Category: Renewable Energy

Great to chat with Tomi Ristimäki CEO of Kempower! Kempower designs, manufactures and commercializes charging solutions and services for electric vehicles! We discussed the fast-paced evolution of EV charging, electrifying fleets and more!

https://carbotnic.com/kempower

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

Remember, If you want to support the podcast please rate and review 5 stars on Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today’re speaking with Tomi Ristimaki Ceo of Kempower welcome to podcast tommy brilliant to start. Could you tell us a little bit about chem power.

Tomi Ristimaki

Thank you Thank you? James. The ke power is ah is a finish and so for the ones who don’t know we are in Europe. So so we are finished fast starting manufacturers so we make for electricive vehicle buses work machines, everything that moves actually. Charting solutions.

James McWalter

That very good and when what drove the initial decision to start working at Kem power and what was the kind of early days of kem power like.

Tomi Ristimaki

Early days of campmpo is not so distant past I think the company in this form is found in 2018 but as ah as a history of the company. We belong to a company group which has been doing more than 70 years application with power electronics to welding industry. And this was skippa was found in as a new company in the group to focus in in in the new market and there’s a lot of synerys even people don’t maybe think that that welding and charting is the same thing but that so engineers view it’s it’s quite close. Application is is is there. So I think that that’s the background why it was founded exactly here to this company group.

James McWalter

And so yeah, we’ve actually talked to a few people who have spun out or been founded by you know, large kind of corporations or or company groups. Um, what do you think are the you know I guess the pros and cons of that way of Starting. Ah. Like a business I mean obviously you you definitely have some support in a way that like a typical startup might not have but you also potentially have to kind of deal with ah you know aspects of large company bureaucracy and so on.

Tomi Ristimaki

Yes, exactly ah that that was the reason it was It was like kind of like a clean start that it was powdered as a completely different company so you get kind of the pros and cons of the world so you can use the resources of the big company and the processes working and and basic the it systems and. You don’t have to do everything in the beginning because we were buying buying like the finance services Hr services from the group in the beginning now and now it’s actually independent but it gets gives a good startup point when the company can keep the keep the bureaucracy out of things.

James McWalter

So.

James McWalter

And absolutely.

Tomi Ristimaki

Can take only the good things from the past and um and concentrate on on on making the important things so looking at if you look at the first years I think it was first hundred percent r and d that it was hot under r and d in sales and now when we are looking at 2022 is all the older function are within the company already.

James McWalter

So.

Tomi Ristimaki

But it it gave a good kickstart for the business.

James McWalter

Absolutely and and in those kind of first year or 2 of just kind of pure r and d focus so were there any kind of pivots in terms of the product you know roadmap or the kind of product vision over those few years you know was Ken power going in a certain direction and and changed later or has it been always very focused on the kind of core offering you have today.

Tomi Ristimaki

Yeah, it’s been coreop offering in charting and actually that history also goes back to the company group. There was a project that we have we’ve done actually the first fat. Ah first chart is already in 2012

James McWalter

Yeah.

Tomi Ristimaki

But then the then the company who its actually the family who owns it they decided that there is not enough evs to focus it in this yet. So so part of the let’s say but portfolio ideas come come way before way before the company was founded.

James McWalter

And you know I think looking in 2022 when pretty much all the large auto manufacturers have said they’re moving fully to evs you know over the next decade you know having ev charging station infrastructure seems like ah like a no brainer. But even four years ago that definitely wasn’t the case and so I guess what was the kind of. Like the court insight that made its make sense in 2018 where it didn’t make sense in 2012 um to be so that you’re ready for this kind of inflection point. That’s just occurred in the last like eighteen months

Tomi Ristimaki

Yeah I think it’s it was the market studies and looking at the numbers which are the growth figures and and nobody actually believed in those figures at that time and and then what actually happened is a lot faster will open in the market in real life. So that. It has ah surprised me I’ve I’ve been working with demobility for the last ten years and the fast pace what has happened in just the last two years has surprised me a lot.

James McWalter

I’m so and so you know when you were kind of considering this like taking on this this particular kind of you know direction from your kind of previous career. What was like I guess the most exciting aspects about this relative to some of the other opportunities like I’m sure that were available to you.

Tomi Ristimaki

Yeah, it was actually I was I was working I’ve been 20 years in electrification in in overall but the first ten years went in an industrial looking at energy saving in industrial space and and things like that. But then I joined the startup world in 2011 working with power trains for heavy vehicles doing hybrid systems electric systems for trucks processses machinery and that was pretty early that you can call really tri dog to excavate the manufacture in 2011 about doing a hybrid or awful electric system that’s completely different than than doing it today.

James McWalter

Right.

Tomi Ristimaki

So I Got really excited on on the Ev business and and let’s say electrification because I didn’t really mind on cars or evs or trucks as a young. But then I became an electric engineer and then finally when everything turned to electric. It turned my head as Well. And um I can be called maybe Ev enthusiastic and now all the machines are really interesting because it’s actually close to your heart and and what you know.

James McWalter

And threaten.

Tomi Ristimaki

So this is this is is definitely the opportunity to join the charging business was kind of relevant move to even more electric because doing the powerrain business was a lot of hybrids and things still working with diesel engines. This is a lot lot more focused on actually making the world better.

James McWalter

So.

Tomi Ristimaki

But you’re working working in the full electric world.

James McWalter

Absolutely and and so today I guess who is like ah like a you know a core user. What and what does that kind of typical kind of customer profile look like.

Tomi Ristimaki

If you if you look at our our customers who buy our solutions I think the biggest group is transport operators today who are serving then the customers with electricity. But for us, it’s also the public transport operators logutistic companies.

James McWalter

Oh.

Tomi Ristimaki

And if we look at the mining or harbor world. We are selling to the vehicle manufacturers mostly because that mother is even let’s say less advanced yet but like public transportation or or private causes today except the mining and harpers which is fast but let’s say construction vehicles agriculture.

James McWalter

Um, and and so what would like a typical deployment then look like um to kind of get it. You guys set up for a customer for a user.

Tomi Ristimaki

They are still couple of years ago

Tomi Ristimaki

So I think that from our selection point of view that our solution is for larger installations larger charting sites and this is how we actually believe that it will happen as well that that is single.

James McWalter

Ah.

Tomi Ristimaki

Charters is not the way how how when the ebs are becoming in the norm that people actually want to charge their vehicles in a siteway have more connections and also the services around it if we talk about the private car industry. And also if we look at public transportation. Never there never is a single vehicle. There is always a fleet and this is the same also when we look at the electric trucks in the future I think our main core is the logistic centers where you charge the vehicles when you’re ah, loading unloading or or where the vehicle spent the night and and then this is kind of how we see the future is that the charting sites are somehow concentrated and our whole solution is in this this world. How we develop.

James McWalter

That’s so that’s so interesting. Yeah I think you know coming out of the kind of Fossil Fuel petroleum you know based ah transportation. There’s a very specific I guess Pattern for where you would refill right? It’s ah so it’s a well-known. Um.

Tomi Ristimaki

The.

James McWalter

Kind of site selection process to get a gas station to get a petrol station Sighted. You know you need within a certain kind of level of Demographic density. It needs to be at certain types of kind of crossroads and so on um, and then and there are there are kind of various factors. How is that different for Ev charging. Um, you know. You also have these kind of elements in in electricity whereas the the cost of electricity can vary the amount of charge time that that it takes can vary a lot relative to kind of you know gas-powered vehicles and so how do you think about how that site selection for evs is different to Fossil powers.

Tomi Ristimaki

Of course when you talk about private costs which is easier to understand for everybody. It’s it’s then you have the main way of charting is of course where you stop for a long time. It’s home or workplace and and there the equipment is is not our main scope.

James McWalter

Vehicles. Okay.

Tomi Ristimaki

Are considering the high power so in that the selection of crossroads and things like that is quite similar to the federal states when you look at the long distance the routes. But then now what we see even more interesting in there is the shopping centers restaurants where the people stop anyway. And we see that this happening in Scandinavia in first pace that actually the retail chains are taking over part of the charting because they own the sites which are already in good locations where the people stop so that you don’t need to go to the so-called gasase and fueling world. This was also the mistake what I had when I got my first tv that I thought that I need to go somewhere to charts.

James McWalter

You right? because you could basically could be sipping throughout the day or throughout you know any sort of time period. You can get it at night or yeah, very very short bursts can help as well because you’re really just trying to get enough range to get through the job to be done that.

Tomi Ristimaki

Yeah, and I think the sites where you charge the cars will be the places where you get other services so you don’t actually spend extra time for charging because you you need to do anything you need to do shopping. You need to do you need to eat somewhere. You need to stop when you’re driving. So.

James McWalter

Particular day.

Tomi Ristimaki

I think it Also it’s changing the concept for the I think the gas station in the wrong term in the future. So I think it’s like a human service stations where you have other services where the people need to stop anyway and and plan the routes this at least what I have noticed when when changing dbs.

Tomi Ristimaki

Because we don’t have at home. We have 2 2 electric vehicles and even the lawnmower is is electric so there.

James McWalter

Oh ah, lawowers are about as as polluting a yes, even it’s a small engine as it could be so having electric lot more. They very cool and and so does that kind of open up the possibility of like new types of business model then for.

Tomi Ristimaki

Um, yes, then.

James McWalter

Those stations right? If you had some sort of human services. Maybe the energy to to recharge is literally free and you can have all these other services kind of stacked on top of it because you’re getting you know potential revenue from the driver in other ways.

Tomi Ristimaki

And this is how how actually why at least I don’t know what what happens in us. But at least in Europe you see a lot of fast food ch and and and grocery stores investing in charting equipment because that’s kind of. They have already the services or when you have a new charting station and then the services are built around it. So this is kind of a different different way way of how how ah the future moves in that because it’s ah but when you look at the let’s say professional e equipmentp then of course that you have.

James McWalter

So absolutely.

Tomi Ristimaki

Another thing is because time is money if you look at for long distance trucking they will be separate size. There will be huge powers in the future because you need to move it and when you’re doing professional things. It’s not the same as as you can have ah let’s a coffee break or a lunch break in every.

James McWalter

Ah.

Tomi Ristimaki

Every every place but you need to have breaks in those businesses as well. So that’s just planning.

James McWalter

Absolutely and how you know would in your kind of experience across Europe have the the utilities kind of responded to this kind of emergent ev charging again I know in different markets. Semichies are very excited by it. Some are quite kind of scared about it because they might be already at capacity and are worried about. Ah, you know in this increased load at the end of the day when everybody gets home and like plugs in their evs all at once and so how how do you think about that kind of relationship with the the utilities. Those who are you know own the wires for the energy itself and.

Tomi Ristimaki

I think the main grid in most of the countries can handle the extra load but it it’s the let’s say the last end which has a problem I mean the living areas or shopping malls that the axle connection from the main grid to that site is limited. And that needs some investments in the world and then you need some smart charting also for for I think living areas or suburban areas where you might have a lot of cost charging so that remains to be solved in ah in a way that you cannot grow the grids to unlimited possibilities. But it’s also controlled by the price of electricity. So in a way when the charting is actually taking into account the the market price of electricity which in the modern contract can change by hourly. The people will concentrate the charting when the other loads are lower. And of course we are. We are in a country where the problem is not that big in Finland or in Scandinavia which are used to electrical heating in the houses and in Finland everybody has a sa at home which is just using electricity. So if you don’t turn the so on you have electric electric cap to charts your car.

James McWalter

But it’s a big.

Tomi Ristimaki

But immediately if you use those 2 at the same time. The fuse will burn. So of course that’s ah obvious thing but we have it easy in here with but not every place in the world is is the same. So.

James McWalter

Ah, that’s fascinating I’ve had a finished friend say to me they would prefer to lose their car to their saa. Um, and so if that if that’s the tradeoff you people might maintain theira.

Tomi Ristimaki

That is quite true even that that’s not the topic of today but the Finn wouldn’t buy a house without so night would be like buying an apartment without shower or something like this. It’s a just the culture.

James McWalter

absolutely that’s absolutely fascinating um and yes, very very very different to where I grew up in Ireland but ah, you know my my wife is definitely a fan of saunas and so someday maybe maybe we’ll have one um and so ok and so the ah yeah when you I guess. Like in terms of that that kind of like the core technology then but you guys have built. How do you think about how your frast charger kind of compares to others in the market. You know what are the kind of advantages of that kind of r and d effort that you know that was put in and in your early days of developing power.

Tomi Ristimaki

Yeah, it is this basically the system thinking and having a solution that can serve more vehicles with a single many of the competitors are still working with this kind of standalone boxes which can maybe service 1 or 2 cars at the time. And we are all the time thinking that when the ebs are really like the main mainstream way of moving then you need more plugs more systems and how to use the limited power connection to serve as many vehicles as possible. What we call in the camp power the dynamic solution that the the power of the charging point changes based on the remain of the vehicle so that basically all the capacity what you have can be re resolve to the next one when the other one has a pattern getting full. So that’s I think the core of the idea that. How you can use the limits what you have today and and and make the best of it and and be able to connect as many but cars as possible because the the time the most ill-spent time is that when you wait in a car to get your car plugged in.

James McWalter

So right.

Tomi Ristimaki

And not the time that you wait a card to be charged because then something is happening.

James McWalter

So so I guess couple thoughts on that So one I guess question is around it sounds like we’re moving into this very very data. Rich environment right? whereas before any individual driver was a somewhat a bit independent node that might hit into a given gas station fill up and so on.

Tomi Ristimaki

When.

James McWalter

Um, its its ability to communicate with other drivers is basically just captured in the price of oil and yeah and the price of petroleum over a certain amount of time you know taking into account things like supply shocks and so on which we’re going through now but the kind of world. It sounds like you’re describing is you have a ton of. Somewhat connected devices that are trying to communicate with each other tend to communicate with the grid in some way to try to optimize so that you know the end user has the best possible experience right? when they plug in. Um, yeah, their their car has the sufficient charge or their vehicle if it’s heavy. Duty vehicle has efficient charge for when they need it.

Tomi Ristimaki

Yeah, yeah.

James McWalter

So do you think about that kind of data data element and how these different devices should best communicate with each other right.

Tomi Ristimaki

That is a data element and it’s also very important to provide the information to the end users when they are charging that what’s happening and and and that’s ah also where we are I think with our data connection know how we are in a good system because we are providing even. Mini accurate estimation of charting behavior and providing that to people who are charting even if their car doesn’t have apps how to follow it up. Our charters have basically they make a website special website on every charting session and you can take it with you with your mobile phone when you’re going out so when you’re doing other things you have. All the knowledge that you need to know if the chart is happening that your battery is full in 10 minutes or 20 minutes or whatever you have so we believe in in this sharing the information and and and sharing also the information to the users if their car is the limiting factor in charting or is it charter or. Is it the fact that there might be several people charting in the site with that shares the power and and it gets the uncertainty ah away and gets the easiness and and sharing information into into into the users and that’s.

Tomi Ristimaki

What we have found out. It’s the majority of the employees What we have is Ieb drivers and we are kind of making the products for ourselves as well. So what? what we would like to see is is what we have developed to the market.

James McWalter

Yeah, it’s It’s so nice when the user testing can be done with actual you know the team itself right? like often you know people are trying to build products even my own startup that I’m working on like I am not the end user I’ve never had that direct problem and so it does mean you have to do a ton of user testing and like.

Tomi Ristimaki

Are.

James McWalter

Talking to the users constantly. But if you do actually have that lived experience of of the problem. It does make a massive difference.

Tomi Ristimaki

It it makes and I noticed myself I worked with the let’s say electric systems and and hybrid system for vehicles for 10 years and I would have only been an evi driver for 3 years and I learned more about experience on how it feels like to be an ev driver in the last 3 and. And it’s really important to have a r and d and sales group who are who are actually if it drivers they understand it a lot better.

James McWalter

Absolutely and I guess on the ev manufacturing side of things. How are the manufacturers I guess performing from your point of view. Um, as we kind of talked about a little bit earlier. There has been this kind of clear step change in the last two years where the large scale developer like manufacturers of automobiles have committed to yeah electrification. Um, but I guess some of the recent announcements around electrifying you know, very heavy duty ah like utility you know trucks like f 1 truck and so on in the United States seems to be. Kind of purely just trying to electrify an existing body like like ah from a gas power body rather than kind of thinking through from first principles like what does having an electric drive chain mean to the kind of redevelopment of automobiles in the first place. Do you expect to see a lot more kind of of evolution from ev manufacturers.

Tomi Ristimaki

Um, in.

James McWalter

Over the next few years or will we basically have ah the you know the current types of vehicles but just with an ev drive drive chain rather than a gas-powered one and.

Tomi Ristimaki

It’s a quite different I’ve been involved ah in in more and more than 150 different kind of vehicle electrifications in the past before the charging career. So Actually ah how you design The vehicle is different. And I think I’ve never been in a private vehicle I’ve been in more heavier vehicle standards and of course how you make the vehicle if you make it from scratch to Electric. You get a better design and it’s kind of like an intermediate if you just change an electric power into something Because. Ah, how the weight points and and transmission and everything is Done. You can do it a lot more clever if you design everything from scratch as electric and then you can see that development Also that if you look look at the like a Chinese market where they are only developing evs now. And and how the design is done. It’s done based on the requirements of the electrical design and not having the burden of of the past behind you and that’s even more heavier ever. You go. But what? what? I’m also saying that many of the industries are already doing that.

James McWalter

Oh.

Tomi Ristimaki

And probably the private cost has have have the biggest burden because you have like systems and car bodies which have been developed for investment on on making millions of cars and you are kind of you cannot throw that aside. But if you look at heavier vehicles. You have more easier done because your investment has planned anymore anyway, for the hundreds of vehicles. So that volume goes away and then you can develop something new if that makes sense cut.

James McWalter

Yeah, no, no, and absolutely um and it is the ah the B Two B Versus B Two C markets right? like in all industries can vary quite a bit because you do have that kind of personal selection element. You know people have been optimizing just the feel of driving for such a long time that. Ah, you kind of you know, need to respect and and honestly evs are much more enjoyable to drive in general um relative to the status quo.

Tomi Ristimaki

It’s it’s about private costs having the feeling of of using this these are like a consumer items which are based on on performance in a little but little bit. But if you look at pre equipment. They are even more based on the behavior because that’s how you earn money. That that’s the whole business. So in in that way the demands in in there might be even more because some sometimes if you look at. For example, sample the the cheapest evs. The only requirement is that it moves forwards and backwards and and brings you from 1 place to another.

James McWalter

Right.

Tomi Ristimaki

And then the performance vehicle market I think one of the big things happening in the evs you can say anything about Elon Musk I drive tesla so I like that development but what he did to the market is to make the electric cars look sexy and you’ll make a good looking car with the high performance. Because I think the early hybrids in the market they were weak and they didn’t look good and they were made main for fuel fuel cost optimization or something like that and not for the performance and it changed the whole thinking when when you made the evs look cool. And now we have seen what happens when you do that.

James McWalter

Um, yeah, yeah, you know I personally stopped reading his Twitter feed just because it’s it’s too stressful, but he yeah absolutely is kind of singlehandedly or tessla. Singlehandedly you know, pulled forward the market you know five to 10 years.

Tomi Ristimaki

And it changed the image. It’s it’s now I think without that I think you wouldn’t have even some heavy truck Manufacturers wouldn’t move into that because yeah, like it. It was a publicity for the whole industry of of moving.

