Hi there this is Ed Maguire, Insights Partner with Momenta Partners, welcome to our Momenta Intelligent Edge Podcast Series, where we feature leading practitioners and thinkers, across connected industry and the broader technology landscape.
Good day everyone and welcome everyone, and welcome to another episode of the Momenta Edge Podcast, this is Ed Maguire, Insights Partner at Momenta, and today we have two special guests, Bonnie Lind who’s a VP of Business Development for Pathion, and Trevor Curwin VP of Energy Markets for Greensparc. Bonnie and Trevor, I’ve had the pleasure of getting to know them at a couple of events, and on a panel at IoT Solutions World recently in Barcelona, they were so interesting, the dialogue was fascinating, so we decided to invite both of you guys on, and I want to thank you both for taking the time.
First off, I’ll start with Bonnie, I’d like to get each of you to share a bit of your background to provide some context in what has led you to focus on clean energy, and clean energy technologies?
Bonnie: I guessI knew pretty well what I wanted to do early-on, my degree is in Earth Systems from Stanford, so I started in the clean energy sustainability side all the way in college, ended up working in Europe on the finance side of energy for a number of years, and at the time Europe was significantly further in front of the US in terms of incorporation of renewables, and when I finally got too cold in London and moved back home to California, I kept going with that process. So, I moved from the finance side to the utilities side, working for Southern California Edison, which was fantastic and really gave me a good sense of how utilities look at, experience, and/or valued different products.
After that I ended up working with First Wind which built and operated a 2.4-billion-dollar wind portfolio, at which point in time we did the first wind farm in New England, the first one on a super-fund site, and the first one with a utility scaled battery. It was tremendously interesting and allowed me the opportunity to go work with the Governor of Nevada, Governor Sandoval, to look at energy and sustainability as an economic driver, for the State of Nevada for the next four years and did that including the Tesla Gigafactory which was a tremendous impact on the state.
And since then I have moved more into the distributed side, and now I’m doing more of the solar and storage and integration of distributed energy resources into the market, and how do we continue this transition from an older hub and spoke model, into a more distributed model moving forward.
That’s awesome, and Trevor, what about your background?
Trevor: My background is a little more of an odd trip than Bonnies, I think. I actually came to this from finance, I worked in New York, first for CIBC World Markets, and then Bank of America, on the alternative investments side of hedge funds. I got to know a bit of the investor community that way, and I went to work for a hedge fund directly. I took that experience, it was a very interesting world of internal investments, but primarily I was working with long/short hedge fund, and I wanted to do something that was a little more personally interesting to me, so I’ve always had a bit of an environmental vent, and started hearing about carbon markets and environmental commodity markets, I wanted to figure out how to match these two roles together. I reached out to a few colleagues of mine from the Alternative Investment Community, moved from New York to San Francisco at that point to some friends for the Alternative Investment community out here in San Francisco.
We’d been looking at the space collectively as well, when I was working with a firm doing asset management at trading, in the electricity markets in California. But I realized right away there was no real future for carbon market, this was early-mid 2000’s, it wasn’t much of a market the carbon market for a while in North America, but it was very interesting to see renewable portfolio standards, and how they were driving development of utility scale energy generation in the North American grids. So, I got involved in asset management and electricity trading around that, and renewable attributes as well, racks as well around that.
I made a round trip back to the east coast of Canada where I’m from, to Nova Scotia, to work as an energy trader and asset manager at Timera Energy, which is the subsidiary, the parent company of Nova Scotia Power where a typical model in this space of a regulated utility having an unregulated arm of working in other markets. Realized that a lot of what I was seeing really early-on, like Bonnie mentioned, renewables was to me less interesting about utility scale stuff, and more about how these technologies could change at the distributed end of either power asset management, or provision of power to put some at the end of the grid.
It was very early days for a lot of this technology, but that to me I said, ‘Okay, this is going to be the thing that’s going to be disruptive’. The last two or three years have been spent focused on IoT, and distributed storage as well, but to me even IoT or a lot of the smart city stuff we’re seeing, are really all just distributed network display. So we’re starting to see a lot of stuff coming to fruition. it’s a really interesting time.
That’s really interesting, and I didn’t realize that you also worked at CIBC World Markets, that’s where I started on Wall Street. We’ll table that conversation for a little later, but that’s very cool to hear.
Next, I’d like each of you talk about what your companies are doing and provide a bit of the background, a quick thumbnail on the problem your companies are solving, and the areas in the industry you are focused. We’ll start with Bonnie on Pathion.
