Volts podcast: Jesse Morris on building an operating system for distributed energy

In this episode, Jesse Morris of international nonprofit Energy
Web discusses his group’s work toward building a transparent and
trusted “operating system” for distributed energy resources, with
an end goal of enabling a more sophisticated and resilient energy
grid.


(PDF
transcript)


(Active
transcript)


Text transcript:


David Roberts


Recent years have seen an explosive rise in distributed energy
resources (DERs) — energy devices that are located “behind the
meter,” on the customer side, like solar panels, batteries,
electric vehicles (EVs), and smart appliances.


Distributed energy has the potential to change the grid for the
better, making it cleaner and more resilient, but as things
stand, there’s a problem.


Consider an EV. The customer has a relationship to it, a way to
see its capacity and behavior; it wants to operate the EV in a
way that best serves their own transportation needs. The
aggregator — an entity that gathers DERs and treats them as a
single entity, to sell their services — has a different
relationship with the EV; it wants to operate the EV to meet
contractual requirements. The distribution utility has a
different relationship; it wants to operate the EV to maintain
grid stability. And the market manager (ISO) has yet a different
relationship; it wants to operate the EV in the way that best
serves the market.


All these entities want different things from the EV, but they’ve
all built bespoke systems to track it — systems that do not
communicate with one another. Consequently, most DERs are wildly
underutilized.


This can not last. Confusion and crossed wires will only grow
with distributed energy. What the world needs is a common,
transparent, trusted way to track DERs, their capacity and
interaction with the grid.


That is what Energy Web, an international nonprofit, aims to
provide: “an operating system for DERs” that will assign each DER
a record on the blockchain (yes, the blockchain), allowing all
interested entities to have a common source of information and
tracking.


I am a bit of a skeptic of toward blockchain hype, but this seems
like an excellent use of it, which could unlock a much more
sophisticated and resilient grid. I’m eager to talk to Energy Web
CEO Jesse Morris about what the product is, how it can help DERs,
and where we might see it adopted next.


Alright, then. With no further ado, Jesse Morris of Energy Web.
Thanks for coming to Volts.


Jesse Morris


Thank you for having me. Looking forward to the conversation.


David Roberts


You know, I want to get into the nuts and bolts of Energy Web,
but I feel like we should do a little background, a little scene
setting, a little contexting. So let's start, then, because
Energy Web is, I think, primarily a way of solving the problems,
some of the problems posed by distributed energy. And so I don't
want to assume too much background knowledge on the part of
listeners. So why don't you just really quickly sort of tell us
what qualifies as distributed energy? What's the sort of
technical definition of distributed energy? What is it? How much
of it is there? How much is coming on board? And what challenge
does it pose to the grid?


Jesse Morris


So I think that is a very accurate statement, in terms of our
primary focus at Energy Web and the problems we're trying to
solve. For us, distributed energy, and I'll add the additional
word on here, distributed energy resources. What are we talking
about there, at least in kind of Energy Web's world? So we're
really talking about any kind of electricity using, storing, or
generating device. So that could range from a battery in a home,
a battery in a commercial and industrial building, an electric
vehicle, a charge point, a heat pump, any kind of load that can
be flexed over time.


So our definition of distributed energy resources, at least in
terms of the work that we're doing, is actually quite broad. And
if I think about the challenges and opportunities there, these
are things that anyone working kind of under the broad umbrella
of the energy transition, especially you, David, would be super
familiar with. We know that in many grids around the world, we're
undergoing one of the biggest shifts in the 100+ year history of
the grid. More and more customers are adopting these distributed
energy resources. Again, I'm sitting here in California, massive
amounts of rooftop solar coming online.


The model three is the fastest selling and the best selling
automobile in the state. So all of these distributed energy
resources, in some places, are presenting problems. We do a lot
of work in Australia, where they have too much solar at specific
times of the day. It's literally backfeeding into the
transmission system. It's unbelievable. But then we also are in
places where those same resources can provide immense value to
the grid. My electric vehicle can help reduce congestion at
certain times of the day to prevent our overhead lines from
overheating and starting more wildfires. So a little bit of the
context about what we're focused on.


David Roberts


As I've thought about distributed resources over the years, I
think, in the beginning, most people are, I think intuitively,
most people still just think solar panels, and kind of batteries,
sort of the generating and storing of energy. But as you note,
any energy consuming device in the house that can be controlled,
really counts as an energy resource, as a distributed energy
resource. So, like your water heater. Very sort of banal
household appliances, we're kind of starting to think about them
now as energy resources, which is really a new way of looking at
things. But the one piece about distributed energy that I think
is worth adding is that all these devices that you're talking
about are what's called "behind the meter", which means from the
utility's point of view, the utility comes and reads your meter,
and that's how much energy you use.


So it does not know what is going on behind the meter. I think a
key part of this is just that these distributed energy resources
are operating largely out of sight of utilities.


Jesse Morris


Exactly. That is the problem that we're trying to solve at Energy
Web. We are trying to make it possible for all of these devices
to be seen and be able to communicate by these utilities. And
maybe a little context there. My background. I worked at RMI, or
Rocky Mountain Institute, for about ten years. And my tenure
there, I can't tell you how many times I walked into a boardroom
or with some executives at a utility or another energy company,
and we had these beautiful charts and models showing how much
money different companies could make by taking all of these
distributed energy resources and bidding them into wholesale
markets, and eventually, with regulations changing, bidding them
into local, I'd call them "distribution markets" for electricity
run by local utilities.


And the charts were beautiful, the performers are beautiful, but
you had to make two pretty fundamental assumptions. One, that
regulations would continue to evolve, which as you know, is ...


David Roberts


Not always something you can bet on.


Jesse Morris


Exactly. But the second thing, and this is why I spun Energy Web,
myself and several other colleagues at RMI spun Energy Web out,
is it was very clear to pull off any of these business models we
were talking about, software was going to be needed. And these
utilities, it's not an innovative place necessarily. Building
software means using Zoom in a lot of cases. So that's really
where this came from. We said, "Well, wait a minute, can we start
a new organization to build open source software to crack this
problem of giving grid operators visibility into these assets
that sit behind the meter?"


David Roberts


Yeah. And one more thing to add, maybe, you're referring to the
many potential benefits that could come, if these things are seen
and coordinated in some rational way. But I just want to
emphasize one last time before we move on, that from the
utilities point of view now, not being able to see them, it's not
just that they're leaving benefits on the table, it's causing
them severe problems because utilities turn power plants on and
off to meet demand. And demand traditionally, as you know, has
been pretty predictable, right? It goes up and down. It goes up
when everybody gets home from work and then down at night.


