Episode 03: The Energy Transition Explained: Dr. Diana Gragg on Electrification, Efficiency & the AI Surge

Dr. Diana Gragg leads the Explore Energy Program at Stanford’s Precourt Institute for Energy and teaches one of the university’s most popular courses on understanding energy. In this episode, she breaks down the “electrify everything” strategy, why solar and batteries are reshaping the power market, and how rising AI and data center demand is testing the limits of the U.S. grid.

Drawing on her background in air quality research and energy systems modeling, Diana explains how policy, markets, and technology intersect to drive real-world change. She also unpacks the uncertainty facing power planners today, how to build fast enough without overbuilding, and how to balance cost, reliability, and climate goals.

🎧 Episode Highlights:

● [12:13]: Ethanol, air quality, and why “green” fuels aren’t always cleaner
● [34:55]: Electrify everything and the case for efficiency
● [37:18]: Solar is now the cheapest and batteries change the game
● [44:40]: AI, data centers, and the grid’s uncertainty problem
● [47:01]: Building the next generation of energy leaders at Stanford

🔑 Key Takeaways:

● Electrifying everything is about making energy cleaner and more efficient. When we switch cars, heating, and other services to electricity, we use less energy overall and reduce pollution in homes and communities. Over time, the electricity itself can get cleaner, which makes the whole system better.

● Solar and wind have become some of the cheapest ways to produce new power. Adding batteries helps store that energy so it can be used at night or during peak demand. The real challenge now isn’t just building renewables, but making the grid flexible and reliable enough to handle them.

● AI and data centers are driving a new surge in electricity demand. The problem is that power plants take years to build, while data centers can go up much faster. The biggest risk is not knowing exactly how much power will be needed, which makes planning and investing in the grid more complicated.

👤 Guest Spotlight:

Dr. Diana Gragg

Dr. Diana Gragg is the Managing Director of the Explore Energy Program at Stanford University’s Precourt Institute for Energy, where she leads interdisciplinary energy education and student engagement initiatives. She also teaches Stanford’s popular “Understanding Energy” course, helping students build a systems-level view of electricity markets, renewables, and the energy transition. Dr. Gragg focuses on electrification, renewable integration, and how rising AI-driven demand is reshaping the
future of the grid.

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Transcript

SPEAKER_00 0:00

What are some of the challenges and opportunities for the US to really help match supply against demand?

SPEAKER_02 0:04

The biggest challenge is uncertainty because you don't want to underbuild and you don't want to overbuild. Our data centers can go up very fast, and our power generation tends to be less so. In the United States, utility scale solder is the cheapest, followed by onshore wind, followed by natural gas combined cycle. We saw that as a game changer. These are opportunities to improve our systems and provide those services.

SPEAKER_00 0:36

Today we have Dr. Diana Gragg, managing director of the Explore Energy Program at Stanford University's Precourt Institute for Energy and lead instructor for Stanford's Understand Energy course. Let's get started. Diana, welcome to Houston. Thanks for joining us this morning.

SPEAKER_02 0:53

Thank you. I'm happy to be here.

SPEAKER_00 0:54

Tell us about your background. How did you come to Houston?

SPEAKER_02 0:57

Yeah, well, I'm actually from Houston or consider myself from Houston, moved here when I was about three. So grew up here, grew up in the Clealake area, very near NASA and the shoreline, and spent a lot of time on boats and things like that in the Houston area. So went to Clear Lake High School. I've always been very interested in science, engineering, the environment. So I would say Houston was pretty formative for me. I can remember my dad worked at Exxon and he worked in the Bayonne refinery. So I don't know if they still do this, but they used to do the take your daughter to work days. And so my take your daughter to work days were touring the refinery. So I would say I had exposure to a lot of engineering and energy and things from very early on. And that mixed with my um environmental uh bent, I would say. I think spending a lot of time at the Houston Zoo and the Museum of Natural Sciences really kind of formed what I was interested in. So at Clear Lake High School, I would actually uh was co-founder of our Earth Club. So we didn't have anything like that before. Did our first Earth Day festival at the high school level, um, brought animals to allow everybody to kind of interact with different animals, volunteered at the Nature Center. It's was very much um how I spent my my a lot of my childhood. So um I'm really happy to be back in the Houston area and kind of see how it's changed. Um, like I said, it was right near NASA, and I can think that was also a very much part of my childhood. Um, our my elementary school, we were the satellites, you know, it was very part of everything. I had astronauts that lived in my neighborhood, um, things like that.

SPEAKER_00 2:48

So how many years has it been since you've been back?

SPEAKER_02 2:50

It's been at least 20 years, I think, since I've been back. Um, my family doesn't live here anymore. So um hasn't been a lot of reasons. So I'm really happy to come back and see how it's grown and went back to Space Center Houston, see how that's changed, things like that. Yeah.

SPEAKER_00 3:05

Excellent, excellent. Well, obviously, getting a uh a very uh you know big degree at at Berkeley in chemical engineering. Um tell us about the next chapter.

