 Good afternoon. This is Guillermo Sabatier, your host for today on Perspectives on Energy. And thank you for fighting into the show. Today is just me by myself. I am going to be your host. And I normally am a Director of International Services for HSI, the Health and Safety Institute. We provide a training for the industrial skills, among other things, for the natural utility industry. And today, I don't have a guest. I wanted to go into a bit more of a discussion as a follow-up to last week's episode. We were talking with Dr. David Gatti on the issues of viewing energy as a national security perspective, right? How we're becoming highly dependent on just either renewables or natural gas. And that puts us in a uniquely precarious and dangerously unreliable stance when it comes to energy and national security. Not to mention the fact that it makes energy a little bit more expensive. But we'll go into more details to what that entails. I got the pleasure of meeting him back in early June when I went to a conference at the Association of Rural Electric Generating Cooperatives, where I had a chance to speak on the topics of renewable resources, their variability, and how that variable output impacts reliable operations on the grid. Today, we'll talk a little bit more about what that entails and what possible problems we're facing as an industry and what solutions that we may be applying as we move forward. One thing I will say, though, is I am an engineer. I have been in the industry for 30 years almost. And until recently, I had not seen the active subject matter experts that operate this grid and the system invited to the table to have conversations on how to best bring about these changes, right? One of the things that I was always concerning was the fact that, and just to get something out of the way, climate change is real. We are having issues with human activity that impacts the climate overall. We're seeing records setting heat waves. We're seeing one right now in southwestern Texas that, of course, had a severe impact for two days in a row where Texas nearly had to engage in a load reduction or feeder rotation. So that would have been a problem as well. But again, a lot of that has been exacerbated by some of these viable renewable resources and how that impacts reliability. So one of the things that we wanted to talk about, and if we go up to the first slide, Mike, if you don't mind, is that we're seeing a lot of quite a fast growth in the deployment of renewable resources. And of course, that major driver behind that obviously is to reduce carbon emissions. Now, and most of the country, the majority of the utilities have already done away with petroleum and oil as a source of a generation. But the majority of these power plants that are in the country are running on coal. And I won't say a majority, but I'll say a good percentage of them. I'll say a little bit less than half. And there is the pressure of the demand in the rush to get those retired. And what are we retiring and what are we replacing them with? Really, it's renewable resources, whether it's solar farms or wind farms. And as you can imagine, the problem with that usually has to do with the fact that these resources are not very, they're not based load, right? They have a lot of variability. And they're not available the entire day. So until they get the battery resources, to the point where they're cost effective, easily deployable and reliable, we're not going to see a lot of positive changes in that regard. So what is it that they're using instead, whether they refit these coal power plants with something else, or they build a combined cycle power plant all together, and that's the next bullet there is a natural gas refit. So if a power plant happens, a coal-fired power plant happens to be fortunate enough to be near a natural gas pipeline, well, then it's fortuitous in the fact that they'll be able to refit that plant and have it bring natural gas. Mind you, it's still a fossil fuel, but the amount of emissions is a fraction compared to the coal, right? And now granted, those aren't as efficient. You're not going to see, you're not going to see it operate as cleanly, for example, as a combined cycle plant. Some of these are way more modern and a lot more cost effective. So you've seen the majority of these utilities across the country, whether they're investor owned, public utilities, or even co-ops, they're opting for these combined cycle plants, which is usually two or more combustion turbines with a heat recovery steam generator, and that, you know, all that's producing of course electricity, and it's a very efficient way to make use of that fuel. Of course, that's great until while natural gas is still cost effective, but we've seen the rise of natural gas and prices almost three or four times than what it was three or four years ago. So that's gotten a lot more expensive, right? So as we move forward, right, with this deployment of natural gas as being the main driver of transitional fuels, now we're becoming even more reliant on this one type of fuel. So we're also losing fuel diversity. And that in itself becomes a serious problem, not to mention the fact that it puts us in a single point failure situation, but we'll cover more of that later as I make a note of that as we move forward. The other really, really glaring issue with some of these resources and the way they're currently deployed is the fact that they have quite a bit of their dispatchability. They can't really control them like you can control a regular power plant. Normally you'll have a base load generation and then you'll have variable generation. And then on top of that, you have peak generation. These variable resources are forcing the dispatching of these peak generators, which of course are very expensive to operate, very expensive to turn on, shut off. And then of course add to that the maintenance cycle. So every time you bring one of those units online, you