Mark Thurber, associate director of the Program on Energy and Sustainable Development at Stanford University, comes on the show to discuss the unique challenges of integrating renewables in energy markets, why he believes we should all take bigger risks, and how he uses an online game to teach market dynamics.
Mark Thurber is a Fellow at the Energy for Growth Hub where he leads on issues related to natural gas. Mark is Associate Director of the Program on Energy and Sustainable Development at Stanford University and affiliated with the Precourt Institute for Energy and the Stanford Natural Gas Initiative. Mark’s research focuses on how energy services can more effectively be delivered to low-income populations. Previously, Mark worked in the high-tech industry, focusing on manufacturing operations in Mexico, China, and Malaysia. He is the editor of Oil and Governance: State-owned Enterprises and the World Energy Supply and The Global Coal Market. Mark holds a PhD from Stanford University in Mechanical Engineering (Thermosciences) and a B.S.E. from Princeton University in Mechanical and Aerospace Engineering with a certificate from the Woodrow Wilson School of Public and International Affairs.
Show Notes
- Read Mark’s latest memos on assessing energy leapfrogs, the illusion of “excess capacity” in Kenya, and better battery strategy in emerging markets.
- Learn more about Mark’s energy market games.
- Mark on LinkedIn and X.
Transcript
[00:00:00] KATIE AUTH: I’m Katie Auth.
[00:00:07] ROSE MUTISO: I’m Rose Mutiso and this is High Energy Planet, the podcast from the Energy for Growth Hub about new ideas to solve global energy poverty and the people behind them.
[00:00:15] KATIE AUTH: Today we have Mark Thurber. He’s an Associate Director of the Program on Energy and Sustainable Development at Stanford University, where he studies and teaches about energy and environmental markets and policy. Mark’s expertise is very broad and very diverse. It ranges from global fossil fuel markets to climate policy, to providing energy to low income populations.
[00:00:36] KATIE AUTH: And his current work focuses heavily on how best to integrate growing shares of renewable energies like wind and solar into power markets, and helping regulators understand how to do that and how electricity market incentives really work in the real world. Mark is also a fellow at the Energy for Growth Hub, and Rose and I have both happily gotten the chance to work closely with him over the years.
[00:01:00] ROSE MUTISO: So what stands out to me about Mark is that he’s equally comfortable diving deep into the technical details. So he’s, um, spoiler alert, he’s a massive nerd and we love that. But, , he’s also equally comfortable stepping back to look at the bigger questions around political economy and development. And, you know, he brings both engineering precision and real world pragmatism to thorny questions around energy transitions, market design, and technology adoption.
[00:01:25] ROSE MUTISO: And, you know, that’s exactly the kind of perspective we need more in this space, which is that, like, sweet spot between the technical and the bigger picture.
[00:01:33] KATIE AUTH: So, Mark, welcome. We’re so happy to have you here.
[00:01:45] ROSE MUTISO: Welcome Mark.
[00:01:47] MARK THURBER: Thank you, Katie. Really happy to be here
[00:01:49] KATIE AUTH: So we wanted to start the way we start all these conversations, which is a kind of a background question. Can you tell us something about how and where you grew up and how it made you the person that you are today?
[00:02:01] MARK THURBER: I grew up outside Washington, D. C. in Bethesda, Maryland, and it seems like everyone’s been through Bethesda. I was at a meeting once in Kuwait and meeting with a former ambassador from East Africa, and they’re like, Oh, yeah, I lived close to where you lived. So every, everyone goes through there. Yeah, so, you know, I grew up in, Quite a suburban lifestyle.
[00:02:22] MARK THURBER: I guess it was like a lot of, people growing up here. We don’t have to think a whole lot about energy, but I think I was influenced by my parents were, very focused on how to make the world better. And my, both my parents also worked in the federal government. So I guess I have that family connection to the, civil service.
[00:02:41] ROSE MUTISO: , so Mark, your early career was in mechanical engineering and semiconductor manufacturing. how did you eventually make the shift to focusing on energy markets and policy? And what was the specific catalyst that drove you there?
[00:02:53] MARK THURBER: Sure. So yeah, I have a checkered past in a number of different areas. So my graduate work was in mechanical engineering, but then as you say, I went on to work in high tech for about eight years and areas not much related to my PhD. and one thing that really changed my trajectory is I, , worked on assignment for a little over two years in Guadalajara, Mexico, where we had a manufacturing plant.
[00:03:20] MARK THURBER: And I think what that got me interested in was both the international dimension of all kinds of human activities, and also wanting to do things that were more about systems and, and people and, , you know, how all those things connect. And so energy was something I had worked on to some degree in a technical way during my education and kind of came back to that as just a very interesting convergence of all these international dimensions, but also all these human institutional dimensions.
[00:03:55] MARK THURBER: And so I’ve been working in that area for now over 17 years where, , all of my work is about markets and policy and institutions and, and how those can be as much of a limit on what we Can and can’t do as the strictly technical
[00:04:11] KATIE AUTH: I think we have a bit of a theme on this podcast going this season of people who are highly technically trained. And then at some point in their earlier career, they realized that often the thorniest, stickiest, like most interesting questions are actually not about the technical side at all. Um, so that’s really
[00:04:28] ROSE MUTISO: Yeah, but though I have to say with the semiconductor industry being the hottest thing in town, I don’t know, do you ever wonder what, what, what would have happened if you stuck with it?
[00:04:37] MARK THURBER: No, no regrets.
