1 00:00:02,720 --> 00:00:05,200 Speaker 1: Welcome to Zero. I am aktra Drati. 2 00:00:05,040 --> 00:00:08,880 Speaker 2: And I'm oscar Boyd. Actually, last year, you, along with 3 00:00:09,080 --> 00:00:11,559 Speaker 2: several of your Bloomberg Green colleagues, wrote a big series 4 00:00:11,560 --> 00:00:14,800 Speaker 2: of articles called Bottlenecks, and we made several episodes about 5 00:00:14,800 --> 00:00:17,239 Speaker 2: that series for the podcast as well. For those of 6 00:00:17,280 --> 00:00:19,880 Speaker 2: our listeners who haven't yet heard those episodes, do you 7 00:00:19,920 --> 00:00:22,160 Speaker 2: want to just give a quick reminder of the overarching 8 00:00:22,200 --> 00:00:24,520 Speaker 2: theme of that series and some of the topics he covered. 9 00:00:24,600 --> 00:00:27,720 Speaker 1: Yeah, I mean, this is a constant, ongoing struggle these 10 00:00:27,800 --> 00:00:32,560 Speaker 1: days that countries aren't able to build all the electricity 11 00:00:32,960 --> 00:00:36,720 Speaker 1: generation capacity and distribution that is necessary for all the 12 00:00:36,760 --> 00:00:39,479 Speaker 1: demand that is coming from electric cars, heat pumps, but 13 00:00:39,560 --> 00:00:43,400 Speaker 1: also AI. And what we wanted to do was to 14 00:00:43,440 --> 00:00:47,159 Speaker 1: look at why is that happening? And in rich countries 15 00:00:47,200 --> 00:00:51,360 Speaker 1: we found these bottlenecks, things that our supply chain issues, 16 00:00:51,560 --> 00:00:55,080 Speaker 1: and we had plenty of those after the pandemic, but 17 00:00:55,400 --> 00:00:58,279 Speaker 1: these specific ones have yet not been resolved. 18 00:00:58,480 --> 00:01:00,400 Speaker 2: And what are some of the specific issues that are 19 00:01:00,400 --> 00:01:01,320 Speaker 2: closing both necks and. 20 00:01:01,360 --> 00:01:04,280 Speaker 1: These are like instruments most people don't think about things 21 00:01:04,319 --> 00:01:08,679 Speaker 1: like transformers and cables, even engineers and their skills to 22 00:01:08,840 --> 00:01:10,839 Speaker 1: just be able to build out all that we need, 23 00:01:11,640 --> 00:01:17,840 Speaker 1: and especially in Europe and in North America, these equipment 24 00:01:18,120 --> 00:01:22,880 Speaker 1: and people bottlenecks is what is really making the build 25 00:01:22,920 --> 00:01:27,679 Speaker 1: out of electricity very expensive, making it import dependent because 26 00:01:27,760 --> 00:01:31,039 Speaker 1: it's not like China doesn't have a surplus of capacity 27 00:01:31,080 --> 00:01:35,640 Speaker 1: to make those things, and making it well not self sufficient. 28 00:01:35,920 --> 00:01:39,760 Speaker 1: If you're going to commit to using so much electricity 29 00:01:40,280 --> 00:01:42,000 Speaker 1: in the energy system, and. 30 00:01:41,959 --> 00:01:43,640 Speaker 2: You highlight North America and Europe as kind of the 31 00:01:43,640 --> 00:01:46,280 Speaker 2: problem zones there, why is it particularly about in those countries, 32 00:01:46,280 --> 00:01:49,640 Speaker 2: and why have China and India, for example, escaped this 33 00:01:49,680 --> 00:01:50,360 Speaker 2: problem so far? 34 00:01:50,640 --> 00:01:54,200 Speaker 1: Well, Historically in North America and Europe there has not 35 00:01:54,360 --> 00:01:56,240 Speaker 1: been at least for the last three decades or so, 36 00:01:56,800 --> 00:02:00,240 Speaker 1: much growth in electricity demand, and so as a result, 37 00:02:00,960 --> 00:02:05,560 Speaker 1: the industry had gotten into this maintenance mindset to just 38 00:02:05,880 --> 00:02:08,960 Speaker 1: keep on building what was necessary and replacing what was 39 00:02:09,000 --> 00:02:09,720 Speaker 1: going bad. 40 00:02:09,919 --> 00:02:12,239 Speaker 2: And this was partly because things like LEDs were coming 41 00:02:12,280 --> 00:02:16,120 Speaker 2: along making electricity to use more efficient. So actually demand 42 00:02:16,120 --> 00:02:18,960 Speaker 2: in some places with either completely plateaued or slightly folding. 43 00:02:18,880 --> 00:02:20,920 Speaker 1: Efficiency was part of the thing. But really it was 44 00:02:20,960 --> 00:02:24,040 Speaker 1: de industrialization because a lot of the industries were moving 45 00:02:24,200 --> 00:02:29,040 Speaker 1: to Asia, and so the industries that used to make 46 00:02:29,080 --> 00:02:33,600 Speaker 1: electrical equipment started to shut down or essentially because it 47 00:02:33,680 --> 00:02:36,200 Speaker 1: was cheaper to make it in India and China to 48 00:02:36,880 --> 00:02:40,320 Speaker 1: let those countries make that electrical equipment. And now that 49 00:02:40,400 --> 00:02:44,320 Speaker 1: has flipped. Now the demand for electricity is rising everywhere 50 00:02:44,400 --> 00:02:48,320 Speaker 1: on the planet and in Europe and North America, which 51 00:02:48,360 --> 00:02:49,480 Speaker 1: it hadn't done for a while. 52 00:02:50,000 --> 00:02:52,600 Speaker 2: Your final piece in the bottomneck series, all the ones 53 00:02:52,600 --> 00:02:54,560 Speaker 2: before that, you were looking at the specific BOTTLENECKX, but 54 00:02:54,600 --> 00:02:56,240 Speaker 2: then you moved on to looking at what are the 55 00:02:56,280 --> 00:02:59,560 Speaker 2: effects of these bottomnecks? So moving on from why can't 56 00:02:59,560 --> 00:03:01,880 Speaker 2: we build it? To what happens when we can't build it? 57 00:03:02,320 --> 00:03:03,040 Speaker 2: What did you find? 58 00:03:03,440 --> 00:03:07,080 Speaker 1: So there is this historical research that I was aware 59 00:03:07,080 --> 00:03:10,520 Speaker 1: of that you know, is spoken of in the development sphere, 60 00:03:10,560 --> 00:03:15,440 Speaker 1: which is countries that have shortages of electricity. Typically developing 61 00:03:15,440 --> 00:03:19,560 Speaker 1: countries see lower economic growth or vice versa, where if 62 00:03:19,560 --> 00:03:24,160 Speaker 1: you're able to bring enough electricity, and I'm specifically mentioning electricity, 63 00:03:24,240 --> 00:03:27,119 Speaker 1: not all other forms of energy. If you can bring 64 00:03:27,240 --> 00:03:31,600 Speaker 1: enough electricity to those countries, those countries start to grow economically. 65 00:03:32,240 --> 00:03:35,800 Speaker 1: ITQPIA has a very good test case. You know, recently 66 00:03:35,840 --> 00:03:38,920 Speaker 1: it built this large dam on the Nile and suddenly 67 00:03:38,960 --> 00:03:41,920 Speaker 1: it has a surplus of electricity now which it wants 68 00:03:41,960 --> 00:03:45,160 Speaker 1: to put to use, to productive use, and as a 69 00:03:45,160 --> 00:03:49,560 Speaker 1: result at seeing an economic boost. What I was curious 70 00:03:49,600 --> 00:03:52,480 Speaker 1: about was whether, as a result of what we are 71 00:03:52,480 --> 00:03:56,040 Speaker 1: seeing in the electricity world, whether that is now becoming 72 00:03:56,080 --> 00:03:59,760 Speaker 1: true for rich countries too. And so we ask much 73 00:03:59,800 --> 00:04:03,000 Speaker 1: more people than we find in the newsroom, which are 74 00:04:03,040 --> 00:04:10,400 Speaker 1: economists like people at Bloomberg Economics who do analysis in 75 00:04:10,520 --> 00:04:12,800 Speaker 1: much more quantified ways, who can take, you know, large 76 00:04:12,840 --> 00:04:15,600 Speaker 1: data sets and make sense of it, and ask them 77 00:04:15,640 --> 00:04:18,840 Speaker 1: whether they could apply that to rich countries. And so 78 00:04:19,480 --> 00:04:23,840 Speaker 1: they created an electricity system stress Index for us, and 79 00:04:23,880 --> 00:04:27,280 Speaker 1: it essentially had these five factors included, which was adequacy, 80 00:04:27,320 --> 00:04:30,240 Speaker 1: whether there was enough supply of electricity, how much was 81 00:04:30,240 --> 00:04:33,400 Speaker 1: the demand, what was the cost of electricity, whether there 82 00:04:33,400 --> 00:04:36,320 Speaker 1: were losses on the grid, and what kind of impacts 83 00:04:36,800 --> 00:04:39,920 Speaker 1: did climate change have on the grid, because that's growing 84 00:04:39,920 --> 00:04:43,560 Speaker 1: these days. And then they crunched those numbers and basically 85 00:04:43,720 --> 00:04:47,680 Speaker 1: gave us a result saying places where there is high 86 00:04:47,680 --> 00:04:51,720 Speaker 1: stress on the grid are places where you're seeing lower 87 00:04:51,760 --> 00:04:56,200 Speaker 1: economic growth. And this is now true of all major economies. 