WEBVTT - What climate tech is overhyped and what's not 0:00:01.000 --> 0:00:05.160 Welcome to Zero. I am Akshatarati. This week Hyped just Right. 0:00:17.400 --> 0:00:20.560 Whatever the mood on climate these days, there's always big 0:00:20.600 --> 0:00:24.159 ideas in the climate technology space, but it can be 0:00:24.200 --> 0:00:26.439 hard to get your head around all the different types 0:00:26.440 --> 0:00:30.400 of technologies making waves and to separate what's real and 0:00:30.440 --> 0:00:33.959 what's low carbon smoke and mirrors. So this week I'm 0:00:34.000 --> 0:00:37.360 teaming up with Shale Khan to play a game of overhyped, 0:00:37.520 --> 0:00:41.240 under hyped, or hype just right. Shale is a venture 0:00:41.280 --> 0:00:44.840 capitalist at Energy Impact Partners. This episode is a collaboration 0:00:45.159 --> 0:00:48.559 with the Catalyst podcast that Shale hosts, where he interviews 0:00:48.720 --> 0:00:53.240 tech experts about decarbonization. Together, we're going to talk about 0:00:53.320 --> 0:00:56.160 some of the climate technologies that are working, the ones 0:00:56.200 --> 0:00:59.200 that are going nowhere, and some that we can't wait 0:00:59.240 --> 0:01:06.880 to see their full potential. Chill, Welcome to Zero. 0:01:07.160 --> 0:01:08.800 Thank you, Akshat, Welcome to Catalyst. 0:01:09.280 --> 0:01:11.880 Well, this is a different kind of podcast and we're 0:01:11.880 --> 0:01:17.040 making it across an ocean, but with similar politics in 0:01:17.080 --> 0:01:17.720 the background. 0:01:18.200 --> 0:01:20.760 Yeah's what's going I mean, I have a question for 0:01:20.840 --> 0:01:25.200 you. You're in London, right yep? Okay, so and you you 0:01:25.200 --> 0:01:27.360 work for Bloomberg Green and one thing that I have 0:01:27.440 --> 0:01:32.040 found is that in the US, places where like green 0:01:32.280 --> 0:01:35.280 or clean or climate is in their name have been 0:01:35.319 --> 0:01:40.000 having an interesting set of discussions around nomenclature. Is that 0:01:40.160 --> 0:01:42.800 true for I mean, Bloomberg is obviously based in the US, 0:01:42.880 --> 0:01:44.920 but so I'm curious how you see it from the 0:01:44.920 --> 0:01:48.760 Bloomberg perspective high level, but also in the UK and 0:01:48.760 --> 0:01:49.280 in Europe. 0:01:49.600 --> 0:01:52.880 Yeah, so Bloomberg News is a global news organization, but yes, 0:01:52.920 --> 0:01:56.360 it is US headquartered. I would say there isn't that 0:01:56.520 --> 0:02:00.960 much muzzling of terms as it's happening in the US government, 0:02:01.320 --> 0:02:04.240 but there's certainly a backlash on the politics here. So 0:02:04.800 --> 0:02:07.040 there is a party called the Reform Party that's on 0:02:07.080 --> 0:02:10.040 the rise over here, doing in the polls better than 0:02:10.080 --> 0:02:13.639 the main two parties Labor and Conservatives, and they are 0:02:13.840 --> 0:02:19.880 against net zero. So we are usually a step behind America, 0:02:20.600 --> 0:02:22.040 but then eventually catch up. 0:02:22.400 --> 0:02:24.800 Well in this case, I'm not sure I want you 0:02:24.840 --> 0:02:28.040 to catch up, but let's see what happens, all right, 0:02:28.040 --> 0:02:30.440 So this is going to be fun. What's our plan here? 0:02:30.880 --> 0:02:33.320 So we're going to do something different where we're going 0:02:33.360 --> 0:02:36.760 to go through a number of topics that our producers 0:02:36.760 --> 0:02:40.679 have selected. Where we're going to say whether we think 0:02:40.720 --> 0:02:44.480 it's under hyped, overhyped, or hyped just right, and explain 0:02:44.639 --> 0:02:47.600 our positions for why we think. So, let's start with 0:02:47.919 --> 0:02:52.080 meeting load growth for electricity, which is a hot topic everywhere, 0:02:52.400 --> 0:02:56.559 but specifically within that, What do you think about distributed 0:02:56.680 --> 0:03:00.240 energy resources? What are they and where do you land? 0:03:00.000 --> 0:03:03.280 And right? So, distributed energy resources is like a grab 0:03:03.320 --> 0:03:06.480 