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Why are VCs betting big on clean power? And what are the most promising new technologies for reaching net-zero?
Meet the people from Ontario and beyond who have made it their mission to combat climate change. From energy production to emerging technologies, listen in on conversations about what the path to net-zero looks like here in Canada, and abroad.
Climate Challengers Ep. 4 Transcript Final
[00:00:00] Andrea Bain: Hello, I'm Andrea Bain. And welcome to another episode of The Climate Challengers, where we speak with people who are leading the fight against climate change and learn what we can all do to be climate challengers in our everyday lives. So far on the show we've heard from nuclear activists and former skeptics, electrification specialists, electric vehicle enthusiasts and clean energy industry leaders.
We have learned about what's being done to lower our carbon emissions. And we have heard that it will be a very challenging task to meet our targets and prevent the worst of climate change. This is why, in addition to increasing traditional clean energy sources, like solar, hydro, and nuclear, we also need new technologies to come online and help us move the needle, even further.
So today we're going to look ahead to new ideas that are on the horizon and solutions that are already here, but have yet to be widely [00:01:00] deployed and to help us do that. My guest, Ron Dizy, is here. Ron started in tech, but has since spent his career working to bring new energy technologies to market. He is a venture capitalist who was the first leader of the Advanced Energy Centre at Mars and is now managing director of Red Jar Capital.
Ron. Thank you so much for joining us. How are you?
[00:01:21] Ron Dizy: I'm great, how are you Andrea?
[00:01:23] Andrea Bain: I'm good. I want to dive right into this conversation with you, and I want you to start off telling us a little bit about your career and what led you to becoming a venture capitalist focused on clean energy and why clean power?
[00:01:38] Ron Dizy: Uh, I guess I started in management consulting, but in the late nineties ended up migrating into venture capital. I actually helped the Teachers Pension Plan launch their venture program. And shortly after that, I joined Celtic House, which was an early stage tech focused VC. I joined there in 2000, I guess. I left in 2007 because [00:02:00] I wanted to take on a truly operational role and became CEO of a clean tech company.
I believe that that time, that clean energy was sort of at a tipping point and that there would be opportunity. And I'd learned as a VC. It was way more important to be in the right sector than anything else. And I believed even from 2007, that this would be a generational way to create wealth. I ran that company and Ballot was named for seven years, I guess, and then left to become the founding managing director of the Advanced Energy Centre at Mars.
That was a chance to work in what was really a nonprofit, but to really see if we could help speed the pace of adoption of innovation. The observation was, we've got lots of inventions that just don't get adopted very quickly. And I thought we could make a difference at Mars. And I think we did make some progress in that.
But doing that also, you know, [00:03:00] highlighted just how difficult that adoption problem is. Uh, I returned to the private sector as chief commercial officer at Spark Power. I thought that was a platform that could bring new technologies to bear into traditional industries. And I formed Red Jar together with the rest of the management team from Spark Power, actually, where we're investing our own capital and finding ways to change the pace of adoption and clean energy.
[00:03:26] Andrea Bain: All right. I want to share a quote and get you to expand on it. You said that we don't have an invention problem. We have an adoption problem. Can you explain what you mean by that?
[00:03:39] Ron Dizy: Yeah, when I became Managing Director of the Advanced Energy center. I mean, our whole focus was how do we increase the adoption of innovation in the energy sector? And we really saw the problem wasn't one of what technologies were available, but the problem was one of adoption. How do we actually use them? And, and it, it always sounds like, well, that should be an easy problem to fix.
It's really not. The reason there is an adoption problem is because of the way our energy systems work developed over the last hundred years. How does a utility system work with a regulator and market makers. The way the incentive systems work in large businesses, especially regulated businesses, especially the way those decisions are made. They all tend to slow down adoption.
As a VC, I used to see lots of companies with inventions that they had a hard time breaking to market. At the heart that is always the hardest thing.
And so you really have two choices. You either figure out how to bring technologies to bear that can work within the existing incentive systems. So those tend to be, you know, very often more gradual changes that are better technology, but it does the same thing in essentially the same way.
