In a conversation with Fazl, he asked me the Hamming question - "What are the most important problems in your field"?
After which he proceeded to ask if I'm working on solving them, and if not, "why"? Unfortunately, I was stumped. At the time, I was working on automating site assessments for HVAC contractors. No matter how many parrallel universes, I'm confident this is the most important problem in none of them.
The Hamming question is mostly asked in the context of research. It follows that if you're not solving an important problem, your work is not important. Imagine a world in which every researcher/scientist worked on the most important problems in their field. Where could we be? Regardless of the original context of the question, I wanted to ask this question from the perspective of a founder -
What's the most important problem that your company can solve?
We live in a beautiful period of society which allows a lot of people to work on really important problems. I've landed upon energy generation, but before we dive into why this important, I want to talk about my the journey to get there.
While exploring the problem of why heat pump penetration isn't higher considering how efficient they are, I found that natural gas is too cheap in the US to consider running your HVAC system on anything else. In most states in the US, the price of natural gas is 3-5 cents per kW, whereas the cost of electricity is on average 18 cents per kW. The ROI on Heat Pumps is attractive only when the price of electricity is within a 2-3x the price of gas. That's because they are 4x more efficient than a natural gas boiler, for reasons which you can learn about here. The more expensive that natural gas becomes, or the cheaper that electricity is, the more attractive heat pumps become. Natural gas is subsidized in the US, which might stop soon but it seems unlikely and ever since fracking, there's a huge supply of natural gas in the US.
So, why is electricity not cheaper? What can we do to make it cheaper? Considering that moving to a renewable future essentially means electrifying everything, electricity generation being cheaper is important! Moreover, the demand for electricity is not decreasing (nor should it)! Large data centers are opening up to support computational heavy workloads relying on LLMs. They current consume 4.1% of all US electricity and that's expected double to to 9.1% by 2030. We're also electrifying our transport, heating and cooking. While this kind of growth in demand is not unprecendented, it hasn't been the norm for the past 20 years.
Will supply keep up?
We've established demand is going to continue to grow. Is the supply keeping up? It's not just more of what might exist currently, it needs to be clean, renewable (or nuclear) energy. New energy production requires new developers to create solar and wind farms, hydropower and nuclear. Those projects are not being able to get approved and get connected to the grid, for reasons that my friend John Tam over at Sightline Climate explains in depth.
The short answer is no. There's changes to transmission equations, maintaining, updating and creating new transmission systems is slow and siting and permitting for new energy project developers on average takes 3.5 years.
Morevoer, the kind of energy we want to add to the grid is non-dispatchable, i.e., cannot be turned on or off within the span of a few minutes. Battery deployment is growing, but a lot of it is heavily subsidized and it will take half a dozen years for battery technology to be commercially viable at the scale we need it to be deployed.
What can I do about it?
The Inertia Problem
Old-school energy generation is simple. You burn/combust some material like coal or natural gas. You use the heat generated from this process to boil water, which creates steam that you direct towards a turbine. The spinning turbine is connected to a generator which uses turns the kinetic energy into electromagnetic induction, creating an electric current that powers the grid. The alternating current generated has a frequency of 60Hz (in North America). When you turn on your TV at home, there's a tiny drop in the frequency but it's handled by the grid because the generators that are spinning have a significant amount of kinetic energy stored in them, so as a grid operator, you don't have to immediately react to the smallest shifts in frequency.
But, what happens when your energy generation stops using these turbines and instead uses inverter-based resources, like wind or solar? A drop in frequency is handled quickly because inverters have millisecond response times but as a grid operator, you just lost the leeway you had to react to fluctations in demand. There's a lot of work to be done to deploy grid-forming inverters, battery energy storage systems (BESS) or create synthetic inertia. Deployment of these technologies is going to be paramount in the transition from generator based to complete renewables powering the grid.
Grid Congestion
Congestion occurs when the demand is higher than what the transmission lines can support. This leads to reliability concerns, increase in electricity prices and costly infrastructure upgrades (on which we're already behind).
To solve this, plain and simple we need more electrical grid infrastructure like transmission lines, substations, transformers, the whole lot.
Siting and Permitting for new Energy Projects
I recently participated in Lowercarbon Capital's Energy Hack, where my team and I wanted to tackle the long siting and permitting process for new energy generation projects. We operated with the hypothesis that if project developers had a platform to visualise and connect with all the relevant stakeholders in order to get their siting and permitting done, they could cut down the time it takes to get projects approved.
It's important to validate if this is actually solving a problem, but if it does, we can significantly reduce the time it takes for an energy project to get connected to the grid. This will allow us to match supply with the increase in demand we see.
There's broad implications for cheaper energy
There's a plethora of problems worth focussing on in the electrical grid.
Drastically cheaper energy is not just an environmental or economic issue. It has the potential to be a transformative force for the entire fabric of society.
Cheaper energy use means we could unlock GLOBAL use cases that are too expensive for agriculture, healthcare, education. Sectors that are energy prohibitive like the desalination processes could be the norm. We'd be able to solve the water crisis.
Working on energy is about unlocking a future where energy is not a barrier to progress or a cause of inequality but a foundation for unimaginable prosperity.