Strange allegiances in the solar energy world: June 17, 2018 Snippets
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This week’s theme: checking in on an odd saga happening in the Solar Energy industry. Plus Syapse introduces their new Precision Medicine best practices council.
In this week’s Snippets, we’re going to take a break from cities for a little while and check in on a story from a few years ago that had an interesting new update this past week. It’s a story full of great themes: Elon Musk and Warren Buffett, cheap solar energy, local backlash to tech disruption, and the struggle between centralized and decentralized network design. (In all seriousness, I can’t think of too many stories that check off that many boxes.) And, somehow, it’s a story that’s escaped the tech world’s general consciousness. So this week, we’re going to take a look at what’s been going on.
You may remember Elon Musk and Warren Buffett beefing a few months back around whether or not business moats still exist in the 21st century (which was an interesting topic on its own), but a similar feud between them you might not remember started back in 2016, when Solar City faced off against NV Energy, an energy utility owned by Buffett’s Berkshire Hathaway. The debate concerned the small but quickly growing solar industry in Nevada, and originally concerned a thorny problem called Net Metering.
Net metering generally refers to a widely-adopted practice whereby customers who generate their own energy (from solar panels on their roof, for instance) are allowed to sell their energy back to the grid in times where they are generating surplus power. In other words, the electric utility is legally required to buy back the customer’s power, whenever it is made available, at some regulated rate. In some states, that rate is set at near the wholesale price of power (what utilities pay to power plants), but in most, it’s set at or near the retail price (what customers pay for electricity — which can be 5 times higher or more).
As you can imagine, both the environmental sector and distributed solar energy providers (e.g. Solar City, who has since been controversially absorbed by Tesla) are strong proponents of this rule: it encourages homeowners to invest in their own rooftop systems, since it helps customers realize a return on their investment much more quickly. The utilities, on the other hand, absolutely hate net metering, and for good reason. Granting customers the legal right to sell electricity back into the grid creates several problems for them: first, it makes balancing the grid much harder; second, the people causing the problem in no way pay for its resolution (which must be born by some combination of ratepayers, shareholders and taxpayers), and third, it opens the door to a very dangerous possibility called the “Utility Death Spiral”.
The Utility Death Spiral, as imagined and described a few years back, describes a hypothetical situation in which the price of rooftop solar becomes sufficiently attractive that large numbers of people start installing their own rooftop solar rigs, while still relying on the grid for power as backup at night or during peak times. This presents a big problem for utilities, who by law have to charge consumers per kilowatt-hour they consume and are mandated to provide service to everyone in their area: if large numbers of people move to distributed rooftop solar, their revenue will go down significantly, but their operating costs won’t go down at all (in fact, they might even rise, as grid balancing becomes progressively harder). This would force them to raise rates for their remaining customers, who would then become in turn incentivized to adopt their own rooftop solar rigs, perpetuating the problem in a positive feedback cycle (hence the term, ‘Utility Death Spiral’).
Warren Buffett warned about this phenomenon, along with other unintended consequences of decentralized energy production, as a potential threat to American energy production and security in his 2015 annual letter to shareholders. The counterpoint, which became adopted as “The guaranteed right to self-generate electricity”, was in turn promoted by distributed solar manufacturers like Solar City, arguing the counterpoint that decentralized energy production, not centralized regulation, represented the best path to true energy independence and security. (Sound familiar?)
The fight got batted around for a few years in Nevada courts and ballot boxes, as it collected all kinds of outside interest from hangers-on, all while the cost of solar energy continued to plummet. But something interesting has happened since that turned the Utility Death Spiral into somewhat of a moot point: the cost of large, utility-scale solar energy has fallen much faster than the cost of rooftop solar. Customers who want to purchase solar energy don’t really need to do it themselves anymore; they can simply wait for their utility to purchase solar power at bargain basement rates. And that’s exactly what’s been happening: NV Energy recently announced their intent to enter a power purchasing agreement to buy solar energy at 2.3 cents per kilowatt hour, the cheapest energy contract of any kind in American history. It appeared, for the time being, that Buffett’s model, and not Solar City’s, has won.