bag category of a bunch of different things. I would 0:03:06.520 --> 0:03:08.280 say the way I define it is anything that you 0:03:08.400 --> 0:03:11.440 deploy at a customer site, So it's sitting behind the meter, 0:03:11.880 --> 0:03:16.799 the customer side of the meter that either generates energy, 0:03:17.520 --> 0:03:22.520 stores energy, or shifts load. So canonical examples generates energy, 0:03:22.520 --> 0:03:26.600 think rooftop solar stores energy, think power walls and batteries, 0:03:26.600 --> 0:03:31.480 home batteries, batteries of buildings. Shifts load, think smart thermostats 0:03:31.560 --> 0:03:34.120 right where you can shift it. And there's a broader 0:03:34.200 --> 0:03:36.440 array of things that fall within that, but they get 0:03:36.440 --> 0:03:41.400 grouped together, and is distributed energy resources. On the question 0:03:41.480 --> 0:03:45.480 of deer's for meeting load growth, which is a question 0:03:45.520 --> 0:03:47.839 here is it over hyped, under hyped, or hype just right? 0:03:48.320 --> 0:03:51.680 I think my argument here would be in the circles 0:03:51.680 --> 0:03:54.840 that I travel in which are pretty like wonky energy 0:03:54.880 --> 0:03:59.400 tech circles. It's becoming increasingly hyped because we're just starting 0:03:59.440 --> 0:04:03.280 to see this way of announcements that are inexorably coming 0:04:04.440 --> 0:04:07.440 where there are going to be partnerships between hyperscalers or 0:04:07.520 --> 0:04:11.880 data center operators and third parties who do aggregations of 0:04:11.960 --> 0:04:14.840 drs to deliver capacity, to get data centers on the 0:04:14.840 --> 0:04:16.960 grid and things like that. Like that's coming, no question, 0:04:18.279 --> 0:04:21.120 and so it's starting to bubble up into the hype world. 0:04:21.279 --> 0:04:25.039 But I think that is my world is a pretty 0:04:25.040 --> 0:04:28.440 small portion of the world, and broadly, I think even 0:04:28.440 --> 0:04:31.640 in data center universe, it has not really been considered 0:04:31.680 --> 0:04:34.200 very much yet. Like mostly it is we're going to 0:04:34.200 --> 0:04:37.760 build a data center, can we get grid capacity? If not, 0:04:38.000 --> 0:04:41.039 can we build a big gas turbine? And so my 0:04:41.160 --> 0:04:43.520 argument is because of all that, it is still under 0:04:43.560 --> 0:04:44.400 hyped as of today. 0:04:44.960 --> 0:04:48.320 Yeah, that's an interesting perspective. I would say in my world, 0:04:48.400 --> 0:04:50.960 which is a little bit broader because I talked to 0:04:51.120 --> 0:04:54.200 policy folks, and I talked to big businesses and I 0:04:54.240 --> 0:04:57.720 talked to vcs, is that it actually used to be 0:04:57.760 --> 0:05:01.599 more hyped because it was way in which everybody was 0:05:01.760 --> 0:05:05.480 justifying having all these big renewables goals being set up 0:05:05.520 --> 0:05:09.040 because look, don't worry about it. I know it is variable, 0:05:09.120 --> 0:05:11.840 but we'll have these technologies that are just going to 0:05:11.839 --> 0:05:15.440 come online within the next few years and they'll make 0:05:15.480 --> 0:05:19.640 it easier to manage this variability in renewables. At that time, 0:05:19.680 --> 0:05:22.279 it was pretty hyped. Now I would say it's under 0:05:22.360 --> 0:05:25.159 hyped because it's not something people talk about that much. 0:05:25.279 --> 0:05:28.360 But those solutions are actually starting to bubble up. So 0:05:28.400 --> 0:05:31.599 we had the CEO of Octopus Energy, which is the 0:05:31.680 --> 0:05:34.479 largest utility here in the UK, on the pod and 0:05:35.400 --> 0:05:39.520 this year they've launched a bid Lee's program where you 0:05:39.560 --> 0:05:42.679 can just pay monthly to get a bid electric car 0:05:43.040 --> 0:05:45.880 and they would give you twelve thousand miles of free 0:05:47.000 --> 0:05:49.480 range in a year as long as you make sure 0:05:49.480 --> 0:05:53.840 that you put your car into the charging port whenever 0:05:53.839 --> 0:05:57.960 you're home, because they'll use the car for a virtual 0:05:58.000 --> 0:06:01.760 power plant. Essentially, that sort of thing is now becoming 0:06:01.839 --> 0:06:05.760 very frequent, Like I get text messages from Octopacology saying, hey, 0:06:05.800 --> 0:06:08.360 twelve pm to two pm today, free electricity, use all 0:06:08.360 --> 0:06:13.280 you want. And so I feel like, now those technologies 0:06:13.320 --> 0:06:15.360 are here and they can actually be put to use 0:06:15.440 --> 0:06:18.240 and so they're kind of underhype because you could actually 0:06:18.279 --> 0:06:20.240 now see those things out there. 