This transcript was automatically generated.
Robinson Meyer:
Hi, I’m Robinson Meyer, the founding executive editor of Heatmap News.
Jesse Jenkins:
[1:28] And I’m Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Robinson Meyer:
[1:32] And you are listening to Shift Key, Heatmap’s weekly podcast about decarbonization and the shift away from fossil fuels. Jesse, happy new year.
Jesse Jenkins:
[1:40] Happy new year. I’m back.
Robinson Meyer:
[1:42] It’s good to see you. It’s so good to talk. Look at this. We’re doing a Shift Key episode. I feel just like, feels like October 2025 in here.
Jesse Jenkins:
[1:52] If only.
Robinson Meyer:
[1:55] We have an exciting show planned for you today. We’re going to talk about, I think, one of the most interesting series of events to happen in the U.S. energy markets recently, in a little bit. But first, we have some housekeeping news for you that we want to talk about. We have some exciting, but also somewhat sad, changes at Shift Key. We have some good news and bad news that affects the show. And Jesse, I want to start with the bad news. So do you want to share anything with the class?
Jesse Jenkins:
[2:20] Yes. I’m going to be stepping back from my regular co-host role here on Shift Key and leaving you and Rob’s capable hands and transitioning to more of a guest host role. I will be back on the show, but less regularly than before. That’s to make time for a new startup venture that I have co-founded called Firma Power that I’ve started with Scott Burger and Brent Alderfer, my co-founders. We are working hard right now to scale the company up and we are working on supplying clean, reliable electricity to data centers to meet the pressing demand growth challenge that’s happening right now by trying to unlock more capacity and load enabling capacity from wind, solar and storage resources that are often overlooked as resources that can support big loads like data centers. We think that’s the fastest way to get more capacity onto the grid and to make sure it’s clean. And so excited to be working on that at Firma, but it is taking up a lot more of my time. And so to ease the load a little bit, I’m going to be transitioning to a guest role here and we’ll be with you less often.
Robinson Meyer:
[3:17] Jesse, little did we know when we started talking about the AI electricity surge that it was going to change energy so much that it would take you away from us.
Jesse Jenkins:
[3:27] That’s right. It was going to change Shift Key too.
Robinson Meyer:
[3:29] It was going to change Shift Key too. Well, that’s the bad news. The good news is that while we’re very sad to lose Jesse, the moment of his departure gives us a chance to loosen up the schedule a little bit, shift to a more dynamic Shift Key product. I will be taking over primary hosting duties as Jesse announced, but we’ll also be welcoming a new set of occasional co-hosts, much like Jesse, who will start rolling out in the next few weeks. We’re very excited for that change. I think it’s going to lead to a newsier, maybe more dynamic Shift Key. The core of the show will stay the same. We’re going to keep bringing you the best discussion we can and the best insights and reporting we can into the energy transition, the shift away from fossil fuels and the state of this giant ...
Robinson Meyer:
[4:10] Energy, fossil, climate, clean energy story that we cover all around the world. So let me also take this opportunity to thank you for listening to Shift Key
Robinson Meyer:
[4:17] and encourage you to stick around. And with that news, on this week’s episode of Shift Key, we are talking about power grids in the winter and specifically the American power grid in the winter. The Northeast United States and the Mid-Atlantic just experienced, I would say, a relentlessly frigid three weeks, which rivaled recent records for the longest periods of time where temperatures did not get above freezing. I think we came just short of the record here in New York City because in the middle of this three-week span, temperatures just peaked once slightly above freezing, but otherwise we actually would have smashed the all-time record for a number of days below freezing in a row, which is kind of funny, of course, given climate change. I should note that North America is in an anomalously cold bubble in the world right now. A lot of the rest of the planet is much warmer than usual. But for whatever reason.
Jesse Jenkins:
[5:11] Including the including west of the Rockies, actually, which is undergoing a very warm snow drought with no, you know, very little snow across the Sierras and Rockies and Cascades this year.
Robinson Meyer:
[5:21] I was hanging out with friends from Denver this weekend and they in D.C. And they were like, we’re going to go home. It’s going to be 65 degrees and very weird. And it was, of course, yeah, below 20 degrees. It was like wind chill of negative three degrees Fahrenheit, exactly, in D.C. Because of these very cold temperatures, the electricity grid was stressed and stressed in pretty profound ways. So at the peak of the winter storm in New England, oil and really diesel fuel generated 40% of New England’s electricity, which, given that oil and diesel normally generate roughly zero percent of New England’s electricity, is a marker of just how stressed the grid was. It means grid operators were looking for any source of marginal generation they could find. They had exhausted all the usual alternatives and they had moved to the dirtiest and rarest form of electricity generation, which is diesel.
