Clean Energy Traceability – E78

Great to chat with Grant McDowell, Co-Founder and Head of Commercialisation and Strategy at Enosi Energy, a company that unlocks the promise of clean energy for all households and businesses! We discussed the future of renewable energy, the energy grid mix needed to reach true zero, how Australian energy compares to the USA, COP26 and more! 

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Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello! today’ ‘ speaking with Grant Mcdowell co-founder and head of commercialization and strategy at Enosi, welcome to podcast grant brilliant I suppose to start with. Can you tell us a little bit about a no see so.

Grant McDowell

Thanks, Very much James Great to be here. Thank you.

Grant McDowell

Well Enosi is a um, an energy trading platform Traceability platform. In fact, what we we do in principle and Essence is match the the solar farm and the wind farm energy with the household consumption. And we do that by measuring the generation that’s coming from a solar or wind farm meter and and then match that with the meter of the household or business and in doing that simple matching and Traceability. We can unlock source time and price. Um, so a small small ah essentially a counting exercise but because that counting exercise is is allowing us to see where the energy is coming from at a specific time and um, what power Tracer does is add price onto that layer. Um, there’s an enormous amount of value created and so yeah, that’s what that’s what power Tracer does.

James McWalter

And what drove the initial decision to start a Enosi.

Grant McDowell

Well, the the um the initial decision for me was ah I’ve been on this kind of personal quest for a long time. In fact, I had this idea in 2000 7 so you know almost 15 years ago where I I was living in a. In sydney and australia and and had a lots of trees covering my roof and I was frustrated by not being able to put solar on the roof so worked out that if you put solar in the solar farm and matched that to the meter of the house there. There would be this economies of scale. And access to clean energy and that simple idea sent me on this path to join the industry to get an innovation patent. Um, which which I then went out and and and learned about the industry but I was way way too Early. So what I ended up having to do was to. Join the industry join the solar industry and in in in residential solar and then in commercial solar and over that interim period came to meet the team 3 years ago who had started out doing energy traceability on anosi and joined as a co-founder so we. Business has been running 3 years um and and primarily here in australia but we’re starting to to look ah abroad. We’ve got a retailer. We’re working with in singapore we’re doing some work in South africa and and the uk so it’s um, you know we’re creating a. Strong foundation with retailers here in in australia with the view to take our tech global.

James McWalter

And and what change in those nearly 15 years that made you know this idea ripe today versus versus like over a decade ago.

Grant McDowell

So the the biggest change is the cost of solar to be honest and and wind but the cost trajectory of solar just is unlocked and an enormous amount of value. The nobody is and as I’m sure most of your your listeners would be aware. Nobody had got any of the predictions. Right around how that cost trajectory was just going to be. You know a steep steep curve downward. Um, and that’s what’s unlocked the value. So so when I came into the industry was very expensive cost. Yeah 60 or seventy thousand dollars to put something on the roof it now costs three thousand dollars to put.

James McWalter

So thankfully.

Grant McDowell

Solar on the roof same size. So you know that that an incredible certainly in australia we’ve seen australia leads the world in rooftop installations. We have over 3 million rooftop installations and when I first joined the industry there was fifty megawatts of solar installed. Across australia we now have twenty three and a half gigawatts of solar installed across that 15 year period so yeah very um, ah surprise is the big big driver big change and and where the unlocked unlock the value and and as Matt campbell said.

James McWalter

Meza. Yeah.

Grant McDowell

On your podcast in an earlier episode. It’s this next trajectory of price which we’re still in this steep decline to bring 1 cent per Kilowatt hour sole intivity solar to the market which is which is what we’re really excited about because that will then unlock the the next stage of Making. Factory Storage Hydrogen and other applications of energy possible. So yep, the the cost trajectory continues down.

James McWalter

Yeah, and absolutely yeah, the the level of excitement for all the the enablement of those different kind of industries that you mentioned you know there’s a lot of people running around with pitcht text right now for those industries and 1 of those have a incredibly cheap renewable energy as part of like a necessary risk factor. Them to actually you know reach their kind of larger vision and so yeah, absolutely and you know it is everyone got it wrong thankfully because it’s been obviously way better than anybody predicted and you know long may it continue because it doesn’t unlockck all this other value.

Grant McDowell

Yes, that’s right? and and I you know I think offshore wind is the next frontier and it we’ll be seeing huge huge value brought and and and again downward cost trajectory. The interesting thing about the work that we’re seeing in this next frontier so this was first period that I you know that. We’ve been I’ve been witness to the last fifteen years is to to prove out that renewable energy is going to be the next you know our? ah next base load power if you like and that moving off fossil fuels is possible and I think we’ve proven that that the the next 10 years are critical though. In that we need the diversity. It’s not It’s not just about simply rolling up more wind and solar only um, we need the diversity in the mix to create that firming when the wind’s not blowing and the sun’s not shining so power tracer and and the work we’re doing with 24 7 carbon free energy. Um. Is is that next stage is that next phase in in development in in the in the tech and the industry.

James McWalter

And so let’s say I become a customer of an Oc I start to use your power tracer platform. Yeah what? what does that experience look like what does my onboarding. You know what? what is the entire process like.

Grant McDowell

So what we do is we? Um, we’re a software layer that that the different retailers in australia and you know our retailers will partnerships. We’ll work with globally will have within their billing systems. So we’re’re. We’re not a retailer with just a layer of software. Essentially a counting layer of software. Um, and so if you would if you lived in australia and you wanted to sign up to to power tracer you could do through do that through our 5 electricity partners through energy locals or simply energy or or some of the others and and essentially you can. Gain access to a utility scale profile. Um or indeed you can you can do peer-to-peer trading with people who have rooftop solar installed so those things sound you know, quite straightforward, but but what they do is unlock. Enormous opportunity because we’re seeing variations on that theme where a big tech firm in Sydney is about to launch a staff program where they have a power purchase agreement from 2 solar farms here in new south wales and they’re extending that. Power purchase agreement through to their staff working from home in the pandemic people have started to live from home of course and and and what what power tracer is enabling is for those that us to have a staff energy program so that those team members can get access to that clean energy. Um, during the day so it’s from the solar profile and the fact that tech company is going to pay for that energy through the year and so not a huge cost imppost on them. They get the scope 3 benefits the team get to sign up to a collective sustainability action and. And so small change. but but ah you know I think a ah real innovation in the way energy is being being consumed here in australia.

James McWalter

And I guess if I think about yeah, what I how I think about the way people are selling renewable energy to customers to consumers of commercial entities today. They’ll say look you could buy a or going to a power purchase agreement if you’re a commercial entity with a solar farm. And you’ll buy a certain amount of electricity from that soil farm not so a farm could be in a different state across the country. Um and the odds of the electric electrons being produced by that sort of farm getting to your actual business are pretty slim and so there does seem to be this kind of great difficulty in saying you know if I if I’m buying renewable energy like is that actually renewable energy. That’s. Getting to me and how do I kind of trace all that um I guess how is your you know how is power tracer kind of changing that kind of status quo.

