Shift Key Classic: What Is a Watt?

This episode of Shift Key is brought to you by Vers. Vers delivers a path to power that gets data centers online up to three years faster. He maps labs recently sat down with Sayid Medini, the CEO of Vers. The central power grid is out of capacity. We need to take that and decentralize it. And the way to do it is invest in small generators at these local facilities and build the technology on top to orchestrate these power assets. That is the model of Vers, taking a centralized grid and decentralizing it. That will solve many problems. It will help us with the grid problem. It's help us with being good grid citizens. It helps us powering the AI race and we can do it in a sustainable way. Stay tuned to the end of today's episode of Shift Key to hear the full conversation with Sayid about how Vers helps its customers quickly connect to power. This episode of Shift Key is sponsored by RE Plus, the largest clean energy event in North America, happening November 16th through 19th at the Las Vegas Convention Center. Experience a complete agenda spanning solar, storage, micro grids, EVs, grid edge technologies, and beyond. At RE Plus, you can network with the companies and experts advancing projects, improving supply chains, developing resilient solutions, and more. Plus, the tools to find them. This is where today's energy is being built to meet tomorrow's demand. Register at REPlus.com and use code Shift Key 20 to save 20% of a full conference pass. Hello, it's Wednesday, September 9th in the unofficial first week of fall here in the United States. I was out on vacation last week at a great time, and so this week we're going to bring you a classic episode of Shift Key. It's actually one of my favorites that we've ever done on the show. I still think back to it all the time. It began our Shift Key Summer School series in 2025. In less than an hour, my old co-host Jesse Jenkins and I are going to try to walk through some of the biggest concepts in energy and electricity and the power grid and explain what gives rise to them and how they work. This episode is like a one hour tutorial on how to think about energy, power, watts, horsepower, volts, amps, and what uses approximately one watt hour, one kilowatt hour, one megawatt hour, and one gigawatt hour. These are terms we use all the time, but don't always necessarily explain or fully decode. If you care about climate and energy, but have never listened to this show or need to refresh, I encourage you to stick around. We'll be back next week with a new episode of Shift Key. In fact, more than one new episode, I think. Until then, I'm Robert Samir, the founding executive editor of HeatBab News, and you are listening to Shift Key. Jesse, let's start. Yeah, let's start at the big question. I mean, energy is a weird thing, because it comes in so many different forms that it takes on all kinds of different units, as we'll talk about here later, and it can kind of be dizzying as we convert back and forth between different forms. Also, we only really experience it like in a physical sense in a couple of its forms, unless you're shocking yourself, but you're not really feeling electricity on a regular basis. I like to think of energy to start with in kind of its basic, define its basic terms, right? It's both basic scientific information units, SI terms, and then to get a physical intuition for those units. So let's start with the jewel, all right? The jewel is the SI unit for both work and energy, and the basic definition of energy is the ability to do work, not work in a job, but like work in the physics sense, meaning we are moving or displacing an object around. So a jewel is defined as one Newton meter, among other things. It has an electrical equivalent, too. A Newton is the unit of force, and so force is accelerating a mass, right? For basic physics, over some distance, in this case, so one meter of distance. So we can break that down further, right? And we can describe the Newton as one kilogram accelerated at one meter per second squared, and then the work part is over a distance of one meter. So that kind of gives us a sense, something you feel like, a kilogram, right? That's 2.2 pounds, I don't know. I'm going to try to think of something in my life that weighs a kilogram. I don't know. A couple pounds of food, I guess. A liter of water weighs a kilogram by definition as well. So if you've got a liter bottle of soda, there's your kilogram. And then I want to move it over a meter. So I have a distance, I'm displacing it. And then the question is, how fast do I want to do that? How quickly do I want to accelerate that movement? And that's the acceleration part. And so from there, you kind of get a physical sense of this. If something requires more energy, if I'm moving more mass around, or if I'm moving that mass over a longer distance, right? One meter versus 100 meters, versus a kilometer, right? Or if I want to accelerate that mass faster over that distance, right? So 0 to 60 in three seconds versus 0 to 60 in 10 seconds in your car, that's going to take more energy to accelerate that rapidly. I'm looking up what weighs. Oh, here we go. A 13-inch MacBook Air weighs about a little more than a kilogram. So your laptop. Yeah, if you want to throw your laptop over a meter, accelerating at a pace of one meter per second square. That's about a jewel. It's not a huge unit of energy. We obviously, you're moving your body around, right? It weighs a little bit more than a kilogram. At least mine does. And you're moving around, accelerating all over the place, walking around like that is using up energy on a regular basis. So jewels are pretty small. And that's important because a jewel, a watt, which is actually a unit of power, not a unit of energy, is described as a jewel per second. So if energy is a quantity, it's something that we're consuming or producing or transporting