Atomic Show #247 – Jigar Shah, founder SunEdison and Generate Capital
Jigar Shah is the founder of SunEdison, a former CEO of the Carbon War Room, and is currently the President of Generate Capital.
He is also a member of The Energy Gang on Greentech Media.
Jigar and I have been engaged in some lively discussions on Twitter about the future of solar and nuclear energy as businesses and as carbon free electricity generating sources.
Though I love the sun, I remain convinced that collected solar energy has only limited usefulness in supplying the kind of controllable, on demand power needed to run a modern society. In my analysis, atomic fission is the new fire that will take humanity to new heights of prosperity while enabling us to consume far less material. Doing more while consuming less will enable a cleaner, more evenly abundant, more inhabitable, less contentious planet for all human beings.
Jigar has a different point of view. He believes that solar energy development is a multi-trillion dollar opportunity. In addition to his commercial ventures, Jigar published a book titled Creating Climate Wealth: Unlocking the Impact Economy. Though he has spent his professional career developing solar energy, he has been intrigued by the potential of nuclear energy since he was 16.
Jigar has been far more successful in developing and marketing his vision than I have been. He has some tough-love advice for the nuclear industry and the people who want to see nuclear energy grow as a source of clean, abundant energy.
Last night, we decided to continue our sparring in an audio conversation. I hope you will agree that our engagement was lively and worth the time you invest in listening to it.
We still see the world through dramatically different lenses, but there is much that we can each learn from the other’s point of view.
I hope this will not be the last discussion that you will hear featuring the two of us.
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Hi, new to your site…I can’t see an obvious way of listening to this discussion. Is there an embedded player I have some how missed? I did try clicking various links but nothing led me to the media…just away from it. TQ
Rod – thanks (in advance of adding the podcast links) for this conversation. @wfp – you’re absolutely right about the links. If you check the previous Atomic Show post (https://atomicinsights.com/atomic-show-246-carmen-bigles-coqui-pharmaceuticals-update/) you’ll find the play button, play in new window link, and Download link at the bottom of the post. Rod will add the links to this one shortly, I’m sure. Keep checking back.
wfp – Welcome. I hope you find as much food for thought and action at Atomic Insights as I do.
Oops. Thank you, wfp, for pointing out that I had neglected to link the audio file to the show notes.
The issue has been corrected. You should now see an embedded player at the bottom of the post along with a link for downloading the mp3 file.
I’ll do better next time. It’s hard to find superior quality help these days. 🙂
You might think about asking your webmaster if there would be a way to create a template that would allow you to create the pod-cast news posts, that would automatically link the audio files for you, so you don’t have to remember to manually add those. That just seems like a task ripe for automation.
wfp – in addition to the in-page link, if you like the podcast, I would recommend subscribing to the podcast RSS feed with a podcast manager app. I personally use BeyondPod for Android on my smartphone, but you can also use iTunes, and a number of other audio players, as long as they support subscribing to an RSS feed.
BeyondPod automatically downloads new episodes for me every morning, so the podcasts are sitting on my phone’s SD card memory, and I can play them whenever I want. It’s a fantastic way to listen to the show – much more convenient for me, than opening the website.
Jigar is probably correct. Government selects winners and losers by regulation and subsidy.
Multi trillion sounds about right, ultimately much of it from the taxpayers.
Forgetting about how sour mash is acquired (14 proof), How many endothermic Joules does it take to refine a gallon of ethanol to 80% ethanol, 20% water? How many Joules dos it take to refine it to 98% ethanol, 2% water? How many exothermic Joules in consumption of a gallon mixture that is 98% ethanol?
2 questions for which you’ll never find answers:
1) what percentage of water is in the ethanol mixed into gasoline?
2) What is the input energy/gal to refine sour mash into ethanol for gasoline?
… Illustrates what happens when Government politics is involved in economic activity.
Government should only pick losers, not winners. What I mean by that is – conventional coal, oil, and gas, long term, should be picked as losers – because of the known damage they are causing to the atmosphere and public health. I’m OK with government picking losers when those losers are harming others.
But, amongst clean alternatives, such as nuclear, wind, solar, geothermal, Coal with CCS, ocean tidal, hydro, etc – well, the market should pick between those.
Although I have a strong nuclear background, I now work in renewables, but in a neutral sense. As part of my job, I neither advocate, nor rally against, renewables.