Grant McDowell

Well, what power trace is doing is is measuring the source at that in that half hour trading period australia now has five minute trading period. but but but the rei meters are still half hour so in that half hour trading period. We’re seeing how many megawat hours are coming out onto. Grid and then we’re seeing how much energy is being consumed in that half hour period by the household and power traces matching that out within that half hour period at a particular price. So again in australia we we the utility says solar is cheaper than the firming price. And so we’re able to offer clean energy cheaper than firming um because we’re able to bifurcate the price for the first time so traditional retail is a kilowatt hours a kilowatt hours is just a grid mix and you might have time of use which gives you some variation in the price. But it’s never related to the source of the energy and and this is classic measure and manage as soon as you’re able to measure that source and match them through what you’re consuming and then we’ve done the modeling on this across nine thousand household households um, historically. Here in in in sydney and when we match that to a solar farm. It comes in around around forty percent of the of the consumption and when we add a wind profile on top of that that comes into seventy six seventy seven percent of that profile so we call that. Path to true zero. So instead of just having 1 hundred percent renewables and by the certificates what power tracer enables you to do is to buy cheaper energy because the solar is cheaper and the and the wind is slightly cheaper. So we’ve got cheaper, clean energy. That’s seventy six seventy seven percent of your load. And then for the balance of that um load of 22 or 23 percent you can buy certificates and be 1 hundred percent for your renewable. So it’s complementary to the certificate market. But most importantly, you’re able to see where that energy is coming from and now add our second solar phout. A second wind farm but you might only then get into the early Eighty percentile and then the incentive is well I’d like to pay a bat. Ah you know, have battery storage and you’re prepared to pay now above the firming rate because you’re into these high percentages and what’s happening is that the humble consumer is driving the the mix driving this diversity. In the generation mix because the battery then has is as as clean energy from the solar stored during the day and then used in the evening. Um, and we we we we get you on this path to to true zero which which is aligns perfectly with what google.

Grant McDowell

Trying to do with the the 24 7 carbon free energy compact with the United nations and recently we you know he was invited to to cop 26 to to give the first foundation meeting for the un carbon-free energy compact very exciting stephen. Hoi our ceo and I went and we think that this next um, you know innovation and which has been driven by the big tech companies. What powertrace is doing is ah is expanding that that accessibility to just general business. But then right down to the household where. Where we where everyone can be on this same path essentially towards true zero and unlock the value because the choices will drive the the clean energy uptake and then those higher percentiles will be driven by the diversity and and people be be prepared to pay that little bit extra.

James McWalter

That’s yeah I love a lot of that I I like all of it. But I think what’s really interesting is moving the standards piece right? because generally standards are adopted by players that fit their existing ah the existing status quo in some way right? So we’ll say. You know it’s easy for us to supply energy in this particular way. Um, but what’s the cleanest way we can kind of you know, put move some things together to make it look like it’s it’s it’s a kind of carbon zero energy mix. Um and let’s do that and and it’s not the worst idea in the world right? It’s the first chapter. It’s the first version that makes a ton of sense.

Grant McDowell

Um, sure.

James McWalter

But actually shining a light on it and saying hey there is this gap and the way you can fill that Gap is through some sort of transparent purchase and that could be carbon off like credits or as you mentioned or that could be you know, actually investing in more expensive Energy. You know, battery storage that might be more expensive in a given time of day and all that kind of thing. I Think that’s that’s really interesting because what it also gives is a signal to the kind of entrepreneurs and the product developers of the world to say oh you know where? what’s the next layer in that kind of in that slice that we should be building towards you know.

Grant McDowell

Sure, but more importantly, it it to echo that it it unlocks the op a new understanding for the retailers because in australia we have gentators so they they generate and retail electricity and and and what. What power tracers doing is showing for the first time to you know, demonstrating to the retailers that the customers will buy these products and that they can build these products with a customer base behind them and so you know in the past they’ve had to just build the assets. And and and use this idea of the energy trading as ah as a big amorphous blob of energy. Essentially we call this the the energy lake um that that the energy retailers are buying and selling into and and now traceability unlocks this visibility of where the. Where the energy is coming into the lake. Um, and where it’s going after the lake and and then paying for that directly and and and through the the payment we’re able to track and and drive and show incentive to the market that you know more solar and wind is is needed. And there’s ah, there’s an appetite and market for it. But then the diversity mix as as people are on this true zero ambition would be people will be prepared to pay for it as we use battery storage and and and hopefully hydrogen storage down the track to to then? um. Complement these very tough parts of the the small percentages at the top end that will be harder and harder and we need to create a market for that and we believe that that you know this this 31 enty four seven carbon -free energy is the is the foundation to unlocking that and. You know our our expression for is true zero because that’s much more consumer, friendly and easy to to understand and we’ve had great reception to the idea of true zero and and and people being wanting to sign up for that because it makes sense if we can take the heavy lifting.

James McWalter

Sure.

Grant McDowell

Out of the equation and make it simple and cheaper. Then why wouldn’t you sign up for something that’s cleaner and cheaper and and and and has you on a path of sustainability over time so it can complement the existing infrastructure with Certificates. We’re not, we’re not saying don’t buy the certificates. We’re just saying that. There is a um you know a ah grid 2 point zero here and and this unlocks an enormous amount of value to move fossil fuels out of the the grid mix and keep the lights on.

James McWalter

That that’s fascinating and I suppose that kind of lead me to think about things like monetization right? because within all these different systems. How these things are Monetized. You know has a direct effect on the incentives right? to kind of push to something like true zero. How are you thinking about Monetization. What’s the kind of. Model of it today for.

Grant McDowell

Well, the monetization. Um, for for everyone in the ecosystem works I think particularly well because as we’ve said the solar trajectory um is you know that that continues to go down and and so that’s price that those prices can be reflected. Um, back to the customer but the margins are still there for for the retailers. So they’re not out of pocket. Um, the you know from our point of view. The the cost of energy is going down therefore the electricity consumer should pay less and we’ve seen this in australia you know the the. Everyone always said, we’ve always pay a premium for renewable energy and as it’s turned out. Um, ah, clean energy certainly in South australia’s put the prices down and across the rest of the country. We put the prices down so we you know we’ve hit peak pricing in australia where I’m the downward trajectory of that now. Um, and and that’s. And again locks unlocks the value for the general consumer. Um, and then our tech you know in terms of the cost. We’re a saas play so software is a service and we only charge the householder 2 dollars fifty a month to to use power tracer and that’s done through the retailer. So. It’s such a small number that the retailer is absorbing that figure anyway. So it’s ah it’s a it’s a really good news story if we can get this right to bring down the cost of energy. Um and and to keep the reliability there and move fossil fuels out and in an excessive accelerated way. So.

James McWalter

Not so that’s fascinating and yeah, that definitely kind of lines. It makes a lot of sense to me. You also mentioned this ability to you know for a consumer to basically trade energy with a specific source in some way. Um, that’s kind of fascinating to me like.

Grant McDowell

We we think it has great potential.

James McWalter

Who’s I guess is like a typical profile of somebody who might do that on your platform.