And it's relatively predictable for utilities how much power
they're going to need. But if you've got like a solar panel
generating behind the meter, from the utilities side of the
meter, that just looks like demand going down, right? Demand from
that household going down. Only now, because you've got all these
thousands and thousands of DERs, of distributed energy resources,
behind all these meters, suddenly demand is just becoming less
predictable for the utilities, right? Because you got things
generating and storing and timing their consumption behind the
meter, you can't see any of it. So all of a sudden your sort of
very predictable demand curves, that you're used to sort of
orienting around, are starting to look wonky and weird.


Jesse Morris


Exactly. And I'd say I'd push it even further. Two examples come
to mind for me. So another one in Australia, there's so much
solar being exported at the distribution network that grid
operators there, today, need a tool to be able to communicate
directly with smart inverters and shut off those solar systems.
Most cases they don't have that.


If I spin around the world to Europe, so far we've been talking
about customer-owned resources that sit behind the meter, they
actually have this problem with their own equipment in some
places. A lot of sensors that are used and a lot of automation
equipment on distribution networks. They're actually using
relatively analog technology to kind of track where those assets
are and communicate with them. And so, even there, you might have
some industrial sensors that you're using some old school
technology to actually collect data from them, instead of having
a nice dashboard to show you the temperature of your distribution
network in different places. So it's not just customer-owned
resources that are operating a little bit with kind of old school
methodologies and technologies. It's also some utility-owned
ones.


David Roberts


It's a little wild, and I won't do all this, but many people have
remarked how amazing it is that the grid works at all.


Jesse Morris


Shocking.


David Roberts


You can't store electricity, at least you couldn't until very
recently, at least very well. So you have to be generating
exactly in concert with demand at all times, 24 hours of the day.
And they've been doing this for a century without clear
visibility into the things that are at the end of the lines,
right, the edge of the grid. It's just amazing that it's been
pulled off as long as it has. But the idea that, "oh, we should
have some real time awareness of what's going on out there on the
grid that we're trying to manage," it just seems so obvious. It's
crazy that it's only just now coming along.


Jesse Morris


I continue to be surprised. I mean, I can't tell you how many
times I've been sitting with a grid operator and made an
assumption, being a millennial in their mid-30s and has a
supercomputer in their pocket. "Wait a minute, you're telling me
you haven't thought about sending me a digital communication to
maybe not use electricity at a certain time? And you're talking
about, let's make sure we send Jesse a flyer to engage in a
demand response problem." I mean, that's a real conversation I
just had.


David Roberts


I love it. I love it. Direct mail. They're still in the direct
mail phase of things. It's crazy how primitive some of the pieces
of it are. So there have been some efforts to try to address
this, and to try to sort of make use of distributed energy in a
more coherent way, but it hasn't really taken off much. So, like,
for instance, the Federal Energy Regulatory Commission, FERC,
issued this Order 2222. I'm not sure what's the right industry
way to say that. Is there some slang?


Jesse Morris


I think you got it.


David Roberts


22-22? I don't know.


Jesse Morris


Sure.


David Roberts


Meant to sort of authorize DERs to bid into wholesale energy
markets, so that all the energy that's generated that isn't self
consumed by the consumer doesn't just go to waste. And there have
been sort of efforts in this direction in the EU, but your sort
of take is that they have fallen short. Nothing's really gotten
along. So what are the efforts so far? And why haven't they done
much good?


Jesse Morris


Unfortunately, I kind of said there's two things you need to
believe for these DERs to be being fully utilized, right. One is
these regulatory barriers need to be overcome, and the second is
you need technology to go out and get them. We're really focused
on number two, in particular, and one of the reasons we're
focused on number two is because one of the reasons, that are at
least put forth by key people in some of these utilities,
especially in the US, is that a grid largely relying on DERs to
help balance the grid, instead of centralized thermal plants,
just isn't reliable enough.


And our approach there is, say "No, no, no, let's prove that
wrong. Let's show that we can give grid operators near real-time
visibility and, potentially, control, if a customer allows it,
into exactly when, for example, an electric vehicle is charged
and with how many amps." So we're really focused on the
technology side, but if we want to talk, I can offer a couple of,
at least, observations on the regulatory front. I'm lucky enough
to be able to have conversations with every time zone on the
planet pretty much every day. We're really active in Western
Europe. We have some projects in Turkey. If we spin all the way
around the globe, we're very active in Australia, then here in
the US we've got a lot going on.


So if you look globally, I mean there are opportunities for DERs
to make money via either bidding into the wholesale market under
some limited programs. So California is probably the best example
of that. And then these local programs managed by, for lack of a
better term, distribution utilities. So the companies that are
running the distribution networks, and there's your traditional
virtual power plant demand response programs. You hit the nail on
the head though. If we're trying to generalize around the world,
very few places can distributed energy resources have unfettered
access to the wholesale energy market or to these, what I like to
call, "distribution level markets", even though they don't really
exist yet.


And David, you know better than me why that's going on. I mean,
you should, perhaps, offer that synthesis.


David Roberts


Well, there's a bunch of reasons. I assume you're referring to
the fact that utilities traditionally make money off building big
infrastructure, and to the extent, consumers or customers are
building that infrastructure for them, basically, which is what
you're doing when you put solar panels on your roof and a battery
in your garage. You're building a little piece of grid
infrastructure. To the extent customers build it, utilities don't
make any money off the building of it. The same problem that
faces DERs and efficiency and anything else that might trim
consumption of central thermal plants.


Jesse Morris


Yes, exactly. And there are other issues too. In Europe it's a
little bit more nuanced. I would say the conversation in Europe
about DER provision of services locally, and at the wholesale
level, is a little bit more advanced than here in the US. I think
more and more market participants are recognizing that there
needs to be a way for them to be compensated. So there's a lot of
really interesting work going on on these energy communities.
There's a lot of different ways for some of these devices to be
able to participate in the market. In Australia, there has
emerged what I would call rough consensus on kind of what the
market is going to look like as it relates to DERs.


Most of the 25 or so distribution utilities in the country are
going to start offering more full-blown virtual power plant
demand response programs. We call them "local service exchanges."
So it's not just capacity shaving from DER, but it's, "Hey, I
need X, Y or Z service at this time. What DERs can help?"


David Roberts


Right. Well, I want to get into some market structures later, but
first, we've been sort of dancing around the topic, but now let's
talk about it. You say, in one of the papers that you guys wrote,
that, in some sense, these arguments over, "how to aggregate
them, and how to get them into wholesale markets," are a little
putting the cart before the horse. It's like, I think the analogy
used, "It's like arguing whether Gmail or Hotmail is better
before you have established an email protocol via which you can
exchange emails." So with that said, sort of tell us what Energy
Web is trying to do with all these DERs.


Jesse Morris


So our ultimate vision here is to make it as frictionless, as
easy and as cheap as possible, for any DER to be either rolled
off the manufacturing line at a manufacturing plant, or plugged
in at a customer's house, or activated by an energy aggregator or
retailer. Our vision is to make it just completely frictionless
for that DER to be energized, and immediately digitally
connected, and trusted by every grid operator that has a
relationship with that device.