or converting. Then power is the rate at which we're doing that. So if I'm consuming a jewel of energy in a second, that rate of consumption is one watt. And one analogy for that is like a path tub, right? Like the amount of water in the tub, the volume of water, that's the energy. And the size of the faucet or the rate at which the faucet is adding water to your tub, that's power. I'm raising my hand. Does that make any sense? Yeah, okay. Robinson has a question. Yes, Robinson. Okay, so I have a few questions. The first is I just want to, I think it is kind of important to establish like energy here, the jewel, what that changes about a substance. And I realize this is like high school physics, physics 101, is the acceleration, not the velocity. Like we sometimes think of energy as a property of velocity, but it's actually the ability to change velocity. That is what energy does, right? Yeah, that's right. You think about the kind of basic Newtonian mechanics, right? If you're you have an object in a vacuum with no friction or no forces working against it, it will continue at the same velocity and the same trajectory forever, right? And so the what it requires energy is to change that direction or velocity, which requires acceleration or the application of force to some mass. You just kind of said this, but what is the difference between energy and power? Yeah, energy is the is the actual thing that it's the quantity of the thing that's doing work, right? So it's a amount of fuel we burned or them or calories we had to eat to run our bodies over the course of a day or the amount of electricity we had to generate to run our lights or our computer. Power is the rate at which that energy is consumed or supplied or transported or transformed. And so it is not itself a unit of quantity. You don't use power. You use energy. Power is the rate at which you're using energy. So again, it's how quickly the bathtub is filling up or draining, not the quantity of water in the bathtub. So a what is the basic unit for the SI unit for power, which is going to be equal to energy divided by time, energy over some period of time. So power energy and time are fundamentally related in that way. Energy is equal to power times time. So when we talk about electricity units of energy, we usually use the term watt hours instead of jewels. That's a watt of power sustained over an hour. That's the quantity of energy that would be delivered over an hour if we were sustaining at a rate of one watt. So energy equals power times time, power equals energy divided by time. And then I guess time is energy divided by power if you want to think about it that way. So a watt is not specific to electricity. A watt we could actually talk about for any kind of energy. It's just the fact that we could even describe your car motor. Yeah. And in fact, in Europe, they do that. They don't use horsepower. That's another unit of power. It's kind of a weird one when you think about it, right? Like what is a horsepower in the US, we and in the UK, we know there is power. So yeah, exactly. There's no confusion about this horse. Oh, big a horse. I have questions about this horse. And in Europe, you'll often actually see the motors, the engine power rated in kilowatts, which is your maximum power output from that motor. Obviously, when we switch to electric motors, that makes a lot more sense too, because now we're even talking about electrical power. And when we talk about power plants having a number of watts or kilowatts or megawatts or gigawatts, that's usually the maximum power output that plant can deliver, right? So it's a rated power or maximum power. And it doesn't necessarily produce at that maximum power all the time, right? Think about a wind farm that's varying and it's output with the wind or solar with the sun or even a nuclear plant that has to shut down for maintenance. And so if you wanna understand how much energy a power plant produces, you have to know the power at which it's producing integrated over time. Or what we call the capacity factor, which is the average power of that plant over a given amount of time. - I wanna go there in a second, but first I wanna make sure I understand something correctly, which is as an energy reporter or as a person who reads energy documents and reads energy stories, reads heatmap, there's a discussion both of kilowatts but really of kilowatt hours. And am I right to understand that one watt, if one watt times one second equals one joule, right? That's correct, right? That's like a kilowatt hour is a, even though it sounds like a chunky unit. And sometimes I feel like it's a bit of a weird unit to throw around. It is the same, it's measuring the same kind of thing that joules are measuring. In other words, when I throw my laptop one meter and from that distance at one meter for a second, right? That's actually the thing we're measuring by saying that I've just expended one joule of energy is the same ultimate substance that we're measuring when we say solar farm put out 60 kilowatt hour. - Yeah, that's right. And that's like worth pausing on because again, this is why energy is so slippery a concept because it can come in so many different forms and we often use different units when we're talking about a different form. So when it's electricity, we often, we talk about kilowatt hours or megawatt hours. We should, they pause and say a kilowatt is a thousand watts, right? So a kilowatt hour is a thousand watt hours. So we got all these prefixes too. But you know, you could, so we've talked about defining energy and physical terms, right, displacing a kilowatt over a meter at a meter per second squared of acceleration. But you could also think about it in heat terms. So, you know, heating up a body of water or heating up a room, right? That's gonna require energy to do that, right? Energy coming out of your furnace or your fireplace or