are incurring a significant cost. And then you're accelerating the maintenance cycle, assuring the life of these assets. So as you can imagine, now you, and they haven't properly accounted the cost of these renewable resources, right? When, since they haven't been taken into account, the effect that it has on the rest of the generation fleet. So in a lot of utilities, that's been changing. So now you're seeing like a little slowdown. And they're slowing down in the deployment of some of these rent and solar assets, because now it's not as, not as economical as it won't stop, or as it won't stop. So let's go ahead and go to the next slide and make your mind. Okay. So here's an example of year over year, right? I'll show a few of these tables. And you're seeing here in highlighted in pink, I guess the white, you're seeing how many of these generators were retired, you know, how many they added, how many they retired. So you're looking at net capacity of additions, which so if it's a negative number, it's really you lost that generation, right? So here's of just year in 2021, you notice that they managed to retire 25 coal plants, which is great for the environment, right? It's great for emissions. They're very dirty. The issue with coal is that it's one of the least expensive sources of energy, right? But again, the cost that that brings about on the environment is rather high. So in 2021, they got rid of 4,000 megawatts, right? Of generating resources that were coal. But they also got rid of 5,000 megawatts of nuclear. Now mind you, that's only five units. And we have not built a new nuclear plant except for one, since 1980s. So we've let go of 5,000 megawatts of baseload nuclear, which is zero emissions, very cost effective. But it has a there's a general issue with a the the optics, of course, when it comes to nuclear energy. And then of course, it's a lot of these nuclear power plants do have a licensing, which by the NRC, the Nuclear Regulatory Commission that limits how long they can their service life. So oftentimes, they have to extend these licenses. I know a few power plants that are that were built in the 70s that are starting running to this day. And they're they're under fourth or fifth license extension. So so I mean, they're efficient, they're maintained well. But at the same time, you know, you see you see the change. So what has replaced that generation? You see the next two roles wind, solar thermal affordable take and look at how many how many megawatts of generation they added 17,000 and 16,000 respectively. Now, this tells you, at the US total right of what they added net additions. That is that is basically the majority of the added generation in the last year was not combustion turbine or nuclear or anything of the sort, it was mostly solar, solar and wind. Now, you do see natural gas on their summer, right? Well, you see that they added, they added about the 5000 megawatts of generation, which is great. But it's still a fraction of when compared to the wind and solar. So that's great, great for the environment. That's great for the cost. Once the installation cost has been capitalized, you know, all of that output is doesn't cost you anything beyond that. However, now they're taken into account what the effect is for the impact that it has on the rest of the fleet. Now, as you can imagine, these these renewable resources, of course, have a lot of variability during some solar at starting at 9, 10 am is when they really begin to to give you a good solid output. If you don't have any clouds that don't give you solar up up until 3, 4 in the afternoon. And it's not a it's not a flacker, right? It's it's a nice nice like don't peak. And of course, that has an impact on on generation, right? Where where it's like, you're going to have more and more of that during the day. And then eventually, you will end up having to back down or even cycle off some of your generation between the hours of 10 and 3 in the afternoon. Of course, usually after four o'clock, you know, everybody goes home, the sun begins to set, they do the cooking and lighting peak. And by this time, sun setting, so you're losing all that resource when it comes to solar. So now you have to turn all those generators back on to be able to manage that lighting peak that happens in the late afternoon or in the evening. And that is a significant amount of of demand for energy at that time. Now, as soon as it comes, it goes away and eight, eight o'clock comes around, then you have to come back and cycle off all those plants. Now, when you take into account the cost of cycling, one of those combustion turbines, they say they're about maybe $7 to $8,000 per cycle. And some of them are more, some of them are less. In the end, that's a simple cycle CT. When you have to back down a combined cycle plant that is even way more expensive and you may not be allowed to bring it back online. So that complicates things further. So as you can see here, we're shutting down coal, we're shutting down nuclear, and we're replacing it with much more wind and solar. So that really keep those numbers in mind. We're looking at over 33,000 megawatts of added generation when it comes to wind and solar. And we've gotten rid of 9,000 of coal and nuclear. Taking away a lot of our diversity when it comes to generation, right, in this regard. So natural gas over there, you're looking at 5,000 megawatts. And everything else is just done. Now, here on the logo, we don't see it too well, but hydroelectric is not that much as well. So we haven't added much hydro conventional. So at least we're not getting rid of those. But nobody's building any new dams either in this country. So that's another aspect of the fact that, you know, those are clean zero emission fuel resources, but they're very environmentally destructive because now you have to create a reservoir, a lake where there was once a valve. So Mike, go ahead and go to the next slide, please. So let's look