Great to chat with Tony Pan, CEO of Modern Electron, a sustainable heat and power technology company that helps buildings and homeowners save money, reduce carbon emissions, and increase resiliency during power outages! We discussed energy efficiency, technology that converts heat into electricity, the carbon footprint associated with heating systems, decarbonizing buildings and more!

Can your boiler generate electricity for your house? – E69

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The unedited podcast transcript is below

James McWalter:        Hello today we’re speaking with Tony Pan: CEO at Modern electron welcome to podcast Tony.                                                                            

Tony Pan:       Hello everybody.                                                                                                                      

 James McWalter:        I suppose to start with. Can you tell us a little bit about Modern electron.                                                                                                

Tony Pan:       We are an energy technology company based in Seattle USA and we work at an interface of sustainable heat and power.                                                                                                       

James McWalter:         And and what drove that initial decision to start Modern electron.                                                                                                                

Tony Pan:       So I’m trained as a physicist and it’s been very clear with that kind of educational background that energy is a single best predictor of quality of life and was really the driver of human civilization that was what the whole industrial revolution was about and so yeah” as you can. Literally plots a quality of life with energy and as the quality of life increases. Basically, the difference between us and our ancestors in the time of ah Queen Elizabeth is that we now use a Hundred times more energy per person and yet we’re. Toasting the planet and so we need to find a way to use pretty much the same amounts of energy for everybody on the planet to enjoy the same quality of life and somehow do that in a way that does that doesn’t destroy the environment so that was the founding goal right about specifically how the company got started was. I worked with a deep tech incubator I was very interested in energy in Seattle and we decided to look together at the problem of heat into electricity conversion.

James McWalter:         So that that point about the link between energy and the prediction of kind of quality of life. ” this is like a kind of fascinating topic. It was why the west won book that ah kind of has these incredible charts about the amount of energy that the average human being used 2000 years ago 1000 years ago ah ten years ago etc and how that kind of exponential curve occurred and you also sometimes see people kind of have these quizzes. would you go back 500 years ago and be the Queen of England or whatever may be versus ah like a middle-class person in the west today or a middle class person and developed country today and. Very few people want to go back because for 1 thing you didn’t even have hot running water I was just like ah  the center living which is so so different even for the very very wealthy and so that kind of great equalizer that yeah know more ubiquitous energy as brash is this kind of fascinating kind of aspect of Underer society. So that makes a ton of sense. Did you mention the? Ah yeah this kind of deep tech piece. Yeah so I suppose  what is the kind of core science that you were working on and when you started in the lab. So.                          

Tony Pan:       So we actually started with the problem statement first which is 80 percent of all electricity generated on the planet is generated from heat when you think about some fancy part plant whether it’s ah old coal-fired power plant. There’s also gas ones and even if when you think about something advanced like nuclear and there are lots of nuclear fission power plants around the world today and people are working on nuclear fusion which is supposed to be 1 of the holy grails so wides span of different technologies some using the most advanced tech that humanity has right like nuclear fusion. People trying to make that work at the end of the day. All they’re doing is generating heat from their fuel source and then what happens in a park plant is then you use that heat to boil water to generate steam and that steam ah basically pushes on a big fan and spins a big magnet. And that part of the technology is a steam engine which you are probably familiar with from the all the history books on the industrial revolution. well the steam engine is alive and well today the modern example is called a steam turbine which was invented 1 hundred and 30 years ago and the steam. Turbine alone generate eighty percent of all electricity on the planet. So that’s that’s why we decided to look into this and say hey is there any new technology that would work better in several attributes because anything that does that would be a civilizational skill contribution to humanity.”                                                                                                         

James McWalter:         And every single 1 of those steps that you mentioned like the efficiency issues are massive right? So you start with ”          ? let’s say a pure energy ah in the form of Electron ah like as potential energy and by the time you get to the end this conversion to heat and back and forth heat to steam to all these kind of things. How much efficiency is left at the end like how much energy is actually still retained at the end of that entire process and.                                                                                          

Tony Pan:       On average the power plants efficiency is about One third so you put 3 units of fuel in you get 1 unit of fuel so energy out as electricity. The remainder 2 thirds escapes as heat up the smokestack. Of the power plant. But here’s the irony and this will get into what modern electrons specifically does. But so when we do this conversion right? We produce both heat and electricity at a part plant. We actually use a lot of heat in our civilization you use heat to heat your homes in winter. You use heat in your industrial plants fifty percent of final energy demand as heat and yet we’re throwing all this heat away apart plant 2 two-thirds of the energy. We just throw it away. Why is that because heat cannot be transported long distance so we built these large central park plants. But we throw away all the heat and then in our homes and buildings. We still burn additional fuel such as gas would to generate that heat again. So we’re doubling up because of all this efficiency loss.”                                                                                                           

