Renewable energy outlook in 2023

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Paul Yeager: Hey, everybody, it's Paul Yeager it's 2023. Same podcasts, different topics. Better pizza, I don't know, something like that. I must have watched too many bowl games. And too many commercials. And reminder, this podcast is commercial free. This is the MtoM Podcast. I'm Paul Yeager, this is a product of Iowa PBS in the Market to Market TV show. We are a nationally distributed show on the PBS system. You can also watch us wherever you want to on the world on YouTube. And that might be how you're watching us today. So we do like the National topics. And one of the biggest topics that came out of '22 into '23 is going to be energy. Renewable energy is something we talk about all the time, whether it's ethanol, wind, solar, so why not discuss those topics, we're going to get a southern taste of some things from say, Tennessee in across to Arkansas, we're also going to talk about Louisiana and Iowa. And the state of Texas, which we know is a whole nother discussion in its own right. Our guest today is Simon Mahan. He is with the Southern Renewable Energy Association. He's sitting in Arkansas. So we talk a little bit about there. We'll discuss the weather, of course. And we discuss the topic of energy, what's happening, couple of interesting stories that he shares about his time in Texas on his energy bill. And a couple of things to look for here in 2023. Specifically, a couple of states and the projects that they are working on. That is today's MTom Show podcast, new episodes each and every Tuesday. If you like us, rate us share us tell a friend. That's really what means a lot to me when you share this with a friend and say, Hey, I think you'd like it. And I think you're gonna like this topic here. Sign up. 

Early January is supposed to be what in Arkansas? Because I always think of you and Oklahoma is in this. Are you winter? Are you not? 40 degrees is considered what in January for you?

Simon Mahan: Oh cold. It is preparation for the deep darkness of February, that's going to be even worse. I you know, December, you know is supposed to be when winter is supposed to start. But February is what we really dread. So we're we're going to prepare for the cold in February.

Paul Yeager: Okay, so you consider February cold and I get it, it's cold. But to me, I look at it as a daylight thing. When the sun goes down past 530 or almost six o'clock and the end of February I get more excited. That's how I get through it.

Simon Mahan: That's fair. That's fair.

Paul Yeager: Simon, what's your LinkedIn profile bio, say that your job is?

Simon Mahan: I am the Executive Director of the Southern Renewable Energy Association. That mean, it means I run a trade association of large scale renewable developers. So we focus on wind energy storage, Solar Hydrogen transmission throughout the southeast, Louisiana, Arkansas, Kentucky and everywhere south of there. And we mostly focus on regulatory affairs and legislative fairs throughout the region.

Paul Yeager: And you are tied in I think, to a larger consortium to

Simon Mahan: What do you mean by that? Well, in terms of

Paul Yeager: there's a larger group that you're I won't say network, but when it all renewable, there's a group, you're well how many is in your states that you when you say South? When you say Southern, what does that mean for you? How many states in your group?

Simon Mahan: Yeah, so we cover I think it's seven states, so Georgia, Alabama, Mississippi, Louisiana, Arkansas, Tennessee, and Kentucky. But we do try to keep track of all of our neighbors and make sure that what's happening in our neighboring states. The good things happen over here as well. And of course, also anything that's happening at the federal level. We have to keep tracks on tabs on what's going on there. Because it does trickle down to us as well.

Paul Yeager: Do you have to pay attention more to federal legislation or state by state legislation when it comes to all of the different energies that you're a part of?

Simon Mahan: I really prefer to stick to the state level stuff. That's where most of the activity happens. What a lot of folks don't know is that a lot of your energy matters your electric bill. Issues are really decided from your state decide and the decision makers. Your electric companies are often regulated by your state Public Service Commission's your state public utility Commission's sometimes even your seat city council members And so while there's often an awful lot of focus on what's happening in DC inside the beltway, it's sometimes your state elected officials that are making much more decisions regarding your energy mix in your state than what's happening out in in DC. And so we focus almost exclusively on the state regulatory side of things with the Public Service Commission's and more recently with the state legislatures. And often, we really just want to make sure that the electric companies are allowing renewable energy resources to compete and embracing the lower cost resources available, because we are seeing the low cost renewables are the cheapest things available to them. So if if we can provide those low cost renewables to the utilities, it's often the most economic resources that they can buy.