NV Energy 2.3 cent solar contract would set new price record | Gavin Blade, Utility Dive
But there’s a catch. In a twist of irony, the Right to Self-Generate Electricity crowd (led by Solar City) has found a strange ally. The Las Vegas casinos, led by Republican magnate donor Sheldon Adelson, along with other large power buyers in the state like Walmart, have found common cause with the rooftop solar crowd: they have mutual interest in seeking to deregulate the Nevada power market, inviting competition from outside states and forcing energy providers to compete on an open market. The strange alliance has managed to bring the issue to the ballot box, and Nevada voters (who are strongly expected to vote yes) may soon cast their ballots in favor of deregulating the Nevada energy market and breaking NV Energy’s monopoly on local power. Should they vote yes, NV Energy would no longer be guaranteed their sole position in the Nevada energy market, making them likely unable to make good use of the abundant surplus of solar energy now on the table.
So, we have an odd situation: the good news is that two large and well-organized sides are fighting over the future of energy, not between the past and future but rather between two different visions of a clean energy world that’s rapidly becoming real. That part is great. The strange aspect of it is that we have an energy utility committing to buy power at the cheapest it’s ever been in the United States ever, but only if voters don’t pass a law deregulating power purchasing. It’s funny how the law of unintended consequences shows up every time. But it also speaks to how dramatically the prices of solar energy have fallen: at the time when these laws were being drafted a few years ago, few utilities seriously forecasted that solar prices this cheap would materialize any time soon — let alone by 2018. When costs are falling that fast — as happened with Moore’s Law, with genetic sequencing, and now with solar energy — we get some bizarre consequences along the way, and some strange alliances to go with it. And it’s worth remembering that the phenomenon of marginal costs falling to zero isn’t only limited to software, media and the internet: it’s happening with clean energy, a lot faster than we thought it would. And that’s something to celebrate, warts and all.
It’s M&A time in Telecom & Media land, after the courts rule in AT&T’s favor:
United States vs AT&T, Inc, United States District Court for the District of Columbia
Why you will see bigger, not cheaper, cable bundles | Christopher Mims, WSJ
The media deals that could follow AT&T decision | Jessica Toonkel, The Information
Comcast makes $65 billion offer to steal 21st Century Fox from Disney | Chris Welch, The Verge
Brain repair:
Better navigation:
Uber brings on Facebook product director to lead driver product | Megan Rose Dickey, Techcrunch
How maps became the new search box | Jessi Hempel, Wired
Podcast episodes for your commute (or wherever you listen):
The ins and outs of genomics with George Church, Part 2 | Rob Reid, The Ars Technicast
Neil Hunt and the story of Netflix streaming | The Internet History Podcast with Brian McCullough
The QAnon Code | Reply All Podcast
Other reading from around the Internet:
The valuation obsession | Fred Wilson
How Fortnite captured teens’ hearts and minds | Nick Paumgarten, The New Yorker
Exploring the digital ruins of ‘Second Life’ (it still exists, sort of) | Joe Veix, Digg
China sets a strong example on how to address scientific fraud | Nature Editorial Board
In this week’s news and notes from the Social Capital family, we have news to share from Syapse, whose precision oncology platform is helping to lead the fight on cancer.
Syapse launches precision medicine council to advance health system adoption of precision oncology
What is the Precision Medicine Council, and why does it matter? Leading hospitals, networks and health care system around the country are increasingly turning to precision medicine as a way to provide better care for cancer patients while continually improving their oncology practices. Cancer an inherently personal disease, and personalized treatments tailored to patients’ own genetic and clinical profiles represent the clear way forward for 21st century oncology. The challenge, of course, is that accurately training even very basic software models to understand and treat individual patients’ cancer profiles requires an enormous amount of data; far greater than any one hospital or even any one network can feasibly provide.
