A Beginners Guide to Understanding Clean Energy

This is an excerpt from a longer piece I wrote about three rapidly growing industries in the 2020s.

I have secretly harbored a great deal of shame since my high school physics days for not having a strong grasp on how electricity and energy systems work. Physics was not intuitive for me but recently I bought an electric vehicle and it has been a powerful inspiration for me to start reading books/articles and watching videos about energy, electricity, motors, power plants, etc.

A few things are clear:

1) I am never going to become an electrical engineer.

2) Creating a simple mental model for understanding energy systems is the best way to start to understand this domain.

3) You do not need to be a physicist to put together a logical high level picture of what is going on in the energy world and to form opinions.

I found the book “How to Avoid a Climate Disaster” by Bill Gates to be immensely helpful in getting foundational knowledge and then going down Google rabbit holes from there. I’d also suggest checking out any book written by Vacliv Smil. Here is the gist from ‘How to Avoid a Climate Disaster’:

The book breaks the future of clean energy down into 5 buckets:

1) How much of the 51 billion tons of emissions (annual emissions today) does any individual solution impact?

2) What is your plan for cement? (The world uses a boatload of cement and it accounts for 10% of all emissions).

3) How much power can any individual solution produce if scaled? How much would that cost to implement?

4) How much space does it need? (ie wind needs more than nuclear for the equivalent amount of power).

5) What is the green premium? (How much more does it cost than the non-green alternative).

If we put these questions in our pocket for a second, let’s think about the different types of energy and how energy works at a very very high level (like 1,000,000 ft).

Energy is described (very unsatisfyingly) as “the ability to do work”. Ok what the fuck? Basically that just means you need it to do literally anything. I don’t know all the laws of Thermodynamics offhand but you can Google them, they will give you scoop on the properties of energy and then if you drop “The Second Law of Thermodynamics” at a cocktail party people will probably think you are super smart and know a lot about energy. But maybe after COVID, cocktail parties won’t exist anymore and then your newfound knowledge won’t be as impressive on Zoom. TBD.

Back to the point, there are many different types of energy (nuclear, chemical, solar, heat, electrical, motion, light, gravitational) and energy can convert from one form (ie chemical) to another (ie heat). I don’t think you need to understand the specific details of each conversion process or else you will drive yourself crazy. Just know that energy can convert from one form to another.

Power is the metric we use to measure how much energy can be used or converted in a given time period and this is one of the primary ways we can compare energy sources to one another.

This is what (I think) you need to know in order to have a good mental model.

Power, power, power. Power is the concept that literally makes the world work (no pun intended).

Here is a very specific framework you can use to plug in details and assess if an energy concept sounds promising. (NOTE: This is incomplete as it ignores the other half of the puzzle which is removing greenhouse gases from the atmosphere i.e. direct air capture…but it’s still a useful thinking tool).

The power source starts as <type of energy> and each <unit of volume> produces <unit of power> which costs <dollars to produce> and has a <green premium of X> and the method of conversion is <insert method of conversion> which is <percent efficiency> and the byproduct is <what emission & heat>.

Once you have a good grasp of these high level ideas then you can start to think of energy systems as sequences of energy conversion methods and start to imagine creative ways to get a type of energy captured and converted to power in a clean way. Kind of like energy legos.

Here is an example:

If I want to charge an electric vehicle by the side of the highway, I need electricity to put into its batteries. So how can I get that electricity? There are a lot of different ways.

1) I can be connected to an electricity grid powered by a local coal plant.

2) The charging station can use solar energy to generate electricity.

3) I could have 100,000 smurfs ride stationary bicycles to generate electricity.

4) If I am by a river, I could generate electricity from a hydroelectric dam.

5) I could collect shit from thousands of cows in the area and convert it to chemical energy and heat, then power a motor that generates electricity which then charges the car.

6) If I am by a hill with a reservoir at the top, I could pump water up the hill into the reservoir and then let it fall back down to produce hydroelectric energy to create electricity to charge the car. This is similar to #4 but illustrates how you can effectively ‘arbitrage’ energy (ie the ‘energy cost’ of pumping the water up to the reservoir is less than the ‘energy output’ of the resulting hydroelectric system).

As you can see there are a lot of different chains of energy conversion that lead to the desired outcome of power that is needed. So at the most fundamental level what we are evaluating is what technologies, energy sources and chains of connecting them together results in the power (usually electricity) we need and how much more that is going to cost than the way we do it today. If a technology, energy source or method of connecting them together appears to answer any of the 5 “Bill Gates questions” in a favorable way, then you’d be more likely to consider it a promising idea.

The city of Shenzhen, China is a very interesting and cool example. They managed to convert their 16,000 city buses to electric vehicles. So if we use this as an example, the questions that you might consider in this case:

1) How much is the conversion cost from internal combustion to electric vehicle?

2) Who did the conversion? How did they do it? What electric components are they using? What batteries? How long did it take to convert each vehicle?

3) What is the emissions reduction?

4) What government policy is needed to make this happen?

5) What is the green premium (total cost of ownership)?

6) What are the power sources of charging the buses? Are they green or fossil fuel based? If green, what is the green premium?

7) How much cheaper is the servicing of the vehicle?

8) What is the battery replacement cost?

#6 and #7 are sub-questions related to the ‘green premium’ but worth laying out explicitly for illustrative purposes.

One last example that I found particularly creative I saw firsthand when I was at Kakuma Refugee Camp in northern Kenya in the summer of 2019. I met these Dutch NGO workers who were introducing a (for profit) very inexpensive solar panel system that generates enough light for one household to have at night and is cost effective enough for a refugee to afford (on a payment plan…like $80 total). Why do I find this interesting? It shows that not every green energy solution needs to be a massive infrastructure project or energy system. This is a great example of how a creative energy solution can unlock a huge amount of value in terms of human capital which I will discuss in the next section (more light == more time to learn & read when it’s dark == more educated global population == new labor opportunities with higher wages == more economic development in these places).

My eyes have become wide open to the massive energy transformation that is taking place in the world since purchasing an electric vehicle and its an area I am trying to actively learn more about. I hope this brief summary will help to demystify it or make it more approachable for anyone else who wasn’t that stoked during high school physics class.

All things startup and technology. Founder of https://www.scrumlaunch.com— A product development studio for high growth startups and leading brands.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store