Bonnie: Pathion is an energy solutions company, and in particular what I love about Pathion is our energy management system that can coordinate with various different types of generational sources and energy storage systems, and in particular how we are integrating with the grids. So, I would say technologies like Pathion’s are what is going to take things like distributed solar, and rooftop solar from being a very annoying 8 to 10 percent of the generation portfolio, or at least annoying to the utilities, to really being an integral part of the utility model, and the new energy model where it can be a proper 30-40 percent of the electricity being provided.
What I love about Pathion is, it’s built for incorporation of multiple technologies, we can incorporate old solar panels, new solar panels, different chemistries, into our systems. So, what I love is its built for a proper 20 to 30-year development cycle that matches more of your traditional utility scale asset, and financial commitment, with the ability to upgrade and consistently adjust for new regulations or other energy markets. The neat part about it is, we are looking very much at grid services, and how do you take distributed assets and incorporate them into the grid, so that they’re providing ancillary services, such as frequency response, or voltage control, and really improve power quality, and at the same time providing control and visibility to utilities.
Who are your typical customers, or stakeholders?
Bonnie: We do predominantly CNI, we do some utility scale, but we do a lot of micro-grids, we do CNI and in particular are working with some of the community choice aggregators here in California, around different opportunities to work with that around providing local resilience and local array. So, we’re doing a lot of weekend work with a lot of different entities, and industrial customers make a lot of sense. Our AMS for a DC coupling structure also supports all the power quality behind the meter, so we support and protect all of the equipment that we are connected to, as well as having a strong grid resilience. So, we say that we manage from cell to the grid.
That’s a lot to unpack there, so I definitely want to come back to that. It’s a rich array of capabilities and technology challenges as well.
Trevor tell us a bit about Greensparc and what you guys are doing.
Trevor: We launched Greensparc a few years ago, the first product, the first thing we were really trying to do was take real-time energy data, and for Bonnie and I that has an entirely different meaning than say the average energy user is used to. So, we knew that there was a disconnect in terms of what people were seeing in terms of their energy composition, and use information, and what we knew about it.
So, take a large Fortune 100 company, they want to have 100 percent renewable goal, and usually how they will handle that is, okay we consumed this much electricity in operations over the last 12 months, we bought wind energy in a renewable portfolio, and an agreement, whatever it may look like with a wind farm, or with the provider of green energy to cover that, or we bought racks, whether they rendered our purchase agreement, or whether they bought just the racks in the open market, to say, ‘Oh, I’ve off-set all my energy use with that’, well what we can do is give it to them in real-time, so there’s a pretty significant potential savings of money, because they’ll realize what the green composition is of their regular, ‘power’ that they get right now.
So, Bresda became an analytics tool and a dashboard that clients are interested in. Our next step though was that when we would approach power generators, and trying to understand how much of a given load, or megawatt use within a certain hour of a certain grid, and at certain node, was green or not, we got talking to a lot of powerplants; again we’re asset managers and traders by profession, so we know a lot of those people anyway, it’s a very fragmented ownership market, and they said, ‘Can you actually find a way for somebody to buy more of my green energy?’ and that turned into, IoT, AI roll-outs, things like that. We said, ‘We can’, and what we’ve started to do is, ‘How do we build distributed compute capacity at a power plant where immediately the savings is generally around 50 percent, because I’m not transmitting the power, I’m actually sitting right beside the powerplant.
So, we’re building a distributed data grid that sits on top of the power grid, and the data grid is a global thing where it can move data from around the world by virtually the speed of light. We can’t move electricity around the world, even if the wires worked that way, I couldn’t actually move load without such significant losses. So, it’s a way to gain the power grid. What we saw, well now we’re involved in trying to launch our first project around building the first distributed data center at a powerplant.
Great, I’d like to just turn to some perspective from your experience; 10 years ago, we had a big wave of investments in clean tech, a lot of people lost a lot of money, but there were a lot of projects that some failed, one would say there was mixed success, but now the environment is a lot different. This is for both of you, could you talk about some of the initial challenges early on in implementing clean power projects, whether wind or solar, and then some of the developments that have really paved the way for more realistic adoption, and more successful adoption of clean technologies? We’re talking mostly on the generation side but would love to get your perspective on the broad arc of evolution in the market.
Bonnie: Trevor, do you want to take a go!
Trevor: Sure! Around that, what I think you’ve seen over 10 years is that original avalanche of new technology. I can remember going to a Cleantech forum 10 years ago. We’ve settled out into the technologies that we actually know we can do either at grid scale, and then what can work as a more distributed technology, and the challenge there of course was, okay, that’s great, you’ve built wind turbines, you’re probably going to be okay. You do solar PV, okay its practically commoditized at this point.
