Transitions to Sustainability: Electrify Everything

I have something to admit that I’m embarrassed about. Especially because the title of this article is ‘Electrify Everything’! Here is is: I sold my Tesla shares at what I thought was a reasonable profit, when they were at $60 and had just launched the Cybertruck, which I thought at the time was truly awful. Although I owned Tesla again at various times at various prices, if I had just kept those shares, I would be several millions richer by now!

Image Source: Tesla

I thought Telsa was an amazing company back in 2019 when the Cybertruck was released, but at that time I was still skeptical that electric vehicles could overcome the entrenched forces of the oil and gas industry. However, the Cybertruck seemed to me like something out of a low budget sci-fi flick, the sort of thing you start watching on Netflix because the title looked interesting. I was sure it was a major misstep and Telsa shares would tank because of it, so I sold.

If you had asked most people ten years before if an upstart electric car company shares would be worth over $4500 (the peak 2021 price based on the original pre-split share basis), most would have laughed. At that time the Toyota Prius was the butt of frequent jokes about wimpy kale-chomping environmentalists. Wind power and solar were becoming a thing, but they were something that happened a long way away off in the desert or in places that no one really ever wanted to visit. Tesla had not yet even released the Model S.

The market for luxury electric cars simply did not exist until 2011.

It's become a bit of a cliché in leadership thinking circles, but I love the idea that people underestimate how much change happens in a year, but massively underestimate how much change can happen in a decade. In July 2020, Tesla became now the world’s most valuable automotive company by market capitalization, despite only producing a tiny percentage of the world’s vehicles. Elon Musk is now the third richest person in the world, after Jeff Bezos and Bill Gates. For a while, he was the richest, before Tesla shares dropped sharply in recent months. 2020 saw a wild ride of many electric car startups as the market fought a battle of innovation to define which company would become the 'next Tesla'. Every new electric car globally is essentially now benchmarked against the vehicles Tesla produces. In early 2021, every global automaker is burning the midnight oil to catch up with Telsa.

The idea that we can 'Electrify Everything', in order to transition away from oil and gas in order to reduce carbon emissions and reverse global warming might be one of those ideas where progress in any single year might seem insignificant. Every year, unless we carefully follow statistical trends and reporting, we barely notice that there are more solar panels on rooftops, more electric vehicles on the roads, more wind turbines in rural areas, and fewer and fewer people globally that do not have access to electricity. Yet in another decade, by 2030, the accumulation of these incremental changes may have the potential to utterly transform the global energy system drastically for the better.

The pieces are now in place for the world to be staggeringly different in 2030 because of innovations in electricity production, distribution, storage, and use. As a phrase, 'Electrify Everything' phrase is useful to help guide us conceptually through this coming transition. Yet this is not the only energy transition that humanity has set in motion. Here are the two others that provide essential context to the Electrify Everything energy transition.

Sustainability Transition One: Coal to Thorium

The first article in my series on global energy transitions looked at how humanity could reduce its dependency on the greatest producer of carbon emissions globally - which is burning coal for heat and energy. Despite the rapid amounts of renewable energy being produced around the world and its plummeting cost, renewables are not keeping up with global electricity demand in developing countries.

The solution proposed in that article was to replace coal power with nuclear energy based on thorium instead of uranium. This next-generation nuclear technology would allow the global energy system to move away from burning coal, dramatically reducing carbon emissions, improving the health of millions of people who live in areas polluted by burning coal for heat and energy, and provide baseload electricity. Despite the remarkable growth in wind and solar, many countries are still are a long way from being able to replace baseload electricity needs from renewables without building enormous amounts of expensive energy storage.

Sustainability Transition Two: Oil to Hydrogen

The second article looked at how humanity could architect a new economy based on clean hydrogen, in order to reduce its dependence on the next biggest source of carbon emissions globally - which is burning oil for energy, heat, industrial processes, and transport. Creating a green hydrogen economy to replace oil is an incomprehensibly massive human undertaking, which challenges our imagination just as much as it is a technical or political challenge.