James McWalter

Yeah.

James McWalter

But and absolutely and I think you can do a kind of straight line from that kind of development on Testa side through the kind of emergence of spacs themselves like even as like ah like a concept and a lot of the funding of you know and not every clean energy sp has obviously gone very very well.

Tomi Ristimaki

Um, and goation.

James McWalter

But some definitely have and have’t enabled you know some pretty cool companies to emerge over the last like 2 to 3 years so yeah yeah,

Tomi Ristimaki

And without somebody doing it first. Ah you, you might not have the situation that thediciable move move further because you need examples in the market.

James McWalter

And what really has done also is like drive fear into the heart of the incumbents of like oh you know like we we are now dealing with a company that has a market cap greater than basically the entire industry right? So onces tesla hit a trillion dollar market cap all the other car manufacturers are like well yeah. Like even though their actual amount of units produced is so much lower than this clearly this is the future clearly this is where the markets think the future is and so they then scrambled in. Ah I think a net positive way to actually respond to that and start producing a ton themselves.

Tomi Ristimaki

It has pros and consoles starting from clean table. So so you you might have other challenges then than than the electric thing but I can also understand the difficulty for traditional manufacturers to move the electrification because it’s you have done.

James McWalter

Ah.

Tomi Ristimaki

Hundred years on something and developed all the or your investment efforts are there and we are talking about the peakest change since the invention of internal compost engine to the cars or gasoline engine first and then the other variations.

James McWalter

But not absolutely and on the kind of policy side. Um, do we have all we need in place for the kind of mass adoption of evs and getting the V infrastructure charting infrastructure in place. Ah you know. The the way I kind of think about policies is a couple different elements. So one. There’s direct encouragement of something but then also there’s direct discouragement right? So maybe permitting is too difficult. Environmental fact you know environmental policy might prevent things like ev charging stations actually getting built in certain areas. Um, so how do you think about the kind of current policy picture in Finland and across Europe and potential areas that it could improve.

Tomi Ristimaki

I think the you especially in the eu there is a lot of legislat and go go going on which actually supports the electrification process and actually make it makes it a must actually from the infrastructure side I myself don’t like subsidies on the on the. My own business that much but I say the subsidies actually and and people getting the evs solves the chicken and the egg situation in a way that if you support the getting of Tvs The infrastructure will follow. Except of course for for not so populated areas and there you need government supports and and things like that. But that’s kind of the way it is but somehow somehow the heavily subsidized market also becomes weird. So that that’s from the business point of view. That’s that’s not the favorite place i’ would like to have at least the charting infrastructure. So um, coming from the market demand and it’s the way because we believe that we have the best system and that helps to win with the best system but in subsidized market you get some kind of a consultant making a specification says that the. Charles days might be like this and when you are providing then something better. It doesn’t fit to the spec that some guy wrote and that is giving a a live weird. Let’s say behaviors in in a subsidized market.

James McWalter

Yeah, it’s it’s I think the way I kind of think about it is there’s these kind of 2 kind of curves that kind of cross at some point and so there’s definitely like a role for government and policy to enable certain completely brand new greenfield markets to emerge out of r and d labs and so on um, but then. As the cost curve for that technology comes down which we’ve seen from Lithian I on batteries right in particular like that that incredible kind of decrease in cost curve now. It’s so cheap, relatively speaking and continue to get cheaper. Although of course there are supply and jaing issues and you know nothing is completely easy. But um, the governments then.

Tomi Ristimaki

Um, name.

James McWalter

Really their biggest role is really then to get out of the way. Um and kind of remove like restrictions because the technology itself is not cheap enough that that yeah the market can can respond in a very dynamic way and picking winners and loses it at that point fails and so it is this kind of interesting you know, kind of Conundrum you know I’ve looked at.

Tomi Ristimaki

You.

James McWalter

Different government programs in the United States so this organization organization rpe which does funding of like large scale kind of our you know r and d type type work for anything to do with clean energy or not just clean energy anything to do energy but a lot of clean energy components of it today and some of the ah. Like grants that they’ve made some are completely frontier technology and I’m like yes there should definitely be grants for those but some of them are things like ev charging infrastructure I’m like well I think it’s a well yeah, it’s a reasonably well solved problem right now. It’s all about distribution and business model rather than the underlying r and d and so yeah I guess how do you kind of think about that balance.

Tomi Ristimaki

Yeah I think in know overall overall the I want think Glory a little bit different direction and question I’m I’m thinking about a louder on the charging infrastructure and and and how the evies become become the norm and nor in the industry and basically.

James McWalter

Please.

Tomi Ristimaki

If you look at the government funds going in there. You you help the first stage get the the fear out of people that they can actually buy it and maybe that’s that’s a good way. But after that. Comes to second way with which will be large need for the infrastructure because when the people actually get get the evs and everybody notices that you have too little amount of infrastructure and um, um, it’s it. It’s what what’s happening I think the future lab of evs which is called Norway. And you thought that you made a lot of investment in the recent years but now that people have actually a high number of evs. The investments are growing a lot and also the payback time is getting very short because the amount of charting people are doing is is so high.

James McWalter

Bret.

Tomi Ristimaki

Ah, you might have even less than 2 year payback times for the investment which is normally pretty good if you look at the infrastructure and and and it’s changing the way and I think a lot of the countries who are now thinking that they they are doing a big investment in charting infrastructure. It’s way too little for the real.

James McWalter

5 but.

Tomi Ristimaki

Need in the future years.

James McWalter

Yeah, you know you’re seeing like single digit billions. Um, across like you know large countries like the United States and go 7000000000 in the most recently passed bill for ev charging infrastructure and at 1% of vehicles in the road in the us are ev’s um I believe what. in in Norway it’s it’s kind of approaching 15 to 20% now but particularly well all new vehicles like the numbers of course like way higher. Um, but we do have to kind of move through the existing stock.

Tomi Ristimaki

The the total stock of course is lower. But I think in Norway I think they’re closing up the new cars. It’s it’s more than 60% is is either either plugin hybrid or or electric.

James McWalter

Yeah, yeah. Yeah, and how do you? what? I I Guess with all these you know we’re kind of talking about the kind of broader context you know within that. What are the kind of next you know 1 to 2 year Milestones that Ke power hopes to achieve.

Tomi Ristimaki

I Think it’s It’s so of course we would like to be the prepared solution for easy charting all around the world. That’s not the mild goal but that that that’s a goal. Ah and we are hoping of course to see it is also in the in the background is is is.

James McWalter

Sure.

Tomi Ristimaki

I’ve been working with clean tech all my life and it feels good to come to work and to to working in this kind of solution of course the massuptional evs I Truly believe that it actually helps the environment helps the world.

James McWalter

Up. So.

Tomi Ristimaki

And I think it’s a high value I think we also see now employees that there’s a lot of Ev drivers where I think we have also a high rumper of solar panel owners and things it actually affects the other things What you do when you’re thinking goes goes that way that you are you are starting to think about the environment and talking about. Feeling good about doing things that that improve things.

James McWalter

Yeah, not so and and that the kind of number of people who are starting to work in this space and then who are you know coming up with their own kind of innovative ideas and maybe within the companies are working at or maybe they spin off and start their own things. Ah. That Yeah, absolutely incredibly bit exciting and honestly it’s the basis of the startup of this podcast is like talking to people who are kind of on on those kind of different types of Journeys Where would you let you know if there was a couple of smart people ah kind of listening to this podcast interested in starting something in in this space. Are the kind of big gaps where there’s not enough innovation where some cool companies could be potentially formed to kind of focus and solve some interesting problems.

Tomi Ristimaki

I Think it’s also I think ah, all around the space at the moment because I think there is more demand and than Supply. So So there’s a lot of space to to be around. But I think the universal payment solution things and making that easier has has a space. But also also making let’s say a I think the general laziness of of humans in nature is is giving a lot of opportunities people in in a way that if you make things Easy. You have a way to succeed in in the world.

James McWalter

And.

James McWalter

And so when you say the universal pay. Are you talking about like like Cross network for charging infrastructure or kind of more generally.

Tomi Ristimaki

Cross network of starting in from ah structures. But also the the way how the vehicles work today and and how how how generally everything works is is I think the best inventions in the world ah is done because people are lazy and they want to make things easier.

James McWalter

Earth.

Tomi Ristimaki

That’s the first thing what comes to mind when when you if you make things easier then you have a possibility to succeed and our goal is also to make the charting experience easier than refueling so that was the winning idea in the beginning. How how how can you make that easier.

James McWalter

Right? right? Yeah I guess it’s you know and it kind of goes back to deity part of the conversation about you know once you start experiencing driving evs yourself or experiencing a specific new type of way of being you start to see the problems around that and one of the things I say to a lot of people are interested in starting companies is like. Just start jotting down every annoying thing that happens over the next week like every time you see something that’s like you know, delayed you or was slightly annoying or whatever it may be just jot it down and all of a sudden that’s your list of company ideas and because of kind of the nature of the world today. So many of them have a clean tech or climate kind of relationship. Ah, to start something in and.

Tomi Ristimaki

But actually the driving of Tv is already so much more comfortable than using a combustion engine car that there is no way of going back I always say that but it’s not enough to test for one week because you get this annoying things which are not actually annoying after few months of using. So I think the the general test drive is not the good way I think it’s just jumping in and and and going into the into the solution and there is no way back if if you are if you are doing maybe some individual will will go back. But that’s that’s say I think the this justifies the rule.

James McWalter

So no yeah I fully fully agree absolutely and I guess for you you know personally you know you’ve been kind of you’ve been Ceo of the company for for a little you know for a few years now um what’s most surprised you? um.

35:27.74

James McWalter

As you’ve kind of built out the company you know from kind of your position.

Tomi Ristimaki

I think from the point of view is the last two years and the market growth we are still growing 3 digit growth and and we are still talking about last year the revenues for twenty seven million Euros and you are not supposed to do 3 really digit growth at that level anymore.

Tomi Ristimaki

So it is what has surprised me a lot is the adaption of the ev and and and how the market is growing. It’s I would have suggested like I said it shouldn’t surprise me working 10 years in theopulate. But the last two years have really surprised me on on on what’s happening. And even in Finland I think the general but public was so much against on evs and now the now you see normal people buying evs which is a big big change. They not not only your engineer friend who is just enthusiastic about technology I would like to have a new toy. It’s it’s normal people who are who are moving.

James McWalter

Sure or no.

Tomi Ristimaki

And then there’s a lot of things which is of course the increasing fuel prices and things like that is changing changing the attibus.

James McWalter

Yeah, and ah, you know we’re we’re also seeing some of these kind of supply shocks around what’s happening in you know in Eastern Europe and so on and the the kind of large effect that has on energy prices on you know oil the barrel of oil. Um, we’re seeing queues at gas stations at least in the United States that we haven’t seen in a very very long time and all those things like feed into this idea of if I have an electric vehicle that I can plug in in all these different ways I have more general security if I have solar panels on my roof I start to have my own kind of personal ability to have resilience. Not just as a. Private citizen. But also yeah, commercial and industrial applications and and starting to kind of give people a lot more flexibility and resilience around like their own energy needs to transportation.

Tomi Ristimaki

Yeah, and it’s it’s now having options also to choose from if we look at let’s say 7 years back the only option was nicent lee for tesla more or less that there. There’s a lot a lot of between and it’s how how the carif effects are bringing the new models it. It’s it’s there’s something for everyone.

James McWalter

Right.

Tomi Ristimaki

Not yet boy if we want to pull a horse trailer for several hundreds of kilometers so or Caravan or something like that and and that that might be a niche market where you have yeah we have diesel cars and things like that in the future as well because that’s difficult to achieve with the current current.

James McWalter

Sure yes.

James McWalter

Yeah, but to your point a lot of those kind of use cases I think are sometimes they’re kind of overstated um by like you know people generally talking about the market or people just even talking about their own lives like people all often like overd index on the you know 1 in 2 year events rather than like how they actually live every day and I think that’s.

Tomi Ristimaki

Ah, think solosis.

Tomi Ristimaki

Million.

James McWalter

Ah,, there’s I guess some you know that that falls on the people building the solutions right? to better communicate like and better understand you know the the emotional need to have that backup and ability to you know to toe of to toe enough that maybe the person actually has never towed before but they. Feel the need to have that option even if it’s like not super relevant right? yeah.

Tomi Ristimaki

Yeah, and and and in Finland it means going to lapland without toilet break with a trade and and has to try run thousand five hundred kilometers without any charging or that’s kind of like ah abnormal needs or. You wouldn’t do that. We even we weren a gaszzling car but that’s what you want before you can change kind of thinking that’s at least what you can read from ah any newspaper article written positively on the ev is the first comments on the comment section will be like that.

James McWalter

Yeah, how how do we get to lab land. Yes, that’s that’s fascinating.

Tomi Ristimaki

Ah, next comment will be about the children of Congo and then about coal power as so i.

James McWalter

Right? Ah, yeah, it’s always the same 3 and I’ve I’ve seen something very very similar when I’m Fred read those comments as well. Ah.

Tomi Ristimaki

And every Ed driver must know where the electricity is produced and what’s used for that that that’s a general requirement from from the people commenting. So do you really know where your electricity is made. Okay, yeah, would you know where your gasoline is coming from so it’s.

James McWalter

It’s it’s it’s ever coming from somewhere worse by definition push. Ah yes I I think you know a lot of those are to be honest, like I think sometimes fake comments. Um, like I mean again, there there are the way think about it like there are completely legitimate. Reasons for concern around an individual you know, range anxiety like maybe going to La Plan doesn’t make sense but you know if they have ah parents that they want you know grandparents to to see their children and that’s like an extra few hours away. Yeah and those are definitely kind of understandable use cases. Um that that we have to kind of you know, respect. But I agree like there’s a lot of these kind of random statements that are very very consistent and seem to be coming out of you know often kind of Troll farms that that kind of thing. So.

Tomi Ristimaki

And and it’s not always troll farm ja individual with a lot of voice and and lot of opinions. But it’s it’s something is not real. Something is real but it’s also the general. Um, let’s say resistance against change and this is a big change and it’s a change of thinking. Ev behaves in a different way and and you need to think you’re traveling in a different way. it’s it’s it’s actually not so stressful. It’s a way of thinking and looking at range anxiety. It’s a very normal discussion in the areas we don’t have a lot of ebs. You don’t see that anymore happening in Norway.

James McWalter

Right? yeah.

Tomi Ristimaki

But there’s a lot of discussion on charging queues and the problems with charging queues that you have to wait 2 hours to get your car to charged and that’s actually how it changes and that’s also where our our sal solution kind of addresses it that you have to have the places to block the car so that. You are not waiting in the car to get get to the get to the larger. Yeah.

James McWalter

That’s your opportunity. Absolutely tommy. It’s been great. Really enjoy the conversation before we finish off is there anything I should have asked you about but did not.

Tomi Ristimaki

Yeah I don’t think so I think you ask a lot and I could talk forever. So so I think we are not jeopardizing your time time here. Yeah, thank you.

James McWalter

No, where is it all well to I mean thank you so much is is great chatting 

Great to chat with Sam Steyer, Co-Founder and CEO at Greenwork, Greenwork is a software company that connects workforce training programs to employers in clean energy, transportation, and the trades! We discussed ways of increasing the industrial workforce, the importance of finding the right co-founder,  trade schools and more!

https://carbotnic.com/greenwork

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

Remember, If you want to support the podcast please rate and review 5 stars on Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today. It’s my absolute pleasure to be speaking with Sam Steyer cofounder and Ceo Greenwork welcome podcast Sam Steyer brilliant to start. Could you tell us a little bit about greenwork.

Sam Steyer

Um, thank you James Thanks so much for having me on. Yes, absolutely so ah greenwork is a software company and we are helping ah clean energy companies and generally future looking industrial companies hire skilled trades talent today. We do that by offering. Ah, platform for trade schools and workforce development programs where anyone who is a student or a core member or customer of one of those programs can make a profile and get help on greenwork in building their profile and getting their construction history together. Ah, from the trainers and career counselors. They’re already working with in real life. The schools can organize their job placement and career readiness place process in 1 place and then employers can log in and connect with schools connect with students and hire. Awesome tradespeople who are passionate about their industries and who are getting started in their careers.

James McWalter

So super cool and what drove that initial decision to start greenwork.

Sam Steyer

Ah, my interest in greenwork really grew out of working on the twenty twenty presidential campaign I’d been a software engineer in clean tech and a software founder in clean tech but on the campaign I was. You know, surrounded by the democratic party thinking around the green new deal and build back better and my dad tom steyer was running on a climate message. So I was out you know going to factories and projects related to renewable energy and talking to americans across. The country and especially the early primary states about climate and it just became so clear to me that there’s this amazing opportunity to grow and and rebuild a. Ah, highly paid. Highly trained large industrial workforce in the us and then it was absolutely a necessary step to work on climate and an amazing thing in and of itself and so I wanted to build a company that would play a small role in supporting that broader mission.

James McWalter

So That’s so Interesting. You know I think those of us working in tech were often quite insulated I Guess from you know more kind of blue- colar type work and so as you were kind of starting to have those kind of conversations. What were the initial surprises as you talked to people in the ground that kind of inspired. You do kind of start green work.

Sam Steyer

Yeah, um, the first was I visited the largest wind tower manufacturing facility in the United States in Pueblo Colorado um, it’s actually really cool because it is right by a decommissioned you know Fossil Fuel drivenn steel mill and a decommissioned coal plant and now there’s a massive wind manufacturing facility which I found emblematic. It’s also just in at so brief aside an amazing city puebo Colorado that has 4 congressional medal of honor winners for a relatively small town which is very. Ah, cool and you know statistically unlikely. But um so I was there I got to tour this incredible facility and while I was doing the tour. They let me know that they were sort of hiring for every skilled trades role and couldn’t find enough folks industrial painters, welders, etc and I was shocked by that because I felt like okay this is a highly paid job. Doing really cool future looking work I’m surprised. It’s hard to find people and that sort of set off my interest in learning more about the skilled trades and ah the shortage of people entering construction. Um, so that was one and then I would say the other experience. To me that was sort of was meeting all the staff across the campaigns. You know the nature of the primary is the campaigns are always going to the Sam Steyere place for the Sam Steyere events and I just met so many young people whose plan for their life was work on this campaign. Ah, help the Democrats win and then go get to work implementing climate solutions and I felt like okay, there’s this you know some of those people are going to be policy activists or or white collar business people but to solve climate. We need to move a lot of atoms not just bits. And some of these people are going to go build awesome careers being tradespeople and engineers and technicians.

James McWalter

And in terms of like people. Yeah not being enough people to do all that kind of construction move all those atoms is it more that those people do exist but they’re like in the wrong places geographically or even in career stage or is it. We just. Have a massive gap in the number of people who are just not trained for these kind of Roles. So.

Sam Steyer

Um, so I think it is more the latter though I will say that that we have heard over and over again from you know, contractors and experience construction experienced manufacturing people that someone who has mastered a trade is much. Way far ahead at doing ah, you know, different kind of trades work than someone who’s starting from scratch so there is a big opportunity for people who have been you know doing ah related trade to come be senior theaters in clean energy companies. Ah, but there also just are not enough raw number of people and I think that’s because ah, we didn’t have positive enough messaging about the trades we didn’t share how much money people we can make it can make how with people how much money they can make in the trades and in some cases we’re not paying people enough or offering. You know, good enough benefits of vacation and safety and the things that make it good job up to people in the trade. So I think there is a need in messaging and resources to to reinvest in the industrial workforce in the United States just to bring in more people.