SPEAKER_02 3:14

Yeah, so I I kind of I mentioned that I had this environmental ban. I've always wanted to be impactful in my work and in my studies and in my my social activism. Um and I had this idea that with my chemical engineering degree and my skills, I could go into industry and really make a difference from the inside of industry. You know, we industry is making the products we need. Can we make them greener? Can we make them more efficiently? Can we do them in ways that are less impactful for the planet? Uh so I spent two summers during my degree um at Exxon. So one was in the refinery in Louisiana, and one was in their oil lubricants plant in Louisiana. So both of those were in Patent Rouge. And then when I graduated with my bachelor's degree, I came to Lake Jackson and Freeport, Texas, and worked at Dow Chemical. And there I was a production engineer. So this is a very entry-level, very typical chemical engineering degree uh program. And I was making chlorine. So chlorine production is a 24-7 activity, um, very large scale. Um, and that chlorine is used primarily a lot of times to make plastics. It's used in other chemicals as well, um, but it's kind of like the backbone of a lot of the products that we make. Um, we make chlorine by electrocuting salt water. So electrocuting salt water large scale. Um people may, you know, people in the energy industry have heard about electrolyzers. They often think about it now for hydrogen production. You're basically electrocuting water, fresh water in that case. Um, in this case, you're electrocuting salt water. We had electrolyzers. We had older technology, these diaphragm electrolyzers as well as membrane electrolyzers. Um, so but we were making chlorine and hydrogen. So I actually got some exposure to hydrogen production as well and processing. And we had some um demonstration fuel cells with GM that we got to test out while we were there. But about two years in, I really wanted to focus um more and have um I felt like a bigger impact on, you know, addressing air pollution, addressing climate change, these things that were really important to me. Uh, so I started preparing to go back to graduate school.

SPEAKER_00 5:29

What was the experience of working at Dow versus maybe Exxon over your internships?

SPEAKER_02 5:33

Yeah, I mean, it was very, it was very different, but mostly because it was a difference between the oil side and the chemical side. So I would say with oil refining, we've been doing, we know how to refine oil, and we've been doing it the same way for, you know, 80 years. I don't, I don't know how many years now, right? Um, and so that was a lot more about, you know, tweaking, optimizing a little bit, but um it's it's not a business that's changing a whole lot. Whereas I would felt like chemicals, there's a lot of change. There's formulations that change, there's a demand that changes. It's like there's a lot more change and innovation happening on the chemical side. And you probably would have seen the same thing at Exxon, but just on the chemical side rather than refining. Um, and so I found that a little bit more interesting and exciting. Um, the other thing I would say that this is also something I learned from being kind of inside the industry is um refineries are kind of squeezed between the cost of upstream oil and the cost of you know the downstream gasoline prices. And it's a very low margin industry. And so they have to do things at volume. Volume's the only way they make money. Um, but that also means that like there isn't a lot of buffer, there isn't a lot of flush funds to do other things, to try it, try out things. You just need to keep things going because it's such volume. And so they used to joke that, you know, even in the in the refinery, they used to joke that the upstream guys got free coffee and the downstream guys had to buy their own, you know. Um, but it it is this, you know, um, it's a different uh, you know, economics. Yeah, yeah, kind of market position. Yeah, for sure.

SPEAKER_00 7:16

Interesting.

SPEAKER_02 7:17

And I know we're talking about me, but just an antidote there, California is is dealing this right this right now, because California's gasoline market, which people would be surprised, is one of the largest gasoline markets in the world. If California was its own country, it'd be like third in terms of gasoline market that might be moved down to fourth. It's slowly coming down, but it's declining as we get more electrification of vehicles and things like that. It's a declining gasoline market. And refineries in the state are the ones that provide the products. And refineries tend to provide the products close to markets. So it's really a California market with California refineries.

SPEAKER_00 7:54

Fan five, I think, is the specific district.

SPEAKER_02 7:57

Exactly. And and so as the gasoline demand has come down, those refineries are looking at, they're like, we can't continue to do a volume business, and our margin's really little. And so we've had several refineries say we're gonna just make renewable fuels because renewable diesel, for example, is still a growing market. Um, or they're just gonna shut down. We have a local refined valero that's like, we're just gonna shut down, you know. I think April is the latest number they gave.

SPEAKER_04 8:22

Interesting.

SPEAKER_02 8:23

And um this is a back and forth where like policies in California are intentionally trying to drive gasoline down for air pollution and climate and other reasons. But you also worry about when you you're gonna have these step changes and availability of fuel, which will step change price at least temporarily until volumes come down again. Um, and so it's it's a real challenge in terms of how do we make these transitions happen, which we'll be talking about transitions later. And so um, I feel like I got to see insights in that just by being in the refinery, even for the summer work that I did. I know we'll talk more about transportation in a few minutes, but somebody asked me, Do you are you pro energy or against energy? And I said, okay, well, let's let's talk about what we mean by energy. So we start with energy services. That's what people want. We want lighting, we want comfort, we want our phones charged, our computers charged. And then it's how do we get those services, right? And how do we get those services to more people in more places at the quantity we want them, right? That's our goal. What we have on the planet are our energy resources. And so I've listed here our energy resources, right? That's what we have to get the services we want. We usually have to transform them into something else. We're going to talk about electricity today. And sometimes it's not available at the time we want it. That's what storage gives us, right? It gives us the ability to vary the time between when the resource is available and when we want the service. You'll see I put energy efficiency as a resource, and we'll talk a little bit about that. We talk about it as a resource. We're talking about providing more services to more people, and we can do that more efficiently. Then we um have to use less of some other resource. So it is a renewable resource. These are the two biggest energy systems in the world today. Coal for electricity production and oil for transportation. And so that's the where we start. That's where we are today. There's a lot of reasons that those are our big energy systems in the world. Unfortunately, these aren't aren't super efficient. And that's just physics. Um, we're using heat to do work. That's a lossy way to get energy. Um, and so we talk about for impacts, for costs, for geopolitical, all the reasons that we care about energy. These are pretty lossy systems. And so the question is, can we do that better? This has really been changing, the landscape has been changing in terms of what these pies look like. And so we're going to talk about some of that transition. Um, and then 2005 is when I started my my PhD for working with Mark Jacobson, um, focused on air quality, which is what I came in with my background, with my chemistry knowledge to do. Um, and it was really integrating a very complex uh chemical mechanism, uh, it's called MCM, it's out of the UK, um, into a global energy and climate model that my advisor had. Um, so it was making the chemistry more complete and adding aqueous elements. So if you think about in our atmosphere, um you have gaseous chemicals, chemistry going on. But if there's raindrops, if there's a fog, if there's things, there's also aqueous chemistry going on that actually can impact the air pollution and the and the air quality. Um and so adding those elements to the model would allow us to do better modeling of air quality. Uh, because it can get it can get pretty complex. What's going on in the atmosphere? Um, but you know, having this newfound interest in energy, I was like, okay, I'm I'll I'll do this chemistry model, but I want to apply it to an energy problem and and figure something out. Uh so this is again the the 2000s, 2010s when I'm doing my PhD. Ethanol was was really on the scene. Um, ethanol was being looked to as a green biofuel that we could transition to that would lower you know greenhouse gas emissions, things like that.

