Kumar: Hey everyone, Kumar Dattatreyan here, and we're trying something new. You know, we've been interviewing lots of guests with very set topics. Today, we're going to try something different with my good friend Glenn, who has been on the show before. We've had lots of episodes on topics that range from XSCALE to permaculture to climate change—you name it, we've talked about it, even though I'm certainly not an expert. Glenn is probably more of a nerd, and he gets into these things. I just like to talk to him because he's so knowledgeable about this stuff. Before I just ramble on, let me pull him on. Glenn!
Glenn: Hey Kumar, how are you doing?
Kumar: Good, thanks. So, you know, I was thinking about this show and thinking about that movie Forrest Gump. And you know the famous line in that movie—"Life is like a box of chocolates. You never know what you're going to get." And so for these fireside chats, which I'm intending to try—maybe do one of these every once in a while—you just never know what you're going to get. It just depends on what our mood is and where the conversation leads us. And obviously there's a lot going on in the world. It's disruptive. People are—I'd say no matter what side of the political fence you're on—it's making people sit up and take notice, engage in conversation, maybe not always in a good way. So where do you want to start? What's on your mind, Glenn?
Glenn: You sparked a thought when you said "disruption." I have kind of a long story about that, but there are two major disruptions that people don't talk that much about that are going on right now—with a caveat that I hope it happens fast enough, because we're going to be in a beautiful place and people will have a lot of abundance. I'll use the "A" word that some people are using. People will have a lot of abundance thanks to this. So there's a tickler and a tease.
Kumar: Oh, that sounds wonderful! We need some positivity in the world right now. And as we're recording this show, the temperature outside on the East Coast is probably in the single digits now, maybe double digits—it's probably in the teens. It's very cold, coldest winter in a long time. Certainly climate is being affected. I mean, people might say… well, anyway, I'm not going to get into that. It's just, you know, there's a lot going on, and any good news is probably welcome. So what do you have to share?
Glenn: It's minus fifteen up here, for the record. I'm in Toronto.
Kumar: That's Celsius though.
Glenn: Oh okay, okay. We're all cold.
Kumar: It's probably minus fifteen Celsius, minus fifteen degrees Fahrenheit—it's probably about minus five here then, something like that.
Glenn: I think I'll start with a story, and it'll make sense why I'm saying this as I go on. I'm fascinated by the story of Horace Rackham, who was the chairman of the original Ford Motor Company. When Henry Ford formed the Ford Motor Company—this was after his two bankruptcies, by the way—so he was not viewed as a very good business risk. He asked all of the shareholders to put in five thousand dollars. Going by—I looked that up once, going by memory—I think that's about eight hundred thousand dollars equivalent today. But don't quote me on it. The point is, it was a lot of money, and Horace had to sell a bunch of property. So it was kind of a big deal. And he went to his banker and asked him what he thought. And the banker said—and this is a famous quote, you can look it up—"Do not invest in Mr. Ford's company. The automobile is merely a novelty, a fad. The horse is here to stay." And of course we laugh at that today. But in 1903, it actually almost made sense. In 1903, there weren't many cars. There were a few, but not that many. The first mass-produced car was the Model T, and that hadn't happened yet in 1903. And mass production hadn't even been invented yet. All the cars were made by hand. So the banker is not as crazy-sounding as we'd like to think in 1903. Now, in 1912, when the production line was in full swing and everybody was buying Fords and the more volume they made the lower the price got, and they sold billions of them—it was out of the park, a home run. At that point, yeah, it was clear. Of course the horse is gone, the car is here. But in 1903 it wasn't quite so clear. To put a bow around this story: In 1919, Henry Ford bought out Horace Rackham—
Kumar: Sorry, I couldn't hear the last part. You're a little muffled.
Glenn: Henry Ford bought out Horace in 1919 for twelve million dollars.
Kumar: Okay, that's a tidy return on investment.
Glenn: Sure. Yeah. So I say that to lead into the topic of disruption. When something really radical happens—like switching from the horse to the car, or manual labor to manual calculators to computers—that's kind of a big deal. And it's hard to wrap your head around it. People have trouble visualizing it, although there's always keeners and pioneers like Henry Ford who are ready to push the envelope. But like, is this going to be mainstream? Is this going to take off? It's hard to predict, and it's particularly hard to predict exponential growth. It's hard to even—I'd say I'd go even further and say that it's hard to know as an individual that you're in an era that is experiencing exponential growth in an area.
Kumar: Right, outstanding point. And in 1903, it wasn't clear that you were in a period of exponential growth with the automobile. In 1912, it was.