0:06:20.560 --> 0:06:23.359 Yeah, I think that DRS are a second We're in 0:06:23.400 --> 0:06:25.680 a second wave now, right, Like I've talked about this 0:06:25.680 --> 0:06:27.040 before on the pod, but there was a wave of 0:06:27.080 --> 0:06:29.040 excitement around DRS, which I think is what you are 0:06:29.120 --> 0:06:31.880 referring to maybe a decade ago, and at that point 0:06:31.880 --> 0:06:34.160 it was like, Oh, we're going to decentralize the grid 0:06:34.240 --> 0:06:37.479 and maybe this is going to disintermediate utilities, and none 0:06:37.480 --> 0:06:39.680 of that happened. But I think what is interesting that's 0:06:39.680 --> 0:06:43.880 different is the frame of the question here, which is 0:06:43.880 --> 0:06:46.840 is it overhyped, under hyped, or hype just right for 0:06:46.920 --> 0:06:49.880 the purpose of meeting load growth? And that was that 0:06:50.000 --> 0:06:52.280 was not a thing we cared about a decade ago 0:06:52.320 --> 0:06:55.560 when DRS first emerged. So I think this second wave 0:06:55.600 --> 0:06:59.040 that we're seeing now DRS as a solution to managing 0:06:59.480 --> 0:07:02.240 load growth is interesting. It's one of the things that 0:07:02.279 --> 0:07:05.080 makes it more attractive now, alongside a bunch of other 0:07:05.560 --> 0:07:07.919 factors as you mentioned, like the rise of evs and 0:07:07.960 --> 0:07:12.680 EV chargers as a significant dr source of capacity is 0:07:12.680 --> 0:07:15.520 another one. Okay, so we're on the same side here. 0:07:15.560 --> 0:07:19.520 We will think it's currently under hyped. Let me ask 0:07:19.600 --> 0:07:21.520 you another one that I've talked about a little bit 0:07:21.520 --> 0:07:25.200 before on this spot, which is putting collocation with generations, 0:07:25.200 --> 0:07:30.080 so basically putting generation largely gas on site with data centers. 0:07:30.640 --> 0:07:33.480 Is that as far as meeting the load growth challenge? 0:07:33.560 --> 0:07:35.720 Do you think that is overhyped? Under hyped? Drype just right? 0:07:36.080 --> 0:07:39.600 I think it is hyped because I have been reporting 0:07:39.800 --> 0:07:45.120 on gas turbines, which are currently, as my editor put it, 0:07:45.480 --> 0:07:48.120 the la booboo of climate solutions. 0:07:48.760 --> 0:07:51.400 That's a very I get it. 0:07:51.440 --> 0:07:54.840 That seems right, very high in demand, and there's a 0:07:54.960 --> 0:07:58.160 year's waiting list before you can get the one you want. 0:07:58.760 --> 0:08:02.240 And so sure you know, in principle, if you could 0:08:02.480 --> 0:08:05.600 get a gas turbine, you would build it close to 0:08:05.640 --> 0:08:09.200 where the data center is. But can you even get 0:08:09.240 --> 0:08:10.280 a gas turbine? 0:08:10.680 --> 0:08:12.440 Yeah, there is that. So you think it's hyped just right, 0:08:12.520 --> 0:08:14.760 because like it, it is a thing that would happen 0:08:14.800 --> 0:08:17.360 a lot. But the supply chain bottleneck is the is 0:08:17.400 --> 0:08:20.600 the rate limitter. I think that is generally true. I 0:08:20.640 --> 0:08:23.200 do think so I've talked about a little bit before 0:08:24.120 --> 0:08:26.280 on my pod. I think it is a little bit overhyped. 0:08:26.440 --> 0:08:28.440 The degree to which not to say that we don't 0:08:28.480 --> 0:08:30.280 need a ton of new generation, and not to say 0:08:30.280 --> 0:08:32.520 that we don't need a ton of new capacity on 0:08:32.559 --> 0:08:35.680 the grid, but the degree to which that capacity needs 0:08:35.720 --> 0:08:38.480 to be co located with the data center, to me, 0:08:38.640 --> 0:08:41.040 is a little bit overhyped. We will see it happen. 