Grant McDowell

Sure so we have um, ah layers of trading on on the platform and and our peer-to-peer layer is just 2 options. Somebody can go onto the power tracer platform and set their own price for the solar energy that they are exporting out onto the grid. You don’t need to go through your retailer to have that conversation and you set up a trading partner. So if I want to sell my electricity to a family member I can sell it to my sister-in-law. Um, and I can offer a zero price for energy for just the the energy part. So so. In that in that stack we have the energy Sta energy cost the poles and wires cost the enviro costs in the retail margin and all we really all power traces do is calculating the energy only part of that stack each time and comparing that to either feed tara or or the standard. Price from the retailer. So in this case, my sister-in-law would would pay would have a saving of around 8 cents per kilowatt hour if I was selling that electricity. That’s um, if I had a trade of zero cents on power tracing with her I could also send it. To an uncle of mine who’s lots of money so he’s prepared to pay more so so you know um an uncle would pay potentially you know 10 cents per kilowatt hour so on power tracer you’re able to to go onto the platform and then and then set your own set an invitation at an offer. To to trade directly with those trading partners that you may know and and that that you know it’s ah it’s a feature to be honest peer-to-peer trading is ah it’s a great feature but it’s not where the action is it’s it’s you know? ah people aren’t that interested in energy I always say that you know there’s this. Tiny space in our mind where we we prepare to look at energy for about um you know I think I think the average is about ten ten minutes a year and the rest of time is on Netflix. So so you know we have to keep we have to always as energy people be aware that the punterellial or the customer isn’t that engaged and we have to make it simple accessible. And and and and and and and as cost effective as possible because it’s a commodity people are are are far prepared to pay less for energy than they are to pay a premium for Green. So so that’s the kind of ethos behind it. The last thing I’ll mention in the trading. Ah, the next trading layer is the is the community trading a where if both in this case, my sister-inlaw mine haven’t consumed all the excess energy I’m sending out onto the grid I can I can offer that into the community pool and and and that.

Grant McDowell

Allows anyone in my community pool to match out that electricity in the way. It’s a very kind of Australian algorithm we we match out the the person offering the the the lowest price matches out with the person. Um, who’s prepared to offer the The. Ah, the the highest buy price and so the the match the the the algorithm works out where the lowest and highest match out and then it runs all the way through to the centre and and it’s naturally a very equitable way of of matching out all those trades across the community. So We have those 2 layers of of a um you know peer-to-peer trade which we call a nominator trade and then a community trade as well.

James McWalter

This is absolutely fascinating and I think what’s remarkable to me mostly is that a lot of what you described there for the audience is basically illegal most of the United states um, the idea of moving. Um, what they call distributed energy resources are drrs. Um. Having kind of a prosumer layer or even like a somewhat aggregated you know mom and pop business d layer where you might have ah you know a farm at putto and solar panels and they you want to bid into a local market. Um, that is incredibly expensive or illegal or both in most parts of the United states. And so the thing you’re describing is actually something I’ve heard a few people kind of like you know shake their fists at the at the sky about in the us about these are the kinds of models that would be amazing to have emergent in that market and so yeah and you know I guess is that your kind of experience as you look at other markets around the world is australia like. Specific you know particularly kind of you know, open relative to other types of energy like trading to to that level of granularity. So.

Grant McDowell

Sure so so look australia has led the way in so much of this distributed energy future just because of the the low cost with the lowest cost installed solar in the world rooftop specifically. Um. You know we’re down to less than a dollar a watch I I think the us is still hovering around 3 dollars or what it’s you know it’s ah, incredibly expensive still and I you know I think there’s been some work done to to reduce those soft costs and applications and things which have only recently come through in the last few months. Few months which have been led by open solar and others. So so I think ah, but because we’ve had such an aggressive rollout of of Solar. We’ve you know we’ve just we’ve an energy only Market so very different to to other other markets. Um, so we are progressive in that way. But. But ultimately, what’s happening if you look at it from a macro point of view electricity has always been the central central system where big generators like coal generators and gas generators have provided all the energy centrally and then that’s gone distributed out onto the electrical grid. Um, and now those. End nodes are now the centre of the universe. The end node is is where the action is the customer. In fact, can put solar on the roof a battery on on the on the wall and and will soon have an electric vehicle and so their influence on the grid is so much more. Important now than than the centralised system. So I think the policy needs to catch up in the us I think the policy needs to reflect that the the homeowner um will be the centre of the universe. And and then and then that distributes um, how do you How do you track value and and allow the homeowner to participate in the ecosystem by by being able to you know capture some of the value themselves.

James McWalter

I Yeah that was actually the next thing kind of of my mind to kind of ask you about is you know we we do have this kind of ev future I think every day it seems to be coming faster and I also think more and more that um, we’re.

Grant McDowell

Um, so.

James McWalter

Collectively pretty unprepared for how different things will be once we get to a plus thirty percent penetration of evs in a given neighborhood. Um, you know there’s all these positive effects. It’s quieter. You know it’s less pollution. All those kind of things but the strain on the kind of local grid. Is something that has a kind of very very large management problem that know utilities as great as they are and I generally do think they’re great tend of moves not to me slowly um and adopt things and and very careful kind of risk you know, obsessed fashion as they showed right? like losing electricity is like a major.

Grant McDowell

Are.

James McWalter

You know downer for for everybody and life and death really? So yeah, so how how are you thinking about you know ios the role that in Nosu will play in this kind of rapidly emerging ev market.

Grant McDowell

Well before we get to anoci I think again, there’s another macro 30000 foot view which we should. We should take and um, which is yeah know another thing we’ve been looking at in australia which is instead of thinking about 1 hundred percent renewable grid. Let’s look at a five hundred percent renewable grid and and that just that exercise that mental exercise of of to get back to the terror base example of 1 percent. What 1 cent per per kilowattho you know this is a market driven exercise and if solar is that cheap. It’s going to be everywhere and and and if we’re able to to um you know.

James McWalter

I No no.

Grant McDowell

Blow past 1 hundred percent and get into 1 hundred and 50 or 200 and 3 hundred and certainly in australia with all the space and great sun hours. We’re able to get into you know the 500 percent renewable economy what that unlocks is cheap Green steel. Um. Cheap hydrogen which we’re able to export um and and and evs become the the the sponge they become the energy sponge to soak up all that excess in the day. Um and and then and then play a role with vehicle to grid. Um, in stabilizing the grid in in providing you know v to g or v 2 h v to household and the the vehicle but is that that instead of a stationary battery on your wall becomes a you know sogryphersis you know, 5 or 6 or 10 batteries on wheels.

James McWalter

Right.

Grant McDowell

And the car just happens to come with it. so so I I you know I think that that opportunity is is so I’m not as concerned about the grid not being able to cope with the volume of energy and and this flow of energy which is. Which just gets back to the earlier point the the grid now is 2 wo-way. It’s been a 1 way from the centralized sending out across the the grid network and now we have a very much a 2 wo-way relationship with with the householder which is why we need the householder engaged not necessarily. You know. Themselves. But but we need the value to be filtering through to make that ev more affordable to provide some of that you know whatever those grid services are that the ev can provide um to to extend that back into the lease or whatever it might be and get the adoption curve. Accelerated and then we move fossil fuel out of the market that much faster. So ah, you know that’s my you know my first take on it the second. So how power tracer fits into that is this bringing this value of of source time and price means that there’s some accounting. To to take some of that value and extend it. Toever who’s whoever the participant is um and and what power trace is doing that is instead of behind the meter where most of the value is is is happening at the moment where you do have control. We want to bring that onto in front of the meter. And allow allow participants in the network and participants on the grid to to you know have have value attributed to whatever role they’re playing at any and any given moment so already australia’s in the five minute settlement period. Um. And and we’re able to you know that that gives batteries much much better opportunity to compete in the market than the big gas turbines and so that’s the reason for the change in the rule and that stimululates the battery market so there are there are there is policy. And there’s a policy framework and a policy vision today. There’ll be a new aemo which is our regulator will be publishing a integrated systems plan the new version which I haven’t had a chance to to read it. It’s published today but that will set out again. These. Goals that we set twelve you know, maybe twenty four months ago we’ve blown past them and and and there’s recalibration. so so I think um, the regulators will need to be much more dynamic and and ah.

Grant McDowell

You know there’s more change in the next 10 years in the electricity sector than the last hundred years combined.

