Imagine for a moment that instead of Republicans and Democrats, we had two different political philosophies: the Dynamists and the Stasists.
Dynamists put their faith in experimentation, ongoing competition, and iterative evolution towards ‘the good’ without knowing exactly how we’ll get there. They value ongoing progress but can come off as a bit simplistic when pressed on the details of how their policies will lead to flourishing.
By contrast, Stasists seek stability and order—either through a return to a previous ideal period, or through technocratic control of ongoing change—in pursuit of the ‘one best way’ to organize society. They often deride the Dynamists as naive and out of touch with human nature, believing that without rigorous control we risk spiraling into chaos.
Now, which best describes the culture of the electric system?
No points for guessing: the mindset of most electric utilities and regulators is deeply Stasist and technocratic.
Arguably, this is for good reason! The traditional grid hierarchy—large central generators and naturally monopolistic distribution managed by a central operator—practically begs for stability and top-down control. The alternative risked grid collapse or rolling blackouts from mismatches in generation and load.
This centralized structure further bolsters calls for strong regulatory oversight. ‘How do we know this monopoly utility isn’t just padding its pockets? We need a legalistic process of regulatory oversight to protect people’.
Virginia Postrel, who first minted the Dynamist / Stasist framing in her 1998 book “The Future and its Enemies”, said as much in pointing out that:
[Stasist technocrats offer] complex regulations to make the world simple. Through a million tiny, specific rules, decreed and adjusted to cover each new situation as it arises, they promise to mold the future to the one best way. (p. 113)
But now, the world is changing, and the Stasist paradigm is struggling to keep up.
Load is growing again, often in hyperlocal pockets that strain both generation and distribution infrastructure1. Generation is becoming more distributed, with new energy technologies like solar PV and batteries upending the traditional logic where large central generators were most efficient. System complexity is growing rapidly.
The embedded Stasist paradigm, with fossilized layers of process and regulation, has made it hard to respond to changing customer needs and to make use of new technologic affordances. The result is slow change and rising costs.
The original technocrats simply wanted to manage change. But the apparatus they created provides a million ways to stop it altogether. (p. 23)
If this is the status quo, and it isn’t good enough, how can we inject more dynamism into the system and accelerate the energy transition?
Two recent conferences, the Progress Conference and DERvos, show what a Dynamist approach to energy could look like, one that emphasizes experimentation, broad rules, and competition to accelerate progress.
This essay is cross-posted from: https://cleanenergyreview.io/p/the-case-for-energy-dynamism
Progress Conference 2024: Thinking Big
Hosted at the beautiful Lighthaven campus in Berkeley, the Progress Conference was far-reaching and exploratory, ranging across biology, urbanism, AI, energy, and regulatory renewal (and weather, self-driving cars, mechanism design, religious-hued sci-fi, and much more). Virginia Postrel herself even gave a talk.
A big part of the magic of the event was the architecture of Lighthaven campus itself. Comprised of multiple buildings and in-between nooks and courtyards2, the space itself felt ambition-expanding in its allowances for unscripted side discussions (that sometimes expanded to 40+ people).
Within this constellation hung interviews by Dwarkesh Patel with Tyler Cowen and Patrick Collison—the two progenitors of the ‘progress studies’ movement with their 2019 Atlantic essay “We Need a New Science of Progress”—where they shared their perspectives on progress.
Interview b/w Dwarkesh Patel and Patrick Collison, Progress Conference 2024
But what can this tell us about energy in the more literal sense?
Within the multiple talks on energy abundance and related topics (e.g., permitting), discussions at the event demonstrated a key Dynamist pillar: allowing for experimentation / alternative paths to progress, and a forbearance on specifics. To be more concrete: where disagreements existed, people mostly avoided saying “X won’t work”, in lieu of things like “we think Y is most likely to work because of A and B”.
This is important, because the bear (pessimistic) case for something almost always sounds more intelligent than the bull case. One can sound very erudite and wise in describing why something won’t work. It sounds deeply naive to say “we’ll figure it out!” even if this latter attitude is what drives progress forward.
The benefit of this forbearance was amply demonstrated in a conversation between Casey Handmer (founder of Terraform Industries and probably the most well-known solar maximalist working today) and Bret Kugelmass (founder of the fission startup Last Energy).
Here were two men whose companies and professional reputations were tied to their chosen technologies, and who might be expected to have trenchant criticisms of the other’s approach. But in the event, they spent most3 of their time agreeing on the importance of energy abundance and the multiple paths to get there.
While one might be enamored of one technology or another (apparently lots of men love nuclear!), as a society we shouldn’t actually be trying to decide on the “one best way” to create energy abundance. The future of energy is big enough for multiple technologies to win, and it will likely look at least as diverse as it does today.