0:08:41.120 --> 0:08:43.480 It's already happening in some places, right, You're seeing this 0:08:43.520 --> 0:08:47.400 in the US. We have the Xai Colossus data Center 0:08:47.679 --> 0:08:50.640 has a bunch of gas turbines. Meta is building a 0:08:50.640 --> 0:08:52.120 big facility that's going to have a bunch of gas, 0:08:52.280 --> 0:08:56.600 and a number of these projects will. But I think 0:08:56.600 --> 0:09:00.080 it's going to end up being the minority of new 0:09:00.160 --> 0:09:02.480 data centers, not the majority of new data centers. I 0:09:02.480 --> 0:09:04.960 think the implications from what you would see in the 0:09:05.000 --> 0:09:06.920 news is that like every new data center is going 0:09:06.960 --> 0:09:10.600 to come equipped with a bunch of gas turbines. Again, 0:09:11.200 --> 0:09:13.240 not to say that we won't build a ton of 0:09:13.280 --> 0:09:15.960 new gas generating capacity. I just don't think it's all 0:09:16.000 --> 0:09:18.400 going to be collocated with the with the data centers. 0:09:18.880 --> 0:09:21.080 Yeah, I mean the reason we are bringing this up 0:09:21.160 --> 0:09:25.240 is because building the grid has been so hard, Right, 0:09:25.280 --> 0:09:28.200 the goal would be with co location, you don't have 0:09:28.320 --> 0:09:31.760 to wait for a grid connection to come through before 0:09:31.800 --> 0:09:34.839 you can build your data center ensure if you can 0:09:34.960 --> 0:09:37.880 pay really high prices for the gas turbines, which some 0:09:37.960 --> 0:09:40.679 tech companies can, then you might be able to do it, 0:09:41.040 --> 0:09:42.680 but most places won't. 0:09:43.520 --> 0:09:45.920 It's also there's an interesting embedded question in that too, 0:09:46.120 --> 0:09:49.960 which is at some point will costs matter? Well, no, 0:09:50.040 --> 0:09:52.880 actually two questions. At some point will costs matter and 0:09:53.000 --> 0:09:57.920 at some point will uptime not matter quite as much? Right, 0:09:57.960 --> 0:10:01.559 because if you have the same uptime requirements for your 0:10:01.600 --> 0:10:04.880 AI data center as cloud data centers have historically, and 0:10:04.920 --> 0:10:09.160 you want to front run your grid connection by installing generation, 0:10:09.480 --> 0:10:11.960 you can't just build gas turbans, right. You have to 0:10:12.040 --> 0:10:14.600 build a lot of infrastructure because you have to have really, 0:10:14.600 --> 0:10:16.960 really high reliability. So you're going to build your gas turbans. 0:10:17.320 --> 0:10:19.800 You're going to build You're going to oversize some batteries 0:10:19.880 --> 0:10:22.640 that's going to be really high CAPEX. You might add, 0:10:22.800 --> 0:10:25.120 you know, additional layers to your UPS system. Like, there's 0:10:25.120 --> 0:10:26.600 a lot that you would build, and that comes at 0:10:26.600 --> 0:10:29.400 a real cost. Now where we are in the cycle 0:10:29.480 --> 0:10:33.200 right now, you know, the reality is that the energy 0:10:33.280 --> 0:10:38.040 total embedded energy cost in compute is small compared to 0:10:38.200 --> 0:10:42.199 the capex of the of everything else, but mostly the chips. 0:10:42.520 --> 0:10:46.120 So maybe energy cost doesn't really matter, even if you're 0:10:46.160 --> 0:10:48.080 deploying a bunch of more capex into that stuff. But 0:10:48.080 --> 0:10:51.360 there's an interesting question of will that ultimately matter, which 0:10:51.400 --> 0:10:55.520 would dictate the degree to which this equation of speed 0:10:55.600 --> 0:10:59.480 to power versus cost of power shifts a little bit. 0:10:59.480 --> 0:11:01.560 I think it it will shift. I just don't know 0:11:01.600 --> 0:11:02.160 when that is. 0:11:03.000 --> 0:11:06.040 There's also the chance that you know, these guys would 0:11:06.120 --> 0:11:09.840 go and build the power capacity where the grid