Robinson Meyer:
[6:13] I wanted to talk about that. I also wanted to talk about it because when we talk about winter grid performance, it’s a bit of a preview of what’s to come. Because while historically in the mid-Atlantic and northeastern U.S., the summer has been the time of year where we use the most electricity. It’s because it’s the time of year where everyone cranks their air conditioner up really high. As we continue to see electrification make way as data centers and new factories get built. And as people electrify not only their vehicles, but also their heating, we expect the winter, especially in New England, to take over as the most electricity intensive time of year from the summer. And so in some ways, when we see these moments of high winter grid stress, we’re previewing the future of the electricity grid. And we’re also seeing the moments that we most need to be worried about on the electricity grid, because there are some more straightforward forward ways we could proceed to reduce carbon emissions during the summer, the winter is a
Robinson Meyer:
[7:12] little bit of a trickier challenge. Let’s actually start the conversation off there. Jesse, can you give us some context on like what just happened in the Mid-Atlantic and Northeastern power grid in the United States and like how should we be thinking about it?
Jesse Jenkins:
[7:27] Yeah, I mean, this was, as you mentioned in the setup, quite unique for the length of frigid temperatures. So it wasn’t the coldest temperatures we’ve ever experienced in this sort of period. In PJM, at least, the largest market in the U.S. that expands the Mid-Atlantic to the Great Lakes region. And we didn’t quite set a new winter peak in demand. January 29th and 30th fell as number six and number eight in the top 10 winter peaks in PJM. But it was the fact that we had many, many days in a row, two, three weeks, really, of prolonged stress conditions where every power plant available was being called into action when natural gas pipelines were strained to deliver a simultaneous peak in demand for heating fuel and power generation from gas-fired power plants. And when frigid temperatures were increasing forced outages, you know, knocking offline power plants as they dealt with those extreme cold conditions that they’re not typically planning for, they’re much more designed to plan for the summer. This is sort of an example of like, these are the one in every, I don’t know, 10- or 20-year events that become design basis events for the grid, right? These are the kinds of circumstances that we have to be able to get through.
Jesse Jenkins:
[8:31] And for the most part, we did. There were outages that were obviously difficult to endure for people who lost power in the middle of a subzero windchill day. But most of those outages were the result of, really, I think all of those outages were the result of transmission and mostly distribution network failures, which remains our kind of critical vulnerability in the grid, and not generation adequacy from the wholesale power supplies. Power prices got high. We burned a lot of gas. We burned a lot of oil. We can talk more about that. But the supplies remained adequate and system operations managed to get through this prolonged stress period pretty well, I should say. This was not like the Winter Storm Uri in 2021 that really crippled Texas’ grid or even Winter Storm Elliott, which hit in 2023 and was really the kind of most recent stressor event for the larger Eastern interconnection of which PJM and ISO New England are part of, where we saw much higher reductions in gas availability and much higher forced outages. Since both of those events, I think that the grid operators and gas network and power plant operators have done more to prepare for these kind of winter events, and that seems to be showing up in more favorable outcomes this time around.
Robinson Meyer:
[9:39] And just to put some numbers on this, PJM saw 139 gigawatts of demand on January 29th, 138 gigawatts on January 30th. That’s below the all-time winter high, which is 143 gigawatts, which was last January, actually almost exactly a year ago. Looking forward this summer, we expect PJM is probably going to set an all-time demand record for any season of about 160 gigawatts. We won’t know exactly where it will come out, but it will break a record last set 20 years ago, thus showing that we are fully out of our 20-year period of flat electricity demand in the mid-Atlantic United States. So look, 140 gigawatts, you’re still 20, 21 gigawatts below what we expect the summer demand to be this summer. But it’s like a very different demand profile because at least when I think about the summer, I think about afternoon and evening peak periods of demand on the grid. So folks turn on their air conditioner. And yes, you know, electricity demand goes up a little bit maybe when they wake up. But when they wake up around dawn or around 7am tends to be the coolest part of the day.
Robinson Meyer:
[10:45] Electricity demand really gets cranking in the summer, like starting afternoon and then going into the peak like 7 to 9pm period. And so when I think about it, I’m like, okay, well, that’s a fairly straightforward challenge to solve with solar and batteries. and to some degree solar and batteries is like very well designed for that challenge. You know, solar generation peaks around noon or 1pm and all you have to do is.
Robinson Meyer:
[11:12] Hold on to that electricity generated by your peaking solar for another five or six hours and then dump it on the grid during periods of peak demand. Winter is tough because in winter, yes, you have this afternoon peak when folks get home and they cook dinner and they run the laundry machine and all of that. But you also have this tricky morning peak when folks wake up, they maybe turn on space heaters in their home, they crank up the thermostat. Really before the sun has fully come up, there’s a surge in power demand right at the beginning of the workday.
Jesse Jenkins:
[11:43] I mean, that’s challenging. It’s less, I think, that it’s happening right in the morning because you could keep your battery at a full state of charge from yesterday at noon. The bigger problem, of course, is that in the winter, there’s not as much sun. And so you’re not going to be able to charge your batteries reliably midday with very inexpensive electricity. Power prices may stay relatively high during the day and gas generators are likely setting the price throughout the day, as opposed to these periods of solar excess that might be more common in summer periods, especially as solar penetration increases in regional grids. If we look at kind of the periods of peak pricing in PJM, this sort of occurred most recently on February 9th from about 5.45 a.m. To 8 a.m. So you’ve got like, you know, two, three hours in the morning, little blips again in the evening hours. But the biggest ones are those early morning hours when it’s the coldest out in terms of the exterior temperature and people wake up, throw those warm blankets off and start turning on the heaters and getting ready for the day. So if you had other sources to charge from, batteries still do help quite a bit in these circumstances. Those peaks are not 12 hours long, they’re two, three hours long, and batteries are still quite capable of supplying winter peaking capability. And if you look at the kind of ratings that batteries get in the capacity markets, where they accredit the kind of percentage of capacity that’s expected to be available, they do pretty well still in winter months in different parts of the country. But solar is going to effectively get derated over time to zero in the winter because it’s just not going to be able to contribute.
