Jigar Shah is currently Director, Loan Programs Office at US Department of Energy where he has $40B of authority within manufacturing, innovative project finance, and tribal energy. But that’s just the most recent chapter in his career as a clean energy leader. Shah sat down with CleanTech Talks for a broad ranging discussion the practical challenges of transforming the US grid in line with 2035 targets.
Jigar’s modus operandi has been about commercialization of technology. When he was young he was fascinated about both nuclear and solar being commercial offerings, yet still being relatively stagnant. He subsequently went down the path of commercializing solar. A key thing he learned was that it didn’t help to villainize anyone in the effort to bring low carbon electricity to market. Instead, it’s necessary to identify the barriers to commercialization and slowly break them down. However, his bullishness on nuclear was likely a necessary prerequisite for a senior role in the US DOE, as about half of its budget of $88 billion is devoted to the technology, something that surprised a previous Secretary of Energy who thought it would be almost entirely fossil fuels.
His background in mechanical engineering leads to a certain humility about what it takes to build infrastructure that lasts for a hundred years. We agree that Silicon Valley missed the necessary slowness of essential electrical infrastructure transformation. From Shah’s perspective they leaned too heavily on the comparison to running fiber, but missed a few key factors, the first being that the costs of under-grounding fiber are inconsequential compared to the expenditure on the end product, but have much larger impacts on the bottom line for electricity.
Another factor is that while HVDC alleviates many of the challenges related to its alternating current alternative, including much lower resistance when under-grounding it and greater capacity, it isn’t in the same ballpark as laser multiplexing increasing fiber capacity by orders of magnitude.
Extra costs for under-grounding transmission, similarly to pumped hydro, are now starting to be considered within the systems context, instead of just as a component cost. In the US, while others have pointed me at the regulatory burden for pumped hydro, Shah doesn’t see that as a barrier. Everyone now acknowledges the systemic value, but the markets don’t enable a reasonable return with rate-based adjustments. There’s a clear value proposition in the HVDC mesh being considered for the US northeast, especially for drawing offshore wind energy onto shore and transmitting it efficiently in the region, but who pays for it?
For the $8.25 billion in loans the loans program office has available for transmission, resilience is a factor, as their mission statement says. But the DOE only funds requests brought to them, it doesn’t create new projects. Public service commissions (PUCs), if they could, would bring only the cheapest transmission alternatives. However, over-grounding transmission through wildfire areas isn’t an option now, so proposals like that aren’t being brought forward.
From Shah’s…
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