The Wisdom Wall

“it's actually hard to get to a big market size for it, ultimately, because it is so cheap. Like, I don't remember exactly the number, but, um, we did an episode on this, like, I don't know, a couple years ago, and it was something like a couple billion dollars might get you, like, half a degree Celsius of global…”

“the big lesson of the current state of affairs in climate tech is that, um, in a lot of the subcategories of the market, Being clean, being green, whatever, is insufficient. Being ex but clean, um, particularly if it's ex but clean and more expensive. Is just not enough. And you don't have the durability of…”

“If you're, if you're building something that you think is a better mousetrap, like, it's 20% better, Than whatever the incumbent technology is. In all likelihood, your reaction, my reaction, when we see a company that's doing that is like, 20% better is not better enough. Because in five or 10 years, the industry is…”

“one of the things that we, we do know as pretty likely is that it's possible you could do solar radiation management Um, that would deliver substantial reduction in warming for a very, very, very low cost relative to all the other approaches that we're seeing out there, particularly this emergent world of Carbon…”

“the rest of these, I think, not that I'm like a Pure Chicago-style economists, but I think the market ultimately solves most of them. Transmission and permitting don't fall into a category that the market ultimately solves, necessarily, because, as you said, they're socially constructed.”

“We see a lot of startups who are doing something where their sort of fundamental assumption is marginal cost of energy is going towards zero, and maybe that, that could be true over a longer time horizon, but show me how you can deliver positive unit economics with electricity costs as they are today. Uh, otherwise, I…”

“The actual challenge is, uh, A very limited supply of high quality carbon credits or carbon removals, uh, and a huge supply of really low quality, really bad carbon credits or offsets. That is the actual problem, and Web three is not really a solution to that.”

“So the big categories of where the money pits in cleantech one.o were thin film solar. Like you said, alternatives to silicon for PV, biofuels, and then one big money pit, which was, you said battery swapping, it was Better Place... If you subtract those three things out, it's a very different picture.”

“If the training data is all private and walled, you got to be able to use your customer's data to train. They're not going to like that, and you got to figure out how to get over that hump, and if you can't get over that hump, there's kind of no way you end up building a product that scales or gets better.”

“there's no, construction finance is a thing if you're building a utility-scale solar project, but if you're building a first-of-a-kind thing, there's also not really, we've been talking about, like, financing the long-term operation, there's also not really a construction financing solution, so you end up having to do…”

“though going from lab scale to full commercial scale almost never makes sense, I do think that some entrepreneurs that I've seen take as gospel this notion of the, uh, order of magnitude to scale up that isn't necessarily true to their technology, right? The real question should be, what is the next scale that I need…”

“The reason for that is, the way that I Think about CDR is that you're looking, your, your mythical unicorn solution for removing CO two from the atmosphere has four characteristics. It is cheap, which is, you know, let's just call it sub a hundred dollars a ton, but like ideally sub 50 dollars a ton, who knows, but…”

“most clean energy technologies , the thing about them is that they are high capex, low opex... And because they're high capex, low opex, that makes them particularly sensitive to the cost of financing.”

“These data centers, um, generally speaking are somewhat price insensitive, but time sensitive. And when you have that dynamic, uh, it, it creates a different kind of an opportunity to say like, well, okay, we got to deliver power sooner, even if it is a little more expensive than the grid, uh, because otherwise we're…”

“you have a hard time getting to scale, because the whole point is that this technology is going to graduate from the type of thing you would do to the type of thing that, that JP Morgan would do. Uh, and so you, if you're the one focused on just the sort of first few of a kind, then you have to continually cycle…”

“for any one player, any one company to single-handedly bend the curve on heat pump adoption, it sort of has to be a vertically integrated solution of some kind or another”

“On the downside, you probably lose the market. You lose a big, big chunk of the market, right, who is in the carbon market, not in the business of, uh, of subsidizing practices they like from farmers somewhere else.”

“Uh, I, I think that's where things like nuclear fission have struggled in the past. It's not really a manufactured technology. It's an engineered project. Uh, and it's tougher to get the kind of learning rates with stuff like that.”

“if you have 10 cent per kilowatt hour power, no direct air capture system is going to be anywhere near in the money, no matter what you define in the money as. If you have one cent per kilowatt hour power, then it looks really, really promising.”