So I give a very specific example. I'm sitting in Northern
California. My utilities, I have three: I have a community choice
aggregator, I have my distribution utility, and then I have the
California ISO that's managing the whole network. All three of
those entities can extract value from my DER, assuming that
regulatory piece is solved with at some point, but they are blind
to that device right now. In this case, I'm talking an electric
car.


So that's our vision. "How can we make it possible for my car to
be automatically integrated to all of these different markets and
programs, and so that these utilities can see it and interact
with it?" And to just paint a picture of how acute this problem
is right now, my colleagues and I recently counted in California,
there are at least eight different programs for DER to provide
some level of service to local utilities and regional.


Now get this. How many of those programs do you think are
coordinated, as it relates to an underlying protocol or
technology?


David Roberts


I'm guessing they're all bespoke?


Jesse Morris


You got it. Zero. So that is recognizing that we still have a lot
of evolution that needs to happen on the regulatory side to
unlock the value proposition of these DERs. We are saying, "let's
just focus on the underlying technology to make it as easy as
possible for all of these different assets to be trusted and able
to communicate with each other."


David Roberts


Right. So the idea here is you make every DER transparent,
basically, its capacity, its capabilities, what it's currently
doing, what DER programs it's currently enrolled in, like who's
getting what value out of it. All these things about the DER are
just going to be accessible to all these different utility
parties.


Jesse Morris


Exactly. Able to be trusted and to be able to transact and
participate in these different ... we have to protect customer
identity information. We have to protect person identifiable
information. But no, you're right. It's all about making those
DERs usable in these different markets and programs, and making
that process as seamless and low cost as possible.


David Roberts


And so, related to this, there's something called a narrow waist
protocol. And I'm wondering if I need to know what that means.


Jesse Morris


That's definitely an Andreessen Horowitz Silicon Valley term for
technology. It might be useful. And this is where, if we want to
go there, there is the whole blockchain Web3 of it all, if that's
what you're trying to get at.


David Roberts


Well, I do want to know how that relates, but I think sort of,
again, to go back to the email analogy, I think most people, most
listeners, even not particularly tech savvy, will know that there
is a sort of protocol — it's called SMTP — that structures all
emails. And that's why any email can be read by any email
program. And so you're basically trying to do that for DERs,
right? Create a protocol that is universally acknowledged and
universally accessible and readable.


Jesse Morris


Yeah, so the way the technology works, it's pretty simple to
describe. Basically, we use these things called "digital
identities" for every person, every DER, and every organization
in our ecosystem. So basically every one of these DERs gets an
identity. Those identities might sit in another aggregation of
identities. And then every aggregator gets an identity, every
utility gets an identity. So we basically construct these digital
identities for every object in any grid where we're working. And
then starting from those identities, which you could almost think
of, like passports, we then enrich them with additional
information about them: "Who installed them? Do we trust it to
participate in this market or that market? What are the different
characteristics about it?"


David Roberts


Sorry to interrupt, but once you've got the identity, is there
any limit to the kinds of information you could add to it? I
mean, I'm presumably you've started with basic stuff, but is
there any technical limitation to how much information you can
stuff in there?


Jesse Morris


The main thing is about latency. So if you have one of those
identities, and you need to send very granular information at
high frequency between identities ... let's think about frequency
regulation in these wholesale markets, right. You can run into
some very challenging engineering things where, "oh, my gosh, I
now have 100 million DERs in California. 100 million of those
things need to send some data every 2 seconds to the California
ISO." You start to run into some scalability things. But then
again, look, I'm an energy and climate guy. I think, David, on a
podcast, I heard you talk the other day. You said, "Hey,
everybody, the nerds have come to the energy transition." Well,
if we unleash the nerds, so the incredibly talented software
engineers and all those folks on that problem, it too can be
solved.


David Roberts


I mean, I'm sure some of them can be solved, but it's interesting
to sort of contemplate it. In a sense, electricity works at the
speed of light, so in some sense, you're trying to move
information around to get ahead of something that's moving at the
speed of light. I can see how there could probably be some
irresolvable problems at some point.


Jesse Morris


Definitely. And right now, most of the time-sensitive
applications that we're building against is really more on the 5
to 15 minutes interval, of data being shared.


David Roberts


Which is plenty, we should note. You can get plenty out of that.


Jesse Morris


Definitely. But those identities, again, not to oversimplify how
we work, but that's basically our technology stack works. You
establish these identities, and there's a number of ways to do
that. With some partners in Europe, we're actually working with
SIM card manufacturers. So the cards that are in our phones, and
they put those SIM cards into different devices, be they smart
meters, or electric vehicles, or what have you. And then with
those identities in the asset, you can literally trust it the
moment it rolls off the manufacturing line, which is super
interesting.


David Roberts


I mean, this feels like a dumb question, but is this a chip that
needs to be attached in or onto all these devices? What does it
look like? What's the actual ...


Jesse Morris


That's just one path. So if you talk about the SIM card, SIM
cards can take a lot of different form factors. Literally, if you
look at some of your credit card., you have a little chip in
there.


David Roberts


Oh, yeah.


Jesse Morris


In many cases, that's a SIM card. And that can come in a variety
of form factors. It could be in our car, it could be in your
phone, it can be in a home energy gateway device, what have you.
But that's not the only way, right? Because if we have to go
around the world in retrofitting every IoT device, we haven't
done this right.


David Roberts


Yes. I have in mind my humble water heater. And I'm just
wondering, like, if I want my water heater to get an identity and
play in these markets, what do I do? Do I stick something onto
it?


Jesse Morris


If we are in a situation where you, or me, or our parents have to
do anything to get paid a few bucks a day for your assets to
provide services to the grid, we have failed. Let's just put that
out there. So that's why the SIM card thing is interesting for
long term, because we could maybe get these devices to be ready
to rock from the beginning. But right now, most of our business
is very closely focused on working with OEMs — so Volkswagen is
an example of a company we work with — or aggregators. We
basically conduct an integration with those companies.


So those companies are running their own servers, and those
servers are having communications with all the different assets
that they manage. And so we can actually conduct these kinds of
integrations with those aggregators, with those manufacturers, to
begin establishing these identities. Now, it's not as ideal from
a kind of utopian and even a cybersecurity perspective. If you
could go all the way to the edge of the grid directly, with every
single asset, and have that, what's called in technology land a
"root of trust", right, in every toaster, in every electric
vehicle, that would be ideal. But that's going to take a really
long time to get there, and climate change isn't waiting for us.


So our focus is, "Let's just move quickly." And that's why we
work very closely with aggregators and OEMs.


