Thread by @JigarShahDC

In 2019, @Chrisnelder did a must listen to @TransitionShow
with a researcher from Lappeenranta University of Technology in Finland. It is he argues for how critical #PowertoGas real is for the future of decarbonize -- vital actually
xenetwork.org/ets/episodes/e…

Most of the activist sphere went crazy with an anti-RNG and anti-gas rage that was document in a "not his best day" listening to the @sunrisemvmt piece by @drvox here: vox.com/energy-and-env…

Good thing is that @drvox redeemed himself with this piece today which I found informative and more accurate: vox.com/energy-and-env…

Why does all this matter? Because the electric utility companies don't know what to do on renewables integration. They are penalizing #solar/#wind and overcharging their ratepayers by about 30% as a result.

It starts with how the electric utility makes money. They make money by investing capital. They were largely forbidden from investing in electricity generation starting in the 1980s with enforcement clearly coming in 2009 after the financial crisis. So they shifted to the grid

In 2003, after the NYC blackout, the industry agreed that we needed to make up for underinvestment in grid infrastructure. A few years later, renewable energy advocates thought shipping clean electricity from the deserts of Nevada to NYC was a good idea. scientificamerican.com/article/preven…

By 2012-13 it was clear that #solar/#wind was going to be cost effective without subsidies and the utility companies had a binary choice. Build out the grid to meet their numbers, or find a way to manage demand better and pursue #powertoGas (#PtG)

They decided to overtax the American people on the grid. They also charged #solar/#wind projects unGodly fees on building out the transmission grid. They also blamed EVs for the need to build out the Distribution grid. cleanegroup.org/ceg-projects/e…

In fact, in 2003, the average electricity bill was about 50% wholesale power and 50% the rest (T&D, billing, overhead, etc). We maintained this through 2008, albeit because generation costs went up in lockstep with expensive NG

So now we are at a place where wholesale prices have never been lower (and going lower because of COVID). While the asset utilitzation keeps going down (we overbuild for peaks -- first for HVAC now for renewable energy) epicenergyblog.com/2015/06/30/hal…

So what can we do to achieve lower electric rates, electricity bills, and decarbonization? Find ways for the electricity utilities to electrify everything, connect electricity with gas utilities, and join in with the transportation fuels/chemicals industries. Confusing?

Here is where #PowertoGas comes in. The electricity grid has alot of excess capacity, some 45-50%. We can do something useful with that and supply the world with cheap #Greenhydrogen which can turn into feedstock for ammonia, fuel cells, etc.

But to do this we need the electric utilities to stop hoarding all of the attention and instead focus on enabling others on their network. The NG utilities have their own "grid" and it is also underutilized in most places. They can transport 10-20% of their volume in hydrogen

If you add carbon dioxide to the equation, you can convert the hydrogen to methane -- another word for natural gas. With solar/wind getting cheaper they can pay the gas company for the electrolyzers instead of the electric utility company for grid upgrades (that are unnecessary)

And this is where policy/government comes to play. The electric utilities are powerful and even though they say nice things, they really just care about investing enough money each year to make their shareholders company. Simply put we have to buy them off.

Instead of platinum plating their grid what else could you buy them off with? Electric utilities spend about $50B per year on capital investment. About 50% of that is discretionary -- can be shifted to better uses for ratepayers.

In 2009, the ARRA Stimulus provided $5B of extra weatherization money, small pocket change compared to $2T passed by Congress this week. That led to over 1 million homes being weatherized. We have about 12m more to go. $50B over 10 years right there. forbes.com/sites/justinge…

BTW, that could include IP addressable refrigerators, water heater heat pumps, and window airconditioners so we can finally make good on all that [so far] wasted smart meter money that was invested in 2009. Largest investment into non-wires alternatives ever.

So the electric utilities can be placated with weatherization, EV infra and education, heat pumps, in short electrify everything investments. But to accomodate more clean energy (renewables, nuclear, spilled hydro, etc) you need more seasonal storage.

Most people think that the seasonal storage will return back to the grid. Wrong. Most of those hydrogen/methane molecules will be used locally in other industries where margins are much higher and so compensation is also much higher.

I appreciate all of the hard work that @drvox and others put into this industry. But their insular thinking about the electric utilities is holding us back. We are merging many industries together. That is important because it is how clean energy becomes as vital as oil today.

We at @GenerateCapital are already invested in #RNG (waste industry), Hydrogen (forklifts), Fuel Cells, and other areas that cross between gas/electric/etc. I get this is complicated, but we have to start realizing that $0.03/kWh power is worth more than $0.03/kWh power.

Once you realize that, everything else falls into place and decarbonization goes from a fantasy to a irreversible momentum.