connection 0:11:10.040 --> 0:11:12.480 is available, which there are many parts of the world 0:11:12.679 --> 0:11:16.040 where there is grid connection available. So yeah, I think 0:11:17.160 --> 0:11:19.880 it is a little too hyped. With co location for 0:11:20.120 --> 0:11:22.600 data centers, some will get it, but most people won't. 0:11:22.960 --> 0:11:25.400 Let's come to the next topic, which is falling on 0:11:25.559 --> 0:11:28.760 from trying to build the grid here at zero. We've 0:11:28.800 --> 0:11:32.240 done a series called Bottlenecks because we are seeing these 0:11:32.240 --> 0:11:36.240 bottlenecks to build the grid, especially in Europe and North America, 0:11:36.920 --> 0:11:40.640 show up in so many places. There's so many bottlenecks 0:11:41.200 --> 0:11:44.720 that it's not just about permitting and politics but about 0:11:44.880 --> 0:11:51.080 actual objects. So where is generating capacity on your hype meter. 0:11:51.440 --> 0:11:54.040 And the hype meter as a bottleneck. Right, So the 0:11:54.120 --> 0:11:57.600 question is basically, are we overly and like over hyped 0:11:57.600 --> 0:12:00.640 would mean we're too worried about it. Under hype would 0:12:00.640 --> 0:12:03.440 mean we're not worried enough about it. I think that, 0:12:04.200 --> 0:12:06.640 you know, the long lead times or gas turbans in 0:12:06.679 --> 0:12:11.760 particular is very well established and reported and understood by everyone, 0:12:11.800 --> 0:12:14.720 which I guess argues that it's it's hyped because people 0:12:14.720 --> 0:12:18.240 do appreciate that that is a real challenge. There also, though, 0:12:18.320 --> 0:12:23.560 has been a lot of good data to suggest that 0:12:24.640 --> 0:12:28.000 generating capacity in the next few years is not the 0:12:28.120 --> 0:12:32.640 dominant bottleneck, Like there is enough capacity in enough places 0:12:33.320 --> 0:12:35.160 to deliver the kind of load growth for the next 0:12:35.160 --> 0:12:37.760 few years that the grid will need. So I think 0:12:37.760 --> 0:12:39.760 this will get to the next one where I think 0:12:39.760 --> 0:12:41.920 there is a real concern. But I would say generating 0:12:41.960 --> 0:12:45.680 capacity to me, might be a little bit overhyped. The 0:12:45.800 --> 0:12:49.880 cues are long if you want to build new gas turbans, 0:12:49.920 --> 0:12:52.000 but I don't think that is going to be the 0:12:52.080 --> 0:12:55.920 rate limitter on load growth at least through like twenty thirty. 0:12:56.640 --> 0:12:59.880 I think that is right. We spoke to a utility 0:13:00.080 --> 0:13:03.959 CEO the next or CEO in the US, who said, 0:13:04.000 --> 0:13:07.160 you know, if gas turbines are going to be that expensive, 0:13:07.760 --> 0:13:10.679 that's just going to make solar prose batteries so much 0:13:10.760 --> 0:13:15.079 more attractive, and we will build those instead. So there 0:13:15.120 --> 0:13:19.320 is certainly no reason to think all forms of generating 0:13:19.360 --> 0:13:22.160 capacity is in a bottleneck, and so all sorts of 0:13:22.280 --> 0:13:26.240 other things could be built. But there are other challenges 0:13:26.320 --> 0:13:30.320 in bottlenecks which are much more severe to me, that 0:13:30.360 --> 0:13:31.599 we need to worry about. 0:13:31.480 --> 0:13:33.640 So that maybe gets to the next one I think, 0:13:33.679 --> 0:13:37.600 which is which is transmission deliverability basically is the way 0:13:37.640 --> 0:13:40.880 to put it. Do you think that is overhyped underhyped 0:13:40.920 --> 0:13:41.559 as a bottleneck. 0:13:42.000 --> 0:13:44.720 I think it's super under hyped. Let me give you 0:13:44.760 --> 0:13:49.280 a European example, which is that the Netherlands has twelve 0:13:49.360 --> 0:13:54.520 thousand businesses waiting for an electricity connection. Companies like ASML, 0:13:54.760 --> 0:13:59.320 which is like the Netherlands' biggest company, most valuable company, 0:13:59.600 --> 0:14:02.760 isn't a to build extra factory because it cannot get 0:14:02.760 --> 0:14:05.040 an electricity connection for the next few years. 