88 00:04:56,400 --> 00:04:58,400 Speaker 1: So the g twenty when you look at it and 89 00:04:58,440 --> 00:05:00,360 Speaker 1: there's a lovely chart in the piece which I hope 90 00:05:00,360 --> 00:05:03,160 Speaker 1: people will go and see. There was a nice period 91 00:05:03,240 --> 00:05:06,520 Speaker 1: in the twenty tens when electricity stress was pretty low 92 00:05:06,720 --> 00:05:11,599 Speaker 1: or in some cases negligible, and suddenly all of that 93 00:05:11,960 --> 00:05:14,240 Speaker 1: is in the red in the last three four years. 94 00:05:14,400 --> 00:05:17,039 Speaker 2: You also looked at various different companies through this, and 95 00:05:17,120 --> 00:05:19,280 Speaker 2: one company that you profiled in your piece who was 96 00:05:19,360 --> 00:05:23,080 Speaker 2: really struggling with its lack of electricity was called ASML Holdings. 97 00:05:23,120 --> 00:05:26,080 Speaker 2: It's a Dutch semiconductor company and they wanted to build 98 00:05:26,120 --> 00:05:28,200 Speaker 2: a new campus to employ up to twenty thousand people. 99 00:05:28,520 --> 00:05:29,360 Speaker 2: What was their story. 100 00:05:29,480 --> 00:05:32,360 Speaker 1: So ASML is not just a Dutch company that has 101 00:05:32,440 --> 00:05:36,800 Speaker 1: lots of people. It's actually like the crucial piece in 102 00:05:36,839 --> 00:05:41,159 Speaker 1: the AI supply chain because it creates this sort of 103 00:05:41,160 --> 00:05:45,640 Speaker 1: equipment that is required to make very dense and small 104 00:05:45,960 --> 00:05:49,479 Speaker 1: nanometer scale chips that are being used for AI. So 105 00:05:49,680 --> 00:05:52,040 Speaker 1: if you didn't have ASML, and then of course you 106 00:05:52,080 --> 00:05:54,839 Speaker 1: didn't have TSMC in Taiwan, well there would be not 107 00:05:54,960 --> 00:05:57,520 Speaker 1: much happening in the AI world. So ASML is a 108 00:05:57,600 --> 00:06:00,839 Speaker 1: key part, and it's so big as a company that 109 00:06:00,880 --> 00:06:05,000 Speaker 1: the Dutch economy. Actually, you know swings, as the fortunes 110 00:06:05,040 --> 00:06:08,320 Speaker 1: of ASML swings. So you would imagine that ASML would 111 00:06:08,320 --> 00:06:12,000 Speaker 1: be like a national champion in the government exactly. The 112 00:06:12,040 --> 00:06:16,440 Speaker 1: government would just you know, make whatever they want available. 113 00:06:17,080 --> 00:06:19,800 Speaker 1: But turns out that's not the case because ASML is 114 00:06:19,839 --> 00:06:23,560 Speaker 1: one of twelve thousand businesses in the Netherlands waiting on 115 00:06:23,720 --> 00:06:27,960 Speaker 1: an electricity supply, and the grid folks who we spoke 116 00:06:28,000 --> 00:06:30,560 Speaker 1: to for the story told us, you know, the country 117 00:06:30,640 --> 00:06:33,880 Speaker 1: spending eight billion euros, like nine billion dollars every year, 118 00:06:34,360 --> 00:06:37,520 Speaker 1: and yet it is going to take many years for 119 00:06:37,560 --> 00:06:40,880 Speaker 1: this bottleneck to be sorted because the country has ended 120 00:06:40,960 --> 00:06:44,440 Speaker 1: up in twenty twenty five consuming as much electricity as 121 00:06:44,520 --> 00:06:47,120 Speaker 1: was projected for the country to use in twenty thirty. 122 00:06:48,839 --> 00:06:51,360 Speaker 1: And this is not just a Dutch story. I mean, 123 00:06:51,400 --> 00:06:55,240 Speaker 1: maybe the Netherlands is a is an extreme example of 124 00:06:55,279 --> 00:06:58,440 Speaker 1: this in Europe, but we know of these examples in 125 00:06:58,480 --> 00:07:01,640 Speaker 1: Germany and the UK and Swim in all sorts of places. 126 00:07:01,760 --> 00:07:07,560 Speaker 1: And this is where the Bloomig economic study shows what happens. 127 00:07:07,600 --> 00:07:10,960 Speaker 1: Because when you don't have enough electricity or electricity is 128 00:07:11,000 --> 00:07:14,360 Speaker 1: too expensive, either you're not making stuff or you're not 129 00:07:14,440 --> 00:07:17,880 Speaker 1: building the factories that would be making your economy grow. 130 00:07:18,320 --> 00:07:20,679 Speaker 1: And so it was nice to be able to round 131 00:07:20,680 --> 00:07:23,760 Speaker 1: off the series and not just look at the bottlenecks 132 00:07:24,200 --> 00:07:28,200 Speaker 1: stopping electricity, but what is the impact of that electricity shortage? 133 00:07:28,360 --> 00:07:31,520 Speaker 2: So you said that they're using as much electricity now 134 00:07:31,560 --> 00:07:34,480 Speaker 2: as was projected in twenty thirty. Is that purely an 135 00:07:34,520 --> 00:07:36,720 Speaker 2: AI story or where's that demand coming from? 136 00:07:36,760 --> 00:07:39,040 Speaker 1: No, there is some data center, but in the Netherlands, 137 00:07:39,120 --> 00:07:42,720 Speaker 1: it's really electrification of transport, it's electrification of heating. It's 138 00:07:42,760 --> 00:07:45,600 Speaker 1: a combination of all three things that is showing up. 139 00:07:46,040 --> 00:07:47,800 Speaker 2: So one of the issues that you highlighted in your 140 00:07:47,800 --> 00:07:50,520 Speaker 2: bottleneck series is that why it's so hard to change 141 00:07:50,560 --> 00:07:52,360 Speaker 2: is that the industries sort are kind of at the 142 00:07:52,360 --> 00:07:55,960 Speaker 2: center of these bottlenecks require high levels of certainty before 143 00:07:56,000 --> 00:07:58,560 Speaker 2: they do things like expand production or invest in their 144 00:07:58,600 --> 00:08:01,640 Speaker 2: own services because they're factories are really expensive. The gear 145 00:08:01,640 --> 00:08:04,680 Speaker 2: they're creating, it's hugely, hugely expensive. But from your reporting, 146 00:08:05,120 --> 00:08:08,880 Speaker 2: it seems clear that this electricity demand is sustained, it's needed. 147 00:08:08,920 --> 00:08:10,920 Speaker 2: We're already ahead of where we were projected to be. 148 00:08:11,400 --> 00:08:13,720 Speaker 2: So are those bottlenecks starting to come undone? 149 00:08:13,800 --> 00:08:15,680 Speaker 1: Well, there have been some solutions that have come through. 150 00:08:15,720 --> 00:08:19,480 Speaker 1: So the transformer story, which we wrote last year in 151 00:08:19,560 --> 00:08:22,920 Speaker 1: January February, already within the last twelve months we have 152 00:08:23,080 --> 00:08:26,480 Speaker 1: had these announcements from the likes of Hitachi Energy and 153 00:08:26,600 --> 00:08:30,960 Speaker 1: ge Va Nova, big electrical equipment makers who are investing 154 00:08:31,040 --> 00:08:34,760 Speaker 1: in building a transformer factory in the US or expanding 155 00:08:34,800 --> 00:08:40,120 Speaker 1: their operations. But we haven't seen a systematic, government led, 156 00:08:40,360 --> 00:08:46,400 Speaker 1: policy oriented push to try and resolve these supply chain bottlenecks. 157 00:08:46,640 --> 00:08:51,840 Speaker 1: Because the bottlenecks exist domestically. There isn't self sufficiency, but 158 00:08:52,000 --> 00:08:56,720 Speaker 1: there are suppliers available, mostly Chinese, sometimes Indian, and so 159 00:08:56,960 --> 00:09:00,480 Speaker 1: if you're okay paying higher prices, paying thats that are 160 00:09:00,520 --> 00:09:03,480 Speaker 1: showing up these days, then you can get what you want. 161 00:09:03,920 --> 00:09:06,320 Speaker 1: It just takes a little longer and it's a little 162 00:09:06,360 --> 00:09:10,000 Speaker 1: more expensive. But if this is going to last for decades, 163 00:09:10,080 --> 00:09:12,200 Speaker 1: it is something that governments are going to have to 164 00:09:12,200 --> 00:09:13,600 Speaker 1: think about more systematically. 165 00:09:14,080 --> 00:09:16,480 Speaker 2: You didn't only look at what's going on in the 166 00:09:16,600 --> 00:09:18,720 Speaker 2: rich countries of the world, you also looked at what's 167 00:09:18,760 --> 00:09:21,640 Speaker 2: happening in those sort of rapidly developing and the rest 168 00:09:21,679 --> 00:09:23,719 Speaker 2: of this episode will be hearing a conversation that you 169 00:09:23,800 --> 00:09:26,320 Speaker 2: had with Manaj Sinha, who is the CEO of Husk 170 00:09:26,440 --> 00:09:29,640 Speaker 2: Power Systems, and they build what are known as distributed 171 00:09:29,800 --> 00:09:33,480 Speaker 2: energy resources or deers as you call them in the conversation. 