Robinson Meyer:
[13:12] When you say derated, what do you mean? Sorry.
Jesse Jenkins:
[13:14] That means like, so if I want to make sure I’ve got a megawatt, I can support a megawatt of peak demand. I need more than one megawatt of supply because gas generators fail, their gas supply gets reduced because of competing demands for heating. Wind farms aren’t always, you know, turning, solar panels aren’t always cranking out, batteries run out of juice. So for all of those reasons, you know, coal piles freeze, everything has deratings that mean that they’re worth less than their rated capacity in terms of how much peak demand they can support. So if I want 100 megawatts peak demand, I might need, you know, 180 or 250 megawatts of, you know, install capacity. And that ratio depends on the kind of individual contribution of each resource at those peak demand periods. Most MISO and SPP, the mid-continent ISO and the Southwest Power Pool that operate in kind of the middle of the country, they’ve already moved to seasonal accreditation of capacity in these markets. So they recognize that solar is worth quite a bit in the summer, but it’s worth a lot less in the winter. For example, gas plants face a much higher derate in the winter because of struggles around equipment, freezing and fuel availability than they do in the summer. So they’re kind of recognizing those different contributions. ISO New England is moving that direction as well towards summer and winter. PJM eventually will, but at the moment it has a single annual rating. What’s interesting is that annual derating has become set by winter stress conditions
Jesse Jenkins:
[14:33] like this, even though they peak demand in the summer.
Robinson Meyer:
[14:37] Yeah, well, one statistic that I don’t think I mentioned in the intro, but that really stuck out to me is that winter loads are growing. Winter electricity demand is growing three times faster than summer electricity demand.
Jesse Jenkins:
[14:47] And so it’s going to be even more of a stress issue in the future. Yeah, I think ISO New England predicts that winter peaks will exceed summer peaks by as early as 2030. So this is not some distant 2050 electrification scenario. Like, it’s coming.
Robinson Meyer:
[15:00] No, this is like an imminent problem with grid management that is going to matter.
Jesse Jenkins:
[15:03] Within the planning horizon today, yeah.
Robinson Meyer:
[15:05] Not only within the planning horizon, but like fully within the political horizon. Yes, that’s true. Like current policymakers are going to be judged on decisions they make now because they may still be in office by the time that these constraints become really pressing on the grid. So I want to back up because we’ve kind
Robinson Meyer:
[15:19] of been talking around this, but I want to ask it directly. Like, what was your takeaway from watching PJM and ISO New England, which we’re calling ISO New England? It’s just the New England power grid. And conveniently, it covers exactly the states of New England, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, and Maine. New York also has its own power grid and was subject to some of these dynamics, too. So watching this whole swath of the country, really Virginia and Indiana up into Maine, what was your takeaway from how the grid performed over the past three weeks?
Jesse Jenkins:
[15:51] So again, I think kudos to system operators and to the generation owners who were working hard to keep these plants online. It really wasn’t a constraint. It cost a lot of money, right? You know, prices that we had to pay for fuel at peak periods, the prices that marginal generators were setting in terms of electricity market prices were very elevated. So it’s going to show up in a big way in our bills when those kinds of wholesale prices end up actually hitting our retail bills. But we did not have widespread rolling blackouts anywhere. Those blackouts that occurred, again, were due to distribution network failures, mostly from freezing rain and sleet and heavy snow impacting distribution lines, trees falling or power poles coming down, which is, again, like that’s, you know, I would say 90%, 95% of all power disruptions that people experience are due to those distribution network failures. But that’s not because there aren’t risks at the grid level. It’s just because those grid level risks have been managed very effectively. And we focus a lot of attention on them because when things go wrong there, it’s not just one neighborhood that loses its power. It’s the entire region. So you have an event like Winter Storm Uri in Texas, where, you know, a third of their power is unavailable and people all over the state are freezing. I’m not trying to minimize the generator challenges. It’s just that we have done a very good job, I think of mostly solving them. But I think if we go through each generator type, we start to see some of the previews of these challenges that we’ll face in the future. I already talked about solar. Obviously, you can’t count much on solar in the winter.
Robinson Meyer:
[17:17] Man, I was in PJM for some of this wintery period. I was being a good reporter, Jesse. I was going in the field, in PJM, yes. And the town where I grew up has some community solar and local municipally owned solar projects. And I was driving past them right around the 22nd, 23rd at the peak demand. And, Those solar panels, I will tell you, covered in snow. They were covered in snow. I was like, man, they might be generating 10% of it.