Not all the pieces are in place for the oil to hydrogen transition are in place or have technologies developed. Almost none of the politics are in place. But the potential is enormous, with the possibility of a fuel that burns completely clean with no carbon emissions, can be produced anywhere where there is water and renewable electricity, can be used to store excess energy from renewables, can be stored indefinitely with minimal energy loss, and transported long distances.

Sustainability Transition Three: Electrify Everything

The Tesla story is a kickoff point for this third transition, Electrify Everything. In the Electrify Everything global transition, humanity accelerates the transition away from using coal, oil and gas to renewable energy by replacing gasoline vehicles with electric ones, home systems based on fossil fuels with electric ones, and industrial processes with sophisticated, clean powerful electric motors, hydrogen fuel-cells, efficient and powerful batteries and intelligent digitized control systems in an expanded and the strengthened electricity grid.

'Electrify Everything' is not my terminology. I haven’t been able to find out who or which organization came up with it. Perhaps it's one of the terms that simply appear when the time is right. Yet it is perfect. It encapsulates the size, audacity, and significance of this coming global energy transition in just two simple words that anybody can understand.

It also contrasts with what we did in the 300 years of burning fossil fuels, which could perhaps be described as “Burn Anything”. Humanity burned forests, we burned oil, we burned coal, peat, wood and natural gas. Basically, we burned anything that would burn, that we could cheaply cut, dig, or mine. Now humanity is paying the price in terms of warming temperatures due to increased carbon emissions in the atmosphere. This warming is rapidly nearing catastrophic levels that may throw the entire world's weather systems in disarray.

These transitions are all highly technology and capital intensive, so progress will come first from highly industrialized societies. Poorer countries can leverage the Electricity Everything transition that industrialized countries go through by utilizing their innovations to deploy renewable sources of electricity as they move through their own process of industrializing , rather than turning to fossil fuels as was done in the past. Electricity availability has increased dramatically since 2000 in many poorer countries, a fact that is often overlooked if you live in an already industrialized one. As of 2017, the number of people globally without access to electricity was less than 1 billion, and even more progress will have been made since then. The problem is, most of that increase in electricity has been created through building coal-burning power plants.

You may already be seeing how the first three global imperatives fit together. Produce clean electricity from next-generation nuclear, gradually displacing coal, which is still both the largest source of global energy, the dirtiest, and the most dangerous to human life. Use that green electricity to both create green hydrogen for use in fuel cells in heavy vehicles like trucks, city buses, construction vehicles, trains, and ships, to replace diesel and heavy fuel oil. Use batteries in any smaller vehicles such as pickup trucks, SUVs, cars motorbikes and bicycles.  Electrify our homes, business, and pastimes with upgraded electrical heating, cooling, and intelligent management systems.

Experiencing the Transition

The electrical system that powers the modern world is largely invisible to people already living in industrialized societies. Most of us just take for granted that we can plug in our ever more numerous handheld electronic devices, flick a switch in our homes to get light and turn on the air conditioning to stay cool in summer. Yet for many, seeing an electric vehicle glide soundlessly by for the first time can still be quite a significant and even shocking event. Gasoline cars and diesel trucks, with their constant engine noise and until recently, acrid smell, have become the ever-present soundtrack of industrial societies for over a century. It's surprisingly disconcerting when it is suddenly gone.

Experiencing an electric vehicle glide past you almost noiselessly is a visceral way to experience the possibilities of this new world in a tangible, sensory way. In fact, manufacturers of electric cars now add artificial exterior noise to them at low speeds, as their quietness can be dangerous to pedestrians as it is so unexpected. Imagine the change in your local city if traffic noise was almost completely absent because city buses and most other vehicles were required to be electric. During the coronavirus pandemic, when cities fell silent around the world, people reported being surprised when they heard birdsong right in the middle of their cities. Imagine cities with only electric vehicles becoming so quiet that we could hear birdsong, all the time. That's just one example of the enormous potential of the Electrify Everything transition to our daily lives.