whatever else. And we often have different units for that too. So calories are the standard unit in SI terms, whereas we also often talk about British thermal units or BTUs and energy worlds. This is a pure unit that we rarely use outside of the US. Those units are defined in terms of the amount of heat required to usually to heat up some unit of water. So for example, a calorie is defined as the amount of heat required to raise the temperature of a liter of water by one degree Celsius. And that's the kilocalorie, that's the big calorie. The small calories or gram calories is one millimeter of water raised by one centimeter. So that's the other way we can think about it as like a heat flux, right? That's what a lot of our energy goes to combustion, right? To generate heat and then do something with that heat. So that's another way to get a physical intuition for energy, but then often we use different terms. Energy of course can also be contained in the chemical bonds of certain things. That's what we're combusting. We're breaking up the chemical bonds of wood or coal or natural gas. And so then we also talk about the heat content of or energy content of those fuels. And you can use jewels for that, you can use BTUs, you can use calories, you could use megawatt hours or kilowatt hours. Or in many cases they use physical units to describe different types of fuels as well. So you might hear things like barrels of oil or millions of tons of coal. Those all have to be standardized units of energy as well, which just adds to the confusion. So one calorie, one kilocalorie I believe is 4186 jewels. Yeah, of course. You can do that mental math in your head, right? I do it all the time. So I think what's interesting here is that, you know, if you think about a standard, this isn't quite standard anymore, but if you think about people leading 2,000 calories a day, that means the human body is expending like 8.3 million jewels a day. Yeah, 8.3 megajoules. I think, yeah, exactly. That's 2.3 kilowatt hours. So does that mean actually people use more, how many, what's the household use of kilowatt hour, like one point something? No, so a typical household in the US and this would be less if you're in Europe or somewhere else consumes a little bit over kilowatt of average power. So that's the average rate at which they're consuming electricity. And now, of course, it goes up and down as you turn off on and off devices, right? Yeah, that's about 24 kilowatt hours a day, right? So that's exactly. So that's a little over 24 kilowatt hours a day. So a family of three. Yeah. So according to the US Energy Information Administration, the average US household consumes about 10,500 kilowatt hours of electricity a year. So that's about 28, 29 kilowatt hours a day or about 1.2 kilowatts average over the course of the day. Well, I'm now just thinking about the average diet for a person, right? Just 2,500 kilocalories, which is about 2.5 kilowatt hours. So what? Yeah, that's a good, that's a good. We write a thing about using 10 times as much energy as your body is through the day. And that's just the electricity. Yeah, that's just the electricity part of the energy, too. If you're driving to work in a car that's not electric, you're not, that's not counted in that energy consumption that you're consuming the energy in your gasoline. If you're heating your home in natural gas, right? That's not counted there, too. But yeah, to give a sense of scale, I like that. One human is 2.4 kilowatt hours or something like that. Four kilowatt hours is the amount of energy you'd need to run a window AC unit of a half a kilowatt for eight hours. You want to cool yourself for eight hours a night when you're sleeping? That is four kilowatt hours. So usually we're thinking about most things we're doing that are like major energy users are in the kilowatt hour scale. I like this, because I think-- I mean, there's a certain element to where this is getting a little matrix C, where we talk about humans producing kilowatt hours of electricity. But no, I like this, because it makes sense, right? I have one more question, which is in energy writing and energy reporting. I think there's often-- it's very common, simply frankly, in writing to avoid echoes, to avoid repetition, to very referring to energy as power, or referring to it as energy. Do you think that's OK? Do you think that's forgivable? Or are there moments where we're writing about power that we should be sure to call up power and moments where we're writing about energy? Because I think especially writing about the power grid, referring to electricity, energy, and power, those things are basically treated as interchangeable, even though from a physics perspective they are in. As we've talked about here, the way we experience the grid is in terms of energy, right? It's in terms of the amount of energy we're using to do something useful. So I would recommend generally reporting it in those terms, in energy terms. And that's just because the rate at which we consume energy or the power varies dramatically, as we're talking about over the course of a day, do I have my EV charger on or off, do I have my air conditioner on or off, like these cause huge swings in the rate at which we're actually consuming that energy, or the power rate. And that's also true on the generator side, too. You think about it, particularly we're talking about reporting the size of an offshore wind farm or a solar plant. You usually will hear that expressed in terms of its maximum rated power output. It's a 300 megawatt wind farm, for example. That's the maximum it can produce, or the maximum power rate at which it can produce. But it doesn't sustain at that rate all the time, and so the average power rate is much lower than that. And that's where this capacity factor concept comes in, which is basically the average power rate divided by the maximum possible. So