The Ad Hoc Gist: The Big Energy Surprises of 2024
Artwork by Anne Bailey of Latitude Media.
(From L to R: Jay Griffin, Melissa Semcer, Sally Talberg, David Owens, and Jonathan Kleinman)
As the holiday season begins, our trusted senior advisors reflect on the biggest energy surprises of 2024 and why they matter for the climate and the energy transition. From artificial intelligence’s unquenchable thirst for energy to the existential demands of an increasingly vulnerable electric grid, a lot has changed this year.
AHG is excited to welcome Angela Kent as a senior associate and Jonathan Kleinman as a new senior advisor. We’re also looking to hire three new associates early in 2025.
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Happy holidays,
Jim
The Big Energy Surprises of 2024
Sally Talberg, Former Chair of the Michigan Public Utility Commission
What Happened: Official steps were taken to restart the Palisades nuclear plant on the shores of Lake Michigan. The plant’s new owner, Holtec, secured a $1.52 billion US DOE loan guarantee and additional funding from the state and federal governments, building off of agreements executed with two electric cooperatives for the plant's output. They started to complete a series of physical upgrades to reactivate the Nuclear Regulatory Commission license for a late 2025 restart.
Why It Matters: Bringing this 50-year plant back to life will be a first in the nation. This action is both globally significant and for my home state of Michigan, a historically coal-dependent state that is transforming its power supplies. Wolverine Power Cooperative, one of the cooperative off-takers, is now on track to reach 100% carbon-free power by 2030, 10 years ahead of Michigan’s new target. There are also plans to develop small modular reactors onsite.
We also saw other major nuclear developments. Constellation-Microsoft struck a deal to restart Three Mile Island unit 1 by 2028, and Duke Energy and technology companies like Google developed contract terms aimed at advancing small modular reactors and other carbon-free resources. 2024 could represent the start of a nuclear renaissance spurred by federal support, surging electric demand, and climate and resource adequacy concerns.
Jay Griffin, Former Chair of the Hawaii Public Utilities Commission
What Happened: The energy industry completely flipped the switch on utility load growth and concerns about meeting demand from new data centers and manufacturing facilities escalated.
Why It Matters: When I started at the Hawaii Public Utilities Commission more than 10 years ago, a utility-financed white paper warned that declining electric sales from disruptive technologies like rooftop solar would create a cycle of increasing electric rates. In the extreme, this could cause a “utility death spiral.” With the recent specter of declining sales, I was surprised by the alarmism over growing demand, but I remain optimistic. Utilities and regulators will be pressed to meet demand quickly but will be motivated to find solutions, given the opportunity to create jobs and prosperity in their jurisdictions. In a year, I hope to see more innovative solutions, such as grid-enhancing technologies, virtual power plants, and flexible interconnection, emerge to fill the gap between growing demand and traditional approaches.
David Owens, Former Executive Vice President at EEI
What Happened: It became clear in 2024 that America’s outdated electricity planning processes can’t keep pace with the massive power demands of generative AI and data centers. Utilities, technology companies, and regulators are scrambling to find solutions. Traditional planning processes (e.g. through Regional Transmission Organizations) that take years are colliding with tech companies' goals to build data centers in much shorter time frames.
Why It Matters: The electrical grid wasn't built for rapid growth. Tech companies are racing to build energy-hungry data centers for AI, but utilities can't expand power supply fast enough under current rules and processes. The challenge isn't just about building more power plants — it's about fundamentally rethinking how to plan and pay for grid expansion. While some tech giants like Microsoft and Google are offering to build their own clean energy facilities, this raises tricky questions about grid impact and cost sharing. Should electricity customers help pay for grid upgrades that primarily benefit tech companies? Should data centers be required to locate near existing power plants? Utilities and tech companies are forming partnerships to tackle these issues, but without reformed planning processes that move at the speed of tech, we risk reliability problems that could affect everyone on the grid.
Jonathan Kleinman, Former CEO of AIQUEOUS
What Happened: The latest capacity auction by PJM Interconnection — the organization managing the electric grid for 65 million people across 13 Eastern states — delivered a shock to the energy market. The auction, where utilities secure commitments from power plants to be available three years in advance, will cost consumers $14.7 billion for 2025-26, up from just $2.2 billion in the previous auction, marking the highest capacity prices in PJM's history.
