1 00:00:00,040 --> 00:00:02,360 Speaker 1: Hey, anybody, This is Mark Taylor and this is Danda Perkins, 2 00:00:02,360 --> 00:00:07,400 Speaker 1: and you're listening to Switch on the benof podcast. Each 3 00:00:07,480 --> 00:00:10,400 Speaker 1: week we speak with bienn F analysts about the interesting 4 00:00:10,440 --> 00:00:13,280 Speaker 1: research they're working on, and this week we are joined 5 00:00:13,320 --> 00:00:16,200 Speaker 1: by Meredith Annex, who is Bloomberg an EFS head of 6 00:00:16,280 --> 00:00:20,040 Speaker 1: Heating and cooling research. Okay, wait, why do we have 7 00:00:20,079 --> 00:00:22,319 Speaker 1: a head of heating and cooling research. It's actually a 8 00:00:22,320 --> 00:00:24,880 Speaker 1: new thing for us, so it was a gap that 9 00:00:24,920 --> 00:00:27,040 Speaker 1: we needed to fill. And the reason it was a 10 00:00:27,080 --> 00:00:29,680 Speaker 1: gap is that heating and cooling are actually a huge 11 00:00:29,800 --> 00:00:34,519 Speaker 1: part of total energy demand buildings alone account of global 12 00:00:34,600 --> 00:00:37,600 Speaker 1: energy consumption. She's going to speak with us today regarding 13 00:00:37,680 --> 00:00:40,519 Speaker 1: two pieces of research her team has written, the Greening 14 00:00:40,520 --> 00:00:44,800 Speaker 1: of Heat and Decarbonizing US Heat Getting Started. These have 15 00:00:44,880 --> 00:00:47,239 Speaker 1: a lot to do with gas and electricity and what 16 00:00:47,360 --> 00:00:50,040 Speaker 1: options we might have in the future to pivot between 17 00:00:50,080 --> 00:00:52,880 Speaker 1: the two for heating and cooling. Okay, cool. So both 18 00:00:52,920 --> 00:00:55,080 Speaker 1: of these reports are available at benf dot com and 19 00:00:55,160 --> 00:00:58,160 Speaker 1: b NF go on the Bloomberg terminal for our subscribers. 20 00:00:58,240 --> 00:01:01,120 Speaker 1: If you're interested in becoming a BEANF client, reach out 21 00:01:01,160 --> 00:01:03,640 Speaker 1: to us at Sales dot BNF At bloomberg dot net, 22 00:01:03,760 --> 00:01:06,360 Speaker 1: we write about a wide range of topics, including clean energy, 23 00:01:06,440 --> 00:01:10,320 Speaker 1: advanced transport, digital industry, innovative materials, and commodities. Please note 24 00:01:10,319 --> 00:01:13,039 Speaker 1: that Bloombergunny does not provide investment or strategy advice, and 25 00:01:13,040 --> 00:01:14,440 Speaker 1: you can hear a full disclaimer at the end of 26 00:01:14,440 --> 00:01:18,360 Speaker 1: the show. Meredith, thank you for joining us. Hi Dana, Hi, Mark, 27 00:01:18,480 --> 00:01:20,560 Speaker 1: thanks very much for having me such to day. We're 28 00:01:20,560 --> 00:01:23,000 Speaker 1: going to talk about heat because that's what you spend 29 00:01:23,040 --> 00:01:25,440 Speaker 1: pretty much all of your time focused on, isn't it. Yeah, 30 00:01:25,440 --> 00:01:28,400 Speaker 1: pretty much that's new for you, right it is. Yeah. 31 00:01:28,600 --> 00:01:30,600 Speaker 1: I've been at Bania for a number of years now, 32 00:01:30,640 --> 00:01:33,120 Speaker 1: but we only started the team looking at heating and 33 00:01:33,120 --> 00:01:37,039 Speaker 1: cooling at the end of last year because for us, 34 00:01:37,160 --> 00:01:40,880 Speaker 1: it was really about finishing the puzzle pieces around the carbonization. 35 00:01:41,120 --> 00:01:43,680 Speaker 1: If we look around the circled high chart of emissions, 36 00:01:43,760 --> 00:01:48,240 Speaker 1: we understand power at BENIF very well. We're understanding transport 37 00:01:48,320 --> 00:01:51,160 Speaker 1: better and better every single year. Our EV team is great, 38 00:01:51,240 --> 00:01:54,320 Speaker 1: our autonomous driving team is great, but we haven't had 39 00:01:54,360 --> 00:01:56,200 Speaker 1: as good of a picture of our solid picture of 40 00:01:56,400 --> 00:01:58,960 Speaker 1: is buildings and industry. And that's where my team really 41 00:01:59,000 --> 00:02:01,720 Speaker 1: comes in because it comes to building an industrial demand. 42 00:02:01,760 --> 00:02:03,800 Speaker 1: A lot of that has to do with heating and cooling. 43 00:02:04,600 --> 00:02:07,559 Speaker 1: There is a path to decarbonization. You outline this actually 44 00:02:07,560 --> 00:02:10,239 Speaker 1: on a lot of the research that you do, and 45 00:02:10,480 --> 00:02:12,520 Speaker 1: it seems to break down into just three areas. You've 46 00:02:12,560 --> 00:02:17,000 Speaker 1: got electrification, district heating, green gas. Can you explain to 47 00:02:17,040 --> 00:02:20,040 Speaker 1: us what each of those three things actually are. Yeah, 48 00:02:20,080 --> 00:02:22,840 Speaker 1: So when it comes to decarbonizing buildings, what you're looking 49 00:02:22,880 --> 00:02:26,239 Speaker 1: at mostly is space heating and hot water and hot 50 00:02:26,240 --> 00:02:30,200 Speaker 1: water provisions for like your showers or that sort of thing, 51 00:02:30,520 --> 00:02:32,800 Speaker 1: and you need it to be kept at sixty degrees 52 00:02:32,800 --> 00:02:35,280 Speaker 1: celsius at least so that it doesn't grow bacteria. So 53 00:02:35,320 --> 00:02:37,760 Speaker 1: you do need heat to be put into that wherever 54 00:02:37,840 --> 00:02:41,800 Speaker 1: you are in the world now right now, Traditionally we're 55 00:02:41,919 --> 00:02:45,320 Speaker 1: using fossil fuels to provide that heat. Very often around 56 00:02:45,320 --> 00:02:48,240 Speaker 1: the world it's coal gas or oil being provided through 57 00:02:48,240 --> 00:02:50,720 Speaker 1: a boiler or a furnace that is providing this heat 58 00:02:50,760 --> 00:02:53,560 Speaker 1: to your home. When it comes to low carbon heating solutions, 59 00:02:53,560 --> 00:02:56,160 Speaker 1: we do see three pathways, as you said, Dana. So 60 00:02:56,400 --> 00:03:00,079 Speaker 1: one option is electrification um which is the you of 61 00:03:00,160 --> 00:03:02,799 Speaker 1: heat pumps or direct electric heating in order to heat 62 00:03:02,800 --> 00:03:05,360 Speaker 1: your home. What is a heat pump. It's a great question. 