if we say a wind farm has a capacity factor of 50%, then that 300 megawatt wind farm-- so that's 300 megawatts of maximum power-- is varying around between 0 and 300 on an average. It's producing energy at a rate of 150 megawatts. Even a nuclear plant isn't running constantly. That's as close as you get to an equivalence between a power rating and an energy output, because it runs 90% of the time. But even there, the nuclear plant turns off for 12 weeks, every 18 months to refuel. And so it's not producing all the time either. So I would probably counsel describing things in energy terms for the most part, because that's what we actually experience as heat or as acceleration of mass or other things that we can feel in our daily lives. Let's talk about scale for a second. So in writing about electricity and in writing about renewable specifically, you encounter these big units. You encounter watts, but you really encounter kilowatts, megawatts, gigawatts, and then at the scale of national systems, terawatts. And for ease of use, these energy units are almost always followed up by-- and this is the number of households at powers. This is the number of average households it's going to power. But the thing is, when you start digging under the surface, there is a huge amount of variance in those household terms. And I think it really obfuscates how people understand the energy system in the power grid. So how much are these units? If we want to switch to a unit first and a watt first way of thinking about renewables and thinking about the electricity, how big is a kilowatt? How big is a megawatt? What is the right comparisons to hold in our head for those that don't require just converting to like, oh, this is 10,000 households. And this is a million households. Yeah, so again, if you're thinking in watts, you're talking about power. And so there, again, it's like, are you trying to describe an instantaneous power, a maximum power, an average power? Those are all different things. I think the key thing is, if you're talking about power, you've got to start with what am I actually trying to describe. [BLANK_AUDIO] but I'm not actually trying to describe a unit of power, I'm actually trying to describe a unit of energy, which is like how much energy households use, then we probably shouldn't be using watts, oh, we should be using watt hours or they're equivalent. So that's my first point. So let's talk about scale. Yeah. Yeah. So to follow my own advice, let's start with the energy units first, and you'll get the relationship here between energy and power to some degree in this explanation. So if I'm talking about the amount of energy that a computer, a laptop, or a light uses over an hour, for example, that's the scale of like tens of watt hours. So a 10 or 15 watt LED bulb, that's the maximum power it's consuming when it's on. So if you have a 10 watt bulb on for an hour, that's 10 watt hours. The draw of a typical laptop, if you look on the back, it's, let me see what mine is. (laughs) It looks like my laptop is rated at 60, 60ish watts of power draw. So if it's on and I'm computing that it's maximum power draw for an hour, then I'm using 60 watt hours. Personal electronics, lights, those are on the scale of watt hours per hour. You know, so if I'm using it for days or weeks, then it might grow to a kilowatt hour, but if I'm thinking about kind of the near term use of her period of hours of a laptop, cell phone, or an LED light, those are on the scale of watt hours. If we're talking about other larger consumers of electricity, or again, the scale of annual of daily use of a human, then we're at the scale of kilowatt hours or 1,000 watt hours. So like you said, a human uses roughly 2.5 kilowatt hours of food a day. If you're running your air conditioning unit over the course of the day, that's going to be in singles to tens of kilowatt hours. Your solar panels on your roof are usually on the scale of five to 10 kilowatts of maximum capacity. And so they produce 25% on average. Maybe they're producing four kilowatt hours per hour on average, and seven kilowatt hours per hour and the sun is up, something like that. And your chargers as well. Your EV charger is also on the scale of several kilowatts. Also. This episode of Shift Key is sponsored by RE+26, the largest and most comprehensive clean energy event in North America. Bringing together 37,000 clean energy professionals and more than 1,100 exhibitors from November 16th through 19th at the Las Vegas Convention Center. Experience a complete agenda spanning solar, storage, micro grids, EVs, grid edge technologies, and beyond, with tracks built around policy drivers, tech trends, land use, grid integration, finance, and business strategy. At RE+26, you can network with the companies and experts advancing projects, improving supply chains, developing resilient solutions, and more. Plus the tools to find them. Whether you're sourcing new technology, scouting your next partner, we're just trying to keep up with where this industry is moving. You'll find it here, all in one place, all in one week. It's RE+26. Register at RE+.com and use code ShiftKey20. That's ShiftKey20 to save 20% off a full conference pass. One reason load growth has come back, right, is because through the 20 teens, and at least this is my understanding, you should correct me if this is wrong. But through the 20 teens, we were basically increasing the efficiency of the power grid at the same time that we were adding new demand to the power grid. And we were increasing the efficiency because we were replacing the stock of incandescent light bulbs with LED light bulbs. Basically, that was the biggest story in electricity demand. And just to go back to your units, like if you think about how much power in incandescent light bulb draws, it's like 60 watts. And now, as you were saying, it's 60 to 100. And now, as you were saying, LED