Plugged In Blog

The Future of Energy: Facing the "New Normal"

05.08.22

In September 2017, just after unpacking their new home, Melinda and her family awoke to a phone call. “Get out now!” the neighbor’s voice yelled through the phone. Outside, the sky glowed red and smoke choked the air. Mel’s toddlers were asleep as she grabbed them out of their beds and strapped them into their carseats. Jon, her husband, followed with his truck and chainsaw. Within a quarter mile the road was surrounded by flames. White-knuckled and shaking, Melinda drove through a tunnel of burning trees with the determination that only a mother saving her children can source. Thoughts surged through her mind like: Would the metal hold up to the heat? Would the gas tank catch? Would the tires melt before they got out?

Once they arrived safely out of the fire, Melinda and her children stood shaking with hundreds of other families watching their homes and town burn. She scanned the edge of the fireline looking for her husband’s truck. After 20 heart-stopping minutes, a fire truck emerged and her husband Jon jumped out. He was covered in soot, eyes swollen and red. He lost his truck to a tree. He asked with a trembling voice, “Is everyone is ok? Is everyone alive?” Mel held him close “Yes,” she replied. 

In 2017 and 2018, thousands of families like Melinda’s lost their worldly and most treasured possessions and barely escaped with their lives, and tragically some didn’t. In addition to more than one-hundred human fatalities and the loss of thousands of homes, Californians saw more than $11 billion in direct costs and economic losses due to fires that raged in 2017 and even higher numbers in 2018 (total costs have yet to be determined for 2018).

PG&E Corp filed for bankruptcy in 2018, citing potential liabilities from the California Wildfires as a core reason - saying “it is probable that its equipment will be determined to be an ‘ignition point’ of the 2018 Camp Fire (Reuters).” Moreover, on January 19, 2018, Moody's downgraded the rating outlooks to negative from stable for 24 regulated utilities in the U.S., citing that they estimate that the debt to capitalization ratios will continue to increase for regulated electric utilities - catastrophic events playing a huge role in these ratios. This suggests that it’s time for us all to radically rethink the utility business model. 

Adapting to the “new normal” and rethinking the utility business model 

Catastrophic fires are becoming the “new normal.” This “new normal” is just one consequence of climatic changes that have created hotter temperatures, longer drought seasons, and drier landscapes. We have arrived at this precarious place due to short-sighted economic priorities. Our economy has been powered by fossil fuels, much of which come from large power plants and are distributed via high-voltage power lines connected to substations, then to homes and businesses. In an age of catastrophic fire, extreme temperatures, and power outages, the old centralized grid energy model no longer works. We are now in a new era of climate change mitigation and adaptation where clean energy and distributed power are essential. 

In the fall of 2019, it is estimated that California economy suffered more than $2 billion in losses just from power outages designed to prevent catastrophic wildfires seen in prior years. A number of businesses shut their doors during this time due to unrecoverable losses - the restaurant industry suffered the hardest hits. When the power is out for five days and perishables are not refrigerated, the consequences are huge. A food processing plant in the Central Valley reported losses of over $3 million in just one week. 

But it wasn’t just businesses. Many residents dealt with personal struggles during the power outages as well. A year and a half after losing her home in the fires that swept through Northern California, Melinda was diagnosed with Hodgkin's lymphoma. Cancer rates and other smoke related diseases are predicted to increase in Northern California in the coming years and many people, like Melinda, will be fighting for their lives. To keep her white blood cell counts up during chemotherapy, Melinda takes a drug that has to be refrigerated. The drug costs $2,000/week and insurance will only pay for the minimum required. During the weeks of power outages, her family lost $4,000 in spoiled medicine - putting her already-depleted finances at risk, not to mention her health. Without the refrigerated medicine, she could die from a common cold. 

The Future of Energy: Clean, Renewable, Distributed and Easy

We are at the 11th hour in the climate crisis. We have to continue to fight climate change but we also need to adapt to the massive changes in climate with extreme and unpredictable weather patterns. Moving to a renewable energy economy as quickly as possible is essential to our survival. Bringing on renewable energy resources fast is a game changer and is possible: Wind, solar, biogas and more. This transition means moving to a distributed energy economy, allowing for innovation and minute-by-minute demand response from a grid that is smart and adaptive. We need flexible, portable, distributed power that is easy to develop and use. Businesses and residents need onsite power generation and battery storage. 

I predict that within this next decade, nearly very household and business will have onsite generation and storage. Vehicles will be simply a way to move and store energy.  But EVs aren’t enough - we will need more storage than just electric vehicles. The trend toward a distributed grid is ever increasing and the need for diverse solutions, innovation and advancement in energy storage technology grows. An indicator of the trend in distributed energy is the growing demand for residential solar and battery storage. “The Solar Energy Industries Association anticipates that total installed US PV [solar] capacity will more than double over the next 5 years.” 