Who lost? Well people like Cylindro, I’m not going to touch Cylindro’s issues as far as it’s now the half billion-dollar loan, and how it got to be kind of a punching bag. But in that story is, ‘Hey, it’s a really innovative piece of technology’, but it turns out the use cases went from 80 percent of the market to 2 percent, and, ‘I can’t pay back the half a billion-dollar loan on 2 percent of the market’. So, a lot of that kind of technology came and happened, realized it had a niche application, ‘Okay, well can you build that? Can you get a return on investment on that or not?’ I think 10 years later we’re now in a spot where some of those niche technologies, and I’m thinking niche generation stuff, In-Pipe Hydro, something like, ‘Oh God who cares about that’, which is basically a round river hydro. ‘Right, okay well who’s going to let me put that in their waste water pipes?’ Well it turns out as a distributed energy system, that can make more sense.
One of the things I think, and it really applies much more to what I look at today, micro-grids, originally, ‘Okay, great’, it’s the mesh network, its military education school and hospitals, and Bonnie correct me if I’m wrong on that. But you had like a hospital campus that had a back-up generator, and so they had their own little power grids, if grid power goes out for whatever reason they could sustain their operations. Well, now with more interesting real-time analytics packages that can sit on top of that, and some of the other distributed technologies, whether it’s something like Bonnie is doing, or any of the other storage ideas, or small scale power generation whether its wind or solar, or waste-to-energy projects, whatever it may happen to be, your little micro-grid can now spread out and add a lot more resilience into the overall grid.
Why that is far more interesting to me is, now you’re getting into an area where the utilities are being challenged; if I could run 10c blocks of a grid, one in 100, or why not half a state, or whatever it may happen to be, so you’re basically tying a bunch of power islands together. So, to me that’s what I’m seeing them lock now, that ten years ago wasn’t happening, was that the avalanche of big data to be able to analyze what’s going on in your generation assets, and in your distribution network, and in your use, your load, is really interesting.
That’s super helpful. Bonnie, I don’t know if you have any thoughts about the early projects that you were involved in implementing, and what sort of challenges you faced that may not exist today. Do you have any thoughts on that?
Bonnie: Trevor and I are very much in agreement on a lot of things, and particularly those early projects. I think as you have seen a greater push for… I don’t know if deregulation is the right word, but more market-structured energy ability, and the ability for more individual control of your own destiny over what your energy usage is. That really has pared with the big data, and the ability to look at, see, and analyze things. The utilities used to really be the only ones that had that visibility, it was too cost prohibitive for anybody else to come in and play. I think that’s still definitely one of the issues you see from 10 years ago that continues today, is the timeframe on an infrastructure return, or a large energy return as opposed to your traditional 3 to 5-year VC returns, that mismatch is always a bit difficult.
But now that you’ve got the new AI, you’ve got the machine learning, you’ve got all of these pieces that have come down in price, you’ve seen the energy storage component come down so much, there’s no technologies around that, that I think it’s the first time you’ve had this opening and the ability of the markets, to be able to support additional pieces that weren’t there before. When the utility was the only one that saw everything, there wasn’t that capability, I think you see it in sensors, I think you see it in the AI, the speed of the AI, but for sure when we were the first wind farm in New England, the ISO and the utility we were connecting to was really challenged by…
- Well, how do I know what you are going to do?
- How are you going to share the data?
- What timeframe are you going to share the data?
- What do I know, what do I not know?
It was a real balance to teach and get the utilities and therefore the markets to understand…
- Where do these different intermittent resources work?
- How can they participate to support the grid?
- Yes, if I go offline, you’re not going to die.
- How are you going to make this work?
We used to joke about the chicken little phone calls on a regular basis, and having been on the incorporation of technology into the grids for over 10 years now, to be fair to the utilities they get to have a moment, if you look at PGME here in the Bay area they see 3,00 to 5,000 new solar systems every single month, and they have no visibility, and no control over them, those are all roof-top solar systems.
But we think there’s a lot of changes in the micro-grids, AI, the control systems, that you’ve seen with the incorporation of Big Data, and this ability to shift to mesh networks is really opening up a lot of opportunities that didn’t previous exist. I think the cost coming down has made such a difference, I remember the racks in the different RPS structures that were absolutely critical in the early days of wind and storage, that are really either through market adjustments and rate changes, are now much more favorable, and have made the market a place where all of the different entities can participate.
What are some technologies, or notable innovations that have helped to integrate clean generation sources into an existing grid? It sounds like Trevor you guys are doing a lot of analytics on sourcing where power comes from, but have there been specific innovations that have acted as a catalyst? And a further question is, how different and how distinct are the systems for each utility, to systems from others, if you’re going from state to state, or country to country?