[00:04:38] ROSE MUTISO: No regrets?
[00:04:39] MARK THURBER: So, right. So I was in, yes, I was in the hard disk drive manufacturing industry, which is a very difficult industry still is, , as, as a semiconductor, but no, I think what I learned had a lot to do with what’s rewarding to me. And I think one of the pieces that I learned through my work experience was that I really like my product being writing, you know, ideas, really delving deeply into questions.
[00:05:07] MARK THURBER: And so I’m a much better match for what I do now.
[00:05:10] ROSE MUTISO: I love that so much. That’s, that’s, you’ve literally described me to a T as well. So
[00:05:14] MARK THURBER: Yeah, right. True.
[00:05:16] ROSE MUTISO: um, less, I want to produce less tangible things.
[00:05:19] MARK THURBER: Yes. Yes. Precisely. Precisely.
[00:05:22] KATIE AUTH: Mark, we wanted to dive a little deeper into one of your specific interests, which is figuring out how energy markets and regulation need to shift in moments of major technological disruption. One of which we’re clearly living through right now. So, for example, you’ve written a lot about. the unique challenges that arise when you’re figuring out how to integrate growing shares of wind and solar in markets.
[00:05:47] KATIE AUTH: What’s the single biggest kind of market design problem that renewables create and what’s the most interesting solution you’ve seen to address it?
[00:06:00] MARK THURBER: Yeah. This is a great question. You’ve really put your finger on it that we’re in the midst of a Massive paradigm shift technologically in going from historically all our power came, or almost all our power came from large central station power plants, mostly generated electricity with fossil fuels. And so the paradigm would always be, well, we’ll put these big plants, relatively close to where people live.
[00:06:28] MARK THURBER: And then we’ll transport the fuel to those plants and we’ll burn them. And it was really very easy. I mean, you kind of knew roughly what was going to be, you know, you knew what was supply was going to be. It was a very predictable system. What we have now as. really everywhere around the world, we’re shifting to very high shares of variable renewable energy resources, wind and solar in particular, is the system has become much more dynamic.
[00:06:53] MARK THURBER: So one aspect of the paradigm shift is now we need to get the resources where they’re best. So we’d like to put our solar farms and wind farms where the best. wind and sun are the strongest. , and so now just from a transmission network perspective and electricity, it’s a bit of a different ball game because you’re putting the, the generation where the resources are, and then you’re bringing the energy to people on an electricity transmission line. And then, The really, really significant difference is this intermittent quality of wind and solar that it’s there when it, when the wind and sun are there, and you can’t control it, you can’t dispatch it. And so what that means is that your whole system has to be much more integrated and adaptable.
[00:07:42] MARK THURBER: You need, backup resources for whenever the wind and solar aren’t there. You could have batteries to time shift the energy from wind and solar to another time when you don’t have that wind and solar. You want more of these things like storage that can shift that energy around. And then another trend, which you alluded to a bit, Katie, is just A thing that’s different now from how it was 30 plus years ago, almost everywhere, is that in much of the sort of rich country, mature markets, we have markets, right?
[00:08:17] MARK THURBER: So electricity, at least in generation, is often more expensive. competitive, right? And so there are all these, these different players that are offering their resources into the market. And then you have a market operator who’s clearing it. And that is also a very, very different paradigm. And it comes with a lot of advantages.
[00:08:36] MARK THURBER: So the beauty of a market is it creates a very strong incentive for those market participants to reduce their costs, and to innovate.
[00:08:45] MARK THURBER: Challenge about markets is they’re quite a bit more difficult to regulate and to manage.
[00:08:52] MARK THURBER: So the job of the regulator has become totally different, both because of the advent of the market, and now making this all much more important and difficult, the rise of wind and solar. And so a lot of regulators don’t kind of yet have the full tools and resources to, do the best job for their consumers in this new world of high wind and solar and, and markets for electricity.
[00:09:20] ROSE MUTISO: one, one hotspot, like just one interesting trend workaround idea that you’ve seen kind of somewhere in the wild that tries to get at, you know, at least one piece of this problem of this new, new, brave new world we’re in?
[00:09:35] MARK THURBER: No, no, absolutely. Well, so one thing that we do a lot is we do a lot of workshops with regulators where we’ll run electricity market games that are good stylized simulations of how these markets work. We’re developing these new kind of e learning modules to help people learn about markets. But one classic example of that is that A great way to make a generating company behave the way you want to in an electricity market, in a wholesale electricity market, in real time, is to have had them already sell their energy in a forward contract, potentially even several years ahead.
[00:10:17] MARK THURBER: And so it turns out that very powerfully incentivizes them to do exactly the kinds of things the regulators want to make sure they have enough generation, , to make sure their generation is ready to run in the real time if it’s needed. So that financial contract obligation has A lot of power as a mechanism regulators can use, but that’s very poorly understood by almost everybody.
[00:10:45] MARK THURBER: I mean, by me even before I got more involved in this space, like how does a financial contract make things line up the way you want to in the real time market. So it’s, it’s a powerful tool, but if you still don’t quite get how the markets work, you’re not going to use it. And you know, as a result, you may end up with, with a market arrangement that ends up costing the consumers much, much more than it has to, and maybe isn’t as good as it could be in making sure that you always do have backup for when the wind and solar aren’t there.
