The Exchanges

Q Um, let's talk about end life. So jumping in, give us the sort of overview. What exactly is the problem that you're trying to solve, and how are you solving it?

A The world does not have a copper discovery problem. We have a copper recovery problem. So the fact is we need so much more copper in the next 2030, 40 years, and we found a lot of this copper sometimes decades ago, sometimes hundreds of years ago, but Current technology can't get it out economically. It's very complex. There's low permeability. We can talk about how heap leaches work, but new mines take 10 to 15 years to permit and build, and those clocks between needing the copper today and new mines, they just, they do not align. The answer does not work there. So at Endolith, we use microbes and data to pull more copper out of material that's already been mined at operations that already exist. The microbes aren't new. They've been breaking down rock for billions of years, and this enables us to really equip and turn these heap leeches into a precision tool to get more and more copper out and bring it to market today.

AI assessment note: “we use microbes and data to pull more copper out of material that's already”

Q Right. And so I think this leads to you essentially answering this question, but, but I guess I was getting at kind of, like, why haven't they done some of these things on their own? Like, are they using any microbial approaches? Is there a reason that they That they shy away from this kind of innovation? Like, why?

A Yeah, so there's two parts there, and it's, it's partially because the downside is asymmetric, and honestly, if I ran a mine, I would be worried about that, too. These heap leaches that we're talking about, they are multi-billion dollar assets that have to run every day, so if an external party's innovation adds two points of recovery, that's nice, but if it disrupts the heap, Someone's quarter is destroyed. Someone's career might go with it because they're not hitting their milestones, and so the internal incentive structure for major rewards is typically saying no to startups and thinking about building internal versions which may or may not work. Um, I don't fight that logic. Like, that's not something that we're coming up here to disrupt, but we really want to work with it and design around it. So everything we do is really structured so that the customer has minimal downside. It's fully plug and play. And then the conservative move ultimately becomes, why wouldn't we bring this new technology in?

AI assessment note: “it's partially because the downside is asymmetric”

Q is that critical materials is one of actually the bright spots, particularly in sort of the climate energy conversation, that there's still a focus and still a recognition by this administration that that's something that we need to work on. So is that, is that your feeling? Like, do you, do you, are you feeling the love from the federal, like, Funding and sort of regulatory context, or not necessarily?

A Not yet. We have to find a giant pile of government money that magically helps us. But that said, I think there's a lot of real momentum here, and it's great. The structural logic at the end of the day is going to hold regardless of who's in office, because you can't electrify anything. You can't build AI data centers without copper, and much of the world's current refining and processing capacity sits outside the US. So The recovery argument is pretty simple. You can add domestic supply without new permitting, which makes it the fastest lever that the country has. The incentives, as they continue to emerge and evolve, I really look forward to that, but at the end of the day, the unit economics have to clear, and it has to make financial sense for mining customers.

AI assessment note: “Not yet. We have to find a giant pile of government money that magically helps us.”

Q use to ultimately fund that work. That's really cool. Um, okay. Next big question. Uh, it's a crazy geopolitical moment. A lot of fertilizer that traditionally comes from global markets, specifically around, you know, a particular Gulf and Strait of Hormuz, um, is now not coming into the world. So can you say a bit about the global picture right now for fertilizer supply and what that means for you?

A Yes. The Persian Gulf, through the Strait of Hormuz, supplies 38% of global urea, which is the most common form of nitrogen fertilizer used in the world. And because of the closure of the Strait of Hormuz, it is estimated that over the next year, an additional forty-five million more people around the world are going to go into food insecurity. And so that, that highlights that the current market structure Ah, which is hypercentralized and reliant on coal and natural gas, that that current market structure is just unacceptable. And so, um, I, I think the thesis that Nitricity has been, um, working on and sharing with the market is that we need to move towards a more, um, uh, local, uh, production model where we use, uh, recycled ag waste and renewable power and air and water to make fertilizer instead. And we're seeing a lot more, and since the, um, uh, the closure of the Strait of Hormuz, we have seen a lot more interest in, in our company. Um, we've quantified it across, Um, like HubSpot or other, like, channels where we measure the number of inquiries that we get across different forms, including, like, number of people that apply to our open jobs. And, uh, and compared to a baseline from before, we've seen about a 500% increase in the amount of inbound interest in the business.

