Episode 119: Reinventing the grid with PG&E

Molly Wood Voice-Over: Welcome to Everybody in the Pool, the podcast where we dive deep into the innovative solutions and the brilliant minds who are tackling the climate crisis head on. I'm Molly Wood.

This week, let's return to talking about energy where utilities have one of the most complicated jobs in the world right now. They're fighting to keep the lights on while infrastructure ages around them. Demand is skyrocketing from electric vehicles, data centers, and electrification at large. A transition to renewable energy might feel like it's slipping away, but plenty of states and countries still have net zero goals, and for these utilities, renewables are simply the cheapest and easiest electrons to bring online.

Today's guest is a utility that has taken some hits on this show and lots of other places. PG&E is California's largest utility. It serves some 16 million people in Northern and Central California with a complicated history of deadly wildfires, bankruptcy, and occasional and recent unreliability.

And also, the utility is genuinely focused on grid modernization and renewable energy, and investing in startups and innovations to balance electricity demand with California's aggressive clean energy goals. So let's dig in.

Quinn Nakayama: Thanks for having me on the show. My name is Quinn Nakayama. I'm the senior director of a small little organization we call Grid Research Innovation and Development, also known as Grid. Uh, we really try to help position our R and D and our innovation to make sure it's pointing in some of the biggest challenges that we have here in the state, and how, that we have here as a energy industry.

Um, and so, you know, we try to make sure that we clearly understand what problems that we have. Then we work with vendors and the ecosystem of partners to be able to solve that together, take their technologies and their processes and pilot that here, uh, inside our company walls. And then really with a view towards scalability. How do we get these things to scale?

Molly Wood: Yeah.

Quinn Nakayama: You know, we have, uh, Silicon Valley right in our backyard. And, uh, you would imagine that somebody who, who lives and breathes in a state of innovation would be very fairly innovative. But actually, you know, all large corporations suffer from, how do you create an innovation as a process here in the company that's more product development rather than project management and engineering.

Molly Wood: Mm-hmm.

Quinn Nakayama: And so we are the organization that tries to bring that type of capability and skillset, um, here to the utility in a way that benefits our repairs.

Molly Wood: Great. And it, this is a, a bit of a recent move for you, is that right? You were planning in operations before and now you are leading this innovation and development group. Is that correct?

Quinn Nakayama: Uh, to an extent. I mean, like, you know, when it first started,

Molly Wood: Is it new? This, you know.

Quinn Nakayama: It's somewhat new. I mean, okay. Prior to the wildfires, we had a innovation organization, um, and the innovation organization was really centered around DER integration. Distributed energy…

Molly Wood: Distributed energy source integration, yep. Yep. Thank you.

Quinn Nakayama: Solar energy storage, things like that. Um, and then the wildfires related, uh, wildfires happened in 2017 and 2019 and, and the innovation organization pivoted towards, uh, being able to identify new technologies for wildfire risk reduction.

Molly Wood: Got it.

Quinn Nakayama: When I came in, that's where the innovation organization was really centrally pivoted towards. Since Poppy came on board, um, and Jason Glickman as well as the other executives, and we got out of bankruptcy and, um, felt like from a wildfire perspective, we had really good plans in place. We needed to think broadly around the energy system.

And so, um, you know, we created this organization at that time, maybe about three years ago, whether we meant to take a look at innovation holistically to support the energy system needs of California. And so, um, you know, innovation is not new, but this process to bring innovation as a core process here in California is somewhat new. Um, and so yeah, that's where I'd leave it.

Molly Wood: Um, I wanna talk more about innovation, but let's, let's touch on, there's kind of the, the moment that utilities are in now, and then there's the moment that util that a utility is in, in California, which is its own kind of unique space, let's say.

How, how do you think about both of those things? The national kind of energy and grid conversation, and then what it means to operate in a, in a state like California?

Quinn Nakayama: Yeah, that's a great question and, and if we think about, just like take a step back, you know, utilities, we exist for our customers, but also we exist for the state and the economies that we serve, both in the state that we serve as well as, you know, from a United States perspective, how do we become the energy provider that enables the economies of our state and and our union?

If we especially look at what's happening today in a lot of the advanced industries that the United States is attempting to lead in, and California in particular is attempting to lead in, they are highly, highly energy-intensive. So we're thinking about not just data centers. Yes. Data centers and AI are all the rage right now. But like pharmaceuticals, advanced manufacturing, um, semiconductors, semiconductor manufacturing, EVs and EV manufacturing batteries and the whole nine yards.