0:14:05.640 --> 0:14:08.240 And is the Netherlands in the same situation as the 0:14:08.360 --> 0:14:12.360 US where we just basically stopped building new transmission lines 0:14:12.640 --> 0:14:16.319 years ago, like we I mean not zero but effectively 0:14:16.440 --> 0:14:19.160 zero for the past few years. Is that the situation 0:14:19.360 --> 0:14:22.000 and in Netherlands or in Europe in general, or is it? 0:14:22.080 --> 0:14:24.880 No, No, it's not that severe because a lot of 0:14:24.920 --> 0:14:28.200 European countries are interconnected and they have been building more 0:14:28.200 --> 0:14:31.640 interconnections between them. It's more like there are places around 0:14:31.640 --> 0:14:35.160 Europe where there is more generating capacity, and there are 0:14:35.240 --> 0:14:38.880 demand centers which are typically further away from those generating capacity, 0:14:39.320 --> 0:14:42.680 that aren't getting the power supply as it's needed. So 0:14:42.680 --> 0:14:44.800 the transmission hasn't been able to keep up with the 0:14:44.840 --> 0:14:47.240 demand that is showing up. 0:14:47.360 --> 0:14:49.680 And I don't think of that. Maybe I should know better, 0:14:49.720 --> 0:14:51.560 but I don't think of the Netherlands as having been 0:14:51.600 --> 0:14:54.760 a big data center hub historically, do you know? 0:14:55.760 --> 0:14:58.800 No, I don't think so. I mean, it certainly has 0:14:58.800 --> 0:15:02.240 some industry. A lot of it is, you know, oriented 0:15:02.280 --> 0:15:06.320 towards electricity because it's high end manufacturing. But no, I 0:15:06.360 --> 0:15:08.200 don't think it's a big data center hub. 0:15:08.720 --> 0:15:11.280 Yeah, which I mean is even more concerning if you 0:15:11.280 --> 0:15:14.520 think about the context of there's this big, long queue 0:15:14.960 --> 0:15:17.600 to get grid connected in a market that hasn't yet 0:15:17.640 --> 0:15:21.440 seen the boom in like very large load interconnection requests 0:15:21.480 --> 0:15:23.040 that we're seeing in lots of other places. 0:15:23.360 --> 0:15:26.760 There is the aspect of dr like distributed energy resources 0:15:26.760 --> 0:15:31.320 that is affecting the grids in Europe. So Netherlands has 0:15:31.360 --> 0:15:36.680 the highest per capita rooftop solar in the world, which 0:15:36.720 --> 0:15:38.480 you know for a European country, it'll be like, oh, 0:15:38.480 --> 0:15:40.560 that's odd, but you know that's what you get. You 0:15:40.600 --> 0:15:43.960 get cheap solar panels, and you get some policy available 0:15:44.000 --> 0:15:46.600 and you'll deploy a lot of solar panels. But it's 0:15:46.640 --> 0:15:52.000 causing real problems at the transmission and distribution network locally 0:15:52.480 --> 0:15:54.600 because the grid has been built over the last hundred 0:15:54.680 --> 0:15:58.240 years and many of the objects of the grid are 0:15:58.640 --> 0:16:02.400 much much older. So that brings us to the next topic, 0:16:02.480 --> 0:16:07.480 which is transformers. Transformers are this object that said, between 0:16:08.480 --> 0:16:11.520 generation between a power plant and your home, because they 0:16:11.520 --> 0:16:14.440 have to make sure that the voltage at which power 0:16:14.480 --> 0:16:16.880 is delivered is just right for the devices that you 0:16:16.880 --> 0:16:19.760 are going to attach to it. Where do you land 0:16:19.840 --> 0:16:23.960 on whether transformers are over hyped, under hyped, just right hype. 0:16:24.920 --> 0:16:30.000 So again, if the question is overhyped, under hyped as 0:16:30.040 --> 0:16:33.760 a bottleneck to load growth to meeting load growth, then 0:16:34.000 --> 0:16:37.720 I think that they're overhyped. I want to clarify. Transformers 0:16:37.720 --> 0:16:42.560 are incredibly important, and there is a bottleneck, and the 0:16:42.640 --> 0:16:46.000 lead times are very long, and I've witnessed it firsthand, 0:16:46.040 --> 0:16:49.520 both from the utility side and the load side. It 0:16:49.600 --> 0:16:51.520 is a problem. I don't think it is the rate 