Jesse Jenkins:
[17:47] Oh, I doubt it. Yeah. Even that. I mean, look, we got 10 to 12 inches of snow in much of the region around here and then a nice layer of sleet on top of it. So we’ve been living here in Princeton with basically an ice sheet on top of a foot of snow everywhere. Think about that on top of your solar panels and your roof. And it hasn’t warmed up enough to melt that. So if you weren’t lucky enough to like shovel out your driveway or your parking spot before the sleet hit, like you were dealing with giant ice chunks,
Robinson Meyer:
[18:14] You could send someone up to go. Periodically clean them off, but then your operation cost is much higher for the solar panels. That’s right.
Jesse Jenkins:
[18:22] Or if you are a large enough utility scale project, you could put like resistive heaters into your panels that you turn on in the winter. There are ways to weatherize them. But yeah, so, you know, the other big issue, of course, is it’s been cloudy and it’s winter. So the solar production is already lower. We just need to be clear that solar is a useful resource. It provides a lot of low marginal cost electricity throughout the year. When it does, it’s displacing other more costly resources. And for the moment, with the exception of maybe California, it’s still contributing quite a bit to the summer peaks because those do occur and do stress the system as well. And so it’s, you know, one of the pieces of a broader system that we need, but we shouldn’t be counting on it in the winter. That’s not a shocker to system operators. Wind power, depending on where you are in the country, can help in the winter. Other times it doesn’t. And so it’s a very location-specific resource because the wind patterns are much more geographically particular.
Robinson Meyer:
[19:12] Is that because of the wind patterns or is that because of in some places it makes sense to invest in winterizing your wind turbines and in other places it doesn’t?
Jesse Jenkins:
[19:20] I was thinking more of the former. The latter is also true. You know, if you’re in a region that very rarely gets cold, it doesn’t make a lot of sense to invest the extra money to make sure that they don’t get iced up once every five years versus, you know, wind turbines in North Dakota are clearly all planning to deal with those conditions all the time. But more that just wind patterns are much more localized than solar patterns. Solar tends to be less variable over geography, whereas the wind can be affected much more by local topology and differences between land and sea temperatures or lake and land temperatures or mountain passes, things like that. So wind, not a huge factor for PJM or New England at the moment because they don’t have a lot of installed wind capacity onshore, at least. But it is more relevant in places like the middle of the country, the MISO and SPP, where I think it did have differing contributions over the course of the last couple of weeks.
Robinson Meyer:
[21:42] Nothing has convinced me yet that the Trump administration is going to be successful in stopping these four or five big offshore wind projects from coming online. I mean, are those projects designed to work in the sleet and snow, or is that going to be like a summer overnight resource?
Jesse Jenkins:
[21:57] I assume that those are going to be winterized to operate in the kinds of waters that they’re operating in here. But that’s a good question. I don’t know definitively the answer to that. I haven’t done this, but it would be a really great, I think, useful exercise to look at the projected wind production from a wind farm off Long Island, and maybe look at Block Island or South Fork Winds production during this period, and then scale that up to think about how much it might have saved in energy costs over the week, the last couple of weeks, while power prices were really elevated and gas prices were high. My guess is we look at that, there are periods of time when it was contributing quite a lot and periods of time when it’s contributing very little. And so mostly it’s providing energy, which again could be used to charge batteries and wait for that system peak, but it may or may not align exactly with that early morning peak. That said, I do think, you know, offshore wind and coastal wind do tend to produce the most in the morning and the evening when you get this land-sea temperature differential that drives a shore breeze or an ocean breeze. So it may be that those are positively correlated periods.
Jesse Jenkins:
[22:59] My takeaway from all this, and I’ve said this before, I said this in Congress, as I testified after the Winter Storm Uri, is that wind and solar are contributors of energy in different seasons and at different times. They may contribute some fraction of their capacity now to meet these peak demand periods, but their primary contribution to the grid is not capacity, it’s energy. And that energy can then be stored in batteries and used to provide capacity. So they’re synergistic with batteries in that sense, just like the summer peak scenario you talked about, Rob. But they’re reliably unreliable. We know that, right? And we’re not planning our system around them. We are planning our system around our firm generating technologies and increasingly energy storage.
Jesse Jenkins:
[23:39] And I think it’s really critical in these winter periods to look at the kinds of vulnerabilities that those technologies face. Because when they fail, like they did in Texas in Uri in 2021, the system fails because those are the technologies that we’re counting on to show up. They’re the ones carrying the system on their backs. I think in this circumstance, they performed quite well overall, although there were elevated outages for gas and coal generators across the region. Overall, we had enough of them online and operating to get through the peak demand period here. I think what’s helpful is to think about the difference between summer and winter stresses on these thermal plants. Because again, it is a very different type of risk. In the summer, the main risk is the ambient temperature, ambient water temperature that they’re using as their heat sink gets higher. And the efficiency of thermal power plants is basically proportionate to the difference between their combustion temperatures or inlet temperatures and that heat sink. It doesn’t have a huge effect, but it can knock several percentage points off of the available capacity of your thermal power generators in really hot summer conditions. There may be just mechanical stresses from running over prolonged periods and having some equipment failure. The winter has a whole different set of challenges. And the biggest one is around fuel availability.