Uh, California and the United States is trying to lead in those areas. And all of that requires an intensive amount of energy. And you know, I think about, I think about this in three ways. There is energy availability. Do we have enough energy to be able to provide for all of this? Energy access, even if we had the energy, is the energy in the right space to be able to send it through our wires, to wherever these advanced industries need to, need to and want to be. And, and you know, that is like, the wires are limited, right? Substations are limited. How do we get the electrons from, you know, the, the mountain conditions where there's hydro or from Oregon and Washington back over to San Jose, right? That's, that's what I consider energy access.

And then energy affordability, right? Where it needs to be cheap, it needs to be abundant, um, in order for us to continue to attract businesses here, to attract people here, um, to be able to provide for those businesses. That is at the holistic level, you know, where utilities really need to start playing into. 'Cause, you know, we can either provide for the economies of the future, we can be the ones that enable the economies of the future, or we can become a choke point.

And, um, that is kind of on the holistic level. Now, peel that back into California, right? 'cause I think one of your questions was, okay, what does it mean for California?

Molly Wood: Yep.

Quinn Nakayama: We need to be able to do all of that and we need to do, be able to do it cleanly. [Laughs]

Molly Wood: Right? Exactly.

Quinn Nakayama: Um…

Molly Wood: Yes. I should specify maybe for people who are not in California that we have a net zero by 2045 goal.

Quinn Nakayama: Right. So, um, we have that and, you know. We have to deal with that in a changed climate. People talk about climate change. No, no, no, no. California has a changed climate.

Molly Wood: Yep.

Quinn Nakayama: Right? Yes. Um, and, and from the bark beetle infestation that killed all of our forests, um, in the 10 year drought to this now condition that we have of heavy rains and heavy heat.

It's really kind of like extreme versions that we have in the winters and the summers here in, in California.

Molly Wood: Mm-hmm.

Quinn Nakayama: It's like we have to be able to provide energy for the energy economy of California. We have to do, be able to do it cleanly and we have to deal with things like wildfire related risk.

Molly Wood: Right.

Quinn Nakayama: All at the same time.

Molly Wood: Right.

Quinn Nakayama: And so I think those are the type of places where we are really trying to figure out how do we create balance in a way that. Again, meets California's objectives.

Molly Wood: So let's, let's talk about that through an innovation lens. So, uh, PG&E has been investing and expanding R&D and identified, maybe we should talk about the themes, identified six or seven sort of key themes, right, around these R&D efforts?

Quinn Nakayama: That's right. So, I mean, we have…

Molly Wood: I don't wanna put, I have a list if you don't, but I'm sure you do. [Laughs]

Quinn Nakayama: We have the, we have the R&D strategy report, if you go to pge.com/innovation, it's all kind of written there. But yes, we do have particular themes that we try to go after.

For example, um, electric vehicles is a great one because electric vehicles enables both California to be that clean climate energy leader by taking, um, diesel cars and moving them to electric. And also at the same time, it also reduces rates. So the beautiful thing about moving diesel cars over to the electric infrastructure is that it is revenue and that revenue offsets costs, and it does so at a higher tick rate than what it costs to bring on that revenue.

So it actually is what we consider a significant beneficial load. It reduces rates for everybody the more people go out and buy electric vehicles,

Molly Wood: Which I will say is not a narrative we hear about electric vehicles. [Laughs]

Quinn Nakayama: Right. Right. Now, obviously we have to do our part to avoid building out the infrastructure as much as we can, as possibly do to enable for electric vehicles, but that needs to, that is something that we have a clear eye towards. And so the other areas are, for example, we know that we live in a changed climate. So undergrounding has to be a major component of what we're doing, um, to be able to reduce the wildfire related risks that we have. Wildfire is another component of that, is how do we just eliminate and reduce our wildfire related risk for this changed climate so that we can, you know, make sure that we're investing in that area in the cheapest way possible.

And so, you know, yes, we do have the themes that we're trying to go at, but at the end of the day, it really kind of gets towards those three themes that we talked about at a very macro level. How do we reduce our costs? How do we do so and do so in a clean way? And then how do we do all of that within a changed climate is what if you just take a, take a giant step back, that's what all the themes are trying to do.