James McWalter

Yeah, that makes absolutely ton of sense and just to your kind of point of Batteries. You know was 1 of the kind of surprising things I learned relatively recently is that you know a battery as storage for stabilizing the grid is just far better than existing peaker plants like coal and gas because a battery if you turn it on it immediately. Generates. Gives you power within in you know a second whereas coal and and and oil you still have to you know heat up a furness. You start to kind of go through this process and so yes, moving to this kind of five minute um dynamic ah you know timing gives a huge advantage to something that can be as nimble as a battery right. And then the other power of the batteryter is that they can move across lots of different types of electricity markets and stabilize the grade all the way through and service services and everything in between in a way that most other types of energy cannot do so because they just lack that flexibility right.

Grant McDowell

That’s right batteries have the ability to attract Eight value tree 8 value streams. Um, and so when you unlock a single resource that’s able to capture 8 value streams then you know it’s creating a much healthier greater much. More stable grid. Um, and and there’s certainly challenges to come with. We’ve got you know batteries operate great fantastically within the millisecond and over 2 and 3 hours we need long duration storage solutions and this is the reason why Google have got behind this 24 7 carbon free energy idea is that. The hard parts those top you know, eighty and ninety percentiles is where the work needs now and then we need to find a way of conquering those single percentages over this next decade so google will be 24 7 carbon free by 2030 and all their their data centers around the world and all their their operations. Um, and so that’s a tough call I mean that that means in in singapore where there isn’t much solar penetration renewable energy solutions that need need to be found and and supported and so that innovation. Most innovation exists today and we can we can invest in it and grow it and and blow past 1 hundred percent renewable as I said but there will be new innovation that that certainly in battery storage and others that that will come to the market but but the stimulus is needed but you know we need to create the market and and what the market then. You know if there’s if there’s sufficient market behind it that unlocks an enormous amount of value.

James McWalter

Yeah, you know you talked about australia up from ireland originally and the ah the energy mix in Ireland just can be very different right? It’s going to be onshore and mostly offshore wind and there’s a large investment in Hydrogen happening today to kind of solve for you know the longduration storage piece.

Grant McDowell

Um, sure.

James McWalter

Are you know the hydrogen fee in particular is like an you know nascent Marketll we’ll see how it scales up but you know there’s already billions of dollars from the Irish government going into this as we’re seeing in projects across the world. So Yeah to your point last hundred years you know and’s ah everyone I talked to. It’s like get into clean energy. You know there’s a lot of opportunities and exciting things Across. You know the climate solution space. But if you want to kind of get to massive scale quickly like energy and the related aspects of the energy is where it’s at.

Grant McDowell

Yes, I mean the the other interesting thing is that certainly australia we’ve we’ve got a huge penetration of of renewables. You know I think solars around yeah nearly thirty percent of whatever it is. It’s massive but globally. Um, solar is only 1 percent of the energy mix now we need to be in the seventy percentile in the next twenty Twenty five years. So if you map that out. It is just an incredible amount of of clean energy. That’s that’s coming in an industry that that will continue to to grow.

James McWalter

Fresh.

Grant McDowell

And prosper and bring lots lots of jobs, lots of innovation and you know I think I think like electricity said it’s been very dormant and and boring for a long time. But I think it’s going to be the next 10 years is going to be a wild ride.

James McWalter

Absolutely. And yeah, the next 10 years they were definitely out top of mind for the people like cof twenty six as you mentioned you were there. You know what surprised you most about your time there.

Grant McDowell

So ah, the you know the biggest takeout from Cop Twenty six is that and this is not being publicized in the media to my mind is that it’s no longer cool to have fossil Fuel sub subsidies. Um.

James McWalter

Yeah.

Grant McDowell

And that’s a big deal. You know the fossil fuels subsidies and governments that have just you know randomly so ongoingly support year in year out subsidized fossil fuels I think will be more and more tough politically? Um, so that’s. First observation the the the second observation is that although it was you know the um, some of the the ambitions weren’t achieved that we set out to achieve it at a cop and not me but the the broader cop ambitions um, the we were able to get. ah well ah next year will be another opportunity to to come back to the negotiation table rather than wait in 5 years and I think that’s an achievement. Um, so the urgency is is has dawned although you know not much progress was made this time. The the urgency has meant that that cop 20 7 in in in egypt Next year will be I think another big opportunity to to move things forward. So yeah, progress incremental but those are 2 but those am my 2 takeout.

James McWalter

Yeah I guess my view’s pretty similar. You know I think that in any sort of sit like setup like that if you get sixty percent of what you want going in like you’re doing pretty well 50 1 percent is probably more typical at best and so.

Grant McDowell

So.

James McWalter

You know there’s obviously a huge amount of disappointment from large parts of know society in general at the climate community in particular, um, you know small outland nations around the world. Obviously you know are are feeling this most harshly but you know we went from like Decade long conversations to like yearlong actions and um and I think the levers that we’re seeing right on the consumer level the kind of company such innovation level and now more and more on the governmental level to kind of you know, accelerate? What’s happening on the innovation side. Yeah I think it’s actually fascinating and you know there’s few big bills happening some of past some are about to pass across europe. Um, leave australia some as as well as united states and yeah and some starting to see real dollars going into this space as well.

Grant McDowell

Yeah, and and I think the the yeah that’s exactly what? um the opportunity really is is we we’ve got um a tenure window and we can embrace that opportunity because. We’re running under time I mean the it’s no fun to live in a world that’s gone up 3 degrees celsius you know climate the impact on the Climate. We’re seeing it already. Everyone’s aware of it. The the exciting thing about the electricity sector is we can play a big role we can play if you look at it. Um, from electricity directly and then how that flows through we can we play a role of around seventy percent of emissions. Um, when extended through to transport and so the electricity sector is by its nature then an exciting sector to join because the contribution we can make is enormous. Um. And and we’ve got ah we’ve got to roll out and replace the huge amount of fossil fuel in the next 10 years um and Beyond and and do that effectively by creating. You know the price signals to the market to to get access to those cheaper prices. The clean energy brings and ah and a sense of. Being of everyone being able to participate and that’s why 1 of the things that I’m particularly excited by an ocn power tracer is. We’re able to enable just ah, a regular household to be on a path towards true zero. And to to get on board and and then measure and manage their own performance against resources that are out there in the in the market and then with vote with their dollars to say you know I want to say to the retailers to say to to to generators the signal le we want more of this and we’re prepared to pay for it. And and so if we can bring that radical transparency across the grid. Um, we we hope that that will have a positive impact and and and accelerate the adoption.

James McWalter

Yeah, you know the level of apaqueness across the global economy. Um, you know some of it accidental a lot of it have planned um is really what I think the common thesis of many many companies trying to either decommorize the grid or decarbonize other industries. It’s like really trying to shine a light. Um, these different incentive structures and so on and what I think is fascinating but what you’re doing at a noc is that the ah the business itself like the more transparency like your business model is tied basically to a transparency that also decarbonizes and I think that is I guess the sign of like ah like a. Climate company. That’s properly tacking Climate. There’s a lot of climate companies that like may might do the measurement piece but like that doesn’t necessarily like drive change in the same way and so yeah, but I’m quite fascinated by kind of that approach. Um, 1 thing you know as I like kind of looking into your background and so on and started listening to some of your podcasts. So I believe you have.

Grant McDowell

Um.

James McWalter

Podcast called Spark Club Yeah I’d love to hear a little bit about what kind of was genesis of that project.