SPEAKER_00 12:22

Um maybe speak to what ethanol is, just for listeners who may not know what that is.

SPEAKER_02 12:26

Yeah, ethanol is well, it's an alcohol. It's the same alcohol that you're drinking in beer or wine. Um when we use it as a fuel, we actually add things to it so to make it undrinkable, usually just like gasoline or something you wouldn't want to drink. Um so it's the same alcohol. Um and when you're using it as a fuel, you're you're burning it just like you would a hydrocarbon, like gasoline or or you know, something like that. Um, it has a different chemical makeup because it is an alcohol, which means it has that OH on it. Um, so like gasoline will just have your hydrocarbons, your carbons, and your hydrogens. Um, so it burns a little bit differently. And that means that you can't just replace your gasoline with ethanol in your car, it's not made for that. Um, you can make vehicles that can have higher percentages of ethanol, and that's kind of the trend that was going on at this time. Um, if for people that remember, it was flex fuel vehicles were kind of coming on the scene, um, where they could blend up to about 85% ethanol in the in the vehicle. So anywhere between like, you know, an E10 to an E85, you could run in your flex fuel vehicle. Um, it takes upgrading of the combustion systems, the software system, the gaskets. It's not a huge cost. I remember estimates being, you know,$150 a car or something to do those upgrades. Um, but it isn't just like you didn't just pour it into your gas in the vehicle.

SPEAKER_00 13:49

And did you focus specifically on the sugar-based ethanol or was the ethanol agnostic on the feedstock?

SPEAKER_02 13:54

Yeah, it's it once it's ethanol, it's ethanol.

SPEAKER_00 13:57

Okay.

SPEAKER_02 13:57

Um, it doesn't matter where it came from. And so I was looking at the downstream impacts of it. Once you put it in the car and you're burning it, I was looking at E85 because that's what we were talking about for our flex view vehicles up to an 85% uh mix. What happens to your tailpipe emissions and how does that impact air quality? Um and the basic results I found, you know, so first you go through proving your model works based on existing data, and then you can go through and put it to um case studies. I use Los Angeles as a case study. If anybody's in air quality, it's just kind of like a perfect air quality basin because um it's surrounded by mountains that stays in there, yeah. And so it kind of cooks the air pollution. Um, and just looked at how that would change, both with and without a fog, because I've added this aqueous element to my model. Bottom line story is that you know, you're still burning a fuel and you might get a different mix of emissions, different volatile organic compounds coming out. But from a human health standpoint, it's no better than gasoline. And that that really wasn't a surprising finding. Um, places like Brazil have used ethanol as a fuel for a long time. That was kind of their response to the Arab oil embargo in the 70s, was like, oh my God, let's use ethanol. We can make that domestically help us get off, um, you know, reduce our dependence on foreign oil. Um, and they they saw the same mix of of air pollutants that I saw from my study. So it wasn't, it wasn't a surprise. Um, but I would say it was it was good timing for this kind of research to come out because there had been this big push um for ethanol for these.

SPEAKER_00 15:41

Did you receive some pushback? Was there was there a reaction?

SPEAKER_02 15:44

So fascinating. It was so fascinating. Um, I first I was really surprised about how the reach of my, you know, I just published it in some research papers, and I think there was a press release maybe from Stanford. Um, but I had um radio stations from Colombia and Brazil and other places that were, you know, looking at ethanol interview me for their radio stations, which was was fascinating because then it would be dual language interviews. Um and I also had um, yes, I got pushed back and very surprised. I got pushed back from um environmentalists mostly that felt like um I was kind of betraying the environmental movement um with these results. You know, was I paid for by the oil industry or something to come out with these uh results, um, which is kind of fascinating because I would say the oil industry is not a big supporter of ethanol and having to blend that in with their fuels. So um it was it was really interesting. Um and I think being at Stanford and having that kind of topical paper release, um, it's it's amazing the reach you can really have. Um the I would say the landscape has really changed on ethanol and how we look at it. Um, we have policies in the United States. We have the renewable fuel standard, California has a low-carbon fuel standard that are looking at trying to reduce the carbon intensity of our fuels. Um, and so that has driven a lot of growth in ethanol um use in the United States. Um, we're about at E10 everywhere, but that's what we call the blend wall. That's about as much as you can put in just a gasoline vehicle. Um, and so there's been pushes for E15. The automakers usually push back. They don't really want E15 in their cars. Um, and so that's kind of where we're at. And to speak to the source of the ethanol, you're talking about the feedstock. Where are we making the ethanol? In the United States, we primarily make it from corn. And it's from the sugar of the corn, the same part we eat. That's the easiest part. We're just basically fermenting it. Just like you would make beer or wine, you're fermenting the sugars into ethanol. Um, that is what we call a renewable fuel, at least by our our standards, but it doesn't meet the advanced biofuel or cellulosic biofuel levels, which would be a lot lower carbon intensity. Um and we've tried, we've tried to make cellulosic, we've tried to, and that would be using the rest of the plant, the leaves, the stalk, the corn cob, the you could use paper, you could use whatever if you could figure this out.