James McWalter:         Yeah” and people suppose want to have a picture in their mind of   an example of this massive heat Loss.      a lot of people think about nuclear power plants as having these big kind of Chimneys with things kind of spearing out but the entire purpose of those Chimneys is just to dissipate dissipate the excess heat. Basically right. And so we have  any major power plant.. There’s just a ton of ah mechanisms set up a machinery setup just to dissipate the heat and get the heat basically into the atmosphere where can   just not be utilized by anybody at all. So yeah   and absolutely this is a kind of a massive problem.     and so how  you kind of zoomed in on that core problem.    what were the initial kind of  initial ways you sought to solve that problem.

Tony Pan:       So we surveyed a bunch of existing technologies out in the world. They’re generally called heat engines. But basically things that converts heat into useful work or useful electricity and in particular we look at technologies that what people consider solid a state. So not the mechanical engines that were first invented in the industrial revolution but things that are closer to material science. Ah semiconductor technology that directly converted heat into electricity without any moving parts without any motion. So not like a mechanical engine. We looked at a bunch and then eventually ah chose 1 that seemed right for our. Write for a breakthrough that was the thermonic converter which is this actually pretty old technology 50 years old and it used to be used in satellites in space. They used to par defense satellites because they had this magical attribute that they can produce a lot of power. From a very very small vole so it fits very well with satellites that needed to be small but somehow needed a law of electricity. So they’re the most par dense heat to electricity converter known to mankind. Plus they never require any maintenance because they have no moving parts.”                                                                                                          

James McWalter:         And so that so that that kind of core piece of technology.   what were your kind of initial experiments around that to potentially build a product out of.                                                                                            

Tony Pan:       Yeah” so if you can crack heats into electricity. This can be used in so many applications not just part plants right? but actually 1 of the things that we were most focused on is we don’t believe the future is going to be power plants a centralized park plant. Whenever you do that necessarily It’s inefficient because there is no local user of the energy. So. That’s why you first have to build a trillion dollar transmission grid to get electricity where it needs to go right? We have I think 6 million miles of transmission and distribution lines in a usa alone and also because you’re not next to the end user. You have to throw away your heat even though the heat is valuable because there is no way to transport heat. So we believe the future is going to be distributed generation which means you want a lot of small mini power plants where people already are and so some of the key things that we had innovate is to make sure that this technology. Would be able to integrate with the fuel sources that are already ubiquitous in our buildings where people will live and work like we spend ninety percent of our time of the time we are alive within buildings and in particular for example         most of us already have a half a par plant where we live. Especially if you’re in a ah    cool or cold climate in winter you have half of our part plants because you have a boiler a hot water heater or a furnace. You have the fuel coming in oftentime. It’s natural gas some people use ah fuel or wood but you already have the fuel. You’re already burning it. Ah you have already half of the park plant infrastructure. There. All you need is a way to convert heat into electricity locally and so a lot of the work. We’ve done with the technology is figure out how we can be compatible with those existing ah heating appliances and those heat sources from these fuels.                                                                

James McWalter:         And okay”       this this is fascinating so  let’s say I’ve ah  I have a boiler  I have ah my own home.  I have like a boiler so  ah I’m the only person you really have to kind of I guess deal with and I am like my electricity bill is way too high and        especially in in different times a year and I am using  wooden coal I have a wood burning fireplace I have a boiler. Whatever may what? what would be the process. What would be the I guess the onboarding to get kind of get the let’s just talk with the boiler piece but what would the onboarding to kind of get the most use out of a modern electron. Yeah.                                                                             

Tony Pan:       Yeah” so there’s the business model side and there’s the technology side. Let me just cover the business model first to give us yeah simpler contact because the tech gets into nitty grity details. But long story short we are working with the major heating appliance companies in the world. So we have partnerships already underway with major furnace makers and boilermakers to integrate our technology within their appliance. So think this is like an intel inside model. Ah they will incorporate our technology sitting completely inside your furness and boiler. So that as a home user there is nothing new from the outside. It takes the same footprint There’s no additional maintenance. There’s no additional install. And basically whenever you replace your future fer a boiler the next generation that comes in it just behaves like a normal furnace and boiler from your standpoint except for the fact that whenever you turn it on ah produces you bonus electricity and that means you no longer need to buy as much electricity from the grid this saves you money. And because it’s more efficient it lowers the seal to 2 footprint plus you have but you have some energy independence now right? since you’re producing a bit of your own power. This gives you some blackout proof capabilities and in fact  this is pretty important in the usa in particular because our grid is not. Super stable. You’ve probably seen this other news nine million homes in the last winter season lost par for more than a day straight and the irony is even though as you mentioned right? You run most of your heat from these fuels whether it’s wood or natural gas but for a lot of these heating appliances especially natural gas furnaces. That’s the. That’s by far the most common appliance even though the gas is still there if you have a blackout you lose your heat because the the furnessce right? It’s ah it’s still of appliance like all our players at home. It needs electricity to run too. So when you lose your electricity you lose your heat. A hundred people died in texas if you remember the last winter season they froze to death when the electricity grid wents out just just this last winter and ah even if you that’s very tragic. But even when that doesn’t happen way way more homes have massive damage right? like where water pipes freeze they burst. And then that’s ten thousand dollars in Damages so our tech can prevent all that and that’s sort of how we’re bringing the technology to market by basically working with the furnace and Boiler makers. So that our techs already inside whenever you go and buy a new 1.                                                                      

