WEBVTT - Can Hot Bricks Save the World? (The Solar Era, Part 2) 0:00:15.356 --> 0:00:15.836 Pushkin. 0:00:20.356 --> 0:00:24.236 So Jenny Chase, who's arguably the foremost solar analyst in 0:00:24.276 --> 0:00:27.916 the world, recently said, by twenty thirty, in the middle 0:00:27.956 --> 0:00:30.636 of the day, essentially everywhere in the world, unless it's 0:00:30.636 --> 0:00:32.956 a cloudy day, electricity is free. 0:00:33.756 --> 0:00:36.316 She told me that at nine am today. I interviewed 0:00:36.356 --> 0:00:37.436 her five hours ago. 0:00:37.556 --> 0:00:41.556 Seven hours All right, great, So now that we live 0:00:41.716 --> 0:00:45.996 in that world like people don't get how profound a 0:00:46.116 --> 0:00:50.796 transformation that is. 0:00:53.396 --> 0:00:55.956 I'm Jacob Goldstein, and this is what's your problem. I 0:00:55.996 --> 0:00:58.716 hope you listened to last week's episode where I did, 0:00:58.756 --> 0:01:02.756 in fact talk to solar expert Jenny Chase about how 0:01:02.876 --> 0:01:06.996 solar energy got so cheap. That was the first of 0:01:07.076 --> 0:01:09.996 three shows we're doing on the triumph of solar power. 0:01:10.516 --> 0:01:12.636 Today and next week, I'm going to be talking to 0:01:12.676 --> 0:01:15.796 people who have very big plans for what to do 0:01:16.276 --> 0:01:21.036 with that very cheap or even free, intermittent solar energy. 0:01:21.756 --> 0:01:25.036 My guest today is John O'Donnell. He wants to use 0:01:25.156 --> 0:01:28.196 cheap solar and wind energy to solve one of the 0:01:28.236 --> 0:01:34.396 biggest unsolved problems in the energy transition heat industrial heat, 0:01:34.916 --> 0:01:39.036 delivering the reliable, intense heat that companies around the world 0:01:39.076 --> 0:01:42.116 need to make everything from steel beams. 0:01:41.716 --> 0:01:42.516 To t shirts. 0:01:42.916 --> 0:01:47.476 Today, company's burn fossil fuel to generate that heat. John 0:01:47.596 --> 0:01:50.316 is the co founder of Rondo Energy, a company that 0:01:50.636 --> 0:01:54.036 John thinks has figured out an economical way to turn 0:01:54.076 --> 0:01:58.796 intermittent electricity into industrial heat. John has started companies before, 0:01:59.036 --> 0:02:01.236 and at the beginning of our conversation he told me 0:02:01.356 --> 0:02:03.996 one of the most important and really kind of surprising 0:02:04.076 --> 0:02:06.556 lessons that he learned from those earlier. 0:02:06.196 --> 0:02:11.716 Companies innovate as little as you can. If the technology 0:02:11.756 --> 0:02:14.356 is going to make a difference, one of the important 0:02:14.396 --> 0:02:16.876 questions is not just how quickly can I develop it 0:02:16.916 --> 0:02:19.636 and make a first unit, but how quickly can I 0:02:19.676 --> 0:02:22.916 make it bankable? How quickly can I make it suitable 0:02:23.436 --> 0:02:27.436 for billion dollar infrastructure investments. And it is a very 0:02:27.556 --> 0:02:33.716 high standard to be able to prove reliability, durability, certainty 0:02:33.756 --> 0:02:41.276 of deployability. And there are lots of material science research groups, 0:02:41.916 --> 0:02:44.996 folks who are trying to work on innovations at an 0:02:45.116 --> 0:02:52.276 individual cell level, who don't really necessarily understand the challenge 0:02:52.356 --> 0:02:56.996 that customers by systems, bankers by infrastructure that we know 0:02:57.156 --> 0:03:01.716 will last for thirty years. And it was with that 0:03:02.196 --> 0:03:07.876 rigorous focus of what is the simplest, most proven thing 0:03:07.996 --> 0:03:11.996 that we could do that led us down the path 0:03:12.116 --> 0:03:16.716 that we're that we chose because we found a path 0:03:16.916 --> 0:03:22.036 that others had opened two hundred years ago. That you know, 0:03:22.116 --> 0:03:25.156 we found a way to reuse a technology from the 0:03:25.196 --> 0:03:30.116 eighteen fifties with a physics insight that let us use 0:03:30.156 --> 0:03:34.636 these proven materials in this new way to solve this challenge. 