SPEAKER_00 18:24

Yeah, you mentioned that ratio of you know, sort of ethanol to gasoline. Oh, yeah.

SPEAKER_02 18:29

Yeah, ethanol is is is just lower energy content as well. Um, it takes about a gallon and a half of ethanol to equal the energy content of gasoline. So when you are using it in your car, you're lowering your fuel economy. Um, you have to fuel up more often because you're getting less energy per gallon burned. Um, so all of these things I think are working against ethanol a little bit. Um, there is still, we still use about half of our corn acreage for ethanol production in the United States. Brazil makes their ethanol with sugarcane, which is um a lot more um, you get a lot more ethanol, gallons of ethanol per acre. And so it's it's a less land-intensive way of making ethanol. So it tends to reach a lower carbon footprint uh certification than corn ethanol. Um, and so, for example, it's it meets some of the low carbon fuel standards they have in California. Um, so then we end up importing Brazilian ethanol, even though we're making corn ethanol, and sometimes we export corthine ethanol to them, and it gets a little bit messy with these different policies.

SPEAKER_00 19:37

Gotcha. Also, one personal data point during that time when you were building up your thesis, uh, we had just launched CSL in the summer of 2008. So, right on the doorstep of the global financial crisis. And I remember in our first 12 months of operation at CSL, uh, of course, as part of the global financial crisis, everything was for sale. Um, everything in energy uh from upstream, midstream, downstream power. And I do recall uh specifically in the credit area that there were a lot of uh uh uh ethanol producers in the US that were going through a tough time. And it was right when I think the industry was determining that that the bridge to cellulosic ethanol was going to be maybe a bridge too far, and that perhaps just corn or sugar based would be the extent of the final yield or efficiency. And uh unfortunately for a lot of those business plans that where they had raised capital to to to to to to make that you know final leap to cellulosic, I think it was a very difficult period. But I remember reading a lot of industry and trade magazines at that time. So it's interesting to kind of you know now hear this from a very different perspective, more from an environmental and and energy perspective.

SPEAKER_02 20:42

Yeah, exactly.

SPEAKER_00 20:43

And actually uh reading about Amory Levin's connection to you and maybe even sharing an office, I think, next door. Yeah. Um, this was uh his book from '99, Natural Capitalism. And I brought it uh today because uh he came and spoke in our first semester at HBS when I was getting my MBA in 2000, 2002. And uh sounds like a very similar experience, kind of a standing room only uh, you know, uh talk that he gave. Of course, it was just you know a couple years after the publication of that book. And uh at uh at Harvard, the MBA program, they had uh basically an environment energy and environment uh you know group or energy and sustainability uh club, and he came to speak to that group and uh he gave a really, really good, inspiring talk about just the importance of energy, but also thinking about more efficiency and uh and really incorporating that into his books and his his uh Rocky Mountain Institute and some of the other organizations he was involved with. So yeah, so interesting.

SPEAKER_02 21:38

Yeah, it's it's been a lot of fun. Yeah, so we share an office now actually at Stanford.

SPEAKER_00 21:42

Oh, okay.

SPEAKER_02 21:42

When he's on campus because he's only on campus a few to a few times a year.

SPEAKER_00 21:45

But exciting.

SPEAKER_02 21:46

This is what it looks like big picture over history. Uh so have we done transitions in the past? Absolutely, of course we have. Um we were biomass based and then we were very coal based, and now we're kind of in the oil and gas starting into the renewable phase. Of providing our energy services with a bigger variety of energy resources. I firmly believe we are on our way to cleaner energy dominating. I think it's just a question of how fast and at what scale, right? And so that's some of the things that are coming for this landscape. Why do we care about energy? There's lots of reasons we care about energy and where we get it from and how much there is. These are just a few things that I've listed. There's economic reasons, political, environmental reasons, ethical, and of course health reasons. These all play into our choices for our energy resources. When I introduce this concept to my students, is social costs versus private costs and externalities. I say, okay, when you're reading the media, think about what costs it's talking about. Because a lot of our resources, the private costs, don't have a lot of the externalities incorporated into it. Those externalities are real costs. It's just cost to who, um, in what ways. Air pollution is a pretty obvious one, um, where air pollution is often the costs are borne by individuals or taxpayers, but they're a result of our energy resource use. And so when we're talking about cost and cost of transition, we have to think about the full costs or who's who's having to pay, who's the winners, and who's who's having to bear the burdens. Um, because there is a it's a pretty comp complex landscape when we're talking about who gets energy services and who bears the burdens of those energy, energy resource choices.

SPEAKER_00 23:38

Just walk us through the mechanics of what happened to pre-court and maybe explore energy.

SPEAKER_02 23:42

Yeah, so pre-court was existing. So there was a pre-court institute for energy.

SPEAKER_00 23:46

The course maybe who is pre-court.