0:16:51.560 --> 0:16:54.560 limiting factor. Even today, with long lead times, it's an 0:16:54.600 --> 0:16:57.960 annoyance to get anything built. Things will still get built, 0:16:58.000 --> 0:17:00.440 and certainly those lead times for transformers are so shorter 0:17:00.480 --> 0:17:03.000 than they are for gas turbines. But I do think 0:17:03.040 --> 0:17:05.600 we also will see a lot of new transformer manufacturing 0:17:05.640 --> 0:17:09.080 capacity come online in the next few years. It's the 0:17:09.440 --> 0:17:11.280 lead times are going to come down, and I think 0:17:11.280 --> 0:17:13.679 we'll see a way of new technology. I'm an investor 0:17:13.680 --> 0:17:15.560 in a company called hair and Power, which is building 0:17:15.560 --> 0:17:19.399 solid state power electronics. You know, I think stuff like 0:17:19.440 --> 0:17:23.320 that is going to revolutionize that sector. But even in 0:17:23.359 --> 0:17:25.000 the absence of things like that, I don't think it 0:17:25.080 --> 0:17:29.440 is going to be the thing that stops the load 0:17:29.480 --> 0:17:31.920 growth from getting met. So I'm going to say overhyped 0:17:31.960 --> 0:17:32.440 on that one. 0:17:33.080 --> 0:17:35.959 I would go under hyped if I look at the 0:17:36.240 --> 0:17:40.720 non data center crowd because transformers are needed for everything, 0:17:41.000 --> 0:17:43.800 and in my reporting, like I've come across many many 0:17:43.840 --> 0:17:47.439 projects like housing projects that are completely on hold for 0:17:47.520 --> 0:17:51.520 eighteen months because they're missing this one object that they 0:17:51.560 --> 0:17:56.760 need before they can power the area, and so it 0:17:56.840 --> 0:17:59.440 is affecting a lot more people. But the people who 0:17:59.480 --> 0:18:01.720 can afford to pay for it can jump the queue 0:18:02.200 --> 0:18:05.680 and get the object, then yes, they can. They can 0:18:05.840 --> 0:18:08.919 get there. And then on the manufacturing side, again, my 0:18:09.000 --> 0:18:13.760 reputting says, these companies are very conservative. They will invest, 0:18:13.880 --> 0:18:17.119 but only if they have surety that there will be 0:18:17.720 --> 0:18:21.320 demand for transformers for twenty years or so, which they 0:18:21.320 --> 0:18:22.960 are not yet sure will. No. 0:18:23.400 --> 0:18:26.119 I totally agree with that, and it's already evident in 0:18:26.160 --> 0:18:27.960 the fact that we've had these long lead times for 0:18:28.040 --> 0:18:31.800 transformers back to I don't know, twenty twenty one, twenty 0:18:31.840 --> 0:18:34.080 twenty two. It's not a new thing, and it has 0:18:34.200 --> 0:18:36.520 been persistent for longer than I think a lot of 0:18:36.520 --> 0:18:39.040 people expect it, in part because of the conservatism of 0:18:39.080 --> 0:18:42.440 that industry, who, to be fair to them, they've gone 0:18:42.440 --> 0:18:46.720 through cycles before where they've overinvested and then been underutilized 0:18:46.760 --> 0:18:48.720 and so on, and so they're reticent to do that again. 0:18:49.280 --> 0:18:52.760 I think that the expansion of capacity is not entirely 0:18:52.800 --> 0:18:54.520 going to come from the incumbents, though, I think there's 0:18:54.520 --> 0:18:57.480 going to be a wave of upstart companies, whether they're 0:18:57.480 --> 0:19:00.920 doing traditional oil filled transformers or solid state stuff like 0:19:01.320 --> 0:19:03.679 Karen is doing. I think they're going to fill in 0:19:03.720 --> 0:19:06.040 a lot of the supply gap in the next few years, 0:19:06.400 --> 0:19:09.359 even if the hitachies of the world, you know, expand 0:19:09.400 --> 0:19:10.960 capacity slower than you would want them. 0:19:10.960 --> 0:19:17.159 To join us after the break for more of my 0:19:17.240 --> 0:19:20.360 conversation with Shilkhan, and Hey, while I've got you here, 0:19:20.680 --> 0:19:24.440 fancy writing us a review on Apple podcasts or Spotify. Recently, 0:19:24.640 --> 0:19:28.439 Jfred nineteen eighty eight wrote zero will prompt even mildly 0:19:28.440 --> 0:19:32.160 interested listeners to get pumped about green politics and technologies. 