Bonnie: I think it depends a lot on the utility, you have different entities that are much more progressive, you take Green Mountain Energy up in Vermont, or some of the other perhaps smaller, Austin, that are really engaged in how to shift their portfolio, versus some of the older municipalities, Los Angeles Department of Water and Power just hasn’t spent any money on infrastructure upgrades, so a lot of their systems are just still from the 70’s and the 80’s, and they haven’t been driven to do any of that innovation in that change. So, I would say interestingly enough, places like India and some of the new development around energy, similar to the telephone structure of skipping the wire structure and shifting straight to a mobile technology, I think a lot of places internationally, you’re going to start seeing the micro-grid structure, and you’re going to see the growth of the micro-grid structure, or smaller more regional componentry that is able to support.
I do think the evolution of the ISOs, and the ability and the desire to incorporate the new technologies has created a new window that wasn’t there previously.
Trevor, do you have any thoughts?
Trevor: Bonnie is right as usual. I’ve been very fortunate over the last two years to be back and forth to China. The idea that we often have here in North America, particularly here in Silicon Valley, about sure there’s massive infrastructure building in China, is it real, is it not real? First off, I don’t think we really truly could grasp should we go there to grasp the movement of humanity that is happening from rural areas to urban. But I was recently over there, basically the city of Xi’an they’re building a place called Xi Xi’an next to it, basically New Xi’an, that is not just amazing knock back, but all of the stuff that I’ve looked at the last 10 years, or if you’ve been to any Cleantech conference from 2007 to 2010 let’s say, all the ideas we had about how those distributed systems, whether it was waste water management, energy collection, all of the things that we thought about, they are deploying, and in a modular system where you can see how they can add neighborhoods basically as small micro-grids, and tie those power islands back together into a real grid.
I see a lot of innovation technology-wise that’s coming in, in North America and the West, and a lot of increasing involvement of everybody else in the enterprise big data space from Amazon, Microsoft, Google, Oracle, whatever ‘insert me here’, in analytics and trying to gather information. Where I get bearish about this world is… I think there are certainly some innovating utilities, I just don’t think the utility business model will work, its no-one’s fault, you drag the shark on the land and ask him to run a marathon, it just doesn’t work that way. It’s very hard within the way the structure works.
So, even if you see some innovation of how utilities are structured, or how power markets, more likely as we envision them right now will be structured, or how grid management will be structured, in other words should there be five different ISOs and a bunch of RTOs and a bunch of areas that that the utility runs, or should it look like the air traffic control system? Canada has an innovative way to track its air traffic control system, it’s a not for profit entity that the airlines, airports, and general aviation users pay into, and you see it in your ticket prices. It’s a very effective system that can get you from one end of the country to the other, or out of the country.
I see the same kind of thing happening, that to me makes a lot of sense as a model to tie the ISOs together, but then you’re left with the question, ‘Well what does the Utility do? They’re not providing reliance, they’re not providing energy, they don’t build power-plants, so what’s their role in that?’ That’s going to be the challenge of how that evolves, I’m not marking down the idea that all those wires are worth maintaining, they certainly are, but let’s be honest about the age of that infrastructure, and what needs to be invested in it for us to move onto the next century.
You just touched on a point that’s so critical, and we discussed this previously that when you have a change in how the source of energy, that does change a lot of the dynamics. Well, when the economics change, when you don’t have oil taxes or gasoline taxes, they go into municipalities, if utilities have been regulated they’re seeing their models change; what do you see as first of all key pressure points, who’s getting pressured, and are there opportunities that you see for different players to come into the market? Or will there need to be other approaches such as what they’re doing in Canada, where there may be national legislation, or different types of taxes to offset the lack of a viable business model for the utilities?
I know that’s a big question! You can chip at it any way you want.
Trevor: You want to go ahead Bonnie!
Bonnie: Sure. I think one of the critical things that we perhaps aren’t discussing as well, is the utilities are always one of the 10th or the 12th mover. That’s because they are the provider of last resort, and it’s a structure of how do we look at the different opportunities, the new technologies, the new energy systems that are coming into play, and mirror that with the absolutely risk-averse provider of last resort aspect. The utilities have been the provider of last resort, they have never been incentivized for incorporating new technology. They’ve never been incentivized to do things other than spend a lot of money, the rate of return is all on the capital expenditures, so they’ve not been incentivized in good ways to look at new opportunities to incorporate things.