James McWalter

And we also have this yeah this concept the great resignation that’s been happening over the like the last six months yeah and that seems to be happening basically across the entire economy um people are you know are trying to upscall and people who are already I guess upskilled. But maybe in a lower skill job than they initially committed to. Um, they want to kind of move on to something bigger and better often with kind of an impact level. Yeah how you thinking about that I guess that macro piece is that helping to be a bit of a you know tailwind for what you’re trying to build as well.

Sam Steyer

Um, it. It is because companies are really reckoning with hiring problems and so that you know makes them more inclined to talk to us the way that I really think about it is it is. Holding companies accountable to offer good Jobs. You know in ah in a world where there are more jobs than job seekers and where people are sort of taking a step back to look at what’s happening in their lives jobs that were underpaying people or offering a you know, unfriendly or unhealthy environment. Um, but. They cannot cut it anymore and so the the way that you know I think that’s a good thing and the way that we try to reflect it in our platform is we um, won’t let you know any employer post any job. We um, you know want w two full-time Jobs. We want fair. Wages and if we have people through the platform get a job at a company and you know report back you know a number of them. It doesn’t work out and they say it’s not a good work Environment. We would remove that company from the platform. So I think it has meant. You know companies need to think harder and work harder to offer good jobs and I think that’s a good thing.

James McWalter

You absolutely and then in terms of the the kind of company getting up and running right? So You know you saw this kind of massive need. Um and I believe you have kind of a cofounder. You know what were those kind of interim steps to kind of go from this. Yeah,, there’s a big problem to be solved I have this idea. Up to you know I have I have a startup and cofounder and we you know we have a product and all that kind of thing.

Sam Steyer

Yeah, yeah, great. Great question and I’ll tell you what I did and also you know ways in which I would do it differently for for entrepreneurs who are listening because I definitely did do everything right? Um, so I I decided I wanted to do this sort of an August Twenty Twenty I spent

James McWalter

Right.

Sam Steyer

Ah, the rest of 2020 just organizing conversations with people who I thought would have a interesting perspective or who who might you know were sort of a good model of our future users to to ask them and to try to learn more about what we should build through that process I was extremely lucky to meet. My cofounder gotham j a raman he was a good friend of a good friend and he had um, ah recently ah been cto and cofounder and built a business called rickshaw that was bought by Jodache and then he was working at Jordache and after a while at jordash he decided. He wanted to do something focused on climate and so he was when I met him on a sabbatical trying to figure out a next step related to climate and um I after 1 or 2 conversations just had an extremely strong. Intuitive feeling that he was the right co-founder for me that you know why values it was just someone I really liked and wanted to spend time with and and that you know I am a software engineering background but probably not or or certainly not qualified to be a cto um and whereas he’s really really strong. Ah, engineering and product person who’s a great cto and um I think so I I realized I wanted to to be cofounder at First. He just wanted to sort of be an advisor and help explore the idea together and then a few months later he came on as co-founders sort of December January Twenty Twenty one um I actually had my first child was born in January Twenty Twenty one my wife and I welcomed our son and so I took paternity leave and or I guess I didn’t technically have a job but I took so you know a step back and then we.

James McWalter

Button Sure course. So.

Sam Steyer

Incorporated the company and sort of started operating on March thirty first twenty twenty one

James McWalter

And that’s pretty much exactly a year ago from when you know we’re recording this or even actually when I think this might be coming out. Um, and so you know and that’s I think having personally just also just gone through the kind of cofounder search process and finding also an amazing cofounder which for the.

Sam Steyer

Um, yeah.

10:18.84

James McWalter

Audience Sam Steyer also has met to charles my co-founder and charles and I would be doing our own podcast here in the next couple of weeks to talk about what we’re working on. Um but it is it is kind of remarkable like I probably easily talk to well over a hundred people in that co-founder search and then when you find them it just feels very easy and and you know the default the default is yes instead of like.

Sam Steyer

Um, yeah to yes completely agree.

James McWalter

Figure out ways to say no you know Um, so and so and you know in that’s kind of I guess in the last year you’re like okay you know you have this kind of founding team. You’re ready to go. You have a clear you know need within the market. Um. Were the kind of different like product ideas I guess right? because there’s a lot of different ways to potentially kind of solve this problem. You know what? what were your kind of thoughts that as that kind of went along. Yeah.

Sam Steyer

Yeah, we yeah gosh we have been through several. Um, so we actually originally launched as an online cohort based class for people to transition into ah technical solar jobs. So we. Um, we worked with a really awesome experienced solar technician to build a very short online course five total hours of live instruction as well as some sort of quizzes and tests and we would offer it for free and then. Ah, try to help the graduates get jobs and charge the companies that hired them a placement fee. Um I still think there’s definitely room for more online education in the climate space and and there’s some cool companies building it. But in our case for that role. We learn pretty quickly that hands on. In-person training was important both you know to learn how to do stuff that’s at least partially kinesthetic. Um, and second to understand the the challenges of being a solar installer you know fear of heights and physical demands of crouching and lifting heavy stuff and feeling comfortable in a construction site environment. And that we were you know, not even though we were trying to tell people those things that that we weren’t conveying them that well in an online course and um and so it wasn’t a good. It wasn’t enough preparation and it wasn’t a great you know, vetting mechanism to figure out if people it was the job as a fit for them so we did that for a few months and then. Ah, you know, adjusted to what we are currently building. Um, so other ideas we considered are were instead of building the marketplace between people and jobs building the marketplace between you know subcontractors or you know. Contract small construction firms and big companies I think I think there’s lots of things that are needed to approach this problem. We ended up feeling really excited about what we’re focused on because of what we were talking about earlier that we felt like we need just more overall people to have skills and experience. In the trades and that we need a ah more inviting more transparent path for people to get there and so we wanted to build that.

James McWalter

It makes a ton of sense. So just just quick show note: um your Mike just started just just in the last minute just started hitting against maybe the table or whichever but is up to the up to up to about 1 minute ago everything was fine but nowheres at all.

Sam Steyer

Oh sorry about that I’ll step back from the table has this made it a little better. Okay thing.

James McWalter

This is this is perfect. This is perfect I think you just wanted if it hit something that was the only thing um and Q were back in and so once you kind of as you kind of iterated through those I mean it sounds like you were doing actually a little bit of coding you’re getting it actually launched seeing where where the sticking points were. Um, or was this more kind of user kind of qualitative user research based I Guess how was that kind of entire process and then what was the point where you were like oh this is very clearly the the right thing to move forward with.

Sam Steyer

Yeah, so we right or wrong really had a bias to try things by launching them. Um, and so we we actually created our online solar installlar course we actually taught 9 cohorts nine one week cohorts of it.

James McWalter

Oh Wow I.

Sam Steyer

Um, and we sort of lucked into what we are now building because we as one of many recruiting tactics to get people to take the course we approached the California conservation core which is a state. Ah. 1 to one and a half year service program where people go and learn either land conservation firefighting or ah energy efficiency and for the energy efficiency folks they work on state buildings and it’s just an amazingly cool program in my opinion. It’s been around since one 76 it has. Really high. You know review from the people who go through and it’s a mix of sort of like hands-on technical skills learning to work in challenging environments with a team and then also sort of like spiritual conservation like they have a ah reading list of amazing. Poetry and writing’s about working with the land and working outside so but a brief aside but so we’ve got a number of students from the Ccc the California conservation core and we found that in teaching our class our average student who we acquired off an online channel who had little. Construction background was struggling to get a job and if they got placed in a job. Not always finding it to be a fit in both directions but that the folks who took the course from the Ccc who were very close to finishing their service who then worked with us to get a job. We’re getting a job. Job offer in the first interview and then we’re having a good outcome on the job and so it made us think oh like going through a trade school or a workforce you know conservation course some sort of training is a really. Strong signal that someone will get and succeed in one of these jobs and so we decide to just reorient towards working with those kinds of programs.

James McWalter

And so you’re kind of been moving into something with some sort of kind of Marketplace dynamics right? So you have you know the like the the trade schools on one side and then the employers in the other.

Sam Steyer

Very much. Yeah.

James McWalter

And when you in Marketplaces you always have a bit of a cold start problem and always one side is harder than the other. How do you think about those dynamics and.

Sam Steyer

Totally yes, so we we definitely face all of the cold start marketplace dynamics. Ah we we believe that the hard side of our marketplace is talent that. You know if you can find ah great tradespeople and technicians and maybe engineers. There is a huge demand for them from the kinds of companies that we work with um so to solve the cold start problem. We we have. Trying to do are 2 things 1 limit geography. We’ve only launched in the Bay Area Sacramento in Los Angeles and the idea being if we can get to you know, ah honor number of users if they’re dispersed across the country. It’s very unlikely that we’ll have matches between jobs and people. But if we if they’re concentrated. Have a much better shot. Um, and the other thing that we’ve done is try to build helpful tools for the supply side that are helpful even in the absence of looking for a job or having the right job on the platform. So we have been. You know you can use greenwork. To work with your career counselor to build a job search profile and a resume and a cover letter. Um, you can see other folks from your school and what they’re doing their job search and so we’re trying trying to you know, build something that really listened to and solve problems for a trade school ah to. To have a way to sort of build up supply in because they’re awesome and we want to help them.

James McWalter

And then in terms of the trade schools right? So I would imagine they have some ah yo some courses or diplomas or or certifications that are very well fitted right? like explicitly maybe renewable energy related others will be something more akin to construction or generous construction general contracting. You know. Electrician that kind of thing and so how do you think about? you know, pairing things up relative to a very very specific ah type trade schools skill into a specific role and yeah, and yeah, how do you kind of think about that balance.

Sam Steyer

Ah, we focus almost completely on the latter kind of background that ah you know our belief is it is hard both to learn and to sort of have the desire. You know the right desires and attitude to succeed as a. Construction worker or an Electrician but that the um, the a like the new learning that someone needs to do from that skill set to to succeed at a solar company or a battery company or a Ev company is much smaller than the learning to build that. Core skill set. It’s much more like we need good tradespeople and we need them to work on these problems. Not like we need hyper specialized people who are you know, really different than an Electrician um and then also on our experience companies do want to teach on the job. They want to teach. Ah, specific to their product. They want to teach their way of doing things. They they want to and so so it almost does it make sense to bring them someone and say like this is a fully finished person who knows how to do everything you do because each company has little things they do differently. The key is. Connecting with people who have the core skillset and who understand the rigors of these jobs and are are going. You know, excited for them and able to thrive.

James McWalter

And how do you think of it. You know your kind of key metrics. So is it Yeah people placed people who are still there after a certain amount of time that kind of thing.

Sam Steyer

Yeah, so we um, we haven’t I mean are are given that we’re working with a marketplace that has sort of 2 sides sort of three sides we we have a number of metrics. It’s it’s not super simple but basically ah first we think about. Building supply you know number of job seekers number of schools. Then we think about ah connection and placement. So a number of interviews number of placements and then critically you know retention in the job because we want to help people get jobs. They’re really excited about and we want to help companies hire people work out and then our business model is. Greenwork is free for job seekers and for schools and we charge ah employers on a saas basis and so we have sort of standard saas metrics around monthly recurring revenue and growth and churn.

James McWalter

And in terms of the employer side. So I’d imagine it’s a ton of solar especially if you’re in California maybe a couple of wind. Um are you seeing kind of any interest in some of these other you know green infrastructure type elements. Yeah ev charging stations hydrogen those kind of things.

Sam Steyer

Yeah, absolutely so so most of our existing employer base are solar contractors but we have absolutely have seen a big opportunity in ah energy efficiency building automation green construction. Um, we’ve had the. Ah, we’ve definitely seen a big opportunity in building out and maintaining charging infrastructure that we don’t actually have a customer in that space yet. Um, and then the um I would say the biggest surprise to me very pleasant surprise is um I’ve seen a number of awesome advanced manufacturing. Projects in the Bay Area you know companies that are building a factory or a product design facility in the bay area who need assemblies and fabricators and cnc machinists and and other sorts of high skilled hands-on rolls.

James McWalter

It makes sense and yeah, it’s ah super exciting. You know people literally like building out like these kind of future kind of use cases and in terms of the um, the trade schools themselves and you know in in Ireland trade schools are like a very kind of integrated part of the community part of education. Um, yeah I grew up. Yeah in in a kind of farming background and like the default is like your construction every day you know for most your your teenage years and so there’s like a very clear pipeline into getting some somewhat certified and then moving into kind of more professional type type use cases. You know and I know other countries like Germany and so on have also these kind of incredibly like sophisticated ways of of matching people. You know, matching people with skills and interests and and all that wouldn’t trade. How is the Us doing in general like do we have enough trade schools are they to write types of trade schools to kind of hit the numbers that we need to over the next decade

Sam Steyer

Um, so my opinion is without just casting any aspersions at the existing trade schools some of which are fantastic. No I think we need more I think we need them to get more. Attention and have more prestige. You know like if you if you ask the average person to list as many colleges as they could and then as many trade schools as they could um you know most people who lift many borders magnitude more colleges. Um, and ah and so no I think we need more. I would also just say we right now work with schools that we ah you know consider good feeders for us. But that are really different like we have 2 year community college programs we have twelve week nonprofit training programs we have state conservation core. Which are somewhere between a school and a state or national service program so there so there are awesome programs out there. But I think we need more more attention and ah a more sort of organized and standardized system.

James McWalter

And the trade schools themselves. You know I’ve talked to a few people and not through the podcast. But in general who are trying to sell to you know, educational institutions governmental institutions and so on those sales cycles can be you complex and long even when maybe the ticket price isn’t even that high and so. How do you? Yeah, How have you’ve kind of found that. Um you know are are some of the trade schools. Incredibly Excited. Some are more difficult.

Sam Steyer

Yeah, um, so we are in a slightly different boat than a product that is like at core selling to schools because our product is free for the schools. But um, but my general impression has been the administrators and teachers and career counselors at these schools are. Fantastic, fantastic like really committed for the right reasons really smart, really practical. Um and are understaffed and over committed and so the I think the slowness that people see in the sales cycle is they’re selling to someone who has. 18 priorities on their plate and is doing their their best and so what we have tried to do is make sign up and onboarding incredibly easy and fast and impress upon people that we don’t need to start with a schoolwide rollout that like if they have. 1 technical education program and 1 instructor who’s willing to hold the admin account and 20 students who they can email their school greenwork link to that. That’s enough to start and then we try to land and expand.

James McWalter

So super interesting. Do ever any of them. Ask you to come in talk talk to anybody get get on the ground kind of thing.

Sam Steyer

Yes, and we’re trying to you know?? Um, we we obviously started the business during the pandemic and we’re very remote and online at the beginning. But um, we’re trying as much as possible to get in person with schools and companies and it it. Um. They ask us to to do it to sort of onboard and help people set up their accounts but it is actually a gift to us every single time we go. It’s worth It. We always understand more learn more build a deeper relationship by going and meeting people in person.

James McWalter

And yeah I think one of the fascinating things about this whole space is that the perceived risk of getting a job is um, probably higher to the average person than what it actually is because it’s so opaque you know I’m ah I’m currently in and in South Bronx at my mother-in-laws and all the ads around here. Are you know. Basically force trade schools in spanish um, but there’s kind of ah I guess a gap between what’s being advertised and like the actual role that people will be doing right? It’s just kind of like talking about the course itself but not really kind of filling in the gap of like you know this is a twenty thirty year 40 year career

Sam Steyer

Um. This minute.

James McWalter

Ah, this is the actual income you could have this is how you would become you know a respected memory of community All that kind of thing. So how do you think about those kind of community kind of social elements that inspire people to kind of engage in. You know the kind of jobs that we both agree need to be you know, need to have more of.

Sam Steyer

Yeah, that is a really smart question. Um, so I think 2 things 1 is our goal is ultimately to make our software tell that story in a transparent clear way. You know show people who have graduated from this program now work at these companies. They work in roles where people are making this much money here is a video of someone who has a awesome career that started at a trade school talking about their career that sort of thing. So I think that’s one is just trying to make that information much more accessible I think the other is. Um, trying to dispel a sort of Stark distinction between trades and white collar. You know it. It doesn’t make sense to me and it actually is usually not true that the whole senior leadership team of a so of a excuse me solar company would come. From a white collar background when a solar company is you know in most ways, a construction company and a core you know, moving atoms. Um, and and so I think ah making sure that it’s actually true that there are are roles that start as. You know, hands on technical roles and and laid to a career path in a very senior position of leadership making a lot of money and highlighting people who have walked that path.

James McWalter

Its super purchaing and you know there’s also this and I’d love to kind of get your take especially having you know seen the kind of internal kind of political machinations and and um on the kind of policy side over the last couple of years. But what’s been really interesting is this kind of. Set of thoughts around what some people are calling new industrialism others have called the abundance agenda these are coming from people like Ezra Kline and Derek Thompson and so on were you talking about how the United States in particular over the last you know few decades just has not built enough things internally right? and we just need to do a ton of that and so obviously build back better is like this. Very big shiny like effort at a kind of moving policy in that direction I know the the motto of your company is build the future. You know how do you think that policy can interact better with the kind of work that you’re doing day-to-day to kind of accelerate that you know just building more out you know things getting more atoms and you know deployed.

Sam Steyer

Yeah, um, that is a great question I think for one ah the one the way that would sort of most directly impact us and that I really believe in is more public funding for. Ah, trade School Education Community College education having less people take on college debt. You know I think that there’s there is a lot of innovation in Silicon Valley around finding creative ways for people to pay for vocational education. But I think it. Ah. It’s hard because the benefits to vocation to education not to vocational education accrue to the person who’s learning over the rest of their life which is a really long payback time and accrue to you know all of us the the people who work with them. The people who vote in the Sam Steyere elections as them. The people who live with them and so I think there’s. Education so valuable. Ah, but it but it usually or often makes sense either for people to pay for it through tuition or just for society to pay for it. So I think more funding for education and including trades and engineering education. Um. Is is 1 thing and then I think the other thing which I think the byed administration is doing a great job of is using the public sector to model good things to the whole country so you know buying ah 0 carbon advanced. Infrastructure projects with federal government having good labor practices and high wages for the people who work on those projects and it is a little more abstract but like setting an exciting positive example that we can build really cool, big things and so I think. You know most of the the private the public. The private sector is bigger and a lot of the the sort of stuff we need to build is going to end up being private sector. But I think the public sector can set a really strong inspiring example.

James McWalter

And yeah, that that makes some sense and ah you know one of the ways I think about how these things play out is like there are different types of levers right? and so we have you know to tackle climate. We need to have all the levers you know being used in similar ways. But it’s you with activism lever you know you have ah you know. Policy lever. You have you know, kind of large corporate enterprise lever you startup levers you all these different for kind of levers that kind of hit pieces of problem in different ways and 1 of the things I’ve been kind of thinking a lot about is how government and actual startups I could potentially could be interacting better and so you know on 1 side you know should startups. You know.

James McWalter

Ah, as well as you guys are as as well as like the kind of thing I’m working on should be more involved should we be more involved in the political process and on the other side you know should governments be doing more to kind of encourage successful startup formation or is it really just you know it’s like oil than water like those 2 things have such kind of ah you know opposite methods of like thinking about risk and all those kind of things that.