172 00:09:33,880 --> 00:09:35,079 Speaker 2: Could you explain what these are? 173 00:09:35,480 --> 00:09:40,440 Speaker 1: So in developing countries, the grid is still not as 174 00:09:40,480 --> 00:09:43,760 Speaker 1: big and doesn't go to all parts of the country, 175 00:09:44,920 --> 00:09:49,360 Speaker 1: but the demand for energy, especially electricity is growing because 176 00:09:49,559 --> 00:09:52,680 Speaker 1: smartphones are now there in the poorest or poorest countries, 177 00:09:53,160 --> 00:09:57,160 Speaker 1: people want to be able to use electrical equipment for 178 00:09:57,400 --> 00:10:01,280 Speaker 1: if not entertainment, communication and work, but they don't have 179 00:10:01,440 --> 00:10:05,280 Speaker 1: steady supply of electricity because the grid hasn't reached. So 180 00:10:05,360 --> 00:10:09,320 Speaker 1: these distributed energy resources, at least in the developing country context, 181 00:10:09,800 --> 00:10:12,640 Speaker 1: and which is what Husk powered Us is. These mini 182 00:10:12,679 --> 00:10:16,920 Speaker 1: grid microgrids which are essentially serving maybe fifty or one 183 00:10:17,000 --> 00:10:21,439 Speaker 1: hundred households, have a small power generation typically nowadays solar 184 00:10:21,720 --> 00:10:26,319 Speaker 1: combined with batteries that allows for much more productive outcomes 185 00:10:26,320 --> 00:10:29,840 Speaker 1: for those people. And this is a thing that existed 186 00:10:29,920 --> 00:10:33,080 Speaker 1: for decades. It's just that the technology now has become 187 00:10:33,160 --> 00:10:36,040 Speaker 1: cheaper because of solar and because of batteries that have 188 00:10:36,360 --> 00:10:40,080 Speaker 1: fallen in price. But DR's is a concept is a 189 00:10:40,200 --> 00:10:43,920 Speaker 1: much bigger idea because it's essentially anything that is distributed. 190 00:10:44,000 --> 00:10:46,960 Speaker 1: So you could think of a wind farm, which is 191 00:10:47,240 --> 00:10:51,160 Speaker 1: wind turbines and lots of distances as a distributed energy resource, 192 00:10:51,320 --> 00:10:55,240 Speaker 1: rooftop solar. Rooftop solar would be one electric cars that 193 00:10:55,360 --> 00:10:58,440 Speaker 1: can be used as a backup for storing electricity on 194 00:10:58,480 --> 00:11:02,960 Speaker 1: the grid. All of those things are distributed energy resources. 195 00:11:03,080 --> 00:11:07,520 Speaker 1: It's sort of really applying digital to a physical asset 196 00:11:07,720 --> 00:11:11,240 Speaker 1: where you don't have to think about the central power 197 00:11:11,280 --> 00:11:13,319 Speaker 1: plant like a cold power plant or a nuclear power plant, 198 00:11:13,360 --> 00:11:16,439 Speaker 1: being the place from where electricity is generated and then 199 00:11:16,520 --> 00:11:19,160 Speaker 1: given to all the people who consume it. You become 200 00:11:19,280 --> 00:11:22,719 Speaker 1: much more of a two way system where sometimes the 201 00:11:22,720 --> 00:11:25,720 Speaker 1: electricity is consumed in a home, sometimes the solar rooftop 202 00:11:25,760 --> 00:11:28,240 Speaker 1: is actually generating more than what the house is consuming 203 00:11:28,240 --> 00:11:31,960 Speaker 1: and thus exporting it back to the grid. And it 204 00:11:32,040 --> 00:11:35,680 Speaker 1: is a whole phenomenon that's really disrupting how grids work. 205 00:11:36,440 --> 00:11:38,959 Speaker 2: And the relevance to kind of rich countries is if 206 00:11:39,000 --> 00:11:43,199 Speaker 2: you can use these distributed energy resources, well, it might 207 00:11:43,240 --> 00:11:45,320 Speaker 2: free up some of those bottlenecks that you've been exploring. 208 00:11:45,520 --> 00:11:47,640 Speaker 1: That's right, It can do so at least here in 209 00:11:47,679 --> 00:11:50,400 Speaker 1: the UK, for example, there is a real fight among 210 00:11:50,480 --> 00:11:54,880 Speaker 1: some utilities saying you could use these drs to actually 211 00:11:54,920 --> 00:11:58,160 Speaker 1: not having to build really large transmission lines. In the 212 00:11:58,200 --> 00:12:00,840 Speaker 1: case of developing countries, is the idea that if you 213 00:12:00,880 --> 00:12:04,240 Speaker 1: start building these mini microgrids in other parts of the country, 214 00:12:04,559 --> 00:12:07,400 Speaker 1: then eventually when it is economical for the grid to 215 00:12:07,440 --> 00:12:10,319 Speaker 1: reach there, you could just combine them with those minigrids 216 00:12:10,320 --> 00:12:12,680 Speaker 1: and microgrids, and thus you don't have to build a 217 00:12:12,720 --> 00:12:16,120 Speaker 1: whole new system, and thus you're more efficient at using 218 00:12:16,160 --> 00:12:17,199 Speaker 1: the resources that you have. 219 00:12:17,520 --> 00:12:20,160 Speaker 2: Great, So we'll be listening to that interview shortly. But finally, 220 00:12:20,160 --> 00:12:22,800 Speaker 2: before we get into the conversation, we've got a lot 221 00:12:22,840 --> 00:12:24,760 Speaker 2: going on at zero over the next few months. What 222 00:12:24,800 --> 00:12:26,280 Speaker 2: are some of the things that you're excited to cover 223 00:12:26,320 --> 00:12:27,200 Speaker 2: in twenty twenty six. 224 00:12:27,440 --> 00:12:30,600 Speaker 1: Yeah, So in February there is a conference happening at 225 00:12:30,640 --> 00:12:34,640 Speaker 1: the International Energy Agency in Paris. It's their annual Innovation 226 00:12:34,760 --> 00:12:40,240 Speaker 1: Forum and it brings together companies, governments, entrepreneurs to try 227 00:12:40,280 --> 00:12:43,680 Speaker 1: and talk about how we can deploy energy innovation to 228 00:12:43,760 --> 00:12:46,520 Speaker 1: the problems we are facing today. Of course, I'm going 229 00:12:46,559 --> 00:12:49,640 Speaker 1: to continue to write a lot about electrification and we'll 230 00:12:49,679 --> 00:12:53,600 Speaker 1: have plenty of episodes exploring electrification in all sorts of forms, 231 00:12:54,000 --> 00:12:58,200 Speaker 1: and especially looking at developing countries where it is happening 232 00:12:58,240 --> 00:13:02,160 Speaker 1: at a much faster pace than in rich countries. We 233 00:13:02,200 --> 00:13:04,960 Speaker 1: are also going to continue the series that we've launched 234 00:13:04,960 --> 00:13:07,960 Speaker 1: called Imagine, where we're going to talk to artists and 235 00:13:08,240 --> 00:13:13,400 Speaker 1: musicians and movie makers and authors to try and understand 236 00:13:14,120 --> 00:13:17,520 Speaker 1: how art can help us understand the climate crisis. We've 237 00:13:17,559 --> 00:13:20,240 Speaker 1: got a couple of episodes coming very soon, one with 238 00:13:20,280 --> 00:13:24,680 Speaker 1: a musician and one with a novelist. Later in the year. 239 00:13:24,800 --> 00:13:26,839 Speaker 1: We are going to of course talk about Trump, because 240 00:13:26,840 --> 00:13:30,000 Speaker 1: there is no way you can ignore Trump, and we'll 241 00:13:30,000 --> 00:13:31,880 Speaker 1: talk about Cop thirty one, which is going to happen 242 00:13:31,960 --> 00:13:34,800 Speaker 1: in Turkey this year. And finally I'll leave this for 243 00:13:34,880 --> 00:13:38,319 Speaker 1: our listeners. We'll also do a Q and A episode soon, 244 00:13:38,520 --> 00:13:41,000 Speaker 1: so if you have any questions, send them to zero 245 00:13:41,120 --> 00:13:42,520 Speaker 1: Pod at Bloomberg dot net. 246 00:13:42,880 --> 00:13:43,840 Speaker 2: It's a busier ahead. 247 00:13:43,880 --> 00:13:46,800 Speaker 1: Thank you very much, Sua, Thank you, Oscar. And now 248 00:13:46,840 --> 00:13:55,840 Speaker 1: here's my conversation with Manotsna, CEO of Husk Power. Welcome 249 00:13:55,880 --> 00:13:59,520 Speaker 1: to Zero Manoj, thank you act so Husks far bills off, 250 00:13:59,600 --> 00:14:02,640 Speaker 1: GRED and GT Solutions. You started this company all the 251 00:14:02,640 --> 00:14:05,599 Speaker 1: way back in two thousand and eight, and there is 252 00:14:05,679 --> 00:14:08,480 Speaker 1: conversation now that you are going to have your initial 253 00:14:08,480 --> 00:14:11,360 Speaker 1: public offering as soon as next year, in twenty twenty seven. 