at 2022, right? We're already halfway through this year. And this slide, I gathered it back in May. So that tells you where we're at. And as you can see, now we've gotten rid of even more coal, 14,000 megawatts, right? So far this year. So the pace has accelerated. We're doing this a lot quicker. And but you notice the amount of wind they're putting up is not as much. They did put a little bit more solar, but not quite the 33,000 megawatts that we saw the previous year. So that's slowing down. But however, we're speeding up the rate at which we're taking coal units offline. So that tells you two things, right? And if you take a look at Texas this week and what's happened over there in Ercut, they were experiencing this heat wave. And pretty soon it'll also be California, right? Where they forecasted, they NERC issued a statement earlier in the year where these different regions were going to have trouble meeting their load based on the fact that their generation is too variable and they're experiencing record heat waves, which of course leads to record peaks and load and demand. So this all is causing quite a stir when it comes to the industry in the East Coast, where it comes to the Eastern under connection. Fortunately, even though it's hot here, we've had quite a bit of mix when it comes to generation is a lot of hydro on this site as well. But there's also quite a bit of different generating resources when it comes to what we're creating, whether it's quite a bit of coal still, but mostly natural gas. So reliable, it's not too expensive. But the problem is that you're relying on one source of fuel for all of your priorities, which now brings me to my next point, right? This puts us in a very, very precarious position from a point of security, not just reliability. But as Dr. David Gaddy said last week, last week, I mean, last show two weeks ago, it will become a national security issue. From the perspective that if we, for example, that those pipelines for natural gas, so for a cyber attack, well, if they're vulnerable, then of course that puts the entire grid, not just in the region of the country, but across the entire nation, and along with that, right? Ultimately, these challenges also raise the cost of energy when it comes to our industry, which that in itself is another problem, because then now it aggravates all the other issues that we're seeing when it comes to inflation. So why am I complaining about all this today? And talking about the issues with renewable and viability. Mike, if you go to the next slide, I want to wrap that next point concisely. So we're looking at here, right? So 2021 through 2025, right? We're seeing how much solar and thermal, and then of course, wind that we've added, how much COVID got rid of, but we're adding a lot of natural gas as well, right? So sounds great when it comes to the perspective of getting rid of fuel sources that cause or generate a lot of carbon emissions. And natural gas is a fossil fuel, but it's a lot cleaner compared to coal, but at the same time, eventually we'll have to get away from natural gas as well. So as we're relying more heavily on these renewable resources, right? And we don't have the adequate energy storage facilities, right? We're going to have to find another way to actually create or serve a baseload demand when it comes to these resources, especially when we have the growing energies of our country. One of the things that Dr. Gatti pointed out was the fact that China, for example, is investing in renewables, but they're also investing in a whole host of other resources. They are investing quite a bit of nuclear, not just in a large scale, but small modular reactors. They're investing in storage, they're investing in different types of coal, not to have it dominate their industry, but to at least have it there for diversity. And when we say diversity, it's one of the things that matter is the fact that you don't want to be relying on just one major type of fuel, natural gas for example. So one of the things he proposed was to mandate at least a certain minimal number of megawatts to be fueled by a certain type of resource. And that at least guarantees you have that kind of diversity, right? So by all means, right, let's go ahead and move away from fossil fuels. Let's go ahead and move away from carbon emissions. But we also have to maintain the option of being able to fall back on any one of those should we have an emergency. As we're already seeing in Germany with the crisis in the Ukraine, we're seeing where they have to, they lost their natural gas, now they have to bring a lot of these old codifier plants back online, refit them, re-tool them and get them to burn coal so they can actually have, get through the summer, but more importantly get through this winter, not to mention the fact that the industries are suffering. So that's an example, right? But one of the things that we see as a potential solution to all this, right, is going to be nuclear energy. Some parts of the country, even in Hawaii, I know that nuclear energy is very taboo, but small modular reactors and micro reactors are starting to make quite a big impact. A lot of them have been deployed so far in military bases for testing. And some of these are small, 50 to 100 megawatts, quite small compared to the conventional nuclear generating plant, which is like a thousand megawatts, right? And there's usually two reactors on the site for a small or SMR, they call those, right? Those are the ones that are should bridge the gap when it comes to our energy needs and being able to meet those climate goals that we set for ourselves, right? Now, the Nuclear Regulatory Commission and the entire nuclear permitting, the process is almost set up to provide obstacles along the way for almost anything. So there's an interesting debate when it comes to the feasibility and the ease of being able to deploy these SMRs pretty much anywhere they're needed, right? And they contain