David Roberts


So aggregators have an individual relationship with my hot water
heater. How are they doing it? Like, are they communicating with
my hot water heater somehow? I don't know why I'm obsessed with
my hot water heater.


Jesse Morris


No, it's a good example. Have you had any aggregators on the pod?


David Roberts


No, I haven't. I should actually. I've been meaning to.


Jesse Morris


I think it'd be a super interesting conversation because I've had
a very bipolar experience with the aggregators that we work with.
Some of them are going crazy on technology and are using all
sorts of tech to do what you described, which is to have a really
tight digital relationship between their server and your water
heater, so that they can control it and optimize it for bidding
into these different markets. Other aggregators are still sending
text messages, like, just to be clear. That's what's going on.


David Roberts


Text message, like, "turn your water heater down" and ...


Jesse Morris


Yeah.


David Roberts


Oh my god.


Jesse Morris


So it's really a broad spectrum, and I say that not even to throw
them under the bus. They're performing an incredibly important
mission, I think, which is enrolling these customers, so that
their DERs can eventually make money.


David Roberts


We should actually pause here. I don't want to assume too much on
listeners parts, but just to make it clear, an aggregator is an
entity that goes and makes deals with hundreds or thousands of
DERs and gains the ability to control them. And thus the sort of
aggregation of DERs, in sum, acts like a big battery, or a big
power plant. Basically, you can treat it as one entity, once you
have it all coordinated, more or less, you can. I imagine if
you're sending text messages, your sort of ability to be nimble
is limited, but to some extent, right, that's what aggregators
are. I just want to make sure everybody knew what we're talking
about. So I say with some trepidation, tell me what the
blockchain has to do with all of this.


Jesse Morris


I share the trepidation and you should hit me with a ... we can
have a whole other part of this conversation on blockchain and
Web3 and what's going on. I'm happy to offer my candid take on
all that. For what we've described so far, it's actually pretty
simple, and maybe a little bit of context is useful. When we
started Energy Web, we had a strong hypothesis that blockchain
could actually help us do some of the stuff that we've been
talking about, thus far on this conversation. But we didn't know
exactly what. We knew that some of the high level principles
about what blockchains could be capable of sounded really
interesting, and let's experiment with them.


And since we started Energy Web in 2017, coming all the way now
to 2022, I'd say we found 200 ways to not use a blockchain in the
energy transition.


David Roberts


The entire world is currently sifting through ways not to use
blockchain, I think.


Jesse Morris


Yes. And we found a couple of ways that we think make pretty good
sense. And so the way that we use it, in the applications that
I've talked through here, is they act as an anchor for those
identities. So if we're talking about any of these use cases that
we've talked about, you've got those identities, and you've got
some metadata associated with them, that needs to be seen and
trusted by a lot of different companies. And each of those
companies, they have their own It systems, right? So we can't get
them to come in and use a single gigantic centralized piece of
software. That has a number of problems, a number of challenges.


It's also incredibly cyber insecure. I mean, just look at all of
these things that have happened with different centralized
databases being compromised and hacked. So the way we use
blockchain is each one of those identities I've talked about are
anchored onto that blockchain, which doesn't mean that all of the
data is sitting on a blockchain somewhere, but almost like a
digital thumbprint of that identity sits on the blockchain, which
makes it very easy for these different market participants, at
the end of the day, to trust that that DER is what it says it is,
and to verify that it has the credentials that it claims to have.


David Roberts


Is that what a token is? I'm waiting ... so rapidly past my
background knowledge.


Jesse Morris


Not quite. So I'd separate cryptocurrency and tokens from how
these blockchains are constructed. So if you have an address,
which is like a wallet on one of these blockchains, and I have a
wallet, which is almost like a bank account on one of these
blockchains, we can send tokens to one another. But these
identities, that doesn't have to do with the tokens at all. It's
almost like every one of these identities has one or multiple
addresses on the blockchain that is associated with it. And so
that's how the verification and check happens. Now, we still do
use tokens, and there are other ways to use multiple tokens in
blockchain.


But for us, the primary, most important thing here is using
blockchain to act as this universal anchor for identity. And I
should say, we're not the only ones doing this. Microsoft has a
very interesting project about creating digital identities for
college students and anchoring them onto blockchain, so they have
an entire business around that. It's really interesting.


David Roberts


So we don't lose track of our college students. The whole thing
about the blockchain, too, is that it's not sitting in some
central database. There are basically copies of it all over the
place. So there's no sort of way to get at — you can't corrupt
it.


Jesse Morris


Correct. It becomes much more challenging to corrupt it. It
becomes much more challenging to attack it. And I don't want to,
actually, maybe I'm being a bit too harsh on the Web3 and
blockchain folks. We're also experimenting with using it in very
innovative ways. So if I put my energy hat back on for a second.
Let's pretend that we're with a couple of utilities, and we're in
a situation where there's a demand response program, and there's
a wholesale energy market, and you have aggregators bidding DER
into both of those markets at the same time. Well, somebody's got
to run a solver.


Somebody has to decide, "Okay, given the constraints of the
distribution utility and the bids and offers going to the
wholesale market, we need to make sure there's no double counting
going on, and we need to make sure that those services are going
to the right places." That's a pretty complicated kind of solve.
And most of the companies offering that to the market today, it's
kind of done in a black box, which is, "hey, trust us, this
works." So one of the blockchain concepts we're building, as we
speak, is, "let's decentralize that function. Let's make it so
that that matching algorithm, and that solved function, is
actually being performed by a decentralized network of computers
who are all competing to output the best result."


So that's bringing kind of how blockchains work into the energy
sector and that's where these technologies can unlock an immense
amount of value. So when I see the Metaverse, NFTs, it's very
frustrating for me, and frankly our whole organization, to say,
"look, we're actually proving how this technology can unlock real
world value and help fight climate change." But sorry, I digress.


David Roberts


Yeah, it's hard to distinguish yourself from that large swamp
right now. I'm sure over time that stuff will shake out, it won't
all be lumped together. So here we are then. We got a bunch of
DERs, thousands of DERs, each of whom now have an individual
digital identity, which is anchored on the blockchain so that any
utility, my distribution utility, my market manager, my
aggregator, whatever can look at that identity and see what that
device is doing, what it's committed to, like its capacity, et
cetera. So that information becomes secure and transparent to
everyone involved.


Jesse Morris


That's right. And at the end of the day, what we're just trying
to enable is so that those devices can provide full value to the
distribution network and full value to the transmission network,
all with one plus one equaling two, as it relates to what that
device is actually doing for the network.


David Roberts


Right. Not double counting. Alright, so we have this system now
we're tracking DERs. So tell me then, give me an example of where
is this being used in the world? And how is it being used thus
far?