You know, it's a better transformer. It's a better thermostat for your house for that matter. These are things that are relatively easy to adopt because you don't have to change everything else around them. Much harder would be to change the whole system to make it work differently. And often we'll see, you know, the big thinker saying, well, we should just, you know, have systems work completely differently. And yeah, that would be interesting and it would work. It just tends to be really, really hard. So I really think, you know, we still have things to invent. Let's be clear. But we have a much bigger challenge in front of us. And how do we adopt the things that are invented and how do we bring them to market much more quickly.
[00:05:37] Andrea Bain: Yeah, and you make a really good point. Once things are set, it's very challenging for people to break that down and think, think about approaching that issue in a completely different way. But I want to talk about the technologies that are available. We hear a lot about hydrogen. Can you tell me what are some of the potential uses of hydrogen?
[00:05:55] Ron Dizy: Ya sure. So hydrogen is fascinating in that there could be a lot of different uses. We talk a lot about it potentially in transportation. So the idea of, for example, long-haul trucking using hydrogen as opposed to diesel. Or, you know, optimistically natural gas where people thought about it, and it's never really attracted a ton of attention.
There's potentially use of hydrogen; it's simply injecting it into our existing natural gas supply and simply reducing carbon emissions that way. At concentrations, I've heard, everything from five to 15%. You know, your existing appliances will work the same as they do. And we're just reducing the emissions associated with natural gas by that amount.
I know people that are working on hydrogen as a way to supply stationery energy. So for example, think of the film industry where you're onset and they would normally use diesel gen sets. They’re loud and noisy, they smell, so I know people that are thinking about bringing stationary generators using hydrogen or fuel cells.
We've seen a bunch of applications like that. I think there's also going to be applications for very large scale. Uh, what you almost would think of as storage. In a way that's what hydrogen is. When you create hydrogen, you've actually taken and used a bunch of energy to create hydrogen. That hydrogen is now effectively storage. And at scale, we can then use that to reinject into the electric grid. Or in fact, we could use it for other uses. So. Hydrogen could be a very flexible solution or a very key part of the clean energy transition.
[00:07:40] Andrea Bain: What about carbon capture and sequestration? Can you walk us through the state of play with this technology?
[00:07:48] Ron Dizy: Yeah. I think to start, you know, we probably are far enough down the path, you know, we're just finished COP26 and, you know, generally people are not super happy with exactly how far we got with that.
It's likely true that we're going to have to figure out how to do some amount of carbon capture and sequestration. Um, because we're so far down the path, that said, you know, you sorta said, where is it at? It's still, you know, kind of expensive. And I think perhaps the one thing that, you know, proponents of alternatives would talk about it.
There's something like 40 mega tons a year being captured in carton CCS facilities right now, I suppose the one unfortunate thing is most of that carbon is then used for enhanced oil recovery. So yes, we're capturing the hydrogen except we're using it to make ourselves more efficient at extracting fossil fuels, which ultimately can't be what we're focused on.
We're also starting to see more of the alternative, which would be direct air capture. There's a company called Carbon Engineering in Squamish. There's Climeworks in Iceland. Both have been in the news a little bit lately. That effectively are these giant fans on top of buildings and they're literally sucking in the air, and it has carbon dioxide in it and extracting it and either injecting it into rock in the case of ClimeWorks or trying to convert it into liquid fuels, in the case of Carbon Engineering. These are still pretty small scale projects, but they're getting bigger and they still kind of require carbon pricing in the $600 a ton range. So that's, you know, quite a bit higher than where we're at. But I, it strikes me as a Venture Capitalist as an investor is within striking distance.
Right. You know, it's yeah, it's got to get 10 times cheaper, but that's the kind of thing that, that innovators do. And that's, that is where we still need invention. And as we talked about, talked about earlier.
[00:9:38] Andrea Bain: And earlier. Yeah. And I want, now I want to talk to you about storage, but before we do, I'm hoping that you can explain the difference between power and energy.
[00:9:43] Ron Dizy: Yeah. Always a little bit difficult. Power is the rate at which you produce or consume in this case, electricity, you usually measure power in Watts or kilowatts or megawatts. That's what we're, we're used to. Energy is the amount of electricity that you consume. So, and you measure that in kilowatt hours or megawatt hours typically.