Grant McDowell

So I I um I was a startup founder in in here based in sydney and really felt long for a community. So if you can’t find 1 they say just build it yourself and and and so in 2000 16 I I set up spark club which. And and the premise behind it is that we’ve got to some credible opportunity here in Australia. We’ve got great Universities. We’ve got great abundance of clean energy and and and in aspects of of this distributed energy transition australia leads the world and so the idea was to. To create a forum spark club for people to come together and and and and learn from each other so I interview founders and and and elders and and and then particularly depending on the policy. We. We do a policy piece as well. We did 1 on blockchain 1 on. Big battery storage and five minute settlement and and so ah, you know the idea is to to share this knowledge and experience with the with the broader community here and replicate the success of of silicon valley um, in in what they were able to do in the early days. Um, was was communicate and share as a community and learn and accelerate by by taking tech that was developed universities and bringing those successfully out into into the broader market and so yeah, that’s been I’ve been doing this since 2000 16 and and it’s been. Fantastic opportunity to to learn and share ideas across the the clean energy entrepreneurial space. So it’s been a good journey.

James McWalter

Super cool. yeah yeah I think you’re you’re kind of slightly smiling because that’s somewhat similar to obviously what reform we’re trying to do ah on on this podcast as well and I think the trying to recreate the kind of innovation of of silicon valley around the world. Um, like I think this is like fascinating story and some places do it better and worse I think. Having a very much a kind of Storyd driven approach can help a lot because to me like the core value or the core reason that Silicon valley is what it is today is that basically failure is not really punished like risk is very very rewarded in general. Um, you know you can go and like tell somebody like you lost 15 million dollars last week and they won’t.

Grant McDowell

Um, so.

James McWalter

Like an eye whereas you know you’re castigated and pretty much everywhere else in the world. Um, now if you just if everybody is just losing all that money obviously like they would never have gotten into it but because it encourages that level of kind of risk takingking around specific types of business. You know it’s had success and I think hearing stories of success and all the failures that led up to that success. Because everybody has like 20 failure stories before they got into success I think that encourages like that next kind of generation of entrepreneurs to like take the chance.

Grant McDowell

So And and this is the premise that we have at spock Clubb um is that we can no longer afford given the climate emergency to have a 1 in 10 ratio. So The Silicon Valley ratio is. You. You know you have 1 unicorn or 1 success and and and then it’s nine failures and and our premise is that we needed to change that ratio if we’re going to be successful to 30 to 1 and we we need to blow up some money. Um and and in blowing up some money we can indeed.

James McWalter

Right.

Grant McDowell

Ah, from an innovation point of view. Bring some some new ideas new tech into the market and make those successful. But if we sit in an old paradigm of 10 to 1 we might get there by twenty forty or twenty fifty in which case it’s just too late so you know let’s blow up some some money now. And and and try and accelerate some of the the you know these ideas that are coming out of the university ideas coming out of entrepreneurs young and old and and and if we can do that successfully can certainly australia we can do as silicon valley did export those ideas around the world. Silicon valley is done very well and handsomely from the success of of what I you know um we we call you know I think that that’s tech 2 point Zero. We’re now in in in the third stage of tech which is is how do we leverage the internet against the internet of things against the real world bricks and mortar. And that’s the electricity sector and and that holds the the largest opportunity. So um, yeah, very but very much um in favour of of a 30 to 1 ratio how vcs feel about it is is different. But I think there’s lots of money out there. It’s just about framing those risks. Umm, interviewing some fantastic entrepreneurs to come who have I think the the potential to build building dollar billion dollar businesses and that’s the first time I’ve seen it not since ah doing doing this in 2000 16 it’s the first time I’ve seen. Okay here are the unicorns coming and. And I think they’re they’re going to come thick and fast in the next twenty four months.

James McWalter

Very exciting. Um grant is of e Been brilliant I’ve really enjoyed the conversation before we finish off is just anything I should have asked you about but did not.

Grant McDowell

Now I think we I think we did cover the ground that I really wanted to share the 1 little tip Thatt I’ll I’ll share is that we were um on an oc we’ve been um. Going through years. But but recently we’ve had a successful recruit in in David letwi who’s joined us who who’s out of voltus and and that’s really got us excited because having this tech depth will allow us to really accelerate what we’re doing. Um, and oes is is just raised ah around and will be going out next year in 2022 for a series a in late late 2022 to allow us to go to go global. So just ah. Wanted to share that on specifically on on an oc which is which ah so thank you.

James McWalter

Absolutely and the people can check out a no see sign up, check out the careers page. Potentially you know try to try to get hired and kind of go from there. Thank you very much grant.

Grant McDowell

Um, thanks, very much very much appreciate it. James.

The Future of Roofing is Solar – E76

Great to chat with Martin DeBono, President at GAF Energy. GAF Energy offers homeowners elegant, roof-integrated solar and is part of Standard Industries, the largest roofing materials company in the world! We discussed the benefits of solar roofs relative to solar panels, the role of contractors when homeowners are choosing replacement roofs, the role of subsidies and carbon taxes in a clean energy future and more!

GAF energy is also hiring!

Download Podcast Here: https://plinkhq.com/i/1518148418

Transcript

Remember, If you want to support the podcast there are two amazing ways!

  1. Subscribe to the Carbotnic patreon  
  2. Rate 5 stars on Apple

Thanks so much! 

James

Stopping Batteries Catching Fire – E67

Great to chat with Brian Morin, CEO at Soteria Battery Innovation Group who make lithium-ion batteries dramatically safer! We discussed battery safety, how battery explosions lead to major recalls of EV batteries, what certification and safety tests are needed, licensing consortium models and more!

https://carbotnic.com/soteria

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast there are two amazing ways!

  1. Subscribe to the Carbotnic patreon
  2. Rate 5 stars on Apple

Thanks so much! 

James

The Epic Quest for Cheap Solar Energy – E66

Great to chat with Matt Campbell, CEO and Founder at Terabase Energy! Terabase accelerates the deployment of solar power plants! We discussed the advantages of rapid characterizing the site for solar power plants, the use of GIS, the exciting technologies that cheap solar energy enables, the relationship between local developers and big players in the energy sector and more!

https://carbotnic.com/terabase

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast there are two amazing ways!

  1. Subscribe to the Carbotnic patreon  
  2. Rate 5 stars on Apple

Thanks so much! 

James

Scaling Grid Storage with Batteries – E8

Excellent conversation with Nick Kitchin, CEO of Cumulus Energy Storage, developers of scalable, low cost batteries for the electrical grid. We discussed the pros and cons of copper/zinc batteries and why they are the best solution for long term grid energy storage, the importance of supply chain considerations when scaling energy products, why microgrids are such a massive opportunity, why Sheffield is an amazing place to build a company focused on advanced manufacturing and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: Could you tell us a little bit about Cumulus.

KITCHIN: Cumulus is designed to help electricity get to where it needs to get to at the right time. It means developing grid scale energy storage, basically big batteries. We are based in Sheffield in the north of England, and my two co founders, Darren and Mike, are based over in the Bay Area.

MCWALTER: In terms of the founding team, did the technology and idea come first, or did you have an existing relationship with your co founders, and this was an idea that you cooked up together?

KITCHIN: The Cumulus story really starts in March 2012 at a wind energy conference. Us founders had some Friday night discussions about how we could work together and if so, what would we do? And we very quickly honed in on energy storage as the key disruptive technology that we could put into the offshore wind industry. And so we started a conversation about big batteries in particular using rechargeable copper/zinc as the best chemistry. It wasn’t really about the battery chemistries specifically, it was more about the opportunity that we saw seven years or so ago and what could we do that was different from everybody else? And where were the openings in the marketplace?