254 00:14:11,800 --> 00:14:15,880 Speaker 1: That's a span of nineteen years spent as a startup 255 00:14:16,080 --> 00:14:18,360 Speaker 1: or as a private company. Just give us a quick 256 00:14:18,440 --> 00:14:21,400 Speaker 1: rundown of what the last eighteen nineteen years have been 257 00:14:22,080 --> 00:14:24,800 Speaker 1: like for you. Where did you start, what did you build, 258 00:14:24,880 --> 00:14:25,840 Speaker 1: how did you change? 259 00:14:26,040 --> 00:14:29,320 Speaker 3: I didn't realize that we have spent almost eighteen years 260 00:14:29,760 --> 00:14:32,560 Speaker 3: doing this. So when we started in two thousand and eight, 261 00:14:33,080 --> 00:14:35,880 Speaker 3: our journey was not really to build a company. We 262 00:14:36,000 --> 00:14:40,280 Speaker 3: really wanted to solve this problem that impacted people of 263 00:14:40,360 --> 00:14:43,720 Speaker 3: my home state, which is Bihar. And then that's when 264 00:14:43,840 --> 00:14:47,520 Speaker 3: we came up with this idea of decentralized electrocity generation 265 00:14:47,680 --> 00:14:52,520 Speaker 3: and distribution and not using fossil fuel close to the customer, 266 00:14:52,720 --> 00:14:54,200 Speaker 3: so that you don't have to invest a lot of 267 00:14:54,240 --> 00:14:57,560 Speaker 3: money and your power is catered to the needs of 268 00:14:57,760 --> 00:15:01,960 Speaker 3: actual population that you're serving. When we started, minigrades or 269 00:15:02,000 --> 00:15:05,160 Speaker 3: microgrades were a term that nobody knew. So my slide 270 00:15:05,200 --> 00:15:08,760 Speaker 3: I remember almost up to twenty twelve, twenty thirteen, I 271 00:15:08,880 --> 00:15:11,640 Speaker 3: used to have two or three slides describing what a 272 00:15:11,800 --> 00:15:15,960 Speaker 3: micro grade is. Now it has become mainstream. Just so 273 00:15:16,040 --> 00:15:19,160 Speaker 3: that we are clear on the IPO plan, we are 274 00:15:19,160 --> 00:15:22,440 Speaker 3: not planning to IPO next year. Our plan is to 275 00:15:22,480 --> 00:15:27,920 Speaker 3: IPI today around twenty nine twenty thirty, because we have 276 00:15:28,160 --> 00:15:31,600 Speaker 3: a pretty bigger ambition than what we had even two 277 00:15:31,680 --> 00:15:35,720 Speaker 3: years ago. We are planning to deploy to gigabat worth 278 00:15:35,720 --> 00:15:40,760 Speaker 3: of dr assets across Asia and Africa, and we now 279 00:15:40,760 --> 00:15:43,840 Speaker 3: have technology to be able to manage those tens of 280 00:15:43,880 --> 00:15:47,720 Speaker 3: thousands of assets spread across geography. So our ambition has 281 00:15:47,800 --> 00:15:52,000 Speaker 3: been going upwards on an annual basis as we see 282 00:15:52,360 --> 00:15:57,040 Speaker 3: microgrades and drs as the mainstream solution to solving not 283 00:15:57,120 --> 00:16:01,080 Speaker 3: just the electricity problem that impacted roughly a billion people 284 00:16:01,120 --> 00:16:05,000 Speaker 3: without access to power, but also another two and a 285 00:16:05,040 --> 00:16:08,920 Speaker 3: half billion people who have access to unreliable power. So 286 00:16:09,120 --> 00:16:11,160 Speaker 3: that's what we are trying to solve at scale in 287 00:16:11,200 --> 00:16:12,000 Speaker 3: the global South. 288 00:16:12,680 --> 00:16:17,480 Speaker 1: So husk power, because you started using husk as an 289 00:16:17,480 --> 00:16:22,960 Speaker 1: agricultural waste by burning it and making electricity, but that 290 00:16:23,080 --> 00:16:25,280 Speaker 1: no longer is the business model for you. 291 00:16:25,320 --> 00:16:28,360 Speaker 3: Right correct. So when we started back in two thousand 292 00:16:28,400 --> 00:16:31,200 Speaker 3: and eight, like I said, we were trying to build 293 00:16:31,240 --> 00:16:37,160 Speaker 3: something for the rural population with very limited disposable income. Personally, 294 00:16:37,200 --> 00:16:39,480 Speaker 3: I come from a semi conductor industry. I used to 295 00:16:39,520 --> 00:16:43,760 Speaker 3: work with Intel design microprocessors, so I understood solar quite 296 00:16:43,840 --> 00:16:49,280 Speaker 3: well because solar panel is absolutely a semiconductor. But at 297 00:16:49,320 --> 00:16:52,320 Speaker 3: that time, solar PV was very, very expensive, like five 298 00:16:52,360 --> 00:16:56,320 Speaker 3: dollars per what as Compared to that, we discovered that 299 00:16:56,400 --> 00:17:00,600 Speaker 3: biomass classification system that was apparently discovered back in World 300 00:17:00,640 --> 00:17:04,480 Speaker 3: War two timeframe could be used or repurposed to use 301 00:17:04,600 --> 00:17:08,560 Speaker 3: the locally available biomass waste, in our case, rice husk 302 00:17:09,240 --> 00:17:12,760 Speaker 3: by product of mailing rice crop that could be gasified 303 00:17:12,800 --> 00:17:15,960 Speaker 3: to generate electricity. It was much cheaper than so back then, 304 00:17:16,480 --> 00:17:18,840 Speaker 3: and it was appropriate for the market that we were 305 00:17:18,840 --> 00:17:22,000 Speaker 3: trying to serve back in two thousand and eight. But 306 00:17:22,400 --> 00:17:25,240 Speaker 3: fast forward that too. Now we don't have to use 307 00:17:25,240 --> 00:17:28,600 Speaker 3: biomass glassification, though our ambition still is to be one 308 00:17:28,680 --> 00:17:33,399 Speaker 3: hundred percent renewable energy provider, so we do use solar 309 00:17:33,440 --> 00:17:36,600 Speaker 3: PV as daytime supply. We use battery as a storage 310 00:17:36,640 --> 00:17:40,320 Speaker 3: for nighttime, but we still need a second source of 311 00:17:40,440 --> 00:17:42,639 Speaker 3: energy right so that we are twenty four to seven 312 00:17:42,960 --> 00:17:46,520 Speaker 3: up no matter what, and we strive to have the 313 00:17:46,520 --> 00:17:49,680 Speaker 3: second source of energy that can be bio CLG, that 314 00:17:49,760 --> 00:17:53,520 Speaker 3: can be some other form that is actually renewable so 315 00:17:53,560 --> 00:17:55,160 Speaker 3: that we don't have to depend on diesel. 316 00:17:55,400 --> 00:17:59,120 Speaker 1: And so you started in India in these eighteen years, 317 00:17:59,359 --> 00:18:02,160 Speaker 1: how have you spandard your business? Which are the most 318 00:18:02,160 --> 00:18:03,199 Speaker 1: active markets for you? 319 00:18:03,680 --> 00:18:05,879 Speaker 3: Right? So in India, we started in the state of 320 00:18:05,920 --> 00:18:09,600 Speaker 3: Bihar that had probably the one of the largest populations 321 00:18:09,640 --> 00:18:13,879 Speaker 3: that was not served with reliable electricity back then. That 322 00:18:13,960 --> 00:18:16,719 Speaker 3: has changed quite a bit in Indian context with the 323 00:18:17,840 --> 00:18:21,280 Speaker 3: I would say around twenty eighteen timeframe, the grid presence 324 00:18:21,400 --> 00:18:25,359 Speaker 3: was almost everywhere, but the reliability of electricity is still 325 00:18:25,440 --> 00:18:28,200 Speaker 3: lagged and that is the gap that we have been 326 00:18:28,240 --> 00:18:32,040 Speaker 3: filling in the state of Bihar, Up and shark And 327 00:18:32,119 --> 00:18:34,160 Speaker 3: those are the three states that we are present in 328 00:18:34,160 --> 00:18:38,480 Speaker 3: India for our minigrad offering. But we not only serve 329 00:18:38,520 --> 00:18:41,960 Speaker 3: our customers with minigrades offering. There are clients that might 330 00:18:42,000 --> 00:18:45,000 Speaker 3: be a cold storage and things like that nature for 331 00:18:45,119 --> 00:18:49,240 Speaker 3: whom we are providing commercial and industrial rooftop solar solution 332 00:18:49,520 --> 00:18:52,879 Speaker 3: for them at their premises. And the third line of 333 00:18:52,920 --> 00:18:58,160 Speaker 3: business that we entered recently given India changed its policy 334 00:18:58,359 --> 00:19:01,920 Speaker 3: for residential rooftop which I think is a tremendous opportunity 335 00:19:02,600 --> 00:19:05,760 Speaker 3: which we call a residential rooftop business for us named 336 00:19:05,920 --> 00:19:09,800 Speaker 3: Beam under Husk brand. So those are the three businesses 337 00:19:09,840 --> 00:19:12,439 Speaker 3: that we are doing in India, mostly in the northern 338 00:19:12,480 --> 00:19:16,960 Speaker 3: part of India. And we entered Nigeria markets sometimes in 339 00:19:17,000 --> 00:19:20,720 Speaker 3: twenty twenty, not a great time to enter given COVID happened, 340 00:19:21,280 --> 00:19:23,760 Speaker 3: but we could not predict that in January of twenty twenty. 