James McWalter:         Understood and in terms of I suppose let’s get into technical bit and then I have a few questions but there was this model but I think I think learning a bit but the technical bit would be helpful and so ”      how does it I guess then gets the convert yeah electron electricity in a way that  .                                                                                  

Tony Pan:       Yeah” yeah.                                                                                             

James McWalter:         My my home could actually benefit from so.”                                                                                                         

Tony Pan:       Yeah” so what’s really going on is that we are converting the high grade heats. That’s currently being wasted within your furnace and boiler today into electricity and then ah we come that conversion results in some. Lower temperature heat but our lower temperature heat is still hot enough to be completely transferred into your home and still hot enough to heat the rest of your home. So what’s really going on is if you look inside your furnace. Ah there is some fuel being burned and let’s say it’s a natural gas furnace. Ah that fuel is burning at a flame temperature of think 1400 to 1500 celsius it’s this incredibly hot. It’s what ah people in thermal engineering called high grade heat. This is the heats that normally in a park plants would be used. To drive our steam engine to to move things and learn to generate useful electricity. That’s high quality energy right? there the real big problem we face in our civilization today. The real big waste is that that flame is. Very hot right? but actually infernace is a boiler today lay let that high grade heat degrade and lose most of its useful energy content by cooling down until it’s much below 1 hundred celsius before it goes around to heat your air and hot water. That temperatures drop is typically what’s using in power plant to generate electricity but you can’t shrink a steam turbine in a power plant down to the size of something that fits inside your furnace and Boiler this is why we’re letting that high- grade heat going to waste today. It’s not some kind of conspiracy is because we don’t have tech. To puts a power plant inside your furnace but the magical thing about the thermonic converter is we make it we can make it work even when it’s small james can’t see me although you on the videoca but I’m holding 1 of our prototypes james can see this but it literally fits into the palm of my hand this is something that is. Very small can generates a lot of power from a small device and that’s really 1 of the magics of this new technology. The fact that it’s small. That’s why we can enable this when no 1 else has tried. This has been a holy grail for like a century but we basically just put this right next to the flame inside your furnace. Absorbs a high temperature heat and converts some of that into electricity and then the rest goes into lower temperature heat. But ah        we’re still rejecting heat at about several hundred celsius so over Heats is still useful enough to heat your home heat your water.                                                                

Tony Pan:       And therefore the combined efficiency is a hundred percent.”                                                                                                      

James McWalter:         Its”     Fascinating and I can confirm for the listener that yes it definitely fit in Tony’s palm of his hand.         it was kind of the size of like a like a snickers bar or something that was coming along those lines.      okay  that’s that’s fascinating and and then so it’s it’s kind of it’s taking in that heat. It’s.  you’re going from thousands of degrees to hundreds of degrees So you’re still getting that benefit for your home and that differentiator is being converted or some portion of that differentiation is being converted into electrons and electricity and how did that electricity then get into my actual home and do I need a smart thermostat or what is that kind of Mechanism. So.                                           

Tony Pan:       So we are intentionally targeting electricity generation below a baseload electricity meaning that we’re trying to stay below the the the usual ah bottom curve of your electricity demand. And that means we are not selling electricity back into the grid and that’s very important because that means your your furness already has an electrical plug usually going into the electrical main panel. So we can actually just use the same war and feed electricity back at your home through that circuit. Because we don’t need to sell electricity back into the grid we’re trying trying very hard not to ah first of all”     you don’t get paid a lot to do that nowadays. What is called feed-in tariffs the the price you can charge your utility by sending electricity back in the grid that used to be very high when folks were subsidizing solar all that has dropped by a factor of 10 so we. We’re not goingnna monetize that we’re just going to shave off to the man you need to buy from a grid and because we don’t need to do that. You don’t need to install what is’s called a 2 wo-way meter anymore. Ah your panel and so this greatly simplified install. So think your furness usually already has like a wire that goes into the circuit. And we’re just shipping electricity to reverse direction back into your home.                                                                                              