63 00:03:05,919 --> 00:03:07,959 Speaker 1: I think a lot of people think that they don't 64 00:03:08,000 --> 00:03:09,760 Speaker 1: know what a heat pump is, but you actually do. 65 00:03:09,919 --> 00:03:13,120 Speaker 1: It's just an air conditioner running in reverse. So if 66 00:03:13,160 --> 00:03:19,399 Speaker 1: you imagine that, I don't have an air conditioner, right, 67 00:03:19,520 --> 00:03:21,959 Speaker 1: So so then we explain it a little bit more. Um, 68 00:03:22,000 --> 00:03:26,000 Speaker 1: as long as you are above absolute zero in the world, 69 00:03:26,000 --> 00:03:27,840 Speaker 1: which we always will be, and if we aren't, we 70 00:03:27,919 --> 00:03:31,160 Speaker 1: got other problems. Uh, You've got latent energy in the 71 00:03:31,200 --> 00:03:35,360 Speaker 1: ambient environment around you. So even at zero degrees celsius, 72 00:03:35,400 --> 00:03:38,480 Speaker 1: there's still energy in the air outside. Even then in 73 00:03:38,520 --> 00:03:41,680 Speaker 1: the ground outside, there's going to be energy. What a 74 00:03:41,720 --> 00:03:43,840 Speaker 1: heat pump does is it sends a refrigerant out there 75 00:03:43,960 --> 00:03:47,240 Speaker 1: and takes in some of that energy by boiling the refrigerant. 76 00:03:47,600 --> 00:03:50,400 Speaker 1: A electric compressor then compresses refrigerant to put even more 77 00:03:50,480 --> 00:03:52,520 Speaker 1: energy in the system, and all that gets released as 78 00:03:52,560 --> 00:03:56,440 Speaker 1: heat into your home. So you are using you're basically 79 00:03:56,440 --> 00:04:00,560 Speaker 1: transferring heat from the ambient environment into your house using 80 00:04:00,600 --> 00:04:03,640 Speaker 1: a very small amount of purchased energy and form of electricity, 81 00:04:03,840 --> 00:04:05,920 Speaker 1: and this means that you have a huge amount of 82 00:04:05,920 --> 00:04:09,000 Speaker 1: efficiency from it. So on average, in Europe we would 83 00:04:09,000 --> 00:04:11,920 Speaker 1: expect that for one kill a lot hour of purchased electricity, 84 00:04:12,000 --> 00:04:13,920 Speaker 1: a heat pump would produce three point five kill a 85 00:04:13,920 --> 00:04:16,400 Speaker 1: watt hours of useful heat in your home. And just 86 00:04:16,480 --> 00:04:18,719 Speaker 1: as a comparison, do either of you guys have gas 87 00:04:18,720 --> 00:04:21,520 Speaker 1: boilers in your home right now? I do, and it's 88 00:04:21,560 --> 00:04:27,320 Speaker 1: broken at the moment. I've got a repairman coming today anyway. So, um, 89 00:04:27,360 --> 00:04:30,719 Speaker 1: in comparison, those gas boilers that you have, for every 90 00:04:30,760 --> 00:04:33,080 Speaker 1: one kill abott hour of gas that they're consuming, they're 91 00:04:33,080 --> 00:04:36,159 Speaker 1: producing around point nine to kill a lot hours of 92 00:04:36,279 --> 00:04:41,240 Speaker 1: useful heat. So you're just you have under efficiency for 93 00:04:41,279 --> 00:04:43,680 Speaker 1: a gas boiler because that's how physics works. But for 94 00:04:43,680 --> 00:04:45,800 Speaker 1: a heat pump, because they take advantage of this latent 95 00:04:45,880 --> 00:04:49,200 Speaker 1: energy in the ambient environment, you can have well over 96 00:04:50,520 --> 00:04:55,480 Speaker 1: in terms of the Yeah, so district heating, what you're 97 00:04:55,520 --> 00:04:57,880 Speaker 1: doing is you're moving hot water around a series of pipe, 98 00:04:57,880 --> 00:05:00,840 Speaker 1: so you've created heat in a centralized look asian or 99 00:05:01,000 --> 00:05:04,279 Speaker 1: semi centralized location. Usually it's a c HP plant. It 100 00:05:04,360 --> 00:05:07,000 Speaker 1: could be like waste heat from a facility, or it 101 00:05:07,040 --> 00:05:09,360 Speaker 1: could be a heat pump, but you're heating hot water 102 00:05:09,480 --> 00:05:11,719 Speaker 1: that's going around pipes, and then you have a heat 103 00:05:11,760 --> 00:05:14,279 Speaker 1: transfer unit in your home that takes some amount of 104 00:05:14,320 --> 00:05:17,239 Speaker 1: that heat into your home and then leaves a slightly 105 00:05:17,279 --> 00:05:22,040 Speaker 1: colder fluid in the pipe afterwards. And then there's green gas. Now, 106 00:05:22,080 --> 00:05:25,359 Speaker 1: what is what what comprises the green gas category? Yeah, 107 00:05:25,440 --> 00:05:27,960 Speaker 1: so we're using green gas as a catch all term 108 00:05:28,000 --> 00:05:30,560 Speaker 1: at BNF because there's no real industry standard for what 109 00:05:30,560 --> 00:05:34,159 Speaker 1: it means. Usually it consists of two or three types 110 00:05:34,200 --> 00:05:40,560 Speaker 1: of things biogas, so biomethane, hydrogen, and synthetic natural gas, 111 00:05:40,600 --> 00:05:43,719 Speaker 1: which would be basically methane molecules, but they're cregated through 112 00:05:43,760 --> 00:05:47,760 Speaker 1: a process like electrolysis. So, of these three, electrification, district 113 00:05:47,760 --> 00:05:51,360 Speaker 1: heating and green gas, which is got the rosiest future 114 00:05:51,360 --> 00:05:54,800 Speaker 1: ahead of it. I think it depends on where you are. Actually, 115 00:05:55,360 --> 00:05:58,360 Speaker 1: it's a very diverse field. Are in if you're lucky 116 00:05:58,440 --> 00:06:03,880 Speaker 1: enough to have historic legacy district heating, that's really fortunate 117 00:06:03,880 --> 00:06:08,800 Speaker 1: when it comes to the carbonization because it's relatively straightforward. Iceland, yeah, 118 00:06:08,920 --> 00:06:11,440 Speaker 1: or or Denmark is usually the example that you would hear. 119 00:06:11,760 --> 00:06:15,800 Speaker 1: Um District heating is source agnostic as long as it's 120 00:06:15,839 --> 00:06:19,400 Speaker 1: operating within a certain temperature range um and that means 121 00:06:19,440 --> 00:06:22,440 Speaker 1: that you can replace that c HP plant with lookhard 122 00:06:22,440 --> 00:06:25,000 Speaker 1: and sources in a pretty stat foremanner. You have to 123 00:06:25,000 --> 00:06:28,320 Speaker 1: do some digitalization, you have to do some some optimization 124 00:06:28,400 --> 00:06:31,400 Speaker 1: of the facility, but you can do it everywhere else. 125 00:06:31,680 --> 00:06:35,520 Speaker 1: It's kind of an open field about whether it's going 126 00:06:35,560 --> 00:06:38,560 Speaker 1: to be green gas or electrification. And it's kind of 127 00:06:38,600 --> 00:06:41,159 Speaker 1: the battle that we're seeing in most countries regardless of 128 00:06:41,160 --> 00:06:43,720 Speaker 1: whether they've got a strong gas grid or not today. 