AI assessment note: “The Persian Gulf, through the Strait of Hormuz, supplies 38% of global urea”

Q So at some point, you did enough work that you had a working prototype, right? And it was time to start thinking about building a factory. Can you talk a little bit about that transition?

A Yes, so we had a working prototype, and then we brought it around with us, and we gave a presentation in Fresno, and a farmer stood up in the back of the room and said, you know, if I buy it, will you install it on my farm? And then we got a contract with that farmer, we went down, we installed it on his farm. Um, and then we got another contract on another farm. So, so those, those opportunities came, uh, first, and then second came, uh, funding, and then third actually came building a, a factory, you know, a couple years later. But we, we were really, um, um, you know, building the product directly on farmers' fields.

AI assessment note: “first, and then second came, uh, funding, and then third actually came building a, a factory”

Q Very cool. Um, okay, so let's talk a little bit about Tandem PV as a company. Can you say a little bit about sort of the origin story of the company and, uh, and how the company has evolved over the years and when you came on board?

A Yeah, sure. So Tandem PV was started by our co-founders Colin Bailey and Chris Iberschbacher. They're both PhDs in material science and applied physics. Between the two of them, they've over 50 years of experience. Uh, they met at Stanford when Colin was getting his doctorate. Um, and that is where Colin made the world's first perovskite silicon tandem cell. And so people ask us, like, you know, what's your secret? How did you, how did you figure this out? And Colin always says, I don't know what the secret is. I've just been working on it longer than anyone else. So, so when he left Stanford, um, there wasn't Many, no one was really working on perovskites in a commercial way, and so we start, he started Tandem PV. So this June will mark 10 years of the company's existence. Um, and we've been a purely R&D company for about that long. Um, and this is, you know, what the team is doing is really hard. It's incredibly cross-functional, right? So it's chemistry, applied physics, engineering, material science, and it just, deep tech takes a long time. Um, But about three years ago is when we started kind of transitioning into commercialization, so we brought on Scott Wharton, our CEO, um, who, this is his fifth scale-up and startup, um, and then I joined, uh, almost two years ago now to really lead the company into this kind of next chapter of commercialization and scale-up, which is…

AI assessment note: “then I joined, uh, almost two years ago now to really lead the company”

Q it. So how does that tend to work? Are you all ever actually supporting the sort of direct investment in these projects? Are you helping them find investors? Do you find that they're almost always using venture capital and sort of financing on their own balance sheets if they're a little bit earlier? What are the sorts of things that you're seeing on the actual sort of project investment side?

A We typically work with three types of suppliers. You've got the established, typically energy companies that are looking to diversify their revenue streams, add a new revenue stream from some sort of low carbon business. You've got Companies that are traditional carbon market players that have done a lot in a carbon avoidance world and are trying to move into carbon removal. And then you've got startups, you know, pure play ideas, thinly capitalized. And so I think the financing model varies based on each of those. In the first case, there is some sort of corporate finance Agenda. They may end up thinking about project finance, but they're, they're going through your corporate balance sheets and Like they would any other new capital project. In the second category, they'll probably engage a little bit more in project finance, sort of, depending on the strength of their, of their balance sheet, and, uh, our offtakes are a critical component of that, so that you've got a high credit-worthy offtaker on the other side, and they can, though, go raise capital against that. And then the third case of the sort of startup model, you know, anything's on the table. There are some venture approaches, and, uh, Uh, and project-based approaches, but we vary our contracting in two big ways. So if the project's ready for scale, we will work through a long-term off-tick agreement that's modeled …

AI assessment note: “financing model varies based on each of those. In the first case, there is”

Q You've mentioned at various points both engineered, you know, carbon dioxide removal as well as nature-based solutions. Do you all kind of have a preference For one over the other? Or do you think about the sort of differentiated advantages and disadvantages and kind of you do all of the above opportunistically?

A Yeah, we have an all the above strategy to carbon removal, but it requires us having a balanced portfolio. So the, the target is we segment the CDR market based on durability. So for us, low durability carbon removal is you expect that carbon to be sequestered for a hundred years or less. There's medium durability, a hundred to a thousand years, and then high durability, which is millennia plus. And so for 2030, for us to meet our goals and for us to build a high quality carbon removal market, we've been targeting for about half of the portfolio to be low durability and half to be medium and high. There are different approaches to the carbon removal market. Our view is that the climate crisis is happening now and that there are Not only carbon benefits, but also ecological benefits that can happen from nature-based solutions, typically low durability, uh, in the typically low durability category that can buy us important time against, you know, as we work toward a net zero world. So we're looking at that fifty-fifty split, and then buying projects within, within those, and we think about portfolio diversification across that. So we don't want to be too deep in any one Technology, or too deep with any one supply or any one project. So in the low durability, there are certain pathways that we think are more likely for scale by 2030. Those are primarily afflorestation, reforestati…

AI assessment note: “we have an all the above strategy to carbon removal, but it requires us having a balanced portfolio.”