Paul Yeager: And I get what you're saying. But I also hear people come on to our show and mention while the reason that energy is moving, which way or not is all President Biden, it's because he has set a green agenda. And just as an overall paintbrush, when you hear a comment like that. Do you shutter, what do you do? Yeah, well,

Simon Mahan: it's federal policy. I will say, after the inflation Reduction Act, passage of August, Everyone was surprised. We don't really anticipate Congress to do anything. With regards to energy policy, they they really haven't done an awful lot on on energy policy, really, since about 2015. That's the last time that there was major energy legislation passed that that really affected us at the federal level. And so since since about, then, it's all been state level activities. And just this past year, we were kind of counting up the past activities for 2022. And we found that most of the utilities in our region, were really focused on the low cost provisions of renewables, that that were based off of non federal incentives through the inflation Reduction Act. And so they were not anticipating what happened in August. And even with that, we were finding that there were about 14,000 megawatts of renewable energy projects that were being scoped out or proposed by by the utilities that we work with. And to put that into context for the listeners, our states do not have mandates for renewable energy resources, where we're not focused on legislative mandates like places like California or New York, where renewables are required in the States for carbon emission purposes or anything like that. And so our utilities are buying renewables, because it's the least cost thing that they can do. And the 14,000 megawatts worth of proposals and requests that the utilities that we've worked with, would result in somewhere between 15 to $20 billion worth of economic development in our region. And again, that that was all being led Well, prior to the inflation Reduction Act, and Joe Biden doing anything. So while while the federal work is going to help, it was not being led because of the federal activity.

Paul Yeager: I think you said 14,000 different projects. Is that just among your states? 

Simon Mahan: Well, it's 14,000 megawatts. So maybe, yeah, an individual project might be somewhere between 150 to 300 megawatts. So it depends on on how big the individual projects are. But it's it's a considerable amount. You know, had we asked or had someone asked me, even five years ago how, how many megawatts we might be getting over the next few years, and someone would say, 14,000, I would have been surprised. But it's, it's it's a testament to how quickly the technology has evolved. And the power of private enterprise. And the the ability to have low cost energy in our states.

Paul Yeager: A lot of our audience is very familiar with ethanol, that's considered one of the older renewables in all of the different forms that you have mentioned. And there's always arguments about No, the blending level should be here. Then there's a lot of producers who have a wind turbine, near them on their property around them, whatever it is, but now it seems to be solar was to me and in a lot of our rural America audience in 2022 solar was the big topic. Do I have it right? Your region too, is that kind of.. 

Simon Mahan: Yeah, yeah, solar has really started to take a really strong lead. Wind Technology, particularly up in the in the Upper Midwest is still going very strong, particularly down in the south, we have a very strong solar resource, our wind resource is less strong, I'll say that it is in the upper Midwest, we do have a meager wind resource though. But as we we have more solar technology, come online, the wind and solar work well together. So if you think about the weather, you tend to have a very strong wind resource during the the winter time and at night. And that pairs very well with solar, which works well during the day and during the summertime. And so having those two technologies work together, create a more stable grid, and it helps reduce costs all year long. And so that way, users and ratepayers have a a more stable bill. And so you're not just relying on one single technology. And then when you start adding, adding batteries and all that, that that's when we start getting to a really, really interesting mix. 

Paul Yeager: The stability side is is one of the criticisms I think solar and wind get is that yes, it doesn't. One doesn't happen all the time. Is that what power companies tell you of? Well, we can't we just can't make solar work. It's just too inconsistent. We need something consistent. And I get that. What's the counter to the you mentioned part of the discussion already what the counter is one with the other. But I mean, what's another way that those how you can answer that question?