129 00:06:44,120 --> 00:06:46,400 Speaker 1: So the rosy future kind of depends on the drive 130 00:06:46,440 --> 00:06:50,000 Speaker 1: for it. Absolutely yeah, And at the moment, policy is 131 00:06:50,040 --> 00:06:52,560 Speaker 1: going to be a big determinating factor about where we 132 00:06:52,640 --> 00:06:57,080 Speaker 1: see the growth opportunities today. The story in the US 133 00:06:57,160 --> 00:07:00,440 Speaker 1: is a little bit different than the story in Europe. 134 00:07:00,640 --> 00:07:03,440 Speaker 1: Looking specifically at the States, you identify the fact that 135 00:07:03,520 --> 00:07:06,240 Speaker 1: in the South it might be more appealing to actually 136 00:07:06,360 --> 00:07:11,240 Speaker 1: have some of these electrification solutions. Why why is a 137 00:07:11,240 --> 00:07:13,880 Speaker 1: great question. So the South has a couple of things 138 00:07:13,920 --> 00:07:16,520 Speaker 1: working in its favor. The biggest one is mild weather. 139 00:07:16,720 --> 00:07:19,560 Speaker 1: If you're imagining that heat pump again and it's taking 140 00:07:19,600 --> 00:07:22,040 Speaker 1: let's say it's an air source heat pumps, so it 141 00:07:22,160 --> 00:07:24,680 Speaker 1: is that means that it's sourcing its heat from the 142 00:07:24,720 --> 00:07:30,040 Speaker 1: ambient air outside. What matters for its effectiveness at moving 143 00:07:30,200 --> 00:07:32,880 Speaker 1: heat from the outside into your home is the temperature 144 00:07:32,880 --> 00:07:36,240 Speaker 1: differential between your home and the outside. So if I'm 145 00:07:36,280 --> 00:07:38,840 Speaker 1: trying to move the water going around your radiators or 146 00:07:38,840 --> 00:07:40,560 Speaker 1: the air coming out of your air ducts, depending on 147 00:07:40,600 --> 00:07:43,000 Speaker 1: what type of system you've got in your house, is 148 00:07:43,000 --> 00:07:46,480 Speaker 1: going to be somewhere around thirty five to seventy five 149 00:07:46,720 --> 00:07:51,840 Speaker 1: degrees celsius and that temperature differential, So getting the ambient 150 00:07:51,840 --> 00:07:54,920 Speaker 1: air outside up to that temperature is what the heat 151 00:07:54,960 --> 00:07:57,480 Speaker 1: pump has to do, and that determines how much electricity 152 00:07:57,480 --> 00:08:00,320 Speaker 1: work you have to put into the system. So if 153 00:08:00,360 --> 00:08:03,440 Speaker 1: you're starting from a point like in a cold climate 154 00:08:03,680 --> 00:08:07,160 Speaker 1: where it can easily be below zero or negative five 155 00:08:07,160 --> 00:08:10,640 Speaker 1: degrees celsius, that's a bigger temperature that you have to 156 00:08:10,840 --> 00:08:14,600 Speaker 1: work over. And as we all probably know from just 157 00:08:14,720 --> 00:08:17,600 Speaker 1: life experiences, temperature doesn't like to move from a low 158 00:08:17,640 --> 00:08:19,040 Speaker 1: spot to a high spot. It likes to move the 159 00:08:19,120 --> 00:08:21,920 Speaker 1: other way. So you're working against nature in that sense. 160 00:08:22,000 --> 00:08:24,040 Speaker 1: You know, you're adding work to the system through the 161 00:08:24,040 --> 00:08:27,280 Speaker 1: electricity purchase. So the electrical demand is what's driving the 162 00:08:27,320 --> 00:08:30,800 Speaker 1: class competitiveness. Then in these different geographies, half of it 163 00:08:30,920 --> 00:08:33,000 Speaker 1: so this is half the story. So half the story 164 00:08:33,200 --> 00:08:36,480 Speaker 1: is that because the winters are more mild and more 165 00:08:36,640 --> 00:08:39,320 Speaker 1: days are more mild in the South, you're always going 166 00:08:39,360 --> 00:08:41,400 Speaker 1: to have a higher efficiency for your system because the 167 00:08:41,440 --> 00:08:43,840 Speaker 1: system has to work less hard. The other half of 168 00:08:43,880 --> 00:08:46,040 Speaker 1: the story, though, has to do with cooling, which is 169 00:08:46,080 --> 00:08:49,640 Speaker 1: the other half of my team's focus, and that's the 170 00:08:49,720 --> 00:08:53,280 Speaker 1: reverse air conditioner exactly, or the reverse heat pump as 171 00:08:53,280 --> 00:08:56,040 Speaker 1: you will in this context. So a heat pump can 172 00:08:56,120 --> 00:08:58,320 Speaker 1: work both ways. You need to add a fan maybe, 173 00:08:58,360 --> 00:09:00,360 Speaker 1: but you know it can work both ways. As long 174 00:09:00,360 --> 00:09:02,480 Speaker 1: as that's the case, you basically get too for the 175 00:09:02,480 --> 00:09:05,040 Speaker 1: price of one in terms of your upfront cost. And 176 00:09:05,120 --> 00:09:07,440 Speaker 1: that's a huge deal because heat pumps have a very 177 00:09:07,520 --> 00:09:10,520 Speaker 1: high upfront cost When you compare them to a traditional 178 00:09:11,040 --> 00:09:14,079 Speaker 1: gas system, whether it's a furnace in the US or 179 00:09:14,080 --> 00:09:16,880 Speaker 1: a boiler in Europe. Uh, they're usually out of the 180 00:09:16,920 --> 00:09:19,520 Speaker 1: money in terms of upfront costs, and that puts off 181 00:09:19,559 --> 00:09:22,160 Speaker 1: a lot of potential buyers. When you then add in 182 00:09:22,200 --> 00:09:25,160 Speaker 1: the price of an air conditioning system. Now in the 183 00:09:25,160 --> 00:09:27,160 Speaker 1: southern US, you're looking at not just the cost of 184 00:09:27,160 --> 00:09:29,480 Speaker 1: a gas furnace, you're also looking at a gas furnace 185 00:09:29,600 --> 00:09:33,120 Speaker 1: and as some sort of central air conditioning system. Instead 186 00:09:33,160 --> 00:09:35,440 Speaker 1: of getting both of those separate systems, you could just 187 00:09:35,480 --> 00:09:37,600 Speaker 1: get a heat pump, and all of a sudden, heat 188 00:09:37,600 --> 00:09:40,560 Speaker 1: pumps start to look really cost effective, both an upfront 189 00:09:40,559 --> 00:09:43,319 Speaker 1: cost and operational costs, you know. And just an in 190 00:09:43,360 --> 00:09:46,839 Speaker 1: personal interest, just been hearing about the northern US and 191 00:09:46,960 --> 00:09:51,599 Speaker 1: specifically in New York the company Dandelion from Google, So 192 00:09:51,640 --> 00:09:53,240 Speaker 1: I have two questions about that, and that could help 193 00:09:53,280 --> 