Q Let's talk for a second about what's going on at the company, though, because this is a time when you're starting to raise some capital and forming some new partnerships. So can you say a bit about how you were thinking about the company development, the kind of capital you raised, and the folks you started speaking to, uh, for some partnership opportunities?

A Yeah, I have a fundamental philosophy that small companies like Captura need help to solve really big problems. And That's what I did at Carbon Engineering with Oxy. At Captura, what we wanted to do was attract actually more partners, um, so that we had different partners around the world from different, uh, sectors. So during our fundraising, which was, uh, twenty-twenty-one, twenty-twenty-two, twenty-twenty-three, we looked out to find as many strategic partners who could help us with deployment, with questions that we had about, for example, renewable energy, um, with end use like aeroplanes, like, um, Uh, marine logistics. These are tough to decarbonize sectors, so we wanted people on board who understood those problems. So we, we raised what turned out to be eventually forty seven million dollars in our series A. We did it in a series of increments as more people came to us. Uh, we were able to increase the valuation of the company as we progressed. And we actually now have eight strategic partners who are investors. Um, so we have a couple of energy companies in Equinor and Aramco. We have three renewable energy companies, NE, EDP, and National Grid. Uh, we have what we love to call our team Japan. Japan has a lot of interest in this technology for its decarbonization journey. So Hitachi, Moll, and Japan Airlines. And then we also have Maersk, of course, global logistics …

AI assessment note: “we raised what turned out to be eventually forty seven million dollars in our series A”

Q Well, so let's, let's start talking a little bit about the technology solution here, because you've already described a solar-related technology that's different than the one that you're currently working on today. So what did you learn early on that made you ultimately pivot from this solar ranking cycle?

A Yeah, so when we discovered this problem of chilling milk at the village level, we knew that this engine made out of car parts wasn't going to do it. So Serene and I created a for-profit called Promethean Power, and we started to focus on thermoelectrics. We thought we could use Solar powered, uh, running thermoelectric chips to chill milk, and we found some innovative ways, but we just weren't getting enough cooling. Then we pivoted to making ice and using a solar panel to run a pump to pump that ice water up the stainless steel dome that would instantly chill that milk. But again, we weren't getting enough capacity, and the logistics We're just crazy. We spent a year in Goa working with Goa Dairy to try to make this solution work, but ultimately we got rid of solar and we spent the next year figuring out how to improve this thermal battery and reduce the size and get more out of that battery, and in real time we're working with professors and students from Olin College to try to find the perfect nucleating agent to make this ice And a year later, we go from a thousand liter tank chilling 500 liters to a 500 liter tank chilling a thousand liters of milk. 300% increase in efficiency. And that's what we went to market with.

AI assessment note: “we knew that this engine made out of car parts wasn't going to do it”

Q So what are your plans for expansion beyond that? Do you have ideas on other countries for which this technology is relevant, or even other technology spaces or applications that could benefit from what you've built?

A Yeah, um, so we've already started chilling fruits and vegetables with this unit. We're working in Bangladesh and potentially Pakistan, but it's not for every region, because if you have no electricity, it just... Adds too much cost to, to put four kilowatts of solar. It's just not economically viable to, to do that. So we're really constrained to areas that have limited electricity. But in India alone, you know, the 230,000 milk producing villages will keep us busy enough. There's also a really interesting application for our technology, potentially for These new data centers that are so power hungry, where 80% of the power that they use comes from cooling, and our battery seems to be really a good fit for providing some flexibility for the grid, because each of our batteries has about 190 BTUs, or 200 megajoules, and so two of our batteries can provide an hour's worth of cooling, and in a place like Texas, Where the delta of time of use is so big, that could have both an economic impact for the data centers, but also provide some flexibilities for the grid.