MCWALTER: What did the early users look like? 

KITCHIN: We initially looked at two industrious, one is the water industry and the other is mining. We realised that if we could put a membrane in between the copper and the zinc discs in the copper zinc battery, we could then make rechargeable batteries at the right kind of scale. And because copper/zinc is a 200 year old battery technology there is a certain amount of de-risking by using tried and tested chemistries which sped up our development program.

From an industry like mining’s perspective they’ve currently have high carbon solutions powering their equipment on site. If you can then replace that with a low carbon solution, for example solar plus our long duration storage batteries you can change power sources and decarbonize.

MCWALTER: What are the advantages and disadvantages of copper/zinc versus lithium ion batteries?

KITCHIN: Overall, lithium is really good at the high power, short duration, high energy density applications like in your mobile phone. Copper/zinc is really, really good at the high energy, long duration applications where the energy density is less important.  There are several large scale lithium ion long duration implementations, particularly in South Australia. But the number of cells involved in creating a product like that is absolutely huge. Whereas our solution is working towards the point where we’ve got containerized production and our own gigafactories and that is a much lower cost and much greener solution compared to lithium. There will always be a range of technologies. Each technology has its own benefits and specific place in the overall energy storage market.

MCWALTER: What does the supply chain look like for copper/zinc batteries? 

KITCHIN: For copper/zinc, we have a really simple supply chain. The world produces a lot of copper and zinc and so we don’t have the same supply chain issues that the rare earths have like cobalt or lithium. Not that I’m saying lithium is constrained. But cobalt certainly has its own issues, and the rare earths associated with some of the applications as well. So copper/zinc, is very green in the sense that it’s 99.5% recyclable; literally everything we use can be recycled apart from the membrane. And so we will have an end of life value, unlike lithium. In other words, we’ll be paid to do the recycling rather than having to pay to do recycling. Together there are a whole series of different things that we thought about and designed into our system to make it a very low cost, great application.

MCWALTER: What are the pros and cons of funding from private sources versus government grants?

KITCHIN: When you are taking government grants the positive is that the government is showing private investors that there is a real market here as they are willing to put taxpayer money into it. The downside, of course is it takes a long time to prepare the applications and then it takes an even longer time to actually get that through approval and finally get the grant awarded. So first, the dust the ground bit on the finance side of things. business angels, family offices, VCs, and then moving on to funds and all the rest of it. It’s relatively simple to get the first few rounds of finance, but when you’re approaching commercialization, you’re looking for between 2-10m GBP, and you’ve got to get to the point where you’ve got you to move from pre-revenue to post revenue. That’s the difficult part of the overall fundraise but once you’ve done that, then you’re in a really good territory. 

MCWALTER: Thinking back over the last few years would you have done anything differently? 

KITCHIN: Essentially, something like this does take time to develop, you can’t get away from it. It’s not like doing a software app. You do have to build it up into a design, build, test structure and go around that cycle on a regular basis. It just literally takes time. So I don’t think there’s a significant shortcut that we could have gone through to get to where we are today. The technology development has been pretty good, to be honest, and having a foot in both the UK and the US, particularly in California has helped a lot. With the R&D facility over there we have been able to get hold of the right people very, very quickly and have a very flexible team.

MCWALTER: How do you think about recruiting talented people?

KITCHIN: Well, the first thing I would say is it is literally about getting the right people to do the right right job. We’re looking for team players, obviously, and we’re looking for people that can push the founders and challenge the founders and help us move along a bit. The majority of people that we’ve recruited are to date have been people with degrees or masters and a few PhDs. That’s the kind of level of people that we’ve needed for our development team. And when we get to full production, we’ll be extending that out significantly creating a lot of employment across the spectrum. We’d really like to re-employ a lot of people from the automotive industry which is currently going through huge changes. We can re employ those people and employ them in the energy storage assembly plants. That’s a key part of our strategic outlook. 

MCWALTER: What are your views on the decarbonization pledges of large enterprises? 

KITCHIN: I think if you break it down into the departmental case one big example is data centers. In the data center market you have the likes of Amazon, Microsoft and with the total electricity consumption of the data centers themselves, those firms are in a position to actually drive that to be more efficient. The flexibility that comes with the right kinds of energy storage, from a site management point of view means there’s a really good fit.

MCWALTER: What are the biggest cleantech opportunities for entrepreneurs? 

KITCHIN: If you look at where we’ve got significant numbers of people, in excess of a billion people right now with no electricity, for example Africa with 600 million people and India with 300 million people. There is the chance to say, just like with the telephone system where these countries skipped landlines and went straight to mobile. So the same thing can happen with energy in these countries via microgrids that do not need great long transmission systems. Rather there can be a series of micro grids with locally produced and delivered energy from a combination of renewable generation, probably solar plus storage. There’s a huge opportunity.  Similarly in India, where you’ve got remote regions dependent on diesel generators, you can replace those with solar plus storage and create micro grids. It’s amazing. And I’ll be honest with you, I don’t believe anybody has yet really fully clocked just how big this energy storage market is going to be as these areas open up to clean energy.

MCWALTER: What are the advantages of working in Sheffield, UK? 

KITCHIN: We have Sheffield University, that is a really big one. We’ve got the advanced manufacturing research center (AMRC). You have Boeing and Rolls Royce and a wide range of cleantech businesses. Because we are colocated and all working on advanced manufacturing, you’ve got this support network, and synergistic conversations you can have with all sorts of different people at different times. It’s a really, really good network and you can get apprentices, you can get design work done, you can get manufacturing done, it’s just all there. It’s great. 

MCWALTER: A Lot of regions or cities are trying to recreate Silicon Valley, should they rather select specific industries to focus on where they can really shine? 

KITCHIN: Absolutely. AMRC has the advanced manufacturing focus itself as it was built on a former coal mining area. So we’ve got disused coal mines, we’ve got heat, and distributed networks which make it easy to focus on advanced manufacturing rather than consumer software apps. So yeah, I agree with you. California has got its own characteristics, different towns have other advantages for example Leicester and textiles. They’re all different. So let each place build to their own strengths. 

Energy and Data Silos – E4

Brilliant chat with Colin Gounden, CEO of VIA, a company that uses machine learning to enable encrypted analysis of confidential data at large energy companies. We discussed the comparative advantage of the VIA founding team,  the way VIA solves for the data siloing issue which so many machine learning projects suffer from, how they solved for slow enterprise sales cycle with the “30 minute pilot”, how growing up in multiple countries affects your perspective, why energy efficiency of everyday appliances is a massive opportunity for cleantech founders, how they hire for their company value of “love in:love out” and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: What would you say was the comparative advantage of the initial founding team?

GOUNDEN: I think familiarity plays a big part. Some of us have known each other for 10-20 years so there’s some advantages just in terms of direct communication. You can have very direct conversations,  there’s no beating around the bush, there’s no kind of like mincing words, and you get a lot of stuff done a lot faster that way. Also, we tend to know each other’s strengths and weaknesses and have been able to say, Hey, this is my weakness, this is not my area of strength, and I could really use some help here. And sometimes, in other founders, some groups find it hard to admit weakness.

MCWALTER: Thinking back to those early days, what were the first 3-6 months like?