341 00:19:24,640 --> 00:19:28,119 Speaker 3: And in Nigeria we are doing these three things plus 342 00:19:28,160 --> 00:19:31,760 Speaker 3: more so, Nigeria came up with a very forwardlooking policy 343 00:19:31,800 --> 00:19:36,000 Speaker 3: where they are interconnecting minigrads with the main grid so 344 00:19:36,040 --> 00:19:38,560 Speaker 3: that we can do a bulk purchase from the main grid. 345 00:19:38,760 --> 00:19:43,440 Speaker 3: That reduces our battery size requirement, therefore making the LCOE 346 00:19:43,760 --> 00:19:47,880 Speaker 3: or cost of electricity cheaper for consumers. So that's an 347 00:19:48,000 --> 00:19:51,119 Speaker 3: added thing that we do in Nigeria. Interconnected minigrds are 348 00:19:51,200 --> 00:19:54,399 Speaker 3: larger in capacity. These are two to ten megabout in capacity, 349 00:19:54,880 --> 00:19:57,840 Speaker 3: can serve tens of thousands of clients in a perimeter 350 00:19:57,880 --> 00:20:01,159 Speaker 3: of let's say ten to twelve kilometers. That's those are 351 00:20:01,160 --> 00:20:05,040 Speaker 3: the offense that we have in India. And Nigeria, and 352 00:20:05,119 --> 00:20:07,680 Speaker 3: our ambition, like I said, is to deploy two gigabout 353 00:20:07,680 --> 00:20:11,560 Speaker 3: worth of assets across these three business lines, across these 354 00:20:11,560 --> 00:20:12,520 Speaker 3: two continents. 355 00:20:12,720 --> 00:20:15,320 Speaker 1: So most recently we spoke in the context of the 356 00:20:15,480 --> 00:20:18,840 Speaker 1: series of stories I was working on last year called Bottlenecks, 357 00:20:19,720 --> 00:20:21,639 Speaker 1: and the goal of that series was to try and 358 00:20:21,680 --> 00:20:25,639 Speaker 1: tell the story of how electrification is being held back 359 00:20:26,080 --> 00:20:29,560 Speaker 1: in rich countries, and mostly those came down to equipment, 360 00:20:29,640 --> 00:20:33,600 Speaker 1: things like transformers and cables, which most people don't think about, 361 00:20:33,880 --> 00:20:37,480 Speaker 1: but western countries have lost the capability to manufacture. And 362 00:20:37,520 --> 00:20:39,960 Speaker 1: then towards the end of that series, I wanted to 363 00:20:39,960 --> 00:20:43,119 Speaker 1: turn the question and look at what electricity shortages do 364 00:20:43,840 --> 00:20:48,040 Speaker 1: two countries. And that is a question that has been studied, 365 00:20:48,320 --> 00:20:51,560 Speaker 1: especially in the context of poor countries, for decades. And 366 00:20:51,600 --> 00:20:55,760 Speaker 1: we know that when there is reliable electricity provided to 367 00:20:55,840 --> 00:20:59,639 Speaker 1: a country, there is economic growth that follows. So the 368 00:20:59,720 --> 00:21:03,159 Speaker 1: Universe City of Nigeria researchers found in one study that 369 00:21:03,560 --> 00:21:06,880 Speaker 1: just a one percent increase in clean power can lead 370 00:21:06,920 --> 00:21:09,119 Speaker 1: to an increase of two point seventy four percent in 371 00:21:09,200 --> 00:21:13,240 Speaker 1: the gross domestic product of that country. You've built these projects, 372 00:21:13,280 --> 00:21:15,680 Speaker 1: can you give me examples of two or three places 373 00:21:15,680 --> 00:21:19,080 Speaker 1: where you have seen that bringing this husk power system 374 00:21:19,560 --> 00:21:22,400 Speaker 1: changes the lives of people, and how exactly. 375 00:21:22,600 --> 00:21:26,440 Speaker 3: Absolutely my experience in Nigeria was quite unique. When we 376 00:21:26,600 --> 00:21:32,280 Speaker 3: entered in early twenty twenty. I wevertly remember, you know, 377 00:21:32,280 --> 00:21:35,399 Speaker 3: when I got down from the car that I could 378 00:21:35,440 --> 00:21:38,679 Speaker 3: smell diesel in the air. And when you go to 379 00:21:38,720 --> 00:21:41,600 Speaker 3: the milling machine, if they exist in the ecosystem, the 380 00:21:42,720 --> 00:21:46,679 Speaker 3: milled wheat flour, for example, actually actually has a diesel smell. 381 00:21:47,560 --> 00:21:51,600 Speaker 3: So when we brought our first minnigrades back in late 382 00:21:51,640 --> 00:21:55,400 Speaker 3: twenty twenty or early twenty twenty one in Nigeria, and 383 00:21:55,440 --> 00:21:59,720 Speaker 3: then I visited again for inauguration, that smell did not exist. 384 00:22:00,000 --> 00:22:04,000 Speaker 3: Practically ninety nine percent of the diesel generators were removed 385 00:22:04,000 --> 00:22:07,560 Speaker 3: from the ecosystem. The millers absolutely did not have that 386 00:22:07,720 --> 00:22:11,480 Speaker 3: smell wafting around in there. So it's a lifestyle improvement 387 00:22:11,720 --> 00:22:16,439 Speaker 3: just by eliminating diesel. In terms of economic output, you 388 00:22:16,520 --> 00:22:20,040 Speaker 3: gave the data of one percent increase in consumption of 389 00:22:20,080 --> 00:22:24,320 Speaker 3: electricity led to zero point seventy four percent GDP increase. 390 00:22:24,400 --> 00:22:28,920 Speaker 3: We can see that in reality. So for example, the 391 00:22:29,320 --> 00:22:34,200 Speaker 3: shops that were doing manufacturing of some furniture pieces using 392 00:22:34,280 --> 00:22:37,919 Speaker 3: manual method, maybe manufacturing two to five furniture pieces in 393 00:22:37,920 --> 00:22:42,000 Speaker 3: a month. We brought with us what we call productive 394 00:22:42,119 --> 00:22:46,399 Speaker 3: uses equipment, which is sawmill and training machine. All of 395 00:22:46,440 --> 00:22:51,000 Speaker 3: a sudden, the same shop of carpenter with similar resources 396 00:22:51,080 --> 00:22:53,520 Speaker 3: is producing you know, ten times that, so forty to 397 00:22:53,560 --> 00:22:58,040 Speaker 3: fifty furniture pieces. The problem now has sifted from manufacturing 398 00:22:58,080 --> 00:23:01,640 Speaker 3: bottleneck to sales bottleneck for them, which is a great thing, right, 399 00:23:01,680 --> 00:23:04,760 Speaker 3: So you can see the like a dramatic expansion in 400 00:23:04,840 --> 00:23:08,919 Speaker 3: economic activities. Similarly, there are other examples where people have 401 00:23:09,040 --> 00:23:12,960 Speaker 3: as simple as cold storage. So they bought a refrigeration 402 00:23:13,080 --> 00:23:17,440 Speaker 3: system and now they're serving beer throughout the year, which 403 00:23:17,480 --> 00:23:19,800 Speaker 3: is great for me because after a harday work, it's 404 00:23:19,880 --> 00:23:22,960 Speaker 3: nice to have a chill beer. But it's a lifestyle 405 00:23:23,040 --> 00:23:26,879 Speaker 3: improvement for people who live in that community, but a 406 00:23:26,960 --> 00:23:29,800 Speaker 3: great outcome for the business that is running and serving 407 00:23:29,840 --> 00:23:31,520 Speaker 3: people with cold drink. 408 00:23:31,840 --> 00:23:34,199 Speaker 1: Yeah, and cold storage. You know. The beer example is 409 00:23:34,240 --> 00:23:37,639 Speaker 1: a fun one, but it is across supply chains. For 410 00:23:37,680 --> 00:23:41,520 Speaker 1: agriculture a huge challenge because so much of the food 411 00:23:41,760 --> 00:23:46,639 Speaker 1: is wasted from its creation at a farm in the 412 00:23:46,680 --> 00:23:48,600 Speaker 1: process of taking it to the place where it will 413 00:23:48,640 --> 00:23:51,760 Speaker 1: be sold, and just adding some amount of cold storage 414 00:23:51,800 --> 00:23:54,560 Speaker 1: can help save so much of waste food and does 415 00:23:54,880 --> 00:23:58,760 Speaker 1: emissions even if those electricity comes from you know, sometimes 416 00:23:58,760 --> 00:24:00,119 Speaker 1: forsil fuel sources. 