00:09:55,800 Speaker 1: us dip into the players in this in this space 194 00:09:55,880 --> 00:09:59,000 Speaker 1: as well and into retro for versus new build. But 195 00:09:59,000 --> 00:10:01,280 Speaker 1: what I've heard from about them is, well, first can 196 00:10:01,320 --> 00:10:03,760 Speaker 1: clarifies that district heating your heat pumps. It's heat pumps, 197 00:10:04,360 --> 00:10:07,760 Speaker 1: and they're specifically ground source heat pumps. So they're looking 198 00:10:07,800 --> 00:10:10,520 Speaker 1: instead of using the air as their ambient environment, they're 199 00:10:10,600 --> 00:10:13,400 Speaker 1: using ground so the soil. Okay. I was a bit 200 00:10:13,440 --> 00:10:16,000 Speaker 1: dubious about it when I first heard of their venture, 201 00:10:16,080 --> 00:10:17,840 Speaker 1: but it sounds like I got it wrong. It sounds 202 00:10:17,840 --> 00:10:19,680 Speaker 1: like they're kind of killing it. What is interesting to 203 00:10:19,679 --> 00:10:22,640 Speaker 1: me what I've heard is basically that they're putting these 204 00:10:22,679 --> 00:10:26,199 Speaker 1: into new developments, right so new communities, new build homes, 205 00:10:26,400 --> 00:10:28,600 Speaker 1: and using it as a marketing tool to bring people 206 00:10:28,600 --> 00:10:31,320 Speaker 1: to these new communities, right, so they'll say, hey, you know, 207 00:10:31,400 --> 00:10:33,480 Speaker 1: come to this new community where you're heating and cooling 208 00:10:33,480 --> 00:10:37,199 Speaker 1: costs basically zero and people are moving to these these 209 00:10:37,240 --> 00:10:40,240 Speaker 1: new homes. So is that we're gonna be seeing in 210 00:10:40,240 --> 00:10:42,960 Speaker 1: this space more and more? What's the future there? Well, 211 00:10:43,040 --> 00:10:45,439 Speaker 1: So we are actually working on a case study right 212 00:10:45,480 --> 00:10:49,040 Speaker 1: now that's looking specifically at Dandelion's business model. I didn't 213 00:10:49,040 --> 00:10:51,559 Speaker 1: know that beforehand, folks, I know that was a perfect plug. 214 00:10:52,040 --> 00:10:55,600 Speaker 1: So Uh. An analyst on my team, em A Coker, 215 00:10:55,840 --> 00:10:57,920 Speaker 1: is currently working on that report. Should be on in 216 00:10:57,960 --> 00:11:00,320 Speaker 1: a couple of weeks. Very exciting to have the chance 217 00:11:00,360 --> 00:11:04,240 Speaker 1: to plug it in here. Uh. And Dandeliane is really cool. Uh. 218 00:11:04,280 --> 00:11:07,960 Speaker 1: My understanding is that they do retrofits as well as 219 00:11:07,960 --> 00:11:11,640 Speaker 1: honestly is just what I hear. Literally, the thing that 220 00:11:11,679 --> 00:11:14,760 Speaker 1: there's a couple pieces to unpack there specifically within Dandelion, 221 00:11:14,800 --> 00:11:17,240 Speaker 1: And the thing that we find really innovative about Dandelion, 222 00:11:17,280 --> 00:11:20,960 Speaker 1: aside from the way they're working to modularize the way 223 00:11:21,000 --> 00:11:24,760 Speaker 1: that they do ground source heat pumps, is um the 224 00:11:24,840 --> 00:11:29,160 Speaker 1: financing model that they provide, so they're providing private sector 225 00:11:29,280 --> 00:11:32,880 Speaker 1: loans that you pay off over twenty years in order 226 00:11:33,160 --> 00:11:36,440 Speaker 1: to reduce the upfront cost of a ground source heat pump, 227 00:11:36,880 --> 00:11:40,520 Speaker 1: and that can remove that barrier. Because these systems can 228 00:11:40,600 --> 00:11:44,200 Speaker 1: be eight thousand dollars equivalent in Europe a ground source 229 00:11:44,240 --> 00:11:47,480 Speaker 1: heat pump, you're talking closer to fifteen sixteen thousand dollars 230 00:11:47,480 --> 00:11:49,840 Speaker 1: in Europe. These are a huge cost to take. So 231 00:11:49,840 --> 00:11:52,559 Speaker 1: if you can remove the upfront cost, then you're great. 232 00:11:53,000 --> 00:11:56,679 Speaker 1: The biggest thing, though, that you're pointing on is about 233 00:11:57,160 --> 00:11:59,600 Speaker 1: why a new billing would be going for them, And 234 00:11:59,640 --> 00:12:02,280 Speaker 1: actually this is something that we're seeing across the board, 235 00:12:02,280 --> 00:12:06,160 Speaker 1: not just with Dandelion. Across the board, heat pump sales 236 00:12:06,280 --> 00:12:11,440 Speaker 1: are stronger, probably and often driven by new builds. So 237 00:12:11,640 --> 00:12:15,360 Speaker 1: um in the southern US you could have six depending 238 00:12:15,400 --> 00:12:17,760 Speaker 1: on where you are in terms of census region of 239 00:12:17,880 --> 00:12:21,079 Speaker 1: new build homes that are opting for heat pumps instead 240 00:12:21,080 --> 00:12:25,880 Speaker 1: of any other heating system at all. And the US 241 00:12:25,920 --> 00:12:29,440 Speaker 1: on average new builds have a heat pump instead of 242 00:12:29,440 --> 00:12:31,440 Speaker 1: any other type of heating system at all. This is 243 00:12:31,440 --> 00:12:33,920 Speaker 1: not a particularly new business model because we've actually seen 244 00:12:33,960 --> 00:12:38,440 Speaker 1: this in the solar industry, where I'm hearing comparable upfront 245 00:12:38,480 --> 00:12:41,560 Speaker 1: costs and My question really is are the payback periods 246 00:12:41,800 --> 00:12:46,079 Speaker 1: in terms of equal or roughly the same. So that's 247 00:12:46,080 --> 00:12:48,840 Speaker 1: something we're also working on for this summer, because they're 248 00:12:48,840 --> 00:12:52,480 Speaker 1: doing a great job hitching my pipeline um. In terms 249 00:12:52,559 --> 00:12:55,520 Speaker 1: of how it works compared to solar, they're both very 250 00:12:55,520 --> 00:12:57,440 Speaker 1: similar in terms of a high upfront cost that you 251 00:12:57,520 --> 00:13:00,760 Speaker 1: earn back over their operational lifespan. The way that tends 252 00:13:00,760 --> 00:13:03,760 Speaker 1: to work in solar is that you're reducing your electricity bill. 253 00:13:04,200 --> 00:13:06,240 Speaker 1: The way that that works with heat pump is that 254 00:13:06,280 --> 00:13:09,960 Speaker 1: you're using less fuel total than you would have with 255 00:13:10,040 --> 00:13:12,320 Speaker 1: your other system. And so what you have to look 256 00:13:12,320 --> 00:13:14,520 Speaker 1: at is the ratio between the electricity price and the 257 00:13:14,559 --> 00:13:17,520 Speaker 1: gas price and the efficiency of each of your heating system. 