Today’s guest is Lara Pierpoint, Director of Technical Strategy at Exelon. Exelon is America's leading competitive energy provider with one of the cleanest and lowest cost power generation fleets. Its utility serves millions of electric and gas customers. Lara's team is tasked with enhancing Exelon's ability to capitalize on new technology and respond to disruptive innovations. Her expertise is in systems analysis, modeling and policy. And her knowledge is deep in nuclear, gas and electric interface and energy finance as well as widely across the electricity spectrum. This is a wonderful discussion, and I really appreciate Lara's perspective. Enjoy the show!
Today’s guest is Lara Pierpoint, Director of Technical Strategy at Exelon.
Exelon is America's leading competitive energy provider with one of the cleanest and lowest cost power generation fleets. Its utility serves millions of electric and gas customers. Lara's team is tasked with enhancing Exelon's ability to capitalize on new technology and respond to disruptive innovations. Her expertise is in systems analysis, modeling and policy. And her knowledge is deep in nuclear, gas and electric interface and energy finance as well as widely across the electricity spectrum.
Prior to Exelon, Lara has had a number of different roles. She was Senior Advisor for energy policy and Systems analysis at Department of Energy. She was a AAAS fellow at the US Senate Committee on Energy and Natural Resources. And she also has her PhD in Engineering Systems from MIT, as well as a Masters in Nuclear Engineering and in Technology and Policy also at MIT, and an undergrad in physics from UCLA. Suffice to say Lara's got a really interesting perspective to talk about everything energy and everything climate change.
In today’s episode, we cover:
Links to topics discussed in this episode:
You can find me on twitter @jjacobs22 or @mcjpod and email at email@example.com, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Enjoy the show!
Jason Jacobs: Hello, everyone, this is Jason Jacobs and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change, and try to figure out how people like you and I can help. Today's guest is Lara Pierpoint, Director of Technology Strategy at Exelon. Exelon is America's leading competitive energy provider with one of the cleanest and lowest cost power generation fleets. Its utility serve millions of electric and gas customers.
Jason Jacobs: Lara's team is tasked with enhancing Exelon's ability to capitalize on new technology and respond to disruptive innovations. Her expertise is in systems analysis, modeling and policy. And her knowledge is deep in nuclear, gas and electric interface and energy finance as well as widely across the electricity spectrum.
Jason Jacobs: Prior to Exelon, Lara has had a number of different roles. She was Senior Advisor for energy policy and Systems analysis at Department of Energy. She was a AAAS fellow at the US Senate Committee on Energy and Natural Resources. And she also has her PhD in Engineering Systems from MIT, as well as a Masters in Nuclear Engineering and in Technology and Policy also at MIT, and an undergrad in physics from UCLA. Suffice to say Lara's got a really interesting perspective to talk about everything energy and everything climate change.
Jason Jacobs: We have a great discussion in this episode, really giving us a sense of more of the perspective of the utility. What's on their mind these days and what's going on at Exelon? Where they've come from? Where they're going? What some of their key priorities are? And then where innovation fits into all this and how Lara's team goes about doing the work that they do?
Jason Jacobs: As well as some specific examples of some of the projects that they've taken on and some successes that they've had. And of course, we go on to talk about all of this in the context of the broader climate change problem and where energy fits in, where Exelon fits in and what other high leverage things we can do to have the biggest impact in the climate fight. Lara Pierpoint, welcome to the show.
Lara Pierpoint: Thank you. Really excited to be here.
Jason Jacobs: So glad to have you and for a number of reasons. I think nuclear is a topic that we've covered some on the pod, but that's probably under for what's warranted and you are a is it AAAS Fellow?
Lara Pierpoint: That's right.
Jason Jacobs: Yeah, Joseph Majkut from Niskanen came on, who was also in that program, and I've spoken to a couple other people from that program that haven't come on the pod but it just sounds like a phenomenal program. So there's that and you're working at utility now and that's also the first time that I'm having that perspective represented and your focus on the innovation side. So all of these things make your perspective super interesting. So excited to dig in.
Lara Pierpoint: Thanks for that.
Jason Jacobs: Well, for starters, maybe just talk a bit about Exelon and what the company does and your role there and then we can switch gears after that and get into maybe some of the history that led you to the path that you're on.
Lara Pierpoint: Absolutely. So typically, when I'm in a group of people who are all energy folks, the first question I will ask is who has actually heard of Exelon? Because invariably there are a lot of folks who have it and or who confuse Exelon with Exxon Mobil, which we are definitively not. So-
Jason Jacobs: It's like I went to Wesleyan University for undergrad but everybody confuse it with Wellesley College, which is of course an all girls school.
Lara Pierpoint: Of course, yeah these are some of the challenges we face. So Exelon, we are the biggest electric utility in the country by number of customers and by our market cap. We are one of two remaining hybrid utilities, which is to say that we've got both competitive generation and competitive retail and regulated utility is all under one roof. So it's a really fun and fascinating place to be because I get a view on the regulated markets and how that whole world works for serving load to customers.
Jason Jacobs: Each of those three, can you just give like one sentence on what those are?
Lara Pierpoint: Oh sure. I can even give more sentences-
Jason Jacobs: For listeners. I understand all of it but just for the listener's benefit.
Lara Pierpoint: Of course. You've memorized Exelon's org chart I'm sure, but for folks who haven't absolutely. So Exelon generation, here's where we have competitive generation, which is to say big scale generators. So we're the biggest nuclear operator in the country. We've got about 20 gigawatts of nuclear power. We also have about 3400 megawatts of hydro, about 7500 megawatts of gas. We've got about half a gigawatt of solar and one gigawatt of wind and one of my favorite statistics about the company, we don't own a single coal plant. So that's our generation portfolio. Then I mentioned we have competitive retail, so this is also on the competitive side of the business. We serve customers that are mostly commercial and industrial customers in 48 states in the country.