light bulb draws like 10. Like, that's where the demand growth went during the 20 teens. And the fact that we've now basically finished converting, you know, most light bulbs in the United States to LEDs. And, but are still adding new, like no wonder demand growth is back. Anyway, I just wanted to interject that because I was really, I think it's evocative of how like, we're talking about 50 watts per light bulb, which is a lot, but also how these small, relatively small differences in power units add up to massive utility scale decision-making. Anyway, though, as you were saying, EV, it drives the kilowatt, yeah. Yeah, EV is a lot of scale. Yeah, no, that's helpful, I think, to remember. And it's interesting because of course, electricity was first used for lighting. That was its first application way back when. And now it's interesting that lighting has become so efficient that it's such a tiny sliver of the overall, you know, electricity usage nationally now. And so many other things air conditioning and increasingly EVs and heat pumps and data centers and computing and everything else are the big drivers. So, yeah, a couple of other things that maybe are to give us, again, like a household scale that we're used to interacting with, I mean, one would be a tank of gasoline in your car, right, in your conventional car. So, a gallon of gasoline contains about 40 and a half kilowatt hours, 40.5 kilowatt hours. So, one gallon of gasoline is on that scale of a couple gallons of gasoline, I guess, around that scale of like, average household electricity use over the course of a day. Now, of course, you can't turn gasoline directly into electricity at a one-for-one conversion ratio, right? You gotta use a diesel generator, which itself is only maybe 30% efficient. So, it actually takes a lot more than that. And that's also partly why electric motors are so much more efficient, right? At the energy in your battery and converting them into traction in your cars, 'cause this is already electricity, you don't have to combust anything to make heat and then drive motion and then turn that motion into power in your wheels, right? There's a lot less heat loss. Yeah, yeah, tons less, yeah, exactly. So, internal combustion cars, maybe a third is efficient as an electric vehicle. So, yeah, tank of gas, 10 gallon tank of gas, 400-ish kilowatt hours. That's actually quite a lot. That's why fossil fuels are so amazing. You can fill 10 gallons of gasoline and have an enormous amount of energy from a kind of personal perspective. Right, I mean, this is actually like, when you fill up your car's gas tank, let's say it's eight to 12 gallons, relatively, it's a lot, several hundred kilowatt hours. That's your weekly or even more than weeks worth of household electricity use. Right, and also, I should think about it, it's about a week's worth of commuting too, right? You don't use a full gas tank in a day, usually, unless you're an Uber driver, perhaps. Yeah, so anyway, so now we're, yeah, we're in like weekly scale consumption. Now we're talking about megawatt hours, whether that's your commute energy usage or your household electricity usage. Then when we talk about gigawatt hours, now we're starting to talk about power plant scale, right? Or data center scale or industrial facility scale. A large nuclear reactor is typically on the scale of about a gigawatt or a billion watts. It's a million kilowatt hours or kilowatt. So a gigawatt scale power plant, again, producing for an hour would produce one gigawatt hour of electricity. So when we're in that scale of gigawatt hours, we're talking about the output, the sort of the hour by hour output of a large power plant or a large data center or something of that scale. Those are gonna be in your gigawatt hour terms. And then you indicated earlier, terawatts, that's the next scale up, 3,000 gigawatt hours is a terawatt hour. Now we're talking about the scale of like annual production for a power plant or annual consumption for a state or a data center or something like that. Those are gonna be in the scale of hundreds of terawatt hours. And nationally we consume about 4,200 terawatt hours of electricity annually in the US today. So there's now we're in the 1,000 terawatt hour scale. Now we're talking about national annual electricity usage. I think you skipped directly from kilowatts to megawatts, but can you briefly talk about megawatts? - Yeah, megawatt is 1,000 kilowatts. So a megawatt hour is 1,000 kilowatt hours as well. And then that's again, the scale of your weekly electricity consumption in your home or your weekly consumption of gasoline for your commute or maybe several weeks. - Renewables, I mean, I feel like when we talk about solar farms, we're usually talking about in the world of megawatts. So that's true, most power plants are smaller than a gigawatt. A nuclear plant is big. Most power plants are several tens to hundreds of megawatts scale production. So if they're producing for an hour, then you're in the tens to hundreds of megawatt hours range. But if they're producing for a year, you're more like terawatt hours. - I just wanna stick in megawatts for a second, because it's actually when we talk about renewables and when we talk about renewable sized additions to the power grid, we tend to be in megawatts. - Only when you talk about these giant generating sites, like Vogel units three and four, are each, I believe, more than a gigawatt. They're like one boy, two gigawatts or something. - You talk about these massive, massive, new nuclear power plants, then we're talking about gigawatts. But mostly in the world, when we talk about adding new power demand, especially from renewables, it tends to be in megawatt hour world. And so just, for instance, a technology that we don't hear very much about anymore concentrated solar thermal, but that if you've ever flown across the country, I'm just thinking about this 