Jesse Morris


So I think that the real tip of the spear example, as with so
many things in the energy transition, when we talk about the
grid, has got to be in Australia. I mean, we have massive amounts
of rooftop solar. I think half of homes now have rooftop solar in
the country. You have these wild events with just an immense
amount of backfeeding happening from the distribution networks
because there is so much solar on the grid. You have more and
more customers adopting batteries, and now electric vehicles are
just starting to kind of really take market share against
combustion-fueled cars.


David Roberts


Again, totally screwing up the demand curve that the utility
sees. Like now, once you have a battery, a home battery, and an
EV and panels interacting with your consumption of energy, your
demand profile just becomes completely opaque and unpredictable,
unless they have some visibility into these devices.


Jesse Morris


So unpredictable that the CEO of AEMO, the Australian Energy
Market Operator, which basically manages the wholesale market
there. The CEO recently said, and I'm not directly quoting here,
but, "We need to be able to manage a regularly 100% renewable by
2025," right? So this isn't something that's coming in the
future. This isn't, "let's hem and haw about regulations." No.
"Let's go." Right? So in Australia, what we're doing is using
this technology approach we've talked about, we're building for
them. It's a distributed energy resource data exchange that does
exactly what we've talked about. We're partnered with some of the
distribution utilities.


We have four aggregators on board and we're working directly with
AEMO, Australian Energy Market Operator — they manage the
wholesale grid, again — to do what we've talked about. So
basically to make it really easy for distributed energy resources
to participate in what's called a "local service exchange" — so
that's a market for services from DER managed by the distribution
utilities — and doing it in such a way that those aggregators can
also bid their assets into the wholesale market, without those
two programs kind of tripping over each other. So that's what
we're bringing to market. And it's more interesting for other
reasons too.


Distribution utilities need a way to communicate with solar
systems, so they can shut them off, which we talked about
earlier. They need a way just to know what the heck is on their
system. I mean, that in and of itself is valuable, right? So
that's what we're building for them. And we're also doing another
version of it in Western Australia for the market participants on
that part of the country.


David Roberts


So I want to draw one thing out. I mean, you mentioned that,
obviously, part of this is preventing DERs from inadvertently
doing damage by backfeeding, or things like that. But also you
say this is about fully utilizing them. So just explain a little
bit like why, in the current regime, they're not being fully
utilized and what this sort of transparent information about them
would enable.


Jesse Morris


Right now, in most places around the world, batteries in
particular — if we just take batteries as an example of a DER —
they are paperweights, to be blunt. When I was still at RMI, we
did some analysis about these large batteries in commercial and
industrial buildings that were bought to pull down peak electric
demand, so that you could avoid demand charges in some of these
different markets. A lot of our analysis showed that those very
expensive, very slick, state of the art batteries were sitting
unused for 95% of the year. And one of the primary reasons for
that is because, well, there just weren't other ways to make
money with that battery.


You weren't allowed to participate in the market. So in places
like Australia, where now the grid operators are moving to a
point where there are multiple products and markets that those
assets can participate in, that's where we come in with the tech,
that's where we come in with that protocol, to make sure that
those assets can seamlessly participate in those different
markets and programs that are now coming online.


David Roberts


So intuitively, when I think about Australia with these
thousands, tens of thousands, I guess millions, depending on how
expansive your definition is, millions of DERs in Australia that
heretofore were being underutilized in some cases, as you say,
dramatically underutilized, paperweight 95% of the time — that
just seems like an enormous resource, a huge resource of
basically power — it's like a new power source that we are
discovering, that's just sitting there, that requires almost
nothing but information and coordination to exploit. So point
being, have they been doing this long enough to get results? What
do we know about how this is working so far?


Jesse Morris


It's an immense resource, and it's growing so fast in different
markets. Look in Australia we're not even talking about electric
vehicles, because they're just coming online. So if we just look
at California, how many electric cars are in the state right now?
I mean if those things are networked together and charging or not
charging at the right time in the right places, we have the
world's biggest, most beautiful distributed battery.


David Roberts


And I think it's just worth emphasizing, in case listeners don't
appreciate this, but the batteries in EVs are, cumulatively,
going to absolutely dwarf any other kind of battery, commercial
or home batteries or anything else. Like the amount of capacity
in the global EV fleet is eventually going to be just
galactically larger than anything we're dealing with now. So the
size of the resource is mind-boggling.


Jesse Morris


Exactly. How far are we ... and I'm not even going to just say
Energy Web here. I mean let's just zoom out and say there are
dozens of really innovative companies looking at bringing the
full power of DERs to bear. I don't think any of us are happy
with where we are right now. We know that these devices are
technically capable of providing these services. There are some
technical challenges. Part of the work we're doing, making sure
all these things can talk to each other, they're integrated with
utility systems.


David Roberts


That honestly seems like step one. I can't believe it's ... it's
a little weird that it wasn't the first thing everybody sort of
went after. Like you need to know where these things are and what
they're doing before anything else is possible.


Jesse Morris


There was recently a new program announced in California called
the Emergency Load Relief Program, which is a new demand response
program to try and help bring some of the peak generation off of
the mix in the state, when we have these congestion events. In
the bottom of the order, and I hope that they address this, it
said, "it is our hope that this program will coordinate with
other efforts to orchestrate DER in the state."


David Roberts


Is that an official hope? Or did the governor sign off on that
hope?


Jesse Morris


Yeah, it's very much cart before the horse. FERC 2222 that you
mentioned, I mean, there was very little thought given. Most of
the negotiation and process work, based on my experience and our
contributions to those proceedings, is very much legal and
regulatory. There's such little discussion of the technology,
which I find really disappointing because, again, when you can
show otherwise hesitant stakeholders and regulators what these
DERs are capable of, how we can use software to trust them, it
does defray some of those second or third order questions that
they have about the future we're moving towards.


David Roberts


Wait, but let's get back to "Have we been doing this in Australia
long enough to learn from it?" What have we learned?


Jesse Morris


Not no ... so this is relatively fresh off the press. I mean they
have been running demand response and virtual power programs for
several years. Interestingly, batteries have been able to bid
into the wholesale market to some of these ancillary products for
some time. So things like the equivalent of frequency regulation
here. And what's really interesting is that's been very
successful. So much so that the value of those services in
Australia are not that high.


David Roberts


It's cratered, right. I mean, this is the thing that all the
energy nerds say, is these ancillary service markets are very
shallow, and it's going to take like twelve batteries basically
to exhaust that market.


Jesse Morris


Right, So I think with this new construct that I described, this
is very new. Some kind of a system to coordinate across the
transmission and distribution interface that is all open source
and uses this decentralized approach. I mean, they haven't had
any technology filling this gap to date. So it's being deployed
as we speak. There's an entire kind of second work stream, where
some management consultancies are doing a super detailed
cost-benefit analysis. But then we're pushing as hard as we can
for this to go to kind of the standard way of doing business in
2023.