Lara Pierpoint: Then on the regulated utility side, we have six regulated utilities. And this is how folks actually tend to know us, as by our utility brands. We have ComED in Chicago. We have Baltimore Gas and Electric, PECO in Philadelphia, Pepco in DC. In addition to Atlantic City Electric and Delmarva Power in Delaware. So as you can see, we've got basically an Atlantic seaboard footprint of electric utilities that serve load to customers under a regulated model, in addition to Chicago, and then we have that other piece of our competitive business.
Jason Jacobs: Got it. And I guess for context, and I have to admit as I said, it's my first interview in the utility world, which also means I'm delving into an area, which is out of my comfort zone and knowledge base. So where does Exelon sit relative to other utilities and maybe just a bit on the utility landscape domestically or global as well, if that makes sense?
Lara Pierpoint: Yeah, absolutely. So within the United States, there are a number of utilities, some that exists in what we call restructured markets. That's where we are, where we've got generation that effectively has to compete in markets to sell its product or to sell its electricity to load serving entities, like the utilities that then provide power to customers. So that's one model that accounts for about half of the country, the rest of the country still operates under a fully regulated or vertically integrated utility business model. So that means that utilities in those regions not only serve their customers under a regulated model, but they're also allowed to build generation assets and operate those generation assets within a regulated environment. So they effectively are given permission by the regulator to invest in a certain asset and to earn a regulated rate of return on that. And that's true across the entire value chain for electricity so everything from generation to load serving.
Jason Jacobs: And for those markets it's essentially a regional monopoly?
Lara Pierpoint: Effectively, yes. And what we call that is there's a regulatory compact between that utility and the regulator so they are allowed that monopoly but in exchange, they have some limitations on what regulated rate of return they can earn on any investments they make.
Jason Jacobs: And not from an Exelon's standpoint, but overall, how long has that regulated model been in place? And how is it working today?
Lara Pierpoint: That's a great question. I think it's been in place since the late 1800s, as I recall. The whole idea was that this was a particular model that would work well for the build out of electricity service to customers. The idea was, if you're going to build a wire to somebody's house, there's no reason to have two companies competing to build that wire, because this is an expensive infrastructure proposition. So we'll offer these utilities, these means of basically having that monopoly, just investing once in the infrastructure that's needed. But again, an exchange to there's this cap on the regulated rate of return that utilities can earn.
Lara Pierpoint: Then in about the mid 2000s some folks realized that this wasn't necessarily a model that was serving customers well, because it obviously eliminated some of the spirit of competition that we tend to believe so highly in the US, around how utilities could build assets and compete and ultimately compete on price and other kinds of service provision to their customers. So the idea was let's restructure the markets. Let's introduce some more competition. And ideally, this would then drive down prices of electricity provision for customers and help in improving performance in some other ways. And I think there's a massive debate out there around what really have been the impacts of this restructuring. I think certainly there-
Jason Jacobs: This is the deregulation?
Lara Pierpoint: Exactly.
Jason Jacobs: And when did that start happening?
Lara Pierpoint: That was about the mid 2000s.
Jason Jacobs: Got it. And was that through mandate or structurally how did that come about?
Lara Pierpoint: This is a little bit outside my area of expertise but in general, I think it was some folks working with a cadre of state regulators and legislators and other organizations, including federal organizations like FERC that oversee a lot of how the market operates, to get this done. And so we do say that this was a move toward deregulation but it's important to remember that it's not like there's zero regulation in these markets. These are still very heavily regulated areas of innovation and work. And so we see this as being something that has been beneficial. There are certainly some challenges because we're trying to figure out how do you serve all of the needs of a massively complex system and of the customers. And can you do that with a fully competitive model? We're still working all those things out.
Jason Jacobs: Okay and what is your role in the organization?
Lara Pierpoint: So my role at Exelon, I am the Director of Technical Strategy for Exelon. So that means I sit at the corporate level, which gives us purview again, over all those different aspects of our business. And my team's job is really to focus on technical aspects of strategy. So we get to work on for example, our partnership R&D program. We fund work at universities and national labs that we think have the potential to be game changing or near term relevant to our business. Things that we think are really interesting and exciting, where we think we can extract some value out of the IP that might get created there.
Lara Pierpoint: We also work with an organization called Volta Energy Technologies. This is effectively a VC group that Exelon actually seeded and started up. It's led by some folks who came out of Argonne National Lab and what they are is a group of really incredible energy storage scientists and some really awesome people who understand the commercial space as well. They go out and they source deals in the energy storage space, they bring them back to Exelon and several of our other strategic partners. Then we get to decide to make investments in that space and that's been really exciting because while Exelon has a venture's arm, we call it Constellation Technology Ventures. This particular arena allows us to take on a little bit more technical risk in one particular area of technology that's vitally important to the company. So that's another fun thing my team gets to do.