James McWalter

You know it’s better for us to kind of be somewhat siloed and and figure out problems and in kind of unique ways.

Sam Steyer

Um, I’ll answer your questions reverse order. It is not oil and water and we definitely should have relationship with each other it. We almost must you know we’re working on the Sam Steyere huge problems living in the Sam Steyere country. Um I don’t think that startups.

Sam Steyer

I Mean maybe they should but I I would actually not frame it as startups should participate more in the political process I think startups should interact more with the civil service and the apparatus of government and I think that there is a conception among startups that it is more difficult and less efficient than it actually is. You know I think if if you call a workforce development board or a city or you know a part of the department of Energy. You are typically pleasantly surprised by how responsive and helpful and eager to work Together. You will find the person on the other end of the line to be. Um, and and and so I do believe that that sort of startups should be interacting more with government but I don’t think it should be to set policy I think it should be to you know, do projects and um, not always but often. Government is a convener and a funder and a priority setter but not, you know doing the the execution and so I would encourage startups to figure Out. You know what their state and local government is doing and seeing if you could fulfill some of it and I think oftentimes you’ll find if you can. You’re not replacing Government. You’re replacing like an old school software company. That’s good at selling to government and you probably can offer something better.

James McWalter

And then you know I on I guess startup somewhere more generally right? So I believe you went through y combinator and would’d love to kind of hear quick thoughts on the on that experience. But I guess specifically around you know the number of you know climate or you know.

James McWalter

Large global problem focused or impact focused startups in your cohort and I guess how did I guess the very impact focus startups interact with I Guess the less impact focus but maybe still working on you know, large B Two B Saas problems and whatever it may be um, like is there any I guess tension is there a need for you know. People working on on the very impact side are they looking across and me like hey guys you know, maybe maybe you know we should evangelize and onto the impact side and and how do you think about that dynamic.

Sam Steyer

Um, so we we were in the Y Combinator Summer Twenty One batch. Um, it was fully remote. We had a really good experience I think it that um this is not what you asked, but just to give the the context that one of it. We kind.

James McWalter

So please.

Sam Steyer

Incredibly valuable was the partners at Ycombinator have just are very smart people who have seen an incredible amount of startups at our stage and so they were able to guide us direct ah direct us and in some cases sort of push us and hold us accountable to make changes that would have taken us a very long time to figure out on our own. Um. So it. It was really helpful in that regard. There was not a tension at all of trying to be an impact driven startup in ycombinator. In fact, most people I think had a sort of impact lens or you know would be like whoa cool like you’re working on climate or well cool. You’re like.

35:23.44

James McWalter

Right.

Sam Steyer

You know, building something for a blue collar audience that that made it easier to sort of relate and people were supportive of it. Um, ah, there are plenty of climate companies in y combinator. In fact, there was a recent Paul Graham tweet about how there’s a bunch of exciting new climate. Companies why combinator and maybe it foretells a trend in terms of how startups can interact with each other and push one another I think ah at the stage that we were at last summer it is so hard to. Get customers find product market fit. Ah you know, figure out how to do all the things that are expected of a founding team with the time in a day that there’s much more emphasis and sort of shared learning about how to. Get your company off the ground and how to make things work and that is common across you know the companies that are doing b two bs or or climate or whatever and I think that that and so it felt very easy to relate to other companies. It felt like we were mostly sort of strategizing with each other about how to.

James McWalter

You right? right.

Sam Steyer

How to do those things how to make a early stage business work. How to learn from your customers and try to get towards product Market fit. Um, so I think that that conversation about impact lens is super important and I but I could imagine it. Dominating more with companies that are further along in their journey right? right? right? that that’s that is being honest, you know what it what it has felt like and why it’s felt very easy to relate to other early stage startups.

James McWalter

You right? when you’re default dead like everything everything is about just being getting to default alive.

James McWalter

No Absolutely. Um and I guess for you Personally, you know if you were starting out because I know you you had previously cofounded station a and and had these kind of other kind of experiences working at different companies. Um, so. You know some some young person are not not so young, but they wanted to kind of start a company over the like the next little while um, what are something that I guess you learned or you’re like oh I wish I’d known that before I before I get it set out and running.

Sam Steyer

Yeah, so I’m first give advice that is is very common already that I think is cliche but I think is true which is you have to launch and start operating and that is actually a faster way to learn even though it’ll feel you know. Challenging and scary and it’ll be tempting to do more analysis and conversations the things that I’ve found that I think are less commonly known that were more counterintuitive to me. Um, ah oh and the other one which is cliche but it’s definitely true. Is. It’s more fun and easier with a cofounder and and quality of cofounder is so important you know it’s worth time and effort to be the right person. Um, the things that I found that I that were more surprising to me I would say number one when I started I thought of it as like there’s this sort of challenge to get investors challenge to get. Customers challenged to get employees challenged to get you know media whereas now a year in I feel like customers is actually the only challenge and everything else if you can get customers will these you know if you can get sales. You can definitely get investors in media. You know and then employees is hard but it’s sort of a second order problem. You need to hire them to work for a business that exists. So I really if I if I was starting again with think much more about like who are my first 5 customers because that’s what’s really hard. Um, the other thing I would say is there’s a huge amount of writing and talking about. Ah. Product market fit. But I think there’s an increasing amount of writing and talking I think is really smart about founder market fit you know the startups are a very long journey. It is much easier to work that hard for that long if you love and feel authentic about what you’re building and a lot of the early sales will be 50% selling yourselves and if you are a effective you know logical face of the business. It helps a lot. So I think ah, you do need you do need product market fit but also it will be easier to get product market fit and and a lot more fun for the you know 10 years of your life. You’re pursuing it. If you pick something that that stems from a personal mission but also like a personal love for what you’d be doing day to day you know if if you love math and data start a business that has a big you know data science and Ai component if you love marketing and brand. Start a business that’s like an online community that kind of thing.

James McWalter

Right? I guess like so much is so difficult and getting customers as you said is is by far the most difficult all the other bits have to be fun and easy just because that’s your default that’s your default emotion and so if it’s like ah you’re waking up out of bed. Um, you know and I’m sure you’re similar like I’ll like I’ll wake up sometimes at five thirty in the morning and I’m not.

Sam Steyer

Um, yes, yes.

James McWalter

I Don’t feel stressed I’m just like so excited to think about what we’re going to be doing over the next like day I’ll just be like woke up like woke like excited and it’s all stressful of course but like’s it’s also like I can’t wait to you know to get through breakfast to to get going at these things right.

Sam Steyer

Yeah, totally seen.

Sam Steyer

Yeah, and like there’s going to be some parts that are gri like I don’t think Eddie would like cold call it customers or you know figuring out how to set up accounting or and like if you’re the the Ceo you definitely have to do both of those things and um. And so like make sure as you’re saying make sure the parts that are content are something you really love Yeah yeah, the comedy hit of the two and.

James McWalter

Or cold calling quickbooks which is a recent experience I had basically to try to get something up and running um and also no absolutely I also believe you’re a reser ah reservist at San Francisco Fire department um

Sam Steyer

Um, yeah I am.

James McWalter

Which which you would text me but also my my researcher found independent lays I wanted to ask you what that experience is like.

Sam Steyer

Um, it’s awesome. So the the san francisco fire reserve is a a volunteer organization. It started during world war ii in order to have a domestic fire department in case of some sort of attack that caused a fire especially when you know lots of. People were in armed services. It has gotten much smaller since then but carried on you know since I think 1942 it um is a once a week organization where we meet on Thursday nights to practice and then if there is a 3 alarm or greater fire. In San Francisco we’re called to go to the fire and assist the professional fire department. You know we’re doing the sort of support kinds of roles. It is primarily made up of people who um, plan to become professional San Francisco Fire department firefighters and are going through the process and are using it as a way to learn and build their relationship with the department. Um, but there are also some folks like me who are who for whom it is the the end goal. Um, and it’s it’s really fun like we get to go do. Cool physical thing you know spraying hoses and throwing ladders and that kind of stuff and it has a bunch of really nice. You know, sort of community civic oriented people. Um, who who live in San Francisco and it I’ve only been doing it for a year but I love it and it’s been real.

James McWalter

Yeah, and I think having some sort of community engagement is something that I always promote to to friends and and founders and and all that kind of thing. It’s so easy like when you’re you know, servicing a global market and all this kind of thing to forget that so much change and impact can happen.

Sam Steyer

Treat.

James McWalter

On the road and it gives you just a ah bit of perspective on how much just thought the people are living and other people are kind of going about their day that that’s often missing you know when you spend your life on different slack communities. So.

Sam Steyer

Totally totally agree and it yeah it has totally enriched my you know I’m a deep San Francisco lover already. But it has even further and enriched my feeling of community and connection with the place I live which I really really really value.

James McWalter

Sam Steyer It’s been amazing. Um, is there anything I should have asked you about but did not oh.

Sam Steyer

Um, yes, 2 2 things. Ah 1 is both with the the startup and the San Francisco Fire department you know Thursday night volunteer opportunities I’m married and have a 1 year old son both require. A lot of time and put me and the startup puts me in a stressed out mood sometimes and so I want both say a huge thank you to my wife Tessa who’s incredibly supportive and awesome and also just let any ah aspiring founders know that if you are in a long-term relationship you you know your.

James McWalter

So amazing.

Sam Steyer

There is also something your partner is signing up for when you start the company. Um, and ah the other thing I would say wanted to say is I’ve been working in climate tech in 1 way or another since twenty eleven I’ve always loved it and loved the people in it but we are in a moment right now where the amount of. Talent and funding and attention and excitement in climate tech is just so so much higher than it’s ever been before. There’s so many good companies. Um, there’s so much more ah sort of like ah legitimization in the eyes of conventional tech. It’s just awesome and I encourage people to come join and I want to send send love and support to all the climate tech folks out there.

James McWalter

Absolutely I can’t echo either of those enough. Um, thank you Sam Steyer it’s been amazing.

Sam Steyer

Yeah, thank you Really appreciate the opportunity.

Great to chat with Ory Zik, CEO at Qnergy, a company that uses a unique engine to convert normally vented methane to useful energy and reduce emissions! We discussed how a modern Stirling engine generator can decrease methane emissions, their use in oil and gas operation, how they are built to last extreme weather conditions, climate profitability and more!

Qnergy is hiring!

Blog post

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

Remember, If you want to support the podcast please rate 5 stars on Apple, Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today we’re speaking with Ory Zik Ceo at Qnergy, welcome to Podcast Ory to start what is Qnergy.

Ory Zik

Thank you Thank you James and good morning. So Qnergy is a company that focuses on a unique problem on the problem of distributed methane emissions. It turns out that methane is. Second only to carbon dioxide in terms of it’s important to climate change. But it’s a much harder problem to tackle most of the methane sources are distributed you know organic waste sources industrial kitchens dairy farms. Ga operations but most of the current solutions are centralized so we address this problem by focusing on onsite mitigation of methane emission and we do this. Through a propriety technology that I think we’re the only company in the world that controlled in this way called the free piston sterling engine. So we use this free piston sterling engine to address the distributed methane issue and since the technology is useful to many other applications. Part of our model is to partner with companies that would like to pursue those applications.

James McWalter

That and so what’s the typical company type that might use your product. So.

Ory Zik

So I mentioned to recently we’ve announced the deal with the total energies Total energies has a gas operation all over the world. This deal is specific in the Us and our our systems.

Ory Zik

And have I would I would say as follows. Our systems has 2 unique advantages and perhaps a and perhaps a disadvantage The key advantage is that they are very reliable. We provide power generators that walk in all climates all situations from sandstorms to snowstorms. And reliably twenty four seven the other advantage is that they walk with methane in its raw form whether it comes out of the ground and and in a gasfield or and methane digested in a dairy font. So the deal with total energies. Was to help them abate methane emission throughout the gaz supply chain using our generator and the way it walks is we take the gas that they produce provide power and with this power run air compressors now why are air compressors important.

Ory Zik

Because typically in gas operations they used to use the pressure in the gas to activate mnemonic devices now. It sounds very technical and maintained but there are about a million of those devices in the us and it’s equivalent to more than 10000000 cars

Ory Zik

So we we announced the deal where we sold more than 100 systems to total and to mitigate this issue and so since then we’ve signed a large number of similar deals. So that’s number 1 the other typical customer would be let’s say a dairy farm. That would like to mitigate their methane emissions from and common calm manure and our system that can digest again that can take methane in its very and a row and polluting form and take it into and and convert it into useful energy and can do that so that’s. Ah, like 2 examples.

James McWalter

That’s that’s very interesting and I guess in terms of how the kind of company developed over the years I mean I understand that you joined a ceo later but I guess before you joined were those kind of early days was this the kind of primary problem that the original kind of founding team was looking to solve or did this problem kind of arise based on some. Kind of research on something else was there. You know basically was there any kind of early pivots along the way. So.

Ory Zik

So I probably answer it in an unconventional way because we developed a free miston stling engine. It’s it’s a very interesting story that happens across 3 continents and two centuries. So.

James McWalter

I amazing.

Ory Zik

Actually original invention was an invention by a scottish clergyman Robert Robert Sterling invented an engine that is an external combustion engine namely it takes unlike the internal combustion engine that you use in your car or most people do.

James McWalter

And.

Ory Zik

This external combustion engine takes heat external to the engine. So the engine is sealed and and and can generate motion that can generate electricity which was found later on so about two centuries ago the engine was invented and since then nobody built in. 2 centuries nobody built a commercial generator based on the stling engine until cuneg and until cuanji managed to do it and now it’s ah 3 centuries because it was invented in in in in the old England and we develop it in the us. And and there is and and we developed it with a team that combinened innovation from Israel and from the us we’re based in Utah so we have a factory in Utah that has engineers from Utah and from Israel now the reason we need this combination is because one of the. Biggest problems with the sterling engine and I’m talking about the variation that is called the free piston sterling engine and it’s really it’s relevant because it’s a very very low maintenance. It can walk for tens of years without any maintenance and the reason we needed this. Ah. Cross-pollination and across innovation is because these engines are very difficult to control the walk in a fixed frequency and then you need to control the amplitude and it’s it’s a complex electronic exercise that we’ve solved. Now I was in terms of myself. So I’m in terms of my background I’m a physicist I have pgd in physics and I managed a few companies in the energy space that I’ve started and a few years ago four five years ago I was asked by Keyne Energy’s investors. To visit the company and and we had a good conversation and initially I was very cynical because I knew that nobody walked nobody solved a sting engine problem for two centuries. So why why in Utah

Ory Zik

So I remember reading the presentation in the plane and and thinking about a you know ceiling for Helium and the electronic controls that I’ve mentioned and these sort of things and said well it’s probably probably be a short visit because I don’t think that it walks and then I came in and everything is walking.

Ory Zik

Product is actually phenomenal in its performance and so so that’s what brought me to cu and four years ago and I stayed and I mentioned that we have 2 advantages and a disadvantage so one advantage is the reliability and the other is that we work with all. Sorts of methane in the most polluting forms but the disadvantages that our engine is currently pretty expensive. We can go to home depot and buy a a five Kilowatt generator at less than 3 $ 3000 our generators are orders of magnitude more expensive because of the performance.

Ory Zik

And our vision is to increase quantity increase volume and by that reduce cost reduce price and then we’ll have a ubiquitous high performance engine that people can use.

James McWalter

Yeah,, that’s really fascinating and I guess like over those kind of two centuries. You know there’s a lot of different areas that we’ve made advances in you know, materials technology. You know, software programming to manage things you know in a lesser way things like mechanical engineering a lot of those early advances happened. You know. A while ago. Um, what kind of combination of those different advances like resulted in this successful use of the starting engine.

Ory Zik

I think and I would say 3 1 is soft and the and the 2 others are hard. They are start with the hard so precision manufacturing became much lower cost much cheaper and since we win our our engine contains helium. And so we need to seal for helium for about you know more than 10 years and there is a joke in the company that every pressure vessel is either empty or leaking. So you know everything leaks at the end, especially if especially if it’s helium so precision manufacturing laser welding allows us to do this in.

James McWalter

I price.

Ory Zik

In a more effective and lower cost way. That’s number 1 the number 2 is the advances in electronics specifically power electronics as I mentioned that allows us to control the engine and so these are the 2 hard ones. The soft one is perhaps our persistence. Our engineers have been working on this. Problem for some of them for nearly three decades. You know they’ve been persistently solving problem after problem as some of them walked with Nasa on a on a variation that could be deployed in space. So Nasa has a press release saying that this engine design is the most reliable heat engine ever invested. Ever invented in the history of humanity. So persistence is a big deal. You just need to stay on the problem and solve knock out 1 engineering problem after the other.

James McWalter

And understood. Okay, interesting and then you know once you you kind of went out to the factory. You see. It’s like okay, what you read on the plane was actually correct. You’re you’re seeing it in action kind of very exciting. Um, what were the kind of different applications that were considered right because if I think about a typical internal combustion. Engine. You know is there tens of thousands of different applications that it’s been used for over the years and you know from passing your cars to all these other you know to lawnmower and everything in between how do you think about? you know where what was the consideration around these different kind of use cases and then how did you kind of in the end focus on this kind of methane piece.

Ory Zik

Um, where I.

Ory Zik

Yeah, so it’s great. Question. So for us. We wanted to you know it’s I would say it’s the innovator’s dilemma. You don’t want to go to a market which is ah too large for you to tackle and you want you and you want a ah a market that and. People will be willing to pay premium for the performance of the product until you reduce the price and go to larger markets. It’s almost like you know, think about the staircase every every time you reduce the cost you have larger markets but initially out of the gate we were at the level of hundreds now. We’re you know. We’re increasing our production rate. We’ve been growing a hundred percent year over year in the last four years but we started so we started so the way we thought about it is the canonical applications for reliable generators of this size would be combined hit and power namely. You know, residential and genatorors that provide heat as well. So we we knew that we can solve this problem but we didn’t want to start with the residential obit two c market out of the gate because it’s complicated. You need to deal with installers and these kind of things. Other market to consider is a solar. You can put the stling engine on the focal point of a dished trucks the sun and generate power and we and but this was a head-tohead competition with photovoltake and the prices of cofoablel taike were and. Less than a dollar per wat so that that wasn’t interesting. What remained extremely interesting is a problem that nobody could address which is methane abatement initially in gas fields and then in all the distributed methane and that I’ve mentioned so that’s why we focused our generator. The first market would be the oil and gas operation mainly natural gas because those companies have the financial capacity to pay a premium for the performance and they have the urge. It’s if their own need. And also your monities need to reduce methane pollution in those sites. So so that was a perfect match for us. We started focusing on this market now we have we started by the way as an anonymous company. Nobody knew about us so we started with a try and byproduct a program. Namely we let people to try it and if they don’t like it. They can send the product back and we had a hundred percent hundred percent conversion from try to buy which was great for us and something to be proud of in terms of the field first mentality that we’ve implemented.

Ory Zik

And now we have about eighty eight zero customers many of the oil majors. We raised capital from the ogci the oil and gas climate initiative recently and as I mentioned total energies and a few others are now buying our systems in the hundreds.

James McWalter

And and in terms of like the status quo where let’s say an oil and gas major is not using your system. Um the methode that is being kind of produced during natural gas collection like how is that being collected is that being flared is that you know what’s the kind of typical kind of use case.

Ory Zik

Now So the typical use case. This is a problem that will sound very technical but it’s actually acute so in a Ga operation that doesn’t have grid connection The entire gas site is controlled.