0:03:35.356 --> 0:03:38.556 I love the idea that innovation is not your friend. 0:03:38.836 --> 0:03:41.836 Like that's such a it's such a flip, right, it's 0:03:41.876 --> 0:03:45.236 like the OCAM's razor of starting an energy transition company 0:03:45.356 --> 0:03:45.796 or something. 0:03:46.996 --> 0:03:50.556 Well, that's right, And you know, we saw this go 0:03:50.676 --> 0:03:52.956 back to clean tech one point. Oh, go back to 0:03:52.996 --> 0:03:57.796 two thousand and five, where there were companies that were 0:03:57.836 --> 0:04:01.196 going to make PV out of anything but silicon because 0:04:01.236 --> 0:04:02.876 we knew silicon was expensive. 0:04:02.956 --> 0:04:06.756 PV meaning photovo takes photos solar solar panels. 0:04:06.796 --> 0:04:12.356 Yeah, and everybody knew that. Everybody quote unquote knew that 0:04:12.476 --> 0:04:15.076 the simple dumb thing that we've been doing for a 0:04:15.116 --> 0:04:19.556 long time, silicon wasn't going to get cheap enough. And 0:04:19.596 --> 0:04:26.196 then China put capital into reducing the cost of making polysilicon, 0:04:26.396 --> 0:04:30.876 just build more production. The cost of polysilicon fell seventy 0:04:30.916 --> 0:04:36.396 percent in one year. And today, just because of Right's law, 0:04:36.636 --> 0:04:41.196 just because of learning curve, the simplest technology became the 0:04:41.316 --> 0:04:48.196 dominant one. Today we see dozens of alternate battery chemistries 0:04:48.276 --> 0:04:50.116 in electrochemical. 0:04:49.316 --> 0:04:54.636 Batteries, alternatives to lithium ion, alternative lif yest, that's. 0:04:54.556 --> 0:04:59.676 Right, which are facing that same Okay, how fast can 0:04:59.756 --> 0:05:03.276 lithium ion improve? And it continues to improve better than 0:05:03.316 --> 0:05:10.396 anyone forecasts. And again in our case, we are doing 0:05:10.916 --> 0:05:14.876 the absolute simplest thing and it is a solution that 0:05:14.956 --> 0:05:16.156 we know for sure works. 0:05:16.916 --> 0:05:20.196 So you mentioned you came up with this idea that 0:05:20.396 --> 0:05:24.356 is a version of a two hundred year old idea. 0:05:24.956 --> 0:05:26.756 What's the big idea? What's that idea? 0:05:27.476 --> 0:05:30.596 Up until about ten years ago, most of the energy 0:05:30.636 --> 0:05:33.596 storage in the world was at blast furnaces. In the 0:05:33.636 --> 0:05:37.796 eighteen fifties, there was an innovation that reduced coal use 0:05:37.836 --> 0:05:41.556 at a blast furnace by building a tower with a 0:05:41.636 --> 0:05:44.956 thousand tons of brick within it with air passages. The 0:05:45.036 --> 0:05:48.716 exhaust from the blast furnace blows through that tower, heats 0:05:48.716 --> 0:05:52.596 the brick to fifteen hundred C. Then things are switched around. 0:05:52.636 --> 0:05:55.956 The exhaust is being passed through another tower, and the 0:05:55.956 --> 0:05:59.116 tower full of hot brick air is being sucked through 0:05:59.116 --> 0:06:02.316 that tower and preheated to twelve hundred cea into the 0:06:02.356 --> 0:06:03.716 furnace to save coal. 0:06:04.836 --> 0:06:08.996 So basically, when they burn coal to make iron, they 0:06:09.236 --> 0:06:12.476 take the exhaust heat that comes out of the furnace, 0:06:12.676 --> 0:06:15.396 they use that to heat up bricks, and then later 0:06:16.036 --> 0:06:18.676 they feed that heat from the bricks back into the 0:06:18.676 --> 0:06:21.996 furnace and it makes the plant essentially run more efficiently. 0:06:22.556 --> 0:06:27.956 That's right, And we had a physics insight that if 0:06:27.996 --> 0:06:32.636 we built a particular structure we could use the same 0:06:32.756 --> 0:06:36.196 technology that is in your toaster. A very small amount 0:06:36.276 --> 0:06:41.236 of heating elements are delivering heat by radiation, thermal radiation 0:06:41.756 --> 0:06:44.876 and heating in the whole surface of the bread uniformly. 