Sep 14, 2018

Ep 76: Eric Ingersoll - Co-founder, Energy Options Network

Energy Options Network
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Show notes

Q1 - Early Exposure to Design

Bret Kugelmass: How did you become a climate change policy analyst and advisor?

Eric Ingersoll: Eric Ingersoll was born in London, lived there for five years, and then moved to Ghana with his parents. HIs dad was working on solving real problems in the world for people and Ingersoll saw this model as something he wanted to do. Ingersoll moved to the States in 1971 and found himself in a country filled with tension and alienation, compared to the exceptionally nice people he left in Ghana. When Ingersoll was in high school, his father was a solar architect doing passive solar and active solar thermal work, where Ingersoll learned how to do heat flow calculations for a building. He saw useful applications for his math classes and saw an experience, such as how a building feels, is amenable to some engineering and design. Ingersoll became interested in complex systems, leading him to design his own major in college. He also spent a lot of time as a child building and making things, taking responsibility for big projects, like re-roofing the barn, on his own. Ingersoll got a sense that you could teach yourself things and the mechanical and technical stuff is not out of reach. His mentality of thinking of things as design problems and used his formal education to fill in areas of knowledge that he thought would be useful.

Q2 - Meditation and Motivation

Bret Kugelmass: Did you start advising on policy right after University of California - Berkeley?

Eric Ingersoll: Eric Ingersoll has oscillated between entrepreneurial work and policy and advice work. During college, Ingersoll worked for a construction firm and hired on after graduation. At the time, he was very interested in the development of software for editing video. He grouped up with hardware and software grads from Berkeley, but the Avid software came out shortly after they started working together. Ingersoll got a taste for technology and technology start-ups, leading to work with other start-ups in the software and visual processing area. He started his own consulting firm, moved into a zen center, and was able to develop his motivation to benefit others. Ingersoll practiced meditation and began going on long meditation retreats, eventually staying at the retreat for silent meditation for one year. He spent months meditating on how he could help heal the planet and make it a better place. Around Earth Day in 1990, Ingersoll took his interest in energy and technical background and created the Green Pages, which gave a regional comprehensive listing specifically directed for environmental action.

Q3 - Environmental and Energy Startups

Bret Kugelmass: Tell me about harnessing human motivation towards accomplishing the goal of making our environment healthier.

Eric Ingersoll: Eric Ingersoll created the Green Pages, which gave a regional comprehensive listing specifically directed for environmental action. This was at a time in which companies were beginning to think about environmentally oriented products and corporate strategy where environment counts. Nobody had an environmental person on their staff. Ingersoll knew so much about the products and what mattered. He created a consulting firm, Environmental Advantage, with a group of recent MBA’s who were excited about using strategy as a way to create transformation in industries. They did a lot of work around sustainable forestry, but there was no market for the certified product. Environmental Advantage did a big project funded by multiple foundations looking at creating a forest products buyer’s group to get these vendors to buy the certified wood and create an industry. As he had success and his practice grew, Ingersoll wanted to do more stuff related to energy and saw that climate change wasn’t getting any better and economic growth was still strongly tied to carbon emissions. Ingersoll did a lot of work in the early days of the PV industry by making the case for scaling the solar industry and showing how you could use existing financial tools to make it work. After his work with the solar industry, Ingersoll moved to Boston and started a consulting firm playing a role as a turnaround guy for startups. Investors brought him in to redevelop the strategies for their startups. He joined one of his client startups, Mechanology, as the CEO and got interested in the idea of air as energy storage combined with wind energy. They created a subsidiary called General Compression and came up with a design that could provide 300 hours of energy storage.

Q4 - Wind Resources and Energy Storage

Bret Kugelmass: How did you use a product from a different industrial process for your energy storage?

Eric Ingersoll: A process called solution mining, which is dissolving a bottle shape in the salt, produces salt to be sold and the caverns are used to store natural gas. The company did a study of North America and showed how many caverns they could make in the locations where the really good wind resources were to be used for wind energy storage. General Compression got funding to develop and qualify their second stage compressor. While they were doing heavy duty technology development in Texas and building a demo facility in Texas, the company had incredible modeling tools. General Compression had qualified more than $5 billion of projects with the five leading wind developers. At that point, shale technology started to kick in and natural gas prices dropped. Until this point, utilities were pursuing wind technology, but the combination of gas prices and no growth in demand due to the economic crisis and within a year, all of their customers exited the industry. Ingersoll left General Compression in early 2013 and a couple years later they went out of business. After leaving General Compression, Ingersoll’s motivation to solve the climate problem was stronger. The U.S. has a lot of salt cavern potential, incredible wind resources, and lots of areas in the country without many people. Other countries are not as lucky in terms of renewable energy, so Ingersoll started looking for a global carbon emission problem and thinking about requirements for broadly deployable solutions to the energy problem. The solution needed to be cost competitive, adaptable to a wide range of markets, be manufactured rather than constructed, and produce zero carbon electricity, leading Ingersoll to advanced nuclear. Until this point, Ingersoll had been passively anti-nuclear.