James McWalter

Today or the variety of choices that people are making today versus when they’re using your system. So.

Ory Zik

By the pressure of the gas that comes out of the ground the through nomadic valves now the status quo is that anytime you open anytime a a controller a valve changes a sit a position a little bit of methane is emitted. Natural gas is 80 to 90% methane and and this is emitted. It’s too small to flare. So there’s no solution you just emit straight methane into the atmosphere and now it’s considered 84 times more and a potent higher green global warming potential than c o two so there are about a million valves. Million dollars in the us that constantly emit methane to control gas operation 15 to 20% of the industry’s emissions are just these these disolved and the solution is known is straightforward and is very easy to implement all you need is to connect. Our generatoror to a little bit of gas that powers it and then you replace all methane emission with instrument air with clean air which is also safer because instead of having methane on site you have air and and and that’s that’s that’s very easy to implement and now what makes it interesting. The Epa has. Proposed regulation and that to forbid natural gas operators from emitting and methaneroonomatic devices I would say that this is probably 1 of the disadministrations and. Legacy to be regulations on methane.

James McWalter

And so once it it gets into the device is it producing electricity or energy that can then be utilizing other use cases or is it more. This is an elimination of the conversion of the gas into a format that just is not released into the atmosphere. So.

Ory Zik

Yeah, it’s yeah think about it as a conventional power generator but it can walk just a conventional power generator. It can walk with methane from from a gas site as fuel. And produces electricity and some heat. The heat is useful, especially in Canada and in some northern regions when you need access heats in those sites. But essentially it’s a generator takes natural gases fuel and produces electricity now in those sites. The electricity is used to run air compressors. And you have access excess electricity for whatever they need whether it’s a surveillance surveillance dataquisition and data communication. These type of things.

James McWalter

Very interesting I actually had a bit of a deep dive on methane producing coal mines back in the summer I was looking around at different problems within the kind of climate space as potentially something that I might want to work on on and I found this kind of interesting tension between different types of regulations and so.

Ory Zik

Are you.

James McWalter

1 side you had regulations around. Ah you know human beings and like the osho ah kind of regulations around keeping people safe and with those regulations there’s like a very very strong bias towards not keeping any sort of gases very dilute because the last thing you want is somebody down in a mine or in a gas. Well. You know, checking pipes who you know they’re usually wearing all this apparatus anyways. But you know if if anything goes wrong, they’ll suffocate and die and so there’s like this strong tension to have things very very delute on the other side. Um the more concentrated you can make the gas the more valuable it is as a resource either as you mentioned you could potentially flare it. Um, which you know is better for the for the environment if not very useful or you can capture it and kind of generate electricity or energy from it and then actually make a completely I guess useless byproduct into something directly useful and that kind of latter piece is as you mentioned is kind of governed by the epa how do you think about these different you know. Um, kind of rules and policies and how they kind of can produce better outcomes than they currently are.

Ory Zik

Think you touched the very important point which is the premise of what we do most methane sources are distributed and dilute but the current solutions just address the centralized and massive or large sources. So All we’re trying to do is use this sting engine to put to make it as small as possible if you will so we can. We can take the dilute otherwise unused or unuseful sources of methane and turn them into useful electricity and the reason is because collection. Very very expensive make it uneconomical and people are not doing it. But that’s a that’s large large portion of the methane that is ah emitted and and and for us anytime we use a delute source of methane and take it into and turn it into. Electricity. We also support safety and and and allow people to meet safety Compliance comply with safety regulations more easily.

James McWalter

So Absolutely and then how how do you think about? let’s say where the industry is going in general. You know there’s a lot of I guess pressure on things like natural gas production from a kind of total kind of missions point of View. You know there are. The Divestian letter that blackrock wrote around the coal industry. You know, starting to be pressure on the kind of shareholder and proxy vote side of things around any sort of kind of oil gas producing companies. Um, which you know if those companies shut down right? You know those have a you know pretty direct impact on your business. Um, how do you think about navigating I Guess the next kind of Decade. Where there’s going to be increasing pressure to in essence a lot of times shut down these kind of minds versus solutions like yours which are actually trying to make the process you know green in some way.

Ory Zik

Yeah I think the way we think about it is the form traditionally you would think about only the ah roi of your product today. We’re thinking about the climate return on investment or the carbon abatement cost or the carbon intensity of what we provide. Because more and more customers and are thinking about you know they they they invest in carbon mitigation because it’s important for their esg reporting their internal or external or regulation compliance but they invest money that they wouldn’t invest otherwise. Just to clean up their methaneum. The methane emissions and greenhouse gas pollution. So the key driver I think the most important thing to understand is that the key driver keyeconomical driver in the industry is shifting from conventional ah roi. To and a couple between conventional roi and climate ah roi so people will look. We look at the total cost of ownership of something that needs to mitigate a certain amount of and of greenhouse gas. For example, they deal with the total energies that I’ve mentioned and this deal was signed after we’ve. Demonstrated that you can abate methane at the cost of less than a dollar per ton of co 2 equivalent and that that that became very compelling so the number one I think the most important message is that this same climate return on investment or. Or carbon intensity metrics carbon abatement met metrix and that’s that’s that’s number 1 the number 2 thing that I think that we should think about is and the logistics and cost and that is involved with distributed methane. I’ll give you an example, you’re in New York in New York the tipping fee for organicnic waste is can be a few hundred dollars per ton now. So if you can treat waste on site all of a sudden and the economic equations become economic equation become compelling so traditionally. Even if if even if traditionally you wouldn’t pay attention to biogas to energy at low concentrations because of carbon pricing and tipping fees now it becomes very canonical to pay attention to those solutions.

James McWalter

Yeah that’s really interesting I actually there’s a kind of phrase I’m going to try out on you which called climate profitability we’re trying to capture like this kind of tension between what is the profitability of the asset today and then what is its kind of future climate risk. Um, it’s future climate effect and like try to bake those into the overall discount rate of the asset itself and kind of combine those 2 concepts right? because you know I think we’re we’re moving into a space where you know we initially have these kind of various esg net metrics that are just trying to get a handle on what’s happening. But I think as you said like we’re trying to move into a place where. Any sort of asset in the world that is affecting the climate in some positive negative or neutral way. Um, those effects are starting to have a price associated with them through you know to per ton of co 2 equivalents um per you know tipping fees or fines or you know even tax credits. And so trying to bake all of those different things into the asset to try to really actually get to a sense of what the actual ah roi of that asset is um, has you know I think is ah becoming this ever more complex calculation. But I think is ever more important so that people actually make decisions that are not just best for the climate but also actually have ah like ah you know are probably the most profitable decision for the business. Of so.

Ory Zik

Yeah, and so I I land for this, you know it I’ll take you a little bit back to your own Philos Philosophicalphic philosophical days. You know is a stilling book philosophy and we’ll we’ll go to this to this to this way of thinking.

James McWalter

Sure sure why not.

Ory Zik

So tradition. That’s how I think about it traditionally you would think about investment in 2 dimension and gain versus risk and both are measured in dollas right? You have like a 2 wo-dimension space what’s the gain was the risk 2 dimensions I make my calculation now we have a third dimension which is the climate impact.

James McWalter

So.

Ory Zik

The the carbon intensity or the carbon impact or the g greenhouse gas impact of a project now when we think about climate profitability we’re trying to collapse this third axis to climate access on the plane of profit profit and risk. Financial profit and risk but they might be inherently decoupled and we not. We might need to think to to learn to think in in this extra dimension. Not everything can be calculated in dollars because we don’t have a good way to capture the you know negative externalities. So so it’s an open question whether we can say.

James McWalter

And.

Ory Zik

Whether whether we can say okay, this is let’s let’s let’s collapse everything to doolas or can we think in keep thinking in 2 dimensions.

James McWalter

Yeah, and and I think kind of jumping on that like I think this is where I think like the value of storytelling becomes very important. You know there’s a lot of companies who are trying to. Build business models around that exact equation that you’re outlining you know, trying to build things and yeah, a lot of those companies are the people we talked about this podcast and often it’s just because you can’t assign a very easy dollar incentive to the climate element. You know the way we fill in that gap often is a story about the future and saying this is where things are. This is where the kind of media feature looks like it’s going and then the kind of longer term or far-off feature. You know, might look like this and I think that can help I guess start pointing people. You know the customers like your you know your your own customers and and similar kind of stakeholders to start to kind of think in these kind of terms. Um. Because I guess like 1 one area where it does affect the dollars and cents is in the share price of the company itself. You know we’re we’re starting to see like that discount happening at quite a large amount and you know if you’re going to lose several billion dollars of value um because you’re not actually thinking about these things even if you are technically today very very profitable

Ory Zik

Exactly.

James McWalter

Um, the cfo all of a sudden cares. You know.

Ory Zik

Yeah, no I totally I totally agree I think that look if the theory of change of how to impact corporate is through shareholders and we know that it’s happening and we’ve seen what’s happening and what’s happening in Exxon then it’s then the process. The transition is happening now. The question is what metrics people will. Using because you know shareholders still shareholders still say to the Ceo look we need and a profitable company. We want the dividends and we want it to be climate friendly and once the tension arises you need to quantify both and I think that it’s there’s no robust way to. Clearly quantify environmental impact in general and definitely climate impact in a way that shareholders understand so we see and the mscii index and all kinds of esg indexes. But there’s no strong correlation between what you what you report and those are reported. Indices or even externally audited indices and the actual climate impact. So that’s I think the jury are still out and we we focus on methane because we you know this is clearly the largest the largest beast in this carbon zoo and. And and and for us distributed methane is a hugely unattained market.

James McWalter

Yeah, and actually it’s one way when I first started looking at methane as I mentioned last year One of the kind of big appeals about about methane and is tackling it early has outsized effects in the longer term because as methane is released today. Um, a lot of its impact is you know like happens over the curve. First year or 2 as it decays in the atmosphere and then it’s just very very hard to counteract that and so if you for me at least if you had a magic wand and you were like trying to kind of solve climate at scale you try to focus on methane very very early and some of these other ways that we’re producing carbon could come later now. Ah you know the way we’ll actually do it is just a little bit of it all. You know over time and you know try to tackle it in different ways. Um, you mentioned this other use case around the kind of dairy farm right? So we have ton of ton of cows. They’re being milked. They produce a ton of manure this produces methane. Um, and I’ve mentioned in this podcast in the past that I come from a farming background. And you know farmers are a very different type of ah you know type of user type of person to to kind of talk to relative to you know total or you know some of these very very large oil and gas type companies. How have you found? you know those kind of conversations those kind of early users and how those different and maybe how even the pitch might different relative to you know.

Ory Zik

Right? Yeah, no, it’s a great question. So I think many many of the farms are you know? small 20300 cows and that’s our ideal for the size of the generator of our generatorors now if farmers can gain a premium for their product because of their environmental performance.

James McWalter

The kind of oil and gas majors.

Ory Zik

Then then then it starts to be compelling and if they can have a system which is fully circular which is what we’re now deploying it becomes even more compelling now this the top of this food chain company like danon and Nestle and are driving farmers. To better environmental performance. So when we introduce a solution that can take the digested animal manure turn it into and useful power. The heat can be turned into it can be. You know, prevent freeze off of the food and. And and you know and those those farms consumers you know, a lot of hot water. So it’s nearly ninety percent even 95% efficiency. Even the little amount of c o two that our generatoro provides because it’s clean. CO 2 We have only trace amounts of Co O and ox can be used for local agriculture. If you can go if you go come to the farmer and say look you have higher premium for your product and we give you this solution which is very convenient and by the way it’s some kind of an immunity against back and blackouts because you know that farmers are not immune to the blackouts at everybody else.

James McWalter

Threat.

Ory Zik

Suffered but in their case, it’s even more painful then it’s a compelling argument. It’s a different type of sales than in oil and gas. But I think it’s a very large market and it’s a market that we are very serious about.

James McWalter

No, that’s absolutely fascinating and you know farmers are out in the middle nowhere reliability. It’s often. They’re out in middle of nowhere relatively speaking and so reliability and resilience for their facility is is incredibly important right? like often. They’re the last person that the.

Ory Zik

Um, yeah.

James McWalter

You know the electricity company will come to to fix the wires and so having that kind of extra source from resiliency point of view can be also quite powerful. For example.

Ory Zik

Yeah, and and and you’re absolutely right? that unlike and oil and gas operators. These are individual buyers but they’re driven by but their customers as well. So so as the customers but want to become.

James McWalter

And.

Ory Zik

More climate friendly. It drives the entire supply chain.

James McWalter

Absolutely and then I believe you had a couple of recent kind of know, pretty decent capital raises which I imagine are going to help kind of fuel your growth over the next couple years. What are your kind of plans for expansion and development over. Let’s say a 2 year time horizon.

Ory Zik

Yeah, so we are currently hiring and and growing the the company and our business model is as follows we focus on the this distributed methane problem with the with our sterling generator. But then we acquire. Complementary Technologies in order to provide full solutions whether it’s whether it’s the compressors or digestors in order to provide full solutions but our generators have much broader applications as we’ve discussed backup power Microc Hp space. Whatever So We also have part of what we do is partnering with companies that would like to develop those applications and we and we sign them and those type of partnering agreements where we ah keep developing Gen the engine and the generator but other companies can bring it to market so that allows us to grow. And I call it in a responsible way because we need to understand the handful of markets while allowing others to utilize the technology to other Markets. We just raised the $16000000 from the oil and gas climate initiative and thank you and.

James McWalter

And congrats.

Ory Zik

And and we use this for to fuel growth since we are in sales and revenues is you know double digits millions of dollars we will raise additional capital to future to fuel and future growth. But so far we feel with. No pun intended but we feel that we have the fuel in our engines again.

James McWalter

It Very Good. Um, and I guess like thinking about the overall space right? You know distributed methane to problem that there was no kind of great solution for you know your your product goes kind of try to tackle that problem when you think about like other areas maybe directly or or you know they might be. Pretty close to what you’re working on or maybe they’re a little bit more distant where do you want to see more innovation where do you want to see you know more smart start smart people, starting companies or pivoting. You know, existing technologies to kind of work directly on problems that have you know similar impacts to what you’re trying to achieve at Q energy.

Ory Zik

Yeah, oh that’s a great Question. So I think look fundamentally we see even even with the interest Inlin tech and and and and global warming and and your podcast Obviously it plays a role. So Thank you for that. Even with this interest there is much more capital going into. Other sectors that in my humble opinion are less Important. You know what? what we call technology in this society is not a hardcore thermodynamics and electricity. It’s more a computer engineering and optimizing clicks and. And views and these sort of things that for me are less less compelling at least but much more capital is growing going into those spaces So first and foremost I would like to see more capital going into solving climate challenges now within those climate change challenges I think that the buttery cost. Ah, battery storage cost went significantly down So I want to see this trend continues and batteries that are more environmental friendly also in their afterlife because Lithium has its ah challenges. This will be really important in terms of Innovation. And and on the other side of this I think that the grid needs to be modified to be able to deal with all kinds of small contributions. So a virtual power plant.

James McWalter

And.

Ory Zik

Be much more effective if you can take and you know Kilowatt and two Kilowatt sources and not only tens of kilowatt sources and effectively I mean taking it and utilizing it. So these 2 areas I think require and significant development.

James McWalter

I yeah no I love kind of both with those kind of areas and yeah I appreciate the comment on some of the investment you know is going into I mean there the the old line that you know the the best minds of a generation are working on. You know, eking out. Little bit more revenue in fintech and then that became the the best minds of generation or working on ads. Um, and I think what has been very exciting for me I guess over the last two years since I kind of started looking at this space and indep is just the number of people who are yeah making a change you know I had this phrase at the great resignation.

Ory Zik

Um, yeah.

James McWalter

Where a lot of people started just shifting around their work a couple months ago and I you know anecdotally know just a ton of people who have decided you know I’ve been working for you know, a fine of yeah I’m a machine learning engineer at a fintech company. Um, where I’m just trying to figure out better ways to predict. Credit scores. Well maybe there’s some other thing that I could work on that might have you know more of ah aligned impact with their own kind of values and I think that’s just starting and I think the next kind of 5 to 10 years is going to be such a fight for that talent if you’re working on something that has a profound positive effect on the planet you are going to. Start to win more of those hiring battles.

Ory Zik

Yeah, but yeah and I would say that this battle actually starts early in University I would like to see more people studying you know physics and chemical engineering chemical engineering and those type of things because those are the the disciplines that will that can change the needle I mean it’s not that. Information will not change the little needle but I think more Ill but I think that there’s enough of this this an imbalance between the hardcore sciences which yeah at the end of the day will make the impact and as you said those those that are making more money but less impact.

James McWalter

Absolutely and looking at your kind of background. You know you’ve started run companies in both Israel and the us have you found any kind of differences I guess from you know, company culture company development point of view between those you know, just like I’m I’m from higher than originally and ah. Kind of company that I’m working on on the side is just not possible in my view to build in Ireland for a lot of different reasons. So yeah, how how do you find whereas while Israel has like this amazing kind of tech sector. How do you feel like that those kind of 2 kind of company cultures can are different or you know how are they I guess.

Ory Zik

Yeah, yeah, so I’ll start with qynaji I found that these 2 cultures are extremely complimentary and that’s why in kynaji we have 6 engineers that relocated from Israel to to Utah because we find that this a.

James McWalter

Interestingly the same.

Ory Zik

Synergy and and combination of cultures is extremely powerful I think the military background and maybe some of the kendo attitude in the israeli culture allows people to take higher risks which are always necessary but then when you want to build the most reliable generator you need to be really to follow processes and be diligent. How you do things and I think that at least the people that I’m proud to work with in Utah excellent in in those so we have innovators from Israel and and and and us that brings like these 2 and that that make it. Stronger by combining the 2 disciplines but I would say that the israelis are a little bit more and risk takers and and they need to be honested if all have a more at an and and tendency for processes. There’s also some when you think about Israel as a.

James McWalter

I’m fresh.

Ory Zik

Is a startup nation There’s some cultural thing that is happening in Israel this and maybe island is the same way I’m not sure but Israel has some social safety net that in the us and is doesn’t exist typically in Israel you you know after you. You go to the military you go to university but you don’t have these college debts and and those sort of things that impact your ability to take risks as an entrepreneur. That’s why you see per capita more startups in Israel because the risk is lower and in the us there’s a significant amount of and innovation. But I think many people are risk are adverse. Just need a job to pay the bills and I think I would hope that this and this will will change and the other thing which is very comforting to do business here in the us versus in Israel. It’s much easier to scale a business in the us than Israel in Israel because of the size of the map. Because it’s size of the market began because the the system is built for scalability and Israel is a niche. So actually the market for Israel is in the Us.

James McWalter

Yeah that’s that’s really interesting on that first point this kind of tension between well I guess this kind of social safety net and and the power of that at least in the irish case and I think it’s true of a lot of european western european countries the so social safety net is absolutely this way to encourage risk taking. But. At least in irish culture. It’s coupled with a cultural social pressure not to take risks. Um like I I’ll tell people who’ve never visited Ireland that the most hated people in Ireland are typically the wealthiest and most successful um and I’m definitely not a you know hardcore libertarian or anything but it is kind of peculiar that.