Molly Wood: That’s the big thing.

Quinn Nakayama: That's the big thing.

Molly Wood: Yeah, totally. So, so you've recently allocated, uh, 25 million dollars, I believe, uh, in Epic funds to startups by the end of 2023. That happened, but also just ran a pitch fest with 57 companies. I wonder, as you think about something like a pitch fest, what are the problems that you are telling startup founders like, we're ready to fund now?

Quinn Nakayama: Yeah, so we definitely had themes that we were taking a look at. There were like 70 problem statements in our R&D strategy report.

Molly Wood: Mm-hmm.

Quinn Nakayama: So if we asked technologists for all 70, we would get like thousands of submissions. Right. And so we really wanted to focus on some of the major, key areas that we thought that were the largest of gaps.

And so this gets back to, for example, data centers, right? Is, is one major component. We want to be able to create California as a place that data centers want to come to. We have Silicon Valley right in our backyard. They want to be in Silicon Valley, but these are really, really big, big loads, so, um, how do we do this in a way where we can get them speed to power as fast as possible?

We already know we need to build. That's not, that's not a question. The question is how do we not build as much, number one, and then how do we get them into power as a bridge solution to when those wires would be developed to give them full access to the system.

Molly Wood: Okay.

Quinn Nakayama: And then, you know, the other things that we saw, um, that came through Pitch Fest was, okay, let's say that data centers needed to be a part of the solution. Meaning that you hear about, you know, data center flexibility, where they would need during periods of extreme grid stress, lower their output.

Okay. Well, are there technologies that are out there that lessen the compute impact that they may face if we were to lower the amount of energy consumption that they could pull off on the grid? And so we even saw, uh, various innovations come through around something like that where there were AI softwares that said, Hey, listen, we could help manage the compute at a data center. If you had to drop 20% of their load, that would have very marginal impacts on their ability to perform inference based computing, as an example.

Molly Wood: Mm-hmm.

Quinn Nakayama: And so, uh, those are the type of things that, that we saw. Um, obviously we're trying to whittle down, um, this from, you know, the number of ideas down to just a pure handful. Because Molly, I think at the end of the day, the, uh, limited amount of resources that we have and that limited amount of funding that we have, we're really looking to go full throttle onto a very small number of ideas versus, you know, peanut butter ourselves across a ton of ideas because we feel like the biggest key to unlocking these type of technologies is not a pilot. It's scale.

Molly Wood: Mm-hmm.

Quinn Nakayama: Um, and being able to back that not by a $500,000, 1 million seed funding to prove out their technology, but the full billion dollar enterprise that we have behind us…

Molly Wood: Yeah,

Quinn Nakayama: to be able to use that to get them to full scalability is where we're gonna make the biggest difference.

Molly Wood Voice-Over: Time for a quick break. When we come back, we'll talk more about specific technologies for improving the grid without building more infrastructure and why electrifying as fast as possible, makes things cheaper for everyone.

Welcome back to Everybody in the Pool. We're talking with Quinn Nakayama of PG&E's grid research and development arm.

Molly Wood: We've danced around data centers and load growth in general, right? Like national, again, the national picture and the California picture. Nationally, we're seeing that, you know, load growth for utilities has been what, one to 2% for the last like decade. And now they're like, um, it's, you know, more like double digit…

Quinn Nakayama: Yep.

Molly Wood: Load demand in the next decade. Um, what does that start to look like? And then again, in the California sense, what does that. How do we get there without compromising our sustainability goals? And is that an option?

Quinn Nakayama: Yeah, I mean, I think you gotta peel back the onion and say where is that load growth coming from?

So we talked about the data center stuff, and I can talk a little bit about that. We also, in California, it's electrification.

Molly Wood: Mm-hmm.

Quinn Nakayama: So those are the real two main drivers of low growth here in California.

So let's peel the onion back on electrification. Electrification dictates that customers are gonna want to charge their cars closest to their home at home. And, uh, this is where the amount of load growth that we're seeing happens at the very edges of our grid. They don't have, yes, they kind of happen in commercial centers. That's true, but the vast majority of that load is gonna start to happen at the very tail ends of, of the, of the system.

Molly Wood: Mm-hmm.

Quinn Nakayama: Where you and I live, right, uh, in our residential home. Well, like the very tail ends of the grid, were never sized for that type of load growth. They were sized for air conditioning, load lights, heating, um, and, uh, which mo, which a lot of that happens on the natural gas side, as well as, uh, washer and dryers.