their sealed, they're dispatchable, and one can power a town, several can power a city. So now this also creates the unique opportunity where you are now free of having to build larger transmission power lines to be able to transport all this energy. It can be more localized, right? So this creates an opportunity where you can have more resiliency, more reliability, and at the end, you have a greater amount of security, especially from a national security standpoint. Now, of course, we haven't even got into the issues of nuclear waste and all those problems, but in a small module reactor, all of that's contained, and it's easier to replace, swap out, and then they can put anyone in rather easily. And these are small, they're about the size of a 44 shipping container. So quite a few bases already have them. I know in at least two Air Force bases, they already got one of a couple of them running, and they shown to be pretty effective. Naturally, this, of course, is going to face a lot of opposition. But as you can imagine, it's easier to fight and defeat one large nuclear project than it will be to fight and try and stop and defeat thousands of small nuclear, small module reactors, right? So you'd be seeing quite a bit of those around. And again, it's what we get. They're also the energy storage, right? Those will ultimately be something that are still under development. Legislation was made hoping that we'd get there. The technology isn't quite there yet. There's some promise. I mean, we've had somebody from Hugh McDermott from ESS here, the Senior VP of Development, and we talked about his battery systems. And they're great. They're very promising. And they could do wonders for a place I call Hawaii, for example. But of course, Hawaii would also need to, Hawaiian Islands would need to have those undersea transmission cables to interconnect them. So until you have that done, you know, HIKO and the grids in Hawaii are going to have a really hard time to be able to integrate their renewable resources, but actually bring in economies to scale and be more reliable. So different changes have to be made, right? And they're all regional dependent, right? But to us, ultimately, it's my point here is that we have to view energy, right? As a national security topic. And then of course, with climate inclusion, we have to give ourselves diversity of resources when it comes to power generation. We just can't rely on natural gas as we transition from all these fossil fuels to renewable energy. And we also can't just solely rely on renewable energies. There are other countries like Russia, China, Korea, even the Middle East, they are now investing in nuclear power research, right? So to the point that they have different, five different types of systems and designs, we are at a point where we want to build one plant which is Vogle and Southern Company. And that is the only one we've built in the last, like it's 20, 30 years. Not to mention the fact that we're losing the subject matter expertise in this particular field, right? We're not creating new experts, whereas overseas they are. So we may fall behind from a geopolitical standpoint to these countries that are investing in a variety of energy resources where all we're doing really is focusing on solar and wind and not investing in anything else. So again, my takeaway here is that we have energy diversity. Start looking at small modular reactors as a potential solution to complement our transition away from coal. This could be one of the answers and then it would be a safe, reliable answer compared to having to deal with all this, you know, variability that really puts us at a great risk of facing another blackout. Texas, for example, again, I use that as an example. And pretty soon we're going to be seeing more of that when it comes to California and even places in the Southwest. So definitely a lot of things to consider. One last thing I wanted to bring up, right, when it comes to renewable resources, we, I mean, we all agree that climate change is real. And we agree that the human activity is causing a lot of this impact on our environment. So, but at the same time, when we mandate legislation that forces us to get to a certain point in these emissions, and we have to make these changes by a certain amount of time, it's seldom the engineers or the power system operators or the power system designers that are invited to these conversations and coming up with these decisions and these goals. Finally, we're seeing the engineers table, we're seeing the utility execs part of the process and conversation. And fortunately, I mean, sadly, we've had some hard knocks. I mean, we saw Gavin Newsom not long ago declare that natural gas was a zero emission transition fuel. And then not long after that, even declared that he will be remiss if he didn't look at every option regarding Diablo Canyon, which is the last nuclear facility in California. So at that point, it becomes more of a function of economics for the power company that runs that facility, as opposed to them staying on, you know, because they have a need for reliability. So again, thank you again for your time today. I really appreciate it. Hopefully, I didn't drone on by myself too much, but there's a lot of things to talk about next week. I mean, actually next episode, we'll have somebody on there about training in the industry and what we're doing at HSI regarding workforce development industrial skills and what we're expecting when it comes to a unfulfilled jobs for engineering in the next decade. So it's going to be a serious problem. But all right, so looking forward to seeing you all then. And again, this is Guillermo Sabateira, Director of International Services at HSI, and your host for today. And thank you for your time. Have a wonderful evening. Thank you so much for watching Think Tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram, Twitter, and LinkedIn, and donate to us at thinktechhawaii.com. Mahalo.