0:06:45.236 --> 0:06:48.956 If we built the right structure, we could embed electrical 0:06:48.956 --> 0:06:52.956 heating elements in a structure of brick with air passages 0:06:53.716 --> 0:06:58.956 and heat that brick rapidly and uniformly to very high 0:06:58.996 --> 0:07:02.356 temperatures and then pull heat out of it, just the 0:07:02.396 --> 0:07:06.156 way the blast furnace units do. Cool air in superheated 0:07:06.196 --> 0:07:09.356 air out, and with superheated air we can drive a 0:07:09.356 --> 0:07:12.356 cement kiln, or we can drive a boiler and make 0:07:12.436 --> 0:07:16.356 steam for making everything from baby food to chemicals, and 0:07:17.196 --> 0:07:22.876 that unlocked using this abundant you know, brick is basically 0:07:22.876 --> 0:07:28.196 made from dirt, certain kinds of clay. Yeah, no critical minerals, 0:07:28.196 --> 0:07:31.116 and an unrefined material. I mean, that's one of the 0:07:31.156 --> 0:07:34.956 things about Tesla wrote a report last year they're so 0:07:35.076 --> 0:07:41.396 called master Plan three, their forecast for stationary storage. Their 0:07:41.396 --> 0:07:43.556 assessment was the world is going to have twice as 0:07:43.636 --> 0:07:49.676 much heat battery as electrochemical battery storage, but that this 0:07:49.916 --> 0:07:55.596 is categlorically so much lower cost because it's using raw materials, 0:07:56.036 --> 0:07:59.556 not refined materials, because it's not doing any chemistry of 0:07:59.596 --> 0:08:03.516 any kind. It's the same technologies. 0:08:03.196 --> 0:08:05.676 Just making stuff hot. It's just eating. 0:08:05.476 --> 0:08:08.756 Bricks, so you can use raw materials exactly. 0:08:09.916 --> 0:08:14.076 So okay, So just to kind of summarize, there's a 0:08:14.076 --> 0:08:17.516 big problem in the world. Industries burn fossil fuel for 0:08:17.676 --> 0:08:23.756 heat to make almost everything, steal, cement, clothes, whatever. You have, 0:08:23.876 --> 0:08:27.316 This idea the kind of solution to the problem. We 0:08:27.356 --> 0:08:32.596 can use intermittent, cheap, renewable electricity to heat up bricks 0:08:33.236 --> 0:08:38.236 and use those bricks essentially to provide that heat. What 0:08:38.276 --> 0:08:41.196 do you have to do, to industrialize it, to commercialize it, 0:08:41.276 --> 0:08:42.356 to make it a thing in the world. 0:08:43.676 --> 0:08:48.356 So step by step. One of our engineering team members 0:08:48.756 --> 0:08:52.596 and his last job was working on mocks six hypersonic missiles. 0:08:52.636 --> 0:08:57.676 He now does computational fluid simulations on air moving at 0:08:57.716 --> 0:09:00.676 about four miles an hour, and the challenge is just 0:09:00.756 --> 0:09:04.236 as high. We could not do what we're doing without 0:09:04.396 --> 0:09:08.996 modern computer systems that let us do detailed simulations of 0:09:09.276 --> 0:09:13.196 the structure and behavior. But step by step it was 0:09:14.156 --> 0:09:19.996 really identifying, okay, which materials, which manufacturing processes, what geometry, 0:09:20.596 --> 0:09:24.036 And we built a series of things that fit on 0:09:24.076 --> 0:09:27.596 a desktop, to things that look like an industrial refrigerator, 0:09:27.716 --> 0:09:32.076 to things that are just multiplied by about ten x. 0:09:32.876 --> 0:09:36.356 And right now we're doing the fifty x step as 0:09:36.396 --> 0:09:40.196 we go from the first commercial pilot unit to the 0:09:40.196 --> 0:09:45.596 first series manufacturing of the commercial models. There are plenty 0:09:45.636 --> 0:09:48.316 of different steps along the way this thing. As I 0:09:48.356 --> 0:09:51.356 said earlier, how do we innovate as little as possible, 0:09:51.516 --> 0:09:54.956 as much as necessary, but as little as possible, And 0:09:55.036 --> 0:09:59.436 how do we pick subsystems and partners so that we 0:09:59.516 --> 0:10:03.156 are certain we can go to massive scale Because like 0:10:03.556 --> 0:10:08.396 speed is the most important thing, one of the studies 0:10:08.436 --> 0:10:12.356 of this cal as of heat batteries. Their finding was, Yeah, 0:10:12.356 --> 0:10:15.716 this is going to eliminate about twenty percent of total 0:10:15.796 --> 0:10:19.836 world CO two when it gets to scale. Okay, twenty 0:10:19.876 --> 0:10:22.556 percent is a lot, and it's going to reduce the 0:10:22.676 --> 0:10:27.716 cost of manufacturing all the commodities that we use. So 0:10:28.196 --> 0:10:30.156 let's get to it. How do we get there as 0:10:30.196 --> 0:10:31.196 fast as possible? 