Industrial Talk is onsite at DistribuTECH and talking to Jim Thomson, Vice Chair - Power, Utilities, Renewables with Deloitte Consulting about "Smart strategies for decarbonizing the power industry and grid investments". Here are some of the key takeaways from our conversation:
Decarbonizing the power sector and industry professionals' innovations.0:03
Scott Mackenzie interviews Jim Thomson, Vice Chair of Deloitte Consulting, at Distributech Orlando.
Jim reflects on progress in decarbonizing the power sector, noting increased momentum since 2022.
Topics discussed in 2022 included decarbonizing the world and stopping global warming, with a focus on 2030/2035 decarbonized grid.
Decarbonization challenges in the power industry, including grid investment and permitting issues.3:55
Jim: Decarbonizing power industry by 2050 requires 3x increase in renewable generation.
Regulators face challenge of balancing consumer affordability with decarbonization goals.
Jim: Utility companies need more investment in grid and clean energy sources, but regulators face challenges in increasing customer rates.
Jim: Historical permitting and interconnection issues hinder offshore wind projects, causing developers to face financial challenges.
Renewable energy, battery storage, and supply chain resilience.9:08
Jim discusses the tipping point for electric vehicles in the US, mentioning the need for increased electrification and new market models.
Jim highlights the potential for battery storage technology to address grid issues, with advancements in battery manufacturing and new storage technologies emerging.
Jim discusses the challenges of relying on traditional supply chains for rare earth elements in renewable energy technologies.
Jim notes that the transition to renewable energy is happening rapidly and requires nimbleness to keep up with changing technologies.
Power grid modernization, renewables, and energy storage.13:59
Scott MacKenzie and Jim discuss the evolution of advanced metering infrastructure (AMI) and its impact on the grid.
They highlight the need for utilities to manage holistically complex grids with multiple generation and consumption points through distributed energy resources management systems and advanced distribution management systems.
Jim highlights the complexity of power delivery and the importance of reliable, affordable, and secure power.
Jim and Deloitte work with clients across various industries to support them in a time of change and transformation.
Scott MacKenzie: "Connect with Jim for knowledge and sage advice in power, utilities, renewables."
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Welcome to the Industrial Talk podcast with Scott Mackenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work foods. And let's
00:21
all right, once again, welcome to Industrial Talk the number one industrial related podcast in a universe that celebrates industry professionals all around the world. You are bold, you are brave, you dare greatly you innovate, you collaborate, you solve problems, you make the world a better place and we celebrate you here on this particular platform. All right, we are broadcasting on site DISTRIBUTECH. Orlando, Florida is the location. And because I work in the salt mine, I don't it goes way or It's big. It's big. And it's exciting. And it's it's just a one. All right. He's a legend. Right. Thanks, guys. Right off the bat. He's a legend. Jim Thomson. He is the vice chair at Deloitte Consulting. Let's get cracking with the conversation. All right.
01:15
It's good to be here. Scott.
01:17
Good to see you again. Man. I was so excited. I was so excited when I saw your name pop up in the in my inbox yesterday. Because you you you knocked it out of the park, just FYI. You know, if this whole Deloitte thing doesn't work out for you, you just you just you just sort of migrate to this.
01:36
We'll talk later.
01:39
hly data because we met in in:
01:50
normal timing of February in:
02:22
COVID incident, sort of serves as a speed bump in the progress of what's taking place within the energy space.
02:32
Yeah, I would not too much. I mean, the one thing about about the energy industry and the power industry in particular, Scott is, you know, there was no work at home for two years with COVID. For the most part, right? Field workers had to be out in the field power had to keep electrons had to keep flowing around the grid. So it kept going, I'll say that the obvious side of it was manufacturing of the gear to help with the energy transition. Obviously, supply chain issues with those are words we didn't all know, before COVID. Now everyone knows the word supply chain issues. So those did slow down to some extent. But for the most part that I was still on the ball, and thanks, still advancing forward and continue advancing forward through this year. What
03:08
were we talking about back in:
03:28
et us up to a point where, by:
04:18
here's, here's my challenge. And maybe it is way above my paygrade, which, quite frankly, coffee is almost way above my paygrade. But the the efforts to decarbonize when I look at the asset base that exists in utilities, and just there's a ton of thermal Yep. Jonathan, how do we effectively decarbonize what I why I think the time is so aggressive, I don't, I don't know again, coffee is above my paygrade.