Simon Mahan: Yeah, so it's, it's really quite incredible. But most of the region that you and I live in Iowa, down here into Arkansas, you and I live in in a grid operator called the Midcon independent system operator, or miso. And miso is the grid operator balances all the different types of power plants, coal, gas, wind, nuclear, solar, on a minute by minute basis, every hour of every day. And it's really incredible what they're able to do, where they have meteorologists on staff where they forecast when the wind is going to ramp up when it's going to go down. And they they literally balance the power that is needed for the entire region. So that we have stable power, right next to us is another grid operator called the southwestern power pool. And they actually have headquarters here in Little Rock. And their region covers, basically from Oklahoma, on up through the Great Plains. And in the southwestern Power Pool, they have some of the best wind resources in the country. Last year in I think it was in March, or in April, there was there was an hour where they actually reached over 80% of their production was from wind energy. And on an annual basis, they get about 40% of their power from wind energy. And so these major grid operators are able to forecast when these variable generation resources, the wind, the solar, the hydropower, because Hydros not always available than the water behind the dams. And forecast when those resources are available, use them when they're available, and then fill in the gaps with the other resources that that we have. And when they're able to do that. That's how they're able to keep the prices low and keep the lights on. It's just really incredible work that they're able to do.

Paul Yeager: When you bring up the regional aspect of it. That's always fascinating to me, I had a boss years ago on Market to Market that used to say, you know, what seems to make sense on energy is what you do what's best locally for you? Because it's not an answer nationally. How much of that power that say, I know it's outside your region, but in that Southwest, in the Plains area where it's all when how much of that stays in that region, and then how much is shipped across the country? And is that the goal of a national system?

Simon Mahan: Yeah, it's hard to hard to answer that question. So electrons actually don't physically stay close to where they're generated. And it's it's hard. I'm not an engineer. I really prefer to stick to the work and in the legislatures and the regulatory bodies. But the engineers have told me this that electrons will flow where Wherever there's copper, or wherever there's a conductor that that they're able to to be energized. And so effectively, the power will flow wherever it's able to. And so with the winter storm that we had during Christmas, there was power that was being produced in Canada, that was able to help folks in places like Georgia. And so by being better connected with our neighbors, it was able to help keep lights, the lights on in places that needed the power, because we were seeing places like the Tennessee Valley Authority and Duke Energy over in the Carolinas, they had blackouts during the winter storm, because they were having difficulty with coal power and natural gas units being able to keep the lights on. And during that storm, it was really important for miso, and for the southwestern Power Pool, to be able to be connected to our neighbors through these large scale transmission lines, to be able to ship power to our neighbors. And so while it's it's great to have local resources available, so that you can you can have those nearby. Sometimes it's equally important to have resources from our neighbors so that we can borrow them in emergency situations like the winter storm that we just had.

Paul Yeager: The old cup of sugar, I needed a cup of electricity. That's exactly right. That's exactly what it is. And I said the word National Grid, what does that mean? And what does that what's that reaction evoke in you, when you because you're talking about something that sounds like that? Sort of?

Simon Mahan: So there's technically three grids. There's, there's the Eastern interconnection, there's the Western interconnection, and then there's Texas.

Paul Yeager: Yeah, I knew that's right. Yeah, that was the punch line of the joke. Yeah. And then there's,