0:10:31.516 --> 0:10:34.316 In a way, for something to scale that fast, it 0:10:34.396 --> 0:10:36.996 has to be cheaper, right. The only way something can 0:10:37.036 --> 0:10:42.676 grow that fast is if it's just cheaper and simple, right. 0:10:42.756 --> 0:10:45.076 It has to be those things. Otherwise it won't grow fast. 0:10:45.556 --> 0:10:47.916 As long as there is some sort of premium or 0:10:47.996 --> 0:10:51.476 higher cost, it will go as slowly as possible. If 0:10:51.476 --> 0:10:57.236 you're in a razor thin margin commodity business, the last 0:10:57.236 --> 0:10:59.916 thing you want is to increase your cost of production. 0:11:00.036 --> 0:11:05.516 Your customers may go elsewhere. But if there is no 0:11:05.716 --> 0:11:08.516 emission solution that will reduce your cost of production. 0:11:08.676 --> 0:11:14.076 Yeah, markets, huge flows of private capital will drive it 0:11:14.156 --> 0:11:18.836 to scale. It's if it's ready, if it really does 0:11:19.076 --> 0:11:22.156 meet what it says it does, if it's safe. 0:11:22.276 --> 0:11:24.756 I mean, there are lots of things that we and 0:11:24.796 --> 0:11:28.116 as I said earlier, that is it proven enough that 0:11:28.276 --> 0:11:31.396 infrastructure capital can apply, which is just. 0:11:31.316 --> 0:11:34.636 As most sort of conservative, cautious capital or they want 0:11:34.676 --> 0:11:36.556 to make sure not just that it works, but that'll 0:11:36.596 --> 0:11:39.036 work every day for thirty years. 0:11:39.756 --> 0:11:43.316 That's right. And of course we saw the solar industry 0:11:43.356 --> 0:11:48.556 as each technology became bankable, enormous explosion and growth as 0:11:49.156 --> 0:11:53.916 financial engineers joined you know, manufacturing engineers and built an 0:11:53.916 --> 0:11:56.876 industry that meets everybody's you know. And that is the 0:11:56.956 --> 0:12:02.276 opportunity we have right now, this new class of supplying 0:12:02.356 --> 0:12:06.076 the energy for industrial heat. If you just do a 0:12:06.156 --> 0:12:09.916 units conversion, it's about seven thousand gigawatts. It's many times 0:12:10.036 --> 0:12:14.556 more renewables that exist in the world today that will 0:12:14.596 --> 0:12:19.756 be needed in this new market segment. And grid researchers, 0:12:19.836 --> 0:12:23.916 notably Jesse Jenkins at Princeton, have identified that when these 0:12:23.996 --> 0:12:27.716 technologies are connected to the grid, they help the grid, 0:12:27.756 --> 0:12:31.156 they make it more robust, they help more renewables connect 0:12:31.596 --> 0:12:36.036 because it's a new special class of load. So there's 0:12:36.076 --> 0:12:37.556 a virtuous cycle. 0:12:38.356 --> 0:12:41.036 Well, and it's optimized to want to use energy at 0:12:41.076 --> 0:12:43.316 a time when there's too much energy, right, Like, that's 0:12:43.356 --> 0:12:44.916 the whole point, right. 0:12:45.316 --> 0:12:47.396 And in order for that to really work, because lots 0:12:47.436 --> 0:12:49.516 of people say they're going to do that, but in 0:12:49.636 --> 0:12:51.556 order for that to really work, you really have to 0:12:51.596 --> 0:12:54.796 be something that can take energy only a few hours 0:12:54.836 --> 0:12:57.716 a day. You have to be able to operate at 0:12:57.876 --> 0:13:02.796 low capacity factor to have a low cost per kilo loot. 0:13:03.556 --> 0:13:06.636 And I think, as I think I mentioned, the technology 0:13:06.676 --> 0:13:10.236 we use for capturing electricity is the same one that 0:13:10.356 --> 0:13:13.676 is in your toaster. It is literally a hot wire 0:13:14.236 --> 0:13:17.396 and it is difficult to get cheaper than a hot wire. 