“So, within an order of magnitude or so, that voluntary carbon removal market needs to scale up something like 20,000 times. By twenty-fifty in order to reach those IPCC goals, or it needs to no longer be voluntary.”

“Oftentimes, if you pay a premium for the most carbon intensive parts of the thing that you are making, you can pay a fairly hefty premium for those things, but the cost of the end product isn't affected nearly as much because the cost of those things aren't that big a share of the end product.”

“what caused the Inflection for residential solar in the late 2000, which is really when the market started to take off was financing. It was when solar city and sun run and sungevity and all these companies introduced the like PPA and lease model.”

“there are actually 16 rare earth elements, uh, that are grouped together. We really only use four of them, actually. Like, we only care about four of them out of the 16. If you're doing mining, virgin mining, you get this, like, basket of all of them, and you have to do this, like, complicated separations process to…”

“Folks who are buying home batteries now, right, they're generally doing it for one of two Reasons. One reason is if they're in like California and you have a net meter, if you have solar and you have net metering rules that make it like super uneconomic to have solar unless you can discharge it into the house or…”

“The timeline, the capital intensity, the requirements of the vehicle OEMs, who are your ultimate customers if you're trying to build one of these businesses, they all present this nigh impossible gauntlet to cross for a startup.”

“Second though, to a first order, virtually all of these battery technology pitches kind of sound the same. At least on their surface. They promise better performance at lower or equivalent costs. Lots of upside, no downside. And so it becomes a little bit of a blur.”

“if you're able to price the service at roughly the equivalent cost that the human labor alternative would have cost, Because the cost of the robots is so low now, the payback periods on these things are like remarkably fast, assuming you get high enough utilization, right?”

“You need to be developing your first of a kind project well before your demo is operating, and certainly before your demo has six months of operational data, because you don't have time basically to wait around.”

“The second you have a customer who's expecting the product, your incentives are misaligned a little bit because what you really need from an existential company perspective from the demo is to prove the technology and optimize it. What the customer needs is to get their products as they expected to get it, and you…”

“You can generally build this stuff pretty fast, because you're building in smaller increments, and you don't have as long a timeline around permitting and interconnection, all this kind of stuff.”

“So try to isolate your magical thinking to the technology leap that you need to take in the first place, because that is within your control much more so than the inputs that you're gonna get.”

“If you're using it to get to a ridiculous level of precision on the cost structure that you expect to achieve in, in five years, you've probably wasted some time.”

“So removing the methane is going to be much, much harder, or at least much, much more expensive if we're doing it the same way.”

“With methane, there is one key difference, which is that you can oxidize it. You can turn it into CO₂ rather than just capturing the gas and finding a place to sequester it, which is a big advantage relative to what you need to do to remove CO₂ from the atmosphere.”

“when prices crash like that, it's the stationary storage sector. It's like grid energy storage that actually sees the benefit from that From a cost perspective fastest. And that's one interesting dynamic. Whereas EV is what you think of, which is still EVs are still the majority of demand for, uh, for lithium ion…”

“The worse we're doing on mitigation, the more we shift toward adaptation, and of course this is complicated by the fact that oftentimes the investments you might make in the technologies to mitigate climate change may also Have benefits as far as adaptation and resilience go, and vice versa. You can invest in stuff for…”

“Decarbonize electricity, electrify everything that you possibly can, and then basically pick up the pieces. Everything that's remaining, like, figure it out through clean fuels, or carbon management, or whatever it might be.”

“to make renewables truly capacity, you generally need multiple types of storage. You need some storage that's gonna, you know, do your daily peak shaving type of thing, your four-hour lithium ion, you know, workhorse of the, the grid type of thing. But then increasingly, if you really want true capacity, you want to be…”

“You do something worthwhile where you can afford the A very low capacity factor, which means that you need to be extremely low CapEx, uh, relative to OpEx, and OpEx should mostly be electricity. In other words, most of the cost of the thing that you want to produce should be born in the cost of electricity, and if it…”

“You know, the thing, one thing that I always point out though, is that it is now true that actually looking at the cost of the solar module is less relevant than it has ever been Historically, in terms of the cost of the solar produced, because, specifically because modules have gotten so cheap, like, that cost down…”

“what matters at the end of the day for solar is not the cost of the panel. It's the cost of delivered electricity.”