[00:11:20] KATIE AUTH: Yeah. We actually, I’m glad you brought up the, the games that you’ve been developing and using for teaching some of this new, work. And I think you actually use it to train regulators if I’m not mistaken. And Rose and I have taken a look at these and reviewed some of the beta stages and they’re awesome.
[00:11:36] KATIE AUTH: But we were curious, um, , what is it that you think the gaming model gives students or regulators that traditional ways of teaching these concepts don’t offer?
[00:11:48] MARK THURBER: Sure. That’s a great question. And I will, name two right off the bat. One is the games are a great way of levelizing,, the knowledge, putting everybody on an even playing field, even when they come from very different
[00:12:06] KATIE AUTH: Mm.
[00:12:06] MARK THURBER: backgrounds and, and kind of training backgrounds. So, you know, if you look at who are regulators, where do they come from as sort of their own education and training?
[00:12:16] MARK THURBER: Well, everywhere. I mean, some of them might be engineers. A lot of them are lawyers, a number of social scientists. scientists, some economists, some accountants. So it’s just by nature, an incredibly diverse group, which is terrific. I mean, these problems have all those different interdisciplinary aspects to them.
[00:12:35] MARK THURBER: But what the games are great at doing is bringing everybody in some kind of workshop or course up to speed in a very hands on way so that we can speak a common language. We can, sort of all, in this. stylized world compete together as generators or retailers. And you know, it’s very typical that at the start of some of our sessions, we might have, for example, some lawyer within a public utility commission will say, Hey, you know, uh, no offense, But my boss told me I had to be here.
[00:13:07] MARK THURBER: I can promise you I’m not going to get anything. I’m just going to sort of nod politely while you talk, right? And so, so you can almost see the, the fear and the, you know, when you start off, but then. pretty quickly. I mean, all it takes is maybe half an hour, 45 minutes of starting to actually play as a market participant in these kind of simplified versions of the markets.
[00:13:32] MARK THURBER: And you see the light bulbs go on. So you can really get everybody understanding these things in a very hands on way. You put the regulators in the shoes of the regulated, of the market participants, you know, that are generating power in this market. And so that really helps them say, Oh, okay, I see how when I’m playing as a genco, you know, I’m going to try to do X and Y and Z to increase my financial returns because that’s
[00:13:59] KATIE AUTH: Yeah. that’s
[00:14:00] MARK THURBER: companies have to do in the real world to, to survive, right?
[00:14:03] MARK THURBER: So it, it starts you thinking in a different way as a regulator, like, okay. Understanding these high powered incentives, which are the same things that are a force for good when they’re, you know, helping people reduce costs and innovate. How do we take advantage of these incentives to align what the companies naturally want to do with, you know, what the outcomes we want, for, for rate payers and for the overall market.
[00:14:28] MARK THURBER: And then just the, the last thing I would say is the games are great because it’s, it’s a way of teaching Without us imposing some ideology or, or values, and plus we never know what’s going to happen. And we learn a lot from running these, these market simulations and often we’ll see strategic behavior that we didn’t necessarily expect.
[00:14:51] ROSE MUTISO: That’s so cool, Mark. So, This is all really interesting, but, there’s obviously a huge gap between identifying optimal policies, either, you know, via games or simulations, or even academically in, in your research. And, um actually getting them implemented in real world energy markets. And so can you share a specific example of an incident in which something you or maybe even a participant in one of these simulations, , considered an obviously optimal policy, that then faced unexpected challenges when it hit reality?
[00:15:25] ROSE MUTISO: Like what’s a good canonical example of, you know, theory versus practice?
[00:15:30] MARK THURBER: That that’s our life. Yeah.
[00:15:32] KATIE AUTH: Ours
[00:15:32] ROSE MUTISO: Okay, so everything, uh, everything is an
[00:15:35] MARK THURBER: Right. Right. Exactly. Exactly. You
[00:15:37] ROSE MUTISO: in the energy markets space.
[00:15:40] MARK THURBER: Yes, yes, yes. Well, so here’s kind of one maybe funny example. We ran a few times big, conference games for incoming graduate students at Stanford interested in energy.
[00:15:53] MARK THURBER: And one of these times, so we did a session where over three or four days they would play half of all of the games would have one form of carbon pricing, a carbon tax, and the other half would have another form, which is more, common so far, which is a cap and trade, also known as a carbon market. So, you know, we, we ran both of these kinds of games over several days.
[00:16:18] MARK THURBER: And then at the end we asked everybody like, Oh, well, which do you think of these as a better policy, right? A carbon tax, which in practice ends up being much better. simpler, that you just, you emit X number of tons of CO2, and then you just, pay a carbon tax per ton versus a cap and trade where you allocate a certain number of these allowances to let you emit a ton of CO2.
[00:16:40] MARK THURBER: And then you, you trade it and, and the price can just vary depending on what people will buy and sell it for. , and so, I’ve certainly come to view over time that, you know, carbon tax has many, many advantages. It’s much simpler. It’s more transparent, you know, all these kinds of things, but, but we were really surprised.
[00:16:56] MARK THURBER: At the end of the day, when, when I asked, okay, show of hands, you know, like, like which, which one do you think is better carbon tax, maybe a hand here or there. , Okay, cap and trade. Almost all the hands went up. And we’re like, wait, wait, why?
[00:17:09] MARK THURBER: Like, this was so complicated. How did you even know what the carbon price was when you were trading? And, and, you know, they were all like, Oh, well, we made so
[00:17:17] MARK THURBER: much more
[00:17:18] MARK THURBER: money.