SPEAKER_02 23:48

Yeah, so so Jay Precourt um was the founder of the Precourt Institute, had um kind of his background in the oil and gas industry, um, really gave a gift to Stanford to look at formulating um new, you know, the energy transition and doing the research and supporting the research and the um the students and everything else in energy transitions. And so that's a longstanding institute, about four years in, so about 2019, when I got hired into the Precord Institute for energy to do more than the teaching I was doing. Um and it was to start this Explore Energy program. So that was not existing. So the Explore Energy program was a recognition by us, Jane Woodward, profess some professors at at Stanford, the leadership at the institute that energy is super interdisciplinary. It cuts across all schools and all majors. There's like all sorts of different ways that you can come at energy, whether you're thinking about access and human development, or you're thinking about um, you know, the energy policy, you're thinking about finance, you know, you're thinking about the environment. Um, and it's really hard for students to navigate all of the energy opportunities at Stanford because it's so interdisciplinary and so diverse. And so Explore Energy was trying to really serve the students and be able to help them guide them through the landscape. And so that was our primary mission. Um, and so I was hired in as a managing director to start the Explore Energy program and have slowly built my team to build out the Explore Energy program. And so now I have an assistant director, a program manager. We just hired another program manager. So we have a whole team that's really serving students.

SPEAKER_04 25:33

Right.

SPEAKER_02 25:34

Um, and the opportunities that we have for students, because this includes fellowships and internships and connecting them with companies and connecting alumni to students, and there's that kind of that whole career landscape as well that that we're supporting for students. And so that's started Explore Energy. So that was in 2019.

SPEAKER_00 25:54

Okay. And that is inside of Pre-Court, or that's just a separate sort of okay.

SPEAKER_02 25:59

It is inside Pre-Court. And so Pre-Court Institute for Energy, also known as Stanford Energy, that's kind of like the external branding of the institute, um, has now has kind of like three pillars that it focuses on. One is the research side of things. And so that's where a lot of our electricity research or you know, funding or um storage, X, we have hydrogen, we have fuels for the future. These are where people are really activating external funding into research to innovate. And then we have a pillar that's really about analyze, it's called STEAR. Um, well, steer is one of the big parts of the analyze pillar. That's really looking at the landscape. And it's like, how do things integrate? Where are things going? Where are the white spaces where innovation is needed? And then my pillar that I run, um, we call it the propel pillar. It's really for propelling students. Um, it's the education pillar of the institute. And so I'm the head of that. I have, like I said, I've built out a team. Um, some that work on the course side of things, some that work on our online learning um hub, and then some that are really working on explore energy and the touch points for students. Um, and so all of that is within the institute of the prequel institute for energy.

SPEAKER_00 27:18

That's exciting. That's great. Yeah. So, how do you balance all of these different programs between the course instruction plus each of these different institutes?

SPEAKER_02 27:25

Some days better than others, right? Um yeah, I mean, it's a lot. And like I said, it's growing, growing, growing. And I've had the privilege of, as we grow, being able to add team members because otherwise we wouldn't be able to sustain this growth. Right. Um, so you know, I started out just doing the course. Um, and I was co-teaching it with Jane Woodward and also another woman named Kirsten Stassio. Um, and we were we were really both working clearly closely together. Um, she now is the CEO of Nevada's Clean Energy Um Green Bank. Um, so she still comes and teaches some of the classes, but isn't as involved in the course. Um so now I've kind of built out a team of a program manager and a team of two students that help me run the class. We also have this goal of do all of this curation and make energy easy to understand for all of these different resources from fossil fuels to renewables, from transportation to buildings. And we really wanted to take what all this effort we've put in and be able to educate beyond the 250, 300 Stanford students that we're teaching every year. Uh, and so as part of that, that's been a long dream of chains that I've kind of come on. Um, we built an online learning hub. And so now I have a whole team that runs the learning hub, including somebody who focuses on the web design and implementation, somebody focuses on the videos and things like that. So now I have a team that's really about our understanding energy learning hub, which is a free resource to anybody. Right. And it's really taking, like I said, all of this effort we've put into curation and making it available to the world. And then I have my Expo Energy team that's running these points.

SPEAKER_00 29:09

So I think one personal data point on the just everything I've learned just in our discussions uh at Stanford and also you know, recruiting at Stanford at this part of the GSB, the business school MBA program, is I I think your your effort has done such a wonderful program of really bringing energy to the forefront of majors, both for undergrads as well as grad programs. I know having gone to Columbia and Harvard for my for my MBA, and then also having recruited from a lot of Texas schools, I think really marshalling the resources that you have at Stanford and really giving you know uh students the opportunity to have an educational journey and then maybe even a career journey and and and and really providing that resource to them is very is very unique.

SPEAKER_02 29:47

Yeah, it is it is a privilege and it's fascinating. Um and so I really focus on the this fundamentals course, but then I partner with we, you know, the the broader program has other other courses. You know, I mentioned Amory Levin's course with um extreme energy efficiency, but we also have like a Stampered Climate Ventures course that partners with the um the institute. Um, and that is really about entrepreneurship and really um elevating students to be able to build the technology and innovations that will be solving a lot of these these challenges. And they launch a lot of companies out of that, out of that course and get a lot of follow-on funding and things like that. So um that's just an example. It's it's a network, and we're helping to guide the students through that network. Um, my course is one that's open to any and all students. And so, although it's, you know, most of our students are engineering students, you know, all different types of engineering students. We also get students that are what we call pre-majors, those are like freshmen sophomores that don't know what they're doing yet. Um, that's about a quarter of our class, and so it's a great exposure for them. Um, and then we have, you know, other other students, you know, MBA students, law students, things like that. This might be their only energy class, but it it helps them really make the connections with whatever job they're doing. Um and so it is it's fun. I mean, we and we make it fun. We intentionally make it fun. We have quizzes, we have prizes, you know, we make it, I wear silly costumes sometimes for class. Um, we make it fun. Um, but it's also just uh, I think just as eye-opening for all these students, is we get a lot of feedback that it's like, wow, I didn't, I didn't think about the whole system. I didn't think about how this connects to myself or what I'm doing and things like that. That's right. It's rewarding.