David Roberts


I mean, maybe I'm being naive, but it seems like something like
this is just inevitable. There's no solving the problem without a
shared, trusted system of tracking, right? I mean it's got to be
this, it's got to be something, or else we're all just flailing
in the dark.


Jesse Morris


Oh man, if only everybody saw it that way.


David Roberts


Well, I'm telling everybody, get on board. We've got to have
this.


Jesse Morris


At the end of the day, I'm with you. I don't even care if it's
us. But this has to be there. If we're in a situation where there
are hundreds of bespoke, centralized information technology
setups to basically perform the same function in every energy
market around the world, wow, we have missed a huge opportunity.


David Roberts


Is it fair to say then, that just, that the Energy Web is new
enough that we don't have a good real world example yet to point
to. We don't have any track record yet.


Jesse Morris


We have track record because we've done this project in
Australia. We've rolled out an enterprise solution in California.
So there's an entire system in California, where we're using
these identities now for the Flex Alert system, which is their
voluntary demand response program. We have active solutions
running in the market in Western Europe that's focused on helping
electric vehicles directly participate in these programs. And we
haven't even talked about it, but we've got a bunch of different
solutions running in the wild today, actually using this same
approach to facilitate creation and tracking of just RECs, so
like renewable energy certificates, which is a much, much easier
use case.


We have the solutions out there, and they're running. Do we have
five years of historical data of them running in an enterprise
environment? No. And that's because Energy Web or not, this layer
of the grid simply doesn't exist today, right.


David Roberts


Right. I just have such high hopes because one of the things
about distributed energy is unlike big centralized thermal power
plants, which are, there's a small number, they come in large
units. Distributed energy, sort of by definition, is a swarm type
of thing, and that's what tends to produce, I think, emergent
effects that you can't always predict in advance. So I just feel
like once you have a handle on where all these things are, I feel
like a bunch of stuff is going to fall out of that, that no one
could have predicted in advance.


Is that too utopian?


Jesse Morris


That's the hope. I mean, who knows what kind of startups can
emerge if you have all of these devices? How much easier can an
aggregator's life become, if all of these devices are already out
there? I mean, look at the competition we have in the Telco
networks now, especially in places like Europe where it's more
deregulated. I mean, you have dozens of different, effectively,
retailers fighting for your mindshare and walletshare, for your
cell phone use. And that's because every SIM card can be trusted,
every customer can be trusted. Imagine if we had that kind of
landscape for DERs.


David Roberts


Yeah. So this is an open source protocol, meaning, I guess, that
anybody, it's like Linux, I guess, anybody can just grab it and
use it if they want to. So how do you make money or do you?


We try to. So our business model as an organization is very close
to, if you're familiar with, Red Hat, that got bought by IBM
recently.


Oh, vaguely.


Jesse Morris


Okay, so I mean, I'm not an expert in enterprise IT or software
either, but effectively the way that works is open source
software is great. It's sitting there, there's repositories,
which are web pages online with a bunch of code. But typically,
you need some people, either within these utilities or outside of
them, to make that code usable and to run that software on some
servers somewhere. And so what businesses like Red Hat did was
all the code is open source, so that it can be reused in
different places around the world, but they basically offer
services around it.


So we have teams that ... we have a membership program where
companies pay us, and we basically teach them how to use this
software. We actually have teams sitting with these different
utilities around the world, building this software and running it
and deploying it. We're actually structured as an international
nonprofit, which is pretty cool because we don't have any
shareholders. I have a board, that is managed by folks who,
themselves, sit on a mix of different nonprofits and then other
active companies in the energy transition. And the only thing I
have to prove is, "Jesse, are you covering your costs as an
organization? And what kind of impact are you driving?


Because we're completely focused on the energy transition and
climate.


And so, as you say, once this thing is in place, or if it ever
gets fully in place and all the DERs are on the blockchain and
available to anyone who wants to access that, I can imagine that
opening up a huge competitive market. Who knows what the future
nerds could do with this? I just imagine this is like as a
creation of an entirely new market sector almost.


That would be amazing. That would be amazing. Look at all the
innovation that happens in these other sectors, whether it's
social media applications or whatever. All of those startups that
have gotten just tens to hundreds of billions of this Silicon
Valley money, it's because data is readily accessible, and in the
energy transition, that is just not the case right now.


David Roberts


Yeah, as you say, most of your work is devoted to, the way your
website puts it is "to building an operating system for
electrical utilities that can accommodate all these DERs," which,
of course, is huge. But you're also tracking other things, as you
mentioned before. So tell us about this. I think most listeners
are familiar with RECs, with renewable energy certificates. So if
you're a company, you want to offset your energy use with
renewable energy, you can go buy renewable energy certificates,
which allegedly represent a unit of carbon-free energy. And, of
course, the sort of problems around those markets are very
well-documented, and a lot of them have to do with this sort of
traceability and trustability and information. And just like does
this REC actually trace back to a specific ton? Or is there
fuzziness and double counting going on here, et cetera, et
cetera.


So tell us a little bit about what you're trying to do in that
market.


Jesse Morris


Using the same kind of technology approach for all the grid
stuff, we also just help provide deep levels of traceability to
any supply chain having to do with the energy transition. So RECs
are one, right? "How can we give just more visibility and bring
more by volume to certificates?" But there's many others. We're
doing a bunch of work on sustainable aviation fuel. We're looking
at green hydrogen and basically every other kind of hard to
decarbonize sector. I mean green steel, renewable heat, the list
goes on. "How can we actually use this to improve the trust in
voluntary carbon markets?"


So before I talk about RECs in particular, again, from our
perspective, using this technology approach, we can just bring
very detailed levels of visibility into stuff that happens to do
with the energy transition.


David Roberts


So anything that needs tracking and tracing and trusting that's
traded around or sent around in the energy world, you want to try
to get in on that.


Jesse Morris


Yeah. And if we zoom in just on electricity, I think what's
really interesting right now is, and I know you've covered and
talked about this in the past, David, there's a lot of work in
electricity being focused on this 24/7 concept, but then there's
also this other set of work around carbonality or emissionality,
right. And what's really cool is we're actually using our
technology to support both concepts, because, I don't know about
you, I don't know which one is going to win out in the long term.


David Roberts


Well, again, being able to know for certain what you're
accomplishing is a necessary precondition for either of those,
right.


I mean, to get back to the theme, it's amazing how much has been
going on without us really knowing concretely what we're talking
about, right, without us having a clear view into what we're
talking about. So just being able to track those attributes in a
verifiable and trustable way alone, will, I think, have an effect
on those markets.


Jesse Morris


Definitely. And we're also looking at more advanced ways to use
this technology to frankly push the renewables sector harder. And
one example that might be interesting of that is what we're
trying to do with Bitcoin miners right now. So Bitcoin miners
look, frankly, a lot like data center operators, if you're a
utility. You've got a bunch of servers sitting somewhere, they
use a bunch of electricity. Right now, you can go ahead and be a
data center operator or a Bitcoin miner, you can have loads
somewhere, and then you can go buy a bunch of RECs that are
totally unbundled from your actual power consumption.