Lara Pierpoint: And then we also work on what I call Technical Initiatives as Assigned, which is to say, when folks have technical questions, we obviously support the different innovation functions throughout the company. But one big example of something we've been working on for a couple of years is what we call our Nuclear Repurposing Initiative. So I know you mentioned nuclear has been touched on here and there. Exelon as a nuclear company really is interested in the health of our nuclear reactor fleet. And right now our nuclear reactor fleet is facing a lot of really challenging headwinds, particularly in those merchant markets, where we have to compete to sell our electricity. So as a result, our nuclear leadership came to my team and said, "Hey, can you help us think about whether we can actually reconfigure our nuclear plants? So find some kind of technical solution to produce some new product other than electricity that we sell into the markets." And if we could do that, perhaps we could decouple our revenue streams from being totally reliant on electricity, and potentially make some more money and sustain our nuclear fleet over the long term.
Jason Jacobs: And just for order of magnitude, how many people work on your team and what types of skill sets are involved?
Lara Pierpoint: So I've got four people on my team, including me, and we have a lot of PhDs. We actually I'll go ahead and mention this every single one of us has a degree from MIT so we lose points in terms [crosstalk 00:11:38] it's absolutely not a requirement but somehow that just happened. So we kind of make jokes about that, that we need to hire for diversity coming up in the future. But we all tend to be very technical, but also to have some experience really understanding the commercial and sort of socio economic value of technologies and being able to translate complex technologies and environments that are much more business oriented. So it's really a skill set that has to cover both.
Jason Jacobs: I left off when I was talking about interesting things at the beginning of this discussion and why I was excited for it. You also spent some time at DOE.
Lara Pierpoint: I did. That's right.
Jason Jacobs: Yeah. So that was another one. So maybe switching gears let's talk a bit about how you came to work at Exelon in terms of ... yeah what's your story that led you down this path? And maybe a bit of a why as well?
Lara Pierpoint: Yeah, absolutely. I think the story on the path starts a little bit earlier in the sense that, for me, I've really always been chasing impact. That's what this is about for me, I want to be able to make a meaningful difference in the installed capacity of the electricity system that exists in the United States, from a cleanliness and climate change perspective-
Jason Jacobs: From since you were a baby?
Lara Pierpoint: I was born desiring to do that. No, I think for me the genesis of all this, it's about climate change, and it's about preserving the environment. And finding ways to do that, that are really meaningful, that are big, that move the needle as quickly as possible. Sure, a lot of folks that you talk to say that so.
Jason Jacobs: When did you start thinking that way?
Lara Pierpoint: I would say probably in college, I think if you want to take the story to its original start. The short version of it is that I was a math science nerd growing up, of course, and then went to college thought I was going to major in astronomy. And basically, I took a class my freshman year called Science and Society, that totally changed my life. And it taught me two things. One is that I didn't actually have to pick between being a math science nerd and actually doing things that involved policy and social sciences and all this other stuff that I actually also really loved. But the more important thing that taught me was that I really wanted to do something meaningful for the earth and for the world. So while I really loved astronomy, and continue to love astronomy, I just realized I wanted to work on problems that were a little bit closer to home. And so from there, I wound up majoring in physics, sort of figured I would understand how the whole world works by majoring in physics. It turns out if you study physics, it raises more questions than it answers, but that's a whole other story.
Lara Pierpoint: And from there, got into nuclear energy, nuclear security topics and then went to MIT at a time that really was huge for the energy world. This was right when the MIT Energy Initiative got started, was right when the MIT Energy Club got started. Huge amounts of interest and just an explosive growth in the number of people who are really working on energy related problems and engaged in the sector. And that was when the bug really bit me that I said, "I can take my skill sets, I can focus on climate change is a challenge. I can work in energy and it'll allow me to really work across these silos. Do things that are scientific and technology development related, but also be able to think about the broader impact of those kinds of technologies and how they come to be."
Lara Pierpoint: So that's the initial backstory and through that, it led me to my PhD at MIT, where I worked on nuclear waste management related issues, and then eventually to the Senate where I got to do a number of things for the Senate Energy Committee. We can talk more about Congress if you want, that's a fun and crazy beast. But then I wound up at the Department of Energy and from there really started understanding how again thinking about having impact and how do I chase that impact? How do I do more? Part of what I realized was that electric utilities are one place that the rubber really meets the road. This is where decisions are getting made about the installed infrastructure for our energy systems in the US. So I said, "You know, I really want to understand that. I want to learn how the decision making process works. And I want to be part of that."
Jason Jacobs: Sorry to interrupt what led you to that conclusion?
Lara Pierpoint: The funny story about the Department of Energy is that, for a lot of folks in our world they think of DOE as being an energy related organization. Of course, the truth is that about three quarters of DOE's funding goes into the nuclear weapons complex and into cleaning up after a lot of our nuclear weapons related activities. And not only that, but when you think about the authorities that DOE has and what it actually does, it's extraordinarily important in funding research, and there are certain regulatory authorities that has, for example, over energy efficiency. But in general, that's not really where the needle moves on a lot of the policy. A lot of that happens in the regulatory environment. So these are organizations like the Environmental Protection Agency, for example, when they offer some sort of new regulation, for example, on mercury and air toxic standards that changes the way that we actually invest in energy infrastructure. Because we have to comply with these regulations.
Lara Pierpoint: So I watched all of that and said, "Okay, so these regulatory agencies have a little bit more direct impact and near term authority. But again, at the end of the day, they're setting the stage for the decisions that get made by folks within industry." And so that was what I wanted to better understand, is what makes these utilities tech? How are decisions made? How is innovation taken up? What are the barriers to being innovative or to doing things that are cleaner and better?
Jason Jacobs: And when you say that impact is always what's driven you, how do you define impact? Impact on what?
