Produce more. Build more. Generate more. Deploy, deploy, deploy. Those are the rallying cries now in energy policy circles on both sides of the political divide.
Conservatives emphasize energy dominance and oil. The Left favors clean energy. Underlying all of it is the concept of abundance — the argument that government must unlock supply, as popularized in the 2025 book of that title by Ezra Klein and Derek Thompson.
But is the solution really just to build more?
Here’s a different diagnosis — and model — described in a recent conversation on the Energy Changemakers podcast by three respected energy thinkers — Lorenzo Kristov, a market architect and former analyst with the California Independent System Operator; Kay Aikin, CEO of Dynamic Grid; and Mark Paterson, principal and lead systems architect at Energy Catalyst in Australia.
Building more isn’t necessarily bad, they argue. The problem is that it starts from the wrong place, top-down rather than bottom-up.
Aikin, Kristov and Paterson take issue not so much with production as direction — where the energy production begins, who owns it, and how it’s moved around. Get those things wrong, and risk creating an abundantly inefficient energy system.
False scarcity
Why are we obsessed with energy abundance? In part because scarcity animates energy markets. Prices go up as available energy declines.
Kristov argues that this premise — that scarcity is a fact of nature to be managed — is itself an illusion.
“Scarcity is really part of our collective cultural mindset,” he says. “It’s like the water we swim in. We take it for granted. We’re indoctrinated to accept scarcity as a fact of life, basically, from the moment we’re born.”
He traces this back to his early studies at Berkeley, where he was taught that economics is all about the allocation of scarce resources.
His larger point was that we’ve built an energy system that depends on scarcity to function — not because scarcity is inherent to energy, but because the business model requires it.
“We live in a system that relies on scarcity to keep prices high and to maximize profits,” he says, referencing a discussion on an earlier Energy Changemakers podcast with economist Mariko Geronimo Aydin.
The alternative is to build from the bottom up. Today we start at the top of our electrical system with centralized power plants that send energy long distances over transmission wires to where it is consumed.
But starting at the bottom with rooftop solar, batteries, microgrids and other forms of distributed energy is more efficient. It reflects how nature operates, he says.
“Plants capture solar energy and use it locally on the spot to create food to power living cells. So once the sunlight hits the Earth, everything else from photosynthesis to metabolism is bottom-up and local,” Kristov says
So here’s the challenge: “How do we as a society mimic the abundance of nature to meet the needs of people for affordable, reliable, clean energy while trying to function within a system that runs on scarcity?”
The cost of energy delivery
Aikin points out that the current push for more generation ignores a fundamental economic principle — substitution.
“The current administration is talking about gas, gas, gas, talking about fossil fuels,” she says. “And their idea of abundance is just produce more, generate more.”
Substitutions exist to fossil fuels: energy efficiency, grid flexibility, solar and geothermal, for example.
“But what we’re doing currently in energy economics is we are constricting the choices, and that is what’s causing this scarcity,” she says.
And even if we built our way to renewable abundance, we’d still face the problem of getting all of the energy the final mile to the consumer — an issue that rarely enters the policy debate.
“Our distribution grid is on average about 50 years old,” Aikin says. “And as we electrify, which is actually an energy conservation approach… we’re going to actually outstrip the capacity of the distribution system.”
Aikin says some estimates place the cost of distribution-system upgrades in the multi-trillion-dollar range — that’s on top of the already-staggering $8 trillion projected for new generation, transmission, and storage.
“We still have to get the power to the plug,” she says. “The power has to go the last mile. And this abundance idea of generate more, generate more doesn’t take into account that we still have to get the power to the plug.”
And it’s an inefficient journey.
“Sixty-some percent of the electrons from a centralized fossil fuel plant are lost before they get to the plug,” Aikin says. “If we build it at the plug, virtually 100% of it will get to the plug.”
Australia’s warning
Paterson offers Australia as a case study in what happens when you pursue abundance without a coherent system architecture to manage it. Australia has aggressively deployed renewables, and the result has been — counterintuitively — instability.
“Australia is sort of a bit of a living case study of some significant periods of oversupply,” he says, “where we’ve actually got a growing challenge of oversupply of renewables at periods of relatively low load.”
The grid was designed for a world of controlled scarcity, where supply was dispatched to meet known demand. Now it faces the opposite problem: “periods where we have very, very significant oversupply of capacity into the system… which results in, if you like, the equal and opposite problem, which is where you end up with potential system instability.”