Simon Mahan: there's, there's a little bit of a nuance to Texas, Texas is technically got some bit of a connection with Eastern interconnect. But that that's, that's for another story. But by and large, the Eastern interconnection is, the Rocky Mountains and East. And then you've got the Western or connect with, which is the Rocky Mountains and west. And then you've got this this grid system within Texas, which is which is almost entirely isolated into itself. And it's the grid system is these very large scale transmission lines that are sort of connected to each other, to varying degrees. And so for folks that don't deal with this work an awful lot there. The best way to kind of think about it, and I think I've I've talked about this before is to think about a tree with its roots, its trunk and its branches, where if you have power plants, the act is as roots to be able to provide power, you have all of those connected to the trunk, which can be large scale transmission lines. And then those transmission lines are then connected to smaller scale distribution lines, which are the lines that you see in your neighborhood. And so those those neighborhood power lines are the things that that provide electricity to your house, to your businesses, to to smaller scale customers. But it's really those trunks those large scale transmission lines. That's what we mean, when we talk about the grid, the large scale infrastructure that connects one major utility to another one state to another very large infrastructure that carries billions of kilowatt hours across multiple jurisdictions in order to ensure that that the power stays on.

Paul Yeager: Okay. So when you say, some of those phrases, they elicit a whole line of questions from me. So forgive me for a minute, Simon, if I go crazy for a minute, one of the biggest stories that I think we're going to talk about and '23 Maybe you'll agree, is that being able to tap into the grid anywhere, anytime with more demands for electricity, whether it's another six phones, or it's that electric car, that's one of those. When you hear this whole the grid can handle that electric car, you plug it in your house at night. What's your reaction?

Simon Mahan: Well, so I have an electric car Um, the thing about the grid and electric use and electric cars is, you don't always use the same amount of power at the exact same time during the day. And so, for us, for my family, we use our electric car during the day we drive during the day. And so when we parked the car at night, and I think most folks park their car in the garage at night, it's sitting there for 8-10-12 hours overnight. And that's the perfect time to charge a car. And so that's when we charge our car. Well, that also happens to be the time when electric power usage tends to be slack or less than the normal. So electric companies know this, the grid operators MISO, SPP, the other grid operators, they know this. And so you can you can go on their website, you can go to miso, energy.org and spp.org. And go go to their websites and look at the charts of the power demands for those regions. Right now in real time. It's incredible the amount of data that you can see there. But you can see that the power demands for the regions really dropped down pretty significantly at night. And so what the grid operators do is they literally tell the utilities stop generating so much power, we do not need this much power at night. Because we there's no there's no need for it. We have plenty of power plants, because those power plants do have to ramp up during the afternoons. But they're lying around unused at night. Well, if you happen to increase the usage of power at night with electric cars, you all of a sudden have a new need for more power at night. And remember what I said earlier, wind generates very well at night. And so there have been situations where wind generation, in fact gets turned off curtailed, because there's too much of it at night. And so wind generators would absolutely love to be able to build more farms generate power to help folks charge their electric cars at night. And I've got a wild story to tell you. So when when we lived in Texas, you get to pick and choose your electric providers in Texas. And in Texas, we were on an electric rate plan that we got free power at night, zero cents per kilowatt hour at night. Specifically, because they had so much wind power that they were they were actually having negative power prices at night. And so it was actually cheaper for our electric company to give it away for free, as opposed to trying to sell it off at a negative price. And so it was our power prices were higher in the afternoons, of course, so that that way the utility could make money. But because our power prices were free at night from 9pm to 9am. That's when we charged our electric car. So we drove that electric car, no joke for 30,000 miles for free. Because that's when we charged our electric car.

Paul Yeager: And you could probably I mean, I assume it's this way in many other parts of the country as it is here. The power companies here will tell us during my news time it was in the heat of summer, or the cold of peak cold of winter would be saved those big heavy hot activities at night. Don't strain our grid during the day, run your wash your clothes, dry your clothes, whatever it is at night and that that to me sounds like we already had that plan in place. It's just now we have to adjust. It's now electric cars that are going to be running more at night.