258 00:13:17,520 --> 00:13:20,960 Speaker 1: So it's a bit more completely complicated of a calculation 259 00:13:21,040 --> 00:13:23,560 Speaker 1: to do than first solar, which makes it a little 260 00:13:23,559 --> 00:13:26,920 Speaker 1: bit harder, I think for the average homeowner. But with 261 00:13:27,000 --> 00:13:29,240 Speaker 1: a new build home, you're almost always going to be 262 00:13:29,320 --> 00:13:33,240 Speaker 1: having a lower operating cost um and that's usually what 263 00:13:33,320 --> 00:13:35,560 Speaker 1: a new bill developers worried about. They're less worried about 264 00:13:35,559 --> 00:13:37,439 Speaker 1: the upfront cost of the system, They're more worried about 265 00:13:38,120 --> 00:13:42,040 Speaker 1: the lifespan of this building. And how operational costs are 266 00:13:42,040 --> 00:13:45,480 Speaker 1: going to be affecting the future tenants or future buyers 267 00:13:45,520 --> 00:13:49,320 Speaker 1: over time, because having a home that's new with lower 268 00:13:49,400 --> 00:13:52,880 Speaker 1: energy bills is more attractive from a bious perspective. Well, 269 00:13:52,920 --> 00:13:54,560 Speaker 1: I guess the difference is you're going to need a 270 00:13:54,559 --> 00:13:57,080 Speaker 1: heating and cooling system in a home regardless, but the 271 00:13:57,120 --> 00:14:00,280 Speaker 1: solar panels seem to be fairly optional because you've got 272 00:14:00,320 --> 00:14:03,640 Speaker 1: the grid connection exactly and on that. Actually, let me 273 00:14:03,679 --> 00:14:05,680 Speaker 1: ask you guys a question. Do you know off the 274 00:14:05,679 --> 00:14:08,800 Speaker 1: top of your head what the hence per kill a 275 00:14:08,800 --> 00:14:11,200 Speaker 1: watt hour is? Because we're in the UK for the 276 00:14:11,200 --> 00:14:13,760 Speaker 1: electricity that you buy versus the gas that you buy, 277 00:14:13,800 --> 00:14:17,199 Speaker 1: I gotta go well, and this is the thing most 278 00:14:17,240 --> 00:14:20,600 Speaker 1: people don't write, so most people aren't thinking about this. 279 00:14:21,080 --> 00:14:23,720 Speaker 1: But depending on where you are, that ratio could be 280 00:14:23,760 --> 00:14:26,280 Speaker 1: really high or really low. In the UK, actually the 281 00:14:26,360 --> 00:14:29,080 Speaker 1: ratio is really off putting for a heat pump, usually 282 00:14:29,440 --> 00:14:31,800 Speaker 1: because you're probably paying I think the average in the 283 00:14:31,880 --> 00:14:33,720 Speaker 1: UK is about sixteen pence per kill a lot hour 284 00:14:33,800 --> 00:14:36,240 Speaker 1: on electricity compared to eight pence per kill a wat 285 00:14:36,240 --> 00:14:39,080 Speaker 1: hour on your gas. So you would need a very 286 00:14:39,120 --> 00:14:41,000 Speaker 1: efficient heat pump to make up worth your while in 287 00:14:41,080 --> 00:14:43,640 Speaker 1: terms of operating costs? Can we go back to policy 288 00:14:43,680 --> 00:14:46,240 Speaker 1: though in that vein? Is there going to be a 289 00:14:46,280 --> 00:14:50,080 Speaker 1: time where I'm going to be forced to retrofit my 290 00:14:50,080 --> 00:14:52,320 Speaker 1: my house? You know? Regardless am I in trouble in 291 00:14:52,320 --> 00:14:54,560 Speaker 1: in UK or anywhere else? Maybe in the UK more 292 00:14:54,600 --> 00:14:57,880 Speaker 1: than anywhere else. Uh So this is a really like 293 00:14:58,440 --> 00:15:00,920 Speaker 1: you hit on a really serious, Paul, the point that 294 00:15:00,920 --> 00:15:03,560 Speaker 1: that governments are thinking about today, Like, honestly, this is 295 00:15:03,600 --> 00:15:06,120 Speaker 1: a core part of the Net zero report in the 296 00:15:06,200 --> 00:15:08,880 Speaker 1: UK is trying to decide how we're going to incentivize 297 00:15:08,880 --> 00:15:12,920 Speaker 1: this transition. Historically, the way that incentives for heat pumps 298 00:15:12,920 --> 00:15:15,920 Speaker 1: of work has been very similar to solar. You get 299 00:15:15,960 --> 00:15:18,360 Speaker 1: a subsidy for the upfront cost, or you get a 300 00:15:18,400 --> 00:15:21,320 Speaker 1: subsidized tariff for the electricity consumed by that system, which 301 00:15:21,320 --> 00:15:23,240 Speaker 1: would be the equivalent maybe of an export tariff for 302 00:15:23,280 --> 00:15:25,160 Speaker 1: the solar, and that's the way that you would earn 303 00:15:25,200 --> 00:15:28,000 Speaker 1: it back. So it's all financial mechanisms that are driving 304 00:15:28,040 --> 00:15:30,640 Speaker 1: these markets forward right now. What the Committee of Climate 305 00:15:30,680 --> 00:15:33,960 Speaker 1: Change report is saying is basically is that the best 306 00:15:34,000 --> 00:15:38,000 Speaker 1: way to go, Because there's a couple of problems with that. 307 00:15:38,120 --> 00:15:40,120 Speaker 1: First of all in the UK, it hasn't actually led 308 00:15:40,160 --> 00:15:43,840 Speaker 1: to a dramatic rise in the optake of low carbon heating. 309 00:15:43,960 --> 00:15:47,920 Speaker 1: But also there's a big concern around governments about the 310 00:15:47,960 --> 00:15:50,560 Speaker 1: social costs here because as you get to poor and 311 00:15:50,640 --> 00:15:53,400 Speaker 1: poorer communities, a larger portion of their income is being 312 00:15:53,440 --> 00:15:57,120 Speaker 1: taken up by energy bills. So should you be offering 313 00:15:57,480 --> 00:16:01,000 Speaker 1: financial attentives, should you be offering standards and then paying 314 00:16:01,040 --> 00:16:06,320 Speaker 1: for those through kind of a national tax program. That's 315 00:16:06,400 --> 00:16:08,600 Speaker 1: kind of the ongoing question. So how do you remove 316 00:16:08,720 --> 00:16:12,920 Speaker 1: the financial barriers and burden from the individual and what 317 00:16:13,080 --> 00:16:15,320 Speaker 1: do you get a bigger chunk of the change if 318 00:16:15,360 --> 00:16:18,560 Speaker 1: you went for commercial first, No, because commercial there's fewer 319 00:16:18,560 --> 00:16:22,960 Speaker 1: commercial buildings, and commercial buildings use heat differently, right, so 320 00:16:23,200 --> 00:16:27,440 Speaker 1: you have more space heating in commercial