This isn’t an insurmountable problem. It can be corrected with better system design.
“There really is a critical issue of, if you like, the difference between dumb abundance and smart abundance,” he says.
What we’re doing to the grid is like adding new apps to an old computer. “If we never actually upgrade our operating system from Windows 97, there’s a point at which all of our fantastic apps really never deliver the outcome as desired.”
The planning blind spot
Kristov has spent years trying to identify exactly where the system goes wrong, and he traces it to the planning process — specifically, to a blind spot so fundamental that most planners don’t even recognize it.
Standard energy planning works like this: forecast how much electricity people will use, subtract generation that already exists, and then plan a portfolio of large power plants to supply the rest. Governments and utilities have planned investment this way for a century. The problem, Kristov argues, is that it skips an entire layer of the system.
“There’s a whole missing domain in that standard planning paradigm,” he says, “which is distribution-connected supply resources.”
These are solar-plus-storage systems sized not to serve the whole grid, but to serve a community — 1,000 or 2,000 homes, a school district, a business park. Kristov envisions them not behind a customer’s meter, as is typical, but in front of it, connected directly to the distribution wires.
They would require no transmission upgrades and face no land use issues “because we can deploy these things on the built environment, on the roofs of warehouses and schools and shopping malls.”
The potential is enormous. Kristov cites a 2016 NREL study that found rooftop solar alone could supply 39% of annual U.S. electricity consumption and 74% of California’s.
To capture this potential, Kristov proposes a “local-first” planning process. Rather than planning from the top down — starting with bulk generation and pushing power out to customers — you start at the bottom.
“Here’s our metered demand at the granular level of, say, a town or a section of a city or a new subdivision or a business park. How much of that demand can we supply from local resources and start with a local-first planning process?”
Where power can’t be supplied locally, the grid steps in.
Value transfer and dynamic pricing
Part of building that operating system involves fixing what Aikin calls the grid’s “poor value transfer mechanisms.”
The current pricing model — flat rates regardless of time or location — obscures enormous variations in what it actually costs to deliver power. Those variations are real, large, and carry signals that, if transmitted to customers and devices, could automatically optimize the system.
“The cost to provide a kilowatt-hour of power actually changes where you are receiving it and also when you are receiving it,” Aikin says. “There’s a lot of slack in the system when we don’t price it that way.”
She provides an example from Maine, where a recently commissioned transmission line to Canada has created a 20-cent-per-kilowatt-hour price spread between power in Maine and power at the Massachusetts hub. Maine now occasionally sees negative electricity prices — power is so abundant it has negative value — yet consumers see none of this signal. “We don’t actually let customers see that price.”
The natural objection to dynamic pricing is that it places an unreasonable cognitive burden on ordinary customers. Aikin’s response, citing the work of economist Ahmad Faruqui, is that the burden falls on very few.
“The top 3% is 50% of the costs in the system,” she says. Get that peak demand out of the system, and prices fall for everyone — without requiring most customers to change their behavior at all. In fact, a program in Illinois with highly dynamic pricing showed that “97% of the people actually see their bills go down,” she says.
The key, all three agreed, is automation. “As humans, last time I checked, humans were not created to optimize the power system. We want to get on with our lives, our businesses and so on. So a key aim here is how does this just happen in a way that optimizes the system as a whole,” says Paterson.
Aikin invoked Kenneth Arrow’s concept of competitive equilibrium — the idea that when many independent agents, each acting on local information, are given the right incentives, they can collectively reach an equilibrium that outperforms any centralized alternative. “When you have lots of agents, a lot of devices, all with smarts, you actually can create an equilibrium in the system. And that equilibrium through competition can be cheaper than the centralized system that it would replace.”
Ownership is everything
Underlying all of Kristov’s thinking about distributed energy is a conviction about ownership: distributed resources must be locally owned to deliver their full social benefit.
“Ownership is crucially important,” he says. “Distributed resources really allow local communities, local governments, tribes, school districts to own productive assets that generate revenues.” He pointed to a proposal circulating in Minnesota called distributed capacity procurement, which he argued gets the logic exactly backward. “The argument is essentially, oh, we just need more DERs and ownership doesn’t matter. And I believe just the opposite.”
When a community owns its energy assets, the revenue stays local. Schools can fund themselves partly from energy sales. City governments can offset budget pressures. Environmental justice organizations can build wealth in historically underserved communities. The technology alone doesn’t deliver these outcomes — the ownership structure does.