Simon Mahan: That's That's absolutely right. So as a consumer we have the choice to pick and choose our rate plan in Texas and so we chose to go on that rate plan yet. You didn't have to choose that plan. We chose to do that. But when we chose to do that, we intentionally did our laundry at night we did our dishes at night we automatically set our dishwasher to go then we had our electric water heater on a timer so that it would go into so it would automatically turn on at night. We didn't tell any difference. We had a thermostat that would It would change the temperature at night so that during the wintertime it would get nice and toasty during the night and pre warm The house at night. And during the summer time, they would pre cool the house in the morning. And so our electric bills were actually about $40 a month, because we were able to shift so much of our power demand to that nighttime hour. And I was living and working at home. And so it wasn't an inconvenience. And we were saving an awful lot of money by being able to pick and choose our power provider and being able to shift our load like that. Now, not everybody has a rate plan like that, so that you can pick and choose when your your power is being used like that. And that's where, you know, home batteries are going to become popular. And so it's really important folks, for folks to check with your power provider first, to see if that's something available to you, as it's called, it's something called a time of use rate. 

Paul Yeager: Were you in a major metro area of Texas where that was?

Simon Mahan: yeah, we were in Fort Worth, okay. And then we were here in Little Rock, we do have a time of use rate here in Little Rock with our energy provider as well. It's not as good as what it was in Fort Worth. But we do have a time of use right here as well, where it is a little bit cheaper at night than what it is in the afternoon during the summer time.

Paul Yeager: All right, you've danced around you and I have danced around the battery issue I want to get back to that you just mentioned and how prevalent what kind of batteries are we talking and how soon before you think that we're all going to have a battery in our house, that that is capable of doing things that we needed to do?

Simon Mahan: Yeah, I don't think batteries in your home are necessarily for everyone. So we we crunched the numbers over in Texas to try and figure out if it again, we were paying $40 a month for our own electric bill. And it really wasn't quite penciling out to to, to add our own battery or in our own home. Because at the time it was going to cost about $10,000 to put a battery in our garage. And, you know, if you're saving $40 a month on a $10,000. Investment, it's really not going to pay for itself. But the one thing we didn't calculate or add into our math, there was the blackout that happened. Because we were there during the blackout. And so it would have been really helpful to have a battery in our in our house during that blackout. And so it's a matter of what sort of benefits you want to take into consideration when you're adding these batteries into your household. Do you want to have the ability to go off grid temporarily if you have significant power outages for prolonged periods of times? And so, you know, looking back, would we have added a battery, knowing what we know now, you know, maybe we would have because again, we could have charged the battery at night for free and then been able to use it throughout the day regularly. But again, they're not for everyone. They are particularly helpful if you pair them with solar on your rooftop. But for work purposes, we focus on very large scale batteries where they're pairing up with these large scale solar facilities. And when you pair the battery resources with large scale solar facilities, that's where things really start to get interesting from a grid perspective. Because now all of a sudden, you're able to operate solar facilities, much more like a a, a, a unit that you can dispatch, like a gas plant or a coal plant where you can turn them on and off whenever you want to. Because you're charging the battery from a portion of that solar facility that that you're not really using at that time. And so it's it's a really helpful technology that is really quite, it's growing quite quickly. And there's an interesting dynamic between the electric vehicle industry and the utility industry where electric vehicles are going to be the first use for batteries all say that will drive the cost down very, very quickly, no pun intended. And because of that, that's where we're going to see significant cost reductions that will then lead into utility scale battery usage. And once we see those significant cost reductions, it will make it easy easier for homeowners to start adding batteries under their own homes.

Paul Yeager: What do you see the individual consumers price or cost going down being a bigger driver than, say an industry or a business's costs going down on a switch to more renewables in driving the battery industry,