Q5 - Manufacturing Advanced Reactors in a Shipyard

Bret Kugelmass: After setting up your constraints, did you find that advanced nuclear was one of the only solutions that would fit those constraints?

Eric Ingersoll: The two things that would fit those constraints are advanced nuclear and some kind of zero carbon liquid fuel. Eric Ingersoll downloaded all the papers from Oak Ridge National Lab (ORNL) and started reading into molten salt reactors and other advanced reactors. This led to learning about current Gen 3 reactors and realized they weren’t that bad, even though advanced nuclear may be needed to go into different markets. Ingersoll realized the current Generation 3 reactors were a possible candidate, but they had a different problem. Advanced reactors needed to be developed and brought to market which was a commercialization and development problem. The Gen 3 reactors had a deployment model challenge and were being delivered through a completely non-scalable model. These reactors require an experienced and skilled workforce, project management, and contractors to successfully do that. This can be done over time, but takes a long time to build those capabilities. Ingersoll came across a project at MIT which was shipyard manufacturing of floating nuclear power plants. Ingersoll joined the group and completed studies on how much the cost of a nuclear power plant could be reduced if it was built in a shipyard. If you built a twin APR-1400 in a shipyard and delivered it in one piece to the location where it was going to be used, they found they could deliver it for about $2,500 per kilowatt anywhere in the world. The shipbuilding industry has been innovating in an environment of tense price and cost competition where quality standards have to be high. Productivity is lower in construction, of which nuclear is on the low end, than productivity in manufacturing.

Q6 - Cost-effective Manufacturing

Bret Kugelmass: Does your company sell these manufacturing models for advanced reactors?

Eric Ingersoll: Eric Ingersoll’s group developed a lot of intellectual property (IP) to build these reactors in shipyards but were not able to raise money for the company. This project is a difficult sell to the traditional investor community. The Chinese and Russians have started working on small floating reactors, but are not cost-effective because they are designed for specialized applications. The Hyundai shipyard in Korea and produce a hundred large ships a year. These nuclear plants are more complicated than a ship, but are not more complicated than offshore gas processing platforms. The global industry could easily make 100 of these reactors a year. Right now there is a major downturn in the global shipbuilding industry, so there may be interest for this capacity. In Ingersoll’s consulting work, he does a lot of work on cost reduction for existing nuclear and gigawatt scale new nuclear builds. There has not been the same kind of intentional, broad approach for looking at cost reduction opportunities in the U.S. and the U.K. Nuclear plants started out more expensive in countries that are now lower cost. Those countries had a national imperative and concerted effort to reduce those costs. They looked at where there was waste, work that was not added value, production aspects that were taking too long, or steps that could be automated. Both China and Korea focused on reducing cost. They started out recognizing they were at level zero and needed to build out that capability. In the U.K. and the U.S., people had forgotten a lot of the basic nuclear stuff and there may have been a lack of humility in that they couldn’t say they needed to learn the technical knowledge again. The nuclear industry has not figured out how to integrated quality and production.

Q7 - Integrating Quality and Production in Nuclear

Bret Kugelmass: How do you make quality and production complement each other?

Eric Ingersoll: Nuclear components often cost three to ten times as much as regular components and it has to do with the nuclear quality requirements. These are not produced in a high enough volume that anybody has thought how to automate that or design a process in which it is integrated into production. There is a lot of room for automation in the construction process. Nuclear is getting more successful and getting R&D funding, but no money is going towards automation. One of the benefits of having a detailed plan and 4D simulation is that it could be shared with lots of people, so people on site can know what they are going to be doing. Hitachi was worried about the contractors they were going to be using in the U.K. and there was nervousness on the contractor side on how risky the project was going to be and how they would bid the project. Hitachi decided to run a workshop for a couple weeks rehearsing the assembly of the reactor building and utilities on the critical path. The contractors thought the risk was much lower after sitting through the workshop and were more willing to contemplate the idea of fixed price bids. The uncertainty of risk comes from not having a clear idea of what needs to be done. Detailed planning cannot be done without a complete design.

Q8 - Nuclear’s Place in Fighting Climate Change

Bret Kugelmass: Why is it important that we pursue nuclear?

Eric Ingersoll: There is an unprecedented challenge in trying to solve the climate energy problem. The problem is considerably worse, and has the potential to be much worse, than is commonly understood. We are only now beginning to think through the consequences of these things, because they are multifaceted and interdependent on various things happening. Sea level rise has two effects: having the sea level go up every year and affecting coastlines and erosion, and making storm surges higher. The more energy in the atmosphere from additional heating and sea temperatures means stronger storms. When those happen infrequently, they are challenging and difficult, but when they happen frequently, we may no longer be able to ensure large parts of the cities on the coast. This threshold could be reached in the next 15-20 years. We do need a lot more energy to bring the world out of energy and our society will not stop using energy. Large amounts of low-carbon energy will need to be produced and large amounts of carbon dioxide will need to be removed from the atmosphere. Large amounts of nuclear energy are needed to have a chance of eliminating the worst impacts and adapting to the impacts of this change. The entire liquid fuel system of the plant has to be replaced with zero carbon energy.

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