On the Road

As consumers move from gasoline to electric vehicles, there will be several key adoption ‘tipping points’ that may become highly significant to each person that goes through them. The first tipping point will occur when range anxiety concerns dissipate because almost every shopping center, public space and roadside stopping place will have had electric charging points installed by fast-growing companies like Blink Charging and Chargepoint. The average range of electric vehicles will have also increased to about 300 miles (500km) due to advances in battery technology and reductions in cost. Even on long journeys, fast charging technology will enable another 300 miles of charge to be obtained while stopping for a meal or a rest break. This will be more than enough for the daily driving needs of millions of consumers. For farmers, an electric truck or tractor means no diesel deliveries or heading to town to get gas - just plug in overnight at home or in the barn, where perhaps 50 solar cells on a barn roof would provide the electricity needed for tractors, pumps and other farm equipment. The range anxiety tipping point will be reached between 2021 and 2025 when battery technology and size gets standardized to the point where most EVs range have a range of least 300 miles,

Even for small trucks, such as the best selling vehicle in the USA, the Ford F-150, electric versions will become compelling. Electric trucks from EV-only companies such as Tesla, Rivian and Lordstown motors will have unheard-of levels of horsepower and torque, giving them both supercar acceleration and the heavy towing capability of large diesel engines. Traditional automakers will soon follow such as General Motors with its electric Hummer. Performance and durability will so far exceed that of gasoline and diesel trucks that there soon be little competition from gasoline or diesel.

The second tipping point will occur when consumers realize that the life-long cost of an electric vehicle is dramatically lower than a gasoline vehicle. Decreasing battery costs, lower refueling costs, and dramatically lower maintenance costs will all contribute to the overall lower operating cost of an electric than a gasoline vehicle. At this tipping point, consumers will completely lose interest in buying gasoline vehicles. The new electric cars will have proven themselves to be faster, more fun to drive, quieter, more spacious, contain more networked media systems, be more pleasant to ride in, and cheaper to run. In many cases they will even drive themselves to some extent. After that second tipping point, there will simply be no downside to choosing electric. Battery Electric Vehicles (BEV) or Fuel-cell electric (FEV) will become the first choice for all new vehicles, and may become the only vehicles that many manufacturers (such as Volvo) offer. This second tipping point will occur between 2025 and 2030 in already industrialized nations, when major manufacturers such as General Motors, phase out all new internal combustion vehicles.

At the second tipping point, the gasoline engine maintenance and repair industry will go through a major crisis. Massive retraining of mechanics may be required as they become charging station installers, hydrogen electrolysis station installers, or other new jobs related to the adoption of electric vehicles.

Heavy transportation such as trucking will convert to hydrogen fuel cell vehicles using hydrogen produced on-site at the fueling station using electrolysis based on renewables. After the first tipping point of range is reached for electric cars, gas stations will start to convert to charging locations with the services that travelers need to spend time while their vehicle charges. Gas stations will become more like food and shopping centers, or perhaps shopping centers will become today's gas stations, focused on short-term convenience. Along interstate routes that have thousands of predictable truck visits per day, truck stops will convert to a business model where they make profits from producing hydrogen for fuel cell trucks, or even invest in dedicated solar or wind farms to produce the required electricity for hydrogen electrolysis on demand. The need to transport diesel fuel to the right place to fill up trucks will disappear, and be replaced by an upgraded electricity grid.

Source: Nikola Motor Company on YouTube

Established car and truck industries will initially resist the changes in the Electrify Everything transition. But that too is rapidly changing. Many of the world's car companies, after nearly a century in business, find themselves years behind both the technology developed by Tesla and the ‘cool factor’ that Tesla developed in barely over a decade.

Many, such as BMW, a German maker of high-performance sports sedans and SUVs have only recently shifted focus to electric vehicles. Others, like Volvo, have embraced it and are committing to all-electric fleets. Some, like Porsche, have already realized that Tesla’s lead in the new 'luxury electric' segment is a competitive challenge that they must confront head-on in order to survive. Porsche’s recent release of the Taycan to rave reviews from the automotive press is a testament to the importance that electric cars will have in the market and their future.

In developing countries, electric mopeds and smaller vehicles may predominate, rather than the larger, faster, and more expensive vehicles in developed countries. A product as simple as a rugged electric motorbike, with few moving parts and requiring almost no lifetime engine maintenance, able to be charged with any outlet or from village solar cells, could revolutionize life for poor communities in the developing world. In China, it's estimated that there are already roughly 200 million electric bicycles and scooters on its streets.