GOUNDEN: Lots has changed since that period. In the early days, we were really focused in the area of machine learning and AI to solve problems in the energy space. We actually started by working with regulators. The Federal Energy Regulatory Commission was one of our first customers. And I would say in total transparency, it was less about the software and more about solving the problem. It looked a little bit more like a consulting company with software, figuring out what software was the right software to solve these kinds of problems. And certainly, I think even today still, but in 2016 certainly, AI was very much in a custom mode and it needed a lot of hand holding. So the first three to six months in addition to working with some customers like regulators, there was also a lot of client conversations. We had a good CRM tracking system. Jackie Finn runs our marketing group and she was very insistent about us having a really good tracking system. So I think we did over 400 customer interviews in the first year. So a lot of it was just customer discovery, just understanding what the market needs and doing some paid work along the way.

MCWALTER: And what is an example of how VIA solves problems for utilities? 

GOUNDEN: For example, we have a large European utility, who have petabytes of data. And they want good in-house data science people, but it’s actually really hard to attract certain skill sets to the utility industry and you see this a lot; they have six open positions and only one filled. And because they cannot often get the people in-house, they would like to make a choice of packaging the data in order to work with academics or consulting firms or maybe even general data scientists. In an ideal world, that would be great. But of course, there’s lots of confidentiality issues and so they cannot just send that data out. Instead of getting access to the data directly VIA enables third party data scientists to write up queries in Python and basically send that to wherever the data is, it runs there and results get returned. And we have a bunch of checks and balances to make sure the code you’re writing isn’t going to steal something,and the results that are getting sent back aren’t revealing too much. There’s also an audit element to make sure the utility knows who’s doing what when, and with what data. This solves for the privacy concern while giving utilities access to amazing data science talent. 

MCWALTER: One of the big common problems with machine learning and those kinds of ventures is data siloing. What are your thoughts on that?

GOUNDEN: We have one customer who said they have two divisions, one in mainland Europe, and one in that In the United Kingdom, and they said it takes nine months to transfer the data from one unit to another. Mary, Queen of Scots did not take so long. It’s all these regulatory concerns that’s actually blocking that transfer of data. Our goal is that they could learn from each other without having to physically send their data. That is one of the problems VIA is solving. 

MCWALTER: When a client shows an interest what is the typical kind of timeline to get a client up to the point where they’re getting real value? I imagine these jobs in general are just moving pretty slowly?

GOUNDEN: So we launched something in 2018, called the 30 minute pilot. And we thought this is kind of an industry first because so many pilots, prototypes and demos take too long. And so literally we said, well, what would it take? Let’s think about this differently. What would it take to get real data, real results in 30 minutes? So we created an environment to do that. And actually,it only takes three or four minutes to load and the other 27 minutes, is getting people comfortable with the idea that they have to go collect a little tiny piece of data on their own by digging around their files. So that’s why it totals 30. Also, we have a pilot we offer where for transformers for example, if the client is interested in benchmarking their transformer performance against the hundreds or thousands of transformer readings we have in our database without having to actually physically combine your data. So we can do that in a 30 minute process. 

MCWALTER: With COVID a lot of companies moved from an office, or multi office kind of model to something fully remote, what did that transition look like for VIA?

GOUNDEN: Our VP of product the other day, he mentioned we seem to be more productive than, in a way and I said, that’s probably because, One, no one’s on vacation, Two, thankfully no one’s sick  and Three, no one has any distractions or other things to do. So that trifecta means you will likely get a big bump in productivity over the few months while people have been working remote. I do think it takes work to get that to be efficient. So I’d say we learned a lot of tactical things for example, all meetings start on time. And you see people actually show up one minute early because that’s important and video is essential. And, in our Slack channel, everybody logs into the morning and says welcome and everybody says goodnight at the end of the day and that’s an important part. So there are little things that help the culture stays cohesive and I think that that takes a little bit of work. There’s also the little things like virtual pub night and trivia night.

MCWALTER: What are your thoughts on the opportunities for founders in a world that targets 100% electrification?

GOUNDEN: Because I come from the world of data analytics I have a bias which is in a world of complete electrification it means a world where we can optimize power consumption. We can learn from each other about how power consumption varies in the world. In Japan everything consumes gigantic amounts of power, the televisions, the rice cookers, the refrigerators. And if you go somewhere else, like Kenya or parts of India it turns out because power is expensive the exact same 27 inch television does not use the same amount of power in Kenya or India as it does in Japan. And so what are the opportunities for an entrepreneur? It’s saying, “Well, how do I take everyday items and make them low power? Because that helps everybody. So pick your favorite object that you know well and that can be air conditioning or rice cookers or refrigerators or dishwashers or  cell phone chargers or whatever it is and ask how do I make that charge faster, smarter and with low power consumption? There’s hundreds of opportunities like that. 

MCWALTER: What are your thoughts on like the increased risk from cyberattacks in a more and more connected kind of power grid?

GOUNDEN: Unfortunately, that’s increasing as an issue. You once had a house with a door and a lock, and now you’ve got thousands of windows, and it’s easier to break in.  One infamous example of a retailer who had a big breach of credit cards happen by someone hacking in through an air conditioner unit. So I think that’s a real concern.The thing to do is not just depend on cybersecurity to keep up with hackers, but I think edge processing will be a great way to deal with it, in other words don’t move the data. Don’t let the data have access to a window, and do as much processing on the edge as possible, and you minimize some of those risks. Keeping it fragmented and distributed is one way of kind of making sure we are dealing with some of those threats.

MCWALTER: What are your views on things like blockchain applied to cleantech?

GOUNDEN: We actually have a small blockchain component we use to basically audit logs with an immutable ledger; it’s basically a smart contracting function that controls who can access to what data when and for what purpose and then tracking, the usage and and what data was used at what point in time. We never saw really the big crypto coin opportunity. A lot of others did, but the idea of this kind of decentralized database infrastructure and auditable ledger that makes a lot of sense, especially in a world where you need technologies that are beyond trust, or you don’t know all the parties. So, in a power grid, where I have a manufacturer of a electric vehicle, and I have a charging station from somebody else, and I have electricity powered by some distributed generation site by a third party and then a grid that connects them; all of those things may not know each other so they need trust to be able to kind of know what’s happening when and be able to have some auditable trail makes sense. So we see a good use for blockchain in those instances. 

MCWALTER: Where did you grow up?

GOUNDEN: I grew up a little bit everywhere. I was born in Canada, but grew up in Scotland and I went to 12 different schools around the world. Some time in California and in Australia and I think that influenced me in a lot of different ways. You become more open to lots of things and you realize the world is filled with very different people and you have to adapt quickly to stay alive and be respectful of others? Because there’s huge diversity and what you think is normal may not be normal to anybody else. I remember going to school in Scotland and on the first day of school meeting somebody and saying “hi” to them. And “hi” was just not said in Scotland in those days. It was a very North American thing .And I remember thinking, well, that’s what you learn, you learn to adapt. So being respectful and open is probably the number one lesson that comes from growing up in so many places.

MCWALTER: I actually had not a dissimilar background, growing up in different countries. And one of things I found was you definitely started to notice, and ask the question, “Why are things like this?” And often people do not notice certain things because it is the water they are swimming in. 

GOUNDEN: Right. I think this is an age old question. I think Voltaire wrote about the foreigner who comes to the court and asks all questions like, “why do you have all of these odd, behaviors and rules and standards?” The outsider often has an interesting perspective about why we do things.

MCWALTER: When building company culture is the primary lever used at the hiring stage or rather the building of certain values within the company over time?