I generally agree with Rod, although I may be slightly more in favor of renewables. The paragraph about solar above is also something I generally agree with, although I will add a few points, both for and against.
Solar is mostly peak coincident, and can be completely peak coincident if you orient the panels in the correct direction (for fixed solar). In other words, power generation escalates as load escalates during the day, and then they drop off together at night. Solar is good at providing peak energy because of what was mentioned above, but also because peak days are often hot days, which just happen to be sunny days too.
Renewable fans will point to storage as the enabler for a renewable future, and it will help, but likely will not get them all the way to a renewable future. The problem is this thing called winter. Here in Michigan the days are about 15 hours long in June and about 9 hours long in December. You can solve the day-night issue with storage, but you can’t solve the summer-winter issue with storage. So, you either have to over-build your solar to get you through the winter, or use another type of generation to get you through. Oh, and by the way, in winter in Michigan we would prefer to use natural gas for home heat and not for generating electricity.
Generally our issue today is with load growth and the lumpiness of nuclear additions. The large plants are easy to justify when load is growing substantially. This is why places like China and India will see more nuclear activity than the US. I would have thought a few years ago that large coal retirements would allow for replacement with nuclear. This seems to be happening regionally, but is less than I would have thought. Other factors, like cheap natural gas and short-term focused markets are also impacting all forms of generation.
I still favor significant nuclear in the portfolio, but like many on this board, do not hear a lot of discussion about it.
Solar is just not that peak coincident, the curves are quite clear in Europe where solar is beginning to be a significant part of the mix, and the match is very far from being that good.
The load escalates very fast in the morning when people wake up, and solar just does not grow that fast at that time, in some seasons, there can no solar at all at the time consumption begins to grow. Then at mi-day there’s a very strong solar peak, when consumption is just somewhat higher than in the hours before and after. Finally around 5PM begins the evening demand peak coming just at the sun is retreating.
And even for hot climates, the temperature is the result of heat accumulating all over the day, which means it and so the demand for air conditioning is highest at the end of day, when the sun isn’t generating as much anymore.
But you are right about the rest, nuclear needs a very long term thinking, or else the easy solution is clearly gas to replace coal. At first the prediction of Robert F. Kennedy Jr. didn’t work out that well, or at least don’t in Europe, but in the US it’s becoming clearer and clearer.
I mentioned this in my post, but I will reemphasize. Most solar to date has been installed facing due south in the northern hemisphere. This maximizes energy production for a fixed array. Part of why people due this is due to net metering and tariff structures. [If you would like to have a longer conversation about tariffs I would be more than willing]. Anyway due south facing solar does result in the problems you point out, but could be solved with proper panel orientation, or with tracking. Facing panels in a variety of directions, but primarily more south-westerly, would result in solar being mostly peak coincident, as I suggested before. My comment about hot sunny days was just to point out that system peaks do not tend to be set on cloudy or rainy days, nothing more.
Kevin, that may be true in tropical parts of the world but nowhere in the continental U.S.
In Los Angeles winter peak happens about 7PM; summer, about 5PM. You can tilt your panels any which way you like; they will never be “peak concident”. At about this time of year solar becomes “peak non-existent”.
I think I said mostly peak coincident, nor entirely peak coincident. Also, panel tracking, while more expensive, would address your issue.
@Bob In your Los Angeles scenario, I think one hour of the peak difference is explained by the time change. If you used a non-changing clock these peaks would only be one hour apart.
I would think the over-build issue would be particularly acute for the storage problem. My cousin who lives in Hawaii (abundant sunny days) has a rooftop PV array (non-movable south-facing) had to build a separate outbuilding to house his storage system which, as you can guess, is sized basically for overnight storage and a little extra. When I stay with them the rule is always “turn off the hot water” while lathering up in the shower. But, they are mostly off-grid, which was their dream (along with living in HI), given the high costs of electricity on the island (imported diesel, plus wind).
Without looking up the latitude of Hawaii, I would assume that it is close enough to the equator that it does not experience the great disparity of winter versus summer sunlight that those of us at higher latitudes experience. Therefore the seasonal issues are not as dramatic.
You are starting to hint at one tariff issue, and that is off-grid solar is reaching cost parity in areas with high electricity prices. Hawaii is Exhibit A for the reasons you mention.
What would a 6-pack of NuScale reactors do for electricity prices on Oahu?
It would probably lower them, given that I have seen NuScale estimate $90/MWhr levelized.