While utilities in regulated markets are scrambling to adapt, the deregulated energy market is ahead of the game and already seeing huge traction in distributed energy systems and microgrids. In developing countries, microgrids are becoming the leapfrog technology and energy trading markets are springing up.  "Markets in developing countries could become the largest microgrid sector," writes Peter Asmus, an environmental author and senior analyst for Navigant Research. If these microgrids connect to each other or exchange energy via mobile batteries, large power plants and high-voltage power lines may become irrelevant. With the social, economic and environmental benefits of microgrids, according to Asmus, they are "the most attractive bottom-of-the-pyramid business model of any kind available today."

Solar has massive momentum and it makes sense. But what about storage? Batteries/storage lag behind solar installations for several reasons, mostly price and available technology, but batteries are starting to become more available as prices drop and innovation increases. Batteries have now reached the price point that provides a return on capital for utilities investing in massive infrastructure projects. That is great for increasing renewable energy, but it is still using the old model of centralized energy with high-voltage power lines. We now know, due to California’s recent natural disasters and long power outages, that we need a new model of decentralized power generation, storage, trading, and use. California will be the driver of this new model with each community fundamentally understanding the critical need for power in their own hands.

Joule Case has developed a Product Platform for portable power and grid resilience. Joule Case is focused on the interface and platform so residents and businesses can easily and affordably access battery systems and portable power. Joule Case stacks like Lego blocks with no additional engineering or technician to install a system ideally sized for each unique application. Joule Case is chemistry agnostic and is posed to leverage current battery research. It is not about the actual battery - it’s about an energy delivery system that is accessible and flexible to the needs of the resident, business or community. 

Energy storage in every home is fundamental to resilience - and it shouldn’t just be limited to homeowners installing power walls - it should be available to renters who will take their system with them to the next apartment. The fastest way for households to adopt new technology is through creating new community norms and this is accomplished via a product that is more affordable and easier to use than what currently exists in the market. 

When a person has multiple compelling needs for that battery, adoption is faster. Whether it’s camping trips, home back-up or peak-rate shaving, customers need a product that can ideally size for their unique needs and budget. Melinda, battling cancer in Sonoma needs an affordable, portable battery she can plug into her kitchen circuit at the cottage she rents to power her fridge for when PG&E shuts off power for a week. Music festival goers need a portable power system that doesn’t put them at risk for carbon monoxide poisoning. My buddies in Idaho are using Joule Case batteries as a quiet alternative to a generator on their hunting trips. Batteries are a commodity but consumers need an easy-to-use interface that allows them to trust the systems they are relying on. Our team at Joule Case has developed the product that makes batteries and decentralized storage easy and compelling to each person. We make decentralized storage on a mass-scale possible. 

Distributed Energy Makes Sense - Financially

But it’s not just California. The whole world is trending toward distributed energy generation, storage and management systems. It makes sense financially and from an infrastructure perspective. Whether you are a business or a homeowner, when you control your generation, usage and storage from an app on your phone, you have autonomy and control, and you save money. When the battery system is as flexible and accessible as Joule Case and your energy system pays for itself in five years and lasts 40, it makes economic sense. Navigant research estimates that 2019 marks $172.5 billion in revenue from the global distributed energy resource market and will reach about $650 billion in 2028 (15.9% CAGR). Distributed generation represents $131 billion in 2019 and $527 billion in 2028, with 91% from distributed PV installations - this means onsite solar at houses and businesses. With Joule Case, distributed energy that makes financial sense is now fully accessible. 

Impact of decentralized power

According to Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming: “At the current cost, a $500 billion investment in distributed energy systems would save US businesses and households $4 trillion in peak-demand utility billing over the next thirty years (Hawken, 2017). If battery costs continue the downward trend, these gains could be further amplified.  But what does this mean for climate change? This means that solar, wind and other renewable energy resources become viable everywhere, all the time - allowing us to fully replace fossil fuel and reach 100% clean and renewable energy. 

Distributed energy with storage at the point of use makes wind and solar energy viable. If wind and solar reach market potential (storage is critical), combined it would cost a total of $3.9 trillion to implement, achieving $16.9 trillion in savings and reducing 186.6 GT of CO2. Reducing 186.6 GT of CO2 is significant in our total greenhouse gas emissions. If we go beyond our remaining 335 gitaton carbon budget, we will push the planet into a nightmare catastrophic scenario, which includes an acidic ocean devoid of life; cities like New York, Amsterdam and Bangkok flooded; temperate climates become deserts; mass extinctions, with Earth losing 80% of its biodiversity; with more than 300,000 years to reabsorb all the CO2. 

While I am not blind to the impacts of climate change we already face, I don’t see us reaching the tipping point nightmare scenario described above. I see us moving quickly to respond and adapt. I have faith in the ingenuity, collaboration and compassion of humanity. Hope and the compulsion to make a difference is what drives entrepreneurs. As an entrepreneur, I am driven by an optimistic vision for the future - one where we solve climate change, grow equitable and distributed energy systems and economies. This is the future I am working for and why I am building Joule Case into a leading energy storage company. I invite you to join me. 

Knowledge is power ⚡️

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