The US is served by a wide variety of electric generation methods Source: EIA
We actually need to run the experiment and see which new approaches prove most fruitful (and where).
DERvos 2024: Making It Happen
If the Progress Conference focused on the potential for radical transformations over the next 5-25 years, DERvos was decidedly more focused on the 1-5 year future of energy.
Held at the Brooklyn Navy Yard, the event brought together a growing slice of the electric industry focused on distributed energy resources (DERs) like residential solar/storage/EVs and commercial & industrial microgrids (along with the software to power all of it).
The attendees were mostly those working in the trenches of the energy transition, looking to deploy, deploy, deploy their solutions into the market today (or very soon). The vibe was very much: ‘It is still early; if you let us go faster, we can do so much more’.
Duncan Campbell (Scale Microgrids) and James McGinnis (David Energy) at DERvos
Across multiple panels, much of the discussion centered around two other key pillars of Dynamism: the value of broad rules and competition.
For experimentation and exploration to be effective, people and businesses need 1) to be allowed to do things, and 2) to get feedback on their efforts (through competition).
Both are currently challenges in electricity markets across the US, where complex regulatory constructs and incumbent monopolies often block new types of activity. Even where new things are allowed, a lack of price signals and competition slows feedback and hampers the ability for better solutions to win out.
DERvos’s closing regulatory panel drove this point home, with Jacob Mays’ call for “full-strength prices and mandatory contracts4” to clear the way for innovation in electricity markets.
The logic here is that electricity is a unique commodity, and much of the market is structured around serving peak demand.
In practice, the marginal megawatt on the hottest afternoon of the year is way more valuable than on a normal day. But in many places, that value is not properly priced5. With much of the innovation and progress in electricity related to new intermittent generating tech (e.g., solar PV), battery storage, and EVs, this is a huge block on forward progress.
Where broad rules and competitive markets exist—in Texas for example—the introduction of new services and technologies has been rapid. Texas leads the country in deployment of renewables, and is seeing significant innovation in its retail energy markets. As a result, Texas captured outsized mindshare at the conference as a hopeful portent of what might be possible in other jurisdictions.
But where new entrants can’t participate in key parts of the market, then progress will be underpowered where it occurs at all.
The Path Forward: Embracing Dynamism in Energy
So where does that leave us?
A few key pillars stand out:
There is no “one best way” to produce electricity and create energy abundance
Broad rules are needed to create space for experimentation and new approaches
Competition is welcome, and can provide feedback on the best approaches
Embracing each of these Dynamist tenets would provide a significant boost to progress in energy, even if it is not obvious exactly where they’ll lead. We need to ease our grip on the Stasist paradigm that has become entrenched in the electricity sector, one where deterministic management seeks to minutely control the system as a whole.
The grid is becoming too complex, the requisite knowledge too dispersed to be solely planned and controlled by technocrats (whether they be public utility commissions or utility executives). Prices and competition can surface dispersed information and incentivize the best approaches more ably than any single person or body.
This may sound abstract and idealistic, but even incremental movement in a Dynamist direction will have an outsized impact on the cost and effectiveness of the grid.
The electric system will continue to require control and management beyond most other industries, but weaving in more of the Dynamist spirit will help accelerate progress towards a more abundant energy future.
Other coverage of the Progress Conference:
Dean Ball - “Be Embraced, Ye Millions”
Scott Alexander - Notes from the Progress Studies Conference
Kevin Kohler - Americans are from Musk, Europeans are from Greta
Packy McCormick - What do you do with an idea?
Lynne Kiesling - Progress and Its Enemies
Noah Smith - How long can we sustain economic growth?
Even if a region has the spare generation to cover a 100 MW datacenter or a 10MW EV charging depot, it’s likely there will be grid constraints in actually delivering the necessary power to the right place.
Reminiscent of the former bed & breakfast that forms the core of the venue.
Once we got past the headlines, the ‘disagreements’ were as much about focus areas as end-state predictions. There is an opportunity to use cheap, intermittent solar power to produce abundant raw materials (think: fuel, water, metals). This is distinct from the potential to use nuclear to provide dispatchable power for intermediate and end uses (e.g., providing power to homes and businesses), particularly in places like northern Europe where solar is less viable. These are not exclusive, both can be true.
Mandatory contracting is one way to avoid failures like Griddy, a retail energy provider in Texas that directly passed through wholesale prices to its customers. As part of this, Griddy didn’t procure energy ahead of time for its customers, leaving it fully exposed to price swings. Griddy went bankrupt after Winter Storm Uri drove large spikes in wholesale prices which it wasn’t able to pass along to consumers.
In general, industrial customers are more exposed to wholesale price fluctuations, but many residential customers still have flat or tiered rate plans that don’t distinguish when in a month that energy was demanded (creating a large mismatch between the value and price).