SPEAKER_00 31:37

One. Yeah. Is there one area within power that you've, you know, that you've become more expert in as part of as part of the course in your research?

SPEAKER_02 31:43

Absolutely. I would say um, you know, the the electricity system is fascinating. It's, you know, one of the oldest, largest machines we have. Um, and we're expecting it to still operate at the reliability of a brand new machine, even though it's 100 years old, right? Um it has undergone so many changes with going from vertical utility model to regional markets, wholesale markets, some places retail markets, sometimes the retail market, you know, experiment has gone poorly. So, like you think about, you know, California and kind of the energy crisis and um the manipulation of the markets. Um, and so just understanding the way that we can try to basically try to keep a low-cost, reliable electricity system and have the right markets to motivate that um has been a huge part of understanding and growth and thinking about and talking about with our students because that is constantly changing. And as different things come on board, like like batteries, we didn't really have markets set up for batteries to just slot in. And so then we had to think about it differently. It was the same thing when solar and wind kind of came on. Um, they didn't fit in some of the traditional markets, and then we had to kind of think about how do they how do they fit? We have to characterize them differently. Um, and so a lot of that is is changing um and really takes some understanding on how do we build that. And we're we're seeing challenges with it now with the growth and electricity demand. You know, AI is gonna grow, is gonna demand more electricity, but we're also gonna see more electrification of transportation. So fuel switching for that, fuel switching for heating our homes. Um, all of that is driving change in our electricity system.

SPEAKER_00 33:31

Maybe just kind of taking the um audience into what are the recent trends around the power generation source specifically in terms of, you know, I know you've talked about levelized cost of uh of power generation and have a comparison of the different fuels. Maybe just kind of walk through kind of where where's the current state of the union.

SPEAKER_02 33:47

Let's talk about energy efficiency for a minute, because this is something I'm really excited about. Okay, so we probably might have seen this diagram before, but exciting thing about energy efficiency and uh having energy services that use less energy, um, we can start thinking about a world of abundance instead of one of reduction. Um, because if we can do it right, we can get we can meet the demand for these services with lower energy. Um this is just an estimate that really looked at how do we how do we reduce carbon emissions? A lot of the ones that were net positive in terms of of cost end up being these energy efficiency measures. Um and so the challenges, there's a lot of implementation challenges. We have a whole lecture on the challenges with energy efficiency, not meaning to say that it's easy, um, but there's there's a lot of opportunity. And we've been doing it. Of course we do it because using energy costs money. And so we look at efficiency. Um we were just talking about as prices go up, we're probably gonna be looking at efficiency and even more as prices go up, but we we tend to really focus on those costs. So I want to get to a trend that I'm excited about that is related to efficiency, which is this thing that we call electrify everything. What does that mean and why is it exciting? Okay, so electrify everything is about in services. If we can electrify our in services, we get a lot of benefits to our system. Um, and I've just kind of listed them here. The the benefits that we get include uh improved efficiency. So if we're looking at electrifying our heating and cooling systems, electrifying our transportation systems, those tend to be lots more efficient, and I'll show some numbers than their natural gas or other counterparts. So that is one way that we're really improving things and providing more services. We also get to diversify our resources, we're not just dependent on one thing. So if you think about switching your heating system from natural gas to electricity, now your electricity can be provided by natural gas, twins, solar, geothermal, hydro, all sorts of things. Um, so in terms of fuel risk, price risk, volatility risk, you have some diversification. You also can clean your fuel over time. So you insist you have that electrified end use, you can change what provides that electricity over time. Um, and so you can really keep costs down, you can keep some of these impacts down. There's a lot of decarbonized options. We can talk about maintaining one system. Um, if anybody is in an area where they're upgrading or adding to their natural gas systems, some of those costs are significant. Um grid costs are also significant if we're maintaining two systems. That just uh takes more um investment um in those systems. Like I said, your fuel gets cleaned over time. And then one that's really close to my heart is the air pollution. So if we can electrify our end services, remove that air pollution source from our homes, from our communities, from where we work, thinking about our transportation systems, our cooking, our heating uh systems. Okay. There's a lot of challenges with this. So I might be as excited as I want about it, but there's a lot of challenges. And so I've listed a few of those here. There are others that that aren't listed, but it is it would be relying on one system. Um, so the reliability of that system would be even more important if we're putting all of our services onto that one system. It requires a lot of upgrades in a lot of places. A lot of places don't even have a reliable system now. Uh so it does require upgrades. It requires upgrades for the implementation of the electrification itself. Um, not to say that it's an easy solution, but it is one that um I think gets us close to where we want to be in terms of uh impacts and services for humans. In the United States, the I mean the levelized cost of energy, which is just kind of a way to compare just basic costs over the lifetime of a project. Um, solar is utility scale solar is the cheapest, um, followed by um onshore wind, um, followed by natural gas combined cycle. I think, you know, we've we saw that as a game changer when that when that's you know started happening a decade ago and wind came on first and then solar, and solar is the fastest growing resource in the United States right now and is expected to continue to be because it is it is so much cheaper, it's modular, and it's fast. Um, we can kind of do a solar project in a couple years, whereas planning for something like um, you know, other resources, you know, even natural gas or for sure nuclear, something like that, it takes much a longer planning period. Um, so we're seeing huge growth in that. We'll continue to see growth in that. And then the other game changer that we've seen more recently in the last few years is that solars plus batteries and wind plus batteries also being cost competitive. And so then you're you're now stretching your resource into the evening hours when you actually need a lot of the electricity generation. And so we're calling that near-firm solar or wind when you have about a four-hour battery system that it helps you stretch that that resource into the evenings. Of course, wind is a little different because the profile is very different, but you still have about a four-hour storage that that flattens out your profile.