AI assessment note: “We're working in Bangladesh and potentially Pakistan... also a really interesting application for our technology”

Q covered the intersection of policy and capital deployment. We started our conversation by talking about the state of play in Washington. So you were obviously working throughout the, the White House, all kinds of different places within the federal government during the Obama administration. Was there like a single moment or, or event that really crystallized for you what needs to happen for startups in working with the federal government?

A The passage of the Affordable Care Act is one of the proudest moments, I think, that President Obama would still reflect on today. Helped Millions of people get healthcare, but it also spawned a new ecosystem. There are startups like Oscar, backed by Thrive Capital, that today would not have existed without this regulatory turn. And that was an awakening for me of the, one, the possibility of, you know, the government can be this grinding partisan trench warfare that is usually a game of inches. But as the president has previously said, President Obama has previously said, sometimes a seam opens, And just like in football where ground games are usually pretty boring, a tailback can get a seam and take off. And when those moments appear, I think we can probably reflect back on the Inflation Reduction Act being a moment like that. You have to put all your energy into understanding how to advance that opportunity.

AI assessment note: “The passage of the Affordable Care Act... that was an awakening for me”

Q I mean, what he's learned about building big clean energy projects, about what it was like to launch Project Cormorant, and what scaling challenges Eight Rivers still faces today. So you successfully deployed the AFC in the NetPower project, and now you've moved on to Project Cormorant. So can you talk about moving from electricity production into hydrogen production, and what was the genesis of this project that you're building?

A The project in Port Arthur, Project Cormorant, is based around a direct-fired, what we call CO₂ convective reformer. And so it has a looping CO₂ in it, similar to the AFC, where we're utilizing the CO₂ in this case to transfer heat to what we call the CO₂ convective reformer, rather than doing work through a turbine. So in the AFC, you're doing work through a turbine, then you're transferring heat. In this instance, we have a combustor married into a reformer, That reformer is using hot CO₂ to drive the reformation of natural gas and steam into hydrogen. And then the cold CO₂ is coming out and recycling back to the combustor, and we're able to take a slipstream of pure CO₂ out of the system for sequestration. And so, we looked at the hydrogen market and we said, well, The hydrogen, for the sake of hydrogen, doesn't seem to be working. You need to have something that's consuming hydrogen, and you hear a lot of people talk about, you know, the, the future hydrogen market. And we kind of looked at it pragmatically and said, well, there is an existing hydrogen market, and the existing hydrogen market centers around ammonia production and refining. Those are the two largest consumers of hydrogen in the world. Let's focus on how we can engage in those industries, and that's when we decided we were going to apply the ADERH-II system, which is our blue hydrogen production system, for t…

AI assessment note: “we decided we were going to apply the ADERH-II system... for the production of ammonia”

Q And is your plan to produce hydrogen or to fully produce ammonia? Are you working with a corporate partner on this one?

A We will be producing hydrogen. That hydrogen will go into what's called an ammonia loop to produce ammonia. So because we're doing oxy combustion, we need an air separation unit. That air separation unit will give us oxygen, but it also happens to To separate out the nitrogen from air. And to make ammonia, you need two things. You need hydrogen and nitrogen. We already have both of those components coming out of the ARH-II system, and so you add an ammonia loop on the back end, and then you can, you, you can synthesize the ammonia. And we're working with a company by the name of Casale, who specializes in ammonia production technology, as well as other kind of Nitrogen and ammonia products synthesis.

AI assessment note: “We will be producing hydrogen... we're working with a company by the name of Casale”

Q So say more about the origins of this project. So it sounds like one of the first things you did was to figure out a site, of course, after you're characterizing the economic potential for what you're building. What else did you do at the very beginning?

A Before you start a project, in our DNA, what we focus on is off-take first. And that off-take for that ammonia, the demand for the ammonia that we saw was coming from Korea. Uh, and with SK as an investor in Eight Rivers, you know, it became very likely that SK would be off-taking the ammonia from the project. Well, then political dynamics shifted and, and we started putting a lot of time and money into the project and, and then the political winds started shifting and timelines became longer. And suddenly this, this urgency to, to deploy that was once present, it became less urgent. And so we had more time, but also in this time, we had to work on finding new partners for the offtake. Of the ammonia, which we've had some success in doing. You know, the, the project is structured to produce 900,000 tons of ammonia, and we've, we found offtake for about 18% of that 900,000, and we're working on, on getting the rest of that ammonia offtake secured.