James McWalter:         And so in that moment Let’s say I turn on my toaster.  and my energy usage in the home just slightly bps up a small amount.  are the electrons that are coming back from the boiler through your device are those potentially being used by the the toaster in that moment or.”                                                                                                             

Tony Pan:       Yeah” potentially     let me clarify a few things. So definitely any energy you produce in your own home is going to be used first. Ah        that’s the electricity that’s used first. Ah by the home this is the same for solar panels.                                                           

James McWalter:         Ah”    yeah I guess I’m so a little bit unclear about that. Yeah.                                                                                    

Tony Pan:       Ah”    to our technology combined heat and power furnaces and it’s that ah happens almost automatically it’s it’s like a water flow analogy where I think the power plant is let’s say it’s water as a very tall dam and then we’re much closer to you and we’re like a water reservoir much closer to you. And so whenever you turn on your tab. You’re going to draw watchher from like us ah us at any closer source first and anything that we don’t fill. Ah it’s going to come from the power plants the Dam a higher energy potential. So that that that process happens automatically. I do want to clarify due to the fact that modern electron we are targeting to serve and shape off your bas old electricity generation. We can keep your heat running. We can keep your lights on your refrigerator running. Ah the the things that occur all the time right. We’re probably not. We’re intentionally probably not going to help when you plug in your hair dryer your vacu cleaner. We’re not serving the Peaks so that’s still coming from the grid or if you have a home battery with some solar. Maybe it’s coming from that.                                                                     

James McWalter:         And so in that’s an scenario you outlined earlier where you actually had a local power outage. You could basically just have a situation where  Maybe you’re not using your hair dryer but you can ? still                    use your laptop. You can solve the lights on .                                                                

Tony Pan:       Yeah” from what we understand the nber 1 thing people need is heat because that’s life threatening and then apparently second is like wifi on your laptop which of course like we can do a land and then fridge right? and some lights.                                                                                                 

James McWalter:         That kind of thing.”                                                                                                                  

James McWalter:         So there. We go. I on just and said and you mentioned yeah the kind of current go to Markete is and business strategy is to have these installed in new furnaces and boilers and so on.”                                                                                                                

Tony Pan:       That’s we we keep we keep you alive.”                                                                                                           

James McWalter:         What about retrofitting have you looked at that at at all up from the existing kind of build out of these devices right.”                                                                                                          

Tony Pan:       Technologically it’s possible but we decided that was it was more elegant as a startup for us to work with these big companies and have them installed in ah and into their new products that they’re manufacturing and it just comes down to the fact that. Ah” we were go to door to door down your neighborhood right? The furnace you might have a furnace that’s 5 years ago your neighbor might have ah firmness that’s ten years ago and the insides will look a little bit different and as a startup now we have to carry a bunch of different skews to fit into all these different furnaces and that just going to increase the complexity. And early cost. So it’s much more elegant for us to make this as part of new heating appliances and by the way 85 percent of heating appliances roughly speaking go into. Ah what is called the retrofits of the home. So. It’s not going so it’s going to existing homes to replace. Old appliances that have stopped working and you need to buy a new appliance that’s the majority of all heating appliance sales so that’s really what we’re targeting existing buildings that are replacing their heating appliance.                                                                                               

James McWalter:         And what about. How do you think about some of the other kind of emergent technology in the kind of home heating space things like heat pps that are kind of much more ah well are fully kind of electricity-driven.   for those who aren’t familiar with it. It’s kind of like ah”          an inverse air conditioner that ah can blow blow boat cold and hot.            with varying kind of degrees of efficiency. But that’s kind of basic principle. How How do you think about those types of touch technologies compared to yours.                                                                                    