I suspect that it would also destroy the economics of solar. If it became much cheaper to e.g. buy electricity at overnight rates to make ice for A/C than to try to meet peak demand with a roof-full of PV, the whole case for the PV disappears.
They may be approaching parity for per-kwhr usage, but the capital costs are still pretty high. When I first visited there after they moved to Kauai from Salt Lake, he said he worked an extra year, maybe two, to have the money to put in the PV system. They are looking at replacing their batteries because of age and the limit on deep-charging cycles, and for that they are looking at taking out a line of credit on their home (basically re-mortgaging a paid-for home) to pay for it. Since they are in their 70s I don’t think they’ll see a break-even on savings vs. investment. But, they are living their dream, although it is an expensive one.
@Wayne Off-grid is truly an expensive option. What makes sense to me is if your utility has a time-of-use tariff, get on it, build solar to off-set your peak usage and then buy from the utility off-peak. Storage is too expensive, no matter what Elon Musk tells you.
@ E-P The economics of solar would be diminished, but what would truly be demolished is the economics of storage. You would probably end up with a Hawaii grid that was baseload nuclear maybe plus some, and just enough solar and storage to handle peak. The idea of 100% solar combined with storage is a fools errand.
Concerning how lack of demand growth hampers nuclear.
I don’t think the “lumpiness” of nuclear is a significant issue, i.e., one that makes nuclear “need” demand growth more than other sources. It’s a big country with a well developed grid, and nuclear capacity additions are a small fraction of the total.
The reason for renewables relative success has far more to do with policy than with it’s small scale (for incremental capacity additions). I’ve often described Renewable Portfolio Standards as mandating the construction of large amounts of renewable capacity, regardless of cost, practicality, or if additional power is even needed. As time goes on, I’ve come to recognize that last point as perhaps being the most important of all.
You say that lack of increasing power demand makes it hard to justify or build new nuclear plants. Hey, all that’s needed to solve that “problem” is a mandate for new nuclear plant construction, regardless of need (for more power). In other words, the same treatment that renewables get. Problem solved!!
Soft demand, along with mandates for additional renewable capacity, creates a glut in the power market (when the sun shines or wind blows, certainly). The result is low/negative wholesale power prices that attack the economics of baseload plants. It’s becoming increasingly clear that it was all intentional…… The final effect will be that existing baseload plants will be forced into close to “make way” for renewables (along with the backup services to be provided by natural gas, i.e., their politically powerful gas allies). Never mind that new renewables will be far more expensive than keeping the existing baseload plants open.
If these mandates and subsidies were not there, and renewable plants had to make all their money by selling power in the *wholesale* market, the way traditional plants do, much less renewable capacity would be being built. A normal (unperturbed) market would simply and elegantly apply the proper penalty to intermittent generation. Whenever they generate power (i.e., whenever they have power to sell) the spot price for power immediately crashes to very low levels. Thus, they would rarely, if ever, get any significant price for their power. As a result, little such capacity would be built. (Note that solar would be in a better position than wind in this respect, for the reasons you point out.)
@Jim
I appreciate your thoughts. Let me start by saying I fully agree with you that Renewable Portfolio Standards (RPS), did require building capacity when little or none was necessary, and that the subsidies offered have clearly distorted the market.
In some ways I think it was worse than you describe, because RPSs were the rage in 2008 and we had a great recession that caused load to drop fairly significantly. So we had construction requirements for capacity at a time when a market signal would have indicated now is not the time to build capacity.
I’d like to get back to my comment about lumpiness and it ties into my perspective as a state regulator. You mention the big country with the well developed grid, which is true, however, with large load growth you can have one utility build a plant and involve the regulators of maybe just one state. With small load growth, you have to have a consortium of utilities possibly pleading to their regulators in several states for rate recovery. This process get messier and more burdensome when more stakeholders get involved. The more partners in a process, the more one is likely to drop out, again causing a lot of confusion.
There is another problem is with return of capital. The length of time between investment of capital in construction and the return through electricity generation is a problem for nuclear when compared to renewables or fossil. This is one area where I think SMRs may be beneficial. You can construct a NuScale site and bring two reactors on-line and let them start generating electricity, use that revenue to add turbines, order new reactors and bring more reactors online. The process may just work better from a capital recovery perspective.