417 00:24:00,080 --> 00:24:02,480 Speaker 3: If I may. Actually that reminded me of an example 418 00:24:02,520 --> 00:24:05,680 Speaker 3: in Nigeria. So this is our fourth or fifth side 419 00:24:05,720 --> 00:24:08,240 Speaker 3: that we were trying to determine if we want to 420 00:24:08,280 --> 00:24:12,280 Speaker 3: build in that particular village. And actually I was accusted 421 00:24:12,280 --> 00:24:15,920 Speaker 3: by like five or six fishermen who showed me, actually 422 00:24:15,920 --> 00:24:18,880 Speaker 3: took me toward the riverside and showed me how much 423 00:24:19,040 --> 00:24:22,240 Speaker 3: fish actually they waste like this, because the shelf life 424 00:24:22,359 --> 00:24:24,439 Speaker 3: is not more than a day, they actually have to 425 00:24:24,520 --> 00:24:26,639 Speaker 3: dump the fish at the end of the day. So 426 00:24:26,760 --> 00:24:29,320 Speaker 3: actually at that site, we partnered with somebody and we 427 00:24:29,520 --> 00:24:32,480 Speaker 3: brought in a cold storage to store fish in that 428 00:24:32,640 --> 00:24:36,400 Speaker 3: cold storage, and all of a sudden, the economic output 429 00:24:36,480 --> 00:24:40,800 Speaker 3: of these fishermen improved dramatically with just simple intervention. 430 00:24:45,840 --> 00:24:48,439 Speaker 1: After the break, I asked Monoj whide rich countries are 431 00:24:48,480 --> 00:24:51,320 Speaker 1: spending billions on their grid buildout and whether they really 432 00:24:51,359 --> 00:24:53,800 Speaker 1: need it. If you want to get in touch with 433 00:24:53,880 --> 00:24:57,480 Speaker 1: Zero with guests, suggestion, feedback or anything at all, right 434 00:24:57,520 --> 00:24:59,840 Speaker 1: to the show at Zero power at Bloomberg dot Net 435 00:25:00,119 --> 00:25:02,920 Speaker 1: and while you're at it, writers review on Apple, podcasts, 436 00:25:02,960 --> 00:25:05,960 Speaker 1: Spotify and YouTube. It helps new listeners find the show. 437 00:25:18,160 --> 00:25:20,399 Speaker 1: So you live in the US, but your work is 438 00:25:20,440 --> 00:25:25,000 Speaker 1: focused in Nigeria and India. And typically when people talk 439 00:25:25,040 --> 00:25:29,960 Speaker 1: about working in developing countries, the context is usually of 440 00:25:30,040 --> 00:25:34,320 Speaker 1: difficulties because these are places we're doing business is hard, 441 00:25:34,480 --> 00:25:38,960 Speaker 1: there's corruption, there's poorly functioning infrastructure. But at least when 442 00:25:38,960 --> 00:25:42,200 Speaker 1: it comes to electricity, we are now seeing these bottlenecks everywhere, 443 00:25:42,200 --> 00:25:44,520 Speaker 1: not just in poor countries, but in rich countries too. 444 00:25:45,160 --> 00:25:48,440 Speaker 1: And in fact, it isn't developing countries that we actually 445 00:25:48,520 --> 00:25:52,159 Speaker 1: weren't seeing equipment bottlenecks, because those are the places where 446 00:25:52,560 --> 00:25:55,879 Speaker 1: electricity demand has been growing at a pretty rapid clip, 447 00:25:55,960 --> 00:25:59,560 Speaker 1: and so they have the equipment capabilities and the manpower 448 00:25:59,600 --> 00:26:02,480 Speaker 1: to actually build out a grid. What kind of other 449 00:26:02,560 --> 00:26:06,800 Speaker 1: advantages are there when you're operating in developing countries. 450 00:26:07,040 --> 00:26:09,639 Speaker 3: So you're right to get a feel of what are 451 00:26:09,680 --> 00:26:12,800 Speaker 3: the actual challenges. For example, when we were doing business 452 00:26:12,880 --> 00:26:16,360 Speaker 3: in India, I stayed in India for actually two years 453 00:26:17,000 --> 00:26:20,560 Speaker 3: continuously to have that feeling, to understand the ecosystem, to 454 00:26:20,800 --> 00:26:24,360 Speaker 3: understand the bottlenecks that we will face when we start scaling. 455 00:26:24,720 --> 00:26:28,639 Speaker 3: So you're absolutely right, there's no alternative to experiencing it 456 00:26:28,800 --> 00:26:32,040 Speaker 3: in person. I was lucky or slash unlucky because I 457 00:26:32,080 --> 00:26:34,840 Speaker 3: was born and brought up in bhrso understood the challenges 458 00:26:35,119 --> 00:26:37,240 Speaker 3: in Nigeria. I had to do a similar thing. Actually 459 00:26:37,240 --> 00:26:41,399 Speaker 3: I stayed in that area for multiple weeks to really 460 00:26:41,480 --> 00:26:45,639 Speaker 3: understand the challenges. You're right, the manufacturing ecosystem in India, 461 00:26:45,640 --> 00:26:49,840 Speaker 3: for example, is unbelievably good, but there are other bottlenecks 462 00:26:49,920 --> 00:26:53,960 Speaker 3: when it comes to technology, for example, So when you're expanding, 463 00:26:54,320 --> 00:26:58,800 Speaker 3: imagine ten thousand assets on the ground across ten thousand locations, 464 00:26:58,880 --> 00:27:01,960 Speaker 3: let's say in India and Niga. You cannot have twenty 465 00:27:02,000 --> 00:27:05,200 Speaker 3: thousand people running these systems because that would be a chaos. 466 00:27:05,480 --> 00:27:08,480 Speaker 3: So how do you really build technology using the latest 467 00:27:08,480 --> 00:27:11,600 Speaker 3: and the greatest. So actually we are using predictive AI 468 00:27:11,720 --> 00:27:14,840 Speaker 3: slash mL and we are moving towards generative AI to 469 00:27:14,880 --> 00:27:19,680 Speaker 3: be able to manage these assets more algorithmically than you 470 00:27:19,920 --> 00:27:24,080 Speaker 3: have a chaos with twenty thousand people in different geographic location. 471 00:27:24,520 --> 00:27:27,520 Speaker 3: So that's where the local manufacturing is great. But the 472 00:27:27,560 --> 00:27:30,880 Speaker 3: technology development does mean that you have to have access 473 00:27:30,880 --> 00:27:33,919 Speaker 3: to the greatest resource that you can find access to 474 00:27:34,040 --> 00:27:36,399 Speaker 3: that might not be available in the rural parts that 475 00:27:36,400 --> 00:27:36,879 Speaker 3: we work in. 476 00:27:37,240 --> 00:27:41,920 Speaker 1: And then there's also the story of policy experiments done 477 00:27:41,960 --> 00:27:44,600 Speaker 1: in the context of developing countries that can be pretty 478 00:27:45,160 --> 00:27:48,480 Speaker 1: insightful and ways for other countries to adopt. So you 479 00:27:48,560 --> 00:27:51,520 Speaker 1: talked a little bit about your experience in Nigeria. You know, 480 00:27:51,560 --> 00:27:54,679 Speaker 1: it's an oil rich country that has suffered some of 481 00:27:54,720 --> 00:27:58,720 Speaker 1: the worst impacts of oil extraction. And then in recent 482 00:27:58,800 --> 00:28:02,200 Speaker 1: years the national government has cut subsidies on diesel, which 483 00:28:02,200 --> 00:28:07,280 Speaker 1: has really created this boom for solar What are the 484 00:28:07,280 --> 00:28:10,800 Speaker 1: types of policy changes beyond cutting subsidies that have allowed 485 00:28:10,840 --> 00:28:14,040 Speaker 1: your business to actually work well in Nigeria. 486 00:28:14,600 --> 00:28:17,160 Speaker 3: So in Nigeria, like I was mentioning, they were one 487 00:28:17,160 --> 00:28:19,280 Speaker 3: of the I think they were the first country to 488 00:28:19,359 --> 00:28:24,760 Speaker 3: my knowledge or maybe second after Tanzania in Africa continent 489 00:28:24,840 --> 00:28:28,520 Speaker 3: that had a very forward looking minigrants policy that allowed 490 00:28:28,600 --> 00:28:33,239 Speaker 3: an enabled, market oriented solution to come to these you know, 491 00:28:33,400 --> 00:28:35,879 Speaker 3: roughly ninety million people in Nigeria who do not have 492 00:28:35,920 --> 00:28:38,640 Speaker 3: access to any power. That was very forward looking that 493 00:28:38,800 --> 00:28:43,360 Speaker 3: was actually enabled by Reya of Nigeria. Again, the world 494 00:28:43,440 --> 00:28:46,880 Speaker 3: Bank helped, but it was enabled from policy perspective by. 495 00:28:46,760 --> 00:28:49,440 Speaker 1: The area, which is the Rural. 