AI assessment note: “what we focus on is off-take first. And that off-take for that ammonia”

Q So you're in the process of securing customers. As you say, these are kind of long lead times, and, um, was there sort of a specific signal you were waiting for with respect to your customer acquisition before you pulled the trigger on building the manufacturing plant, or were those almost independent journeys for you?

A Yeah, um, we were looking for signals, um, and, and we got them in the form of capacity reservation agreements. So, you know, we have a number of, of these agreements with various, um, project developers, um, I'll name a few that are public. Intersect Power, AES, um, are a couple that we have agreements with. Basically, they say, look, um, we'll put some cash down to reserve your manufacturing capacity over the next few years so that we have access to your technology, um, in our projects. Um, now that only works in a, in a seller's market, right? A market where people are anticipating that, um, That demand for the, the product, the electrolyzer in this case, will outstrip the available supply of technology that meets their needs. And at the time we signed these agreements, it was a seller's market, and so we were able to pull it off, and that was the demand signal that kind of put the wind in our sails to build the factory and, and, uh, and start to scale it up. Things change quickly, right? It's not a seller's market in electrolytic hydrogen anymore. At least not for the time being. We've definitely come out of hype mode, and we're in hydrogen disillusionment mode right now, I think, globally.

AI assessment note: “we got them in the form of capacity reservation agreements.”

Q So this is now a two trillion dollar economy, uh, clean energy. Catherine, what does the US slice of that clean energy economy look like?

A Yeah, I would just give some numbers to this. So the U.S. Department of Energy does an energy and employment report every year, and they did one for 2024. Now, the one for 2025 hasn't come out yet. I expect it to be even more optimistic. But they showed that U.S. energy sector jobs grew three percent in 2023, which outpaces normal employment growth by by 50%. And of those jobs, clean energy and Deployment counts for about 60% of those jobs. So they grow at a rate in clean energy of, like, almost five percent, which is more than twice what the rest of the energy sector grows. And if you look at what EIA has put out in their short-term energy outlook, which they are still doing, increased generation for renewable energy is the main contributor to growth in U.S. electricity generation. Don't see that stopping. So looking at both jobs and generation and capacity, it's booming.

AI assessment note: “So looking at both jobs and generation and capacity, it's booming.”

Q So this is now a two trillion dollar economy, uh, clean energy. Catherine, what does the US slice of that clean energy economy look like?

A Yeah, I would just give some numbers to this. So the U.S. Department of Energy does an energy and employment report every year, and they did one for 2024. Now, the one for 2025 hasn't come out yet. I expect it to be even more optimistic. But they showed that U.S. energy sector jobs grew three percent in 2023, which outpaces normal employment growth by by 50%. And of those jobs, clean energy and Deployment counts for about 60% of those jobs. So they grow at a rate in clean energy of, like, almost five percent, which is more than twice what the rest of the energy sector grows. And if you look at what EIA has put out in their short-term energy outlook, which they are still doing, increased generation for renewable energy is the main contributor to growth in U.S. electricity generation. Don't see that stopping. So looking at both jobs and generation and capacity, it's booming.

AI assessment note: “clean energy and Deployment counts for about 60% of those jobs.”

Q And so this was between New Year's Eve in twenty-twenty-four, and then it was essentially summer twenty-twenty-four when you officially commissioned the plant. So say a bit about, a bit more about kind of what happens in that time. Is that really just kind of like testing and getting the plant up and running, or was it also about building the sequestration system over those six months?

A Yep, both of the above. So we really wanted to get the capture units working as, or the collector containers working as quickly as possible, given that that's the Call it the newest technology, right? So the quicker we can get that running, the, the quicker you can get your, your field learnings. So between that first of January, 20, 24 and then May, we were then getting the rest of the balance of plant. So those pots and pans that I was talking about, the heat exchanges, the pumps, the cooling towers, everything commissioned and functioning as you would expect them to, um, building up the operations and maintenance team, And then also having the storage component built out as well.

AI assessment note: “Yep, both of the above. So we really wanted to get the capture units working”

Q So you already start planning that you're going to do Cyprus then in Louisiana. So what are, what's in your mind at this point about how much scale up and whether now is finally the time to go outside and look for infrastructure financing?

