Recorded 12th July. This week we explore how extreme heat is reshaping electricity systems around the world, and why one of the biggest opportunities is improving how we use the infrastructure we already have.

We begin by examining the record-breaking heatwaves across Europe, where soaring temperatures have contributed to thousands of excess deaths while exposing how electricity grids, homes and energy markets were designed for a cooler climate. We discuss

• Why cooling demand is becoming just as important as winter heating,
• How heat affects both electricity demand and electricity generation,
• Why technologies such as heat pumps, demand response and dynamic grid management will become increasingly important.

We then turn to the United States, where PJM recorded all-time peak electricity demand during an East Coast heatwave. Despite having substantial backup generation, batteries and demand response capacity available, fragmented market rules and regulatory frameworks limited how effectively these resources could be used. We explore the forecasting errors, emergency reliability orders and operational challenges that forced grid operators to keep thermal power plants online and curtail large electricity users.

The conversation also examines the hidden environmental and public health consequences of relying on diesel backup generators during grid emergencies, and why better coordination of distributed energy resources could provide cleaner, lower-cost alternatives.

Finally, we look at two companies tackling one of the electricity sector's biggest challenges: unlocking more capacity from the grid we already have.

• GridSolver (WattCarbon & Resilience Energy) has launched an open-source platform that maps more than 66,000 US neighbourhoods to identify where batteries, flexible demand, EV charging and rooftop solar would provide the greatest value to the electricity grid.
• GridCARE, a Stanford spinout backed by a $64 million Series A, uses AI-powered digital models to identify hidden capacity across existing transmission and distribution networks, enabling faster grid connections without waiting years for new infrastructure.

In this episode

Extreme heat and electricity systems:

• Europe's record-breaking heatwaves and excess mortality
• Why cooling demand is becoming a major challenge for electricity grids
• How heat affects transmission lines, power plants and system reliability
• Why heat pumps can reduce both emissions and electricity costs
• Demand response and flexible electricity consumption during extreme weather

The US grid under stress:

• PJM's record electricity demand during the East Coast heatwave
• Emergency reliability orders and backup generation
• Why forecasting errors created operational challenges
• The regulatory barriers preventing greater use of flexible resources
• The environmental and health impacts of diesel backup generators

Getting more from the existing grid:

• How GridSolver identifies where distributed energy resources create the greatest value
• Why different neighbourhoods require different flexibility solutions
• How GridCARE uses AI to uncover unused grid capacity
• Why utilities are increasingly focused on improving grid utilisation before building new infrastructure
• How better coordination of existing assets could reduce electricity costs and accelerate new grid connections

Recorded 30 June – We explore how engineering, software and market design are reshaping AI infrastructure and electricity systems.

Charlotte examines three stories linked by a common theme: making existing infrastructure dramatically more productive. From NVIDIA's warm-water cooling technology and AI-powered water heaters to the largest virtual power plant ever assembled, we explore how AI is driving innovation far beyond the chip itself.

Lucy then discusses a major US Supreme Court ruling that could increase political influence over the Federal Energy Regulatory Commission (FERC), what that means for electricity markets, and why a new Columbia University report challenges the popular narrative that data centres are driving electricity price increases.

1. NVIDIA redesigns AI cooling with 45°C warm-water liquid cooling

• NVIDIA's next-generation Rubin AI platform is designed to operate using 45°C direct liquid cooling.
• Instead of cooling entire data halls with chilled air, warm water removes heat directly from chips, greatly reducing refrigeration energy and water consumption.
• AI competitiveness may increasingly depend not only on tokens per megawatt, but also on tokens per litre of water and per square metre of data centre space.

2. What if AI GPU's ran inside your water heater?

• Startup WATTER has partnered with AI company Subconscious to embed GPUs inside domestic hot water systems.
• Instead of treating heat as waste, every AI inference simultaneously produces hot water.
• Combining GPUs, liquid cooling, heat exchangers and thermal storage could create a new model of distributed AI infrastructure, much like the evolution of distributed electricity systems.