Lara Pierpoint: I would say on the total parts per million of carbon dioxide in the atmosphere is a big one. But I think there's sort of the big things that's definitely the biggest one and certainly the environmental aspects of how energy interacts with our ecosystems, I think is extraordinarily important. So to take it again, back to that base level, there's a place up in the Sierra Nevadas and that my family went to every single year when I was younger. And when we used to go on these trips, we would pack a bunch of knit hats and gloves and things like that, because it gets really cold at night in the mountains, or at least it used to. But about a month ago, I took my kids up there and got into the 90s, every single day, it was extraordinarily hot. And that had never happened the entire time that I was younger.
Lara Pierpoint: So again, I think for me it's about environmental impact. It's about seeing some of these ecosystems. It's about understanding how the trees are reacting to their environment, from a broader environmental perspective and trying to reduce that harm and preserve these beautiful spaces. So that's at the high level. But again, I'm not so naive to think that something I do today is going to affect the total concentration of CO2 in the atmosphere tomorrow. So measuring some of those smaller steps includes things like, can you actually get some new innovative carbon-free idea across the finish line in the sense that you build some new infrastructure or demonstrate some new thing? Can you develop a new technology or create some IP around something that could be truly game changing in the energy industry, if you can only figure out how to scale it up and sell it? Those are the sorts of things that I do on a day-to-day basis and think about as kind of near term job goals that I hope then that are really contributing to that broader impact.
Jason Jacobs: So the department within Exelon that you work in this technical strategy, did it exist before you came in? And if so, what did it look like when you got there?
Lara Pierpoint: It did not. It's a new. So when I came to Exelon, we had one Corporate Strategy Team, but some folks were recently being hired in with some of these deeper technical skill set that my team now represents. So I think there was already a recognition and that's part of the reason that Exelon hired me that they wanted people who understood the technical pipeline, basically for things that could be interesting or game changing for our business. And then since then, we realized it helps to kind of like streamline and organize things, which is why we organize the Corporate Strategy Team around this technical group, and then this other Business Strategy Group. Part of what's been really interesting for me is that when I came to Exelon, I looked around at other utilities and it took me a while to find some peers and people who had jobs that were similar to mine. But since I've been there, more and more folks have started popping up, many of them relatively recent hires. So I think there's now kind of a broader recognition among utilities, that the skill set is important. It's important to have people who understand technology and technology development and can harness that in really productive ways.
Jason Jacobs: So prior to that skill set existing in these organizations, how did this type of technical innovation happen?
Lara Pierpoint: Mm-hmm (affirmative). In all sorts of different ways. So I think there are obviously lots of other pockets of innovation throughout all of Exelon, and some really important ones really incredible groups of people within, for example, our nuclear organization, and within each utility that have done R&D, have supported R&D, have supported pilot projects, have worked with organizations like EPRI, the Electric Power Research Institute, which is the R&D arm of the utility sector. So a lot of really important work has gone on over the years. And I think part of what these folks have been able to do is look out at the landscape of technologies, pick and choose the things that they find really interesting and valuable, and bring them in and adopt them over time.
Lara Pierpoint: I think part of what's changing now is that actually just the pace of technological innovation is so much faster. Obviously, particularly in the digital sector and in the ways that overlaps with the utility. So what's different is now I think at a higher level, our leadership sees this need to have a really broad view across all the things that are coming up, to be able to have connections with university ecosystems, to have people like my team who can really speak the language across a huge set of technologies, just to help us figure out where to focus. And ideally, to help us find things that are moving quickly that again, we can either harness or at the very least kind of mitigate the threat of new technologies.
Jason Jacobs: And when you are trying to figure out where to anchor and have an impact. I know you said that you came to believe that utilities were the place where you could have the highest impact. You could have done policy stuff coming from where you were coming from, you could have joined a start-up coming from where you're coming from, you could have joined a large ... you could have done energy projects that like at Google, for example. And when I think of utilities, I think of big, I think of screwy incentives and I think of kind of slow and hard to understand. I've never spent any time inside of utility and I want to learn and I have far from a fully important impression. In fact, I'm really eager to better understand because utilities are also huge and are very well resourced and energy is a huge driver of emissions. And are in a position to really bring about change. Provided that we could mobilize that force in a way that can move to push forward and innovate efficiently and effectively. So what gave you confidence going in that you're going to be able to get anything done?
Lara Pierpoint: That's a great question. I won't sugarcoat it utilities are big organizations and Exelon in particular, we have I think, on the order of 34000 employees in the company. So this is a big ship, and there's a lot of inertia. And it's not always easy to do the sorts of things that we want to do. But gain, thinking about that impact question, utilities, as you say, they're well resourced, they have a lot of influence. There are cases where there are regulatory barriers to other folks entering the sorts of systems that they kind of occupy from a business perspective. So there are a lot of reasons that I think new technologies, in some sense, really almost have to think about utilities and how they interact with the system if they want to work with them, or provide some sort of element of change to the system.
Lara Pierpoint: There's certainly a theory that utilities are not necessarily by any stretch, a permanent fixture of the fabric of American society. There's a view that you talk about the utility death spiral, for example, that we get to a point where distributed energy generation is really what drives electricity generation for all of our customers. And at some point, maybe you don't even need the utility anymore. I think a lot of folks are now seeing that as potentially a little bit more distant. But for me going from where I went from policy into a utility, what I thought about is I really want to understand those dynamics. Because there's sort of two options either electricity utilities tend to be a really key and important piece of the picture. That we sort of have to figure out if we want to reform the electricity sector, or maybe it's somehow true that they're not long for this world. But then I want to understand what that means too and how do you figure out what's going to replace those utilities?