One of the things Trevor mentioned before around modular components, and something perhaps that’s either at a national level, or even at a regional level that would make a lot of sense is, creating better testing grounds and modular opportunities for new pilot projects, or demonstration and testing of new projects. I think one of the things that I see especially at Pathion, but have since I was doing wind, is that by the time the utilities build a protocol to allow you to participate, or to even start a pilot process, the original ability that you’re demonstrating is four years out of date. I think what you can see in particular around Real 21 inverters in California is a great example of that, so Real 21 was coming around, everybody knew it was coming. They just rolling it out and everybody’s far more capabilities down the road at this point in time.
So how do we do a better job of giving them some kind of an ability to do new protocols, new testing grounds, something like that, because the utilities are getting pushed really hard, they moving faster than they’ve ever moved, and for all of us on the technology side, we can’t believe how slowly they’re moving because it takes three years to get a grant put together, a pilot project put together, and by the time you’ve done demonstrating the pilot project, that technology is five years out of date, and not worth anything anymore.
Trevor: It’s easy for us out here in Silicon Valley, we marinade in this innovation culture, and it’s very easy to lose sight of how deployable a lot of these technologies are when you’re swimming in cheap capital. So, there will be winners and losers, and no one likes to talk about being a loser. But I find that the people that I see trying to spur the innovation in some kind of way, and I’m a mentor with a couple of accelerators programs here, the thing to me that is missing in the electricity space, which is happening in other… I know some great AI labs, I know some great telecommunications labs, I know a lot of people are like, ‘Oh, what’s the next generation of this whole technology, or this whole mindset?’ What is missing in energy for electricity is across verticals, I don’t just want to go tell an old-line utility how to be innovative, because I know the problems that they have with paying for innovation or investing in innovation.
What is dangerous I guess for those utilities is that we’ll sort this out, I feel a little bit like thin innovation world is on its third date with the utilities, ‘Okay, where’s this going?’ because you say you like this, you say, ‘Oh you’ve hired a chief of innovation, that’s great. I don’t see you actually deploying any of this technology’, they’re starting to build around it. And my advice would be, and I don’t know who is listening to this podcast, but as a guy who sees that third day happening, I look at it and say, who are the other people that could have their finger on the pulse, or an interest in infrastructure, so is it the wireless carriers, should Horizon or AT&T be in the energy business in some fashion? And they already are, because they’re transmitting some real-time energy data. The utilities don’t own power plates anymore, nor does Horizon, or AT&T, so again, what’s the model that will actually make that work? And, who’s better equipped to invest in the innovation that’s going to have to happen.
If you wanted the next billion-dollar idea, to me, somebody who can come along and say, ‘Hey, I’ve got a great way to wirelessly transmit energy across the city block safely’, okay, well you’ve taken away the last thing that utilities have, which is controlling the distributed end of the wires. So, that to me is a very innovative thing that can happen, like to Bonnie’s point, if you’re building around Africa, a lot of Asia went straight from landline phones to mobile, and that has hardly changed the way that they do business and interact, not just because everybody’s got a cheap cell phone, but that thing has rebuilt a network around the old one that didn’t really work all that well. So things very much in danger of that happening.
You bring up an interesting point, which is this opportunity for new business models to emerge, and Bonnie, you were talking about micro-grids getting traction in parts of the world where essentially, you’re leap-frogging generations of technology, because you don’t need that backward compatibility with existing infrastructure. What kind of opportunities are there for new types of players to emerge, and build businesses out of micro-grids?
Bonnie: I think there’s a real opportunity for that, that’s one of the things that Pathion does, and very well. One of the things we are seeing as a driver is all of the super-storm Sandy, it’s been a hurricane, it’s been fires in California, it’s all the different natural disasters, and what’s really interesting is, we’re actually having a lot of home builders and community development entities, come up and talk to us about it from two perspectives. One is, a lot of these communities want to be green, or something, but what they really want is instead of putting natural gas back-up power that’s only affordable at huge homes or something like that, we’re looking instead at, can these communities have their own resilience. And if we do a community level solar plus storage, or solar in wind, and other structures plus storage, what does that allow if nothing else? If nothing else it allows a nature wave to have the lights on, and somebody to be able to come and take a hot shower, get a hot meal, charge their cell phone, all those sorts of things.
Think about mountain communities that have problems with wires during the winter. Or, resilience after super-storm Sandy, and part of what we’re seeing is some funds coming out of homely and security around government entities and emergency services being supported through it, and it’s very much been a driver from our side of the world, both on the homeowners and ‘Hey, wouldn’t you want to buy a house that’s got back-up power, that if the next hurricane comes through your power is going to stay on?’