3. Sunrun, Tesla and Renew Home launch the largest US virtual power plant

• A 16.8 GW virtual power plant combines 7.8 GW of residential battery capacity, 9 GW of flexible demand, up to 9 million homes and more than 12 million connected devices.
• Rather than serving only utilities, the platform is designed to support AI data centres and hyperscalers, demonstrating how software can transform millions of distributed assets into critical electricity infrastructure.

4. Is politics beginning to reshape US electricity markets?

A recent US Supreme Court decision could make independent regulators more susceptible to presidential influence. We discuss:

• why independent regulation matters for competitive electricity markets
• historical examples of governments influencing market design
• how political priorities could increasingly shape electricity regulation
• why investor confidence depends on stable, independent institutions

5. What is really driving electricity prices?

A new report from Columbia University's Center on Global Energy Policy concludes that data centres are not the primary driver of recent electricity price increases. Instead, rising costs largely reflect:

• ageing transmission and distribution infrastructure
• wildfire and storm resilience investments
• equipment cost inflation
• higher natural gas prices
• broader structural issues within electricity markets

6. Markets versus public ownership

Drawing on recent visits to Kenya and South Africa, Lucy reflects on how electricity markets are evolving internationally, including:

• electricity market liberalisation across Africa
• private investment versus state ownership
• wheeling arrangements and direct power sales
• what the UK's political debate could mean for future electricity market design.

Recorded 21st June. Lucy joins from a sweltering London, while Charlotte records from Lake Tahoe after racing the Broken Arrow Skyrace with The North Face team.

We cover three stories spanning UK energy politics, FERC 2222, and rare-earth supply chains:

1. Andy Burnham, Labour and the Future of UK Energy Policy

Lucy looks at Andy Burnham’s election to Parliament in Makerfield and what it could mean for the future direction of Labour’s energy and infrastructure agenda.

The discussion covers:

• why Burnham’s victory is being viewed as more than a routine by-election
• what a more devolved approach to energy policy could mean
• the debate around public ownership, public control and essential infrastructure
• whether nationalisation would reduce energy bills, or whether market design is the bigger issue
• how locational pricing and planning reform could affect where clean energy gets built
• the trade-off between local decision-making and a national energy strategy
• why affordability may become more politically important than net-zero targets

1. FERC 2222, Data Centres and Virtual Power Plants

Charlotte turns to the US, where FERC has ordered six major grid operators to explain whether data-centre interconnection costs are being shifted onto existing electricity customers.

The discussion covers:

• how FERC Order 2222 opened wholesale electricity markets to aggregated DERs, including batteries, EVs, rooftop solar and flexible loads
• why the debate has intensified as hyperscale AI campuses seek hundreds of megawatts to gigawatts of new power demand
• why capacity is becoming one of the most valuable resources in the electricity system
• how 10,000 residential batteries can form a virtual power plant, while 100,000 batteries could provide roughly 1–1.5 GW of dispatchable capacity
• how VPPs can unlock value from existing infrastructure rather than waiting years for new transmission and substations
• why capacity payments, demand response and ancillary services are creating new revenue streams for distributed assets
• how community batteries and resilience hubs could provide backup power during outages while supporting grid reliability

1. Phoenix Tailings and Rare-Earth Supply Chains

Charlotte discusses Phoenix Tailings, the US rare-earth processing company that secured $500 million of financing from the Pentagon’s Office of Strategic Capital.

The discussion covers:

• how rare-earth magnets underpin EVs, wind turbines, robotics, defence systems, data centres and industrial automation
• why China’s dominance of refining and magnet production has become a strategic concern
• the difference between mining rare earths and processing them into usable oxides, metals and magnets
• how Phoenix Tailings uses mine tailings, industrial waste streams and secondary feedstocks
• why rare-earth separation is one of the most technically challenging parts of the supply chain
• how advanced separation chemistry and electrochemical processing could reduce waste, emissions and reagent use
• the key scale-up challenges around yield, recovery, reliability, offtake and commercial execution

Across the episode, the common theme is infrastructure: who pays for it, who controls it, and how governments, markets and technology shape the systems needed for the energy transition.