[00:17:19] ROSE MUTISO: Mm-hmm
[00:17:19] MARK THURBER: So, it was kind of a great illustration of, you know, , that there’s a policy, you know, from a economic perspective that has a lot of advantages, but then in the real world, when, when political economy enters in, you know, you have to sort of think, Oh, well, how do I create a coalition, , that will support this carbon pricing, you know, law that we’re going to put in?
[00:17:43] KATIE AUTH: I mean,
[00:17:44] KATIE AUTH: clearly, You see this play out in certain ways in the context of US politics, which has its own incentives and dysfunctions. And then the same policy, which might make complete sense on a kind of technical academic basis faces totally different.
[00:18:03] KATIE AUTH: political barriers in a, in a different country, a different political context. And so one of the things that you’ve written about that we loved was, a piece about kind of the dangers of blindly assuming that you can apply quote unquote, best practice regulation, , across different types of markets and different types of economies.
[00:18:23] KATIE AUTH: , Is there a specific kind of vivid example where you’ve seen that sort of approach go very wrong?
[00:18:33] MARK THURBER: absolutely. Yeah. This was something I kind of was thinking about kind of bringing up to, , electricity markets are a great example of this, right? So I talked about some of the benefits, but also challenges of electricity markets, you know, and the benefit is, okay, if you have all the other institutional prerequisites, you have, , you know, knowledgeable regulator with a lot of experience, which we even struggle with in mature markets, just because it’s new for them too.
[00:19:01] MARK THURBER: But, you know, energy markets have advantages, electricity markets have advantages and pushing down costs and spurring innovation. But If you don’t have some of those institutional prerequisites, a competitive electricity market might be exactly the worst thing to do. And that’s just so important to keep in mind that you need to look at every context and every situation.
[00:19:28] MARK THURBER: You know, on in its own right, and the reason can be, you know, is especially emerging electricity markets. Largest problems often tend to be around just the basics of are we recovering costs, right? Are we getting from our rate payers, from everyone paying from electricity, enough money to cover all the costs of providing that electricity of the generation of the transmission of the distribution?, there’s sometimes this thought that, oh, okay, well, this electricity market doesn’t work well, and I’m going to come in, some American consultants say, and tell you, well, here’s what I know, you know, we, run markets like this. And, and so what you need is you need to, uh, restructure your market. So there’s a competitive generation segment, right?
[00:20:23] MARK THURBER: And that will, reduce costs and improve all these things. And, and the reality is that could be the absolute worst thing to do because if, if the, just the basics aren’t there and you’re not, you know, you, you don’t have a kind of this basic value chain of, of, you know, the The, the end customers are paying enough to support the, the, all the things that go into their electricity.
[00:20:49] MARK THURBER: It might be much better to just focus on, okay, yeah, we know we’re not going to have the strongest incentives for cost savings. But you know what, this might be easier to fix, easier to get right for now with a vertically integrated utility
[00:21:05] KATIE AUTH: that’s such a good example of this because that breaking apart the vertically integrated structure has been such a canonical piece of development practitioners list of best practices, like you need cost effective tariffs, you need to break apart your sector. And you’re actually seeing some countries who were pushed to break generation apart from transmission distribution, now trying to put them back together again.
[00:21:31] KATIE AUTH: So I think, um,
[00:21:34] MARK THURBER: yes. Which is hard, but once you break it, it’s
[00:21:37] ROSE MUTISO: actually, Mark, I think in a conversation with you, you mentioned that even in the US, some of the utilities are still vertically integrated. Why is that so? Like, even in the kind of best practice of best practice market, why would that occur?
[00:21:54] MARK THURBER: Well, I mean, I think there’s certainly a, , legacy sort of, , like path dependent character to it. Right. So, and a great example is. where I’m situated. , so California, , restructured in the late nineties, we had our, , California electricity crisis in the early two thousands, which is part of why we got Arnold Schwarzenegger as a governor after the, , voters booted out the previous person, which also just highlight.
[00:22:20] MARK THURBER: This is a great example that, , Hey, we mature markets, rich countries don’t have all the answers and we make a lot of mistakes. And so sometimes it’s better to, look and learn from what we do rather than slavishly imitate it. , but, but yeah, so, you know, kind of what happened in the West. And what’s happening, and it’s very interesting and challenging, is so, California restructured and so had, , separated out generation and, and we had some problems, but then kind of fix those over time, expensively. The U. S. has three grids, so there’s, and North America, in fact, this includes Canada in this. So there’s the western interconnection, the eastern interconnection, and then Texas, of course, always different.
[00:22:59] MARK THURBER: So, you know, California restructured first, and the rest of the West was still largely vertically integrated, you know, regulated utilities, and, and much of it still is. And so, you know, I think one of the logics, maybe, of why people stay with that is it’s, it’s more comfortable, you know, maybe as a regulator, you feel like you have more control over, , you know, making sure things are okay for your rate payers.
[00:23:26] MARK THURBER: But then it also is sort of like a cost benefit. I mean, so the real benefit to restructuring and to having competitive generation is if you think you can really reduce costs through doing that. And so that’s why probably California went first is that California had much higher costs. For a generation.
[00:23:48] MARK THURBER: And so, you know, , and, and you know, kind of retail costs were higher. And so there was a, theory that, this might be a good candidate for, you know, competition would, would squeeze out efficiencies and reduce costs. So, so that’s kind of why you do it. And so, honestly. If you don’t think you can save a lot of cost don’t, you know, don’t restructure, you know, stay vertically integrated.