A Well, eventually we have to get to gigaton removal by mid-century, right, by twenty-fifty. And megaton for us is that first kind of, like, sizable step towards getting there. So 10 X of tens of thousands gets us to hundreds of thousands of tons a year. And then once you're building out that infrastructure for hundreds of thousands of tons a year capture facility, You've essentially got the beginnings of your make a tonne hub there. So that's, um, that's the way we're looking at the, uh, scale up in size. And then now it's about crafting with the subsidies in place, both on the capex side, as well as the, um, tax credits through 45 queue, the 180 dollars per tonne, um, for, uh, direct air capture and storage. Crafting an overall business case that We can take to the street to see if kind of more traditional infrastructure investment funding is, is amenable to the market.

AI assessment note: “take to the street to see if kind of more traditional infrastructure investment funding”

Q So take me into the board meeting. We were discussing these options. What are, what are the arguments on both sides of the equation? Because this is such a huge challenge that's So many startups are having when it comes to this question around what they do next.

A For context, our commercial pilot system had two racks of six membrane modules, and our commercial first-of-a-kind system has 600, over 600 membrane modules. But the modules themselves weren't a hundred X. They were about twice as large. And so there wasn't a 10 X or a hundred X question on the membrane modules themselves. There was absolutely a 10 X or a hundred X question on, on the number of modules and then the, the engineering around it, the pumps and the pipes and the foundation and the weatherization and the control system. Uh, those things were, were vastly different between the 10 X and a hundred X. So when we're thinking about, uh, in the boardroom, when we're thinking about things, we're thinking about, okay, in the success scenario, we go straight to a hundred X. We start generating revenue. We've Proven both the technology risk retiring and the, and the model, the business model with which we're selling to the customer, or we hedge a little bit and take a 10 X step on the way there. The 10 X step, though, easier engineering was going to take just as long as getting to a hundred X because our lead time was defined by system components. When you purchase an electrical box or purchase a pump or purchase a, A component that has a long lead time, you can't deliver the whole system until after it comes, and so the lead time was the same for the 10 X or the hundred X, bec…

AI assessment note: “in the boardroom, when we're thinking about things, we're thinking about, okay, in the success scenario”

Q them together into a single system. They believed they could beat out the competition. So silicon PV is starting to come on the scene at this point, but describe a little bit about how that looked and what the price was and why there were some advantages around this technology, especially because I know there's, you know, you've essentially got a thermal energy Storage medium associated with these plants, right?

A Yeah, so to think of it in just terms of what it takes to build something dollars per watt is maybe the easiest term for everybody to think of, and then capacity factor, how much energy you can produce. So silicon PV was around nine dollars a watt, and the tower technology we had was around six dollars a watt, dropping to five dollars a lot. So it was more or less half the price, And it could produce, if you put it in the right site, it could produce at around a 30% capacity factor versus more like a 23, 24% capacity factor. So lower capex cost and higher production gave you about a half of the LCOE, if you want to use that term. So about half the cost of delivered energy in the 2005, 2006 time frame.

AI assessment note: “silicon PV was around nine dollars a watt, and the tower technology we had was around six”

Q still generating power, right? So it, by many financial metrics, it's a big success, but fundamentally, I think it sounds like where the disagreement with your board lay was in the next couple of projects, and the questions around, could you build concentrated solar projects after that? So say a bit more about, kind of, how you were thinking about those next projects, and what ultimately happened with the company.

A Yeah, so to close off Ivanpah, Ivanpah had some awkward parts ramping up, but ultimately delivered and ramps and produces power and energy today at about 90% of its original design capacity. One of the next projects was the Ashaleem project in Israel, which was subsidized, smaller, and it was subsidized by the Israeli government, but it was a good project, but I think it was ultimately probably the last large solar thermal project to get built. Once that was done, It's really hard to see where solar thermal is competitive. It's just the, the economics of photovoltaic power have gotten, they've gone down from three dollars a watt in 2009 to 30 cents a watt for a module today. Now it's nudged up to 35 cents or something, but the, that price decline was so extreme, and the price decline of lithium ion storage has been so notable that even with the attributes of molten salt storage, it's hard to see how solar thermal can be Competitive today. That's not to say somebody can't find a new design and a new application for industrial heat or something in the future, but it's likely to emerge, if at all, as a niche where you have strong sun, strong DNI, and some reason to have heat rather than just electricity.

AI assessment note: “One of the next projects was the Ashaleem project in Israel”

Q And I just want to get some terms right here to inform the rest of the conversation. Ahmad, quickly, when we talk about, we're talking about Time varying rates, so we use time of use and dynamic rates. Can you just talk about the differences in those terms?