Molly Wood: Mm-hmm.

Quinn Nakayama: And your, um, and your, and your dishwasher. Right? I mean, like at the end of the day, that's a majority of what we size a lot of our wires to, because for hundreds, for a hundred years, that's all, that's all there was.

Molly Wood: Right. Right.

Quinn Nakayama: So relatively small wire out there. Now you put basically what is a whole home with a load and you're doubling it, right? And saying, now I have an EV charge charger that I want to deal with. Okay, well that, that. That puts a strain all the way to the very tail ends of the grid. All that small wire out there. And the hundreds and hundreds and hundreds of miles that are out there of, of, um, hundreds and thousands of miles that are out there on distribution wiring. How do we not do those upgrades while getting people the energy that they want?

Molly Wood: Mm-hmm.

Quinn Nakayama: And what you'll find is, like traditionally, we plan our system that you get what you want, whenever you want, however you want it. Um, but if we were to continue down that pathway, man, the billions of dollars that we would need to upgrade on our system would just not be feasible.

So what we would rather do is like, how can, now that we have this new type of load coming onto the system, which is the electric vehicle. How can we better manage the charging of those electric vehicles so that I don't need to build out all that infrastructure and at the same time know that these limits exist, that if customers had to upgrade their own homes to bypass those limits, it could cost them thousands of dollars and months to be able to get that to happen. And then maybe that would turn them off from buying an EV altogether, and that would suck.

Molly Wood: Mm-hmm.

Quinn Nakayama: Because if we did that, that is what, five years, eight years, 10 years of emissions and five years, eight years, 10 years of revenue that we no longer collect that drive rates down. I mean, it's bad for everybody.

Molly Wood: Mm-hmm.

Quinn Nakayama: So what we are putting together are technologies that really enable people to live within their limits. And what that means is that, you know, for example, for me, I travel maybe, you know, go back to Oakland, back to my home for work and I, I use maybe 20% of my battery.

Well, if I were to really squint at this and I take a look at, oh, it charged starts charging at midnight and it's done by one 30 in the morning, what happens if it finished at two 30 in the morning? Would I really care?

Molly Wood: Mm-hmm. Mm-hmm.

Quinn Nakayama: And chances are probably not. Right. And so, okay, if that's true, and I'm okay not having my car charge at full throttle while my air conditioning is running. God, man, if I, it, it, I, I don't think I care about that. Okay, well, if I don't care about that, then maybe we can throttle the EV and I can live within a hundred amps at my home.

Molly Wood: Right.

Quinn Nakayama: And still be charged by six in the morning. And oh, by the way, the, the small wire that goes to the tin can on that pole called the service transformer, if we could suppress EV charging so that they're gonna be charged by three in the morning instead of, instead of one 30.

Are you cool with that? And I think, you know, most of our customers would be like, I don't need, I didn't even know that I was done charging at one 30 in the morning. Why would I care that it's not done by three? Like if that prevents me from having to pay out of pocket and I can get that type of level two charger tomorrow at my home, like sign me up.

Molly Wood: Mm-hmm.

Quinn Nakayama: I give you…

Molly Wood: I mean, Apple does that with my, apple does that with my phone at night. And it's actually funny 'cause sometimes I wake up and see it being like, don't worry, I'll be charged by 6:00 AM. And I'm like, what if there's an earthquake? But also, yes, keep doing that.

Quinn Nakayama: [Laughs] Yeah, that's…

Molly Wood: right. Just because I'm a, just because I'm a lunatic prepper doesn't mean that we shouldn't be doing it that way. We should.

Quinn Nakayama: Well, and you know, customers don't know. But when you have your internet connection and they're like promising 5G speeds or one gigabit internet ethernet, what you don't realize is they're curtailing you all the time. You just don't know.

Molly Wood: Yeah.

Quinn Nakayama: And so like, it's the same sort of thing and we will create technologies that don't inconvenience our customer. I, I'll give you an example. There was, we had a story of this one guy who bought a Ford F-150.

Molly Wood: Mm-hmm.

Quinn Nakayama: And to charge the Ford F-150 Lightning from a little plug. In your wall would take like 12 hours. Right? Like it just wasn't sustainable.

Molly Wood: Mm-hmm.