GOUNDEN: The screening process is super, super important. And one thing we do is give little case studies,whether you’re an office admin, a developer or DevOps person, you have different kinds of case study assignments that everybody gets. It’s easy to be charming on a 45 minute call, right or in a meeting, but you need to actually see, are they interested in the work? Can they pay attention to detail? Are they committed to it? We have a value, which is “love in:love out”. If you love what you do, it’ll show in the output that you have. We have a 3-4 month probationary period and some people are like, “yeah, I take that bet. I bet I’m going to be great.” You know, that’s not much of a leap. Generally the best people are the ones who are willing to take that bet on themselves. There are probably 50 other little things that we do along the way to keep people motivated and which attracts the best people.

Energy Storage, and Decarbonization – E2

Very enjoyable chat with John Jung,  former CEO and Co-founder of Greensmith energy a long term energy storage company, and currently an operating partner at Cota Capital.. We discussed the investment picture for cleantech and green energy, Greensmith Energy’s acquisition by  Wärtsilä, the massive opportunity of energy storage, why India and China are the countries to watch for the future of cleantech, how fresh eyes on an industry can bring about the most radical innovation and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: What is your perspective on raising money for renewable energy, green technology, clean tech companies from VC? 

JUNG: I can speak to that as an entrepreneur that’s gone out and raised money for different ventures, where the goal was actually to raise the least amount of money. Not the most. Sometimes you hear about Silicon Valley CEOs and how they  go out and raise as much as they can. The problem with that mindset is that, although you may need a certain amount of money, you have to really be deliberate about the trade offs that you create, which basically means you have to say no to a lot of ideas that engineers and developers develop. It also really kind of forces you to make strategic choices of what it is you want to be when you grow up? 

But from my experience of the venture capital community with, with energy and clean energy in particular, I gotta be honest with you over the last 20-30 years, it hasn’t been very good. Having said that, I think very much like the railroad where, maybe 1.0 doesn’t quite kind of get there in terms of all the people that invest their infrastructure. it usually takes a 2.0 or 3.0 infrastructure, it requires critical mass which we are now getting to. 

MCWALTER: Your views on the state of the battery market?

JUNG: It’s really good to be agnostic as much as possible. A good example of what I mean strategically about that is if you are a battery company, let’s say your battery is the best battery. But batteries are very much like car engines. In that you’ve got a reason for a Ferrari engine, you’ve got a different reason for a Volkswagen engine. And it’s not to say one is good or one is bad, you just have different horses for courses needs for. And batteries are no different, not just in terms of duration, and density, but all the different cycling. 

MCWALTER: I’d like to understand the business model a little bit better? Was it like a subscription pricing model or more milestone based? What was the actual kind of monetization strategy of Greensmith?

JUNG: Yeah, I think that’s that’s another excellent question. Because I think this is where a lot of entrepreneurs get wrong, quite frankly. I think it is good to start with something, right. It could be an idea. It could be a model, it could be a material. It could be data, it could be anything. But ultimately, when you’re building a company it’s essential to get an understanding of who’s gonna pay for something that you provide…

MCWALTER: One of the things that I’ve noticed is, the US has resisted a carbon tax so far, while we’ve seen other countries move forward with them including some states in the US having carbon regulations of various types. On the other hand, you have corporations like Microsoft, and even McDonald’s making very strong decarbonization commitments, which ends up having a lot of downward pressure on their supply chains to decarbonize. In your view, which will have the larger impact in the US specifically on decarbonization, government regulation from the top or these kinds of sustainability commitments moving through corporate supply chains?

JUNG: I think there is a lot of traction and with some of those household names people and people pay attention, right? When Apple does this with their new building or, Google and Microsoft does that, it gets a lot of attention. Having said that, I think the big shifts that are happening are regulatory. But it’s being caused by other bigger shifts that are also very positive in the market. And that is associated with this phenomenon that people called the Henderson curve. What I’m basically saying is, it’s not just that solar energy generation, power generation is hitting the parity line. And  the numbers just speak for themselves in terms of new assets, new generation assets that are being deployed around the world, but they’re not stopping there. They’re gonna continue getting cheap. And there’s two reasons behind that. One is the sun and the wind is free, approximately free. The second reason is that I think the heat rate or the efficiency of an internal combustion engine is around 40% maybe. But solar and wind just gets cheaper, the more you produce it. So the last time I read any kind of academic research on the new curve for solar, it was like every time you double the production of a module, whether it’s thin, or crystalline, or what have you, it improves in unit cost by a not insignificant amount and we’re still only scratching the surface on solar penetration around the world. 

MCWALTER: What is your view of the Canadian tech scene? 

JUNG: One of the things that I think is kind of nice about starting companies in Canada, is that in Canada, in particular, is that I think the values are very similar to the US when it comes to entrepreneurs and business. And number two, I believe, for a while Waterloo graduated more software engineers that Microsoft hired than any other school in the world, so the talent is there, right? The economy is super stable, startups usually are created or sometimes created in places where you feel free, you don’t have to worry about this and that you can kind of focus on, how this cloud computing platform is going to disrupt, medical services or whatever you’re thinking about. And then the final thing is, I think it’s got enough critical mass of stuff going on in multiple sectors, because one of the things that startups really benefit from is stakeholders that are along for the ride in some way. 

MCWALTER: You’ve seen kind of clean tech applied in a lot of different countries, which country is most on track to overachieve in terms of their decarbonization?

JUNG: They tend to be  some of the biggest economies in the world, one is India, and one is China. China’s pretty simple.  for all the good and the bad of any country in the world, when they decide to put their mind to something they do it and they do it for a really long time. And they do it with basically half the supply chain of the world. So when you look at the statistics on solar deployment, or when deployment or  storage or  manufacturing capacity, you can kind of take that number, cut it in half, and basically argue that half of that is China. That’s how massive it moves needles, right? Many, many different needles. So, and I think people who are operating in the renewable industry have to be thankful for that, regardless of how they feel about different governments. 

The other one is India.There are some very aggressive business people, developers that are operating in that country and unlike Western Europe and the United States, they are bringing clean energy to some of the poorest people in the world, and I just love that. If you take a look at the electricity prices that a poor farmer pays for, in Southeast Asia, they are as high if not higher than Western European, and the United States and North America. And part of the reason is inefficiency, and all these things that I think are a great opportunity to improve on. But ultimately the eye on the prize there is bringing clean, affordable electricity to people. 

MCWALTER: Is there anything I should have asked you about but did not?

JUNG:The only thing that I would like to add about the energy industry is that sometimes it kind of feels impenetrable.That’s why entrepreneurs like to do B2C type startups where they are working on a thermostat or something that they can relate to like an electric bicycle. I would not shy away from getting into stuff that you don’t know. And seeing if there’s an opportunity to apply the things that you do know, to those and energy is a very good example. When I was hired, I was a hired gun type CEO, brought in by the VCs. I’m not an engineer, but you don’t have to be an engineer to have ideas. So I wouldn’t let the confusion, the noise, the complexity associated with the energy industry and how it’s run and managed, prevent you from finding out more. And we also live in a golden age of not only computers but information and data. So anything you want to know you can basically look up and you can educate yourself, It is really a renaissance for learning as well. So the only thing I would encourage listeners to do is do something very, very different. I kind of wonder if some of the ideas that I had and some of my colleagues who also did not come from the power industry had, were because we were willing to ask stupid questions in an industry where you don’t want to sound stupid, right? So don’t be afraid to sound stupid.