0:13:17.676 --> 0:13:21.316 So the bricks, Yeah, these play a unique role in 0:13:21.996 --> 0:13:25.676 being kind of a bottom feeder that's taking electricity that 0:13:25.716 --> 0:13:33.476 nobody else wants. That as a result, eliminating curtailment, making 0:13:33.676 --> 0:13:37.636 renewables that are serving the grid more profitable because they 0:13:37.636 --> 0:13:41.876 can sell all their energy. This new kind of load 0:13:41.956 --> 0:13:44.636 is going to transform the grids it's connected to. 0:13:44.996 --> 0:13:47.996 So curtailment is like turning off solar panels in the 0:13:47.996 --> 0:13:50.476 middle of the day because there's not enough demand. Basically, 0:13:50.476 --> 0:13:51.476 that's what curtailment is. 0:13:51.756 --> 0:13:55.556 Yes, England threw away fifty five percent of the wind 0:13:55.596 --> 0:13:58.316 power available at the Scotland border last year. 0:13:58.476 --> 0:14:00.396 You got to put some bricks over there, man, You 0:14:00.476 --> 0:14:04.636 got to put some hot bricks on the Scotland border. Yeah, 0:14:04.876 --> 0:14:09.556 so tell me about the pilot plant that you have, right, 0:14:09.636 --> 0:14:12.196 that's you have built a pilot plant, is that correct. 0:14:12.796 --> 0:14:18.116 Yeah. We built a first small unit for a customer 0:14:18.156 --> 0:14:23.036 who is an innovator in producing low carbon biofuels. The 0:14:23.076 --> 0:14:26.636 goal is a couple of large units that eliminate all 0:14:26.716 --> 0:14:31.436 the combustion at the refinery, and they said show us. 0:14:32.236 --> 0:14:36.516 We were keen to work with them in the longer term, 0:14:36.596 --> 0:14:40.556 and we were also on a journey. We were preparing 0:14:40.636 --> 0:14:44.756 to build a first commercial unit for another customer that 0:14:45.036 --> 0:14:49.476 holds one hundred magawatt hours. We had built things in 0:14:49.516 --> 0:14:54.196 the lab that hold two hundred kilowat hours, and that's 0:14:54.236 --> 0:14:55.436 too big a step. 0:14:56.156 --> 0:15:00.156 Right, That's like about a thousandfold leap of five hundredfold. 0:14:59.796 --> 0:15:03.556 Only five hundred, Yeah, exactly. Yeah, so let's build something 0:15:03.716 --> 0:15:07.676 in between. And in particular, the work that we had 0:15:07.756 --> 0:15:11.116 been doing in the lab, we had recognized, Okay, we 0:15:11.196 --> 0:15:14.836 have the geometry, we have the materials, but we aren't 0:15:15.276 --> 0:15:17.556 making the thing the way that it's going to be 0:15:17.596 --> 0:15:21.156 easy to construct. We want to make the core a 0:15:21.236 --> 0:15:25.076 different way and we want to actually test build something 0:15:25.716 --> 0:15:29.356 of the full commercial implementation before we go to build 0:15:29.396 --> 0:15:33.076 a big one, and that was the genesis that said, 0:15:33.236 --> 0:15:36.556 why we want to do this project, and they over 0:15:36.596 --> 0:15:39.076 the last year and a half a little more than that. 0:15:39.196 --> 0:15:43.716 Now we've learned a ton from operating there, from going 0:15:43.836 --> 0:15:49.956 through catastrophic rainstorms that flooded the site and flooded the substation, 0:15:50.196 --> 0:15:53.716 and you know, a variety of things that were unpredictable 0:15:53.916 --> 0:15:56.236 that have been valuable learning experiences as well. 0:15:57.276 --> 0:15:59.076 So what's it? Just what's it look like? 0:15:59.756 --> 0:16:05.076 This thing is a It's a box that contains ten 0:16:05.236 --> 0:16:10.356 tons of brick, storing two megawatt hours of energy. Each 0:16:10.516 --> 0:16:15.396 brick is about a one meter cube in terms of 0:16:15.436 --> 0:16:20.596 its size. That has open chambers that in which light 0:16:20.876 --> 0:16:25.276 moves heat around, and fine slots in the brick through 0:16:25.316 --> 0:16:30.556 which air passages. It's a complicated looking object, but it's 0:16:30.556 --> 0:16:32.756 about a meter cube and it weighs about a ton. 0:16:33.716 --> 0:16:35.316 So I'm sorry about half a ton. 0:16:35.596 --> 0:16:41.156 Yeah, each each brick, you're saying, each brick. 