Jesse Jenkins:
[24:51] And the fuel handling equipment at these facilities. So coal plants, picture a giant coal plant, they consume trainloads worth of coal every day. That coal sits in giant coal piles and then is taken by conveyor belts up into crushers that crush and pulverize that coal and then blast it into the furnace and combust it. If any piece of that delivery chain freezes up, then the coal plant can’t get fueled into the boiler, even if you have a giant pile of coal on site. And that that is a frequent occurrence during these circumstances. You do have freezing of the coal supply and that will knock off power plants in the winter and it’s not an issue in the summer.
Jesse Jenkins:
[25:28] And for gas generators, which are increasingly the mainstay of our grid, especially in these regions, as I mentioned, I think before, it’s not just that the power grid is at its maximum, the heating demand from gas networks is also at its maximum. And that’s not true in the summer when we’re not running all our heaters on. And so what that leads to is a few different ways in which gas generators can lose supply as well.
Jesse Jenkins:
[25:49] One is that if they’re connected to a local load serving distribution utility on the gas side, they are allowed to curtail non-firm customers. And that includes typically gas generators who are not willing to pay the extra kind of standby cost to have firm access to the grid to be first in line and uninterruptible. And so gas generators can just get turned off when there’s not enough supply for the local distribution grid and the distribution operator is prioritizing households and heating over the power generators. That’s one of the key vulnerabilities. The other is that as demand goes up, gas pressures can drop in the system, and that can lead to sort of less through foot being received by the generators. And finally, this happened in particular during Elliott and Uri, the gas fields themselves can lose production. If the gathering lines and compressors and other equipment that’s exposed to the cold gets cold enough, that equipment can freeze up. Some of the valves and sensors can also freeze, which might lead to compressors turning off. And you get a drop in production. And because we don’t have a huge gas storage system, the pipelines themselves are basically the storage in most of the country. If production falls in the gas fields, that will also impact available supply pretty quickly, like within hours. And this is an area where this year, actually, the gas producers did much better than they have in the past. It seems they have been learning from previous winter events and weatherizing the system.
Robinson Meyer:
[27:13] Let’s zoom in on two specific challenges that New England in particular experienced during this winter storm. The first is something I referenced in the intro, which is that at peak, New England was actually generating 40% of its electricity from oil and really from diesel, which is crazy. I mean, oil and diesel, I think it’s crazy.
Jesse Jenkins:
[27:35] For me, I’m like- Everybody else thinks it’s crazy. I’ll tell you why I don’t think it’s crazy in a minute.
Robinson Meyer:
[27:38] Okay, well, let’s talk about this is a throwback. I mean you look at 40% of New England’s electricity coming from oil. This is like a throwback and, to the 1970s when the U.S. got a ton of electricity from oil, really only effectively cut off by the beginning of the Arab oil embargo and the energy crisis in the 1970s, ultimately prompting a return to coal, at least way back then. I don’t know. I look at this and I go, something really has gone wrong. If New England’s getting 40% of its electricity from oil, that’s like the most possible polluting thing other than coal you could generate electricity from. But what do you think? I don’t know.
Jesse Jenkins:
[28:14] I look at it and I say, that’s probably what the future is going to look like in a lot more places across the country if we transition to a winter peaking system. And here’s why. So yeah, 40%, but for how many hours? For a week? For two weeks? That’s probably half a percent to one and a half percent of annual generation in New England.
Jesse Jenkins:
[28:30] So a lot of capacity, very little energy, right? That’s the perfect thing for peaking, right? And for prolonged to events like this. The alternative to that is you oversize gas pipelines and you oversize gas production to meet that extra 40% of New England generation that only occurs once every two years for 1% of the hours of the year. While there has been local environmental opposition and political opposition to building greater pipelines into the Northeast, the economics of that also don’t necessarily line up. Gas generators had the option in New England to sign firm gas contracts that would have meant they were uninterruptible by local distribution companies. Those firm gas contracts could then help finance new gas pipeline construction or expansion. They chose not to do that. They chose instead to install oil tanks, diesel tanks on site, and to convert to dual fuel generators for these kinds of circumstances. And the reason for that is that when you’re dealing with this sort of very infrequent event, what you want is something that costs very little upfront, but maybe has a very high variable cost when you consume it. Because you’re not going to consume very much of it, and you’re going to do it very infrequently. And so you don’t want a big fixed cost just sitting there all the time. Well, guess what a gas pipeline is? A giant fixed cost sitting there all the time.
Jesse Jenkins:
[29:44] Oil, on the other hand, is a consumable. It’s very expensive. Power prices go up when we’re using it, right? They’re a couple hundred dollars a megawatt hour at least.
Jesse Jenkins:
[29:53] But you can store many days worth of fuel on site in oil tanks in a fairly compact landscape. Oil is our default long duration energy storage right now, right? Until we invent something better and cleaner. And so for these kinds of rare events that only happen a couple percent of the hours of the year, just like we would like to have more batteries and more long duration energy storage to replace this in the near term, this is a sensible way to manage gas pipeline capacity peaks, right? Otherwise, we’re building, I don’t know what percentage, maybe 10% more total gas pipeline capacity. And that extra 10% increment, we’re basically never using. We don’t need it in the summer. We only need it 1% or 2% of the times when the
Jesse Jenkins:
[30:35] System is at the sort of peak stress.