Tony Pan:       Oh they’re great. We basically see that the market’s going to bifurcate so this is a topic I’m pretty passionate about because we had to think a lot about this and our go-to market strategy and of course this is also a top of mind of or our partners so our partners there they h fact of plans makers they make both but basically this is what’s going on if you have both heat a reasonable like look basically your winters are not cold and your smers are hot and you need to buy our air conditioner anyways”      then a heats pp technology. Especially the modern kind that is bi-directional which means in smer it can cool and the same appliance can reverse direction and do heating in the winter then you get 2 birds with 1 stone and if you’re in a warm climate. This is pretty awesome. You should get that the retrofit costs can be a bit expensive. But if you’re arizona and you can stomach the payback period it works out great. Also if you’re frankly     if you’re in a new building. So if you can build a new building with a lot more electricity going into the panel.             and it’s a modern building built with modernulation which reduces your overall cooling and heating needs because it’s better insulated. Ah and ah       you can just because it’s a new building. You can be to build it just for heat pps. So there’s no extra retrofit cost then the math also works out great. So so that’s awesome and we should do a lot of that. But here’s a fun stat. So there’s there’s a sort of ah another holy grail which is we should use more heat pps as well and 1 day when our grid is very clean. We will fuel the heat pps with green electricity and that will help us decarbonize so europe europe is usually 15 years ahead of the usa in terms of regulation. They’ve been pushing that for 15 years and they’ve kind of given up and are starting additional approaches. So the statistic is that say germany germany if you remember energy gang wind. They were ahead of the entire world and pushing green energy technology. And after all those subsidies for 10 years for heat pps. They have reached the awesome milestone that fifty percent of new buildings now are installing heat pps. However       ah as I mentioned earlier right? like most heating appliances get sold into existing buildings. In fact. 80 percent of all buildings that are going to be here in 2050 have already been built existing buildings is the elephant in the room and even after all subsidies heat pps have reached about 5 percent of existing buildings and that means there’s ah  there’s a few challenges.                       

Tony Pan:       1 of course is the retrofits cost of heat pp technology into existing building also because existing buildings have poor and so ah”  poor insulation. Ah generally speaking heat pps can’t can’t like they can’t deliver enough heating during the coldest times of the year which is that it’s it’s. It’s most useless when you need need heat the most it’s an unfortunate fact of the intrinsic physics of the heat pub technology that it reaches highest efficiency with the temperature gradients between inside and house site is low and it reaches its lowest efficiency. But the temperature gradient between inside and outside is high so and so that’s sort of the issue that folks have realized and that’s why places in europe they’re trying hydrogen they’re trying of course our technology with combined heat and power they’re doing also district heating. They know they need a lot of extra solutions. Ah     this is why heating is 1 of the hardest areas to decarbonize.                                                                                

James McWalter:         And so if we think about  then let’s say this kind of 2030 year time horizon and that we’re looking to get to  net net net zero in a lot of different areas including kind of residential heating and so on ”   as is how how kind of much how much more carbon efficient I guess is.  the kind of boilers would your technology engage versus the status quo type of boiler when it’s deployed. So.                                                                                                 

Tony Pan:       Yeah” roughly speaking a wheel shave off about a third of the carbon footprint that is present associated with your heating system the nber varies because it depends on the climate right? Like if you use a lot more heat. We’ll use a lot more electricity will generate a lot more electricity and so forth. And it depends on how clean your electricity is and your grid because we’re essentially we’re we’re generating electricity out of energy. That’s already wasted. So overall the power plants need to generate less electricity. So we’re shaving carbon. Basically that way. Ah           but ah. Ah      the way europe is going is that there’s going to be also Hydrogen now introduced and mixed into a lot of the gas grids. So as a fuel gets cleaner. This is a way to also get to start getting to zero for the overall system and frankly our technology is actually fuel agnostic where heats into a electricity converter. So whether it’s a dirty fuel or a clean fuel. We make it more efficient. Yeah.                                                          

James McWalter:         I And said I mean I haven’t looked into this space at all Indep but is there kind of work being done on residential cited Hydrogen boilers or is it. Yeah”         there is very explosive.                                                                                    

Tony Pan:       Yes”   yeah so ah it’s very ambitious and frankly  it’s ah yeah   ah      a lot of things have have to go right for that to happen but ah major players in europe already pilot testing this There’s like Hydrogen mini towns in europe already. It goes back to the. The system up the question of how do you decarbonize building heating so bluntly speaking. Ah this might be a bit real politic but building heating is not going to be decarbonized by 2030 this is 1 of the ah like like we’re going to get ah or vehicles 1 hundred percent electricity before this happens. It’s 1 of the. Hardest to decarbonized sectors along with things like agriculture or long distance planes to could you another sense of scale right? The why is electrification failing so we’re both in a usa when we half of us homes use gas for heating in their homes. And it reaches its peak energy right? of course in winter at night when the sun has set and it’s getting cold and that’s also when people return home from school and work when that happens the peak power from all that gas just in homes exceeds 1 terawatt which is greater than all electricity generated. From the entire us electricity grid from every single source so all electricity we have which we’re already using right? That’s not for homes not for home heating yet all that doesn’t even match out to just gas used in homes and only ten percent of our grid is ah solar and wid so. We don’t have enough generation. We also don’t have enough transmission and distribution grid right? if we had to fully electrify all of that our current grid can’t handle it and it takes about 100 years to build this our grid. Ah and so it’s a massive challenge. This is why modern electron is emphasizing efficiency. And this is why europe which is trying to build the stuff they need in 2050 is even doing things like hydrogen because you’ll need additional fuel carriers in addition to electricity.   