0:16:43.796 --> 0:16:45.276 Yeah, A single a single brick. 0:16:45.396 --> 0:16:45.636 Yeah. 0:16:45.756 --> 0:16:49.196 So the part of the journey was learning how to 0:16:49.196 --> 0:16:52.716 make big ones so that the assembly at sight would 0:16:52.716 --> 0:16:57.636 be very quick. Inside that structure of brick are electrical 0:16:57.676 --> 0:17:02.396 heaters that are passing through passages. Inside that brick array, 0:17:03.036 --> 0:17:06.156 it's surrounded by an insulated box which is surrounded by 0:17:06.196 --> 0:17:08.836 an insulated kind of shed, and it looks like a 0:17:08.876 --> 0:17:13.556 small all industrial building on the outside. It's got water 0:17:13.636 --> 0:17:16.236 pipes and steam pipes on one side and an electrical 0:17:16.236 --> 0:17:17.116 connection at the other. 0:17:20.436 --> 0:17:23.476 In a minute, John talks about building plants around the 0:17:23.516 --> 0:17:40.996 world right now. So you have this pilot plant, it's running. 0:17:41.796 --> 0:17:45.076 What are you worried about? What are you still trying 0:17:45.076 --> 0:17:45.756 to figure out? 0:17:46.556 --> 0:17:51.476 Well, today we are in contract and in construction in 0:17:52.156 --> 0:18:01.676 on two, three, four, five countries on projects making cement, polyester, whiskey, beer, polycarbonate, plastic, 0:18:01.796 --> 0:18:07.556 and biofuels. We are struggling to grow the company rapidly. 0:18:07.596 --> 0:18:10.836 We're about one hundred and fifty people in seven countries 0:18:10.956 --> 0:18:17.996 right now, establishing construction relationships with you know, construction companies 0:18:18.836 --> 0:18:21.636 for in all of those five countries. There are plenty 0:18:21.636 --> 0:18:25.556 of things at this point of you know, stretching at 0:18:25.596 --> 0:18:30.716 the seams. We've just only just a few months ago 0:18:30.756 --> 0:18:36.596 concluded establishment of a European subsidiary with financing from the 0:18:36.676 --> 0:18:42.436 European Investment Bank and Breakthrough Energies Project finance team that 0:18:42.516 --> 0:18:48.196 have created an enormous financial, engineering capability and legal capability 0:18:48.276 --> 0:18:50.516 inside our company that almost killed us. 0:18:51.876 --> 0:18:57.116 We uh that bricks are easy finance and legal. 0:18:57.796 --> 0:19:00.076 Yeah, well, it depends on where you are, but at 0:19:00.076 --> 0:19:02.756 the moment, yes, that's right, because it was about a 0:19:02.836 --> 0:19:08.356 year ago that we established a giant manufacturing capacity with 0:19:08.596 --> 0:19:12.116 one of our early investors, who is a diversified producer 0:19:12.156 --> 0:19:16.316 of many things, including this refractory brick, doing business in 0:19:16.396 --> 0:19:21.876 sixty countries. So part of it has been establishing proving 0:19:22.196 --> 0:19:26.836 the initial that the thing works, then establishing manufacturing capacity, 0:19:27.276 --> 0:19:32.156 establishing delivery capacity, the ability of finance projects. There's more 0:19:32.196 --> 0:19:34.996 than one answer to your question depending on what perspective 0:19:35.036 --> 0:19:38.396 that you look, and right now we're engaged in all 0:19:38.436 --> 0:19:38.716 of them. 0:19:39.076 --> 0:19:42.356 So it's execution risk. If I were to reduce what 0:19:42.356 --> 0:19:44.276 you're saying, it's like you figured out how to do 0:19:44.316 --> 0:19:46.916 the thing, but doing it is hard, doing it in 0:19:47.716 --> 0:19:54.836 five countries, and I mean presumably also like the thing, 0:19:55.036 --> 0:19:57.316 like you have to spend a lot of money now 0:19:57.756 --> 0:20:00.716 in order to get sort of steady returns over twenty years. Right, 0:20:00.756 --> 0:20:03.156 that's your model. You're building these things and then you're 0:20:03.196 --> 0:20:05.076 selling the heat over the life of the thing is 0:20:05.076 --> 0:20:07.196 that the way it works for. 0:20:07.196 --> 0:20:09.596 About half of our projects, that is the way it works. 