Quinn Nakayama: And he couldn't charge his EV at his home without a $50,000 upgrade.

Molly Wood: What? Like a panel upgrade?

Quinn Nakayama: Just to upgrade his panel and then to upgrade the necessary lines underneath his home, uh, his house to, uh, to go to a 200 amp panel, it would've costed him 50 grand.

Molly Wood: Mm.

Quinn Nakayama: And months. And months. So what did the guy do? Is, is good for him? He bought a gym membership ship, trucked his car, his truck out to the gym, just so that he could charge his car every single night. Or every other night to be able to somehow manage through this car purchase that he had.

Molly Wood: Wow.

Quinn Nakayama: We put in a, uh, we put in the system that we're talking about, you know, this is our very first customer that we tried this out with, and he was able to get level two charging. He now charged us his EV at home and we were able to do that with almost nothing, right?

Molly Wood: Yeah.

Quinn Nakayama: We changed out his meter. We put in a couple communication devices out there, and that was it. Like he has level two charging at his home right now, so like, you know, we're still testing this. We're making sure that it works. It doesn't hurt the customer experience, but there is huge potential out there.

Molly Wood: I think it's very important that we're having this conversation about not building more infrastructure, because that feels like a huge bottleneck. And also just that's, you know, all we ever think about right now are electricity rates. Like, you know, there are a lot of people mad at PG&E. And whoever their utility is because of the bill that they get.

Quinn Nakayama: Yeah.

Molly Wood: And so the idea that these technologies exist where each of us is a little power plant that helps you and helps us and our rates don't go up, feels really valuable. And I think the, the key question is like. What can we, you know, it sounds like what you are working on is like, what can PG&E do to enable that right now? Or as soon as possible.

Quinn Nakayama: Yeah. You know, I think, I think there's, it's interesting, right, Molly? I think there's been some, you know, from a utility perspective, there's been some mud slinging against utility that we are looking to try to get as much capital into the system as possible so that we can get our capital rate of return and our shareholders can benefit from all of this rate of return that we would get from putting more iron into the ground. And like, maybe that was true like five years ago or 10 years ago or 15 years ago when load was at like a 2% increase.

Molly Wood: Mm-hmm.

Quinn Nakayama: And so like, yeah…

Molly Wood: When it would’ve actually been doable. You could actually build that much infrastructure. And now it’s like…

Quinn Nakayama: Right. And now it's like, and like, and so I, I look at those times and I'm like, okay, I can see how a lot of utilities may have chased wires, upgrades because they wanted to get that, that return.

Molly Wood: Mm-hmm.

Quinn Nakayama: I think every single utility out there across the board is like, oh my God, we have way too much capital. The markets can't fund it. While she can't fund it, we, we are increasing rates like, we have too much capital.

Molly Wood: Hmm.

Quinn Nakayama: Um, we can't build it fast enough. Right. Like, it, it, it becomes more of an issue of no, no, no, no, no, no. We don't want to do more capital. We wanna do less.

Molly Wood: Mm-hmm.

Quinn Nakayama: And, and this gets back to this, if we're able to not do as many wires as upgrade, but bring in all this load onto our system, it will drive rates down. And we as a utility industry know that if we can drive rates down, industry will come and they'll be more than happy to land in the states that, uh, they would be much more welcome to, to land in the states where rates are lower.

Molly Wood: Right.

Quinn Nakayama: And so like, you know. Absolutely. I think especially here in California, we are trying to figure out ways that we can just do less build. We don't need the billions and billions of dollars of capital to get that 8% return. We got it. We're good. Right. Now, it's all about getting speed to access to the power to the customer at the lowest rates affordable as possible. And that is kind of like our, our, our core driver of what we're trying to do. So those are where the innovations are coming into play to say, how can I get more power to the people and less cost, um, in order to drive down their rates?

Uh, as well as just recognizing we've had to do a lot, a lot, a lot of investment to shore up the wildfire, the changed climate that we saw that just happened really quickly here in California. And those locations, they're not highly load or load growth related areas. And so when you invest billions of dollars of hardening infrastructure to be able to shore up those areas from now dead forests and high confl conflaguration, I mean from 10 years ago to where we are today, 50% of our service territory is now in high fire threat. Versus like back before it was like, what? I don't, I don't have the exact values, but it's like 10% or something even lower now. Now you're all the way at 50%. So that's the type of change climate that we're looking at. We've had to shore that up. Okay. That has, that has really put a pressure on our rates.

