An Open Letter to Tech Workers
To my fellow Silicon Valley engineers working at Facebook, Google, Apple, and other tech giants — I’m going to tell you something you may not want to hear. IT’S TIME TO MOVE ON. Allow me to explain.
Sure, you’re paid well, and pampered by your employers with holistic personal care. But are you truly fulfilled with your work, in a Steve Jobs-ian sort of way, connecting to an inner yearning to make a difference in the world? Yes, you can go from zero to millions of users in an instant with catchy online media enveloped in a frictionless user experience. But deep down at the cellular level, however, are you satisfied that you’re putting your talents to meaningful use?
Let me offer an alternative.
In the U.S., energy expenditures across transportation, industrial, commercial, and residential uses total more than $1 trillion dollars annually. It is a colossal market experiencing seismic shifts. Check out a few data points.
The International Energy Agency (IEA) publishes yearly forecasts for energy supply and demand titled World Energy Outlook. The content is a bit dense for the casual reader, and I’m including here an elegant synopsis from Carbon Brief. I want you to pay attention to a chart near the end, describing IEA’s annual forecast for solar adoption going back to 2000. Every year, IEA has underestimated adoption — not just by a little, but by orders of magnitude. The reality is that energy generated from solar is priced at well below 2 cents per kWh. This pricing includes building a brand new power plant from scratch, hooking it up to transmission lines, and maintaining it for the life of the plant. As a comparison, the marginal cost of coal dug out of the ground (excluding the power plant itself) is double at 3.2 cents per kWh, and natural gas is doubled that again at 6.5 cents per kWh. Solar is the clear winner — and the forecast on future pricing is ever downward. You see, with renewable energy like solar or wind, there is zero marginal cost to the fuel. There is no digging or drilling involved. Just passively collecting what mother nature so generously provides without much effort.
Now let’s look at another technology — what I spent a decade of my life working on at Green Charge Networks prior to AMPLY Power — lithium ion battery storage. During that period of time, the price per kWh for storage dropped by almost 10X. Here is the graph from BNEF:
Cheap storage enables a whole new world of possibilities — cool electric cars, drones, cameras, and much more. But for the $1 trillion dollar annual energy market, you now have a storage mechanism to smooth out the intermittency created by the ultra-cheap (but choppy) renewable power source. All we now need is a hard problem to solve to get engineers excited. Luckily, there are plenty of those in the energy space — here’s a quick example.
Hard Problems
Electric utilities publish what is called a “Load Duration Curve” of utilization on their distribution grids. It represents the numbers of hours the grid experiences annually at a certain power throughput level. Below is a typical annual curve from Con Edison of New York, powering the 5 New York City boroughs:
This graph tells you that out of 8,760 hours in a given year, Con Edison’s grid experiences 7 hours above 13 GW, 36 hours above 12 GW, and 156 hours above 11 GW. Nonetheless, Con Edison spends billions of dollars every year maintaining and upgrading its infrastructure to accommodate for the peak load, and it’s all hardware-based. In fact, there are so-called gas-fired peaker plants that only operate less than 100 hours a year for the express purpose of meeting these peak demands. Using Con Edison’s benchmark of 11 GW, those 156 hours (or 1.8% of all the hours in a year), cost a single electric utility several hundred millions if not billions annually to maintain and upgrade. And there are 3,300 electric utilities in the U.S.
You begin to see the wastefulness (and the opportunity!) that exists in energy. What is missing here to make things efficient? In a word, SOFTWARE. You see, for over 100 years, the electric grid has been a brute force, hardware-centric system. Grid operators pile on hardware redundancy and safety factors to ensure reliability. But this approach is starting to break down, not only because of the untenable cost, but the hardware itself is proving to be unreliable in the era of climate change. The current approach simply cannot keep up with wildfires, heatwaves, and future demands — CAISO experienced a Stage 3 Emergency in Aug 2020, the first time in almost 20 years going back to the days of Enron market manipulation.
Software is a key piece of the puzzle — it has drastically improved efficiencies in other markets like education, medicine, and workflow automation. In energy, software carries the promise of pumping many more kWhs through infrastructure already deployed. And boy, do we need those kWhs.
The opportunity
I had previously written about the “why” of vehicle electrification. Since that time, there has been a massive announcement in this space every week by the week. Most recently, New York State announced $750M for to upgrade EV infrastructure. Amazon acquired Zoox. Lyft committing to 100% EV by 2030. California implementing Clean Truck Rule to deploy zero emissions trucks, and Newsom’s executive order to phase out gasoline powered vehicles altogether. All of this in the span of a few months in a middle of a global pandemic! Needless to say, momentum is building, and it’s only accelerating. And let’s say you’re not into cars. I serve on the board of a non-profit called New Energy Nexus, where we aim to create 100,000 cleantech startups by 2030 all around the globe, disrupting markets in energy, agriculture, water, and mobility. AMPLY is part of Elemental Excelerator’s cohort 8, where we have similar ambitions for doing well while doing good. AMPLY is a portfolio company at Los Angeles Cleantech Incubator (LACI) and Advisory Group Partner at LACI’s Transportation Electrification Partnership (TEP). Obvious Ventures, Congruent Ventures, and many more sustainability-focused VCs have portfolio companies with novel solutions to the climate challenge. We are all hiring. Collectively, we have the ambition to transform Los Angeles, Silicon Valley, and many other tech hubs around the world into climate solution centers, and to re-deploy talents towards the most pressing challenges of the day.
I’m not going to promise you’ll get rich fast. We are not going from 0 to millions of customers in 2 years time. AMPLY deals in 480V, 3-phase power and hundreds (or thousands) of amps at a time. It’s not the type of job where you sit quietly at a desk all day long. We are creating, innovating and improving on physical infrastructure that’s been in place for more than 100 years in industries highly resistant to change. It’s hard work, and it’s soul-satisfying.
If you want to leave your mark on the world, the cleantech boom is the place to be.