Why It Matters: Several key PJM decisions drove these prices far beyond what basic supply and demand would suggest. A switch in how PJM measures power plant availability added $4.4 billion to costs, while exempting wind, solar and storage from participating in the auction drove prices up another $4.1 billion. There are clear opportunities to mitigate these costs — particularly through energy efficiency and demand response programs that reduce electricity use during peak times. States within PJM's territory could expand programs targeting air conditioning, commercial lighting and industrial processes that drive peak demand. However, the Federal Energy Regulatory Commission’s recent approval of PJM's proposal to phase out capacity payments for energy efficiency moves in the opposite direction. The next auction in December will test whether PJM can balance reliability needs with affordable costs for consumers.
Melissa Semcer, Former Deputy Director, California Office of Energy Infrastructure Safety
What Happened: We have been facing significant climate related disasters for years now, but how the market responded to these events this year was surprising. Maybe it was the liability outcome of the James case in Oregon or maybe it was the sheer volume of events in unexpected places — like the Texas and Lahaina fires and Western North Carolina floods — but Wall Street now requires industries to build up their climate resilience capabilities. This year saw an explosion of concern and a hunger for operational and technological solutions.
Why It Matters: Within the resilience space, there’s been a pivot away from a primary focus on damage or outage prevention to maximizing asset health and responsiveness after events. For example, utilities have been expanding grid monitoring capabilities, for example deployment of Gridware’s Gridscopes, and inspection technologies to safely pinpoint problems and quickly re-energize power lines. This is a shift from prevention-oriented approaches such as vegetation management (although they still play an important role). Climate change is here to stay. This year saw us ask - how are we going to live under such rapidly changing conditions?
News from Our Network
From our clients:
- CNBC featured Rondo Energy showcasing how thermal batteries could replace lithium-ion batteries for energy storage.
- Giana Amador of the Carbon Removal Alliance on the bipartisan Carbon Dioxide Removal Investment Act the Alliance helped create.
- Xcel Energy partnered with Pano AI to install more than 50 camera stations for wildfire detection in Texas.
- Impulse’s Sam D’Amico was interviewed on Bloomberg’s Odd Lots about induction stoves, the grid and tariffs.
- EPRI and Kraken are advancing DER interoperability standards to boost virtual power plant deployment.
- SPAN’s Richard Caperton tackled the rising cost of electricity and explored solutions for a more affordable energy future.
- Aeroseal to be featured on the Dec. 18th episode of Property Brothers.
From friends and colleagues:
- ConnectDER secured $35M in Series D funding to boost residential electrification solutions.
- Shreya Dave of Via Separations was featured on Latitude Media’s new podcast, The Green Blueprint.
- Paul Bodnar on why the new climate deal sounds good but is offering “unlimited junk food” by not phasing out more fossil fuels.
- Praveen Kathpal was named to the CELI Board of Directors.
- Tailwind released an Adaptation & Resilience Innovation Playbook about current supply, demand, and capital trends in this space.
Jobs in our network:
Send us your job openings in cleantech policy, startups, and utilities, and we'll put them in next month's Gist.
Featured Roles:
- Gridware: Director of Policy and Regulatory Affairs (San Francisco, CA / Hybrid)
- Aeroseal: VP of Policy and Market Development (U.S. Remote / Midwest or East Preferred)
All Roles:
- Charm Industrial: Regulatory Policy Lead (Fort Lupton, CO / Washington, DC / San Francisco, CA / Hybrid)
- Elephant Energy: Product Marketing Manager (U.S. Remote)
- Gridware: Marketing & Sales Operations Manager (San Francisco, CA / Hybrid)
- Pano AI: State Government Affairs Manager (San Francisco, CA / Remote)
- Solstice: Senior Business Development Manager (U.S. Remote)
- Stripe: Legal Counsel, Climate (San Francisco, CA / Hybrid)
- Technosylva: Sales Account Executive for Wildfire Risk Mitigation Software - Utilities (U.S. Remote)
- truCurrent: Program Director, Energy Transitions (Washington, DC / Hybrid)
- Tyba: Growth Marketing Manager (San Francisco, CA / Los Angeles, CA / Remote)
- Uplight: Senior Manager, Commercial Counsel (U.S. Remote)
- VEIR: Director of Business Development, Commercial & Industrial (Woburn, MA / Hybrid)