0:20:09.676 --> 0:20:09.796 OK. 0:20:09.996 --> 0:20:12.356 But you're right, we're spending a lot of money now 0:20:12.396 --> 0:20:14.756 and part of what we're doing, of course, these early 0:20:14.876 --> 0:20:19.596 projects are proving the technology in that place, in that 0:20:19.716 --> 0:20:24.236 application with that construction partner. So we're setting the grounds 0:20:24.836 --> 0:20:29.596 for hypergrowth and establishing that bankability criterion that I mentioned earlier. 0:20:30.116 --> 0:20:32.196 And it takes a lot of work to get the 0:20:32.236 --> 0:20:34.956 first one done. But if we've done that right with 0:20:35.116 --> 0:20:38.436 that partner in that country, you know we will step 0:20:38.476 --> 0:20:41.996 and repeat. And there are these giant markets where we 0:20:42.036 --> 0:20:44.556 are in the money and there are a lot of 0:20:44.556 --> 0:20:47.396 people who want to be customer number two or three. 0:20:48.036 --> 0:20:51.956 But to your point, for some of our projects, we 0:20:52.236 --> 0:20:56.716 are a technology provider where we are building something and 0:20:56.796 --> 0:20:59.796 turning the keys over to the customer, and in others 0:21:00.196 --> 0:21:03.676 we are the owner operator and we are selling energy services, 0:21:03.796 --> 0:21:05.156 not energy equipment. 0:21:05.756 --> 0:21:08.836 Basically, you own the bricks or they own the bricks. 0:21:08.876 --> 0:21:11.476 I mean, are those the two models you're describing. 0:21:11.316 --> 0:21:14.396 More or less? Yeah, So there are several ways that 0:21:15.036 --> 0:21:18.436 customers will bring these things in and in some cases 0:21:18.436 --> 0:21:21.956 it's because look, the heat battery is in the middle 0:21:22.076 --> 0:21:26.996 of their petrochemical complex. They want to own everything in 0:21:27.116 --> 0:21:32.036 that square mile factory facility. In other cases, no, we're 0:21:32.036 --> 0:21:35.356 going to establish something that's right next door and sell 0:21:35.436 --> 0:21:39.556 steam over the fence. That's just the nature of this business. 0:21:39.596 --> 0:21:43.196 And we're standing ourselves up to do business the way 0:21:43.236 --> 0:21:44.556 that the market needs us to. 0:21:45.996 --> 0:21:48.836 You use the phrase in the money. Does that mean 0:21:49.316 --> 0:21:53.116 it's cheaper for them to buy heat from you than 0:21:53.156 --> 0:21:56.276 to use fossil fuel to generate heat? Is that what 0:21:56.356 --> 0:21:57.676 in the money means in that context? 0:21:57.756 --> 0:22:01.556 Yes, that's true every single project, and that is yes exactly. 0:22:02.236 --> 0:22:05.676 Is regulation a problem for you at all? Is it 0:22:05.676 --> 0:22:07.836 a benefit to you? Like, how does regulation fit with 0:22:07.876 --> 0:22:08.756 your business? 0:22:09.276 --> 0:22:12.956 We're using a new fuel, We're using electricity in a 0:22:12.996 --> 0:22:18.116 fundamentally new way, right, and the rules that the world 0:22:18.196 --> 0:22:24.316 has around electricity networks need update, you know. And we 0:22:24.396 --> 0:22:29.836 hear an awful lot about the challenges of connecting renewable 0:22:29.916 --> 0:22:34.956 generation to electricity grids and the delays, and you know, 0:22:35.036 --> 0:22:39.276 the sort of structural conflict between we want a least 0:22:39.316 --> 0:22:43.476 cost electricity network, but we need one that operates with 0:22:43.596 --> 0:22:47.636 these fundamentally new sources of generation. What's gone on so 0:22:47.716 --> 0:22:51.396 far with lithium ion batteries in particular, has begun to 0:22:51.476 --> 0:22:55.676 address the matter of how do we connect these intermittent loads, 0:22:55.796 --> 0:22:59.116 how do we connect loads that benefit the electricity grid? 0:22:59.676 --> 0:23:03.356 And this matter is a very big deal country by country. 0:23:03.916 --> 0:23:06.876 Netherlands just made a rules change, Denmark made a rules 0:23:06.996 --> 0:23:10.556 change in April last year. We had a project contracted 0:23:10.556 --> 0:23:15.236 in October. Germany and England have just made rules changes. 