James McWalter:         Yeah I guess  in terms of timelines.  I would I’d say yeah electrification of all like the  the all griffiths type approach from right wiring America and and similar approaches which is  basically because once it’s in Electron form. It’s just more efficient than moving in and out of of heat and so on. Think as you as you mentioned earlier you fully agree with but it’s like if the heat already exists in some context. Let’s just Adopt. Let’s just grab as much energy out of that heat that we can and convert to electricity. ”   so I agree with that I mean absolutely .                                                                                     

Tony Pan:       Yeah” the electrons way more valuable than the heat right on average I think is four times more valuable.                                                                                                       

James McWalter:         Absolutely and so it’s so that I suppose I’m completely kind of align on that I guess from my perspective  for any sort of ”    1 point five to 1 point 8 degree warming trajectory like basically the U s grade will triple in size from ah like electric generation point of view I think to your point earlier about  this more distributed. Like energy resource these the Er type type situations or  mini power plants. distributed much more kind of widely I think that’s definitely going to be a large piece of the picture I’d say potentially 55 percent of total energy generation will be very very localized and that does dramatically cut down in transmission. . I Also think that we’ll probably overbuild quote unquote from ah        a purely technical point of view things like solar and wind unlike a 20 year time Horizon but like that over build will will be so cheap relative to the status quo of building so wind.  I think it’ll still allow us to get to yeah like a 3 X grid probably in yeah or 2021  20 years I’d say well. But 3 times the size the electricity grid some current kind of curves.                                                  

Tony Pan:       I agree with generation I don’t agree with transmission and distribution I think yeah we can build generation plants with solar wind cheaply and it’s got to get even cheaper. But ah”    you need to get an energy where it needs to go and that’s the elephant in the room.                                                                                                     

James McWalter:         Yeah” no     that’s I suppose.         ah I was a deeper kind of conversation I agree like when I talk to utilities and and kind of some of the projects I work on they are building a ton.     but they’re still not building to the capacity that’s needed and interterminment mission across different states and and regions is quite difficult.                                                         

Tony Pan:       Yeah” yeah yeah it’s hard right? It’s crazy if you look at it electricity costs that it’s builtills into what we’re paying in homes today. It’s funny right? Have you seen your utility bill go down I’ve talked to many people I don’t think this has happened and the reason.                                                          

Tony Pan:       And that’s weird because we have cheap renewables now. So generations should be cheaper right? So why isn’t electricity cost going down. Well ah Ford I think forty 3 percent of your electricity bill is now generation. Ah sorry”   not generation. But it’s transmission and distribution and it’s only gonna get higher.                                                                                          

James McWalter:         Yeah” and and just just for for the kind of layperson. Basically the amount of wires that are built to get energy from 1 place to another.      those’s big kind of high voltage power lines that people drive by sometimes     basically they can only carry so much electricity and at a given points of the day they’re basically just full.                                                                  

Tony Pan:       So yeah.”                                                                                                                     

James McWalter:         It’s imagine like a water pipe full of water and you just basically can’t get the water. You can’t put add anymore water to a water pipe as’s similar to energy like if  a city like Seattle needs a ton of energy. ”  there may be a ton of energy being generated like outside the state all ready to go but the transmission lines. Are fully full and so that you just can’t get anymore into the City. We need to vote a ah hundred percent and you couldn’t mentioned this and I think this kind of goes into both the transmission piece as well as  different types of how the home is affected.  you mentioned some of these kind of european efforts.                                                                                   

Tony Pan:       Yeah” we we need to build a lot more and we just start now.                                                                                      

James McWalter:         What is the kind of regulatory and the  permitting process looks like in the United States  I I know there are some states do have kinds of programs around energy and efficiency in the home and so on. ”  what are you seeing? What are you kind of excited about from the regulatory picture and.                                                                                         

Tony Pan:       Oh so this is kind of funny in europe when you do when you do this kind of waste energy capture to code generates heat and power. Ah our our products right? boilers with our technology inside. Will be rated at above a hundred percent efficiency and of course of the I’m a trained as a physicist right? like ah so I’m like that’s stupid. That’s impossible. Nothing can be above 100 ah hundred percent efficiency. But this is the way the math is written in the books.”                                                                                                                                                                                                                                 

Tony Pan:       Because everybody recognizes electricity is more valuable than heat. Not just from an economic value standpoint. But because if you produce electricity locally. It’s a lot more efficient. Ah because you don’t have their transmission and you don’t have the one third average power plant efficiency. You don’t have to deal with that anymore. So they multiply the electricity by. Factor of 2 point five before it they added to also the heat generated within your boiler so because of the way that math works ah boilers with our technology will be rated above 100 percent efficient which is kind of cool and of course that makes us happy but it’s just again as a former physicist. But I I sort of roll my eyes out that but just take my blessings.”                                                                                                                        