04:49
stated, look, the fact is by:
05:55
The regulators are on. I mean, do you think that they're nimble enough to be able to? To see it? Yeah, experience? I mean, since
06:04
I know a couple of regulators, I'm going to give my my truthful answer. And they would, they would back me up on this, I think, you know, regulators are in a spot there, their primary role is to look out for the consumer, right? For the most Exactly, they need to make sure that consumers are able to afford electricity or gas or water to their home. But just talking about electricity here at this conference, I think there's a natural two sides of a coin. In order to get to where we need to with decarbonization, you need a lot more investment in the grid, and the solutions that control the grid. And, you know, whether it be wind or, you know, solar, obviously, and all the other potential generation sources that are clean green, you need that to do that, that takes money. How do utility companies get money? So customer rates? Yes, so, so regulators are in a little bit of a quandary, I put it right, because on the one hand, they know that the push for getting the planet to a better place is real. And they then they understand that, however, they can triple quadruple customer rates over the next 20 years to get there. So it's a natural thing. So that means how do you how do you do it, then you have to look at ways to bring more efficiency to the grid today, maybe take less cost to deliver the electrons that are available today. And in the future? There has to be ways that you can, you can I guess get to a middle ground and understand that it's not all just about building new assets. Right? It's about also how do we use those assets? How do we do energy efficiency for large buildings for customers to to have a, you know, the overall equation work? Because right now, the equations just a little wonky? That's my technical term.
07:35
I'll give you an example. A real life example, when I was a transmission lineman, and we were talking at that particular time in Southern California has the service territory is that how do we how do we re conductor our transmission assets? You know, what, they're having a conversation? That was some that was more more than five years ago? Let's put it that way. Don't ask me. They're still talking about that. Because we need to push we need we need more
07:59
we do we do. And I think that, you know, another challenge, obviously not an insurmountable challenge, but the historical permitting and interconnection to us. That's simply a problem, right? Because you have you see large offshore wind projects that were put in and propose, three, four or five years ago, that are coming up now. And the economics now for when it was proposed is upside down. And so developers, you know, offshore wind, just using that, as an example, developers have a hard time moving forward with the plan that the finances were put in place with certain assumptions five years ago, because the cost of everything has gone up, there's, you know, it's been a challenge with the length of the permitting process, getting projects to start in a reasonable amount of time, and then they're upside down out of the gate.
08:43
So with all this said, we see the challenge, it's so easy to find the challenges because it is a very dynamic dynamics, it's just those and how they interact and how they it's just very dynamic. What are some real tangible solutions that can be sort of deployed immediately.
09:07
So I do think that's when we think about and you know, we crossed the point in the US it was called the tipping point for electric vehicles right. So for EVs that it was always this this goal of if new sales of automobiles in the US cross that like 8% threshold, then you know, the stuffs getting real right as we say it and you need to start truly focusing more on electrification. So, that the options available even for just Evie and Eevee fleet electrification, imagine if you know a local company that does, you know, line work in, you know, fiber optic work into homes from one area wants to electrify their fleet, and they have 200 vehicles every night 200 vehicles are going to come to a depot and plug into the grid, right? You essentially need a new feeder, you need such a higher level of electrification. So that's not going to happen overnight. But what is happening is we're getting creative and how to provide that increase. Need in certain areas. So individual solar, there's companies that will aggregate solar pain to put solar on your rooftop, and maybe 50 of your neighbors with the agreement that you can use it, you can have the free electricity, but when we need it because of a grid issue, we're going to consolidate it, aggregate it and sell it back to the utility, right to avoid potentially brownouts. That's happening. It's happening now. So there's there's new market models that are coming again, this is this is new for everyone, right? So we're all looking at new models, I think also, the ability to look at the depot example I gave for a fleet. Well, if you're going to build a new depot for EVs, you can blanket it with solar put solar back, you can use, you can use storage technology to store it, because we all know that, you know, the the issue with wind and solar is if you have a one or two weeks with no sun and no wind, it's a problem, right? So you can store that electricity. Now the cost of storage on the grid continues to get more and more manageable for not only utility grade storage, but also for commercial buildings for organizations for anybody who actually wants to have clean energy stored to use it when it's needed. That's that's a battery battery. Yeah, sorry, battery storage. Yeah, that's fine. I just wonder are other storage technologies? But batteries? The predominant one?
11:15
Are we getting to a point where if if we can begin to store there's there's a lot of news that exists in the world of battery manufacturing? Are we making inroads into improving that type of ability to manufacture? Because we are it's all storage? I get it? We are
11:38
I think one of the challenges in a lot of these technologies, be it solar or battery storage is the availability of rare earth elements? Yes, that are required. Right. So a lot of these historically come from parts of the world that right now have issues. And it's a little harder to depend entirely on those supply chains. You don't want to necessarily in our country here in the US, you know, the idea is to somewhat have more of a domestic supply chain where you can count on component parts, rare earth elements for what you need to build these to build these assets. Right. And so there is focus on a lot of traditional since a lot but there's a number of traditional generation facilities as they're retired, they're turning them into wind turbines, facilities, or turning him into battery component manufacturers, right. And so looking at changing the supply chain to not be beholden to one particular source for everything you need. But look at having a broader ability. That way, you don't run into just everything stopping if your one supplier has an issue politically or something else in the world. And if and if
12:40
you're at a point where we have to have 3x DEP,
12:42
here. Again, we're talking by:
12:51
it is and again, it's it's one of those you have to Stace, you have to be so nimble, because it's changing so rapidly. And we were at power Gen, which is the sister of right, yeah. And a lot of conversations around type of green fuels to feed these thermal units and being able to deal with that. It's, it's fascinating to me, yeah,
13:21
y with the Ara grants back in:
13:59
It's nothing.