But then the flip side of it is, making sure the government services, and emergency services are always available, and there’s funds that are starting to be available on that side, and why wouldn’t you support the airport, the police, the fire, and probably your main critical city functions, to ensure that no matter what happens, if there’s an ice storm or anything else, that your community is supported and functioning? And now that the AI is there to be able to support it, it’s a real opportunity for people to take one foot off the grid, not be fully off grid, but take one step off and be resilient without cutting ties.
Trevor: Resiliency as a selling point in new development… if everybody is familiar with the climate assessment that kind of got buried last Friday, the things that we see over here, whether it is the disaster of the wildfires here in Northern California, or Hurricane Sandy, or whatever these more prolonged and difficult spells of weather that we get because of that, this is where I think you’re going to see the scale of infrastructure development really happening around this type of resiliency. If someone were to come to me tomorrow and say, ‘Okay, congress changes hands in January and we’re going to start talking about infrastructure week over week again’, if someone was to ask me, ‘What do you do for infrastructure?’ that would be the thing I would say, because frankly it’s almost impossible for me to do something with power lines in Northern California to keep the campfire from happening again.
Again, in that sense he’s not PGenie’s fault, or the incumbent utilities fault, it’s power lines, and its trees. If you want power at all you need to do that, but what’s the thing that can say when something bad happens, what’s the best way to make sure that we can maintain critical systems and critical infrastructure, but also how do we make that safer going forward, and how do we make the system able to stand up after something like that again? So, that to me, it’s going to be all about resiliency I think, as the selling point for the next 10 years.
That’s a great point, and as a resident of New Jersey, we’ve lost power I would say every two to three years, we have a storm that comes through and knocks our power out, and it’s all over our neighborhood, we’ve got big trees and powerlines, and there’s no easy way around it.
Bonnie: We call it energy independence, and not just response to climate change. It’s a lot of energy independence, everybody wants to stand on their own two feet and be able to support their communities.
Well, as we saw in Puerto Rico having such an antiquated infrastructure, the damage that a storm can do can be just horrific. No doubt independence and being on a network, or having distributed networks is critical for security.
What are some of the challenges of bringing on electric vehicles, and autonomous vehicles as a new source of demand, and potentially a different shape to the load on a daily basis? And Trevor, I know you work with data centers, what are some of the challenges and considerations in moving to a more distributed paradigm when we’re incorporating these additional demand, or sources of demand for electricity?
Trevor: I would say it’s a really good point, when I started I kind of had the picture of that, if you think about who in the future aside from talking to wireless companies or something like that, the people managing, and maybe aside from Tesla somebody’s has a holistic enough approach to say, Elon Musk he was really trying to run an energy company that happens to have some very sexy appliances, if you think about that though as a distributed system, you have a rolling… I couldn’t tell you the Maths around how many assets you’d need to have that kind of resiliency, but if I’m able to charge on the fly, and discharge on the fly, so a Tesla 3 is moving at highway speed at 280 here in the bay area, and I’ve noticed you’ve got a 500 mile charge, if you let me stuck out 200 miles of that peak energy use, I’ll give you a dollar or $5, or whatever it is; that kind of network effect I think is going to be really interesting. Bonnie can speak more about it as a storage player, really is what that is, I think those kinds of assets we haven’t really figured out yet.
As far as the autonomous vehicle goes, well you just saw the announcement from GEM this week, look I think a lot of that is a labor play, but I also think that the people who work in the transmission plants, there are two transmission plants involved, should really be nervous because frankly you don’t need that technology, and autonomous vehicles are all going to be EVs. There’s no reason why a client operating a fleet of autonomous vehicles, why I’d want them to have to go to a gas station somewhere. Those two things are going to collide. So, that is something that is goosing that number of those assets available.
Now, for the utilities they look at that and say, ‘Oh, that’s load’, we know load and we’ve had our list of priority load because of roof-top solar efficiency, whatever it is, let us do that. Well I don’t know if that’s the best way to consider that, or use that, I don’t know what the structure should be within a city, or a campus, or whatever it is, to be able to best-enable that technology, I don’t think we’ve proven that out yet. But those vehicles generate an enormous amount of data, so what am I doing to move data processing closer to where they can work? That’s also another dream we don’t think about, we think about the cars operating as electric vehicles autonomously, we don’t think about the data centers that need to be near them, so they can operate at roadway speed with existing latency, or improve the latency numbers, to also have that. So, the data centers themselves are becoming smaller, more distributed, eating of electricity is their life-blood.
That’s super-helpful. I want to ask each of you, and I’ll start with Bonnie, what are you optimistic about in clean energy and a future distributed intelligent grid, and what keeps you up at night?