buildings, but or 321 00:16:27,520 --> 00:16:30,440 Speaker 1: space coin depending um on on the type of building 322 00:16:30,440 --> 00:16:33,320 Speaker 1: that you're in. For instance, in Bloomberg, we've got a 323 00:16:33,360 --> 00:16:35,960 Speaker 1: lot of servers in our building, so really all that 324 00:16:36,000 --> 00:16:38,280 Speaker 1: we have to do is cool the building because we 325 00:16:38,320 --> 00:16:41,680 Speaker 1: get passive heat provided by most of our servers. Um 326 00:16:41,880 --> 00:16:44,360 Speaker 1: So it gets a lot more complicated. But you don't 327 00:16:44,400 --> 00:16:47,320 Speaker 1: have hot water, which around the world tends to be 328 00:16:47,360 --> 00:16:51,240 Speaker 1: the biggest source overall, because if you think about milder climates, 329 00:16:51,600 --> 00:16:54,280 Speaker 1: especially developing countries, you don't really need space heating. You 330 00:16:54,360 --> 00:16:57,640 Speaker 1: do need hot water. That's not an issue in commercial buildings. 331 00:16:58,000 --> 00:17:01,560 Speaker 1: So commercial buildings also have a challenge be has Generally speaking, 332 00:17:01,600 --> 00:17:05,760 Speaker 1: retrofits are more complicated with a low carbon system, and 333 00:17:05,760 --> 00:17:08,800 Speaker 1: and that has to do with basically the output temperature 334 00:17:08,840 --> 00:17:10,880 Speaker 1: the system and how fast you can eat your heat 335 00:17:11,000 --> 00:17:13,440 Speaker 1: your building and how much of a what's called a 336 00:17:13,520 --> 00:17:15,439 Speaker 1: U loss a heat loss coming out of the buildings, 337 00:17:15,600 --> 00:17:18,320 Speaker 1: like a load of factors that affect this. But if 338 00:17:18,359 --> 00:17:20,320 Speaker 1: you're going to have to retrofit your building in order 339 00:17:20,359 --> 00:17:22,040 Speaker 1: to have a low carbon heating system, that's harder to 340 00:17:22,040 --> 00:17:23,600 Speaker 1: do for an office space that it is for a home. 341 00:17:24,200 --> 00:17:26,800 Speaker 1: So you need to do both. You need to address both, 342 00:17:27,160 --> 00:17:29,200 Speaker 1: but there's probably different ways that you get to both. 343 00:17:29,520 --> 00:17:34,159 Speaker 1: The UK is often looking at using tendency agreements and 344 00:17:34,200 --> 00:17:36,760 Speaker 1: mortgage agreements as a way to do this. So commercial 345 00:17:36,840 --> 00:17:39,760 Speaker 1: buildings in the UK, it's either a current policy or 346 00:17:39,840 --> 00:17:43,159 Speaker 1: soon to be that if you're building has a energy 347 00:17:43,320 --> 00:17:47,119 Speaker 1: performance rating EPC code below an F you're not going 348 00:17:47,119 --> 00:17:50,639 Speaker 1: to really be able to resell that kind of commercial building. 349 00:17:50,920 --> 00:17:52,639 Speaker 1: What they're talking about is looking at the same thing 350 00:17:52,680 --> 00:17:56,800 Speaker 1: the tendency laws. So in a right private building, potentially 351 00:17:56,800 --> 00:18:00,280 Speaker 1: saying that okay, you can't wint out this building if 352 00:18:00,320 --> 00:18:05,320 Speaker 1: it's below you know, be or whatever on the EPC rating, 353 00:18:05,320 --> 00:18:07,679 Speaker 1: which is the energy efficiency ratings here in Europe. And 354 00:18:07,720 --> 00:18:08,800 Speaker 1: so that could be a way that you do with 355 00:18:08,880 --> 00:18:11,840 Speaker 1: your standards, which kind of takes the financial question out 356 00:18:11,840 --> 00:18:13,560 Speaker 1: of the hands of the individual buyer, but you do 357 00:18:13,640 --> 00:18:15,520 Speaker 1: have to find a way to fund that. From a 358 00:18:15,560 --> 00:18:18,359 Speaker 1: decarbonization standpoint, Let's say you've got this finite pot of 359 00:18:18,400 --> 00:18:20,480 Speaker 1: money and you want to spend it on solar or 360 00:18:21,240 --> 00:18:24,920 Speaker 1: on your heat renovating your heat system. Which one is 361 00:18:24,920 --> 00:18:26,600 Speaker 1: going to give you more bang for your buck in 362 00:18:26,720 --> 00:18:30,119 Speaker 1: terms of decarbonization, it depends on the carbon content of 363 00:18:30,160 --> 00:18:32,480 Speaker 1: your electricity credit because right now, if your electricity grid 364 00:18:32,560 --> 00:18:35,320 Speaker 1: is mostly coal, then you know coal's got the highest 365 00:18:35,359 --> 00:18:38,000 Speaker 1: carbon intensity of any of these In electrifying your heating 366 00:18:38,000 --> 00:18:41,440 Speaker 1: systems doing no good because you're now switching to coal 367 00:18:41,480 --> 00:18:44,920 Speaker 1: instead of gas essentially too like really generalize, but if 368 00:18:44,960 --> 00:18:47,280 Speaker 1: you're in a region, and this is why we put 369 00:18:47,320 --> 00:18:49,960 Speaker 1: electrification as one of the pathways to decarbonization. If you're 370 00:18:49,960 --> 00:18:52,960 Speaker 1: looking at a country where the grid is carbonized, then 371 00:18:53,280 --> 00:18:56,159 Speaker 1: your electricity isn't the issue. The issues you're heating At 372 00:18:56,160 --> 00:19:00,439 Speaker 1: that point, Can we go back to the players for 373 00:19:00,440 --> 00:19:02,639 Speaker 1: a minute. Is this the startup play like Dandelion or 374 00:19:02,640 --> 00:19:05,040 Speaker 1: are we going to see bigger names? You know, familiar 375 00:19:05,160 --> 00:19:07,959 Speaker 1: names come into the space right now. There's kind of 376 00:19:08,000 --> 00:19:12,520 Speaker 1: like the big five heat pump companies always a big five. Um, 377 00:19:13,000 --> 00:19:15,159 Speaker 1: I'm not entirely clear on who's in the list of 378 00:19:15,160 --> 00:19:16,640 Speaker 1: the Big five, but you always hear the big five. 379 00:19:17,800 --> 00:19:19,960 Speaker 1: But it's it's going to be your typical like Mitzubig 380 00:19:20,080 --> 00:19:24,440 Speaker 1: Electric di can the big makers of air conditioners are 381 00:19:24,480 --> 00:19:27,480 Speaker 1: the big players in heat pops? Are they also the installers? 