James McWalter:         Absolutely and and then in terms of like the other ah  standards I know new york has some pretty strong. ”   new building standards.           I think it’s the ny c and ninety seven law which is affecting  greenhouse gas emissions. Although I think that’s more for like larger scale than like single-family homes. .  how do you think about?  the importance of regulation.  you’re already talking to a lot of the boilermakers or you’re already have partnerships with a lot of those   are they like do they need a continued push right either from the regulation side or maybe more on the conser side or do you think  just the pure economics of. Technology like yours makes sense for them right now.                                                                                  

Tony Pan:       Bluntly It’s the pure economics and value prop of the technology. Ah Usa regulation ah is not the same as Europe to put them milly. So the major Usa companies are working with us. They’re relying on the fact that they think people are going to love this right.”                                                                                                                      

James McWalter:         Sure I.”                                                                                                          

Tony Pan:       If you first of all”           even if you didn’t care about energy savings. Ah if you’re living in a blackout pro blackout prone area. This is 1 of the best things that has ever happened to heating appliances. It can basically give you backup power. And make make your life a lot easier save you save you pain save you tens of thousands of dollars in damages and your only other alternative is like a fifteen thousand dollars generator installed outside of your home taking extra extra real states and additional maintenance.                                                                                                    

James McWalter:         Or or a similar like cost for a ” solar plus battery array. If if you have the space for that as well. Right? like  you’re right.                                                                                               

Tony Pan:       Oh yeah”         like a solar plus battery array would be even more expensive right? But that that 1 has energy savings unlike a generator generator so that that’s good           but ah  the issue is wintertime right? The the winter time Blackout. You don’t have enough solar. And a battery will run out. It will not last you through like the multi-day multi-day blackhouse that you saw ah in this winter season whereas we have a generation technology. It will never run out during the blackout or just keep going so they’re they’re seeing this primarily just from an intrinsic value propp standpoint in the us.                                                                      

James McWalter:         So right.”                                                                                                                      

Tony Pan:       But I actually would love to see more governmental action here. It’s it’s a little bit absurd. Ah what we have in a us aid regulations are quite behind where I think they should be to give you a sense. Ah. Let’s set aside modern electron right? like ignore our technology exists there are there was a technology called condensing technology within heating appliances I won’t go into how it works but basically condensing technology is mandated has been mandated in europe for . 15 years now because it raises the heating appliance efficiency from about 80 percent to ninety plus not big change but enough to be significant and it was invented like 40 years ago so 20 years ago you’re pretty mandated it ah in the usa it has never. Been really mandated. Ah”  despite the efficiency improvements and so today seventy percent of the usa markets is still the previous generation technology from like the nineteen seventy s and 80 s it’s crazy. Ah.                                                                                             

James McWalter:         Right? And so the massive opportunity to like skip skip ahead to the kind of level that of what what you’re building. ”  that’s super fascinating.  I suppose just before we kind of finish you up here?      I was like looking into your background and I believe you’ve grown up in  combined Taiwan Scotland Korea and now you’re       living in seattle.                                                          

Tony Pan:       Yeah.”                                                                                                            

James McWalter:         What is the kind of moving between those kind of quick culturally different places kind of impacted how you build a startup.”                                                                                                                 

Tony Pan:       Well I think it impacted the mission. So first of all I moved around. Ah fortunately because my dad was in the navy right? So ah”          what’s better than you join the navy yourself as your your parents join the Navy you see the world and they do the work.                                                                                               

James McWalter:         All right? sure.”                                                                                                         

Tony Pan:       Ah”    but ah  it was the taiwanese navy I’m ah I was born in taiwan and ah I think how would I put this I have a little bit of ah allergy to some of the Silicon valley approaches which I like to say it as akin to let them eat cake which is come up with a fancy and expensive solutions. And I think that comes from the fact that I didn’t to be clear I grew up very privileged I grew up in a middle class family in Taiwan which is a pretty developed country but it’s not the United states. It’s just not especially when I was growing up I was just not that rich. And I’m I’m like 1 generation from poverty like real poverty not like and this sounds kind of brutal but like I there’s real poverty in the usa as well. But it’s not the real real poverty and and out there in the rest of the world right? Ah to give you a statistic right? like.                                                                                    

James McWalter:         Like like like dollar ten dollars a day type poverty. .”                                                                                                           