496 00:28:49,200 --> 00:28:53,800 Speaker 3: Electrification Agency, right. So Rural Electrification Agency of Nigeria has 497 00:28:53,840 --> 00:28:58,680 Speaker 3: been very very supportive from also operationalizing the product perspective 498 00:28:59,240 --> 00:29:02,719 Speaker 3: beyond policy. The second is they were the first country 499 00:29:02,720 --> 00:29:05,800 Speaker 3: to minor is that actually built the policy that connected 500 00:29:05,880 --> 00:29:08,960 Speaker 3: the minigrid to the main cred because that's what the 501 00:29:09,000 --> 00:29:11,160 Speaker 3: future of energy is going to be. It is the 502 00:29:11,240 --> 00:29:15,000 Speaker 3: interconnection of these dr assets with the centralized assets that 503 00:29:15,040 --> 00:29:18,800 Speaker 3: will make the grid very resilient and enable us all 504 00:29:18,880 --> 00:29:21,640 Speaker 3: to go to net zero. So that was very forward 505 00:29:21,680 --> 00:29:25,080 Speaker 3: looking off Nigeria, and they mandated all the private discos 506 00:29:25,160 --> 00:29:28,520 Speaker 3: or distribution companies to have at least ten percent of 507 00:29:28,560 --> 00:29:32,160 Speaker 3: the electricity coming from reneable sources. Right. So what that 508 00:29:32,240 --> 00:29:36,360 Speaker 3: means is they have to tap local decentralized resources to 509 00:29:36,400 --> 00:29:39,200 Speaker 3: be able to meet that criteria. So the policy is 510 00:29:39,320 --> 00:29:42,640 Speaker 3: very enabling to bring the latest and the greatest to 511 00:29:42,680 --> 00:29:47,360 Speaker 3: the market that will ultimately help the consumers. Let's look 512 00:29:47,400 --> 00:29:52,000 Speaker 3: at India context. India released a policy for residential rooftop 513 00:29:52,200 --> 00:29:54,800 Speaker 3: in India in I think April of twenty twenty five. 514 00:29:55,240 --> 00:29:58,320 Speaker 3: What that did was that mandated at the national level 515 00:29:58,360 --> 00:30:01,959 Speaker 3: that any distribution company has to honor neate meting, so 516 00:30:02,000 --> 00:30:05,920 Speaker 3: you cannot hide behind net meting policy, right. But they 517 00:30:05,960 --> 00:30:08,400 Speaker 3: have done an amazing thing which is a draft a 518 00:30:08,440 --> 00:30:11,920 Speaker 3: nep I think it's a National Electrification Program policy that 519 00:30:11,920 --> 00:30:15,800 Speaker 3: they're going to release pretty soon. They are now enabling 520 00:30:15,960 --> 00:30:19,960 Speaker 3: peer to peer trading of these solar presumers now so 521 00:30:20,000 --> 00:30:23,160 Speaker 3: that they not only have to depend on distribution company, 522 00:30:23,200 --> 00:30:27,640 Speaker 3: they can actually trade out an inn among themselves, right, 523 00:30:27,680 --> 00:30:30,480 Speaker 3: which is a very forward looking policy. And actually we 524 00:30:30,520 --> 00:30:33,480 Speaker 3: are participating in that pilot as we speak, with certain 525 00:30:33,520 --> 00:30:37,200 Speaker 3: discounts in India. So this is what a future of 526 00:30:37,320 --> 00:30:39,880 Speaker 3: energy for India looks like. Right. So India is targetting 527 00:30:40,480 --> 00:30:44,480 Speaker 3: per capita energy that hours around fourteen hundred kilowa hours 528 00:30:44,520 --> 00:30:49,360 Speaker 3: per capita to actually four thousand by twenty forty seven. 529 00:30:49,880 --> 00:30:52,120 Speaker 3: For that to happen and for India to go to 530 00:30:52,200 --> 00:30:55,480 Speaker 3: net zero, it is essential that these kind of very 531 00:30:55,520 --> 00:31:00,480 Speaker 3: forward looking policy where each consumer or residential custom becomes 532 00:31:00,520 --> 00:31:06,320 Speaker 3: presumer and they're allowing aggregators like ourselves to aggregate the 533 00:31:06,360 --> 00:31:09,360 Speaker 3: supply and demand and serve it in the real time. 534 00:31:09,600 --> 00:31:12,040 Speaker 3: So I see these two policy framework as one of 535 00:31:12,080 --> 00:31:15,040 Speaker 3: the best policy frameworks that I have seen in the 536 00:31:15,080 --> 00:31:20,120 Speaker 3: global South that is not encumbered by historical traditional policies 537 00:31:20,160 --> 00:31:23,040 Speaker 3: that only promotes centralized electrification. 538 00:31:24,120 --> 00:31:27,040 Speaker 1: That's pretty amazing because it is also the time when 539 00:31:27,240 --> 00:31:30,160 Speaker 1: if you can do this kind of aggregation where you 540 00:31:30,280 --> 00:31:35,160 Speaker 1: take maybe one thousand rooftops and turn that into what 541 00:31:35,280 --> 00:31:38,240 Speaker 1: is called a virtual power plant, you can act as 542 00:31:38,280 --> 00:31:41,840 Speaker 1: a utility scale asset and then bid into the market 543 00:31:42,240 --> 00:31:44,960 Speaker 1: and learn from the market when the prices are right 544 00:31:45,000 --> 00:31:48,200 Speaker 1: and how to trade against that, and then it unlocks 545 00:31:48,240 --> 00:31:52,200 Speaker 1: something that is being now experimented in many countries. So 546 00:31:52,600 --> 00:31:56,040 Speaker 1: Spain has some experiments, UK has some experiments, Australia has 547 00:31:56,040 --> 00:31:59,840 Speaker 1: them where they're trying to use electric cars and the 548 00:32:00,400 --> 00:32:04,000 Speaker 1: in electric cars as a grid storage. When you combine 549 00:32:04,200 --> 00:32:07,000 Speaker 1: hundreds of thousands of electric cars, you suddenly have a 550 00:32:07,160 --> 00:32:09,720 Speaker 1: very big battery that you can use to be able 551 00:32:09,760 --> 00:32:11,959 Speaker 1: to do this kind of trading. And I was in 552 00:32:11,960 --> 00:32:15,000 Speaker 1: India and December and just the number of electric cars 553 00:32:15,000 --> 00:32:18,880 Speaker 1: there is just so visibly increasing every time I go 554 00:32:19,000 --> 00:32:22,400 Speaker 1: back home that this kind of policy will also help 555 00:32:22,520 --> 00:32:26,160 Speaker 1: unlock the use of electric cars as an energy storage asset. 556 00:32:26,760 --> 00:32:29,520 Speaker 3: Absolutely, and India again, I don't know off many country 557 00:32:29,600 --> 00:32:31,959 Speaker 3: that has done this at national level. I know, like 558 00:32:32,320 --> 00:32:36,120 Speaker 3: in Texas in the US, they have similar policy. You're 559 00:32:36,160 --> 00:32:41,719 Speaker 3: absolutely right. In India, they have released VPPA virtual PPAs 560 00:32:41,720 --> 00:32:45,560 Speaker 3: that you can write using this aggregation methodology. What is 561 00:32:45,680 --> 00:32:49,600 Speaker 3: very interesting is India is also applying its UPI infrastructure 562 00:32:49,760 --> 00:32:52,160 Speaker 3: or architecture for peer to peer trading. 563 00:32:52,320 --> 00:32:54,640 Speaker 1: So the UPI is the digital payment system. 564 00:32:54,360 --> 00:32:58,240 Speaker 3: Direct and they're going to use absolutely digital currency using blockchains, 565 00:32:58,240 --> 00:33:01,120 Speaker 3: so you don't have to reconcile payment and in India 566 00:33:01,200 --> 00:33:03,920 Speaker 3: rupee in real time. You can store those through the 567 00:33:03,920 --> 00:33:06,960 Speaker 3: blockchain and reconcile every third day or fourth day or 568 00:33:07,120 --> 00:33:11,600 Speaker 3: seventh day. So it makes frictionless transaction possible. And that's 569 00:33:11,640 --> 00:33:15,440 Speaker 3: what gives a scale on a national level, and that's 570 00:33:15,440 --> 00:33:18,040 Speaker 3: what I'm very excited about, and we are actually hoping 571 00:33:18,120 --> 00:33:22,720 Speaker 3: that Nigeria also adopts a similar policy. To your point 572 00:33:22,720 --> 00:33:27,400 Speaker 3: about batteries, you may or may not know, but most 573 00:33:27,440 --> 00:33:31,160 Speaker 3: of the states that we work in, most households, probably 574 00:33:31,200 --> 00:33:34,880 Speaker 3: ninety nine percent of the households absolutely already have a 575 00:33:34,920 --> 00:33:37,800 Speaker 3: battery and inverter system for emergency supply. 576 00:33:37,640 --> 00:33:40,440 Speaker 1: Typically lead acid battery. But yes, there is they call 577 00:33:40,520 --> 00:33:43,400 Speaker 1: you PS system in India and they have quite a 578 00:33:43,440 --> 00:33:44,479 Speaker 1: few of the houses have that. 579 00:33:44,760 --> 00:33:48,680 Speaker 3: So imagine all those gigawards setting, the gigabot hours setting 580 00:33:48,680 --> 00:33:51,280 Speaker 3: there that can be replaced with lithium, which we actually 581 00:33:51,320 --> 00:33:55,560 Speaker 3: plan to do, and then tap that beyond electric vehicle 582 00:33:55,720 --> 00:33:59,680 Speaker 3: as behind the meter battery that already exists in the 583 00:33:59,720 --> 00:34:00,400 Speaker 3: ECO system. 