Simon Mahan: it's hard to say. So the we've we've had a number of of household prices, for solar for our own home come give us quotes for us. And the prices that we're getting today for our own household are aware utility scale solar was maybe about five years ago. And that is a significant drop in prices. We've we've seen utility scale solar prices, in the $30 per megawatt range, or three cent per kilowatt hour range. And to give you a sense, natural gas prices today are roughly in the, you know, call it five to eight cents per kilowatt hour just to buy the fuel, depending on on the price of natural gas. And so if you're if you're able to turn off a natural gas power plant temporarily and use solar or wind instead, you're saving about twice as much by using that other resource. And so, for your typical homeowner, it's, it's still cheaper to buy from the grid, at least for now. And again, not everybody is able to have rooftop solar, because you've got, you've got folks that live in apartments, folks that are leasing. And so it's still important to be able to use power from the grid. But I'll tell you, if you can invest in in solar on your rooftop, it doesn't hurt to get a quote. It's very similar to any other home renovation project that you would get, you know, if you're adding a adding a sunroom or if you're adding, you know, some some other type of renovation to your house, you call up a few contractors get a few prices, it's usually free. And if you're not satisfied with it, you don't move forward with it. So it's it doesn't hurt to ask.

Paul Yeager: Big picture. Have we built our last coal firing plant in the United States? Yes. And we built our last natural gas, energy powered plant.

Simon Mahan: I don't think so. And it's natural gas. It's hard to say what what all is going to happen when Texas is going to build a natural gas plant here, they just approved a new one a few weeks ago, natural gas is is working on being able to co blend with hydrogen. And the ability to switch over a natural gas facility to be able to burn hydrogen, at least in the future, is going to be a really important thing to pay attention to and watch. Because the ability to generate hydrogen, create hydrogen, from renewable energy resources, is going to be a game changer. The ability to have fuel on site or through pipelines, and be able to store that energy nearby is is going to be helpful. And so it's hard to say when when that technology is really going to show up. But we are starting to see many more natural gas turbines that can co blend up to 30%. From what I'm hearing with, with hydrogen.

Paul Yeager: As you look to '23, in the states that you serve there with your group, what do you see as the what state is something that the rest of us in the country should watch to pay attention to might be a leader might be something of interest of they're trying something way out of the box, or somebody this kind of finally catching up to the rest of the country?

Simon Mahan: Yeah, so there's a couple of states that I think are really quite interesting. So Louisiana is is going to be a very interesting state. We're already seeing 1000s of megawatts of projects being proposed in the state, both wind projects, but we're also starting to see the beginnings of offshore wind projects in the Gulf of Mexico, and that's going to be very exciting. It's going to take a little bit longer for those projects to get started, but the offshore wind industry is going to be sort of the the, the way the oil and gas industry is going to evolve. It's maritime expertise in the Gulf of Mexico. And the the expertise and the knowledge in the Gulf is perfectly suited to work in the offshore wind industry. Europe has been working in the offshore wind industry for something like 30 years. And the expertise in the oil and gas industry has been exceptionally helpful for the offshore wind industry. So being able to work with the oil and gas industry in Louisiana is going to be exceptionally helpful over the next couple of decades, and Louisiana is going to help lead that that progress. Another state to watch is going to be Georgia. So in Georgia, we've got a number of projects that that are going to move forward. There's a handful of solar developments that are going to happen in that state, there's also going to be a 500 megawatt battery procurement that's going to happen in that state next year, as well. And it's going to be one of the most advanced developments of some of these advanced technologies in the southeast, if not the rest of the country. And so again, these are states that don't have mandates, it's happening because the utilities and the regulators in the States know that renewable resources, help diversify the energy available, and also help keep the costs low for the customers.

Paul Yeager: The old free market at work again, yeah. All right, Simon, I appreciate it. A great insight today. Thank you for filling things in and always fun to find out what goes on around the country, and then we'll spend the next we'll do this again, but we'll spend 90 minutes just talking Texas energy.

Simon Mahan: Yeah, yeah. Absolutely.

Paul Yeager: All right, Simon, thank you so much.

Simon Mahan: Yeah, I appreciate it. Thanks, Paul.

Paul Yeager: My thanks to Simon Mehan, very interesting, kind of stimulates the brain there gives me something to think about. We did keep talking after we stopped recording and learned a little bit more about some of those energy plants and now maybe there'll be future episodes of The MToM podcast. Check back every Tuesday to see what we think of next. We'll see you next time. Bye bye.