SPEAKER_00 39:23

Do you think that because of course cost is one really important element in the equation, the other is you know intermittency and reliability. Do you think battery storage really can take wind and solar into that reliable category?

SPEAKER_02 39:34

I really do. I think we've we've seen um that at least we're talking about day-to-day, where we start to see challenges um, because most of our battery systems were kind of thinking like four hour, eight hour or something like that. Um, where we're starting to see innovation is like, can we get to a hundred hour? Um, because if you have a week without sun, what do you do? Right. Um, you still need somebody to fill up your battery. Um, and so that is one way to think about it. The other way to think about it is that if we get better at regional integration, um, we have three grids in the United States. And so if we get better at regional integration, you can flatten out a lot of that. If it's not sunny in Nevada, it might be sunny in New Mexico, right? And so you can do regional things that also help with that reliability. Um, and if you think about it, it kind of stretches your day too, because you've got east to west um for sunshine. And so there's a number of different tools you can do to you know reintegrate this. Sure. And some states are really doing it at very high levels. I think Iowa's got the most renewable energy penetration.

SPEAKER_00 40:41

When turbine is on the driver's license and the license plate in the state.

SPEAKER_02 40:44

And and I mean, I'm on the top of my head, it's like 60%, 80%, I don't remember, but they're doing very high um renewable integration because they have all of these tools. And so these renewables, I would say the challenge is not so much their intermittency, it is their predictability. And if we can predict them well, we can do things. Um and we can do things with demand response, we can do things with with other resources, um, we can use hydro to fill the gaps, um, we can use new geothermal. So they're predictability, I think, is the big thing, and we've gotten a lot better at predictability.

SPEAKER_00 41:20

Yeah, we've we've in the last five years started that renewable operations and maintenance platform called renewable RNWBL, and we've seen you know just the the big benefits of you know scale and efficiency as the industry, much more broadly in terms of you know, gigawatts installed, you know, solar has gotten very close, if not exceeded 40 gigawatts a year. Wind install base is over 150 gigawatts, which is pretty amazing. I like your your wind earrings. My wind earrings, yes. Is that your favorite favorite uh power generation?

SPEAKER_02 41:48

I would probably say it's solar, to be honest. Um, but I'm a big uh nature lover. And so even though utility scale solar is the cheapest, I'm like, can we just put it on every parking lot in the world instead of like keep some of these big spaces? But there's an opportunity cost to that. I recognize that. But excellent, excellent.

SPEAKER_00 42:07

But maybe a couple of final questions. One, uh, I know uh in terms of outlook, one of the things we talked, we caught up on previously was, you know, kind of tying together your early years of really being interested in air quality and atmosphere, you know, maybe kind of perspectives on Houston specifically, since we're here right now today. How has the environment maybe improved, you know, based on efforts commercial and regulatory?

SPEAKER_02 42:30

Yeah, um, so our air quality overall in the United States has gotten better over time. And a lot of that is led by policy in California. And so just thinking back historically, um, California had air quality standards basically before the federal government. And that's given them kind of a special status. Um, they they did that because the air quality was so bad in LA, like, you know, you couldn't go outside. It was like um really bad smog. Um, that's given them special status where they've been able to apply for a waiver, basically. And what that means is they can have stricter air quality standards than the federal government. Um, they're the only state that's able to do that. And so they have a long-standing history of having this waiver. And California has really led the way in ratcheting down um air pollution, you know, and and the you know, air quality standards, and the federal government has followed as California's kind of proven the way. And so all of that has improved the tailpipe emissions of our vehicles, which is a huge part of the, you know, the human health impacts from air pollution. And so we've seen that come down, you know, really nationwide from a lot of those policies. Doesn't mean it's not still a problem at certain times of the year, certain missions, and certain industrial missions, you know, um, coal-fired power plants, indust industry uh missions can also still be very impactful for human health.

SPEAKER_00 43:51

Great. Yeah. And then maybe uh two final questions. One on just the state of state of the power market. I know everyone's reading articles daily. About the importance of data center development in conjunction with the AI build-out. What are some of the challenges and opportunities for the US to really help match supply?

SPEAKER_02 44:08

Yeah, I would say the biggest challenge is uncertainty because you don't want to underbuild and you don't want to overbuild. You don't want to have stranded assets. We've already seen some speculation of that that's kind of hurt some of the independent power producers and PJM. Like, are they going to really need that electricity generation? And you don't want a shortage where you can't operate your facilities or your you have blackouts or something because you don't have you have more power demand than than need. So I would say the uncertainty is the is the biggest challenge. Um, and how quickly. So our data centers can go up very fast, and our power generation tends to be less so. Um, PJM, which everybody's reading about, you know, they have a three-year time cycle where a data center might be built much, much quicker than that three-year time cycle. And so um that's a challenge. And it's a new challenge because our electricity demand hasn't really changed in decades. And so this growth in electricity demand that we're seeing in the United States is a new challenge that um I would say that we're still trying to figure out the best way to approach that and to make things happen fast. Um, things like solar are something that can go on really fast. And so if we really need power now, that's one of those resources that we can really grow really quickly is solar batteries. We can install those, um, things even like natural gas combined cycle, we're seeing five years as kind of the minimum just to even get gas turbines um built. And so that's a long time frame for a data center that they want built, you know, immediately. And so matching that is, I think, is a real challenge. The efficiency of those data centers is going to improve. We're already hearing about optical tips and things like that. So understanding what the power demand is is also a challenge. We're not really sure how many of those data centers are actually going to get built and what will their actual power draw be. And so the uncertainty is really the challenge that the the markets are seeing right now.