A Yeah, sure. So a time of use rate simply says it'll cost more during certain hours, and it'll cost less during other hours. You will know the prices in advance. You will know the time periods of the buckets in advance. It's kind of static. It does vary by time, but it's the same rate being repeated day after day. It might change in the summer versus winter, but otherwise it is well known in advance. On the other hand, A dynamic pricing rate, you don't know what the price will be in advance, and you don't know when that price will apply. So dynamic introduces a lot of uncertainty that you didn't have in a standard time of use rate.

AI assessment note: “a time of use rate simply says... On the other hand, A dynamic pricing rate”

Q U.S. by the end of the decade. Reactions to this trend are mixed, though. Some, like data center expert John Kumi, think the highest projections are overblown. Former Tesla VP Drew Baglino just said on the Catalyst podcast recently that it wouldn't be as dramatic as people think because of improvements in chip efficiency, co-located renewable strategies, etc. So, what do you all think? Is this trend overhyped, underhyped, jiggered?

A No, the trend is definitely under hyped, right? I mean, I think you can at the same time say that the, the highest projections are wrong, which I agree. I don't think we're going to have seven percent load growth every year. I think it's probably more like two and a half percent, but it's still something that we don't have the tools to deal with right now. When you think about the normal course of business for most utilities is to build more natural gas plants, Build more transmission and build more distribution. Today, that formula results in 10% rate increases every year. That is not workable. The electric utilities have to keep shareholders happy, rate payers happy, And governors happy. And that last piece means not giving people four-year interconnection timelines for manufacturing facilities that create family-sustaining jobs. If you were to ask all the utility companies, what is your formula by which you're going to do this, right? Which clean firm power generation sources are you going to install? Which tariffs are you going to use, right? Like the clean transition tariff that Google just signed with Fervo Energy and Envy Energy. Is that something you're going to replicate? Are you going to install re- You know, are you going to reconduct your lines? Are you going to put in grid enhancing technologies? Are you going to do virtual power plants, right? They have the list. …

AI assessment note: “No, the trend is definitely under hyped, right?”

Q What do you think of the Advance Act? This is a question for either one of you. Is it, is, how big of a deal is it? Certainly a big deal that We had this piece of bipartisan energy legislation passed, but how, is it transformative?

A It is, right? Remember that when the NRC was established, Three Mile Island occurred right after. And so the NRC's main mandate has been only safety and not the promotion of nuclear power. And with the Advance Act, they're, they now have a dual mandate of both safety and And promoting nuclear power. That is a huge shift in culture, which I'm sure will take time to fully implement. But separately, I would say that having done this nuclear stuff for the better part of three years, I don't know of a single project that was hurt in any material way by the NRC. Right? So I do see the NRC being a bottleneck where we're building 10 reactors a year, but we're not building 10 reactors a year right now, and so the NRC is not currently the long pole in the tent, even though everybody wants to blame them. The current, you know, challenge is just that America has to learn how to do big things.

AI assessment note: “It is, right? Remember that when the NRC was established”

Q little bit deeper into data centers. So, um, questions about the energy intensity of data centers are wrapped up in this bigger trend. You know, power demand is surging in different pockets of the country, and many utilities are suddenly revising their resource planning, sometimes in really dramatic ways. Um, Michelle, over to you. How are these, how acute are these demand increases, and where are data centers fitting in?

A Yeah, so that's a great question, um, and a recent report by Grid Strategies, which is a grid, um, firm, found that demand forecasts were increasing. They found that there is a shift from 2.6% increase in demand over the next five years to 4.7% increase in demand over the next five years. So, you know, somewhere around a one percent increase in electricity demand per year across the country is Is predicted, and that's reflected in filings to the Federal Energy Regulatory Commission. They found that peak demand in twenty-twenty-eight was going to be increasing by about 17 gigawatts. For context, um, the total peak demand right now is around 742 gigawatts. That's about two percent of our total peak demand that they saw, um, you know, increasing in the forecasts. Um, AI right now is using about one to two percent of our electricity, and some reports expect it to maybe triple by 2030. Um, so these are big increases in demand. You know, one percent of total U.S. electricity demand is not a small amount, but to put that in a broader context, to reach a net zero economy, we need total electricity demand to totally double or even triple or more by 20 50. So, while these are significant increases in electricity, we actually need a lot more, and for us at Energy Innovation, we see this as a good moment to start learning how to grow again so that we're preparing ourselves for those much b…

AI assessment note: “a shift from 2.6% increase in demand over the next five years to 4.7%”

Q And, and as you said, you are making the case for utilities to learn to grow again. What does that mean? What are some examples of utilities that are growing the right way and meeting this new demand and growing the wrong way?