'cause I think it's evocative. When you fly across the country, there are two big concentrated solar plants. These are the mirrors that point at the single tower and then boil things and when birds fly across, they instantly get incinerated. But anyway, Ivanka, this famous concentrated solar thermal plant that went up early in the Obama administration and is gonna close actually next year. That is 392 megawatts. - Yeah, you would see this out your window if you're flying from. - Exactly, that's why Los Angeles over. towards Las Vegas and the other. - Exactly. We've had folks from Furvo Energy, the Advanced Geothermal Company on this podcast. They're working on applying, as we've discussed then, Furvo is the company, one of the several companies that is working on applying fracking techniques to generating clean electricity through drilling new geothermal wells. Capestation in Beaver County, Utah, they're a big demonstration project. That's 400 megawatts. - When it's fully built out. - That's going to be 400 megawatts when it's fully built out. Empire Wind, which is the big equinor offshore wind project in New York State, is 810 megawatts. And so just to give you a sense, what is the average combined cycle gas? - A couple hundred megawatts. So just to be clear, when we talk about power plants, normally we're in this world of talking about megawatts. Anyway though, or hundreds of megawatts, or hundreds of megawatts, yeah. - Or another perspective is Princeton University has a gas turbine here that we use to generate some electricity as well as use the waste heat for heating and cooling of the campus. We're going to shut that down soon and replace it with our ground source geothermal project. But that's a 15 megawatt turbine. So for the scale of a single campus, you might have a 10s of megawatt scale facility. The data centers, like the big excess scale data centers we're talking about, like giants, those are usually in the hundreds of megawatts to even gigawatt scale facilities now that we're talking about. So I'm building out three, four, five gigawatt scale campuses for data centers. So that's pretty wild. The other way to think about a gigawatt, I usually think of it in terms of, if again, if it's a gigawatt of average consumption, that's like 800,000 homes. So if you assume two people per home on average, that's like a city of one and a half million people scale. So a gigawatt is a city scale of consumption or production on average, which starts to give you the sale of these data centers, right? If it's a gigawatt scale data center, we're talking about like plopping down another one and a half million people's worth of electricity use with one of those facilities, that's big. How do you convert, you just kind of did adopt the cuff, but often when you see these megawatt, gigawatt numbers, they're immediately followed by a conversion to homes. And I think when you've been paying any attention to this, you realize that these conversions could be like, are especially in PR documents are like so off the cuff. They're like not comparable at all. What do you think is the best way for-- - And embedded assumptions in there. - Yes, exactly. And they also vary a lot by region, where like Texas homes use a lot more electricity than homes in the Northeast. - Yeah, so there's a couple of kind of embedded assumptions there. The most important of which is the average power output of the facility versus its maximum and then what you assume for how much electricity a household uses. So let's take the Empire Wind Project. You said it was 810 megawatts. That's its maximum capacity. Let's assume it's about a 50% capacity factor. That's a good average power output ratio for a wind farm. So wind farms in the great plain states on shore, they might be approaching 50% capacity factor, offshore wind, maybe they're in that range, 40 to 50%. So let's say 50% round numbers. That means it's generating 405 megawatts of power on average. That's pretty big. That's a couple of combined cycle power plants worth all the time, cranking up power 24/7. So that's a fairly big amount of energy from that wind farm. But then we have to assume that the average consumption of a household, which according to EIA, nationally is about 1.2 kilowatts. So I take that 405 megawatts. That's 405,000 kilowatts of average power output. If I assume the average home uses 1.2 kilowatts per hour, then that's about 337,000 homes. Call it 340,000 round numbers or 330,000. That's the kind of conversion that's being done behind the scenes when someone is reporting that number of households. And of course, it depends. If I change that capacity factor to 40%, I get more like 270,000 households, not 340. If I take maybe a more New York-specific household electricity consumption rate, which might be different from the national average, I'm going to get a totally different number, too. So that's where it gets a little tricky is what are you embedding in there? And I think the best thing to do is just get a feel for the round numbers here, right? We're talking about Empire Wind is several 100,000 homes. That's the scale at which it produces. And that's probably as accurate as we can get in these kinds of conversions. Can I ask one more question, which is our homes, even the right way to think about this, we always convert to homes. But like, people don't only use electricity at homes. Businesses, electricity. Industrial facilities use electricity. So what's the breakdown of where US power demand goes to homes versus businesses versus, let's say, industrial uses? So it looks like just over-- I'll bit over a third of US electricity production goes to residential usage. As of 2022 is 38.4% of US electricity sales work to households, residential consumption. That's about equal in size, about 35% went to commercial buildings, offices, and other commercial spaces. And about 26% went to industry. So think of it as