So I can have a data center in California, and I can buy RECs in
any number of other geographies in the US. And I can then claim
that I'm 100% renewable for my electricity consumption.


David Roberts


You just buy some cheap wind from the Midwest. And I keep hearing
Bitcoin people going out and trying to brag about environmental
credentials. Is that what most of them are referring to? Is that
what most of them are doing now? Are they just buying RECs?


Jesse Morris


Some are buying RECs, unfortunately, some are just buying carbon
offsets, so not even buying RECs. People are pretty harsh on the
Bitcoin crowd for some of this stuff. And look, I get it. I'll
just say from personal experience, a number of them, these are
not companies that understand how to buy renewable energy buying.
Let's step back for a minute. Let's go back to like 2010 when
these initial power purchase agreements were coming out from
Google and Microsoft. They had huge teams that were figuring out
how to structure those deals and how to decarbonize. The Bitcoin
miners are at the front end of that curve. And so they're trying,
some of them are trying.


And so what we're trying to do with this kind of work is say,
"Well, look, if you're going to buy certificates, how can we
structure some sort of a certification to get you to buy them in
the most impactful way possible?" So what we're doing with our
technology stack is basically asking a series of questions that
they have to answer, and then we verify them about, "Okay, where
is your load, and how clean or not is that grid? What kinds of
renewables are you buying? Are you directly investing in them?
Are you buying unbundled certificates? Are you in a green tariff?
And then finally, if you're buying certificates, where are you
buying them from? Are you buying them from a new solar system in
Kentucky, which would have a great carbon impact?" Or are you
buying, as you said, "unbundled certificates from the middle of
the country?"


So with that kind of an environment, where you bring more
transparency into what kinds of renewables these companies are
buying, it's our hope that we can sort of push a new sector of
renewable energy buyers into buying more impactful renewables.


David Roberts


And also, well, a big part of the 24/7 push is this notion of
hourly RECs, a REC just for a particular hour, so you can know
exactly how much carbon was displaced in that particular hour, et
cetera, et cetera. And when I was researching those, I kept
wondering over and over again about the tracking and trustability
of those hourly RECs. Have you gotten into that at all yet?


Jesse Morris


Big time, yes. So we have an entire 24/7 solution that we've put
out there. We're working with a couple of different market
participants in different geographies to do it. You know what's
interesting, is, and I see the same news announcements you do
about these different corporates doing these 24/7 deals — the big
thing that is very not transparent is the matching. So you've got
the data coming in about the load, you've got data coming in
somewhere about the renewables, and then, typically, you have a
nice dashboard, hosted by one of these corporates, that says,
"Don't worry, it's 24/7 matched," right?


So that's what we're trying to make more transparent is to say,
"let's make that visible. Let's actually open up and decentralize
the matching algorithm for those different solutions." So that's
what we're trying to do there is just bring dramatic transparency
to these 24/7 claims that companies are making.


David Roberts


Interesting. Alright, well, we're coming up on time, so I just
had sort of two final related questions. One is just: what's next
for Energy Web? I assume you're talking with other grid
operators? Or what's the next big thing on your list?


Jesse Morris


The big, primary focus is getting as many of these kinds of
rollouts, that we talked about in Australia, happening with every
ISO in the US and every TSO in Western Europe and beyond. That's
our primary focus, is just trying to replicate that architecture
in as many markets as possible. And the really cool thing about
working in open source is as we get other markets on board of
this platform, we learn and advances that we make in PJM
territory, who we're also working with, we bring to Australia and
vice versa. So you start to create this network effect that
really knows no boundaries.


So that's what's next for us is our team is just relentlessly
pounding the pavement and trying to do everything we can to get
senior decision makers at, frankly, all of the regulated ISOs and
RTOs in the US, and then most in Europe, to come on board with
this architecture.


David Roberts


Is there a US ISO that's taken some steps?


Jesse Morris


California.


David Roberts


Of course. California.


Jesse Morris


Yeah, of course. Right. So we work directly in partnership with
the California ISO. As I mentioned, we've rolled out our
technology stack to enhance that Flex Alert program. And now the
next step is, again, just trying to make the case to the load
serving entities in California, the Public Utility Commission,
and all of the, frankly, morass of political agents that work in
California that, "hey, we can really solve some problems in the
state, if we all come onto one technology stack." So that's more
of a political effort, than anything right now. But I'm hopeful.


David Roberts


Yeah. And I wanted to ask about this earlier, but I'm just going
to squeeze it in here at the end. One of the things ... when I
think about grid architecture, and I think about the profusion of
DERs, and then I think about these big wholesale markets opening
up to DERs. These wholesale markets traditionally are used to
dealing with dozens, let's say, of participants bidding in and
bidding out in real time. And I've just been wondering, over and
over again, even if you can persuade them to open up those
wholesale markets to DERs, it just seems like pretty rapidly
you're going to run into just computational issues, right?


Like these institutions, that were meant to track a couple of
dozen participants, are going to be tracking tens of thousands,
and quickly millions. And I always took that as sort of evidence
that we're eventually going to have to devolve responsibility for
markets down to a lower level, to the distribution level. And
this is getting into a whole different topic, which we don't have
to get into. But the idea is that you could have, at the
distribution level, a distribution market operator that's sort of
like a mini version of the ISO, that's running a local market and
sort of managing the profusion of local DERs and then just
reporting up to the wholesale market kind of a single number
like.


This is our remainder after we've dealt with all our local market
stuff. These are called DSOs. There's a lot of talk about them.
But I wonder, in relation to Energy Web, do you think that by
kind of solving the information problem, by getting the
information problem all trusted and out in the open, do you think
you're going to enable wholesale markets to be able to handle
these millions and millions and millions of DERs? Or do you also
think that we're eventually going to have to move to something
like a DSO model?


This is super abstruse. If anybody's listened this long ... they
asked for it.


Jesse Morris


I'm a deep, deep grid architecture geek. And your pieces, David,
in Vox, where you had these beautiful animated charts with the
TSO at the top.


David Roberts


Yes.


Jesse Morris


I cannot tell you how many presentations I've used that in. So
thank you very much. I think it's an incredibly important topic.
Typical answer for me is: our tech can support both pathways. It
really doesn't matter to us. I think you do run into some
computational, not necessarily in the piping and the
infrastructure part, but in the solver. You're going to run into
some challenges, if you literally have hundreds of millions of
DER bidding direct into the wholesale market, and we don't really
work on that intelligence that is needed to perform that
function. But I do think there are some potential challenges
there.