382 00:19:27,480 --> 00:19:30,159 Speaker 1: Do they have installing installations? Installers tend to be very 383 00:19:30,240 --> 00:19:32,600 Speaker 1: much like solar, where it is going to be mom 384 00:19:32,600 --> 00:19:35,080 Speaker 1: and pop bands doing the installation. A lot of these 385 00:19:35,119 --> 00:19:38,240 Speaker 1: companies will run training program because installations complicated with a 386 00:19:38,320 --> 00:19:40,399 Speaker 1: heat pump, and so you need to make sure that 387 00:19:40,440 --> 00:19:44,200 Speaker 1: someone's installing it properly otherwise it doesn't work. Um, but 388 00:19:44,200 --> 00:19:46,720 Speaker 1: but it'll still usually be a mom and pop shop 389 00:19:46,760 --> 00:19:50,400 Speaker 1: that's doing the installation. That said, there are smaller players 390 00:19:50,400 --> 00:19:53,040 Speaker 1: in this space as well, like the Dandellions of the 391 00:19:53,040 --> 00:19:56,120 Speaker 1: world who are doing innovation right now. There's a lot 392 00:19:56,119 --> 00:19:58,919 Speaker 1: of lack of transparency around the heat pump space, and 393 00:19:58,960 --> 00:20:02,680 Speaker 1: that allows room for a lot of players, a lot 394 00:20:02,720 --> 00:20:06,879 Speaker 1: of distributed players, a lot of different types of design, 395 00:20:06,960 --> 00:20:10,000 Speaker 1: the business models that may or may not be fully 396 00:20:10,000 --> 00:20:12,680 Speaker 1: competitive with each other because people just have a lack 397 00:20:12,680 --> 00:20:15,199 Speaker 1: of information to do that comparison. So there's space for 398 00:20:15,240 --> 00:20:18,800 Speaker 1: new entrants, yeah, and consolidation. What we're expecting is that 399 00:20:19,040 --> 00:20:21,679 Speaker 1: as these sectors continue to grow, and we've been seeing 400 00:20:21,760 --> 00:20:25,160 Speaker 1: some pretty remarkable growth rates for heat pumps in recent 401 00:20:25,240 --> 00:20:27,600 Speaker 1: years compared to where they were before. They're still a 402 00:20:27,680 --> 00:20:31,520 Speaker 1: very small portion of total homes, but their growth rates 403 00:20:31,560 --> 00:20:33,760 Speaker 1: in terms of annual sales of heatpumps have been rising 404 00:20:33,760 --> 00:20:36,840 Speaker 1: in Europe in the US. As that continues, you would 405 00:20:36,840 --> 00:20:39,800 Speaker 1: expect to see the space continue to evolve with new players, entering, 406 00:20:39,880 --> 00:20:42,880 Speaker 1: players consolidating all of the normal stuff that happens when 407 00:20:42,880 --> 00:20:48,320 Speaker 1: you start to increasingly commoditize a relatively non transparent sector. 408 00:20:48,880 --> 00:20:52,119 Speaker 1: What sorts of innovations would help accelerate this, and specifically 409 00:20:52,200 --> 00:20:56,480 Speaker 1: from cost competitiveness standpoint, So the big conversation right now 410 00:20:56,560 --> 00:21:01,119 Speaker 1: within heat pumps is around variable motors. I think I 411 00:21:01,200 --> 00:21:03,399 Speaker 1: probably have the terms lightly wrong, but it's essentially that 412 00:21:03,480 --> 00:21:05,320 Speaker 1: the idea is that you can operate your heat pump 413 00:21:05,359 --> 00:21:08,760 Speaker 1: and your refrigerant flow at multiple speeds. And the reason 414 00:21:08,760 --> 00:21:11,399 Speaker 1: that you may want to do this is because you 415 00:21:11,440 --> 00:21:13,840 Speaker 1: don't have to have the heat pump operating all the time. 416 00:21:14,040 --> 00:21:17,159 Speaker 1: And you can imagine that this can improve the performance 417 00:21:17,160 --> 00:21:19,800 Speaker 1: of the heat pump dramatically, both in terms of heating 418 00:21:19,800 --> 00:21:21,359 Speaker 1: your home, but also in terms of like what it 419 00:21:21,400 --> 00:21:24,240 Speaker 1: can provide in terms of flexibility to the grid. So 420 00:21:24,640 --> 00:21:26,600 Speaker 1: if you had to demand response portfolio with a lot 421 00:21:26,640 --> 00:21:29,520 Speaker 1: of heat pumps and all of them are on variable speed, 422 00:21:29,920 --> 00:21:31,840 Speaker 1: instead of turning them off and on, you can just 423 00:21:31,960 --> 00:21:34,399 Speaker 1: ramp them up and down and use that to smooth 424 00:21:34,400 --> 00:21:37,800 Speaker 1: your grid, for instance. So that's a big exciting conversation 425 00:21:37,920 --> 00:21:40,960 Speaker 1: right now. Uh. The other one isn't really about costs, 426 00:21:40,960 --> 00:21:45,120 Speaker 1: are about market size, and that's noise reduction. So heat 427 00:21:45,160 --> 00:21:47,240 Speaker 1: pumps have a motor, they have a fan, they tend 428 00:21:47,280 --> 00:21:50,360 Speaker 1: to be a bit noisy. Uh. They are always designed 429 00:21:50,359 --> 00:21:55,159 Speaker 1: to be compliant with noise regulations. But how noisy like 430 00:21:55,280 --> 00:21:59,399 Speaker 1: annoy me? Noisy outside the house noisy you would think 431 00:21:59,440 --> 00:22:02,040 Speaker 1: we're talking about split systems right now. Um, for the 432 00:22:02,080 --> 00:22:04,560 Speaker 1: people on listening to the podcast who know what that is. 433 00:22:04,680 --> 00:22:06,679 Speaker 1: That means that you've got an outside piece as well 434 00:22:06,680 --> 00:22:08,640 Speaker 1: as an insect piece, and those are generally what you're 435 00:22:08,680 --> 00:22:11,399 Speaker 1: talking about when you've got a centralized heat pump. Otherwise 436 00:22:11,400 --> 00:22:13,760 Speaker 1: you're talking about a package system, which is kind of 437 00:22:13,800 --> 00:22:17,560 Speaker 1: like a window mountain air conditioner, right um, and those 438 00:22:17,600 --> 00:22:19,960 Speaker 1: ones they will be about as noisey as a refrigerator. 