In an immigrant household, temperature records must be shattered before modern comforts can be considered at the cost of the electrical bill. California shattered temperature highs in early September, reaching 108 degrees in my neighborhood. The reward? I finally turned on our air conditioning.
After flipping on the A/C, I realized the 3 rooms on the far end of the home weren’t receiving any air. Upon inspecting my central air unit, I discovered it was from the Stone Age, pushing two decades of existence with minimal usage.
While my office and bedroom came to equilibrium with the outside temperature, I hid on one end of the house, researching options to update our central heat and cool unit.
I was excited by this exercise, not because I enjoy replacing old home systems, but because I spent a good chunk of time this year to better understand the often under appreciated world of energy. Turns out, a steady and secure supply of energy is critical for national stability. Energy is modern life. We depend on energy to power our lives: staying cool, getting to work, powering our factories, building our homes, and watching Netflix. The importance of energy sits idle in the background until talk of energy prices surge into every conversation. Nowhere is this more clear than in Europe, where natural gas prices are 5x American prices and we haven’t even reached peak winter yet:
During the pandemic, some called 2020 the peak of oil demand. In defiance, oil has bounced back dramatically since it bottomed in 2021:
J.P. Morgan releases an energy paper every year and it’s one of the most comprehensive reports for understanding the energy transition. The entire paper is worth a read. The first chart in the report is my favorite, demonstrating the slow pace of energy transitions:
As I researched different options to replace our central heating and cooling unit, it became clear that we’re not going to switch off fossil fuels anytime soon. From the Energy Information Administration’s own Annual Energy Outlook, which forecasts through 2050, sees continued growth of fossil fuel usage:
So energy transitions take time. But this got me thinking: what can we learn from past transitions? What innovations will unlock more renewable adoption?
We return to my search for home heating options. Some quick history of home heating. We used to burn firewood for heat—large parts of the world still does and if you show up at an airbnb in the mountains, there will be a fireplace you can use to heat the home.
Eventually, we discovered coal and the steam engine could generate electricity for our homes. Unfortunately, coal releases all kinds of toxic gases when burned, even if it is more efficient than wood. From there, we figured out how to liquefy natural gas and safely transport it for use. This brings us to the modern day, where most of the developed world uses natural gas to generate electricity, heat and cool homes, power stoves, and perform high energy industrial activity. While it is a fossil fuel, it is 60% less carbon intense than electricity from coal. Natural Gas went from an annoying and dangerous byproduct of oil production to something we know how to capture, liquefy, transport, and re-gasify for consumption. In short, we improved on the form factor of Natural Gas.
If we place these energy sources side by side and compare their energy density, we can see that humanity has progressed up the energy density ladder. We’ve figured out how to harness more complex resources and efficiently extract the most energy possible from them:
By looking at how we progressed from burning wood to utilizing coal, oil, then natural gas today, we find the adoption of a new energy source is highly dependent on two key components: (1) the energy source’s form factor, which includes variables such as volume, weight, energy density, power density, relative to other options and (2) the infrastructure required to support the distribution and consumption of the energy source. This is the basis of our energy form factor theory.
I left out one important factor on energy adoption: government policy. Europe’s decision to shut down nuclear reactors (France the exception) and rely solely on intermittent power and Russian natural gas is developing as we speak: people in Europe are burning all kinds of things to stay warm during their energy crisis — coal and wood, oil, and even trash.
In the long run, as my favorite green chicken says: physics will win over platitudes every time. It’s through this lens that I dug into possibilities for our energy secure and carbon free future.
Residential Geothermal Power
To my surprise, geothermal energy popped up as a residential heating option. Dandelion Energy drills a tiny hole below your home, roughly 10-20 feet down and uses the crusts consistent temperature to heat and cool your home, no reliance on fuels of any kind. The gist of geothermal is this: 10 feet below your home, the earth’s temperature stays at a consistent 55 degrees Fahrenheit, whether it’s snowing or a heat wave above. This gives you a consistent source to heat and cool your home. Adapting technology from oil drillers, the company changed the form factor of geothermal energy for residential adoption. Dandelion Energy is an interesting exception to our energy form factor theory — because it doesn’t require a massive infrastructure to implement. If you can drill below your home, you can get a limitless energy source! In some ways, this is like residential solar & battery, grid optional. If you’re interested to learn more, I found this article and this video as perfect companions to understanding geothermal energy.
Solar in our Materials
If geothermal is the new solar, then what’s solar doing today? The form factor continues to evolve beyond panels and roofs. The intermittency problem of solar and wind is well known and the solution is two fold: better battery storage or overbuild. A lot of the progress in solar allows us to overbuild and convert more surfaces to energy generating solar material.
Some progress includes making solar more lightweight for applications in the sky and adapting to two commonly used materials: glass and plastics. The folks at Solar Window have even figured out a liquid spray to apply solar to existing surfaces. It’s not clear how efficient these will be and how they will distribute the technology, but I can imagine a world where this is included as an option for glass and plastics manufacturers.
Iron Rust Batteries for Long Term Storage
In the world of battery storage, I’m excited about potential developments in iron-rust batteries. Why not lithium? Here’s one challenge with lithium batteries:
It’s going to get worse before it gets better. In addition to cost, lithium batteries are best for short term shortage. Here’s a recent quote for a Tesla Powerwall: ~$26,000 for 13.5 kWh battery storage. That provides roughly 6-18 hours in backup power for roughly 3-5 household circuits under 30 amps in rating. Yeah, it’s expensive! Iron Ore is one of the most common elements available on earth and early tests at Form Energy show they will be able to provide multi-day storage. Nothing is a silver bullet of course. The iron rust battery is problematic because of it’s low lifetime. Since the battery is being oxidized on each cycle, the battery degrades quickly compared to a lithium ion battery, which typically have 10x the cycle count. This transcript gives a nicely balanced view on what iron rust batteries can and cannot do for us.
Smaller Nuclear Reactors
If there’s anything close to a silver bullet, it’s nuclear energy. I covered nuclear in-depth here, but if we continued down the energy density path that took human civilization from wood, to coal, to natural gas, then the next leap looks like this xkcd comic:
The big question for nuclear in our energy form factor theory is deployment and infrastructure. Nuclear projects are notoriously huge, expensive, and often with large cost overruns. The fourth generation nuclear reactors, also called Small Modular Reactors (SMR) are addressing this very issue.
SMR’s have a footprint that is small enough to fit in a 20 foot shipping container and more importantly, a much smaller environmental footprint. The typical nuclear reactor requires an environmental clearance space of roughly 80 km radius. SMR’s only require 2 km of radius. This increases the range of places to situate nuclear reactors. In fact, a recent Department of Energy report performed this very analysis, finding that 80% of existing coal plants could be converted to a megawatt scaled nuclear power site.
As shown by the comic, nuclear is energy dense and a great candidate for reducing the form factor. By sizing down the nuclear reactors, we’re improving the form factor of nuclear for adoption. Fred Wilson, one of the top generalist and climate investors, is already looking at how we can make nuclear batteries small enough to fit in our homes or devices.
I’m excited to watch these renewable energy sources evolve as the world pours more investment into the space (or is forced to look at other options by a dictator…) if you find anything that should be added to this list, let me know!