So, you know, if you've got a 60 watt light bulb, that means it draws 60 Watts. That's how much power it consumes. And in an hour it will use 60 kilowatt hours of electricity. So I sometimes think of it. A good analogy is between speed and distance. Power is kind of like speed. So you're driving a hundred kilometers an hour in your car, in two hours you cover 200 kilometers. That's your distance. Distance is kind of like energy. Power is kind of like speed.
So with batteries then, cause you know, you want to talk about storage. Those are both really important measures, power and energy. Power is the amount of electricity that I can push into the battery or the rate at which I can push other energy into the battery or take it out.
But energy is the amount of electricity, if you will, that is contained in the battery. And I think we tend to think about energy when we measure batteries. You know, if you think about people talking about cars, you'll talk about my car has a 50 kilowatt hour battery or 80 kilowatt hour battery, but you really also do have to be worried about power, when you're talking about these things, particularly for grid scale applications.
[00:11:16] Andrea Bain: Yeah, and you kind of just touched on my next question, talking about ion batteries. Lithium ion batteries might work for electric vehicles, but not for the grid level storage we need to invest more in renewables. Is that the, is that the answer?
[00:11:31] Ron Dizy: Um, I mean, we do have lithium ion operating at grid scale. So, Tesla's Hornsdale project in Australia got a lot of press. Was that a year ago, two years ago, you know, that's a big battery, a hundred megawatts, 129 megawatt hours. So that, you know, if you've seen pictures of it, it's sort of several football fields worth of big containers with big batteries in it. But if you take that project, you know, 100 megawatts, 129 megawatt hours, that means it's got about 80 minutes of storage, that's it. Right. So, you know, you're not going to last you know, if you had a grid blackout, that's not going to supply energy for any longer than 80 minutes. When we think about what we need to have happen at the grid, you have to happen, I think in a number of different timescales. So the reason Hornsdale's a grid scale project is for resilience for these temporary challenges they're having in the grid. And it's perfectly good for that. And I think they're very happy with the with the output.
But we also need is a way to, you know, bridge renewables. So you might need a few hours of storage for when your wind goes down or your solar goes down to create, you know, smoothing conditions in the grid. So think in terms of four hours or maybe eight hours. We ultimately also need though to store stuff from day to week. You know, maybe we don't need as much on the weekend, but we need more during the week.
So we might want to have storage that can have you know, days. And when you go further, we may want storage that goes across seasons. Right? If you think about us in Canada and the north, we will say produce more energy in the summer when it's sunnier. And we've got, you know, especially if we're using renewables.
But the hours of sunlight are much less in the winter. We might actually literally want to move energy from summer to winter. And in fact, that's how the people who designed the grid think of it. They really think of seasonal storage. And so all these things are important. Lithium-ion is great. I think most observers would say, you know, up to about four hours of storage, but beyond that, the cost of adding energy storage to lithium-ion is very high.
And so we have to seek alternatives. And that's what we're, I think we'll talk about that as well.
[00:13:45] Andrea Bain: We're going to pause here because it's that time in the show to hear from an OPG climate challenger. Today's OPG’s climate challenger is Christina Dimitrov whose work is all about preparing the company to adopt and disseminate the carbon reducing technologies of tomorrow.
[00:14:03] Christina Dimitrov: Hi, my name is Christina Dimitrov and I'm a senior manager of strategic initiatives at Ontario Power Generation. As listeners of the climate challengers will know OPG generates power using familiar sources, such as hydro and nuclear, but what may surprise you are the activities OPG is undertaking in new and emerging technologies.
As we electrify more and more of our lives from our cars to our home heating, demand for electricity will increase. So we need to be ready. And a big part of that readiness means being able to store surplus energy during times of low demand. So it can be used when demand is highest. Meaning we can take full advantage of intermittent sources of renewables, such as solar and wind.
OPG's first experience with battery storage was in the Northwest in the Gold Bay first nations community. Here we co-developed a micro grid that would help reduce the community's reliance on diesel generators, using a combination of solar panels, battery storage, and automated control technology.
To provide a sustainable locally owned solution, solar capacity is backed up with a battery system, to ensure the community is using a clean power source. Even on cloudy winter days.
OPG is also very interested in the future of nuclear power. And that makes sense, because OPG is Canada's leader when it comes to nuclear - and we believe there is no path to net zero without it.