[00:24:10] MARK THURBER: What’s really interesting that’s happening now is because of the rise of wind and solar, there are a lot of benefits now regionally to, to making the West more integrated, because we have, like, transmission wise, we’re all interconnected across the West, right, into one big grid. But If you don’t have good sort of market connectivity, you’re not going to be able to use the fact that, hey, you know, California, we’ve pushed in so much solar, say, that when the sun sets in California, right, we’re going to need a whole lot of power and we’re going to want to buy it from the rest of the West, but also, You know, sort of early afternoon in California, we’re going to have so much cheap power that we could, you know, that anyone else in the rest of the West, if they had a framework to take advantage of that, could, could really benefit.
[00:25:03] MARK THURBER: So if I’m an Arizona consumer, right, maybe I really can benefit from all this cheap solar that can flow out, you know, from, from California. , so what’s happening is because of renewables. There’s a shift towards regionalization of markets. And so the first step in the West was this Western energy imbalances market, which is basically kind of saying, okay, because of this need to instantaneously adjust according to how much wind and solar you have, it was just taking advantage of available Western transmission to in real time, you know, kind of buy and sell this power in a more transparent, you know, systematic way. That’s saved, you know, a lot of money for across the West, you know, and it’s kind of helped improve reliability. And then the next step now is towards a move towards, towards extended day ahead market, it’s called. And that’s another wonky thing that I love to get into, but won’t here.
[00:25:59] MARK THURBER: Um, but, but so, so yeah, I mean, that’s a simple way to think about it is like, Like you go to markets because you think you can save money through, through having competition. , but, but then what’s happening right now is that market mechanisms can potentially be very useful for integrating large shares of, of wind and solar.
[00:26:20] KATIE AUTH: Your point seems particularly critical in a moment where the power sector is changing so rapidly and in so many kind of unknown and unexpected ways. And those best practices are obviously going to shift as the markets shift. And there’s a delay between like what practitioners learn in the actual sector, and then, you know, eventually it filters into, , the development industry.
[00:26:46] KATIE AUTH: , but there’s a significant lag there. And so I think there’s also a risk of, of just always passing along lessons to other countries that are behind the times, if that makes sense.
[00:26:57] MARK THURBER: Yeah. Yeah. Oh, that’s so true. And I mean, I think that that renewables are a great example of this, right? Where, you know, if you think, and Rose, you and I have talked a lot about leapfrogging, and it’s a hard and elusive concept to get one’s mind around sometimes. But, but, you know, I think you could argue that it.
[00:27:16] MARK THURBER: Like if you look at a place like Kenya, right, where there’s been such an influx of grid scale renewables, so, so a lot of wind and now quite a lot of solar as well. And so, you know, so I think you could argue in many ways, countries like Kenya are, starting to leapfrog in some sense that they’re at least bypassing a certain amount of just this old paradigm of large fossil fuel central stations, you know, located near, near population centers.
[00:27:47] MARK THURBER: I think that’s an example of where maybe some of the thinking does need to leapfrog and, it’s funny, right? Because I was talking about markets as an example of where, you know, it’s a real mistake to just do a cookie cutter and say, Oh, everyone should imitate California and, you know, their some very specific ways in which maybe no one should imitate California, but other ways in which we’ve done, we’ve done good things, right?
[00:28:14] MARK THURBER: So it’s, it’s a, it’s a kind of a mix, but, but, you know, I think you could be thoughtful about, well, other ways. And so, you know, the countries, Doing that like already have the benefit of they can, they can build out their transmission lines a bit differently, right, because you’re not starting with this paradigm of big coal plants near cities, right?
[00:28:37] MARK THURBER: And you’re thinking more about, about renewables, you know, and how do you make that resilient with, with, you know, ample other dispatchable units that can, that can fill in. Even this thing I was kind of saying about, like, like we’re struggling to put in this, this forward contract based resource adequacy in, in mature markets cause it’s just not how things were done, but maybe new markets can be more open to, to like, Hey, you know, we’re struggling if we’re Kenya.
[00:29:08] MARK THURBER: We’re hitting these pain points with, with variable renewables much earlier than a California hit it in its
[00:29:15] MARK THURBER: development path. So maybe there’s certain things we can apply about, about resource adequacy and like, like, you know, but, but again, I mean, it’s tricky because they’re, you know, contracts. I mean, I, this, I could go down a whole
[00:29:27] MARK THURBER: rabbit
[00:29:28] ROSE MUTISO: guess, yeah, which which we love, but I guess maybe, maybe the, the, the key idea here is that it’s just so much more dynamic, how lessons and and are absorbed and adopted in different contexts. And this idea of like the, like you said, this hierarchical sequential thing, you do step one, you, , break up your, market step two, you do the, that just doesn’t make sense, even if it’s such, it’s like such an entrenched mindset in the development sector.
[00:29:56] ROSE MUTISO: , this is really cool. One of my favorite things is talking to people who have a very kind of wide, a long view, I would say long view of history. Your ability to draw comparisons across the globe is so, so interesting. And I think it’s so valuable because obviously, when you take a long view of history, you learn nothing is new.
[00:30:14] ROSE MUTISO: But you do this thing where, you know, when you look across regions and markets, you know, you find surprises. And I think part of the issue in a lot of energy policy, especially in the development spaces, people are so narrowly focused. They just don’t have the ability to look at what’s happening in California, what’s happening here, how complicated it is even in the quote unquote best practice market.