Now we can start to focus on how do we bring those down through load growth and, and that's been a lot of our focus. So as an example, advanced conductors and advanced power flows, these are all technologies that help us push more electricity through our current transmission lines, the big wires.

Molly Wood: Mm-hmm.

Quinn Nakayama: And not have to build as much wires or be able to delay when we need to build those wires or be able to provide those customers who are looking to interconnect access to our system faster. The way that something like advanced power flows works is that, the way that I explain this is like a freeway system.

Here in Oakland, we have, uh, three freeways that all converge to come to Oakland. The 880, the 580, and the 24 freeway. And so imagine a world where, you know, so many people are coming through Oakland from the 880 corridor and the cities like, or the city in this state is like, well, we need to double the size of the 880.

Meanwhile, let's say the 24 is just not as full and could take more cars. To the extent that we could actually take cars from the 880 and move it over to the 24. And this is, this is where the analogy breaks down, but like in electricity, we can do this. So we're taking cars off the 880, we're putting on the 24. I no longer need to build out, double the freeway capacity in the eight 80 to serve Oakland.

Molly Wood: Mm-hmm.

Quinn Nakayama: Our transmission system works the same way. You've got this substation, you've got multiple transmission lines coming into this area, and sometimes too much electricity is being pulled from one of those lanes.

Molly Wood: Right

Quinn Nakayama: Now, I can put new technologies in place called advanced power flow controllers that can make sure that electricity is being pulled equally from all the lines to that substation. And then that enables us to, in this particular example, bring more power capability to that, to those customers in that area. And now maybe that data center that couldn't connect for another five years can connect tomorrow.

Molly Wood: Hmm. Okay.

Quinn Nakayama: And that, that's great for everybody,

Molly Wood: Right. Let's go back to, uh, let's go back to sustainability goals and net zero and renewable energy and load growth.

Quinn Nakayama: Yeah.

Molly Wood: Because all of what we're describing, I think is, is what, you know, I recently interviewed the CEO of Edison, um, and the conver, the conversation about keeping gas online longer or even spinning up new gas resources or whether electrification as a driver of load growth means we shouldn't electrify. And so I wonder how your, like do these, are these technologies in addition to helping to keep rates low and minimizing the amount of infrastructure that needs to be built, are they able to keep us on track for net zero?

Quinn Nakayama: You know, that's a, that's a really good question and I think what we would need to think about is, you know, there could be bridging technologies that may not be as clean as we would like, but get us over the hump until we can access those clean firm resources.

Molly Wood: Mm-hmm.

Quinn Nakayama: And I'll give you a great example. Like data centers for example, is a prime example. They have pound for pound, a ton of backup generation sitting out there not doing anything right. Um. And they're there just to be able to make sure that the data center can get powered up in case there's some sort of grid failure and they can maintain continuity.

But let's say that we have a small need, let's say just five hours in a given year where we're gonna be heavily constrained and you know, yes, we can take a look at like all these batteries that are distributed and see how they can play into it, but, but let's say we need more than that, these generators can then play that role until we can solve that five IR need some other way.

Molly Wood: Mm-hmm.

Quinn Nakayama: And so, okay, let's, let's figure out how, for less than 50 hours in a given year, can I tap into that as a resource? With the view that I don't want to use those resources long term. And now I have access to more energy storage, more solar, more geothermal. So that I don't need to tap into those anymore.

Molly Wood: Mm-hmm.

Quinn Nakayama: And I think that's the kind of the balance that we're trying to take a look at here in California. Um, and I think, you know, clean firm resources are going to have to play into the picture. We know solar, we know energy storage. Wind is not really on the table anymore, you know, based upon certain things that are happening on the federal side.

So, you know, how do we shore up the needs here and are there clean firm resources like geothermal that can now be tapped into? But in the meanwhile, while we do the exploration, needed exploration and figure out how to get the cost down, and how do we make sure this is all cost competitive toward other resources, just that small window period of time as these data centers are trying to connect to the system.

Are there bridging technologies that may not be entirely favorable to that clean world, but we still have an eye to 2045 and we can get there.

Molly Wood: Right.

Quinn Nakayama: And bring these data centers and the economic development that they provide for our state in on the system faster. Those are the trade-offs that I think, uh, we need to, you know, those are the tradeoffs that, of the conversations that are starting to have.