Lara Pierpoint: So I think I knew that what I would learn was going to be interesting and impactful on my journey to try to make change. I will say, though, that I've actually been surprised by the level of impact I've been able to have within Exelon. I knew that Exelon was a cool company. I have liked a lot of the people I met from Exelon before I joined. But I didn't really know until I came there, how deeply committed our leadership is to innovation. And that's one of the reasons that it's a really exciting place to work. I mentioned we're facing headwinds with our nuclear plant and in our generation business, but despite all of that, there's still been a lot of full-throated vocal support for what my team does, for what the other innovation teams throughout Exelon do. And I think a strong recognition that our path to success involves really potentially reinventing aspects of our business.
Lara Pierpoint: So as a result, not everything goes forward, not every idea gets met with applause. But there are certain things that we've been able to do and to convince folks to take time out of their day, and you spend your time on this pilot project, really think about whether we can invent something new together with this particular University and spend some time with us to help that team do that. Those sorts of things we've been able to do. And it's felt really great to know that even if we're not moving at light speed, we're still moving in a direction that I think is productive.
Jason Jacobs: Any examples come to mind that you could walk through that illustrative of the type of impact that you're describing. And it'd be great to talk not just about what you and your team did, but even how you came about choosing the problem space, and the potential solution that you focused on to begin with.
Lara Pierpoint: Yeah, sure. So I'll give an example in that nuclear repurposing arena that I was discussing. So this is one where the original impetus to study this space came from our leadership. Again, the folks said, "Let's not leave any stone unturned, figure out what can we do with these nuclear plants besides just produce electricity?" So the way my team approached the problem was to say, "Okay, let's create our hugely long list of all the things you could do with a nuclear reactor." We kind of categorize those we said, "Okay, nuclear reactors, obviously produce electricity and there are things we could do other than just sell electricity directly into markets. For example, we could sell electricity to a data center."
Lara Pierpoint: We had a whole list of things we could do with the steam that we generated at a nuclear power plant. So this question was, could we reconfigure the plant to remove some steam and sell that directly to industrial off takers? There's obviously stuff you can do with the neutrons inside the nuclear reactor. So creating medical isotopes is one of the common things that commercial nuclear reactors do. And then a whole list of things that we could do if we shut down the nuclear reactor, but maybe you could repurpose the site.
Lara Pierpoint: And so we started without whole list. We brought in some external experts, we brought in some internal experts. And we had people really shake it down and say, "Okay, these are the things that we actually think are promising." And then we continued by doing some more work on understanding from a technical perspective and from a market perspective, which of these things might actually make sense for us? Where do we think we can make money? Where do we have, for example, the right sort of temperature steam that's compatible with some kind of industrial process?
Lara Pierpoint: And so we got a much more deeply narrow list. And interesting to me, hydrogen was one of the things that really popped up as being an interesting product, we could potentially build at our nuclear power plants. So that's kind of where we've gone and from there, my team did some deeper calculations, tried to understand what are some of the hydrogen markets that exist in our nuclear territories? We partnered with Idaho National Lab and actually got some grant money from DOE to work with Idaho and a couple of other partners as well in the lab system to assess how deep are these hydrogen markets and could we actually economically sell hydrogen produced through an electronic process and one of our nuclear plants to these markets.
Lara Pierpoint: And then from there, we kind of started saying there might be some opportunities to really work on this. And so could we do a demonstration of hydrogen production? At about the same time we were asking that question, the Department of Energy, the Office of Energy Efficiency and Renewable Energy released a funding opportunity announcement through their hydrogen scale program that involved demonstrations of clean hydrogen production. So the timing was pretty perfect. And this was one of those occasions where my team rallied folks internally, particularly within the nuclear organization, and said, "Okay, we've run some numbers. We think this is interesting at large scale. Are you guys interested in doing something at small scale, particularly given there's this opportunity to get some support to try this and since it'll be a first of a kind project. And to our great delight, we were successful in that and so on August 15th, DOE selected us for a potential award subject, obviously, to our ongoing negotiations through the award process. But what this means is that we have a clear pathway toward actually building a hydrogen electrolyzer at one of our nuclear plant sites.
Lara Pierpoint: And in doing that, we're going show we can actually cleanly produce hydrogen using nuclear power. We're also going to demonstrate dynamic operation of this electrolyzer, so we're going to show that you basically could use remote market signals to drive its operation and try to understand the performance of the electrolyzer under those conditions. The idea being that if we scaled this up, maybe you could put one of these at a nuclear plant and that could help you buffer for some of the low price times instead of selling nuclear electricity into the markets when electricity prices are low, you use that electricity to make hydrogen. That's kind of the long term vision for it.
Lara Pierpoint: And then the fun part is that in the meantime, this tiny electrolyzer that we're going to be demonstrating at one of our sites will actually cleanly be generating hydrogen for the purposes of that individual nuclear plant. So whereas our nuclear plants each buy a little bit of hydrogen on the open market, usually hydrogen that's created with natural gas. This plant will now have a clean source of hydrogen right there the plant site.
Jason Jacobs: And are there certain criteria through which you're using to assess whether these opportunities are a fit to take on. So for example, are you looking for incremental revenue opportunities? Is it about driving up efficiency? Is it about lowering costs? Is it about emissions?
Lara Pierpoint: All of the above is the short answer. We tend, obviously to lead with the economics, obviously, as the public company Exelon has a duty to its shareholders. And we want to do things that we think have the ability to be scalable within the company. That isn't to say that every pilot project has to be not revenue generating for us, but there certainly has to be a pathway toward commercial value, or toward value for our customers, whether that's creating efficiencies and saving money or some sort of new revenue generation opportunity. Those are all things that we will absolutely consider. We also tend to within our DNA, be a company that's very focused on clean. So we were one of the members of the Climate Leadership Council, for example, and have long been pushing for a carbon price. So that's something that we see as hopefully in the long term future for the industry, and obviously a key piece of what we hope to do with our innovative technologies as well.