like a quarter going to industry. If we all switch to EVs, maybe that's not true. I was going to say I think maybe the share of consumption from industry and commercial properties is going to go up over time more rapidly than households because of the efficiency gains. But maybe that's not true anymore. We've tapped out the lighting efficiency improvements, like you said. And if we all convert to electrocuting and EVs, then actually residential consumption could grow quite significantly. So I guess if you're thinking about what's the largest user today, it is the largest sector as residential consumption. So maybe households are the right number to think of. I'm not sure what else. We could use EVs. That would be more and more people start to switch to EVs. Maybe we'll start to say this will power however many million EVs for a week, or commutes for a week, or something like that. That could be the next intuitive thing that we might switch to. One more question, which is that people, what this all means, and I just want to make sure, is that when you're looking at, say, what energy uses for a geographic area or for a system, you have to be careful between maximum use average use. You said this at the beginning, but I want to draw it up. Between maximum use average use and annual use, because all of those, if I'm understanding correctly, will be in watt hour, whether it's megawatt or gigawatt. And you just have to be careful that you don't elide them. I was looking up because I was curious. The New York City subway system uses 3,500 megawatt hours annually. So, what is that? 3.5 gigawatts? - 3.5 gigawatts. - 3.5 gigawatts of hours annually. - So that would be like three and a half nuclear reactors producing continuously, for or seven natural gas power plants, or seven to 10 natural gas power plants producing continuously. That's a lot of electricity. - Yeah, it's a lot of electricity. - If you think in the household too, it's interesting to break down. Like the biggest users, and I think you guys did a good job in your decarbonize your life guide that everybody should check out on heat map, pointing out that there are just a few really large consumers of electricity in a typical home. That is space heating and cooling. That's the biggest one by far. Coming in at about a quarter that size, or maybe a third is water heating, if you have an electric water heater. And then even smaller than that is refrigerators. Beyond that, everything else is very small, unless you have an EV, which would be on the scale of your heating and cooling too. Lighting used to be part of that equation, but it's not anymore as we talked about because of the growth of LEDs. - I learned a lot from this. It's interesting to do this without my lecture slides with a microphone instead. Hopefully that was somewhat helpful. (laughing) (upbeat music) - And that will do it for us this week, but stick around after the show, we have an exclusive interview between HeatMap Labs and Sayed Bidini, the CEO and co-founder of Verse. And thank you to Verse for sponsoring this episode and recent episodes of Shift Key. I have to say it's gonna be such a busy fall here at Shift Key. And we're gonna kick it off next week with an all new episode, so listen in then. Until then, Shift Key is a production of HeatMap News. Our editors are Jillian Goodman and Nico Lorchella. Multimedia editing and audio engineering is by Jacob Lambert and by Nick Woodbury. Our music is by Edub Kromelow. Thanks so much for listening. We'll see you next week. (upbeat music) - My name is Mike Munsell and I'm the Vice President of Partnerships with HeatMap News. Over the last two conversations with Sayed Bidini, we talked about what Verse is doing now to help data centers connect to power more quickly. In today's conversation, we take a longer view and we discuss Verse's plans over the next five years and beyond. - What's biggest opportunities for Verse over the next five years? And are you looking to expand into new market segments or even new geographies? - Yeah, so I wouldn't brag that we're an AI company. I think all companies are AI companies. If you're not doing AI, you're not really a real company. But there is a lot of technology that we're building. It's one of those things that AI alone can solve the problem. When it comes to physically controlling large pieces of infrastructure, you really need a talented team and we're blessed to have those folks in house. So expanding the technology and product which requires human and tokens is definitely on our radar. And that's why we actually went out and raised capital because we're actually putting fuel on the fire and running faster, which is the whole concept of venture-backed companies. You really need to have an understanding and a pathway that you really want to run faster and you have the backlog and commitment to do so. And then obviously, it's. expanding to new markets is a big priority for us. We do have a presence in footprint in Europe, we're trying to deepen our bench and strength in European markets. Eventually, it will be in APAC as well, but I definitely believe in the walk jog run philosophy. There's so much to do here in Northern America that we haven't even scratched the surface. So while the opportunities arise everywhere, I think as a founder and as a person who's been in this field, concentration and focus pays off really well. So we want to do things one step at a time. - Do you think load growth will continue at its current pace for the foreseeable future? - Yeah, I mean, was it in 2022 or 2023 where we first saw for came out with their load growth forecast, jumping from two to five percent, which is ironic, like it was astonishing to see because doubling up your forecast on a year over year basis was unprecedented. Now what drove that load growth? Unfortunately, it wasn't so much EV adoption. It was the whole rise of AI and data center and