The solution is Syapse. Syapse’s software platform and data sharing network allows hospital and industry partners to upload and trade data, exchange insights, and mutually benefit from pooled knowledge in a way that benefits all of their patients across the board. With their data platform already up and running, the next step for Syapse is to establish a best practices council, where the country’s best oncologists, researchers, and hospital managers can convene to share and learn from the best of the best, accelerating our adoption of precision medicine. Inaugural members of the council include the Henry Ford Health System, Catholic Health Initiatives and Dignity Health, Providence St. Joseph Health, Aurora Health Center, and the University of Miami Health System. A few members of the council shared the following upon the announcement:
“We are privileged to serve a progressive group of early adopters in the field of precision medicine. Beyond providing health systems with the industry’s leading software application, they have asked us to facilitate the exchange of early lessons within our network and to broker insights that benefit the entire group. Through the power of this collective exchange, we believe Syapse customers will help define best practices for the industry.” — Ken Tarkoff, CEO of Syapse
“We have been a founding member of the Syapse network because of the opportunity to share data on similar patients, for both patient care and data mining research purposes, through a common technology platform. Joining the Syapse Precision Medicine Council will also allow us to engage strategically on best practices in scaling precision medicine programs for the future.” — Dr. Thomas Brown, Executive Director of the Swedish Cancer Institute at Providence St. Joseph Health
“Oncologists and administrators know that collaboration is vital in bringing research to and making the best treatment decisions for patients. [The Precision Medicine Alliance] recognizes that health systems can learn from like-minded peers across the country. I’m excited to join the Syapse Council and meet with other members this fall to share information about developing precision medicine programs that ensure access and opportunity to those we serve.” — Damon Hostin, CEO of the Precision Medicine Alliance
The inaugural event for the council will take place on October 18–20 in San Francisco. If you’re interested in finding out more, you can catch up on what’s new at Syapse at their blog, or get in touch if you’re looking to make the next step and join the team. They’re currently hiring in San Francisco and Philadelphia.
Have a great week,
Alex & the team at Social Capital
NV Energy 2.3 cent solar contract would set new price record | Gavin Blade, Utility Dive
But there’s a catch. In a twist of irony, the Right to Self-Generate Electricity crowd (led by Solar City) has found a strange ally. The Las Vegas casinos, led by Republican magnate donor Sheldon Adelson, along with other large power buyers in the state like Walmart, have found common cause with the rooftop solar crowd: they have mutual interest in seeking to deregulate the Nevada power market, inviting competition from outside states and forcing energy providers to compete on an open market. The strange alliance has managed to bring the issue to the ballot box, and Nevada voters (who are strongly expected to vote yes) may soon cast their ballots in favor of deregulating the Nevada energy market and breaking NV Energy’s monopoly on local power. Should they vote yes, NV Energy would no longer be guaranteed their sole position in the Nevada energy market, making them likely unable to make good use of the abundant surplus of solar energy now on the table.
So, we have an odd situation: the good news is that two large and well-organized sides are fighting over the future of energy, not between the past and future but rather between two different visions of a clean energy world that’s rapidly becoming real. That part is great. The strange aspect of it is that we have an energy utility committing to buy power at the cheapest it’s ever been in the United States ever, but only if voters don’t pass a law deregulating power purchasing. It’s funny how the law of unintended consequences shows up every time. But it also speaks to how dramatically the prices of solar energy have fallen: at the time when these laws were being drafted a few years ago, few utilities seriously forecasted that solar prices this cheap would materialize any time soon - let alone by 2018. When costs are falling that fast - as happened with Moore’s Law, with genetic sequencing, and now with solar energy - we get some bizarre consequences along the way, and some strange alliances to go with it. And it’s worth remembering that the phenomenon of marginal costs falling to zero isn’t only limited to software, media and the internet: it’s happening with clean energy, a lot faster than we thought it would. And that’s something to celebrate, warts and all.