Electrify Everything at Home

At the consumer level, clean electricity can replace fossil fuels to supply the energy needs of their homes. New homes will be built with solar panels on their roofs, solar windows, or solar roof tiles to generate their own electricity. This locally generated electricity can be fed back into the newly upgraded electricity grids, or stored in household battery systems.

Battery storage from the rooftop solar system could also act as part of a ‘smart grid’, feeding energy back into the grid at the peak household electricity usage hours of 4-9pm, where commercial solar and wind are no longer producing, but where homes are using the most energy.

Gas or oil heating can be replaced by tankless electric water heaters that take up less space and, are more energy-efficient and faster than bulky hot water storage tanks and gas furnaces. As an interim step, gas lines may be supplemented with green hydrogen to reduce overall carbon emissions from natural gas. As electricity gradually takes over from gas, home explosions due to gas leaks may become a thing of the past, and builders, cities, and developers may even stop providing gas lines to homes in new subdivisons.

Smart home automation systems will learn your habits, increase the efficiency of both heating and cooling systems, and automatically turn off devices to save energy or charge electric vehicles at optimum times.

Electric heat pumps will provide efficient heating and cooling where the climate is most suitable. As global temperatures rise to climate change, summer temperature may rise in many parts of the world to levels unlivable without air conditioning, driving electricity demand. Electric vehicle charging will be managed by intelligent controllers that charge the electric vehicle from the excess process by solar, stored in the home battery, and then fed into the vehicle at off-peak times.

Upgrading the Grid

As solar production and wind energy have grown rapidly in the last three decades, two issues became apparent. Power grids were originally designed for a model where most of the power came from large centralized power stations. These power stations increased and decreased power as needed based on the flexibility of oil and gas generation. Some types of fuel result in power that can be increased quickly, while others like nuclear are best when they run at constant levels of output to supply the so-called ‘baseload’ electricity requirements. The model of electricity generation can be referred to as a centralized model.

When renewable energy from solar and wind is added, the grid model becomes more distributed. There are many more points where electricity is added. Grid operators need to learn how to use weather forecasts to predict when they will see higher levels of wind and solar coming into the grid, and have ways to either store it or balance electricity from other sources.

Upgrading the grid will be assisted by vast increases in the complexity of computer networks that are linked to almost all electronic devices. As the cost of small sensors and cellular network connectivity drops, devices can transmit all sorts of information back to smart grids and other information networks. Appliances will start to 'talk' both to the grid and their owners, in order to optimize their energy use. The increased rates of data communication in the 5G network will enable autonomous vehicles and in in some cases, swappable components like batteries, to talk with each other in real-time, dramatically reducing accidents, most of which are caused by human error. In Taiwan, the leading battery electric scooter brand has smart batteries that are essentially pieces of connected software, able to communicate with a management service and download software updates to better manage the battery.

Accelerating the adoption of new forms of electricity storage has rapidly become a big part of upgrading the grid. Converting excess renewable electricity from solar and wind into green hydrogen using electrolysis is one promising storage mechanism. Electric cars can even become a part of the energy storage grid while not being used. A variety of other storage technologies, including gravity-based storage, grid-scale lithium batteries, or liquid metal batteries will be added to the grid to store excess energy from renewables until the time of day it is needed, or longer-term as a reserve.

One Big Vison, Many Solutions

The essential nature of electricity grids means that they must always be managed using a mixture of government regulation and private enterprise and financing. The ‘Electrify Everything’ global imperative will increase the challenges of public and private cooperation of grids around the world, and that process may not be easy at times.

Every region and country will have its own unique challenges in upgrading their electricity grid. What works in the USA, with its vast distances between the ideal locations for wind and solar in the great plains, and where electricity is consumed in the population centers on the coasts, may not work in India with its dense networks of small rural villages. What works in Norway, with abundant hydroelectric and deep pockets from years of oil profits that can be used to subsidize electric cars, will not work in Saudi Arabia, where the wealth of the entire nation was built on the production and export of fossil fuels.