James McWalter

You know, bono and the collisons from stripe are not people that the average irish person would actually appreciate it all and so you know I love my country of course. But I think it is this kind of this interesting tension where you know you could actually take the time off, you could have your healthcare covered. You can go to university I mean that the state paid for me to go to my undergraduate completely. Plus like ah you know a few extra quid on top of that. Um, but the actual I guess you know peer group that you’re surrounded by um, doesn’t really value taking those risks and so you know for all that kind of technical and structural support. Those kind of software support levels are are missing now it is starting to change. We are starting to see some cool companies forum in Dublin and so on. But I guess how do you think about that relative to Israel us.

Ory Zik

Well I said it is you made me think about something really interesting I think that look there’s a risk and reward so if the reward is only for only financial and the culture doesn’t appreciate. You know those billionaires. It’s 1 thing. But if the reward is also impact. And you would say look these people are making a huge impact taking the risk taking the financial risk and this a scalability also has to do with the business but they have an impact then it might change the social appreciation towards those risk takers. And most social entrepreneurship I think is is is a direction is is a way to think about it I think Israel similar to the us is and I would say financial driven society I mean people appreciate those that made the significant amount of money and but I think this is you know. People make their own balance between the impact and life and and and how much money they need and how much money they want to make obviously in ah in a in a capitalist society There is a financial reward but financial road is not all of it I mean many people maybe including. Ah you know both of us on this call could make. More money if we choose something else but we choose to do what we do because we feel that this is where we want to spend our time and energy.

James McWalter

Absolutely and and very well said I can completely kind of agree with that or is my great conversation. Um, is there anything I should have asked you about but did not.

Ory Zik

Well, we are growing and the biggest challenge at this point is to find the right talent so you know people that want to give us a call and go on our website and just apply people that are talent. Talented in real engineering real hardcore chemical engineering electrical engineering mechanical engineering feel free to go on our website and send us a note. We’re growing and we need We need the brain power to help us grow.

James McWalter

So and we’ll include your careers page in the show notes all right? Thank you so much.

Ory Zik

Thank you.

Great to chat with Deirdre Lord, Co-Founder of The Megawatt Hour, The Megawatt Hour’s software transforms data into energy analytics for fast, accurate, forward-looking energy information for energy users, managers and finance professionals! We discussed how they developed their product, a case study around the value of energy analytics, the state of global energy volatility and more!

https://carbotnic.com/themwh

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

Remember, If you want to support the podcast, rate 5 stars on Apple. Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today we’re speaking with Deirdre Lord Co -founder of the Megawatt Hour welcome to the podcast Deirdre brilliant and I supposed to start could you tell us a little bit about the Megawatt hour

Deirdre Lord

Thank you so much great to be here. Sure the Megawatt hour aims to minimize cost and usage for commercial and industrial customers and improve business outcomes by transforming utility data into actionable information.

James McWalter

And what drove that initial decision to start at the Megawatt hour

Deirdre Lord

Sure so we my business partner Bob bright and I have been involved in retail power markets since the late 90 s we spent you know decades helping to build retail businesses mean it and when I say retail I mean. Businesses that bought power and gas but mostly power wholesale and then transformed wholesale ah electricity into a retail price for commercial and industrial customers and so we were always on the company side doing that and in fact, the. Business prior to the megawatt hour that I started was a business called juice energy started with colleagues from constellation new energy and we focused on transparency and green power and that business closed in 2006 and Bob and I essentially and ah. Couple of others got into a you know conversation and with the classic kind of whiteboard exercise and said what’s missing from the industry that has real value for customers. We acknowledge that there were plenty of. Power suppliers. There were plenty of consultants and brokers. But there was no information resource that linked markets to customers that provided transparency around their cost and usage and if you look at other deregulated markets that kind of. Platform exists you know in financial services you can go to Schwab online and see you know how your how your investments are performing. There was no such thing in our industry and so that was the genesis the spark behind building the Megawatt hour

James McWalter

Amazing and in that kind of whiteboarding you know process over those you know hours or days or whatever it was. You know I Guess how did you? you know how did that process go in detail you know were there are lots of different ideas or did this kind of spring out very early on and it was about kind of. Iterating on that kind of core concept of.

Deirdre Lord

Yeah, it’s a really great question and it came what we really did was we said you know what have we heard from customers in the fat in the past and what have they said to us and one of the things that customers consistently said prior to. Building juice and while we were running juice was you know I you look they would say to to me you know, deirdre you look trustworthy. But how do I know I’m making the right decision for my business that was just a consistent message that we heard from customers so that need. Jumped out right away and then when we looked at the supply chain we and our and how that that supply chain overlapped with our skills. It became pretty clear pretty quickly I mean it was not a matter of days of. Of work. It was you know a couple of hours of of talking through what we thought was missing what our skills really? um, you know called for and how that all of that came together.

James McWalter

And then you’re like okay we have this idea you know we we’ve already kind of somewhat validated from our experience and these other kind of previous conversations. What was next you know how how did you kind of proceed with I guess product development and all that set of things.

Deirdre Lord

Yes, so we we wrote up a bunch of of we first sketched literally on a piece of paper the graphics that we wanted to be able to present to customers the the. The high level information that we thought would then spark a behavior or or help a customer make a decision and we had a graphic designer turn that into more interesting visuals. You know something better than pen and paper. And we then took that around to customers who we’d known in this industry and over the years and said does this information help you characterize and and understand your own business in a new way. You know we really kind of went very basic and just tested the idea that way.

James McWalter

And then kind of going into these kind of you’re like a design sprint I guess where you’re you know, kind of helping helping them help you build an Mvp potentially down the road and so what were the kind of additional elements.

Deirdre Lord

Correct. Yeah. Correct. That’s right.

James McWalter

Yeah, was there anything that I guess was surprising when you were bringing that visualization and it’s like oh that that piece like was more valuable or less valuable than you expected.

Deirdre Lord

Um, well so we thought initially that um we thought that customers would really have a lot of of skepticism. Around kind of the underlying data that sat behind these graphics so we spent a lot of time explaining how we developed these visuals and where the data came from and how we how we transformed lots of rows of data into. Actionable information and we were somewhat surprised that customers didn’t worry about our credibility in terms of our ability to build a price. Um, and so that was 1 surprising piece of of kind of learning that we had. Um, another was that we have and we still to this day have pretty basic straightforward visuals and graphics. It’s not elaborate and it’s incredibly powerful for customers. You know what? what that made us realize is gosh you know these customers are used to looking at rows and rows of spreadsheets in excel and it doesn’t take a whole lot to to bring about real clarity in decision making you know. Basic good graphics and a good ui can can be very very powerful.

James McWalter

Yeah I guess you know I think a lot of companies when they get started out misinterprets The kind of minimal part of visual viable product and and often we’ll overbuild in ways that don’t really get to or don’t really focus on solving the kind of core problem and especially in a world where people are coming From. Trading documents or trading excel spreadsheets and and like um, you know the data like the I guess the the data pipes have such a power the calculations on top of that have a power and like the presentation of itself. Yeah, it was nice to have but isn’t as important as the other elements.

Deirdre Lord

Right? right? I couldn’t agree more and we still to this day find that customers tell us you know I spend when we’re talking to customers who are who are. Talking about their process. Their business process. They’ll say things like I spend the period between the Christmas holiday and the new Year’s holiday gathering all of my utility bills and all of my utility data and trying to turn it into something that I can use. In my business decisions and they never get to the visual representation. You know they never get to what is this information really telling me because they are getting buried in you know, rows and rows and columns and columns of data.

James McWalter

No absolutely and so I guess thinking about where the the the product is today. Let’s say I sign up, you know I become a customer like what’s that experience like and you know how how would I kind of interact with the product and get value.

Deirdre Lord

Um, the first thing we do a lot of the setup because our art we came to understand very quickly that you know customers are not going to type in lots of utility data. They will give us the. Permission to access their utility data directly and once they do that we do all the setup in the back end. It’s all automated. Um, and then you know the so the experience is very quick and very easy and you know it takes us when we get a customer’s you. Utility information and permission. It takes us anywhere from you know, half an hour to maybe a couple of hours to get the the information to the customer and get them the forecasting capability and the pricing data. Um, so it’s quite quick I mean they expect their assumption is that it’s going to take weeks and it really takes hours. So the experience is very very quick and easy and then you know the the real issue is how quickly does the customer get value right? That’s what. We care about um and it will really will depend on what the customer’s goal is naturally um, you know are they are they burdened by managing their budgets and that’s a process they do. You know once a year but then they try to update quarterly so you know getting a budget quickly is is a really powerful and important part of their work and so they can get value within. You know, depending on you know the timeline and depending on what their goal is. They’re seeing value. You know, really almost immediately. Especially I would say during periods like this where we’re seeing a lot of volatility and pricing and cost and a lot of confusion about what the future holds for. Energy users.

James McWalter

And I believe one of your customers Cornell University you’ve kind of done a recent project with them. Could you tell us little bit about that.

Deirdre Lord

Sure happy to in fact, the article we we worked with Cornell um the article just came out in district energy magazine this week Cornell has made a commitment to be carbon neutral by 2035 and so they’ve made a whole host of meaningful investments to get to that goal in the late 1990 STheMontrealProtocol phased out chloroplurocarbons and so the university was faced with a challenge. They either had to replace their chiller plant to accommodate this phase out or you know there had been a project that had been kind of bouncing around I think since the 60 s at Cornell which was to use the the cold water the cold deep water of Cayugga Lake which is. Lake where Cornell is is situated use those that cold water to basically chill. You know provide chiller capabilities provide cooling capabilities to the campus and so if you take we take ourselves back to the late 1990 s and the chillers. The re chiller rebuild was going to cost they estimated 58 to $60000000 I’m sorry the chiller replacement was going to cost $30000000 the lake source cooling which was this. This lake project was expected to cost between 58 and $60000000 and so the the campus was faced with well we would expect despite the high initial capital cost that the lake source cooling project would. Deliver much lower operating costs. Um, the expectation was that chillers were going to be 6 times as energy intensive as the lake source cooling project. So decision makers had to present data and analytics. Back in the late 90 s to capture this trade-off and they did ah quite a robust simulation Monte Carlo simulation that forecast electricity prices over 30 years and then they they did a present value analysis. That compared the present value of the costs of running lake source cooling versus this chiller case and they included you know electricity prices they they included operations and maintenance debt service. All of that and it became clear.

Deirdre Lord

Back in the 90 s that lake source cooling had both a lower expected operating cost by about $20000000 and a lower risk around those outcomes you know it was ah a lower distribution around the mean basically running lakes or cooling. And so Cornell this past spring said well we’ve been running lake source cooling for 20 years how did those initial how did that initial analysis turn out and how did we do you know How did we do on a. On an energy cost basis greenhouse gas emissions basis community lake effects you know lake impacts and so thank goodness you know the the there was an environmental studies class of undergraduates that took this project on. For their capstone research in last spring and they had a team that dove into the economics and the environmental impacts and the lake effects and the community impact. Um, we helped support the. The the students who looked at the economics because what we ended up doing is saying okay we we can now comb through utility bills and see what happened with the actual price of electricity over these last twenty years the actual operating costs of lake source cooling. But then we had to also help those. Students say well, what would have happened if the chillers had actually been running um and it was incredibly exciting. We used a lot of the data that that reside in our in our software to help model all of this. And what was exciting and I think very heartening was to see that after 20 years Lake Source cooling despite the fact that electricity prices have been all over. You know they didn’t they didn’t come any close to the anywhere close really to the expected. Electricity price that was forecast bacant back in the late 90 s but nevertheless the savings were significant um lake source cooling ended up costing the university about $20000000 less than than what the chillers would have cost under that same period and there was a there was a 14% irr on the project and about a six and a half year payback. Um, and so and then.

James McWalter

So amazing.

Deirdre Lord

the the avoided co 2 emissions and metric tons was about one hundred and twenty seven Thousand c o two ah metric tons of co 2 So you know that project was absolutely essential to helping. University get down the path towards carbon neutrality and what’s I think compelling about this is there are going to be other customers like Cornell big and smaller. Even you know you don’t have to be a huge university to face this and they’re going to have to ah. You know, address this question. Do I you know do I invest in a higher upfront capital cost for perhaps a less proven technology. You know, but 1 that has real carbon benefits or do I go to a slightly better. You know, slightly more efficient alternative that that may have a higher operating cost and so I think that example is going to be 1 that could have um you know real real impact and ripple effect across the the commercial industrial customers you know around the. Country around the world for that matter.

James McWalter

Yeah, it’s quite a kind of difficult spot that a lot of clean tech and you know, clean energy companies find themselves in because they are looking at this you know 5 10 20 year time horizon to show like the real value in in their product or solution relative to the status quo. And so you know a lot of the people who are making it you know a buying decision today. Um, very unlikely to maybe be the person responsible for whether there was success or failure ten years twenty years on the right line and so having these kind of very strong case studies showing you know, clear efficiency gains and and clear upside. Very powerful again. Not not just in this specific kind of case. But as you said like across a lot of different cases as people are trying to you know, bring newly commercialized technology to bear solving some of these problems. So.

Deirdre Lord

Couldn’t agree more absolutely and and um, so and you’re right about the institutional commitment. You know one of the things that we hear often is especially if if someone is. Is not sure they’re going to be around for the next twenty years they’ll say well. Why would you know I think the forecast is essential to making these calls and we hear people say all the time. Well the minute you do a forecast. It’s going to be wrong. Why do a forecast you know and um. We would just make the case that what the forecast does as it did for cornell in the late 90 s what it does is it really helps helps an institution to clarify the trade-offs and and and bring some clarity also to. The the values or the the objectives of an organization or or a business and and so you know even if your concern is that it’s it’s not going to be perfect or it’s not going to be right? It definitely surfaces decision. You know. Decision criteria in a ah, meaningful and very kind of directed way.

James McWalter

Yeah, it’s always kind of this 2 step process right? like you kind of have to measure what matters for that old saying to to see exactly what’s happening you need to figure out baselines. All those kind of things and it’s always a necessary but not sufficient first step to getting. Making change happen right? because then the the second piece is then putting in place the the change to improve whatever that metric might might be and I think you know a lot of companies have done a really good job at different types of measurement but giving. Yeah I guess empowering using those measurements to empower that like secondary kind of decision making process becomes ever more important.

Deirdre Lord

Right? exactly? Yeah I mean I think there’s a lot of emphasis on on sort of like how will this? How will this investment or this technology help our business run. But what their. Isn’t always ah, always a commitment to as well. What what did happen? How is it a performing and how can we? you know how can we track our performance and then tweak whatever the decision is that we’re making going forward. You know so.

James McWalter

Yeah, absolutely and and you know a lot of the underling reason for I Guess Megawatt existence is just ah, a kind of default lack of transparency across utilities the energy space kind of more generally. Um, how have you seen that change if at all over the last you know last.

Deirdre Lord

Yes, yeah, great. Great question. You know I would say when we when we first you know how people talk about a product is either Aspirin or penicillin and you really want to be the penicillin. You know.

James McWalter

Number of years like are are is there more transparency is it is this still like ah like a real battle.

James McWalter

Yep.

Deirdre Lord

I think when we came you know we so first started envisioning this early stages I think we were much more in the in the aspirin category. Um, and now you know while transparency continues to be very challenging. Um, there seems to be more and more of a a realization among customers that it is essential and that so we’re kind of shifted into the the essential product category and so. You know again, transparency is still challenging. But I think interestingly you know as as customers and as the cni market has shifted more towards yeah esg goals and and broader you know sustainability goals. There is this? um. Philosophy that and um, integral to that is having more transparency around data and analytics. Um, unfortunately I would say the one area we haven’t made as much progress on is just ease of access to data. Um. That still is extremely fragmented in the United States and I believe is still a significant constraint to a ah real and significant and fast transition to a new energy economy. You know? ah. New energy transition.

James McWalter

Yeah I think a lot of the issues lies in kind of the incentives of the various stakeholders right? So You know the the utility right? The grid operator who has incredible amount of data right? like they’re they’re drouting a data but they’re kind of internal incentives. To share and deploy that data in a way that allows like the ecosystem to benefit is pretty limited. Um, often. There’s also a technical inability. You know, maybe there’s a talent like issue in terms of you know, having a ton of smart data data people at those kind of companies because again those incentives aren’t in place maybe to make those hires.

Deirdre Lord

Correct. Yeah.

James McWalter

And so I guess like how do you see that evolving is is that yeah, are there pressure points appearing to kind of make improvements in that in those areas? yes.

Deirdre Lord

Yes, and I would also add and you you allude to this I mean I’ve been in a big organization. A big company. Um, that has legacy systems and it’s not entirely It’s not a trivial exercise to kind of turn that. Battleship you know Um, so I have some I have empathy sympathy for utilities who are feeling that pressure to make a transition It’s just a big challenge. Um, but to the question of um of do we see this changing and the answer is. I cannot imagine that it will not change and I think a lot of the pressure points are coming from companies like well like take Google. For example, you know Google wants to be able to match their usage 24 7 to renewable. Resources and that is huge undertaking and and I don’t believe it’s possible with with legacy utility data access systems. Um, so what what I am passionate about doing and I’m kind of trying to build. More momentum around this is you know let’s make sure when we when we make utility data more accessible that it’s it works for big companies like Google but it works for it. Also works for you know the k through 12 school down the street or anyone else who. Wants to make a broader commitment to sustainability and renewables.

James McWalter

Yeah I mean you know we have this kind of ah like long tail. You know fat head kind of model right with the distribution model of energy usage and so yeah, even if we sign up all the fortune five hundred s to products like this which is great and would have a mass foot impact like we have. Millions of snbs different organizations that also need to know this and and have a huge kind of aggregate ah effect and.

Deirdre Lord

Exactly exactly? Yeah yeah and I you know I Still believe though that if we can do I mean I know we’re not perfect on Healthcare you know and medical data. But if if we can I don’t think that. Let’s put it this way I don’t think the utility kind of um, ah, privacy and confidentiality is the real issue at Stake I think you know customers would would give up you know and would certainly Provide. Um, permissions to to any kind of company that’s going to help them get on a path to to lower or no carbon. Um, so I think if we can do it for Health Care. We can do it for energy.

James McWalter

Yeah, and even if the each other is gave up the doesn’t even have to be down to the at the at the home or business level like the substation level will be lovely for in a lot of cases you know, ah cool and you could have mentioned a little bit earlier that we are certain cities kind of high degree.

Deirdre Lord

Yes, right? Correct Yeah right.

James McWalter

Of energy volatility right? So we’re starting to see some parts of the United States Europe is in yeah, having very high energy prices. That’s even affecting kind of geopolitical elements and and so on um, how do you think this is kind of going to pan out is this so much shortlived and kind of just early kind of growing pains. Are we.

Deirdre Lord

Crisis. Yeah yes.

James McWalter

Kind of entering an extended period of I guess Energy Volatility and Insecurity right.

Deirdre Lord

Yeah I mean I sometimes joke about if I could you know if I could make a good prediction here I’d be living already living on a um, sailboat in Fiji or something but um, it the sense that we get and we’ve been.

James McWalter

She asked her.