Kristov sees the legal path to enabling this as surprisingly straightforward, at least in principle. Any state legislature could, right now, create a framework recognizing that power produced and consumed within the same local distribution area constitutes intrastate commerce — not subject to federal wholesale market rules or transmission charges.
“Next week or next month or this year, any state legislature could decide to create a framework to allow local energy to be produced by a front-of-meter distribution-connected resource that could be totally consumed by customers within that same local distribution system and have that be a state-jurisdictional wholesale sale that’s not interstate commerce.”
The obstacles: inertia, money, and lack of imagination
Bottom-up planning isn’t happening in any big way for the electrical grid. Why not?
Aikin pointed to what she called a ‘paradigm lock’ — the difficulty of getting institutions to abandon frameworks that have worked for a century.
“People have perspectives. And we start at a very young age, creating this sandcastle of how we look at the world. And it is very hard to tear that sandcastle down.”
She noted that Maine, where she works, has a legislator actively trying to advance systems-thinking approaches to grid reform — and his bills keep getting gutted.
Kristov sees another common obstacle.
“Follow the money is a good rule of thumb here. Our current investment framework loves big projects. They like to build big stuff. A big project that’s a couple of billion dollars and has a comfortable rate of return once it’s approved by the regulators — that’s really the most efficient from the perspective of the large investors. But it doesn’t really start from what do people need? What do communities need? What do businesses need?”
Paterson made a broader cultural diagnosis that he called “Anglosphere,” a deep-seated suspicion of abstraction that prevents the systems-level thinking this problem requires.
“Abstractions are for sissies,” he says. “We don’t have any space for abstractions. We’re very practical people.”
He also emphasizes the need for what he calls a “parallel path” — a space within the industry for working through long-term architectural questions without subordinating them to today’s grid operations.
“In times of transformation to create a parallel path two, which is a space in which you, as a sector and as a society, you’re working through these things of, what kind of power system do we actually need as we move into the future?”
The risk of grid defection
All three worry that if the system doesn’t change with the times, it will face massive defections from customers who find it cheaper to generate and store their own power than to remain on the utility system.
“The technology is getting better and people are going to start grid defecting,” Aikin says, “because the dichotomy here with high electricity prices is it incentivizes distributed energy.” As utility rates climb, the economics of going it alone improve.
They are concerned that grid defection will force the remaining customers — disproportionately poorer ones who can’t afford to leave — to cover fixed costs that would rise as they are spread over a shrinking base.
“The oppressive regulatory and policy structure that tries to suppress DERs is just going to drive more grid defection,” Kristov says. “That’ll hurt poor people and poor communities the most, and it’s just a bad outcome at a system level.”
He compares the grid to the mycorrhizal networks beneath a forest floor, where trees exchange nutrients and chemical signals through fungal threads. “
We used to think that in a forest, each tree is doing its own photosynthesis and taking care of itself. But in fact, underneath the forest floor, there’s this mycelial network where trees are sharing nutrients and they’re sharing chemical signals and they’re actually collaborating and cooperating because they participate in a network.”
Distributed energy assets, he argues, should work the same way — not isolated islands of self-sufficiency, but nodes in a network that multiplies the value of every asset by enabling it to transact with all the others.
“A much better outcome would be to have all these resources that individual parties own or cities or schools own, have them transact over a network and share their excesses, provide surpluses, et cetera, rather than every customer doing their own thing,” Kristov saysn
A decade, not a generation
Can the change the trio proposes be accomplished? And how soon?
Paterson notes that Australia is already moving, with the federal government developing distribution system operator models and working through transmission-distribution coordination frameworks.
Kristov sees early signs in the U.S. too — a California court ruling on net metering, a wave of state legislation favoring balcony solar — as evidence that the underlying logic is already compelling customers and policymakers, whether utilities are ready or not. The danger is that change happens in an uncoordinated way, driven by individual defection rather than planned architecture.
“If policymakers now turn a blind eye to this and don’t do what Mark says about rethinking the architectural structure,” Kristov warned, the result will be “a continued wave of grid defection in one form or another.”
The conversation ends where it begins: with the conviction that the energy debate is asking the wrong question. The right question is not how much energy we can produce. It is what kind of system we want to live in — one in which energy wealth flows to the communities that generate it, or one in which it continues to flow to the incumbent institutions that have captured it. Smart abundance, as Paterson calls it, requires design. And Aikin, Kristov and Paterson say the time to design it is now.
This article is based on the Energy Changemakers podcast, Energy Abundance from the Bottom Up.