Glenn: Yeah, I'll come back to that.
Kumar: I just want to make another point, just to add a thought. You know, as you're talking about the automobile and people in the early 1900s as they were going through this era in their horses and buggies, and they see these curiosities running around with no horse pulling it—I'm sure it was like, "Oh my God, look at these people with cars" and so on. And they didn't think that, you know, twenty years in the future, thirty years in the future, forty years in the future, that was going to be growing at the rate that it eventually did, right? Just like today, I was talking to someone the other day about AI. And I was reflecting back on the growth of AI over the last five years. I mean, we've had AI for a while in some form or another. Like ten years ago, fifteen years ago was the autocorrect in our word application or whatever. And they got increasingly sophisticated until at such point where these chatbots came out. And that was when people started to really take notice of AI. It became a thing, right? But we're living through that age right now. And I'd say a very small fraction of people worldwide are really exposed to it in any meaningful way. The majority of people are not. I mean, if you think about the developing world, a lot of the rural parts of India, Africa, and so on—they're not exposed to AI. They're still living as they probably did, we did, thirty, forty, fifty years ago.
Glenn: I'm not sure about that. What percentage of the world has access to a cell phone? I know they have them in rural Africa where they don't have electricity. They have a solar panel to charge their cell phones.
Kumar: I didn't mean to play that again. Sorry about that. I'll just have to edit that out. No worries. What were we talking about?
Glenn: Africa, India, rural areas.
Kumar: Yeah. I don't have the figure off the top of my head, but I know that in rural Africa, young, keen kids are getting cell phones in rural villages where they do not have electricity, and they're powering them by solar panels. You're right. I mean, that is true. In fact, my son, my younger son, got my wife a birthday card. It was really funny. It was a video that was recorded in Africa by some young men in Africa that were dancing and, you know, sort of wishing her a happy birthday. It was sort of cute and a little sexy. And you're right, they're getting exposed to technology. They're leapfrogging a lot of the technological steps that we had to go through here in the developed world. They don't need to lay down copper lines and all these other sorts of infrastructure things for cable and all this kind of stuff. They're just bypassing that. But yeah, I see what you're saying. They're getting exposed to technology. They may not necessarily be exposed to AI. However, I bet you some of those kids in rural Africa could probably be exposed to AI if they had access to chatbots and so on.
Glenn: I'm going to make it controversial. I think it's going to be mandatory.
Kumar: Why?
Glenn: You want to learn a language. I asked ChatGPT to teach me French, but my French is weak. I wanted to practice my Spanish. ChatGPT can be a conversation partner. It's a hundred times better than Duolingo. This is not even going to be a close run. It's going to be mandatory. I've just been using ChatGPT to teach me—I'll say, "What's the French for this?" And it'll tell me, and it'll give me the pronunciation and so on and so forth. And then I'll say, "Can you give me a conversation in French and give me the translation in English so I can just start to get in the practice of speaking French?" and it does. And some of the translations are wrong, and some of them are right. I don't really know. But the fact is, it's like having a tutor on hand anytime of the day who has infinite patience, and you can keep on asking the same question over and over again.
Kumar: Outstanding.
Glenn: And here's the shocker: I asked a friend who does machine translation—one of the tech guys on machine translation—and I said, "Can ChatGPT translate for me something into French?" And he burst out laughing. He said, "If you want to laugh at it, yeah, do it." I said, "What do you mean?" He goes, "You know, the people who do machine translation for the UN, they're not worried about their jobs. ChatGPT has no memory, or it only has memory for so many words, and then it starts to contradict itself. So if you want to translate a small paragraph, it's pretty good. Anything bigger than that, it kind of falls over." I have watched these translation tools for a little while, and they have a habit of—every about five years—having a breakthrough and getting three times better overnight. This is Wright's Law. This is not magic. This is people that are doing this. The more they use it, the better they get at it. And every once in a while, somebody figures out there's a way to make it go three times faster or be three times as good. And it's like, "Oh my God, how did that happen?" Somebody smart did something smart. Well, in 1991, I think it was in Canada, some very clever person somewhere published a paper—I wish I could remember where it was—of a new way to train computers how to do language. And the next day, language translation went from a joke to an actual functional tool. And I think we're on the cusp of that happening again with ChatGPT with memory, and it's going to be insane. It's going to be world-changing.
Kumar: Okay, so that's one disruption—AI. We all know about this one. What's the next one?
Glenn: I'm still at the windup. Hang on.
Kumar: Okay, you're still at the windup. All right, go ahead.