584 00:34:01,040 --> 00:34:03,400 Speaker 1: So you are now looking to raise four hundred million 585 00:34:03,440 --> 00:34:06,320 Speaker 1: dollars for this new expansion you talked about to go 586 00:34:06,400 --> 00:34:09,600 Speaker 1: up to two gigaboards of all these projects accumulated together 587 00:34:10,080 --> 00:34:15,439 Speaker 1: and then IPO later in twenty nine or thirty. When 588 00:34:15,480 --> 00:34:19,200 Speaker 1: you look at companies like yours around the world doing 589 00:34:19,360 --> 00:34:23,680 Speaker 1: distributed energy, what other places are you seeing or whether 590 00:34:24,000 --> 00:34:27,160 Speaker 1: other companies are you seeing that are doing interesting things. 591 00:34:27,640 --> 00:34:30,240 Speaker 3: One of the companies that I look up to, which 592 00:34:31,200 --> 00:34:33,600 Speaker 3: is in the country that you live in, which is UK, 593 00:34:34,200 --> 00:34:37,120 Speaker 3: I really look up to Octopus Energy and what they 594 00:34:37,160 --> 00:34:41,200 Speaker 3: have created from you know, very in my opinion, very 595 00:34:41,239 --> 00:34:45,520 Speaker 3: pooring retail electricity to what now they have as Kraken 596 00:34:45,880 --> 00:34:48,839 Speaker 3: and other things that they have done, including ev right 597 00:34:48,840 --> 00:34:53,240 Speaker 3: they're selling ev as as well. So I see them 598 00:34:53,360 --> 00:34:57,880 Speaker 3: as more forward looking from the Western countries perspective, but 599 00:34:58,120 --> 00:35:00,080 Speaker 3: with the peer to peer trading and other things that 600 00:35:00,120 --> 00:35:02,480 Speaker 3: we are talking about in India and possible in Nigeria. 601 00:35:03,000 --> 00:35:08,480 Speaker 3: I see many companies coming into the space, especially the 602 00:35:08,480 --> 00:35:11,439 Speaker 3: ones that are digital native and people who are going 603 00:35:11,480 --> 00:35:14,520 Speaker 3: to use AI at scale, because that's what will make 604 00:35:14,640 --> 00:35:18,680 Speaker 3: dr successful. Our traditional company is going to come in, Yes, 605 00:35:18,840 --> 00:35:22,160 Speaker 3: the likes of Data Power Another will come in India. There 606 00:35:22,200 --> 00:35:25,480 Speaker 3: will be traditional companies, traditionalising companies that have been doing 607 00:35:25,520 --> 00:35:29,400 Speaker 3: central power system in Nigeria will also do that. But 608 00:35:29,480 --> 00:35:32,680 Speaker 3: I also see a lot of young and new companies 609 00:35:33,080 --> 00:35:37,200 Speaker 3: like Octopus also becoming part of the national actification program 610 00:35:37,280 --> 00:35:39,160 Speaker 3: of many countries in Global South. 611 00:35:39,560 --> 00:35:41,799 Speaker 1: We had Greg Jackson, the CEO of Octopus, on the 612 00:35:41,880 --> 00:35:44,279 Speaker 1: podcast just a few months ago, which we'll link in 613 00:35:44,320 --> 00:35:48,120 Speaker 1: the show notes, and it's a very interesting conversation, especially 614 00:35:48,360 --> 00:35:51,759 Speaker 1: in the latest context where Octopus is splitting up its 615 00:35:51,800 --> 00:35:56,560 Speaker 1: business with Cracking its software technology side becoming its own 616 00:35:56,600 --> 00:35:59,799 Speaker 1: business which might even start to rival Octopus Energy on 617 00:35:59,840 --> 00:36:03,000 Speaker 1: it at some point. But in the UK context, and 618 00:36:03,040 --> 00:36:06,520 Speaker 1: this is true of all rich countries today, they are 619 00:36:06,520 --> 00:36:09,759 Speaker 1: building the grid out because they've been under investing in 620 00:36:09,760 --> 00:36:12,360 Speaker 1: the grid and the money that they have to spend 621 00:36:12,360 --> 00:36:15,520 Speaker 1: to build that grid out is enormous. So in the UK, 622 00:36:15,600 --> 00:36:17,800 Speaker 1: the national grid is going to spend something like sixty 623 00:36:17,920 --> 00:36:21,720 Speaker 1: billion pounds over the next few years. You know, similar 624 00:36:21,800 --> 00:36:25,280 Speaker 1: numbers are talked about in the US. Of course, China, 625 00:36:25,400 --> 00:36:29,120 Speaker 1: as just a massive electro state, has been building a 626 00:36:29,120 --> 00:36:33,719 Speaker 1: lot of grid through massive projects. Is there something from 627 00:36:33,760 --> 00:36:38,480 Speaker 1: the distributed energy world that these places that these large 628 00:36:38,600 --> 00:36:42,400 Speaker 1: countries can learn. Is there a vain which perhaps they 629 00:36:42,400 --> 00:36:45,680 Speaker 1: don't need all this large transmission network and maybe they 630 00:36:45,680 --> 00:36:49,640 Speaker 1: can build a whole set of minigrids and reduce the 631 00:36:49,760 --> 00:36:52,680 Speaker 1: overall cost of building the grid. 632 00:36:52,800 --> 00:36:56,080 Speaker 3: So I have not seen that what you said is 633 00:36:56,120 --> 00:36:59,040 Speaker 3: absolutely correct, right. So one way is to beef up 634 00:36:59,120 --> 00:37:02,719 Speaker 3: your grid to the next level because all the intermittent 635 00:37:02,800 --> 00:37:06,359 Speaker 3: power that joins intermittent power being the wind and the 636 00:37:06,360 --> 00:37:10,479 Speaker 3: solar that joins the grid creates instability on the grid 637 00:37:10,560 --> 00:37:13,200 Speaker 3: because the grid was not built for this much intermittent 638 00:37:13,239 --> 00:37:16,800 Speaker 3: power injection, right, So you have to beef up the grade. 639 00:37:18,040 --> 00:37:20,000 Speaker 3: In my opinion for the US, it will be close 640 00:37:20,000 --> 00:37:23,279 Speaker 3: to a trillion dollar upgrade across the whole country. That's 641 00:37:23,320 --> 00:37:27,360 Speaker 3: one way to go. But that's the traditional or historical 642 00:37:27,440 --> 00:37:29,879 Speaker 3: baggage that I would say The other way to go 643 00:37:30,120 --> 00:37:35,160 Speaker 3: is do a massive decentralized projects and then manage it 644 00:37:35,320 --> 00:37:37,759 Speaker 3: using the virtual power plant concept that you were talking 645 00:37:37,800 --> 00:37:42,239 Speaker 3: about at national scale and have all the customers as 646 00:37:42,320 --> 00:37:46,160 Speaker 3: prosumers because they can. They all have rooftops, right, they 647 00:37:46,200 --> 00:37:50,200 Speaker 3: can all install rooftops. Instead of sixty billion pounds going 648 00:37:50,280 --> 00:37:52,879 Speaker 3: into all these projects, which I think they still need 649 00:37:52,880 --> 00:37:56,080 Speaker 3: to upgrade, but you know the thirty percent of that 650 00:37:56,120 --> 00:38:00,960 Speaker 3: could have gone into subsidizing a rooftop solar for customers. 651 00:38:01,400 --> 00:38:04,160 Speaker 3: That asset is going to be thirty five forty years 652 00:38:04,160 --> 00:38:07,200 Speaker 3: long ASCID, So you imagine the investment that will last 653 00:38:07,200 --> 00:38:10,160 Speaker 3: you more than almost half a century, and that will 654 00:38:10,160 --> 00:38:12,920 Speaker 3: actualely give you more robustness in my opinion, than just 655 00:38:13,200 --> 00:38:15,480 Speaker 3: investing pure play on the great expansion. 656 00:38:16,040 --> 00:38:18,359 Speaker 1: This was a really fun chatman, which thank you so much. 657 00:38:18,800 --> 00:38:26,160 Speaker 1: Thank you Exha, and thank you for listening to zero. 658 00:38:26,480 --> 00:38:37,760 Speaker 1: Now for the sound of the week. That's the Mario 659 00:38:37,800 --> 00:38:42,120 Speaker 1: theme song played using a singing Tesla coil. Search for 660 00:38:42,200 --> 00:38:44,680 Speaker 1: it on YouTube and you'll be greeted with all kinds 661 00:38:44,680 --> 00:38:48,680 Speaker 1: of songs played alongside a pretty cool display of electrical discharges. 662 00:38:49,480 --> 00:38:51,279 Speaker 1: If you like this episode, please take a moment to 663 00:38:51,320 --> 00:38:54,560 Speaker 1: rate and review the show on Apple Podcasts, YouTube, and Spotify. 664 00:38:54,920 --> 00:38:57,880 Speaker 1: This episode was produced by Oscar boyd Our. Theme music 665 00:38:57,960 --> 00:39:01,120 Speaker 1: is composed by Wondering Special Time thanks to Marilyn Martin 666 00:39:01,320 --> 00:39:06,160 Speaker 1: Somersadi Moses Andam, Laura Milan and Sharancha I am Akshadrti 667 00:39:06,480 --> 00:39:07,160 Speaker 1: bak Sur