Bonnie: A lot of things! I think what I’m really positive about is we’re continuing to see a lot of government support, we’re starting to see a lot more increases in renewable portfolio standards, you’re seeing continued investment in the clean tech space, and when you have policy and money moving towards a goal, that’s usually a pretty strong benefit for you. I think what we’re seeing in particular is so much of the machine learning, and the AI, and I think what’s really funny is, in the energy space we do a bad job of calling it that. For example, the energy management system that Pathion has, looks at all the componentry that for example if it’s an industrial building, and it learns that at 8am all the lights go on, and the fork lifts start getting charged, and something else happens, and then anticipates and is prepped and geared for that, and it knows how much it should store and when it shouldn’t, and how does it support it from a voltage perspective, a frequency perspective, how does it maintain power quality, and at the same point in time how is it looking at the grid, to then optimize and look at, ‘Well, can I provide good services?’ ‘Can I sell my power?’ ‘Should I store my power?’ or it’s a moment where the price of the power on the grid has jumped from $25 dollars a megawatt hour, to $800 dollars a megawatt hour, well we should support the grid and we’ll push power out of the battery.
But I think we do a bad job of talking about the AI and the machine learning that’s going on in our technologies. People kind of think it’s going to magically be a robot or take over, but I think the ability to provide real-time sub-second or two second response rates, where things can correct and adjust, are really enabling the mesh network. We’re starting to look at that, and that’s starting to be understood how all these distributed resources can be brought together to really support it. We joke a little bit at Pathion, but we’d like to make sure that we use all the possible roof-top space before we put up solar over the entire Mojave Desert, and how do we do a good job of balancing the shift to the new generation portfolio that we want, whilst maintaining all of the best opportunities.
What keeps me up at night? I guess a lot of things.
We didn’t talk about security.
Bonnie: Yes, cyber-security is right up there with all of it, and we’re very concerned about that, we are very integrated into that. I think it’s been a bit of a joke for those of us in the energy space that to-date a lot of external hacking options, or concerns, were worded by the fact, I think the article I read in Forbes called it a spider network, instead of an integrated central network like the UK, or somewhere like that. The fact that our grids don’t talk to each other very well is all that has saved us from perhaps some larger cascading impacts. So, cyber security is well up there, in particular on the distributed side; how do you balance the cost, and at the same point in time provide the appropriate level of security, to be part of the critical infrastructure that supports people’s lives.
So, that’s probably the biggest one I think about, as well as how do we keep working, and/or incentivizing, figuring out how to incentivize utilities structures to partner with the new technology in a way that’s a win-win. I think you’re starting to see some of that around non-wire as alternatives, where instead of doing some kind of a large grid upgrade, or permanent infrastructure upgrade, instead there’s a cost-splitting mechanism between the utility and a technology play, which allows to either postpone or completely get rid of the need for an old-school wire solution, and I think more opportunities like that need to be explored and presented.
Trevor, what are you optimistic about, and what worries you?
Trevor: The thing I truly see as being the most interesting piece is this focus again on real-time analytics, and not in the sense of ‘Oh, we have the data available, let’s figure out what it says’, in that we’re learning something from it for the first time, and realizing that it’s there. This is a question that happens across Think Data, and people doing a digital transformation strategy, or whatever you want to call it. It’s really easy nowadays to say, you’re really a data company, it doesn’t matter what you do, you’re really a data company, and if you’re not, figure that out. You’re going to be out of business in five years.
Okay, what data do I have? And you’re getting insights that you weren’t even aware that might be available to you, so I think we’re going to learn a lot of things, and what we learn is going to be exponential, and because as Bonnie pointed out, usually that data is locked up inside utility, or locked up inside a power generation asset owner, it’s now being liberated a little bit more. So, there’s going to be a lot of things we’re going to find out; there’s a little company in San Diego called Pisces that does that for micro-grids, and now they’re just starting to unlock the fact like, ‘Oh, now we can tie more assets into a micro-grid, it’s not just this university campus, it’s the 10 square block surrounding the university campus. And then what stops that from being the whole city of San Diego if it wants to be? Or, whatever. So, that to me is really interesting.
The thing that keeps me up at night. I generally sleep pretty well about that, because I’ve seen how fast we can recover, but to your security point, what was the scary report that came out of the Madcast substation issue our here where there was an attack on a substation at Silicon Valley. I believe there was a Senate Committee or sub-committee that commissioned a report of how weak is our grid? And the report came back, there’s only three places in the world that manufacture this kind of transformer, and if you blew up one of them, and blew up these… I think it was 11 or 13 substations across the United States where there’s literally thousands of sub-stations, but these critical ones you could block out the United States for six-months. Now, that should be terrifying for anybody to hear.