I have been involved with the construction of three Nuclear power plants and the final cost for all three of them was doubled (and more) because of the fact the PUC for the states they were in did not allow one cent of construction costs to be paid for by rate payers until the plants were declared “operational” and added to the rate base by the state PUC. Additionally, my wife was the bank loan manager for a twin unit plant that was finally declared operable in the early 90’s. The bank loan department had a fairly nice party celebrating the fact that the second plant went operational and they could sell the loan with a decent profit. There too, the final loan value was more than twice the original projected cost of the plant. In ALL cases, the doubling of costs was due primarily to frivolous intervener delays dragging out the length of the construction loan. Just like a big loan affects your loan rate a big loan like this affects every other loan the Utility has and increases their operating costs. And YOU pay.
PUC’s may not like to allow CWIP of new construction but it is doubling the cost of nuclear power plants. A loan without CWIP is similar to you getting a construction loan (not a mortgage) to build a house. A Dream home that is going to take you ten years to build. Then, instead of making monthly payments on that loan as you build your dream house you reach an agreement with the bank to roll in the interest each month until you get an occupation permit for that new home. As you can see, unless you have excellent or better credit and are getting that loan at “prime” rate, your dream home will double in cost very quickly.
Twenty-eight states passed renewable energy portfolio laws almost simultaneously around 2008. These laws require a portion of electricity generation to come from “renewable” sources as “renewable” is defined in the laws.
The two truly pernicious parts of these laws is that they require grids to take the “renewable” power whenever it’s available regardless of who else is forced to shut down and “renewable” doesn’t mean clean or low in CO2, it’s just an arbitrary list of favored sources-basically anything intermittent enough to require gas backup.
This is a quiet war on and for caseload generation by gas producers with big green as the shock troops.
Nothing we do about acceptance of nuclear is as urgent and critical as fixing these REPs. It really is the Renewable Energy Portflios that are creating the distortions in the energy markets that lead to shutting down perfectly good NPPs. Well that, and th brain dead movement to make electricity markets “free”. Essential infrastructure services are not well provided by laissez-faire policies. Anyone whose ideological dogma drives them to say otherwise is ignoring basic facts of control system theory.
Sigh. Caseload should have been baseload. Stupid auto-correct.
Thanks for the great comments. Happy you enjoyed the podcast!
Jigar, Rod,
First – Jigar, thank you for coming onto the Atomic Show. I had not heard of you before, but I really appreciated what you added to the conversation. You have a lot of really good perspectives to add to the discussion about nuclear energy, and about the current level of dysfunction in the nuclear industry. I’m planning, maybe this weekend, to go find your “Energy Gang” podcast episode about nuclear, and listen to that. I may even become a regular listener of that podcast (although, admittedly, my time for listening to podcasts is somewhat limited, so not sure if I can add another podcast right now).
I hope we hear you again as part of future Atomic Show podcasts. I’m sure you have a lot to say that would be worth hearing.
Rod: Thanks for inviting Jigar – this was a great idea and he’s a great guest.
I finally managed to get caught up with my backlog of podcasts and I enjoyed the conversation. I appreciate Jigar’s point about the “industry” (such as it is) being the author of its misfortunes; but, this charge is not entirely fair. Nuclear is unique in the degree of political bias (for several historical reasons) and extreme regulation emanating from such bias that constantly works against industry success. The current environment, and that of decades past, has prohibited nuclear from existing as an industry like any other. That historical environment is a big factor that needs to be understood well before a new successful path forward can be found.
In my opinion, such a path must tackle the politics first and foremost. It is a very long game involving thousands of voices including enlightened environmentalists, activists, bloggers, educators AND Big Money representing the largest energy consumers in the economy. At some point a critical mass of opinion will be reached across the spectrum of interests in society to see this negative environment reversed. Given the right environment, we will see innovative reactor vendors get big hits, many of whom are on deck right now, and a real nuclear industry will take flight. I am willing to wager Jigar will want to be on the inside when that transition happens.
Jigar’s other critical comment about the industry not being present at the table when subsidy policy was being drafted and that all they had to do was ask was surprising to me. Is it *really* that simple? Surely the reason his lobby was successful is because it had political favour up the chain of power already in place, not simply because they were present and asked. I find it too hard to believe that one can just show up and get such incredible favour from the public purse without something else going on behind the scenes, without some other driver. These tax subsidy and other policy favours must have been bestowed by the political class for reasons other than magnanimity… at my age, I have learned to be cynical, especially where money, power and politics is concerned! Was it because the politicians saw votes from their constituents, which is how it is supposed to work? But, I understand these policies were put in place by many Republicans and their constituency is not known for its environmental activism. So, there must be more to this political story, but I don’t have enough of the facts to draw solid conclusions.