0:19:32.600 --> 0:19:33.399 Thanks to you, Fred. 0:19:47.720 --> 0:19:50.480 Let's take at version for a second. Here, you had 0:19:50.520 --> 0:19:53.000 a thing that I have no context on, but you 0:19:53.040 --> 0:19:55.520 want to talk about this that's relevant to my day job, 0:19:55.560 --> 0:19:57.399 which is you wanted to talk about VC as a 0:19:57.440 --> 0:20:01.280 tool for scaling climate tech. You're gonna grill me on 0:20:01.320 --> 0:20:01.760 something here. 0:20:01.800 --> 0:20:04.840 I just don't know what I would happily really on 0:20:04.920 --> 0:20:07.640 many many topics, but this one. I wanted to put 0:20:07.720 --> 0:20:09.760 us on the hype or under hype, because you know 0:20:09.800 --> 0:20:14.600 it's your business. But from the perspective of venture capital 0:20:15.560 --> 0:20:22.040 helping scale climate solutions. I think VC is overhyped because 0:20:23.320 --> 0:20:25.960 that model might work in America, and I don't know 0:20:25.960 --> 0:20:28.800 if it's working because there are not that many companies 0:20:28.840 --> 0:20:33.880 that have really been VC oriented big climate champions right now, 0:20:34.600 --> 0:20:38.399 but rest of the world are building climate solutions and 0:20:38.440 --> 0:20:42.080 a lot of those companies aren't VC backed. Your BVID 0:20:42.320 --> 0:20:45.679 wasn't a VC backed company while it became an electric 0:20:45.720 --> 0:20:51.080 car giant. So to me, that is one model. It 0:20:51.119 --> 0:20:54.400 can work in certain cases, and it's not working in 0:20:54.480 --> 0:20:57.720 so many cases that perhaps it's time to look at 0:20:58.280 --> 0:21:02.680 other forms of idea is that would allow maybe existing 0:21:02.720 --> 0:21:07.359 companies to pivot towards climate solutions, which also can happen. 0:21:07.760 --> 0:21:12.720 I think what we've broadly seen historically is that venture capital, 0:21:12.920 --> 0:21:17.479 particularly venture capital in the US, I will say, plays 0:21:17.520 --> 0:21:21.600 an outsized role relative to the dollars that go into it. 0:21:21.640 --> 0:21:26.280 Plays an outsized role in getting new technologies into commercialization 0:21:27.119 --> 0:21:30.520 right like from the lab to the market. And usually 0:21:30.560 --> 0:21:34.119 there's one or two pioneering companies that are venture backed 0:21:34.560 --> 0:21:36.440 that do that and are the first. So if you 0:21:36.440 --> 0:21:38.879 want to talk about bid, like what would bid be 0:21:39.160 --> 0:21:42.080 if Tesla hadn't been Tesla. It's an interesting question. If 0:21:42.080 --> 0:21:45.280 there had never been a Tesla, would BID still be 0:21:45.400 --> 0:21:47.840 what it is today? Would it have scaled as quickly? 0:21:48.560 --> 0:21:52.280 Or was the existence proof of a company like Tesla 0:21:52.400 --> 0:21:54.919 the thing that caused BID in the Chinese government to 0:21:55.000 --> 0:21:57.479 deploy a lot of capital into it. You've seen versions 0:21:57.520 --> 0:21:59.200 of that, I think a lot of times. Yeah. 0:22:00.000 --> 0:22:03.160 Other example would be CTL, which is the largest battery company. 0:22:03.480 --> 0:22:06.720 You know, what would it be if LFB lithimyin phosphate 0:22:06.880 --> 0:22:10.360 had not been invented in America and then first commercialized 0:22:10.359 --> 0:22:13.360 by E one to three, which is a venture back company. 0:22:13.560 --> 0:22:16.119 That's right now, That's a good example of there is 0:22:16.160 --> 0:22:18.040 a separate question that I think is a good question, 0:22:18.480 --> 0:22:23.240 which is do the investors, the venture investors, and the 0:22:23.280 --> 0:22:27.200 companies that they invest in, reap the full reward of 0:22:27.200 --> 0:22:29.840 that invention and commercialization? And A one two three is 0:22:29.880 --> 0:22:31.920 a perfect example of like, that company went public and 0:22:31.920 --> 0:22:34.560 then went bankrupt pretty quickly. So maybe the answer to 0:22:34.560 --> 0:22:36.840