0:23:15.996 --> 0:23:19.036 In some places, the rules like in Urkat in Texas 0:23:19.076 --> 0:23:23.676 already work. I'm speaking to you from California, where decarbonization 0:23:23.956 --> 0:23:28.476 is both mandatory and forbidden. The grid rules in California 0:23:28.556 --> 0:23:33.516 make it impossible to connect projects like ours, and we're 0:23:33.516 --> 0:23:36.636 building our next California project with no connection at all 0:23:36.916 --> 0:23:38.916 at all to the electricity grid. 0:23:38.716 --> 0:23:41.476 For that reason, basically just because they wouldn't let you 0:23:41.516 --> 0:23:42.356 if you wanted to. 0:23:42.476 --> 0:23:44.236 Well, and it was going to take seven years to 0:23:44.276 --> 0:23:47.676 get a connection, and the price would the price of 0:23:47.796 --> 0:23:51.876 the grid service alone exceeds the cost of fuel, so 0:23:51.916 --> 0:23:56.756 that even if the solar energy were free, the economics 0:23:56.836 --> 0:24:01.076 could not work. So yeah, there are places where the 0:24:01.156 --> 0:24:05.076 rules matter, and it is mostly a matter of sort 0:24:05.076 --> 0:24:10.996 of modernizing the rules to sort of deal with today's 0:24:11.036 --> 0:24:15.756 these fundamentally new technologies that were not conceived when today's 0:24:15.836 --> 0:24:20.876 rules were established. Steve chu who was Obama's Energy secretary 0:24:20.956 --> 0:24:23.756 after he won the Nobel Prize, you know, he used 0:24:23.756 --> 0:24:26.196 to go around giving a talk saying, the United States 0:24:26.236 --> 0:24:29.236 does electricity today the way we did roads in nineteen 0:24:29.316 --> 0:24:35.036 thirty nine. And he's right about interstate transmission and all 0:24:35.076 --> 0:24:39.636 sorts of things. But these things are being worked at 0:24:39.676 --> 0:24:43.396 the same time as our technology and others are coming 0:24:43.516 --> 0:24:47.116 to the fore. Because look, five ten years from now, 0:24:47.236 --> 0:24:51.316 I think it'll be widely understood that all of industry 0:24:51.356 --> 0:24:56.356 is going to be repowered on electricity, electrify everything is 0:24:56.476 --> 0:25:00.356 the way we make this transition to a lower cost 0:25:00.476 --> 0:25:06.036 world that is zero emission. And I'm very encouraged that 0:25:06.036 --> 0:25:10.076 that process is underway and a bunch of places, and 0:25:10.196 --> 0:25:12.476 there are different pieces to get out of the way 0:25:12.516 --> 0:25:17.916 and to enable that transition on that journey, and I'm 0:25:17.956 --> 0:25:20.716 delighted that, you know, there are other folks building heat 0:25:20.716 --> 0:25:24.036 batteries and heat pumps and electoralizers and all sorts of 0:25:24.076 --> 0:25:29.476 things that collection, as well as electrochemical batteries that collection. 0:25:29.636 --> 0:25:34.396 Those technologies, the winners will find their way to scale, 0:25:35.756 --> 0:25:38.876 but these regulatory matters need to be adjusted for any 0:25:38.956 --> 0:25:40.716 of them to deploy. 0:25:43.276 --> 0:25:45.276 We'll be back in a minute with the lighting ground. 0:25:58.556 --> 0:26:01.156 Are tandem bicycles overrated or underrated? 0:26:02.196 --> 0:26:05.356 I have three in my backyard. Tandem bicycles are fantastic. 0:26:06.636 --> 0:26:10.516 Why has the world not come to their bicycles? What 0:26:10.596 --> 0:26:12.356 do you know that nobody else knows. 0:26:14.476 --> 0:26:17.116 Most of my rides have been with my kids, especially 0:26:17.116 --> 0:26:19.556 when my kids were younger. It was a way of 0:26:19.636 --> 0:26:22.756 doing centuries when you know they weren't willing to ride 0:26:22.796 --> 0:26:23.476 love liscences. 0:26:23.756 --> 0:26:25.996 You peddled one hundred miles and they coasted. 0:26:27.676 --> 0:26:30.076 It wasn't like that, but there were allegations of that 0:26:30.196 --> 0:26:35.956 at different times. Who sat him back? My kids? But 0:26:36.516 --> 0:26:39.076