Jesse Jenkins:
[30:37] And so it’s a very logical economic solution to this problem. And while yes, it is dirty during the periods when we’re burning that oil, we are burning very little of it and for very short periods of time. You know, it’s a week or two every couple of years.
Robinson Meyer:
[30:51] Can I kind of lean in on that, though? Because I think that, yes, right now it makes sense for New England to have all this oil capacity on site. They store it, they burn it during these peak freezing events. We were just saying, though, how winter load is growing three times faster than summer load. And so what’s driving that?
Jesse Jenkins:
[31:10] Winter heating electrification, which is displacing gas consumption on the heating side.
Robinson Meyer:
[31:15] I see.
Jesse Jenkins:
[31:16] So yes, in its worst case, if you’re running resistance heating and EVs.
Robinson Meyer:
[31:20] I mean, EVs are driving that too.
Jesse Jenkins:
[31:21] Yeah, EVs as well, but they should also be more flexible when they charge. But yeah, that’s true. And data centers, although there’s not a lot of those in New England.
Jesse Jenkins:
[31:27] That’s true in PJM. There is an interesting dynamic here. This is one that my group is actually researching and modeling right now for a New England case study. As we displace gas demand for heating, Yes, we’re building electricity demand, which may rely more on gas generators in the winter or oil fire generators in the winter. We’re also relieving some of the pipeline stresses that are driven by the peak heating demand. And so the key then is to make sure that winter electrification is more efficient when you account for the power plant losses than gas furnaces and boilers. And you can do that with heat pumps, right? If it’s resistance heating, if you’re burning gas in a gas generator, you lose roughly half of that gas, and then the resistance heating is more or less 100% efficient. So you have about a 50% efficient pathway there to heat your home, as opposed to a furnace, which is maybe 80%, 85% efficient. So in that case, we would be consuming more gas to power heating from the grid than we would to fuel heating in a furnace. But if it’s a heat pump, the coefficient of performance of heat pumps that are sized appropriately for winter conditions are greater than two. And if it’s a ground source heat pump, they’re greater than four or five or six. And so in that case, we could actually be relieving gas demand even as we build up the winter electricity peak. And so these sort of dynamics are careful to think about, especially when we’re talking about whether or not we want to build a new pipeline or not. We may want more gas generators. I was going to say more dual fuel generators.
Robinson Meyer:
[32:51] You’re talking about a world where you build. Yeah, exactly. So what I’m hearing here is you don’t need a bigger pipeline or you don’t.
Jesse Jenkins:
[32:58] Maybe. I’m going to say this is just these are the dynamics that you have to be very clear about. It’s not so obvious. I mean, I know like it’s easy to look at that 40% from oil and say, well, obviously we need another pipeline. It’s not so obvious because that 40%, yes, it’s 40% for a few hours, but the savings of that oil cost would have to justify building the pipeline. And it’s not like gas is cheap right now either. Gas prices were as high as $1,000 an MMBTU when they’re normally two or three. So the relative savings from gas versus oil is not as high as you might think to justify building that pipeline. If total baseload gas demand is increasing, maybe we want a new pipeline to satisfy that. But these peak events are best satisfied with storage, ideally in the long-term clean power storage, but in the short-term oil on site. That’s the logical solution. When we’re thinking about whether that baseload demand is going to go up, we do have to be very careful to think about what the dynamics are around electrification. And are we doing electrification in a way that is as efficient as possible?
Jesse Jenkins:
[33:56] That has an extra cost at the household level, right? If I build a bigger heat pump that can handle extreme winter conditions, or I invest in a ground source heat pump, that costs me more up front, but I’m avoiding big fixed costs on the grid. And which one is cheaper is the question for society as a whole to figure out. And then whichever one’s cheaper needs to be appropriately compensated. And right now, we don’t pay for peak capacity at the household level. You pay by volume, and that’s backwards. So we’re going to have to find some way to convey to people that it is worth it to you to install that more efficient, bigger heat pump if you’re gonna electrify or to do the weatherization upgrade or to go for a ground source heat pump because it’s avoiding a bunch of sunk capital that would otherwise just sit there on the grid And, you know, if one is cheaper than the other, you should be putting it in your house as opposed to on the grid. But our rate design doesn’t convey that. Our policies don’t convey that. And that tradeoff is one that we really need to drill into as we think about the best pathway through the winter.
Robinson Meyer:
[34:52] This is extra complicated in New England, though, because New England is already bringing in LNG from the Caribbean to power its summer peak, though, right?
Jesse Jenkins:
[35:01] But again, that’s a variable cost, right? It’s a pure variable cost. I guess you have a terminal that you need to build, but they already built it. You’ve got a basically a pure variable cost to add some additional peaking capacity. Yes, it’s expensive. Is it enough in fuel savings to displace that by building a pipeline with a lot of fixed costs that you only use some of the time? So yeah, I’m not saying that I’ve done the math and said that that doesn’t make sense. I’m just saying it is more complicated than it initially looks.