14:00
It's nothing
14:01
I remember I remember vividly when we were talking about smart metering at that particular time. And and it was it was like, No, you mean you can just sort of pull that information from that meter Yep. And then be able to doubt it then it does this and now then you can do it. Yeah, no way. Yeah, it's
14:18
about that, that that was got:
15:02
to your point, if we're going to try to get into that transition that where we need to be that carbon neutral, that is a, an efficiency conversation, and you need all of these unique special
15:18
the idea now is you will have:
16:18
to a system operator, there was the it wasn't the ISO at that particular time it was it was just, you know, here we are managing supply and demand and it was pretty straightforward. Turn up your you know, your output over here, then all of a sudden, we start talking about what we're talking about today. And as a system operator, I don't know how they do it. I don't I
16:40
regulations coming in. So for:
17:15
gonna hear people complain, you know, let's say I'm a manufacturer, let's just say I'm, I'm Scott Mackenzie homeowner. And if my lights flicker, and it causes me issues, and I see that dark on light, or my my clock flickering at me, that bothers me. 100% 100.
17:34
So safe, reliable, affordable, secure power is everyone when we walk in the house in different parts of the world. Again, we take this for granted, we are blessed in North America, in the US, we can walk in the house and you expect the lights to come on parts of the world where I go, if you lose power, it might be out for a week, two weeks more. And we get mad if we miss like five minutes of the local football game Tampa Bay Buccaneers Go Bucs. So you know that that's the world that we live in. But those are the expectations that the excellent delivery of power companies have given us. They've made us OSU it is complex. And every day when you flick on that switch what it took to get that electron to be right there. It's amazing. If we take it for granted, we take it
18:14
for granted, you're absolutely spot on. But what are you, let's say you and Deloitte are focused on specifically, what are you sort of what's what's passionate for you right now?
18:26
Yeah, I think a big part of what we do I mean that, you know, we have the four businesses, obviously. So we have consulting, tax audit, what we call risk and financial advisor, I think across the board, it's it's working with our clients and supporting them across all those businesses at a time when their journey is in turmoil in a good way, right. And the clients across the board or clients don't need us when things are just going just kind of steady state. They need us when things are going really well. Or hopefully not as often. But if they go badly, but right now, things are going well. It's a time for change. So we need to be part of that change without so it's just a it's an exciting time to do
19:05
you guys need to be the Sherpas. Yeah, well run with it. Well said, Sherpa, because like it because it's like I have a problem. And this is so dynamic. I still have to carry on with my business business.
19:18
I got to do that. Yes. 100%.
19:21
Every morning I get on the internet saying this stuff. Yep. You know, that's so with that said, Jim. Scott. How does somebody get a hold of you? Let's say they're they're really intrigued with this particular conversation. Yeah,
19:34
please do through through obviously Deloitte.com You can go down to the industries link and find me on their email contact info, not my home address, but they'll find me.
19:47
You never disappoint. Thanks, Scott very much. Now for to his name is Jim we're going to have all the contact information for Jim out on Industrial Talk. So if you're not, he's a musket. He's a Sherpa. As you can tell conversation. Thanks. He's touching all points within this, this really dynamic environment. All right, we're broadcasting from DISTRIBUTECH here in Orlando, Florida. We're gonna have a lot more conversation coming from this wonderful event shortly. So stay tuned.
20:15
You're listening to the Industrial Talk Podcast Network.
20:25
Jim, that is a connection that you must have Jim, connect with Jim. It's a bumper sticker. Now. I claim it, it's all Industrial Talk, connect with Jim, you're not going to be disappointed. The guy brings just this. I mean, let's just say a semi full of knowledge and sage advice within the world of power, utilities, renewables, connect with Jim, mark my word you will not be disappointed. Industrial Talk is here for you industrial professionals all around the world. I say it all the time. We are building a platform, an ever expanding ecosystem that celebrates you. Tell your story on Industrial Talk, be a part of this growing community. We're about education, not collaboration, but about innovation, and how all that works together to help you succeed. Be a part of Industrial Talk, be bold, be brave, dare greatly connect with Jim, change the world. We're gonna have another great conversation shortly. So stay tuned.
