Texas energy grid challenges and solutions with Base Power’s Justin Lopas | E1960

Base Power’s Justin Lopas joins Jason (0s)

• Justin Lopas, co-founder and COO of Base Power, joins Jason.
• Base Power is a startup based in Austin, Texas.
• Energy use has increased over time.
• There's a direct correlation between a country's GDP per capita and its energy availability.
• Increasing energy availability can lead to increased human prosperity.
• Energy is fundamental to various industries, including AI, transportation, agriculture, and manufacturing.
• Base Power aims to put a battery in every home to prevent power outages.
• This doesn't require installing solar panels on the roof.

Discussion on Texas energy grid and recent power outages (2m16s)

• Texas power grid fails frequently.
• A recent storm caused power outages for over a million people in Houston.
• Texas grid is isolated from the rest of the US, so all energy consumed in the state must be generated within the state.
• Texas grid faces challenges due to weather and increasing volatility of supply from renewable generation.
• Texas has the most renewables on its grid compared to any other state, primarily due to its location in the wind corridor and the sun belt.
• Texas has a lot of solar potential in the western part of the state and a lot of wind potential in the southern part of the state.

Deregulated energy market in Texas (5m34s)

• Texas has a deregulated energy market, allowing for a faster and more free market approach to electricity generation.
• The market is split between those who generate electricity and those who deliver it, enabling more free market principles and the integration of cheaper renewable energy sources like solar farms.
• Building solar farms has become cheaper than building or maintaining coal plants, making renewables a more economical option.
• Even companies in the oil and gas industry are investing in renewable generation due to its cost-effectiveness.

How the Texas grid works and the role of ERCOT (7m40s)

• ERCOT (Electric Reliability Council of Texas) is a nonprofit entity responsible for managing the Texas grid.
• ERCOT does not own generation, poles, wires, or sell electricity, but it operates the grid and a marketplace for energy trading.
• ERCOT acts as the New York Stock Exchange of energy in Texas, matching buyers and sellers and handling financial settlements.
• The grid has three distinct areas of ownership: generators, owners of poles and wires (regulated monopolies), and retailers who sell power.
• Companies that own the poles and wires cannot own assets that generate electricity or sell electricity to customers, acting solely as carriers.

OpenPhone - Get 20% off your first six months (9m35s)

• OpenPhone is a business phone service that simplifies business communications with an easy-to-use app.
• It offers a shared phone number feature, allowing multiple employees to field calls and texts to a single number.
• OpenPhone is the number one rated business phone on G2 for customer satisfaction.
• Twist listeners can get an extra 20% off any plan for the first 6 months at openphone.com/Twist.
• OpenPhone can port existing numbers from other services at no extra cost.

Issues with the Texas energy system, power outages, and comparison with California's energy issues (10m50s)

• Texas leads the nation in power outages due to its high reliance on intermittent renewable energy sources like wind and solar, as well as an aging infrastructure that has not kept pace with population and energy demand growth.
• The cost of delivering electricity has increased while the cost of producing power from renewable sources has decreased, making batteries a cost-effective solution to reduce strain on the grid during peak times and lower delivery costs for consumers.
• Batteries can balance the grid by storing excess solar energy during the day and discharging it during peak demand in the evening, addressing the "duck curve" phenomenon and reducing the need for the entire grid to be sized for peak demand.
• Air conditioning and the shift from fossil fuels to electricity for transportation and other uses are significant contributors to peak demand in Texas, and the grid does charge dynamically with higher prices during peak demand periods.

Dynamic grid pricing in Texas (20m4s)

• ERCOT (Electric Reliability Council of Texas) operates the Texas energy market.
• Prices change every 15 minutes based on supply and demand.
• Prices can fluctuate significantly, as seen in a recent example where the price increased 12-fold from $7 to $87 within a day.
• Charging batteries during off-peak hours (1:00 AM - 6:00 AM) can save consumers 90% compared to peak hours.
• Prices are driven by supply and demand in a free market.
• The blue line represents demand, the purple line represents committed capacity (supply).
• When demand and supply get close, prices spike.
• Recent events showed demand and supply touching, leading to an overload condition.

ERCOT's procedures during overload conditions and the role of batteries in grid resilience (23m8s)

• ERCOT asks utilities to shut off power during overload conditions, similar to rotating outages in Northern California wildfires.
• Batteries can increase supply and reduce demand by being placed at the edge of the grid, on the home.
• This can widen the gap between supply and demand, resulting in a more resilient grid.
• Batteries are chosen because they can both increase supply and reduce demand.
• The business model involves selling batteries and installing them in homes.
• The cost of installing batteries in an average 3,000 square foot home in Texas is not specified.

Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain (25m39s)

• Base Power offers a unique business model where customers pay a flat monthly fee for energy and receive a battery for backup power during outages.
• The battery costs $2,000 to install, which is significantly cheaper than purchasing it outright.
• Base Power retains ownership of the battery and manages all permits, billing, and maintenance.
• The flat fee is made possible by the battery's ability to smooth out demand and supply fluctuations, allowing Base Power to bid energy into the market more effectively.
• Customers' behavior doesn't change much despite the flat fee, and provisions are in place to prevent abuse.
• Base Power sources batteries from various suppliers, not exclusively Tesla's Powerwalls.

Cost comparison with Tesla Powerwalls (30m40s)

• Base Power is developing a user-friendly, stackable home battery unit designed to withstand Texas heat and serve as the home's interface to the grid.
• The unit can power a 3,000 square foot home for approximately a day and protects customers from 97% of outage hours.
• Unlike generators, the battery-based system can turn on instantly, preventing disruptions during activities like watching football games or being on Zoom calls during power outages.
• Base Power's Justin Lopas discussed challenges and solutions related to the Texas energy grid.

Lemon.io - Get 15% off your first 4 weeks of developer time (36m9s)

• Lemon provides pre-vetted and experienced developers for hire, streamlining the hiring process for startups.
• Base Power offers a cost-effective energy storage system comparable to multiple Powerwalls, with an incentive to maximize efficiency and minimize installation costs.
• The batteries are charged during low-cost periods and discharged during high-cost periods, optimizing energy usage and cost savings.
• Base Power considers usage patterns, pricing, and outages when determining the optimal charging and discharging schedule for the batteries.
• Working with planned communities and builders during construction can be more efficient and cost-effective than retrofitting existing homes.
• Base Power's battery storage system can be installed within a few days, subject to permitting, and comes with a one-year energy services agreement and a 10-year battery agreement that can be transferred or bought out.
• Customers can save 10-30% on their energy bills by using Base Power's system, which offers transparent pricing and outage protection compared to traditional retail electric providers.
• Base Power's Justin Lopas addresses challenges related to the Texas energy grid and proposes a solution involving virtual power plants (VPPs) to manage energy demand and reduce grid load.
• VPPs consist of interconnected distributed energy resources, such as solar panels and batteries, that can be remotely controlled to provide grid services.
• Base Power has installed 10 VPPs and is currently in beta testing.

Current deployment status, operational challenges, and regulatory challenges in the energy market (45m12s)

• Base Power, an energy storage company, is experiencing high demand for its battery installations in Texas and aims to scale up operations to reach hundreds of installations later in the year.
• Texas' deregulated energy market allows Base Power to compete based on product, service, and price, but local municipalities have the authority to permit battery installations, leading to variations in the permitting process.
• Permitting times can range from 2-3 days to 4-6 weeks, with larger cities often facing more challenges than rural areas, creating operational challenges for Base Power in managing customer expectations and ensuring timely installations.
• The company suggests improvements such as streamlined permitting processes and expedited options for trusted providers, as expedited permitting processes for renewable energy projects are not typically available, leading to wasted revenue opportunities.
• Base Power is working with municipalities to improve permitting processes for renewable energy projects, emphasizing the idea of expedited permits and treating renewable energy projects as a portfolio rather than individual cases.

Proposal for trusted vendor programs and preferred vendor status (50m32s)

• A trusted vendor program can expedite the permitting process for solar installations, benefiting both the community and the grid.
• Federal and state-level efforts are underway to standardize permit applications and support streamlined solar installations.
• Base Power's batteries use a newer lithium iron phosphate (LFP) chemistry, enabling longer lifespans and more cycles compared to older battery technologies.
• Battery prices are expected to decrease, and quality is expected to improve due to advancements in the automotive and stationary storage industries.
• Stationary batteries mounted to homes can serve as grid assets, ensuring backup power during outages and supporting the integration of renewable energy sources.
• Base Power plans to move into solar over time, but batteries are the current focus due to their societal benefits and grid needs.
• The energy generation mix in Texas is expected to shift from coal and natural gas to wind, solar, and some nuclear power due to economic factors.
• Batteries will play a crucial role in load balancing and flattening demand peaks, reducing the need for significant grid infrastructure expansion.
• Co-locating batteries and data centers near nuclear power plants could optimize energy utilization and reduce costs.

Correlation between energy availability and GDP per capita (1h3m41s)

• There's a direct correlation between a country's energy availability and its GDP per capita.
• More energy availability leads to higher GDP per capita.
• Increased energy availability is fundamental to increasing human prosperity.
• Energy availability is a key factor in the advancements of AI, transportation, agriculture, and manufacturing.

Solving the energy problem to boost human prosperity (1h4m19s)

• China is heavily investing in nuclear energy, with 54 active units, 24 under construction, and plans for 300 more.
• The world is transitioning away from fossil fuels, except in limited cases.
• Founder Fridays is a monthly Meetup for Founders, where they discuss challenges and find solutions.
• Attendees can gain insights from experienced Founders, build connections, and receive perks like access to a Slack community and social media engagement.
• The next Founder Fridays event will be held on Friday, June 7th, and registration is required.