Steve – I had a very similar reaction as you. Is it really as simple as showing up and demanding that nuclear be built in to the subsidy? That smells fishy to me.
But overall – I thought this was one of the more eye opening Atomic Shows in a long long time. I’m about to go listen to it again. And it has convinced me more than ever to:
1. Not waste time arguing with renewables trolls over the ‘facts’ of nuclear power economics/risk/efficiency or whatever. These are not people who can be convinced – they have signed on to a religion, not scientific reality
2. Stop complaining about the raw deal nuclear gets. The industry has to stand and fight for itself…we need an Leon musk of nuclear like nobody’s business. And maybe it has to start outside the United States.
3. …and for that matter, stop complaining about the golden halo surrounding wind and solar. It exists for many reasons, but as Jigar said: this is bloodsport, and renewables have taken full advantage of their moment. Let’s emulate it rather than disparage it. This is not a battle being fought by facts and objective truths, so let’s stop bringing those things to the fight and wondering why we keep losing,
I truly believe the world will eventually figure out nuclear is a big part of the answer…what Jigar made me wonder is: is this something that’s 10 years away? Or is it *60 years away* – maybe only after the hard limitations of renewable power have found their way into our grandchildrens’ consciousness and there is nowhere else to turn. Man, I sure hope it’s the former.
@swainscheps
@Swains
I was wholeheartedly agreeing with you right up until you wrote the following:
I truly believe the world will eventually figure out nuclear is a big part of the answer…what Jigar made me wonder is: is this something that’s 10 years away? Or is it *60 years away* – maybe only after the hard limitations of renewable power have found their way into our grandchildrens’ consciousness and there is nowhere else to turn. Man, I sure hope it’s the former.
In the list before that statement, you recognized that the “figuring out” would be the result of a dedicated effort to push the public into a different way of viewing the opportunities presented by nuclear energy. Constructive changes will come from action; they will not be accomplished by waiting for a passive realization.
If we decide to wait, the results could be catastrophic. Can you imagine the conflicts that will arise as fossil fuel production begins to slow because easy to reach resources are no longer available to invest in trying to extract the remaining dregs?
I’m with you 100% Rod. I mentioned the 60 year scenario as the worst case possibility, not a prediction.
I will do my part and I know readers here will do theirs…In the dark recesses of my mind I just fear it won’t be enough.
I don’t actually wish failure on Germany’s Energiewende, I don’t want the good people of Denmark to go without power for 15 straight days during a weird winter high pressure weather system that’s stalls their windmills…but I wonder if that’s the kind of thing it would take to bring folks back to reality on renewables.
There just aren’t the same kind of made-for-TV setbacks with solar and wind that our side has the potential to suffer. Even when a South Carolina dam bursts nobody connects it to the larger no-such-thing-as-a-free-lunch-in-energy storyline. Unfortunately nobody is interested in a news story that starts “tonight in Fukushima, nothing bad happened”
We need to become the NRA of energy – where a small extremely active segment of people puts the fear of God into elected officials and would-be regulators. How the hell can we do that?
@Swains
We need to become the NRA of energy – where a small extremely active segment of people puts the fear of God into elected officials and would-be regulators. How the hell can we do that?
That might work, but I’ve chosen a different approach. My goal is to enable and empower people with excited optimism about a future powered by a growing portion of atomic fission. I’d like those excited, positive people to share their understanding with as many people as possible, especially their elected officials.
I believe that many elected officials are willing to begin asking questions like the following if they are encouraged by their constituents.
“What about nuclear?”
“If we’re worried about pollution and climate change, why don’t follow the example of the Navy’s submarine force? They solved their air pollution problem.”
“Why does it take so long to review and approve a new nuclear plant design?”
“Why does it take almost as long to review and approve a proven design on a different site?”
“Why can’t the NRC have people assigned to look ahead and establish workable rules before a project comes forward with an already identified need for those rules to be in place?”
“If we still don’t know enough about the health effects of low level radiation, why did we stop funding the necessary research at DOE?”
“If low level radiation is as low risk as the existing model demonstrates, why do we overreact and increase other risks by more than we lower radiation risk?”