[00:30:35] ROSE MUTISO: So, um, thank you so much for that kind of. putting things in this kind of, this context that gives us both history but also kind of geographical breadth.
[00:30:45] MARK THURBER: Yes, you know, no, it is true. And maybe it’s a weird artifact of my weird career path that
[00:30:51] ROSE MUTISO: We’re glad
[00:30:52] ROSE MUTISO: for it. We’re glad
[00:30:54] MARK THURBER: Yeah. I mean, yeah, me too. Yeah.
[00:30:55] ROSE MUTISO: All right. So Mark, several African countries, such as Kenya, Ghana, Uganda, Ethiopia, Cameroon, and Rwanda, , claim to have achieved quote unquote excess capacity in their power sectors, which is when your total electricity generation exceeds peak demand.
[00:31:10] ROSE MUTISO: So this you know, often surprises people because, you know, Africa is supposed to be where there’s supposed to be this endemic energy poverty and undersupply. And so when countries are claiming excess capacity that, you know, that flips the narrative. But, , you recently wrote about why this metric is misleading and, and I would love you to share that, , here on this podcast.
[00:31:30] ROSE MUTISO: What is the issue with this excess capacity claim and, and what’s a better way to think about power system adequacy in this context? Mm
[00:31:38] MARK THURBER: Well there, there are a couple of dimensions to this. I mean, one is that capacity just at the very high level. Power generating capacity is obviously very important and you want it in an electricity system to, , be more than total demand, right?
[00:31:54] MARK THURBER: , but I think one just high level point to make is that what we really need in the electricity grid moment by moment is energy supply to meet energy demand at every location in the grid in every moment in time. So looking simplistically at California or at, or at the West or at Kenya, you could have a situation where We have plenty of capacity, across the West or in California or in Kenya.
[00:32:25] MARK THURBER: , and we can’t get it to people when they need it because of transmission limitations or, or other kinds of challenges. So that’s kind of one just high level illustration of why what we really care about is moment by moment. energy balancing at each location. And that’s what a market operator or grid operator has to do.
[00:32:46] MARK THURBER: There are also specific challenges when you think about this, this idea of, do we have enough capacity? It becomes a very different question when you have non controllable resources, when you have variable renewables like wind and solar. And one piece of that is, well, just right off the bat, the capacity factors of those resources are lower.
[00:33:06] MARK THURBER: So, there’s sort of two issues that, there, right? One is that a capacity factor of a dispatchable resource is typically just much higher because you could run it up to, you know, 90 percent of the time if, if you need to. Whereas solar wind, you know, maybe that’s 30 percent or maybe, maybe a little bit more than that.
[00:33:24] MARK THURBER: , but then there’s also this issue of, of not being able to have it when you need it. And so those are just, top line reasons why that kind of excess capacity, especially when you’re a Kenya where so much of your new capacity is wind and solar and has been, , that can be pretty misleading because you could have, you could have a number that says we have capacity that’s more than our peak demand.
[00:33:50] MARK THURBER: and I just think it’s not quite the right metric for people more generally is you really have to think about energy reliability and do I have ways of balancing energy supply and energy demand at every location in, in my network, , at any point?
[00:34:08] KATIE AUTH: I completely agree with all of that, Mark, but I think there’s an interesting way in which the metric, , could be useful if it’s used to point out, especially to donors that like, generation is not And the priority right now. , because I think historically at least over the past decade, like there’s been a fixation on the generation sector and on investing in new capacity, partly because that’s kind of the easiest part to do.
[00:34:37] KATIE AUTH: That’s where the private sector wants to come in. , and so If that metric can be used just to stress that, like, it can’t be this, you know, blind obsession with more capacity, more capacity, more capacity until these other aspects of the system are built out that actually enable that power to get to people and make it reliable and all of the things that you mentioned.
[00:35:02] MARK THURBER: That’s exactly right. No, I think that’s such a good point, , to raise about that, that , we’re really myopically kind of focused on just like steel in the ground, , power plants. And we think that that’s sort of what creates reliability for electricity consumers. And that’s not the case.
[00:35:19] MARK THURBER: I mean, that’s an element of it, but exactly like you said, I mean, if you look at, , blackouts and. Kenya in recent years, a lot of those were associated with transmission line, you know, outages. , there’s a lot on the distribution side on the end, you know, there’s just the whole structure of, of how you make this electricity supply system to incentivize people to provide that energy where it’s needed.
[00:35:45] MARK THURBER: So, I think that’s just a fantastic point. that this really needs to be thought about much more holistically. And we can have ample power plants in the ground, , to meet all our demand and not meet that demand reliably. And, and again, that’s not just an emerging market problem.
[00:36:06] ROSE MUTISO: This is so cool. So new, new pitch for the donors, which is good news. We have excess capacity, bad news. We have excess capacity. Then you lure them in with the details about how we need to invest in the grid. Yeah.
[00:36:19] MARK THURBER: true. And
[00:36:20] KATIE AUTH: Mark, we wanted to close with one, question we ask all our guests, which is if you look back on your career. what’s the one thing that has changed the most about you since you started doing this work?
[00:36:32] MARK THURBER: I think a thing that has shifted for me in my career has been my own personal risk aversion in my career. And so I feel like, I mean, I was always sort of growing up, you know, like, like always wanted to do the right thing and study hard and do what I was supposed to do.