Lara Pierpoint: But I think there are some other things to consider too within the electricity sector, reliability is extraordinarily important. As you can imagine, we were literally keeping the lights on for our customers. And so understanding that resilience and reliability needs are paramount for everything that we do. That's something that we absolutely bake into our decision making when it comes to innovative tech.
Jason Jacobs: So given that you mentioned that so much of your motivation is about impact and about parts per million of carbon in the atmosphere. How are you feeling about the state of the climate? I don't know if you call it climate change, climate crisis, kind of where are we with that today? And how have your views on this issue shifted from when you first got into this work so many years ago?
Lara Pierpoint: Gosh, it's really hard honestly, not to get really depressed looking at all the New York Times headlines that kind of cross my view, watching the Amazon burn, watching my own backyard burn here in California. These are things that make me feel really concerned for the environment and scared about the climate. And honestly, I think all of this is becoming much more visceral much sooner than I thought it would. So this isn't something that I'm thinking about for my children's lifetimes now. It's something I'm thinking about for my own, too. So I think all of that is challenging, but I think it really does drive this call to action. I think it's making all of us within this community realize that speed, how fast we move, how quickly we really move the needle, and do things at large scale. All of that is extraordinarily important.
Lara Pierpoint: And I think we've always known that, but this kind of just as driving at home for us even further, every time a new category five hurricane starts sweeping up to our east coast. So I think, again, it's easy to get really, frankly depressed about kind of the state of particularly the policy atmosphere around a lot of this. But I do find that there's some hope and one of the ways in which I see that is in how corporations and cities and other entities are responding and are refusing to sit down and wait for the federal government to take over and to provide all the impetus to get us to the cleaner future we really need.
Lara Pierpoint: One example of that is that right after I talk to you, I'm going to go meet with a European ammonia manufacturer. And they really want to know more about what we're doing with hydrogen and what some of the opportunities are to maybe cleanly produce hydrogen in the United States and how our markets are looking and all of that. And so it's these sort of interesting and in some ways, surprising conversations that I'm having that cross silos and kind of really start to move the conversation forward around the technologies and the solutions, regardless of the policy environment. That's what gives me at least a little bit of hope.
Jason Jacobs: And if you could wave a magic wand and have your work at Exelon play the biggest role that it possibly could in the climate fight, what does that look like looking back in hindsight and in five years and 10 years, even in 20 years, what will you have achieved?
Lara Pierpoint: If we do a couple of demonstration pilot projects, R&D projects that really clearly demonstrate there is a carbon-free technology that helps with reliability that helps with resilience that kind of fits a lot of the boxes that electricity utilities need to check. And if that thing ultimately becomes adopted throughout the utility sector in the US and then ideally in the world and makes a meaningful difference. And our impact on the environment and on our ability to serve our customers effectively, that would be huge to me. That's absolutely the impact I'd like to have.
Jason Jacobs: And outside of the work that you're doing at Exelon. What else do you think can be high impact in the climate fight? What are the other big levers?
Lara Pierpoint: Policy is certainly the big one. I'll leave that to your conversations with other folks to answer how exactly we got there on the policy side. I think there are a lot of big hurdles there. But I think when we get policy right, that's obviously hugely important and impactful and moving the needle on all of this stuff. So a carbon price is a great basic example of something that would be huge there. So kudos to everyone who continues to work in policy.
Lara Pierpoint: I think the folks at the start-ups and the technology development institutions definitely have the potential to make huge impact as well. Anything that is a new technology that's potentially cost competitive, for example, with fossil-related technologies, game changing. So really excited about the work that's going on there too. I think I'm increasingly learning about the philanthropic world and that's another area where I'm really excited to see what's going to happen in the next couple of years. I think it seems like there are a lot more people who are interested in filling the gaps and understanding the pipeline of technologies and the sort of policy landscape and the business landscape.
Lara Pierpoint: Not everything is set up super well right now to make sure that we tackle climate change on the scale and the speed that we need. And the fact that it seems like the philanthropic community is really starting to get serious about asking questions around how do you fill those gaps that nothing else can fill? What are the kinds of technologies or the kinds of approaches to solving climate change that are uniquely well suited to philanthropy means, I think that's all really exciting too.
Jason Jacobs: If you could work on anything you wanted in the climate fight, other than working at utility, like you are, what would you do?
Lara Pierpoint: I always joke with folks, when I talk about my past that you can tell that I still haven't fully decided what I want to be when I grow up. Because I've spent time in academia, I've spent time in policy, now I'm spending time in the corporate world. I think, for me, the really critical-
Jason Jacobs: It's like a custom rotation go again.
Lara Pierpoint: Exactly. And I could see honestly going back particularly into the policy world for the right sorts of conditions and that kind of thing. So, I won't rule things out. But I think for me, I have a mentor that always talks about how the important thing is to work on hard problems with great people. And that's a really big guiding principle in terms of the sorts of things I want to do in my life. So the particular venue, that particular style, I think I'm open to a number of different things I could do as long as at the end of the day, I'm with people who like me are chasing impacts and we're working together to solve these challenging problems.
Jason Jacobs: And putting yourself aside if you just had a big pot of money, let's say 100 billion dollars, you could put it towards anything to maximize its impact on the climate fight. Where would you put it? How would you allocate it?