Glenn: So we talked about the fact that you go back to the automobile revolution, and in 1903 people couldn't visualize it. It's hard to know that you're experiencing exponential growth. The AI example is we're all sitting right in the middle of it. We can't tell. The other thing that we're in the middle of that I think is even bigger news is clean electricity, which can be essentially free. And that ties in with the whole AI thing because AI requires massive amounts of electricity, which is one of the reasons why people are interested in renewables because it's cheaper. But more than just AI, it enables air conditioning, it enables electric vehicles. Once electricity is cheaper than gas, then the gas-powered car is dead. It's a horse. It doesn't matter if you like horses. You're not taking the horse on the expressway.
Kumar: Right.
Glenn: And so this is not being talked about very much. And I think it's a bigger, more fundamental disruption because it will change our world as much as the automobile changed our world. It may even happen faster because you can have a bigger boom.
Kumar: So let me understand. You're saying clean electricity—solar, wind, hydro, all those things—they're getting to the point where they're economically viable, they're cheaper than traditional fossil fuels. Is that what you're saying?
Glenn: They have already achieved grid parity. That's the term. Grid parity means it costs the same or less than the price of electricity from burning coal, burning gas, or using nuclear. They have achieved grid parity.
Kumar: When did that happen?
Glenn: Different places, different times. But broadly speaking, around 2020 is when it really kicked in. And it's not just barely made it. The trend line is that solar is getting eight percent cheaper per year. And it's been doing that for forty years. There's a thing called Wright's Law that says the more you make of something, the cheaper it gets. It's a percentage. You double your output, it drops X percent in price. For solar, it's around twenty percent. And they've been doubling solar output every two and a half years. So you do the math—it drops twenty percent every two and a half years. That works out to about eight percent a year. And this has been going on for forty years.
Kumar: Wow.
Glenn: And batteries have the same pattern. They've dropped in price ninety-one percent since 2010. That's insane. They went from twelve hundred dollars a kilowatt-hour to a hundred and eight dollars a kilowatt-hour. That's a ninety-one percent drop in price in fifteen years. And there's no sign of it slowing down. So you combine cheap solar with cheap batteries, and you can store the electricity for nighttime. The whole "solar doesn't work at night" argument—solved. Done. We're past that.
Kumar: So if solar and batteries are now cost-competitive with traditional fossil fuels, why aren't we seeing more of a shift? Why is it not more widespread?
Glenn: Regulatory capture. The utilities that own the infrastructure don't want to change their business model. Their business model is "we sell you kilowatt-hours, and we make money on every kilowatt-hour we sell you." If you put solar panels on your roof and a battery in your garage, you don't buy electricity from them anymore. And they hate that. So they lobby for regulations that make it harder for you to put solar on your roof or that penalize you for having solar. They want to protect their business model, not give you cheap electricity.
Kumar: That's frustrating.
Glenn: It is. But here's the thing—it's unstoppable. Texas figured this out. Texas has competitive procurement. They basically said, "We don't care what technology you use. May the best technology win. Whoever can provide the cheapest electricity, that's who we're going with." And guess what happened? Solar and batteries started winning. Now Texas has more renewable energy than almost anywhere else in the United States. Not because they're tree huggers—because they're capitalists. They want cheap power. And solar won.
Kumar: That's fascinating. So competitive procurement—technology-neutral competitive procurement—is the key?
Glenn: That's the key. You make it so that the regulations don't favor one technology over another. You just say, "Give us the cheapest, most reliable power." And solar and batteries are now the cheapest. And they're getting cheaper every year while fossil fuels are staying the same price or getting more expensive. So the gap is widening.
Kumar: So what does this mean for the average person? What does it mean for electric bills?
Glenn: Your electric bill is about to drop. Right now, your electric bill is made up of two parts. About forty-five percent is the cost of generating the electricity, and about fifty-five percent is the cost of delivering it to you—the wires, the poles, the infrastructure. If you put solar panels on your roof and a battery in your garage, your generation cost goes to essentially zero. You're making your own electricity. So you're only paying for the delivery infrastructure, which is like paying for internet service. You still pay a monthly fee, but it's way less. Your two-hundred-dollar-a-month electric bill becomes forty or sixty dollars a month.
Kumar: Wow. That's a seventy to eighty percent reduction.
Glenn: Yeah. And Duke Energy in Florida just did this. They lowered their rates because they added solar and batteries. They figured out how to make it work. So it's not theoretical. It's happening right now.
Kumar: So what's stopping this from being everywhere?
