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Dio

@DioOmega

I’m interested in industries that connect the old and the new to the future.
Worldwide Joined May 2013
1.9K Following 1.5K Followers 37K Posts

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Dio @DioOmega
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Pete North Verified account @FUDdaily 18h
The grid is looking precarious this winter. Grid balancing costs keep spiking off the charts. I've seen all manner of creative excuses this morning but this is a crisis tewnty years in the making. It was around 2008, or thereabouts, when I joined a large energy firm to do a highly uninteresting job, only made interesting by way of my co-worker being one of the lead programmers on the energy trading desk who explained to me in great detail how the grid works.

I was already dimly aware of the overall energy strategy. The idea was that we were going to blow up our coal power stations and build windmills instead, on the presumption that "the wind is always blowing somewhere" and that the easter bunny would intervene in the event there was no wind.

But we knew about dunkelflaute even back then. They knew very will the wind is not always blowing somewhere. But this was a manageable problem because there wasn't all that much wind capacity to offset. You could disguise the problem with importing energy through interconnectors. It was a relatively small problem that could be disguised.

But then we did start blowing up our coal power stations, letting our nuclear power age out, and didn't bother to replace our baseload capacity. We instead built windmills. Rather a lot of them. We built them in far away places, requiring long transmission lines for intermittent power that the grid struggles to assimilate.

Making up the shortfall always depended on gas because most large energy plants can't be ramped up and down at a moment's notice. The problems started when shortfalls were measured in gigawatts. The more windmills you added, the greater the instability.

This was known in 2008 and the problem was never acknowledged. Even back then, realists were saying this only had one destination; rolling blackouts. It's been looking hairy since 2022, and the situation has only worsened, exacerbated by a deliberate decision to run down and close our gas storage facilities, making us more reliant on the day-to-day gas market - which is notoriously volatile, especially when wars break out in our vicinity.

Some renewable energy enthusiasts did acknowledge this might be a problem, but they said it would be a small problem, and that by now, there would be millions of electric cars plugged into the grid that grid operators could use to even out shortages of wind. On paper that was a good idea, if only to even out the odd hour of wind loss. The strategy, though did not address the prospect of days and weeks of cold conditions with no wind, or the fact that nobody wants an EV.

As more wind generation was added to the grid, this problem became bigger and bigger, with no real thought as to what was going to keep the lights on in a crisis. We also banned extraction of our own fossil fuel reserves meaning that we are now wholly dependent on gas imports from wherever we can get it.

Now at this point, if you're not politically attuned, you're probably thinking this is a seriously dumb policy that's so dumb that our politicians couldn't possibly have been this retarded, so there must be some other explanation. If only that were true.

The problem is that a number of subsidies and market incentives were put in place so that the energy sector would concentrate on building windmills. There was (and is) big money involved, so there is a very influential wind energy lobby that misdirects the national conversation and influences our MPs. They are easily bamboozled and incredibly gullible.

Consequently, realists lost the argument. The warnings we've seen in recent years from the indefatigable @KathrynPorter26 (et al) are just the latest generation of energy wonks to notice that making your power grid weather dependent is a shit idea.

Anyone raising the alarm is immediately accused of being a "climate denier" despite warnings from them that there are certain facets of the climate that we ought to pay more attention to. Namely that Europe is prone to protracted periods without wind and sunshine. While our Liberian energy minister can be forgiven for not knowing this, her many predecessors cannot.

So we're now in a position where we have gigawatts of windmills installed, doing absolutely bugger all, at times when people are known to need heating and lighting. So now we're scrambling for gas from whatever we can find it, regardless of the cost - and making "resilience" plans for the near future when the grid stops working completely (which they will blame on Russian hackers).

This is made all the more precarious because the European power stations we import from have more demand than usual, not least because of the dry conditions this summer, meaning hydro is less available, and we're feeding cruise missiles into a regional conflict that is currently demolishing European grid infrastructure.

This would be a good time to fire up our redundant coal burning stations, but the last Tory government demolished them. This is a situation that energy analysts are describing as "bad".

Of course, that is a matter of perspective. Should there be a cold spell where the grid trips out for weeks, or we're reduced to energy rationing, many of you will simply die, thereby reducing demands on the grid and other public services. This is a necessary sacrifice toward our green energy future which, after all, is the priority here. We no longer cling to the archaic idea that the grid should serve the needs of the economy. It is we who must change!
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Dio @DioOmega
Capital can fund infrastructure. Only customers can fund a market.
Syed Ijlal Hussain Verified account @sijlalhussain 13h
A $6 trillion AI market scenario is a financing requirement, not evidence that customers will spend $6 trillion.

Bain estimates that annual AI infrastructure spending could reach $1.5 trillion by 2031. Assuming capital expenditure equals about 25% of industry revenue, sustaining that investment would require an annual AI market approaching $6 trillion.

The assumptions matter. This is a conditional economic requirement, not secured revenue.

For a B2B founder, the useful question sits much closer to the customer: which valuable activity becomes possible, who controls the budget and what would they stop buying to fund it?

Infrastructure investment creates capacity. A commercial strategy still has to establish why someone will pay to use it.

Source: Bain & Company, “New Innovation Is Required to Fund AI’s $6 Trillion Buildout”

@RLDI_Lamy @sulefati7 @ILoveBooks786 @Corix_JC @FrRonconii @Nicochan33 @faryus88 @ramonvidall @ozsilverfox @jameslhbartlett @dinisguarda @PatrickCFOD @Eli_Krumova @BCAgroup @ricardo_ik_ahau @timo_vi @violetainsights @DioOmega @66Iot
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Dio @DioOmega
The real challenge isn't changing practices. It's changing the beliefs that justify them.
Syed Ijlal Hussain Verified account @sijlalhussain 2d
Before approving more market-entry spending, decide what evidence would make you change the plan.

BCG's leadership research connects development with examining established beliefs and accepting discomfort. Its survey findings are associations, not proof of a particular expansion method.

The practical application is to make a commercial assumption testable.

If the plan depends on distributors generating demand, establish what would demonstrate that they can. Agree when to review it and what result would justify changing the channel.

A commitment to learning needs a decision that can still change.

Source: BCG, “Mind the Belief Gap”

@RLDI_Lamy @sulefati7 @ILoveBooks786 @Corix_JC @FrRonconii @Nicochan33 @faryus88 @ramonvidall @ozsilverfox @jameslhbartlett @dinisguarda @PatrickCFOD @Eli_Krumova @BCAgroup @ricardo_ik_ahau @timo_vi @violetainsights @DioOmega @66Iot
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