Deirdre Lord

Involved in these markets since the late 90 s I would say one piece of kind of one data point that’s worth considering is we had high gas prices in 15008? Um, there were you know we were up over. Ah, believe it was $8 a de oftherm at one point. Um, we are still I think in relatively good. Um and relatively low electricity and gas price environment. It’s just that we got used to. For 5 years of very very very low prices. Very low volatility. Um, and with the destruction of demand around. Um the pandemic. You know we we hit literally record lows. So 1 thing that I think we’re all reacting to. You know, residential customers through to businesses is um, a short-term memory problem. You know we haven’t we don’t remember when it was routine to pay you know 10 $100 a megawatt hour for you know peak summer prices. You know? So so that’s 1 thing to consider we we are now experiencing more volatility higher prices after years of lows um but the sense that we get from looking at these markets pretty consistently is that. Volatility is likely to be back for some time. Um and at some point we will probably see so right now natural gas sets the marginal price for power in the northeast I think maybe everywhere. That will change as we move towards you know broader electrification more renewables. So I think that’s going to be a really interesting dynamic to watch when do we shift from you know a period in which natural gas is setting. Um, power prices and and then what is going to set power prices you know is it going to be offshore wind pricing. Is it going to be storage. You know we don’t know. Um, so that’s a very very very long answer to your question and I think the shorter shorter answer is we are in a. In periods of uncertainty about how we’re going to transition I believe we will see more continued volatility over the next 12 to 18 months and then when we see a shift to a significantly different kind of.

Deirdre Lord

Set of power resources there that will probably continue. Um, so I guess the answer is yes continue volatility. Ah.

James McWalter

Yes, yes, so all. Yeah I think it is this interesting dynamic that as we’re seeing with some of the the kind of inflation worries in the United States over the last few months um yeah the consumers really hate volatility in prices, especially prices of of staples like electricity food and that kind of thing. And so one of the things I’ve been wondering about is like how this type of thing will intersect with more kind of government policy at some sort of level. So for example, there are some experiments started where you know there will be a consistent subscription price paid for energy by the consumer.

Deirdre Lord

Yes.

James McWalter

Certain point and basically the local utility. The local Monopoly will have to you know, try to eke out some sort of margin out of that but they’re not going to be able to like expose that amount of volatility on a month -to-month basis now in the long run that individual consumer might be paying more for energy because there’s still less to be. Sort of margin baked into that volatility calculation. But I think generally you know I think the human psychology kind of runs in the direction that people want consistency and what they pay rather than volatility where at all Possible. So.

Deirdre Lord

Right? Interesting yeah, you know and when we um when we it this kind of volatility leads to odd behaviors. To be honest, you know. For example, we see customers when the market is is really high and they’ve they’ve. Spent you know years. Not really hedging any kind of power or gas market comes up and they say I’ve got a hedge I’ve got to put a hedge in place. It’s it’s you know it’s understandable on the 1 hand because you’re just trying to kind of stop. The pain of volatility. But that’s just really not the time to be making that decision. You know? Um, so that’s another kind of behavior that we’re really trying to to help customers navigate and manage which is you know the time to buy. Power and gas for 2022 was a year ago not three months ago

James McWalter

Right? and looking at your background I believe you advise a number of different clean tech startups. What do you kind of learned working with those companies how they might do things differently compared to you know your kind of initial approach back when you started the megawatt hour and so on. So.

Deirdre Lord

Yeah, um, that has been so exciting I mean it’s been a tremendous amount of fun for me to to be involved with companies like clean choice and station a and electrota. Ah, they all, um, are very very attuned to and very quick to respond to things that you know work in their products and things that they need to tweak and. You know I think we you know once you’ve been around for a while it can be a little bit harder to be quick to to you know, adjust and change. So I really have enjoyed seeing how quickly you know? um. A company like station a is able to to incorporate. Um, real terrific learnings into into their product. Um, you know they they’re a good example of a company that. Um, really uses um financial and you know pricing information but doesn’t rely on utility data to do so um, you know so they’re presenting cost information but they’re not not relying on you know. Reams and reams of utility data to the extent that um, that customer I mean that that clean tech companies can build solutions for customers that you know don’t rely on some of that. Um, ah. Monolithic utility data I think that’s a great learning to take away. You know, use Ai use machine learning wherever possible. Um, what else have I learned from them. Um I think always the importance of really great customer experience. And um, really you know station a as a great responsive user experience. Um electrota has been great. They’re ah um, they’re a ev charging company. They have been um, great at attracting talent. And um, and shifting their focus from sort of more 1 ne-off charging stations to a broader infrastructure type business and um and then clean choice. Um, is also I think really.

Deirdre Lord

Been amazing at figuring out what residential customers. How to how to make renewable energy purchasing easy for residential and that was something in my career as in in retail that I always felt was vastly kind of under. Under invested in and so they’ve been great at really understanding the residential consumer.

James McWalter

And if you look across the kind of space right now. Um, obviously a lot of problems to solve. Where would you like to see more innovation. You know a couple smart people listening to this and like oh you know I want to want to get involved in this space where like the are the big opportunities that that people could try to start looking at and fetch you tackling. So.

Deirdre Lord

Um, oh boy, Great question I mean I suffer from a little bit of if you’re a hammer. Everything looks like a nail and so I really see you know there are great Technologies They’re great kind of ah. There’s a lot of interest in hardware and battery storage and you know I’m not as well versed in sort of the hard the hardware side but I would love to see more people doing the kind of work that we’re doing which is really diving Into. Um. The forecasting and financial modeling to make the case for um, for new technologies on on really good hard science and and and math you know, um, and and so I Think. You know customers Still don’t have enough resources to evaluate. Um the financial impacts of of different decisions. Um I You know my my vision back in the early 90 s when I first got out of Um. Of graduate school was that I wanted to see essentially significantly more distributed solutions to get to a more Carbon- neutral society and so. I Still don’t think we quite have the you know ideal structure for micro-grids and and I am quite convinced I continue to be convinced that um that our you know our economy and our energy infrastructure will only be. More distributed and I think that we’re still a pretty long way from from making that happen and there are a lot of pieces that need to be added to that puzzle. But I Also as a compliment to that I don’t think we’ve effectively engaged residential customers. In this economy yet in this you know, sustainable ah energy industry I Don’t think we’ve gone far enough there to make it easy and make the choices that they make meaningful to their pocketbooks.

James McWalter

Yeah I agree with a ton of that I think on the figuring out the profitability side I think that’s become more and more core question right? as esg types choices become a just part of any sort of top line or bottom line approach to business where it’s like okay I want to build something that has a.

Deirdre Lord

Let’s say.

James McWalter

More positive climate impact. But what is the third year profitability of that asset again at whatever level I think on the distributed energy side. It is this kind of fascinating thing like we’re starting to see a little bit of lineup on the policy side with some of the recent you know Ferc orders and so on and what’s been very exciting on that. Ah, but in the kind of distributed energy resource space. Um, are these kind of emergence of groups like the der task force and and a few others where you have like just a ton of energy in people who are you know at the early stages of starting companies or just coming out of university and just being really really excited about the distributed space like it’s it’s been absolutely fascinating and then just on that last point I think.

Deirdre Lord

Um, yeah.

James McWalter

I Think one of the things and I’ve harve on this on other podcast episodes I think we’ve done collectively. It’s a pretty bad job of describing like the really exciting fully electrified future for the average homeowner. Um, and I think we just need to do if we do a better job at that and just how much better your home will be if you do all those things I think that helps on the demand side.

Deirdre Lord

Yes, yep.

James McWalter

And then we sell just a ton of work to do so that you know when a Hvac person shows up at some of this house. Their default is not the old fossil model of Buts of no.

Deirdre Lord

exactly exactly yep I mean I have I just visited a friend outside of New Haven who has ah an ev and put pv panels on his roof. This was probably 5 maybe seven years ago and he and he told me back then you know I’m not doing this for the economics. You know I’m doing this because I really care about this. It is his most excited moment when he shows people you know the the charger and when he looks at his you know when he looks at the. The Kilowatt hours flowing back into the grid so you know to see how he he’s a doctor. He’s a he you know he’s not in this business at all. But you know if you could capture that experience and and bring it to people and and help. Them really understand what this means I agree with you I think you know we need to make that much easier to access.

James McWalter

So absolutely deirdre has been a great conversation. Is there anything I should have asked you about but did not.

Deirdre Lord

You know I don’t maybe what? um premier league team. We support in this household but other than then liverpool. Yeah, ah well your time will come.

James McWalter

I’ll go first. Yeah yeah, who’s who is that you are I grew up I just United a supporter but it’s it’s been a bad few years for us. You know.

Deirdre Lord

and and I guess the 1 thing we’ve learned from from their recent experience is that 1 team mate doesn’t make the team right? 1 superstar that maybe that’s the theme for energy. There isn’t 1 superstar that’s going to solve all the problems right.

James McWalter

So absolutely? Um, yes.

James McWalter

So if if we could capture the the spiteful energy of a glance from Christina Ronaldo to the to the bench when he’s being taken off I think we would solve a lot of the problems. Thank you Deirdre.

Deirdre Lord

That’s for sure. Thank you so much.

Great to chat with Tom Matzzie Founder, President & CEO of CleanChoice Energy, a cleantech company that empowers people and businesses to easily access clean energy! We discussed how to optimize the commercialization of clean energy solutions, how to make it easy for people to adopt new behaviors, politics, customer service and more!


https://carbotnic.com/cleanchoice

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 unedited podcast transcript is below

James McWalter

Hello today we’re speaking with Tom Matzzie founder president and CEO of Clean Choice Energy welcome to podcast Tom. Brilliant I suppose to start could you tell us a little bit about clean choice energy.

Tom Matzzie

Thanks happy to be here.

Tom Matzzie

Yeah, clean choice. Energy makes renewable energy easy for consumers that’s at at our core what we do so that a consumer can support clean energy sign up for clean energy with the click of a button ah making a call you know phone call setting a piece of mail. Ah, just where we meet the consumer where they are and then we do the kind of ah, a messy part of the energy Industry. You know to match their consumption with renewable energy. We. We are a licensed provider of energy in the states where we operate. And the places we operate So when a consumer signs up with us. We actually have to provide their utility with the clean energy for ah you know, um, their consumption.

James McWalter

And I believe you’ve been around nearly kind of 10 years now or or just around that amount of time you know what drove did an initial decision kind of back. Yeah, ten years ago to start clean choice energy.

Tom Matzzie

Yeah I mean our spark to start story as a company really starts with my own experience as a consumer and as ah, some of your listeners ah know and you they will now find all find out. It’s actually my second career I had a first career in democratic politics. I had a great, very successful run in that world and um I was putting solar on my own home in Washington Dc I think I roughly 2010 or so and I decided that that experience of having to have a construction project on my home was too difficult. Even though I loved having solar on my home I encourage everyone to try to do it I knew that some people would not be able to do it. They would not be able to do it because they didn’t own their home. They were renters. They would not be able to do it because there was some problem with their roof or it was shaded. They would not be doing it be able to do it because potentially they were. Ah, you know, limited in their credit to be able to borrow or take a lease on for solar and so there are a lot of reasons that people would be excluded from being able to support clean energy on their roof and from that insight it was how do I make this a service and not a home improvement project. And start looking around for business models which we’re operating to right now renewable retail electricity as well as community solar that both allow consumers to support clean energy when they pay their power bill.

James McWalter

And then those kind of first 6 to twelve months when you’re like okay this is a problem I want to solve. You know you’re feeling this problem very acutely in ah in a personal way. Um or those kind of initial attempts and were there any pivots along the way. So.

Tom Matzzie

Well I mean the first thing to think about is like I didn’t know anything about energy I I just had the braga dot show to think I could figure it out and but what I did know from my.

Tom Matzzie

Time on the kind of internet data technology side of politics I could probably figure out how to find customers and ah the first thing I had to do then was to find people who could help me figure out the energy side of being an energy company. Um, that. And that meant finding you know people who’d been worked in the industry for 203040 years who could help me figure out everything from credit support to um, buying energy. You know so having a trading desk that can purchase energy swaps and you know things like that. Um. And ah yeah, that those are real steep learning curves I think you know at this point um, you know our first revenue dollar was April Thirteen the company was formed in 2011, but there’s like a year and a half two years of just getting set up and licensed and things like that. It’s not as easy as I ah, you know, um. 0 to you can’t go from 0 to 100 is easy in an industry that you have to be licensed to operate in and um, ah you know I think the ups and downs are really driven by just the nature of being an energy company so we had we’ve had a couple near-death experiences as a business.

Tom Matzzie

You know one of my former execs told me every startup has to avoid dying at least 3 times before they’ll they’ll finally make it. Um, you know our first one was probably 2014 there was an event in the northeast called the polar vortex which.

James McWalter

Right? right.

04:32.17

James McWalter

I remembered. Well yes.

Tom Matzzie

Yeah, now they’re kind of regular events. But um, then it we became a significant energy market crisis where um, you know prices were unsustainably high and we had just raised our this happened in early January we just raised our series a and December thirty first so

Tom Matzzie

We we were thinly capitalized. Um and we had just put our credit facility in place thirty days prior to that so we just had the balance sheet from the equity and the credit support like thirty days prior but we missed putting the swaps in place but by a couple days.

Didn’t have many customers So The exposure wasn’t very big but you know you have the the nature being an energy company you you have these sorts of events that happen. Um, where you’re market facing for your customers and the market can um you know be unforgiving. Um, the good news is what we decided is a great time to go find new customers was when ah during the great migration when people are moving and changing their relationships at that point and so we grew tremendously through that so trying to find opportunity in that kind of crisis.

James McWalter

And I guess you’re in that kind of you know this squeaky bum times and in that month right? when you’re trying to like keep the business alive like what I guess like you know what was that like process like how did you kind of power yourself through that.

Tom Matzzie

Sure? Well I mean the first and most important thing and I think this is important advice for a founder is you have to be absolutely perfectly. Honest with your stakeholders and transparent with them because their trust in you. Is something that is earned in drips and lost in buckets that if you yeah break the trust with your board or with your investors or stakeholders. You will be very difficult to ever get it back so we were constantly transparent with our stakeholders during that period. Regularly in touch with you know our board of directors on an almost daily basis and we had a plan we put together very quickly for how we were going to get through it and we executed on that plan. Um, you know very quickly. So I think the other thing I’d say is. An an important thing for a startup founder to think about is when you see the iceberg you act quickly to avoid the iceberg right? You don’t act slow. You don’t wait for that you be until you’re close to the iceberg you have to act quickly. So I think those are 2 really important lessons that. Um, that experience taught me was one to be impeccably honest with your stakeholders and second to act quickly when action was needed.

James McWalter

Yeah, and on the latter point I think that you know there’s a kind of phrase that a friend of mine says that like all startup has a speed in in some ways right? because you’re going up against these massive forces massive incumbents and they’re.

Tom Matzzie

Yeah.

James McWalter

And ability to move fast. Um, and for good reason right? There’s a lot you know when you’re a big company that has our big organization that has a lot of impact you don’t want to move too fast because the risks are too high, but when a startup you know maybe of a dozen people maybe a bit more.. Maybe you’ve couple people’s money. Um, these are obviously things we want to respect. But. The ability to move fast and try to like avoid issues but then also see those opportunities is sometimes really the the main thing you have at all.

Tom Matzzie

Absolutely is. It’s one of the things and I think you’re also um, you know closer to the customers and you know as well at that stage in the business. Um, yeah, but those are those are very important. You know.

Tom Matzzie

Factors of like your ability to move Fast is is one of your um, it’s a feature you know of being a startup for sure.

James McWalter

And you mentioned those customers you know who are the kind of customers today. What’s a difficult profile of those people.

Tom Matzzie

Yeah mean our customers I think it’s important to understand because our largest product is actually sold at a premium price to the utility service and so our customers are really environmentalists who are looking to make the biggest impact with their purchasing dollar. They are They are purchasing for impact not for our community solar product is a savings product but that’s a different type of customer almost every consumer wants a a savings. But um, there’s a group of customers who they will do backlips to get the most environmentally impactful.

Tom Matzzie

Um, energy choice. Um that they can with their purchasing dollar and that’s our consumer and it’s one of the things that differentiates us in the market is the kind of care and attention the curation that we do with front with our energy procurements to try to maximize the impact for the consumer.

James McWalter

And and on that kind of pure curement side. Um, what are the kind of projects. What are the kind of developments that you kind of try to focus on.

Tom Matzzie

Yeah, sure. So the first is technology choices. You’re almost exclusively purchasing from wind and solar projects. Ah you know you’re not going to find biogas. There’s probably you know there’s a role for that stuff. But it’s not for our customers. Don’t want things that burn would be the right way to describe it. We’re not going to um you know, buy from 80 year old hydro plants unless there’s like nothing else left in the in the region to buy um and you know the reason being the hydro plant’s already built. It doesn’t need our purchasing decided. Yeah, our person dollar wasn’t in the first fifteen year forecast or pro performa for that project and um, the other thing I would say is we try to put a regional screen on it. So if you’re in New York we’re not buying Texas wind wrecks for your for your service.

Tom Matzzie

We’re trying to buy in New York we’re trying to buy if not New York Pennsylvania or pgm um, and you know keep it as local as possible.

James McWalter

And as you kind of look for those you know the availability of those yeah electrons that are out there in those different regions. Are you kind of communicating with the developers are you trying to you know encourage and like hey yeah, we actually have a big lack in New York state why aren’t we getting more development there.

Tom Matzzie

Right? We work directly. First thing I say is we are also a project Developer. We have a development team that goes and does acquisition of land rights from landowners and develops solar projects from you know, ah dirt Up. Um. The second thing I’d say is yeah we are constantly in contact not with product developers but with asset owners people who own the power plants after they have their operating um to make procurements from them and I think yeah, the people that do that inside of our business have relationships with.

Tom Matzzie

Yeah, the people own all of the wind farms and the people who own. Yeah, most of the solar projects and the regions we operate.

James McWalter

That makes sense and and in terms of like connecting to those you know, very environmentally interested customers. You know you mentioned this past as ah, you know, being involved in the democratic party I believe you’ve been involved in things like get out to vote and you know trying to connect to a ton of. You know individuals who have ah lots of different views but are like kind of joined together on maybe 1 specific viewpoint how I guess how have you brought that to the kind of go-to markete and to the kind of customer development phase for clean choice. Energy.

Tom Matzzie

Yeah, a big part of what we work on is to try to make sure we’re speaking to the customers who will be most interested in the service or offer that we have for them and so we own large data sets for the whole country for every consumer that we have. You know, cultivated over many years and built appended it with other datasets and then built our own um ah models or ah ml you know, um classifications to a score you know people on the consumer file there for. Interest in enrollment. Um, you know how much electricity they use what utility to territory and there’s like a dozen other things that we model um in order to help us run our business in a way that is sustainable and profitable. Ah, because that’s part of our mission is to be successful as a business also not not for the purpose of like enrichment but because we want other people to see that you can be a successful renewable energy company. So that other people will follow and pursue similar business models.

James McWalter

And yeah, especially I guess for like yourself and even myself as a look at this space is like potential space for me to develop a company and you know as people energy outsiders like looking at examples like yourselves where you actually have come in and tried to figure it out. Tried to figure out all these kind of complex licensing elements. Um. Connect that to a business model and then also have that impact you know on positive impact on the climate because there’s so many layers to go through. You know at the moment is just there are a lot of barriers friendry for you know, new tetra founders entrepreneurs people interested in in joining early companies and so yes I think having those kind of examples of people who’ve kind of done it come from. Ah you know. Yeah, came in asked all the dumb questions for a year and then figured it out from there I think is very powerful. Yeah.