Glenn: Regulatory capture. Utilities that want to protect their old business model. Permitting delays. Net metering battles. Rate structures that punish people who have solar. All of these things are regulatory barriers put in place by utilities to protect their profits. But the economics are so overwhelmingly in favor of solar and batteries that it's going to happen anyway. It's just a question of how fast.
Kumar: So what can people do? What can listeners do to help accelerate this?
Glenn: Call your state lawmakers. Tell them you want competitive procurement, technology-neutral competitive procurement. Tell them you want the regulations that make it easy to put solar on your roof, to put batteries in your garage, to do Power Purchase Agreements directly with solar farms. Point out that the technology is changing rapidly, and we don't want to discriminate one way or the other. We just want the cheapest power. Today it's solar and batteries. I don't know what it'll be tomorrow, but let's remove the regulatory barriers and we'll save money. And if the power companies say, "Oh, I want to get a few more years out of my gas plant," allow people to put solar anywhere they want. On their own house, on a community parking lot, on a building, on a sheep farm. Get creative. We need to encourage all sources of generation.
Kumar: Wait, did you say sheep farm?
Glenn: Yeah, agrivoltaics. You raise the solar panels up a bit, you create shade for the sheep, more shade for the plants. You get more plant life. You get more per pound for the sheep, and you rejuvenate the soil. Oh, and by the way, you get all this money from the electricity as well. It's brilliant.
Kumar: That's amazing. I've seen those reports about windmills in the sea helping ecosystems, wind farms or solar farms helping biodiversity and plant life and animal life and so on. Pollinators and everything.
Glenn: Exactly.
Kumar: All right, so let me try to wrap this up. What can people do to convince their state and local lawmakers to push for this competitive procurement for energy?
Glenn: Point out that the technology is changing rapidly, and we don't want to discriminate one way or the other. But we need to have competitive procurement, technology-neutral, so the best technology wins. Today it's solar and batteries. I don't know what it'll be tomorrow, but let's remove the effective regulatory barriers and we'll save money. And if the power companies say, "Oh, I want to get a few more years out of my gas plant," allow people to put it on their own house or somewhere else. Anybody can put in energy anywhere so we can get rid of the high-cost suppliers immediately. The oil industry is a much smaller segment of the market than it used to be. I'm sorry, but it's horse time for them. Treat them with compassion, but they've got—I don't know—Venezuela has the largest oil reserves in the world or something. Let me translate that into our metaphor: They've got the most horses of anybody in the world. That's nice. Horses are nice animals. I actually used to work on a horse farm. I like horses. Am I going to take them on the expressway? No.
Kumar: Yeah, I love it. All right, listen. Can I tie up a few more loose ends?
Glenn: Okay, you have maybe two or three.
Kumar: I don't think they're loose ends. I mean, for me, it's tied up. It's like we are living in an age of disruption, energy disruption. And we are on the cusp of something big where energy can be essentially free, is what you're saying, if we are smart about it and if we're more aware about it. If we call our local state congressperson, lawperson, whatever, to advocate for things that Texas is doing in the US, which is competitive procurement, technology-neutral competitive procurement. And what will happen is that these power companies are going to be going for the cheapest way to generate power, which currently—solar, by far, is solar. And Duke Energy just did it in Florida. Other companies did it in Florida, Virginia, raising the rates because, "Oh, we have to upgrade the grid. Blah, blah, blah." Stick a battery somewhere. Stick solar somewhere. Don't give me this.
Glenn: Yes.
Kumar: And so this is possible. It's possible in our lifetime. The trends are pointing in that direction. We just are not seeing it. And we're being consumed by all the other things that we see on the news every day. So let's not lose sight of what we can do to help our planet that we all live on be more sustainable. And hey, who doesn't want free energy? Right?
Glenn: Hang on. Free per kilowatt, like an all-you-can-eat buffet. You'll still have to pay per month.
Kumar: That's fine. We pay for something. It's a lot cheaper than what we're doing now, right?
Glenn: You got it. And if energy is cheap, electricity is cheap, it might encourage more people to switch from their ICE vehicles to EVs, right? And all that stuff. And by the way, once you have free electricity, you have free fuel for EVs. What do you think of that?
Kumar: Oh, and free fuel for pumps.
Glenn: Boom. Exactly.
Kumar: Which I was sort of alluding to—free energy, right? So that means the gas-powered vehicle is another horse.
Glenn: I want to strengthen something you just said. Or how do you want to handle this?
Kumar: Yeah, we need to wrap this up. So, you know, next fireside chat we can either continue this or go on another tangent with something else that's disruptive in our time. Okay?
Glenn: And this has been fun. I enjoyed it.
Kumar: Cool. All right, till next time. Bye, all!