439 00:22:19,960 --> 00:22:22,720 Speaker 1: I believe. If you take a look at our barriers 440 00:22:22,720 --> 00:22:25,800 Speaker 1: to heat pump adoption in Europe, note then we actually 441 00:22:25,840 --> 00:22:28,320 Speaker 1: show where heat pumps fall on that scale. Now that 442 00:22:28,359 --> 00:22:31,760 Speaker 1: means where they're you know, that's the standard operating of them, 443 00:22:31,760 --> 00:22:34,640 Speaker 1: but they're designed to hit a point for two decibel 444 00:22:34,760 --> 00:22:37,119 Speaker 1: because that's the noise regulations require of them. So it 445 00:22:37,160 --> 00:22:40,400 Speaker 1: adds costs. So there's a lot of investigation being done 446 00:22:40,400 --> 00:22:43,280 Speaker 1: about what you can do to reduce noise in order 447 00:22:43,320 --> 00:22:46,240 Speaker 1: to have heat pumps in more concentrated locations, which as 448 00:22:46,320 --> 00:22:49,439 Speaker 1: multi family housing units with multiple heat pumps, or just 449 00:22:49,520 --> 00:22:53,680 Speaker 1: to you know, have them become more popular because that 450 00:22:53,800 --> 00:22:55,880 Speaker 1: is something that a lot of people worry about making 451 00:22:55,880 --> 00:23:00,520 Speaker 1: heaps exactly. So I'm actually doing a bunch of home 452 00:23:00,640 --> 00:23:02,480 Speaker 1: retrofits at the moment to try and make my house 453 00:23:02,520 --> 00:23:05,720 Speaker 1: more carbon friendly. And I want to know how am 454 00:23:05,720 --> 00:23:08,240 Speaker 1: I going to find out about these companies? How does 455 00:23:08,280 --> 00:23:11,200 Speaker 1: one stumble across them or intentionally come across them? And 456 00:23:11,440 --> 00:23:13,040 Speaker 1: what are the business models that they have for going 457 00:23:13,040 --> 00:23:16,120 Speaker 1: to market? Yeah, it's a great question. So, and this 458 00:23:16,200 --> 00:23:20,160 Speaker 1: is something that that is a big topic right now 459 00:23:20,200 --> 00:23:22,719 Speaker 1: within heat pumps. His education because oftentimes if you can 460 00:23:22,800 --> 00:23:25,120 Speaker 1: just go to your installer, they may or may not 461 00:23:25,320 --> 00:23:27,520 Speaker 1: know about a heat pump or be familiar with them. 462 00:23:27,560 --> 00:23:29,480 Speaker 1: They may not be trained in how to install them 463 00:23:29,920 --> 00:23:31,879 Speaker 1: because it's a mom and pop shop and most of 464 00:23:31,880 --> 00:23:35,200 Speaker 1: their revenues probably come from gas boilers and replacements. So 465 00:23:35,359 --> 00:23:37,600 Speaker 1: what the heat pump manufacturers do is they work with 466 00:23:37,840 --> 00:23:40,159 Speaker 1: mainly two types of companies. Well, they first of all, 467 00:23:40,160 --> 00:23:42,720 Speaker 1: they can just sell them directly themselves. They can also 468 00:23:42,800 --> 00:23:45,840 Speaker 1: work with a real estate developer, so trying to find 469 00:23:45,880 --> 00:23:48,040 Speaker 1: real estate partners that they can work with. And this 470 00:23:48,119 --> 00:23:50,760 Speaker 1: comes back to your question or mark with how the 471 00:23:50,800 --> 00:23:53,560 Speaker 1: operating costs work. So they'll work with the building designer 472 00:23:53,640 --> 00:23:56,080 Speaker 1: to incorporate. He comes right at the start um, so 473 00:23:56,119 --> 00:23:58,680 Speaker 1: you're seeing more and more conversations between those. And the 474 00:23:58,760 --> 00:24:01,000 Speaker 1: last is to go with your utility or with a 475 00:24:01,080 --> 00:24:03,919 Speaker 1: bulk supplier, and both of those are almost distribution venues 476 00:24:03,960 --> 00:24:06,520 Speaker 1: for these companies, so they can advert basically be the 477 00:24:06,600 --> 00:24:10,360 Speaker 1: preferred partner for Eon or for E d F or 478 00:24:10,480 --> 00:24:12,880 Speaker 1: or for whoever. Uh. And that's how you can find 479 00:24:12,880 --> 00:24:15,560 Speaker 1: out about the heat hump. So the benefits utilities as well. 480 00:24:15,720 --> 00:24:19,160 Speaker 1: It does. Yes, for utilities, it can be looked at 481 00:24:19,200 --> 00:24:23,320 Speaker 1: as a way to increase their relationships with their customers, 482 00:24:23,520 --> 00:24:27,720 Speaker 1: bringing new customers, have longer customer relationships, have an extra 483 00:24:28,000 --> 00:24:30,400 Speaker 1: revenue stream coming in from their customers. If it gets 484 00:24:30,400 --> 00:24:33,880 Speaker 1: combined with a smart home or a flexibility solution. Yeah, 485 00:24:33,880 --> 00:24:37,080 Speaker 1: there's a lot of interesting conversations happening on that front too. 486 00:24:37,600 --> 00:24:39,719 Speaker 1: What I find most interesting about this is all these 487 00:24:40,200 --> 00:24:43,879 Speaker 1: existing massive incumbent players that are going to benefit from this. 488 00:24:43,960 --> 00:24:47,159 Speaker 1: Because we talk a lot at the company about potential disruption, 489 00:24:47,440 --> 00:24:50,119 Speaker 1: but I'm seeing this is more of an opportunity for 490 00:24:50,280 --> 00:24:54,360 Speaker 1: utilities and potentially you're even saying water companies. Yeah, And 491 00:24:54,480 --> 00:24:57,000 Speaker 1: I think the question is really around how the gas 492 00:24:57,080 --> 00:24:59,959 Speaker 1: companies deal with it, probably because some of them are 493 00:25:00,000 --> 00:25:02,800 Speaker 1: are moving more and more oil and gas companies. You know, 494 00:25:02,840 --> 00:25:04,960 Speaker 1: they're increasingly the same thing. But some of them are 495 00:25:04,960 --> 00:25:07,760 Speaker 1: meeting more into electricity, some of them are looking into 496 00:25:07,800 --> 00:25:10,959 Speaker 1: heat pumps, and if they do that, then this can 497 00:25:11,000 --> 00:25:13,119 Speaker 1: be a benefit for them to or it could almost 498 00:25:13,160 --> 00:25:16,040 Speaker 1: be a challenge because we would expect that a Europe 499 00:25:16,080 --> 00:25:18,600 Speaker 1: with more electrified heat would also have reduced gust demand. 500 00:25:18,680 --> 00:25:20,800 Speaker 1: Even if there's more gas band in the power sector 501 00:25:20,840 --> 00:25:23,000 Speaker 1: than there is today, it would still be less overall 502 00:25:23,080 --> 00:25:25,919 Speaker 1: gas demand. And so how do you deal with that? 503 00:25:26,000 --> 00:25:30,280 Speaker 1: Do you then kind of push for green gas hydrogen 504 00:25:30,480 --> 00:25:34,879 Speaker 1: as your solution? Do you look for and extremely efficient 505 00:25:35,600 --> 00:25:39,240 Speaker 1: gas provision of heat, such as an absorption heat pump 506 00:25:39,240 --> 00:25:41,840 Speaker 1: which uses gas burning as the heat source. What do 507 00:25:41,880 --> 00:25:45,800 Speaker 1: you do is basically the open question. Meredith, thanks for 508 00:25:45,840 --> 00:25:48,280 Speaker 1: joining us, no problem, Thanks for having me, Mark and 509 00:25:48,359 --> 00:25:53,199 Speaker 1: Dana Anytime. Bloomberg any f is a service provided by 510 00:25:53,200 --> 00:25:57,280 Speaker 1: Bloomberg Finance LP and its affiliates. 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