I honestly don’t think that can happen. Even if that were to happen, I don’t think it would be six-months because we’d figure it out, but that kind of physical infrastructure challenge, to me is that… And you’re seeing this move of the power grid away from being… it was built as a generation focused thing, in other words, SyracuseNew York has an auto plant, therefore you need a giant powerplant here to do this, and the good news is, people living in Syracusewill always have power. Okay well when the auto plant goes away, who maintains the power plant? Does there need to be a powerplant? Syracuse, their population stays around 100,000, meanwhile New York City grows from 3 million to 10 million, or whatever. Well I need a power plant in New York. Well, real estates are really expensive there, you can’t do that. The focus taking away from having built the power grid based on a generation thing, and generation centric to being consumer centric is going to be pretty classy in a way.
One question I have to wrap things up is, any interesting start-ups or technologies that you’re keeping your eyes on?
Bonnie: We’re obviously keeping our eye on different blockchain solutions, and blockchain opportunities, and a lot of the AI and Machine Learning, how can we continue to incorporate things in. I think the other thing we’re looking at is what are the other interesting and new micro-sources of generation, how do we start partnering and pairing? I think you saw some of it, the small turbines in Chicago on buildings and things like that, which perhaps were under-valued a couple of years ago. As we move to this more distributed network and the abilities tile, the smaller components in, I think you’re going to start seeing a lot more micro-components being more effective, and/or able to be partnered with AI or the small scale data centers that Trevor was talking about earlier, that are going to support autonomous vehicles. I think it will be a really neat opportunity, that where they didn’t have a marketplace to participate or incorporate into, I think we’re seeing a lot of new opportunities around that particularly.
Trevor: I mentioned Pisces, the guys down in Southern California were doing that micro-grid real-time analytics. I think companies like ElectrIQ Power, I see at the end its IQ but you’re talking about a smarter invertor analytics package that goes on roof-top solar, that idea to me is like, ‘Okay, you’ve now moved the power management thing inside someone’s garage vs the in utilities Headquarters somewhere. So, to me that kind of thing will be interesting. And to Bonnie’s point, as these distributed networks get built out, a lot of new technologies that maybe didn’t have a place to work because they didn’t have a revenue recovery that could make it worth the investment, like using waste heat, I’ve seen a couple waste heat concepts, hardware concepts; well, guess what? Those were great in data centers because data centers have waste heat, they’re actively trying to get rid of. So, if I can use that to regenerate electricity, it’s a whole new market for them. That kind of thing.
Well, my final question is always one of my favorites, which is a recommended resource whether it’s a book or something else that you could share for our listeners?
Bonnie: I got lucky enough to take classes with Robert Sapolsky who is a Professor at Stanford, when I was there, and he came out with a new book called, ‘Behave: Biology of Humans at Our Best and Worst’, it talks about agency and stimuli and how does biology fit into our real world now. One of his original books was ‘Why Zebras don’t get ulcers’, and I love that he takes very complex scientific ideas and translates it into a very dry humor that’s very relevant to real life. He always has fascinating things to say.
Wow, that sounds really interesting, I will definitely check that out.
Trevor: For me I’ll be maybe even more philosophical on that. I’m reading ‘The Island at the Centre of the World’ which is a story about how New Amsterdam became what is now New York. And for those of us who sit here and think about infrastructure, it’s obviously a really interesting history, and a really interesting history of disparate groups trying to cobble together a community. Every time that happens all of the choke-points of the community, even 400, 500 or even 1,000 years ago, the choke-point to that they’re always infrastructure. And I read it in the eye of a guy who has been in the power business for the last 10, 12 years, you see how the same issues always crop up, with the same things that limit growth. So, it’s an interesting read, there’s nothing new under the sun sometimes.
Well that’s fascinating, just as somebody who braves the infrastructure, the crumbling infrastructure and tunnel bridges in tunnels, underground in New York with a massive amount of construction that’s been going on over the past two years. It’s definitely bursting at the seams, and the supports are creaking. Somehow, we’ve managed to muddle through.
That’s great, and again Bonnie Lind VP of Business Development for Pathion, and Trevor Curwin VP of Energy Markets for Green Spark, have been our guests.
This is Ed Maguire, the Insights Partner at Momenta Partners with another podcast. And I want to thank you both for a really interesting podcast and look forward to continuing our conversation again.
Bonnie: Thanks so much.
Trevor: Thanks for the opportunity.