It’s M&A time in Telecom & Media land, after the courts rule in AT&T’s favor:
United States vs AT&T, Inc, United States District Court for the District of Columbia
Why you will see bigger, not cheaper, cable bundles | Christopher Mims, WSJ
The media deals that could follow AT&T decision | Jessica Toonkel, The Information
Comcast makes $65 billion offer to steal 21st Century Fox from Disney | Chris Welch, The Verge
Brain repair:
Better navigation:
Uber brings on Facebook product director to lead driver product | Megan Rose Dickey, Techcrunch
How maps became the new search box | Jessi Hempel, Wired
Podcast episodes for your commute (or wherever you listen):
The ins and outs of genomics with George Church, Part 2 | Rob Reid, The Ars Technicast
Neil Hunt and the story of Netflix streaming | The Internet History Podcast with Brian McCullough
The QAnon Code | Reply All Podcast
Other reading from around the Internet:
The valuation obsession | Fred Wilson
How Fortnite captured teens’ hearts and minds | Nick Paumgarten, The New Yorker
Exploring the digital ruins of ‘Second Life’ (it still exists, sort of) | Joe Veix, Digg
China sets a strong example on how to address scientific fraud | Nature Editorial Board
In this week’s news and notes from the Social Capital family, we have news to share from Syapse, whose precision oncology platform is helping to lead the fight on cancer.
Syapse launches precision medicine council to advance health system adoption of precision oncology
What is the Precision Medicine Council, and why does it matter? Leading hospitals, networks and health care system around the country are increasingly turning to precision medicine as a way to provide better care for cancer patients while continually improving their oncology practices. Cancer an inherently personal disease, and personalized treatments tailored to patients’ own genetic and clinical profiles represent the clear way forward for 21st century oncology. The challenge, of course, is that accurately training even very basic software models to understand and treat individual patients’ cancer profiles requires an enormous amount of data; far greater than any one hospital or even any one network can feasibly provide.
The solution is Syapse. Syapse’s software platform and data sharing network allows hospital and industry partners to upload and trade data, exchange insights, and mutually benefit from pooled knowledge in a way that benefits all of their patients across the board. With their data platform already up and running, the next step for Syapse is to establish a best practices council, where the country’s best oncologists, researchers, and hospital managers can convene to share and learn from the best of the best, accelerating our adoption of precision medicine. Inaugural members of the council include the Henry Ford Health System, Catholic Health Initiatives and Dignity Health, Providence St. Joseph Health, Aurora Health Center, and the University of Miami Health System. A few members of the council shared the following upon the announcement:
“We are privileged to serve a progressive group of early adopters in the field of precision medicine. Beyond providing health systems with the industry’s leading software application, they have asked us to facilitate the exchange of early lessons within our network and to broker insights that benefit the entire group. Through the power of this collective exchange, we believe Syapse customers will help define best practices for the industry.” — Ken Tarkoff, CEO of Syapse
“We have been a founding member of the Syapse network because of the opportunity to share data on similar patients, for both patient care and data mining research purposes, through a common technology platform. Joining the Syapse Precision Medicine Council will also allow us to engage strategically on best practices in scaling precision medicine programs for the future.” — Dr. Thomas Brown, Executive Director of the Swedish Cancer Institute at Providence St. Joseph Health
“Oncologists and administrators know that collaboration is vital in bringing research to and making the best treatment decisions for patients. [The Precision Medicine Alliance] recognizes that health systems can learn from like-minded peers across the country. I’m excited to join the Syapse Council and meet with other members this fall to share information about developing precision medicine programs that ensure access and opportunity to those we serve.” — Damon Hostin, CEO of the Precision Medicine Alliance
The inaugural event for the council will take place on October 18–20 in San Francisco. If you’re interested in finding out more, you can catch up on what’s new at Syapse at their blog, or get in touch if you’re looking to make the next step and join the team. They’re currently hiring in San Francisco and Philadelphia.
Have a great week,
Alex & the team at Social Capital