A Yeah, so just to start out, you know, what do we mean by the right way and the wrong way? And, you know, many of these utilities have their own stated carbon goals and decarbonization goals. So in some ways, this is, you know, learning how to grow again the right way to meet their own goals. Of course, there are also U.S., um, Carbon emission reduction goals. There are state carbon emission reduction goals, um, that are, that also need to be met. So growing in the right way would be growing in such a way that they can meet those goals, and also in such a way that, um, reduces costs for customers and reduces health impacts on, and on those communities that are, uh, hosting power plants. So that's what we mean about growing, growing the right way. Yeah, so just some examples of, Ways to grow well in terms of meeting those carbon goals and saving customers money would be one really great example is Excel Energy. So they do see a large forecasted increase in electricity demand, but yet they still plan to retire all of their coal plants by the early 20 thirties and install significant amounts of new renewables. Um, one thing that's really great that Excel is doing is they're planning to make the most of their existing resources by bringing new clean energy, like wind, solar batteries, um, Online at retiring and retired coal sites, so reusing that existing interconnection point, and …

AI assessment note: “one really great example is Excel Energy. So they do see a large forecasted increase”

Q And why has industrial heat been so difficult to decarbonize historically? Is it purely economics? Is it because a lot of these, uh, manufacturing facilities or industrial players have such tight margins that they're purely focused on cost? Is it because these have not, that, that, that these are not necessarily drop-in replacements historically, and they require a What have been the biggest barriers?

A You mentioned them, the first two. That is, what we're doing at Rondo, we could have done five or 10 years ago, but it would have been stupid. Intermittent electricity at that time was far too expensive as a replacement for fuel, and there was less of a, shall we say, a corporate drive to decarbonize now, not decades from now. Having a solution that is cheaper than business as usual, not requiring a green premium, coupled with a drive to decarbonize, those two elements drive action at scale. There's been decades of the chief sustainability officer and the factory manager are at odds with each other, because the factory manager is measured on cost of production. We're now entering this world where, on an operating basis, Zero carbon heat is cheaper than fossil fuel heat. Those conditions, the availability of intermittent electricity at a price that's lower than the price of burning fuel, those conditions did not occur until very recently. So, we're just past this tipping point, and one thing we know for sure, looking at grid models everywhere, We see what that future looks like. Someone said the, the future is already here, it's just not evenly distributed. Look at South Australia with 70% renewables in the system and almost 3000 hours a year of negative electricity prices. Look at Oklahoma last year with more than 2000 hours of negative electricity prices. Look at the Netherlan…

AI assessment note: “You mentioned them, the first two. That is, what we're doing at Rondo”

Q So when, when you install one of these heat batteries, like, what kind of equipment are you replacing in an industrial facility? Are we talking about, you know, replacing a, a boiler, a kiln? Like, what, what, what is it replacing?

A Yes, exactly. What is the existing heat source? If we're in the paper industry, or processing food, or refining fuels, or making chemicals, the vast majority of our energy today comes from steam boilers. And those steam boilers hook up to a steam network. Our heat batteries make steam exactly the same way. They'll sit next to those steam boilers. You may run those steam boilers a little bit during the winter or on high price electricity days so that you have a hundred percent firm, but there's no change whatever to the facility. I was on a panel a while ago with the head of sustainability from a major consumer brand who said, my factory teams always hate it when the decarbonization team shows up. They want them to tear the factory apart and replace six-inch steam lines with thirty-six-inch water lines so they can use heat pumps and shut the factory down. This is a drop-in solution for anybody using steam. For cement plants and steel mills that use kilns and ovens, this technology heats, connects to those delivering superheated air, And there are some modifications to a kiln that was designed to run on internal combustion to now run on superheated air. We are working on those things with builders of kilns and ovens, um, in, we have a particular project funded in Denmark right now, but the race to scale is boilers everywhere. Just go replace that. That's something like 80% of ind…

AI assessment note: “the vast majority of our energy today comes from steam boilers”