Lara Pierpoint: Hundred billion dollars that would be so awesome. I'd have to spend a longer time thinking about that question. But I will say that for me, one of the things again, that's been exciting over the last couple of years is that it seems like the pipeline of financial support for particularly kind of the earlier stages of technology development has been getting a little bit more robust. That's not to say that there aren't still gaps there. But I think there's been a little bit of an increased influx of VC funding that's willing to take a chance on energy and climate related technologies.
Lara Pierpoint: Similarly, I think Congress is supporting DOE's mission around some of this technology development and so we're seeing some small but obviously, we need to do more, but some increases in funding there. I think the biggest gap that I'm seeing right now, really is in the availability of funding and institutional structures for large scale demonstrations, for really proving that things are actually investible by a company like ours. That fundamentally is quite risk averse for very good reasons. So that's what I would really focus on is in figuring out what's the right institutional structure? What are the right kinds of people? What are the right sorts of technologies to really support with big chunks of funding. That can make it very clear that you can build a low carbon, highly reliable, economic resource, some sort of new technology in the system.
Jason Jacobs: And you're not the first person to bring that up as a gap. And any thoughts about maybe just one level more specific about what types of things are missing? Or would assist in making that initial plant build out more feasible?
Lara Pierpoint: Sure. Yeah. I'll give an example in a nuclear sector since that's obviously one that I know really well, but nuclear is obviously a technology that's complex and challenging. There are a lot of startups and other kind of organizations out there that are developing new advanced reactor technologies and some that are based relatively closely on existing technology, but happened to be smaller and more modular. And those are really interesting technologies. And the pathway for them to get from where they are now, which is in large cases design and some initial experimentation at the lab scale to an investible. Here's a reactor design that's been built, and therefore electric utilities are willing to spend money to build more of them. That pathway is just not clear right now.
Lara Pierpoint: And so I think providing money for a larger scale demonstrations, making sure to stage date it appropriately so that you allow lots of different designs and lots of different technologies to compete. But that you do eventually allow folks to get through phases of competition to the point where you're supporting a couple of really powerful technologies and really economically competitive technologies at the end. I think that's the kind of program that we need. And I think one of the great things is that if we were to do this effectively and really signal, "Okay, there's funding available, there's a pathway available to really do a demonstration of a large scale, thorny technology like nuclear power, you might spawn even more ideas at the beginning of that pipeline, because more folks will be more engaged in this sector if they see that there's a pathway toward actual commercial viability.
Jason Jacobs: And is that private capital? Is it project finance? Is it coming from the government? Or could it be any of the above?
Lara Pierpoint: Yeah, I think in the nuclear sector, we're probably going to need a pretty strong slug of government funding to make this work. To take on that risk of the first demonstration of an advanced nuclear technology. Obviously, doing it in partnership with business and corporations is important. And certainly, I imagine we'd be willing to provide [CATIA 00:39:32] for those kinds of activities. But I do think going for these really risky technologies that we're going to need better and more government funding.
Jason Jacobs: Is there an official Exelon position or an official lateral position in terms of what that mix should look like directionally? Either for Exelon or just in general, for example, should we be moving to phase out the big light water reactors over time? Should we be investing heavily in advanced nuclear? Should we be betting on battery technology and pushing towards 100% renewable future? And maybe just specify if you're answering on behalf of Exelon, or on behalf of Lara. But I'd be interested in either of those perspectives or both.
Lara Pierpoint: Sure. Well, for the official Exelon perspective, I'd be happy to refer you to our communications and policy teams. I'm sure you love hearing that answer. But no, I'll give you my perspective on it and I'll do it in kind of piecemeal a couple of ways. I think near term, one of the biggest challenges we have is in the potential closure of existing nuclear plants. This is a big issue. This is huge amounts of carbon free power that are coming off the grid, and at the end of the day, are slated largely to be replaced by natural gas. So every time a nuclear plant closes, it's a pretty big loss for the climate. So keeping those assets together, recognizing the environmental benefits they provide, I think that's something that's really important in the near term.
Lara Pierpoint: In terms of the long term and where we go with the system. I'm one of those girls who really is all about performance basis for everything and so I want to see a system that's carbon-free, that is sufficiently flexible to respond to the load needs of our customers, that's sufficiently reliable, that we can count on our electricity, especially since as a society, we're more reliant than we ever have been. This resilient to all potential incursions of weather and other kinds of challenges, cyber security, for example, think all of that is extraordinarily important. So I don't have a huge dog in the fight around what specific technology mix that is, as long as it meets those characteristics. I certainly think the ideal answer is something that's a mix of all sorts of different technologies. So that we're not putting all our eggs in one basket, that we're not fully reliant on one technology type.
Lara Pierpoint: I see a future that involves lots of renewables. I think it's a really exciting how fast those technologies have come down the cost curve. I'd love to see its storage on the system and as much as it's needed, but I think it's one in a suite of solutions that can provide the flexibility we need. And then obviously, I think nuclear technologies have a lot to offer as well. That's kind of different of in profile from what renewables do. So I think TBD where all that goes, but that's what I'm hoping for carbon-free and otherwise environmentally stable.
Jason Jacobs: Are the existing light water plants performing? You said that you favor performance-based approach in the long term but are they competitive in the short term? And if they're not competitive, then is keeping them open, I guess, what's the pitch? Is it, we know it's irresponsible as a publicly traded company, but we need to take one for the team, for the planet, or is there more of a justification that that is convincing to shareholders looking at it through a shareholder lens?