SMRs are the future of nuclear. Smaller and easier to operate than traditional nuclear plants, they are critical to meeting demand for emission free power. The smaller scale of an SMR also makes it ideal for meeting electricity needs of smaller communities or larger industrial clients.
I think of myself as a climate challenger because of the decisions I make as a consumer, I use my dollars to advocate for newer cleaner technologies that reduce my home's energy use and lower emissions. Things like upgraded windows, a smart thermostat and an on demand water heater. I currently drive a hybrid vehicle, but once my kids are out of the house and I no longer have to schlep around two goalie bags, I plan to switch to a fully electric vehicle.
[00:16:12] Andrea Bain: All right Ron, big question for you. Tell us why you are pro nuclear.
[00:16:17] Ron Dizy: I'm probably pro-nuclear because my uncle used to be a nuclear engineer for CANDO and built reactors in Korea and Romania. So I grew up with it.
I think objectively though, it would be hard not to see nuclear as one of the, if not the safest form of energy production. You know, coal mining, just mining coal, not burning. Mining coal kills something like 10,000 or 12,000 people a year. If you try to add up all the people that have ever died from nuclear accidents, it'd be no more than a few hundred, over all time.
And obviously a big part of that is because of the precautions we take, right? We are very, very careful. There's a lot of regulation to build a nuclear power plant, and that does tend to drive timelines and costs up, you know, probably a good idea. You know, the problems of having a nuclear fail.
The challenge with this is, and I'm not sure I know how to fix it. I think the nuclear industry has not necessarily been the best at its own PR, cause a lot of people are still afraid of nuclear. I had the chance to travel a lot when I ran the advanced energy center. And it was interesting that relatively few countries that didn't have nuclear, we're not interested in adding it.
And I couldn't necessarily understand why, you know, it made total sense to me as baseload for many of these places. But they don't. And I would just say this we're, we're fortunate to have the nuclear fleet that we do in Ontario. We're fortunate to have generally very solid, you know, non-partisan public and political support for it.
And I think, again, I think we'll find that others are envious of the position we have. As perhaps Europe is of France right now with its nuclear fleet. You know, the cautionary tale of Germany, which, you know, in my view, quite a knee-jerk reaction to the Fukushima incident and essentially decided to close down their nuclear power plants.
But then the result of that has been an extremely significant increase in cost of power to their citizens and increased emissions at the same time, because effectively the nuclear fleet was replaced with coal. And so you gotta be really careful when you decide not to do something. And, uh, I know that that won't happen to us in Ontario.
We're lucky for what we have and we should count our blessings.
[0018:39] Andrea Bain: Yeah, absolutely. But you bring up a point that I want to ask you a little bit more. The marketing for nuclear. A lot of people don't trust it. What can be done to change people's minds about the way they think and feel about nuclear?
I know it's a big question.
[00:19:01] Ron Dizy: It's a great question. I think we really have to, you know, focus on getting some of the mysteriousness out of it. I mean, the only thing I can think of, you know, radiation is scary, right? And it's this invisible thing that can kill you. But I kind of feel like smog is the same thing, you know?
And, we've somehow managed to convince people that smog is a bad thing. It hurts you, you know, I think what we need to do in nuclear is emphasize, you know, the, sort of the facts that I've provided this, it forget about being dangerous. This is the safest form of large scale power generation. And, you know, bring the facts out and demonstrate what the alternatives are.
I think the nuclear industry has started to carry a message around, um, you know, we are part of the solution. We're part of the clean tech solution. I think that's the right, the right thing for the nuclear industry to do. It likely is also true that the industry has to find ways to identify where it it's even better, you know, where will SMRs fit better. Where, you know, where does baseload fit better? And then I think the nuclear industry has to find ways to ensure that wherever it has, you know, adoption, that, that adoption continues, which I do think they're, they're doing.
[00:20:23] Andrea Bain: Okay. But when it comes to storage, there are opportunities to repurpose existing infrastructure. So can you explain why that is considered the place to start?
[00:20:30] Ron Dizy: Yeah. So, you know, you could, infrastructure can have lots of pieces. Qgain, hydro store will end up, you know, potentially using abandoned mine shafts, right?
Anything that's got it's deep and you can pour water in and it doesn't leak out that that could be an application. The other thing I think we're seeing is that some of these large scale infrastructure plays can reuse if not existing infrastructure, at least existing capabilities that have been developed for different purpose.