“we've, we've not yet woken up to how much we need to be modeling these more extreme weather events into, um, electricity reserve allocation modeling, basically. Uh, there, there's a bunch of data around, so like Texas, another example of this, right? You know, where you see these kind of multi-day weather events now,…”

“we are, we are tethering ourselves to weather more in order to avoid the thing that we know is going to happen to weather, which is that it's going to get more volatile.”

“generally speaking, the things that are cheaper today are harder to verify, because they tend to be nature-based. This is a broad strokes, but let's just, you know, I think this is true to a first approximation. Um, Um, and the things that are more expensive today tend to be easier to verify because they're engineered…”

“I'm saying the easy, quote unquote, easy to decarbonize stuff is going to be hard.”

“if you're trying to build some novel technology, if it's the type of thing that we would get excited about, Then, almost inherently, it requires some degree of magical thinking. Like, in the early days, you have to believe something can be built that has never been built before, by definition, basically. But you have…”

“try to isolate your magical thinking to the technology leap that you need to take. In the first place, because that is within your control much more so than the inputs that you're going to get.”

“If you're using it to get to a ridiculous level of precision on the cost structure that you expect to achieve in, in five years, you've probably wasted some time.”

“If we don't figure out managed charging, then there's basically no way EVs scale up to the scale that we need them to.”

“So to a first approximation, I think that a big part of decarbonization is basically a transition from the extraction of fossil fuels to the extraction of minerals. If you've got a sufficiently extended time horizon, then the bet is to go short oil and gas and go long mining.”

“What we've seen so far is some companies having a lot of success producing sort of, um, More complex chemicals that are higher value, but smaller volume commodities. So solugen would be the sort of classic example of this. This is a private venture backed company with a, I don't know, three billion dollar valuation or…”

“the LPO is really well set up for big stuff, And even there, first of all, you know, they're not intending to take a ton of technology risk either, so you have to be fairly mature and at a fairly large scale for the, for the LPO funding to make sense for you.”

“it's not inherently true that it's going to deliver the cheapest electricity. That is available on the market, even if it is fusion. It, that doesn't mean that it's cheap because you still have, you could have very expensive capital costs to build a fusion plant that has to be amortized over the production of the…”

“The problem with lithium ion, uh, is that The cost scales pretty directly with the duration. So if you want four hours of energy storage, it's great. But if you want 40 hours of energy storage, it's very expensive.”

“So actually being able to store, you know, clean, cheap electricity as heat and then deliver it as heat may have as much, if not more value than turning that heat back into electricity to put it back on the grid. So specifically for the industrial heat application, I really love thermal energy storage.”

“battery OEMs, all things equal, will pick EVs over, uh, stationary storage, because they're going to sell way more batteries into electric vehicles than they are into the grid. So if they have to pick and choose and they're limited in supply, uh, stationary storage is going to lose.”

“Anything that uses biomass as it scales up at some point is going to compete with alternative uses for that biomass. So if you're trying to source exclusively waste biomass, you need to be the best solution for whoever holds the keys to that waste biomass, be it a farmer, whoever's doing the forestry or whatever, such…”

“Um, I'm probably not the world's greatest expert on this question, but I think the fundamental, the fundamental thing that drives these learning curves is sort of manufacturability. Like, can you, can you scale up manufacturing of the thing at, by number, not just by scale? So, uh, in the context of solar and lithium…”

“And anything that's gonna have a gigaton scale impact by the time he's 28 needs probably to be proven commercial and scaling by the time, I don't know, he gets acne and has his first awkward middle school dance.”

“The broadest valley of death for hard tech, large volume manufacturing, or project businesses tends to be getting that first of a kind full commercial scale plant built.”

“Just because we achieve fusion does not mean all other energy sources suddenly become superfluous. And conversely, just because we have cheap renewables and storage does not mean fusion would have no role in the market.”

“in battery world, nothing exists in a vacuum. So you can't, you can't create a novel material and then be done with it. You have to figure out not only the material, but then its interaction with all the other materials, which are also in flux. And that's part of what makes batteries so difficult.”

“Well, I've been known to say that the energy transition is at least to a first order, basically a transition from fossil fuels to metals and minerals.”

“Historically, the challenge with compressed air energy storage has to do with this Trade off between efficiency and cost. Um, so the basic challenge is when you compress air, you create heat, right? And if you let that heat dissipate into the atmosphere, you're just going to lose a lot of energy in the process of…”