CAPEX. In our view, load growth absolutely will grow unless we want to give up the AI race. You need to build a certain conservatism in it because I don't believe the 700 data centers in the queue for accessing power are going to get built. So there's a lot of duplicates and a lot of kind of anomalies in there, but at the end of the day, it's a solid amount of capacity that needs to be built. And I think we also need to pair that with environmental constraints. How do these data centers become good grid citizens? Absolutely feasible, absolutely doable. The type of technology that it's been paired with these data centers could avoid transmission charges, avoid capacity charges, avoid investments in stranded assets, which was the whole concept of non-wiles alternatives, which was well studied 10 or 15 years ago. We just need to create the right incentives and really make sure that the AI race stays here in the US, but we do it sustainably. We do it in an environmental friendly way. And we also make sure we protect our ratepayers, which is you and I at the end of the day. Appreciate that. Is there anything about the future of power and AI that you think the market's getting most wrong right now? I wouldn't say there's a fundamental misconception. Around load growth, but there might be some bullish numbers out there that, for example, I use the 700 number that 430 gigawatts of data centers is going to get connected. It won't. We are doing our best, but we're not going to have 100% market share. There's pressure on supply chain for physical power generating assets. There's limits there. So I think depending on where do you fall on that spectrum, your perspective on how bullish is this going to be. There's a spectrum on it and it's going to change. But fundamentally, is low growth going to be astonishing? Yes, to what degree? That's where a lot of different perspectives come into play, depending on who you ask. What do you think the US risks losing economically if we can't bring new power on fast enough? You know, the analogy that I want to use, although I wasn't born in that era, I mean, we are essentially in a cold war time. It's not about going to the moon. It's not about controlling nuclear bombs. It's about controlling this technology, which is going to fundamentally change how we work, eat, sleep, and how we breathe oxygen. That is AI and that's going to be part of our narrative. Let our own getting into robotics and how's that going to change everything. So right now, I mean, if I want to be straight, it's Austin, China. And who's going to win this race? It's going to be dependent on innovation and technology and advanced manufacturing and chips and also the power grid. And I can tell you, we are behind China in the power perspective. I mean, China has the most dominant and aggressive deployments of clean power. I don't think they did it just because it's clean. I think they understood it's flexible and cheap and you don't need to rely on fossil fuels and the straight of hormones. Or it says we are kind of grappling with political issues when it comes to sources of power. Some people call it a green scam. But nowadays, CFOs love it. So we are behind from the power perspective. We are ahead, not by much. We are ahead by the basic AI models and the chip design and chip manufacturing. But who's going to win ultimately needs to cover all aspects. And we are helping. We are contributing as much as we can on the power front. But it's not just about verse and what we do. It's about all the dominoes need to be into place. Well, let's just talk a little bit about that one domino. If you could sum up this conversation, what verse means to the grid, what it means to speed to power, what it means to this point in the history of power markets, how would you sum that up for verse? I would sum that up in the central power grid is out of capacity. And the way to do it is invest in small generators at these local facilities and build a technology on top to orchestrate these power assets. That is the model of verse taking a centralized grid and decentralizing it. It'll help us with being good grid citizens. It helps us powering the AI race. And we can do it in a sustainable way. We're just the cog in this big machine. I just want to give a shout out to my team. They're working day and night, solving some of the world's technologically complicated problems. Because I always say the most non-linear complex system designing created by humankind before the age of computers is the power grid. And we're helping to modernize that. We're helping to decentralize that. And that requires a lot of hard work and long nights. And I'm just proud to me next to these guys to kind of see it happen. Is there anything that you wish was happening on the policy front in the US grid? Clarity. Clarity is the number one thing. No decisions are way worse than bad decisions. So if we can centralize what is the right rate structure? What is the right policies? What is the right framework for winning the AI race? In a sustainable way, I think everybody is willing to move in that direction. If we don't have that, then people go in different directions and a lot of ambiguity and uncertainty happens, which we don't need that right now. We need to minimize uncertainty. We need to all be clear and moving in the right direction. So my folks, friends in the Capitol Hill, lobbyists, utilities, technologists, hyperscalers, we all need to come in the room and make good decisions because whatever we decide now is going to impact the longevity and our future as a nation. So I wish that happens sooner than later. Awesome. We'll leave it at that. Thank you so much, Sayid, for joining the podcast. Thank you so much. Appreciate it. That wraps up our conversations with Sayid Medini, CEO of Verse. To learn more about Verse, visit verse.ink or click the link in the show notes page. Thanks so much for listening.