Robinson Meyer:
[35:25] Well, and I’m kind of carping for the pipeline here, but I’m not actually saying we should go build the pipeline. I’m just trying to think through what all the different sides of this are because you hear about the LNG as much as you hear about the oil winter fuel generation. The other thing I want to talk about before we close is that in mid-January, the New England Clean Energy Connect transmission line opened. And this is a 1,200-megawatt line. It’s been in the news for a long, long time. It connects New England to the abundant hydroelectric resources in Quebec. This has been something that climate advocates and folks have fought over for a long time. It was overturned by a referendum in Maine. That referendum was canceled out by a Supreme Court decision in Maine. But it was successfully built. It turned on in mid-January. It’s a big old transmission line. It’s going to reduce emissions on the New England grid. It’s very exciting. And then a few days into its operation, this winter storm hits, and imports of electricity into New England basically dropped to zero. And so, Quebec stopped sending any new electricity over the line to New England at a moment when New England is just absolutely screaming for electricity. And over that weekend, starting around the 24th, New England actually exported electricity back into Quebec. Now, not that much, but still.
Jesse Jenkins:
[36:39] Yeah, it turns out it was cold in Quebec too. And so they were actually willing to pay more than New England was for that power at that time.
Robinson Meyer:
[36:45] Here’s my question. We’re about to connect new york city to the hydro quebec yeah resource chippy big power line going to run down the hudson river plug directly into new york city grid it’s going to cut our emissions go to reducing some of the uh generation that was previously provided by indian point the local nuclear plant that was shut down a few years ago should.
Jesse Jenkins:
[37:05] We think about this
Robinson Meyer:
[37:06] Yes i here’s my question should we think about hydro quebec and this and this montreal hydroelectricity resource a little differently now, given that during the first big test of its ability to supply generation to the winter New England grid, it kind of failed.
Jesse Jenkins:
[37:23] No, it did exactly what the contract said. So this is an area where again, like, yes, if you were counting on it to provide winter peak with 100% firm reliability, then that was a mistake. You shouldn’t have counted on that. That’s not what the contract said. No one who built the line and was familiar with those contracts thought that that was the case. It didn’t fail. It did exactly what we expected. It is not a firm winter peaking capacity resource. It will contribute energy during winter events, even during some of these periods, right? It didn’t stop exporting for two weeks solid. But like solar, it is not a winter capacity resource that you should count on. And so you got to add up the right mix of system resources to also get your summer capacity. It does provide energy. It provides energy through the winter. It provides energy in the summer. I think it does provide firm supply in the summer, most likely, because temperatures are warmer in the south and their demand is higher than it is in quebec the way to think about those lines is as a big battery that you just tucked up to where when power prices are lower in new england than they are there you can send power north and bank it and when the reverse is true you can take power back the other way just like norway does that for denmark and germany for example and so it is a very valuable resource for the region it will supply a lot of clean energy and it will supply a lot of flexibility.
Jesse Jenkins:
[38:39] But is it a winter capacity resource? No, it was an interruptible winter contract. They knew that when they signed the contracts. And so it’s important for everybody to understand that and to plan the system accordingly. Of course, ISO New England knew that and they did plan the system accordingly. They were not counting on it to be there. So this is again, like at the high level, power systems are systems that each individual resource does not need to be dependable all the time. None of them are, right? Gas plants lose fuel, coal plants freeze, wind turbines ice up, hydro, So Quebec stops exporting, like all of these things have potential vulnerabilities. What you need is a system that as a whole is resilient enough to get through these events. And largely we built that system right now. The question is, can we keep it that resilient as winter demand grows and as we shift away from fossil fuels? So we are less reliant on the resources that today carry the brunt of that load. What will replace them? Will we have to rely on diesel stored on site to run in these winter peak scenarios? Or will we have long duration batteries that we can rely on? Or will we have more hydropower in the reservoirs we can rely on? Or will we have other new clean firm technologies like geothermal and nuclear that can help carry the load in the winter? That’s the key challenge going forward. And we have to think about the demand side just as much as the supply side, as I talked about, how do we ensure we’re not driving up electricity demand more than we should be?
Robinson Meyer:
[39:53] If you could add one resource to the New England winter grid or to the New England grid in general, where they said, look, yeah, we burned a lot of oil. It works fine, but we’re worried about winter loads are going to keep going up. Maybe we can’t synchronize all our demand as well as we might wish. What is the one resource we should add to the grid in order to make sure we can meet these winter events?
Jesse Jenkins:
[40:16] On the demand side, it’s ground source geothermal heat pumps. Because every...
Robinson Meyer:
[40:21] Which we’ll link back to the episode we’ve done on these in the show notes, because we’ve talked to a company producing ground source winter heat pumps.
