Thank you, Swap.