Tony Pan:       Yeah” like my mom. My mom was the fourth child to be born in her family. She was the first to survive past age of 2 right? and I’ve  I’ve she grew up in like sls I that’s still like my grandparents home but or that they pass away very early because you also don’t live very long but like I visited those places right? it’s.                                                                                               

James McWalter:         Or yep.”                                                                                                                       

James McWalter:         Sure sure.”                                                                                                                  

Tony Pan:       It’s horrible. This is what most of the world live like right? So I just can’t I can’t ah I think our company founding mission was to make energy both cleaner and cheaper I sorts of intrinsically refused to just say hey climate change is important so work. No matter what we should just use green technology even if it’s super expensive. I just don’t believe that and I think that has a little bit to do with my background I don’t think that’s fair. So that’s sort of why we take the we’ve spent ah many tens of millions of dollars doing breakthrough technology at Modern electron because of the intrinsic belief that frankly”     a technological miracle is probably. Not only like morally the right thing to do. But I think it’s necessary because we think to get to scale a lot of the world like this has got to be like purely superior to then than current tech right? like the better greener solution has to be superior to the current solution. From an economic standpoint and all these other things. Even if you didn’t care about c o 2 because that’s what a lot of people on the planets are going to be like because they they’re not as fortunate as us.                                                                                            

James McWalter:         I think there” there’s a huge amount of kind of value in that and that perspective  I think we’ve done collectively as people in the climate space either technology or policy a pretty bad job of painting like this incredibly exciting future that the the tech we’re all working on is actually going to produce like it’s a cleaner. You turn not just from a c o 2 point of view but  a smog in the air.          yeah I’ve spent a ton of time in the developing world over the last  11 years and in some of the countries you mentioned and and countries like yeah earlier and I suppose the development kind of cycle and  just just breathing is just very very difficult in a lot of places and we kind of as we introduce like. Technologies that through either electrification or the reabsorption of heat in the way that  modern electrons working on those all those kind of things.    that’s like a net good but it also has to have price parody right along all the way through that kind of value chain.  because  it’s all very well I guess for developed countries to ah decate certain things.                                                              

Tony Pan:       ”          yeah.                                                                                             

James McWalter:         ”          from a particular kind of advantage in terms of like living standards.  like I’m I’m a few more generations ireland’s a little bit further behind the the us than than yeah other developed countries.    but but not not to the same level as your and  there was yeah my I guess I’m like a. Grandparent away from like not having tvs and refrigerators and all this kind of thing I mean be a four generation away from the kind of level of Poverty. You’re talking about but like it’s still I guess something that irish people are obsessed with is this idea that  I want to have ah a sense of safety in the home. A sense of like these these products have to.                                                                            

Tony Pan:       Yeah” yeah.                                                                                             

James McWalter:         Give safety around heat safety that I can eat safety around those kind of things before you get the nice Tv and all those kind of additional add-ons.”                                                                                                              

Tony Pan:       Yeah that’s exactly right right? I think ah there is real suffering in the world and before you ask folks to save the planet. It’s a lot easier to ask them hey use this new product because it’s gonna make your life better and it’s cheaper and incidentally it’s better. For your environment and I think that’s got to be the way that the real big solutions will happen across a planet if we really want to move the needle because yeah I mean  this right? most of the growth in c o 2 emissions is not going to happen in ah in the developed world anymore. It’s going to be the developing world that’s going to have the Fastest. Ah c o 2 contributions and if if we don’t things that work there. It’s sort of at moot points even if europe and usa gets to zero.”                                                                                                                 

James McWalter:         Oh absolutely And and ah all all the charts that I looked at recently like showed that very well.  Tony this has been great. ”      but really kind of enjoyed chatting is there anything I should have asked you about but did not.                                                                                                 

Tony Pan:       Oh yeah.”                                                                                                                    

I’d say sort of the nber 1 thing. We’re pretty proud of with our solution is it’s a drop-in solution right? because of this intel inside model. You’d be able to adopt this new appliance. That’s more efficient. It will save you money. It will reduce your overall climate footprint at like no extra hassle. This is just this is almost invisible sitting inside these heating appliances that just makes them better and therefore we think this is a way to go to scale quickly and yeah” so when it comes out in the Market. Ah consider that and also by the way model electron is growing like crazy. So we  we we have a wonderful team there I’m the spokesperson at this point our our our team we have like 14 page ds 14 masters doing deep tech cool work. Great culture and they’re the people that make the magic happen. And so we’d love for folks to join us in in the climate fight.                                                                              

James McWalter:         So very good. Yeah”   and I’ll include link links to your career page I think you’re doing a ton of hiring at the moment.          thank you Tony It’s been great.                                                                          

Tony Pan:       Okay” thank you keep up the good fight.                                                                                                        

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