Tom Matzzie

Yeah, no I think it’s totally It’s absolutely possible for other people to do similar transitions. Um from other industries into energy climate tech. Yeah, electric transportation. You know, clean Ag, whatever it is climate solutions writ large um you know I think about the kind of areas of renewable energy power plant project development right? Solar development wind development are now storage development. It’s not very different than real estate development. It’s not very different than people who were building gas pipelines or were doing oil and gas projects in terms of the business skills you need right? it’s.

Tom Matzzie

The ability to understand how to develop a piece of land and what the regulations are associated with developing a piece of Land. Ah, the ability to understand what what the cash flow will be attached to the piece of infrastructure that then helps you go finance that um you know project. Ah so there are many transferable skills we’re in. Areas like data science and technology. There are problems still to be solved that in um, other industries are commonly solved with technology software data solutions that the energy industry For example, has been ossified for decades and has not.

Tom Matzzie

You know had to ah get consumers to really adopt different behaviors or manage themselves differently ah that you know people who have figured out those solutions in other areas have a lot to offer.

James McWalter

And what are some of those kind of problems then that you know there could be this potential cross-pollination of what industries from.

Tom Matzzie

Yeah, sure. Well I mean I think 1 thing we have to figure out is how to get consumers to adopt some new behaviors in areas of electrification and electric transportation transportation food and Ag etc. Over time and there are you know industries who are really good at figuring out how to get consumers to adopt New Technologies and really good at helping consumers figure out how to do something new and often they’re doing it through rethinking the solution entirely. So like the. Yeah, the answer we have today for how to do electrification is probably going to be very different from what someone cooks up in the next ten years um and ah yeah but the problems are kind of noble right? We need to. We have different sectors that contribute to emissions. Whether it’s energy generation transportation. You know, industry industry and buildings heating agriculture. Um, and there are you know noble ways to address those problems. Um and often what we’re working towards is figuring out. How to get how to kind of jump the gap towards commercialization of solutions. So that finance is able to you know at a very low cost to capital you know make it easy for people to adopt these behaviors whether it it means you can get a cheaper loan. For a new furnace or new heat pump because the heat pump can also talk to the grid and turn itself on and off as needed and so there’s a second additional source of revenue for you know the heat pump owner. Yeah, that’s like an example, right? there’s. That’s a solution that only an electrification option can ah can access that sort of revenue source by being available as a resource to the grid operator and that can potentially make the upgrade cheaper for the consumer.

James McWalter

Yeah,, there’s There’s definitely all these kind of competing ah you know sources or you know fighting for attention right? You know we’ve never had more things being thrown in our way and I think collectively people working on these big problems need to do some are doing a great job. But. Ah, collectively we need to do a better job. But I think of describing that like better future right? You know that that that electrified home like I tell people It’s like if you kids It’s a better home like that induction stove your your kids are not going to burn their their fingers right? You know and there’s all these other elements and I think a lot of people just kind of picture of the future as you know, maybe evs plus.

Tom Matzzie

Um, yes, better home. Right.

James McWalter

Solar panels on the roof and like that’s that’s it. But I think there’s like this much better potential. That’s cleaner fast or cleaner quieter. Um, and all these other elements that go in and I think you know a lot of the work to be done to kind of bring that next 10000000 of consumers that next ten millions of of people like along the journey. Is like do a better description of that potential future right.

Tom Matzzie

I agree completely and marketing. The future is what the great product. Ah innovators have done for you know, hundreds of years whether it’s Thomas Edison or you know Steve Jobs you know they they painted a picture of people’s head for you know what? the future could potentially be. And yeah, the the difference that’s I think a little challenging with some of our solutions in the climate tech space. Um is that these solutions aren’t really um, community building or social right? It’s infrastructure right? The the most successful and fastest adopted innovations.

James McWalter

Right.

Tom Matzzie

Have had a social or community component to them because people want to interact with other people so they adopt a new technology to be able to interact with other people. Our stuff doesn’t do that. So so that’s the that’s the harder piece is like ah you know it’s like trying to get people to um.

James McWalter

So right? yeah.

Tom Matzzie

You know adopt a new type of car. Well the the new type of car does the same thing the old card mostly did gets you from point a to point B Yeah I Love my Tesla because I never have to go to a gas station again and until you have that experience though of never having to go to a gas station again which.

James McWalter

Okay, okay.

Tom Matzzie

I Always describe going to a gas phase as perhaps the worst customer experience you could ever put into a product. Um, then um, you don’t understand how great you know having an electric vehicle. That’s always charged when you leave your home Although I don’t think we should be thinking of evs as the climate solution. They’re a way to decarbonize.

Tom Matzzie

You know vehicle transportation but we also have to be thinking about transit and development in different ways as well.

James McWalter

Yeah, no absolutely and but it is funny about the refeeling at the ah the gas station. You know it’s so ingrained and it it is like a terrible experience and you know, especially in the United States like some states you’re not even allowed to fill your own gas like there’s all these kind of random things depending on where you are so like road trips become you know, very interesting. Just.

Tom Matzzie

Um, yeah.

James McWalter

Just even just on that basis. Um, but because it’s so ingrained that that expectation is there and’s again until people experience their family and friends who’ve had that new type of experience. You know it’s it’s quite hard to get them to be like oh this is just a genuinely better way like I’ll I’ll save yeah 50 hours a year that were just completely wasted.

Tom Matzzie

Right? Yeah and also safety issues I mean ah you have a non-zero chance of being like murdered go to a gas station right? I mean there’s plenty of crimes that you’re committed against people who are pumping their own gas. So um.

James McWalter

At the gas station going forward.

James McWalter

Right.

Tom Matzzie

I Think Ah, yeah, certainly that’s better in that way as Well. It’s also electric fuel will be a lot cheaper Once It’s ubiquitous because you don’t have the heat waste of an internal Combustion. You know where the energy the btus are lost to heat rather than. Going into power for you know propulsion.

James McWalter

Absolutely and and on that pricing piece. You mentioned you know you are looking and you work with customers who you know wants to pay those premium prices to kind of drive the change. How do you think about how that will develop over time because we are trying to build a ton of solar and wind. Sometimes they’re not being built in like ideal places. But. You know some parts of the country will potentially get to you know a penny a kilowatt hour you know within the next decade maybe yeah sooner than that depending on where you are um I guess how do you think about that interaction of like energy prices um getting very very low as we kind of build a lot of these projects. And how that affects the interaction between the market and the consumer.

Tom Matzzie

Yeah I think um I think we’re often probably overstating how cheap it’s going to be because the cost of electricity delivered to a node like at a unit contingent shape is very different than the cost of energy delivered to a customer at their home. And you have to change the shape to the shape of the customer’s usage. Not just the usage of um that the generator you know is able to generate when it’s windy or sunny and you have um, you know to pay the various ah toll booths for lack of a better term along along the way. So I think the the opportunity is to potentially have cheaper energy but the other components that go into delivered supply to the customer may may become you know a more expensive and I actually think over time what you see is just a wash but what it means is that you’ll you’ll be have able to boot. Build a new clean system inside of the same Costa Envelope as the old system and like that’s a very that’s an upgrade to the current system because it’ll be clean and you know won’t be bad for public health or the climate. And ah, you know has all those additional benefits. Um, do eventually hopefully you can get to twenty four seven supply you know at a lower cost because you don’t have the fuel costs embedded. But um, there’s complexity in bringing. Ah. You know electricity to a customer and their shape of usage compared to the generator’s shape of of ah generation.

James McWalter

That that that makes a ton of sense and I guess like as I’m thinking through you know those customer experiences we talked about for a little bit. You know if I you know came on to clean and choice. Energy’s website like what is that experience for me as consumer as I kind of you know, connect to your product and and start getting value.

Tom Matzzie

Yeah I mean so hopefully you’re in one of the markets that we serve and we serve more than 35 you know markets today and we’ll be a lot in a year from now and be a lot more than that. Um, but ah, you know you can go to an enrollment workflow. You know, go through a couple. Click pages and you provide your name and you choose your plan your account number and then you’re enrolled and you’ll start to get communications from us about the timeline for getting on our service based upon our communications with the back office at the utility. Um. You know and when the utility says that your service may begin. So if you enrolled today it might be 6 8 ten weeks actually before the utility begins. Um the service. Um, there are some states where it’s kind of accelerated switching where it might be like a five day you know conversion um but in other places it could be a lot longer. We’re communicating with you along the way to let you know, um, you know when that service cuts over but an important feature of this product is it’s it’s changing the source of the ah who’s buying the energy for the customer. You know to deliver to their utility and this is I’m using these as metaphors because it’s it’s all done through um ah, kind of a fungible exchange the way that money’s moved around you with you know and different things like that. But um, you know, hopefully in the um, what was I saying I’m sorry um hopefully in the future you know you’ll be able to um you know get that service much more quickly. Ah you know, just through instantaneous enrollment.

James McWalter

That makes sense and so the um and and and then and so then and then ongoing I see you know I Ah I Basically I’m seeing a line of clean energy on my bill and then basically that and you know I have that kind of continued relationship with you know, clean choice energy.

Tom Matzzie

Yeah.

James McWalter

And I know I’ve I’ve done my bitch is that the kind of basic model.

Tom Matzzie

Yeah, we send. Yeah, we send monthly impact reports to our customers where we explain to them the impact of their purchasing dollar. Um, you know how many Kilowatt hours of clean energy it represents we’re telling stories about the projects that we buy from. Um, and um, you know we’re we’re trying to keep the impact part of this story front and center for the customer and you know another part of being a clean choice. Customer is you know Ah who we are as a company. By being ah a b corp but also a company that advocates for climate solutions supports legislation that advances climate solutions we have also you know our our project development team that’s developing new solar projects and. The kind of revenue from our customers supports all these activities of the business. It’s not just the purchasing of the commodity to to for their supply. So I like to think of our customers as also our kind of collaborators on our work to advance. Clean energy.

James McWalter

I And another kind of group of people you have to I guess collaborate with but work with you mentioned a couple times is the utilities themselves. Um, what is it like working with those utilities. How does that vary and you know how could that that work relationship.

Tom Matzzie

Fear of.

James McWalter

Potentially improve over the next you know number of years as ah, pressure comes to bear on on this kind of space. Yeah.

Tom Matzzie

Yeah, in the markets we operate in generally the utilities are regulated in how they’re allowed to interact with our company and they follow the you know rules almost to a t um I would say that the kind of. Challenges are often interacting with utility are more technology-driven where their systems are older compared to you know the technology we might be using and um and that can lead to kind of breakdowns in some of the data communications between the utilities and and and third -party companies but um, generally it’s just a regulated relationship and they just kind of you know because we’re licensed because we have we’re member of the rto or iso where that that utility is which is the regional transmission organization. Um. They have to work with us basically is how it works I would say that in the community solar part of our business those systems and are much more nascent in the utilities and they’re often being done by hand by 1 person. Um to do effect to the billing or effect the credit allocations.

Tom Matzzie

Ah, for community solar credits and that’s a little that’s a little concerning to me I think that needs to be professionalized by the utilities. There are some utilities who have done have professionalized I think couple I would say are very well run in that regard and there’s others who have not at all and then there’s some who haven’t. Able to invest in the systems yet, but they have operations people who are paying really close attention and so that the the challenge is that’s different in many markets right? We don’t have one set of market rules and for data Exchange. We don’t have one set of Market. You know, um.

Tom Matzzie

Requirements for the utilities and so you have to be somewhat expert in all of these different utility Data schema and Utility Arcania for lack of a better term.

James McWalter

So yeah I was talking to somebody who works in the back tech office at at utility in the West Coast a couple months ago and they were telling me about how they’ve just this 1 developer who wrote some code in literally the early 1990 s and will always be there because they’re the only person who knows how to actually run some of the processes that they have internally met even before that might be dos like it’s f to incredible some things that are going on. Um, and I guess one of the kind of other elements is around kind of regulation and and the policy piece and so.

Tom Matzzie

And C sharp or something like that and enough.

James McWalter

You know we’re seeing you know different movements on the state level. We obviously saw some ah big moves and maybe not all the big moves we wanted at the federal level this year how do you think about the kind of role of regulation. What would you like to see change pro or con over the next couple years so

Tom Matzzie

Well I mean our company in ice. Personally, we support the moves towards 100 % clean energy that some states have been pursuing and yeah, we think that there’s a role for providers and in those markets as well. Yeah. Us as a provider either as a wholesaler by someone who develops projects or for consumers who are looking at that point then for a different type of plan with maybe time of use pricing or you know something. That’s a little different than the plain vanilla. They might get for utility. Um. So I think that one we want to see more states push towards 100% clean energy. The second is from the feds we need them to keep the tax and corporate kind of structure structure. You know innovation going. Um that is very important to support. Um, you know, new renewable energy projects. And I think they need to extend it to new technologies and new types of you know consumer behavior whether it be storage or extending it to certain home energy efficiency investments um or other type of investments like that but most energy policy at least climate tech is broad in many areas, but most. Most energy policy set in the United States at the state level and um and you know we have seen some states really move very quickly. New York obviously being one of them illinois being another but do we have other states that are um, you know, dragging their feet and aren’t moving forward at all. We have other states that kind of are start and stop start and stop and you know we need to see more consistency.

James McWalter

And I guess that consistency is brought on by you know the usual kind of levers of you know Activism policy. You know political change that kind of thing. Wow.

Tom Matzzie

Yeah, and I think 1 thing I notice is we increasingly every year have ah legislature legislators in the states who are more and more sophisticated about these policies and how they facilitate. Both climate impact but as well as well as economic development in their states and so when you have ah you know a senator a state senator or state legislator who understands this. It’s a really big step forward. Because they are actually more fluent in understanding how government can support and policy can support these you know virtuous activities. We want to see happen than even the industry can be and and so that one of the things I think has been exciting to see has been to see over ten plus years legislators who now get it and are working um to advance clean energy and climate solutions.

James McWalter

Yeah, know the the picture even just in the last you know six to nine months has dramatically changed since I’ve started kind of following it in depth and it is quite exciting right? It’s you know we are starting to see that flow of you know ideas talent and kind of money coming into the space.

Tom Matzzie

Yeah, and I you know I would say um I’ve been in this space long enough to have seen that once before and then see it Alpha dry up so we have to create we have to figure out how to make the whole virtuous cycle of capitalization work from seed stage through liquidity.

James McWalter

People No no.

Tom Matzzie

So that investors in all of these areas um can can feel comfortable that their money is not going to be wasted that there is a path to return of any level I mean I think it’s just like not having it be philanthropic at that point. Um, and. Yeah, we have had in the last ten years a couple of big companies who either went bankrupt or just you know got stopped operating their assets got gobbled up by somebody else that have then really does have been really big setbacks for the industry. Ah, so I’m thinking about like sun edison or there’s a company in the northeast called nextstep living that was doing home retrofits but been very successful until it wasn’t and um I think ah, you know we have to be careful about.

Tom Matzzie

Losing the momentum we have when when there’s a new wave of failures. Um, yeah.

James McWalter

yeah yeah I mean there’s absolutely you know a ton of ah venture money in particular is like flowing into climate tech kind of generally and which is incredibly exciting I do say to people though is like you know it is venture so 90% of the things they fund will fail like that is that is the model and so.

Tom Matzzie

Um, yeah, right.

James McWalter

Um, you know we have to have that discipline collectively over that time that you know even as things fail. Um, we can maintain it and I think it comes back to one of your earlier points that you know I think but lot of the technology we need not not in everything but a lot of technology we need is generally in place or on a path to commercialization. It’s the business model innovation that I think needs this.

Tom Matzzie

Yes.

James McWalter

You know, a lot of smart people thinking about trying to figure out How do you make these things get to scale Very very rapidly. Um, you know in this social way and you and you mentioned like there’s a lack of social elements to infrastructure. Um, it’s actually funny I was talking to somebody recently who’s actually looking at having basically a digital co-op using some of this web 3 technology to try to build some. Ah, clean, our 0 carbon apartment buildings in their neighborhood and like that those type of things are just starting to emerge and you know a lot of that a lot of that stuff is more smoked in you know, smoke and mirrors. But it is interesting. There is some innovation happening on that side as well.

Tom Matzzie

Here? Yeah no I’ve I’ve seen that those I’ve seen examples like that and it just it hasn’t had the like pop from um, what I’ve seen in my prior life experiencing. How. Cultural moments can really drive an upswelling of kind of action by millions of people. Um, and I think that’s okay because um, we also have products and services that people have to buy they need electricity. They need transportation. They need food. Um, they don’t need Facebook or Twitter. It’s just that that social component has like helped Facebook and Twitter or whatever. The social form is to get really big, really fast and so um, all of our our all of our solutions will have enduring long-term. Ah, usability and usefulness utility. Um, even as ah, things become the next compuserve or the next Icq chat or whatever you know it might be that becomes a little more dated. Um, you know the web 3 and deep in the dao or Dao whatever. However, you want to pronounce it? Um I think it’s still very nascent like the the user community for that is very small and um. I think people will be able to get things like digital co-op like that’s a that’s a term people might be able to understand um, but we’re a ways way. Yeah I think from the ah from what’s next although I think the idea of web 3 is interesting.

James McWalter

Yeah, yeah, absolutely. It’s um, it will definitely have its big crash in the next few months and then ah then people start building like real stuff on it. Hopefully after that you know, um.

Tom Matzzie

Right? Well we’ll have it’s 1999 and then everything else gets built from 99 to 2005 right it’s like that’s what happened twenty years ago

James McWalter

No Absolutely. We’re in that other cycle I think definitely um, you know this kind of background you have in politics I mean I think it’s this when I talk to different you know, ceos and founders who are bringing to bear interesting kind of backgrounds that aren’t maybe atypical. You know, move through a couple different corporations and end up kind of founding something um often they will have some sort of kind of insight that you know surprises them when they kind of start focusing on a a startup fast movinging startup trying to get to a certain level of scale. Um, what. But I guess like most surprised you as you’re trying to build out a company relative to I suppose your expectations going into it. Yeah.

Tom Matzzie

Um, I mean I would say um I’m trying to think you know I think that I actually wrote a business plan for my company at the time that I started it because I was the first investor with my savings right.

Tom Matzzie

And I wrote like a 65 page single-spaced like narrative document on the business plan and all the risks we would have to address and as I’ve looked back at that overtime a couple things that were really never accounted for was 1 kind of black swan events.

Tom Matzzie

And the second was I think we probably overestimated the consumer demand. Um, you know earlier and I think that you see this actually reflected through ah the customer acquisition cost for rooftop solar. For example, being very high. Our product is an ingredient. It is not a solution entirely right? We’re a solution for a different problem. But if for our customer it’s a solution for their identity or maybe there’s a cost savings component but the product works the same. You know, generally before and after the customer makes the transaction and so um, you know that’s a different thing to try to figure out how to get people to adopt than something like carrying 5000 songs in your pocket with an ipod um, and it’s a.

James McWalter

Right.

James McWalter

Okay. Right.

Tom Matzzie

You know I think I underestimated at different times. How much demand there was for the ingredient and um, and really yeah, having to take spend time to understand the consumer better and what they were looking for which is really just to be can get find the easiest onramp possible.

James McWalter

That makes absolute sense and Tom this’ been great I really enjoyed the conversation I suppose before we finish off is there anything I should have asked you about but did not brave. Um, thank you so much Tom this has been great.

Tom Matzzie

No lot fun all right take care.

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! 

https://carbotnic.com/enosi

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 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.

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

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