Lara Pierpoint: Yeah, the way we talk about the light water reactor fleet right now is to say that without getting too deep into market structure and pricing and all of that. Effectively, the market price of electricity in the markets where we operate is set by natural gas. And of course, as we know, natural gas is extraordinarily cheap right now. And I think what that means then is that yes, electricity is cheap and not certainly good for customers. The problem is that we are effectively pricing in the environmental attributes of the technologies we're using on the system. And so that's really kind of the point is that yes, you need to aim for performance, but you need to include all elements of performance. So cost is one of those, reliability is one, but so is environmental impact. And that's where we think it's really important to recognize the value that the light water reactor fleet brings to the table and to price that in as part of how we keep the system together.
Jason Jacobs: Someone mentioned to me the other day that their perspective is that lithium ion battery as EVs have more widespread penetration, that lithium ion batteries will have such an excess capacity of energy that it will make solar and wind so cheap that we can get to 100% renewable future and that we're not going to need nuclear long term and that flow batteries are a pipe dream and a waste of time.
Lara Pierpoint: Go.
Jason Jacobs: What's your reaction to that?
Lara Pierpoint: Where do I start? I think there are a lot of different ways that you can describe the future. And I think if you make a certain set of assumptions, you can drive yourself toward a lot of different permutation of this system. I'll say this that I think we're very interested in lithium ion technologies. We're really interested in electric vehicles as a source of potential grid flexibility. I think there are big questions around what is the adoption curve, really, for electric vehicles? How fast will those come on to the system? Same thing, I think for renewables, and then the question becomes, all right, so how are you going to provide a buck stop for all the kinds of flexibility that is required by those renewable technologies?
Lara Pierpoint: And I think it's important to recognize that in storage, there are different kinds of technologies that are better suited than others for different types of applications. And I think we're just starting to really dig into that on my team and to get a sense for, "Okay, lithium ion we know already makes sense in certain applications, and we're building lithium ion batteries in certain locations within our utilities, but we're also asking, okay, where are those limitations in cost and in performance and what are the potential other solutions that we could bring to the table from a storage perspective?
Lara Pierpoint: So I'm not yet ready to be as all in committed on a single future like that. I think it's still unclear which technologies really are going to be best. I think there are some interesting things out there that can out-compete lithium ion. I think there's some interesting ways we could still consider integrating advanced nuclear reactors into the system depending on what the particular system needs are and the characteristics are of those reactors. So I'm not willing to place my bets that hard in one direction yet, but I think there's a lot that's interesting there.
Jason Jacobs: Are you an optimist that we're going to figure this problem out? And in the meantime, regardless of your answer there, how bad do you think things are going to get?
Lara Pierpoint: Oh, gosh, yeah, pressing set of thoughts. I guess it depends on what you mean when you say figure things out? Will we fully decarbonize the global economy? Maybe someday. Do I think that will happen on a time scale relevant to keep our global temperature rise under two degrees C? I'll be honest and say I'm pretty skeptical and pessimistic seeing that come together as quickly as it needs to. I do think one interesting shift I've seen in a lot of the conversations just among my friends and colleagues is that everybody had been pretty unwilling to talk about adaptation, and about the things that we're going to need to do to deal with a hotter world. Because we wanted to focus ourselves on mitigation and avoid that particular outcome. I think now we're starting to talk about that more.
Lara Pierpoint: So I'm certainly hopeful that humanity can find some answers that can make the temperature rise. We're likely to see palatable and workable, I'm hopeful that at the end of the day, somewhere down the road will find systems that are much better for our environment and for climate as a whole. But I'm also deeply worried about how far we go and how hot we get in the meantime.
Jason Jacobs: If there was one thing that you could change that would accelerate our path overall towards that decarbonization future that we so desperately need. What would it be?
Lara Pierpoint: Political will probably.
Jason Jacobs: Domestically?
Lara Pierpoint: Yeah, domestically and internationally as well. I think we've got a particular deficit compared to some other nations at the moment. But it's certainly not just about the United States and what we do, I think there really has to be an extraordinarily strong collective efforts. As much as I think technology can help drive the system and businesses and cities can help drive the system. At the end of the day, if we have wide-scale policies in place to really reward the kinds of technologies we need to keep our climate safe. I think that's probably the most important thing we could do. So it's about changing hearts and minds of the politicians, but also about the electorate and making sure that we're pushing for that.
Jason Jacobs: And for any listeners out there who are very concerned about this problem and trying to figure out what they can do to help. What advice do you have for them, or what parting words you want them to leave with?
Lara Pierpoint: Well, obviously to listen to your podcast, Jason. First and foremost.
Jason Jacobs: Because that's the answer that's going to have the biggest impact on solving the problem.
Lara Pierpoint: No, but honestly, I think for me, it's gathering information and be out evidence-based and be willing to change your mind when new evidence challenges your worldview. I think that's the most important thing is this constant curiosity, this willingness to try to understand, to take on some aspect of the system, at the same time to make sure that you're hungry for information about how your piece of the system fits in with the rest of it. Keep asking questions, keep seeking answers, and adjust your view and keep moving forward in the face of the new things that you learn.
Jason Jacobs: Great. Well, I think that that is a great point to end on. Feel like my questions were a little scattered, but I learned a lot. And that typically means that listeners will as well. So thank you so much Lara for coming on the show and I wish you every success.
Lara Pierpoint: Awesome. Thank you Jason. Same to you.
Jason Jacobs: Hey everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note that is .co not .com. Someday we'll get the .com but right now .co. You can also find me on Twitter @jjacobs22 where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The words made me say that. Thank you.