SPEAKER_00 46:08

Final question on Stanford. Uh, the John Doer School, maybe and how Precourt is now part of the John Doer School, maybe just comment on that program.

SPEAKER_02 46:15

Yeah, absolutely. So the Pre-Court Institute for Energy is one of a couple institutes that we have. And we also have the Woods Institute for the Environment. Um, and these two institutes kind of formed uh some of the backbone for when they started the new Door School for Sustainability. Um, so those were existing institutes that are now within uh the door school, like you said, that was a big donation by John Doerr and others to build that school. It's the first time Stanford's not a new school in a long time. Um, and it really elevates the emphasis on sustainability. It is growing and is growing rapidly, and they're hiring new faculty when the school was formed. I think they had 40 new faculty billets that they're kind of doing over time. Um, and so it is it is truly growing the programs and everything within the school, but it serves beyond the school, both beyond the school within the campus in terms of trying to get sustainability into other programs all around campus. And it has kind of this mission to serve beyond Stanford. And so um there's interactions with other countries, with other professionals, with um other things. We're we're building an online course for Coursera that's more targeted for professionals to learn about energy systems as part of the door school. So all of that is is kind of part of the, I guess, the mission of sustainability.

SPEAKER_00 47:41

Our podcast uh centers on a number of different themes, but energy and AI is you know are sort of two of the central themes. AI, how how is that influencing, you know, uh your outlook for the power market?

SPEAKER_02 47:52

Yeah, I mean, I think we all kind of just see growth right now. Um the way I look at it is it's not the only thing that's growing electricity demand because we have electrification of other services going on, and it's just how fast those are going to happen. Um, so we have to prepare for growth in our electricity system. Um, we also see use of AI, right, in all these different ways. And I think we're still in early stages and figuring out the most optimal way to use AI in all sorts of different applications. Um so I'm kind of just excited to see how it's going to play out. Yeah.

SPEAKER_00 48:30

Excellent. Great. Final section, which is our lightning round. This is more just to get a number of different kind of personal anecdotes, four or five topics, largely questions from uh my kids and and and really just to get to some of your passions. But married kids.

SPEAKER_02 48:43

Yeah, so I'm married and uh have a blended family of four kids. So right now we have three 16-year-olds. Oh wow. Um, so two juniors, one sophomore, and then the youngest is 11 and and he's a sixth grader. Uh, so it is busy. You're talking about busy offer.

SPEAKER_00 49:00

Do you have some new drivers in the household?

SPEAKER_02 49:02

I have two drivers, yes. So both 16-year-old girls are driving, and the 16-year-old boy is close behind. He's shortly driving. So excellent. Yes, our all-electric cars. Our all-electric car family. They're driving a little Chevy Boltz that they get to share. Um, it's been great.

SPEAKER_00 49:20

Oh, fantastic. Favorite book, favorite movie?

SPEAKER_02 49:22

Yeah, that's uh that's a great. I'm really into fantasy. Okay. My favorite book series is Wheel of Time. Oh, great. Yeah, by Robert Shorten. Okay. Yeah. Excellent. Yeah.

SPEAKER_00 49:31

Favorite movie?

SPEAKER_02 49:32

Favorite movie. That's a tough one. I love Star Wars. I love Lord of the Rings. I love the kind of sci-fi fantasy type movies. I like the whole, and I like Marvel. I like the whole, like, um the whole Star Wars series, honestly. And so um Andor is one of my favorite series from Star Wars. Excellent.

SPEAKER_00 49:53

Favorite sports team? Giants fan? I 49ers.

SPEAKER_02 49:57

I'm a Giants, 49ers and Warriors fan. Okay. Uh I've adopted them since I left Houston so long ago. And besides, I was an Oilers fan and they don't exist anymore.

SPEAKER_00 50:06

So next to my oldest daughter, uh, I guess favorite technology or AI tool that you're currently using?

SPEAKER_02 50:13

I mean, I'm excited about electrification. And so I don't know if that quite answers you the question, but I'm really excited about I get excited about heat pumps and electric vehicles. I'm excited about you know, new electric vehicles. I have friends at Rivian and other things.

SPEAKER_00 50:28

So outside of Stanford, favorite passion for my son.

SPEAKER_02 50:33

Yeah, I mean hiking back to the house.

SPEAKER_00 50:35

So cross-country, running.

SPEAKER_02 50:37

Yeah, running, um, uh snow skiing, all those things that get me out outside in nature. Excellent. Excellent.

SPEAKER_00 50:45

And then last question for my youngest favorite uh pet do you have a pet at home?

SPEAKER_02 50:48

Yes, we have a dog. Um, he is a lab hound mix. He we got him right before COVID, which was kind of perfect timing. He was about six months old then. Excellent. Um, has been a great little member of the family.

SPEAKER_00 51:00

Fantastic.

SPEAKER_02 51:00

Yeah.

SPEAKER_00 51:01

Diana, thank you so much for joining us today. Really appreciate all the comments and great to hear about your journey.

SPEAKER_02 51:05

Yeah. Thanks for having me.

SPEAKER_00 51:07

Diana, thanks for unpacking what's really happening in the accelerating energy transition from rising global energy access and electrification to the AI and data center demand surge and why energy efficiency and clean energy tools matter for affordability, climate, and health. If this conversation sparks something for you, please subscribe and share it with others. We'll be back soon with more conversations on energy, AI, entrepreneurship, and investing. This is your host, Charlie Lycam. Thanks for listening.