Molly Wood: Yep. Did those trade offs exist before? I think like we're all starting to, we're all trying to put a fine point on, you know, is, is AI training and inference and, and just cloud computing in general, right? Data centers do a lot of things. How much of a, how much of a setback could it be to net zero goals, you know?

Quinn Nakayama: Yeah. Yeah. And so, you know, I think we still feel very firm and committed to the net zero goal 2045. Yeah. And so really what what we're talking about here is speed to power and bridging solutions. And, and that's pretty much about it, right? And that is where like California will continue to be the leader in clean energy. There's no doubt about that.

And so, uh, what I would consider this is, is purely just being a bridging solution related, related requirement. And then just having that view to say, okay, what other type of resources can we bring to bear? That is clean, that is firm. Um, and that is untapped. And I think, you know, from my perspective, there's a lot of potential for geothermal here in California to be that type of resource.

Molly Wood: Mm-hmm.

Quinn Nakayama: But again, it's going to have to come with additional build to be able to make sure that we can access where those resources are and bring them onto our grid. And that can't be understated.

Molly Wood: Right. Totally takes a minute. Yeah, we can, we don't, we don't even have a whole other hour to get into, you know, how many thousands of line transmission lines we need to, to really do that.

But then the other, the, my last question for you though is, you know, sort of there's the data center boogeyman, but then there's the electrification boogeyman, and, and I think that that is one that, that I would love your help in taking off the table. Like, I don't want electrification to become the, the, what people think is the reason that they're paying more. When, you know, as somebody recently put it to me like there's nothing that gas can do that electric can't do better.

Quinn Nakayama: Yeah. Electrification actually, what I want everybody to know is electrification actually brings down rates. And the beautiful thing about transportation, electrification in particular is it's flexible.

Molly Wood: Mm-hmm.

Quinn Nakayama: And so when you think about those two things in particular like it, it will bring down rates. Period. That's why like I think that we need to rush into vehicles, right? Rush into transportation electrification because, um, the contribution margin that the revenue it brings on versus the type of upgrades that we need to bring on to the system for it…

Molly Wood: Mm-hmm.

Quinn Nakayama: Will, will be, will be rate, rate relieving.

Molly Wood: Does that also include home electrification? Appliances and heat pumps. And is this a larger umbrella conversation?

Quinn Nakayama: I think this is maybe a larger umbrella conversation. I will say, you know, um, obviously when we take a look at heat pumps, there's a couple things to consider.

You know, there's a lot of old HVAC systems that are out there, heating and um, air conditioning that are highly inefficient. And being able to move those two heat pumps will save both natural gas and electricity. Right. Um, and then obviously we, we are taking a look at, okay, well how do we get, you know, um, these more higher efficient type of heat pumps for places that are already efficient and what does that look like? And we're starting to see a lot of innovations that are happening in this area whereby, you know, batteries integrated into these particular assets will give you a little bit more smoothing amount of how much electricity they need over time.

Molly Wood: Mm-hmm.

Quinn Nakayama: So it doesn't look so big when they start up. And, and so some of those type of things will help create kind of much more of, uh, uh, rate beneficial type of load as they come into the system. And then getting off of the natural gas system onto electricity.

Molly Wood: Amazing. Um, I clearly could do this all day, but I will stop. Quinn Nakayama is the senior director of Grid Research Innovation and Development, which spells GRID. Which I just have to pause on because well played everybody. Um, that's right.

Quinn Nakayama: People tell me that I can't do that, and I'm like, you know what? I'm an innovator. I think I can. So… [Laughter]

Molly Wood: Exactly. That's, it's out of the box. That's disruptive thinking is what it is. Quinn, thank you so much for the, for the time today.

Quinn Nakayama: Thank you, Molly. I really appreciate it.

Molly Wood Voice-Over: That's it for this episode of Everybody in the Pool. Thank you so much for listening. In future episodes, I'll be talking with some of the more interesting companies PG&E identified at its pitch fest toward the end of last year to give us a sense of what a reimagined and yes reinvented energy system might start to look like.

Email me your thoughts and suggestions to in[at]everybodyinthepool.com and find all the latest episodes and more at everybodyinthepool.com, the website. And if you want to become a subscriber and get an ad free version of the show, hit the link in the description in your podcast app of choice. Thank you to those of you who already have.

Together, we can get this done. See you next week.