[00:36:53] MARK THURBER: And. I think it becomes limiting at a certain point because you sort of, I mean, I think I was too afraid of making a mistake. And so I kind of always sort of doing, okay, where’s the, the solid, you know, well thought of place to go for school, , what’s the big company to go to for a job.
[00:37:13] MARK THURBER: And,, so I think what really started to free me up over the course of my career was. Just a change in risk calculus of thinking, , Oh, what if I make a mistake to, Oh, what if I stay in this same, , corporate job and I’m still here when I’m 70 or 80, like, and realizing, Oh my gosh, like, and then , there’s not about corporate jobs per se, but it’s about a job that was not a great match to me.
[00:37:42] MARK THURBER: That the much bigger risk in one’s life is. , looking back when you’re old and be like, Oh my God, why did I stay in that? Why didn’t I do something else? And, then I think together with that, just realizing that the world is full of people doing all kinds of different things. And so you can find your way to things that are the best match for you.
[00:38:07] MARK THURBER: You know, just like Rose, you were talking about you and me, , we both had highly. technical training, , in, physical sciences, engineering, you know, all,, all this but then just finding your way to, oh, okay, no, you know, actually what I really like instead of making widgets, it’s really
[00:38:22] MARK THURBER: look like delving deeply into
[00:38:24] MARK THURBER: questions, writing
[00:38:26] ROSE MUTISO: Yeah.
[00:38:27] MARK THURBER: you know, so, so those are some of the things for
[00:38:29] ROSE MUTISO: Yeah.
[00:38:30] ROSE MUTISO: I love that. I love that so much. And if there are any Bethesda youth listening to the podcast, um,
[00:38:35] MARK THURBER: Yeah. Walt women
[00:38:36] ROSE MUTISO: this is for
[00:38:36] MARK THURBER: let’s go Vikings.
[00:38:38] ROSE MUTISO: Take bigger risks. Okay.
[00:38:41] MARK THURBER: Yeah. But you know, it’s hard. , I mean, it’s take bigger risks, but, but the other thing is like, just life is an iterative process know, I think it’s easy to get paralyzed by a sense of, Oh, I have to find my passion.
[00:38:51] MARK THURBER: And, and while I, you know, Proof of, of exploring one’s for one’s passions. I, I think it’s sort of, you know, also recognizing about, like, you, you just, it’s all a big experiment and you just keep learning and you, you try something for a couple years and feel like, oh, okay. Like, I really like that this part not as much and, and just, , it, it’s, uh, like, like being a little more free to just explore.
[00:39:15] ROSE MUTISO: All right, Mark. , thank you so much. This has been an incredible conversation. We’ve really enjoyed, , learning so much from you as always.
[00:39:21] ROSE MUTISO: so now it’s time to play short circuit, which is a rapid fire round of questions. , don’t overthink it just boom, boom, boom, boom, boom. Are you ready?
[00:39:31] MARK THURBER: All right, yeah, let’s
[00:39:33] KATIE AUTH: All right. First is a two part fill in the blank, complete this battery energy storage hot take. The hype is justified for blank, but totally overblown for blank.
[00:39:43] MARK THURBER: Battery hot take. Hype is justified for batteries playing an important role time shifting energy within a day and not justified for batteries replacing, , dispatchable generation in emerging markets right now.
[00:40:03] KATIE AUTH: So the first one is a two part fill in the blank complete this battery energy storage hot take. The hype is justified for blank, but totally overblown for blank.
[00:40:17] MARK THURBER: So I’m going to say justified for using batteries as shock absorbers in emerging markets, where you, you use batteries to very quickly, , help make supply and demand match, at every place in the grid, in an emerging market. So batteries are great for this. It’s called frequency regulation. Battery hype is not justified in the potential of batteries to replace dispatchable generation for integrating wind and solar in emerging markets right now,
[00:40:51] ROSE MUTISO: all right. Next question. What’s your favorite place that you’ve lived and why?
[00:40:55] MARK THURBER: Well, so I’ve lived now a little more than half of my life on in the San Francisco Bay Area. I live in San Jose now, a little less than half of my life in on the East Coast, and I really like them both. I like the East Coast and the West Coast. You know, they’re just both great. I mean, I
[00:41:16] KATIE AUTH: You have to pick one.
[00:41:18] MARK THURBER: Yeah. Oh, I’m
[00:41:19] ROSE MUTISO: one. We need some East Coast, West Coast beef here.
[00:41:22] MARK THURBER: I know. Okay. Okay. Let me, oh, I’m so bad at short circuit. Okay. Um, let me, okay, let me
[00:41:28] ROSE MUTISO: More polarizing views. No, it’s all right. You love them both. We’ll move on. Oh,
[00:41:34] MARK THURBER: I’ll come back with a better, better hot take. You know, where I always love to go on vacation was to Nova Scotia, where we went there. My grandparents moved up there. And so we went up to Nova Scotia, Canada every year. And it was just this kind of young person’s paradise of wandering the woods
[00:41:50] ROSE MUTISO: lovely. I love that Canada is a tiebreaker. The
[00:41:54] MARK THURBER: Yes, yes, Canada.
[00:41:58] KATIE AUTH: So imagine you’ve had a rough day at work, maybe your regulation game simulation didn’t go the way you wanted, your What’s the first thing you do when you come home to unwind from that?