Jesse Jenkins:
[40:28] With Dig Energy, who I advise. So the reason I say that is because every unit of heating you get from ground source heat pumps, while it does increase electricity demand by one unit, would displace natural gas demand by probably three units. So you want to relieve pipeline constraints in the winter? Ground source geothermal is a big bang for your buck. Now, of course, we’ve got to be able to install those at a reasonable cost. That’s, again, what Dig is trying to work on and others. But if I could wave my wand and have some breakthrough technology or some new technology come to market to expand our toolkit in the winter, ground source heat pumps are the thing, especially for northern climates. On the supply side, in New England or New York, it’d be nuclear power, right? Technology that doesn’t rely on an external fuel supply, does not rely on coal piles that can freeze up. As long as it’s appropriately winterized, it’s auxiliary systems and cooling. It does quite well in the winter. It doesn’t deal with the summer stresses that I talked about with cooling water temperatures. It’s an excellent winter resource. And that’s why it’s such a shame that New England and New York both shuttered Pilgrim and Indian Point, which we’re now sort of barely replacing with these long distance transmission lines to Quebec, many years later. Those were excellent winter reliability resources. And if we could, again, wave our magic wand and be able to build nuclear power plants at a reasonable cost and on a reasonable timeframe, it would be a very good option for the Northeast to turn to for the winter.
Robinson Meyer:
[41:45] And we should give credit to New York’s governor, Kathy Hochul here, who has already solicited contracts to build one gigawatt of new nuclear upstate somewhere in New York, and has said that she wants to build ultimately at least five gigawatts of new nuclear at some point upstate. And that would, by the way, go toward helping these New England electricity
Robinson Meyer:
[42:05] problems as well, because there’s a lot of transmission capacity between New York and New England. And by the way, we should add one more thing, which is that this too ties into a cross-border U.S.-Canadian project because New York State, if you read between the lines, you can tell that New York State might be talking to Ontario, which is itself trying to build new nuclear capacity to meet rising demand. And so, I don’t know, maybe a feel-good story for those of us who still value American Canadian economic integration. There’s lots of ongoing projects to knit those particular grids tightly together and to also go in together on building new kinds of generations, such as small nuclear reactors that could help relieve some of these problems. Okay, Jesse.
Jesse Jenkins:
[42:47] Yeah, let’s leave it there. I hope you all stayed warm over the last couple of weeks.
Robinson Meyer:
[42:50] Of course. I live in a radiator building. I got to say the problem was not staying warm. The problem was how much can you open the windows overnight? I know.
Jesse Jenkins:
[42:59] Let’s do less of that, too.
Robinson Meyer:
[43:01] Exactly. Before we go, we’re not going to have time for an up shift down shift today. But I do want to note the Rivian R2, we’ll stick it in the show notes. The first test drives of the Rivian R2 are coming out, the affordable, roughly, at least it’s going to start at $45,000 crossover that’s coming from Rivian at some point during the first half of this year. We’ll stick a link to a test drive in the show notes. It’s getting pretty good reviews. We don’t know final range yet. We don’t know final price. And we don’t know when they’ll start delivery. But other than that, other than that, seems to be getting pretty good reviews. And one of them is that it’s, you know, 10% to 80% percent charge in 30 minutes. Yeah, that’s pretty solid. Decent.
Jesse Jenkins:
[43:39] I also I texted you last night about that. They have these prototype units out for testing right now that look awesome. They’ve got this really cool print paint job on them. I really hope that they sell some of those to the public. Go Google it. Check it out. They look so cool.
Robinson Meyer:
[43:52] We’ll stick in the show notes. I cannot tell if that is.
Jesse Jenkins:
[43:55] I assume it’s just the prototypes,
Robinson Meyer:
[43:57] But I assume it’s the prototype to. We’ll see.
Jesse Jenkins:
[43:59] If enough Shift Key listeners write to Rivian, perhaps they’ll release some with those trims.
Robinson Meyer:
[44:04] RJ Scarange, if you’re listening, release the prototype paint job. Emily Panicova, my colleague, was like, are they going to sell it with those stripes? And I was like, I don’t think they are. But we’d love to be wrong. I’d love to be proven wrong.
Jesse Jenkins:
[44:15] They should.
Robinson Meyer:
[44:15] That will do it for us this week. Jesse, You know, it’s the end of one chapter, but it is not the end of your relationship with Schiffsky. We will have you back. That’s right.
Jesse Jenkins:
[44:24] The journey continues.
Robinson Meyer:
[44:25] The journey continues. We will have you back in the weeks to come. We have some very exciting episodes coming up, episodes we’ve already started planning.
Jesse Jenkins:
[44:32] I can say I love listening now to episodes that I don’t know what they’re going to say. It’s a delight to be on the other end of the other side of things.
Robinson Meyer:
[44:40] You can follow Jesse on Bluesky or LinkedIn at his name, right? Anything you should add?
Jesse Jenkins:
[44:46] Yes. Jesse D. Jenkins. Yeah.
Robinson Meyer:
[44:48] Yeah, at Bluesky, LinkedIn, at my name, Robinson Meyer. If you enjoyed Shift Key, please leave us a review on your favorite podcast app. Share this episode with a friend. Shift Key, as always, is a production of Heatmap News. Our editors are Jillian Goodman and Nico Lauricella. Multimedia editing and audio engineering is by Jacob Lambert and by Nick Woodbury. My full-time co-host is Jesse Jenkins. For the last time ever, he’ll be returning in the future as a guest co-host.
Robinson Meyer:
[45:08] Our music is by Adam Kromelow. Thank you so much for listening and see you next week.
Curtailments are on the rise. BNEF