We should stay open to being surprised. As all three energy transitions accelerate at different speeds (with Coal to Thorium being the slowest due to the investment and engineering required), it may be countries that have the deepest dependency on oil that are fastest to move, because they recognize the impact on them is greatest if they miss this transition. I firmly believe that the oil-rich Arab world has an unprecedented opportunity to show global leadership by combining an ideal geographic location to build solar and wind farms in their vast empty deserts, with retooled oil and gas expertise that would allow them to build massive electrolysis plants to make green hydrogen for export from repurposed oil and gas export facilities.

Saudi Arabia's wealth makes it uniquely positioned globally in terms of an ability to define audacious sustainable city visions such as The Line and build them at unprecedented speed. Perhaps they will also follow the example of the nearby UAE, where the massive Barackah Nuclear Power Plant located in the Persian Gulf between Qatar and Abu Dhabi has recently been completed in order to provide decades of future fossil fuel free electricity to the growing populations of Dubai and Abu Dhabi.

YouTube: Welcome to The Line

Upgrading electricity grids to fully integrate ever-increasing amounts of renewables will not be without problems. In the USA, electricity infrastructure has a rocky history. The Enron scandals among other things led to the rigging of California's electricity market, line maintenance failures in California leading to catastrophic wildfires in 2020, or the Texas polar vortex outages in February 2021, shows how critical the energy grid is to daily life and how fraught the relationship between corporations and public utilities can become. As we move through the transition to electrify everything, the demand for oil will decrease and electricity increase, we will need to rethink the role of electricity in every way, as electricity will play an even more integral role in humanity's sustainable future.

Politically, that will play out in different ways depending on the mix of economic and political systems found around the world. Countries with a more structured, top-down government-led approach to infrastructure, such as China, will likely be able to move the fastest. Countries such as the USA, with a business-centric approach, may move somewhat slower while the tension between regulation and business profitability plays out. However, business-led economies like the USA are also more likely to come up with more market-leading innovators such as Telsa because of increased capability for innovation. Companies like NextERA energy that made some of the earliest and biggest bets on renewables increasingly will be seen as examples for other utilities rather than outliers. Some oil companies like Beyond Petroleum are already in the midst of sometimes painful transitions.

The Electrify Everything Eco-System

Building a sustainable future for humanity requires us to think differently. The extractive industries of coal, oil, and gas were giant one-way, linear systems. Oil, gas, and coal are extracted once from the earth, transported and stored, then burnt in various ways releasing their emissions into the atmosphere. In contrast, the electrification of everything is best thought of as a complex, multi-part eco-system. This new global electrical eco-system will be made of thousands of interconnected energy sources, upgraded grids of cables everywhere, and a multitude of technologies, owners, financial models and end-users. A household with solar on its roof and storage in its garage is no longer just an energy consumer. They are also an energy producer with a financial stake in the electricity economy, and they may demand new rights as a participant in what should be an equitable energy pricing system. By installing solar on their home, they have become part of that complex eco-system, and not just an end-point consumer of fossil fuel converted to electricity.

The electrify everything eco-system will become both more local, because electricity can be generated anywhere in the world in many different ways, but also more global, as innovations will no longer be dominated by massive fossil fuel producers with enormous capital and logistical capabilities. Some countries will lead in solar cell production, others in wind power, others in electric motor design, others in sensor systems for vehicles.

Are we Up to This Challenge?

The ‘Electrify Everything’ global energy transition will not be easy. ‘Burn Anything’ has been the de-facto mantra of human energy use for the last three hundred years. Like the transition to the green hydrogen economy, many of the technologies required to electrify everything are known already, but acceptance and implementation of them will take some time.

I believe there is hope, and that more and more countries are beginning to clearly articulate these possibilities. The rise of Tesla captured the public imagination and showed us that there is still some quality of magic about electricity and the things it can do for us. A luxurious electric vehicle is now a global status symbol, the must-have sign that you are connected with the future.

People around the world now want clean, green, quiet sources of energy. Electricity is that energy. Let's get on with it and Electrify Everything!

Peter Hill is a founding investor in Our World Two, and online sustainablility startup, and works as a technical program manager for some of the world's largest technology companies.

Disclaimer: The author currently or in the past owned stock in a number of the companies referenced in this article. This article is not intended as a promotion for any of those companies and is not sponsored by any company.