[00:42:09] MARK THURBER: What I’ve been doing a lot recently with my 17 year old son that’s super fun is bouldering in an indoor bouldering gym and I’m not that good at it yet. he, my son is, is much better even after we’ve both done it about the same amount of time, but that’s a really fun thing. I’ve really been enjoying the, the bouldering piece.
[00:42:31] MARK THURBER: because it’s just sort of like, it’s a workout, but there’s such a built in Like meditative element?
[00:42:38] MARK THURBER: working on problems. And yeah, yeah. It’s just, it’s hard to
[00:42:40] MARK THURBER: think about that. Also, if bouldering is your thing, you’re probably a West Coast person, so that’s, that’s solved.
[00:42:45] ROSE MUTISO: Okay. Complete the sentence. The future of electricity markets is blank.
[00:42:50] MARK THURBER: Dynamic adjustment of demand and supply. So it’s, and it’s a world where people are more connected to how much energy they’re using and when and how, but we’ll have technologies that will make it so that process of being connected to that is not burdensome.
[00:43:12] ROSE MUTISO: Good one. All right. , next one. I get most excited when blank.
[00:43:15] MARK THURBER: I’d say I get most excited when I’m engaged in writing, honestly. And so the writing that I do for my work is engaging when I feel like I’ve come up with a new way of, of thinking about something through the writing process and then writing that I do outside of work just for fun.
[00:43:35] ROSE MUTISO: That’s super cool. , it shows in your writing, , which is always really, really cool and insightful. Okay. Final one. I want to learn more about blank.
[00:43:42] MARK THURBER: I think at its core, um, I think it’s wanting to learn more about other people and where people are coming from. I think it’s very interesting when we have so much polarization in this country, but I think in a lot of countries politically, just to try to understand on a deeper level where, where people are coming from and kind of the way that different people see
[00:44:10] KATIE AUTH: so Mark, last episode we talked to Kate Steele, who’s currently the CEO of Nithio. She finances off grid products, um, and is a long standing, uh, a colleague and friend of me and Rose. And she talked about how there’s a lot of reasons to be pessimistic about global energy right now. And a lot of reasons to be optimistic, whether you’re thinking about access or climate or all of the ways in which the energy world is changing.
[00:44:37] KATIE AUTH: And she’s curious, What’s your perspective on that? Are you optimistic about where the global energy system is heading?
[00:44:44] MARK THURBER: mixed. , and I think there are, there are things that make me optimistic and things that make me pessimistic. The thing. That makes the thing that always makes me pessimistic is it’s really hard to have climate rise above people’s more immediate concerns, and I totally get this and I think it’s just as a very natural that that that’s kind of an issue that if I’m facing.
[00:45:13] MARK THURBER: Personal economic challenges that, that those are always going to predominate. So it’s, I feel like it’s hard to really focus on, on climate and it just feels like all our climate advances policy wise always feel provisional. So, you know, okay. If in Canada, if there’s a change of government, does the carbon price go away?
[00:45:32] MARK THURBER: So, so that’s, those are the things that make me pessimistic. I think what makes me optimistic is. On a, I think one very specific technological thing that I think is quite interesting is I think the potential for remote sensing to make greenhouse gas emissions all over the world more transparent so that we can start to see, you know, I just think in 10 years, that’s a technology that could look very different how much we can see from satellites.
[00:46:03] MARK THURBER: I just feel like to the extent that we really can see where things are being emitted in, in real time. That doesn’t solve the problem. It’s still the challenge with climate change is it’s just such a hard problem because greenhouse gas emissions are so embedded in every aspect of of the economy.
[00:46:22] MARK THURBER: But I think that’s one that that makes me more optimistic. , and I also think there will, there’s continues to be a lot of experimentation on integration of wind and solar and, and I think we’ve already got gotten further than I thought we could get, , in terms of wind and solar shares of generation, , without massive hardship and, and with less cost than I might’ve expected.
[00:46:50] MARK THURBER: So I think that’s an area where we’re continuing to surprise ourselves in, in ways that, that we can do this integration in a lower cost, more reliable way. And, and I think that will, will continue. That will continue. and you know, I’m, I’m just hopeful that, that people can start to make a turn towards, uh, coming back together and understanding each other better on these things and just, just have improving the quality of, of the dialogue.
[00:47:18] ROSE MUTISO: So, so on balance, optimistic, maybe.
[00:47:21] MARK THURBER: Yeah, yeah, I think I’m balance optimistic. I mean, I think there, and I think there is a lot in the technology that will, I mean, I think what technology does in the climate space is it makes the economic and political problems easier, um, if, if you have better technologies, cheaper technologies, and, and I think we’ll, we’ll keep making progress on that.
[00:47:44] KATIE AUTH: That’s great. And that’s a great, thoughtful place to end. Mark, thank you so much for being here. We loved having you and learning from you as always.
[00:47:51] ROSE MUTISO: Thank you, Mark.
[00:47:53] MARK THURBER: Spending time with both of you.
[00:47:55] ROSE MUTISO: Always, always, always a pleasure. That’s it for today’s show. High Energy Planet is a production of the Energy for Growth Hub, matching policymakers with evidence based pathways to a high energy future for everyone. Find out more at highenergyplanet. org. at EnergyForGrowth. org and share your questions and thoughts with us at EnergyForGrowth.
[00:48:18] ROSE MUTISO: x and LinkedIn.
[00:48:19] KATIE AUTH: If you liked today’s episode, please be sure to rate and review the podcast and tell a friend about us. Audrey Zenner is our senior producer. Join us next time for more High Energy Planet.