And just having worked with these different market participants
around the world, seeing the direction Europe going, seeing the
direction Australia is going, that local market operator model,
to me, intuitively, as somebody who's worked on this kind of
stuff for about twelve years now, it feels like it is a better
fit for the direction that the grid is evolving for a variety of
reasons. But I don't pretend to have a crystal ball to say what
direction it's going. From our perspective, we can solve both
architectures.


David Roberts


Well, the utility sector, especially in the US is so sclerotic
and kind of constipated. It's difficult to imagine such a
fundamental reform these days. But I agree, that the technology
and the markets are kind of pushing in that direction. Either
way, having good information is good. So I asked you what the
next step is. Now, by way of wrapping up, I wonder if you could
just indulge, maybe, in a little utopian dreaming, a little
utopian speculation about what kinds of things you think might be
unlocked or possible, if the world's DERs, I guess then you're
probably getting into trillions ... if the world's DERs are all
on the blockchain, all have identities, all tracked. We know the
capacity, and the capability, and the behavior, and the market
commitments of every one of those DERs in the world. What kinds
of things might we be able to do in that future utopia?


Jesse Morris


I worked directly with Amory Lovins for a long time, when I was
at RMI, and he had this beautiful way of going zooming into the
micro and then going to the macro. So maybe I'll try and answer
it with that kind of framing. At the micro level, to start
simple, Iwant for you, me, my parents, eventually my kids, when
they have buildings that they're working in or living in and all
these devices, I want companies blasting them via text, via
email, knocking on their door, saying, "sign here to make a few
bucks a day in order for your stuff to help decarbonize the
grid."


David Roberts


And beyond signing, you don't have to do anything.


Jesse Morris


Exactly. It just happens, right? And you get no sacrifice. Your
beers are still cold. You can take hot showers when you want. So
at the micro level, I think that's really important, because if
we haven't constructed that, I just don't think it's going to
happen. If we zoom out to the macro level. What happens in
aggregate if we can do that? I don't have the specific numbers,
but I think something, like, we should be able to shave 20% to
25% off of these peak moments, so that here in California, we
don't have these rolling blackouts in the most advanced economy
in the world.


If we have that happening, we should be able to network together
some of the biggest batteries in the world through all these
different electric vehicles, in order to make optimum use of
these increasingly low-carbon grids, so that we don't have to
have dramatically oversized wind and solar systems all over the
place.


David Roberts


Well, also, I'm not sure ordinary folks necessarily understand
that there are lots and lots and lots of power plants out there
that were built just to provide those peaks. That's a
disproportionate amount of capacity, fossil capacity you're
taking offline, when you shave those peaks.


Jesse Morris


Yes. So if we could use all of these beautifully networked
together DERs in every country, you could effectively eliminate
the need for these thermal power plants to provide that peaking
capacity, which would go a real long way towards cleaning up the
grid and, frankly, make us all more resilient. I think this gets
buried sometimes, but if we are able to move to an electric
system that has these local sources of flexibility, instead of
having these central points of failure in the system with these
large thermal plants that just happen to turn off at the moments
you need them most, we're all going to be happier.


David Roberts


I think everybody can understand intuitively, that if you're
operating a system with ten units, that your ability to take
things off and on is limited. But if you're working with millions
or billions, that gives you such fine-grained control, right? It
gives you such fine-grained, you're not working in big chunks
anymore, you're working in exactly as much as we need, like real
time, exactly as much as we need kind of levels. And that's just
going to trim an immense amount of waste too, it seems like.


Jesse Morris


And hopefully it won't be a utopia, at least in some places,
right? I do think in the next decade, we're going to see some of
this happen, certainly before 2030. And I'm watching Australia
really closely. They're close to 100% renewables several days a
year. They have the pressures to do it. Their energy prices are
going up. There's an election about to come up, where some more
liberal leaning politicians may come into power. So I'm crossing
my fingers because ...


David Roberts


As Saul Griffith is fond of saying, "it's cheaper to buy power
from your own rooftop panels than it is just to transport power
from a power plant," right? Even if the power plant power were
free, just the cost of getting it to your house exceeds the cost
of your home solar, which is just so mind-blowing. It shows
what's possible here, if we would quit messing around.


Jesse Morris


Indeed.


David Roberts


Truly final question, and I'm not lying this time, and this is
asking you to descend into wild, hand-wavy speculation, but
there's a big sort of meta argument about distributed versus
centralized power that's been going on a long time. The Amory
Lovins soft path is more distributed, and then there's been
pushback to that, saying that to really provide modern levels of
convenience and to run a city with factories in it, et cetera, et
cetera, requires big, centralized, concentrated power.


And I'm sure you're very familiar with this argument. It goes
back forever, it's endless and generally tedious. But it does
seem like once you're tracking all the DERs, and you are fully
exploiting all the DERs, then you're kind of going to be able to
answer that question finally. You're going to finally be able to
answer the question of, "how far can distributed energy get? And
how much do we still need big centralized power plants?" And
again, I return to the question of car batteries. People say
there's just not enough distributed energy, but that's a
shitload. The distributed fleet of car batteries is a ton that is
not being exploited now.


So I guess I wonder whether you have an opinion on how far we can
get with distributed. and maybe, like, what the sort of final
balance is going to be between distributed and central.


Jesse Morris


Well, I have a very strong opinion on it, which is that I think
that regulators should be forcing utilities when they submit
these IRPs, before they even do an integrated resource plan, they
need to say, "what is your plan for getting your stuff together
to go out there and figure out what is actually on your network?"
Because they should be starting from the bottom up. They should
be tasked with saying, "you need to figure out how many DERs are
on your network. what are they capable of providing?"


And let's not even have the distributed versus centralized
argument. Let's just start from fact, and then we can get the
nerds to run the models to figure out what the perfect mix is. So
I would just start there, and say we absolutely should be
starting with that "start from fact", which we just don't do
today. If I had a magic wand to wave it and sort of look at this
centralized versus distributed split, I think it's going to be
intensely regional.


David Roberts


Yeah.


Jesse Morris


Right? I think it's really impossible to make a generic statement
on that, especially ... I'm just putting on my hat where I work a
lot internationally, there are definitely grids in Europe where
there is much lower load. They've got a solution for heating,
because they're doing district heating, and it's just different.
So it's very challenging, I think, to make a generic statement on
that. And I think it's going to be intensely regional.


David Roberts


Yeah, I guess, it's sort of one of my articles of faith. I think,
just that distributed is going to surprise us. It's going to
continually surprise us. It's unexpected. I think it's capable of
surprising us in a way that giant thermal plants are not.


Jesse Morris


I share your optimism.


David Roberts


Alright, well, thank you so much for coming on. This is, in
addition to everything else, like the first coherent and sensible
use of blockchain I've heard about. So congrats on that, and I
look forward to tracking your progress.


Jesse Morris


Thanks for having me, David. Keep up the good work.


David Roberts


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