So another example, if we're digging big holes well, who digs big holes? Well, actually the fossil fuel industry has been doing that for a long time with drilling technology. And so to the extent we can repurpose those technologies to bring clean energy solutions or storage solutions to bear. I mean, that's a great thing that actually provides transition right, for old economy to new economy.
So these are very, these are very positive developments, I think where we can reuse how things work right now.
[00:21:32] Andrea Bain: So, Ron, I'm curious, where are you placing your bets now? What's peaking your interest.
[00:21:36] Ron Dizy: It's a great question, Andrea. I think the best opportunities are in the companies that are finding ways to improve the built environment. So, if you think about it, you know, new technologies, cars, new building technologies, if you're building a new house. These are all great. They're important. They are part of the solution. But if we don't find ways to address the built environment, the houses that are 50, 75, a hundred years old, we're going to have a hard time, really making a big enough dent, in our energy budgets, in our, you know, in our emissions.
I think there's this great opportunity and we're starting to see a bunch of companies that are figuring out ways to, you know, retrofit existing buildings. Whether it's with smarter building management systems, companies like Brainbox AI and Shift Energy.
Whether it's smarter thermostats, even for your house: Ecobee. Whether it's companies finding ways to reinsulate older buildings. Whether it's finding ways to improve how replacement windows might work. These are all really important ideas and technologies that will, I think, deliver outsized returns for the people that can figure out how to bring them to market, cost-effectively and with great value propositions for customers.
[00:23:03] Andrea Bain: What do you see as some of the more promising uses of small modular reactors?
[00:23:08] Ron Dizy: Yeah, I think that it's interesting. It's right in the name. Right? Small and modular.
So, we've got different companies building these in different sizes, you know, as small as five or 10 megawatts, and up to 60 or a hundred megawatts. That to me says that these are great solutions for communities that are probably not otherwise grid connected. Or for significant large industrial applications that need power for some period of time, need it quickly. It's too difficult to get transmission connections.
I still think there's probably a role for SMRs in the grid. You know, it's quite conceivable that we need 50 megawatts of power at a particular location and adding something like that to the grid might make sense. I think we'll see them then, and, you know, heavy industry, remote communities, mining communities, et cetera.
And I think this just represents yet another bet on what we can do in the future, this idea of large scale, I'm going to use the term portable, you know, relatively portable power. We've never really had that before. So I also think that we're going to think of more applications as these things become available over the next, you know, 7, 8, 9 years.
We do have to resolve some of the regulatory issues, of course. Where do I place them? What does containment look like? How do I operate them safely? But you know, our nuclear industry is well versed in how to, and how to do that. So I'm optimistic that these will have a role somewhere in this clean energy transition.
[00:24:43] Andrea Bain: Yeah, absolutely. All right. So you've traveled a lot all over the world. What do you hear from people about Ontario's grid when you travel? What do they say?
[00:24:52] Ron Dizy: Yeah. They mostly, you know, part of what our story for Mars was helping educate people about, you know, Canada in general and Ontario in particular and what we'd done in the grid. And, and I think in general, I would say there was a surprise people, you know, didn't know, they often didn't know where Ontario was, but then when they did, you know, they didn't necessarily appreciate how far we had come in the modernization of our electricity system. Part of it was, you know, the energy mix that we do have in the very low GHG intensity of the Ontario grid. But it extended past that, it extended to, you know, our adoption of smart meters, you know, now almost 15 years ago. You know, really a world leadership position. Our adoption of different forms of energy storage we've been through, even in this podcast today, you know, the number of Canadian companies with really innovative storage technologies that are making a significant impact in the globe.
People are surprised that, you know, Canada, Ontario, small and the global context, are delivering that kind of value.
[00:26:05] Andrea Bain: Absolutely. So why do you think Ontario is a great place to be a climate challenger?
[00:26:12] Ron Dizy: It's interesting. I think we benefited from the four years of the Trump administration for one thing. It's Ontario generally, and I'm going to say Toronto, I think in specific, is generally viewed to be a pretty great place to live.
You know, Toronto is high on many livability lists and it is viewed as a great city; and Canada is a great country to be in. When we compare against the alternatives and people are choosing, you know, where to live, you know, we win a lot of the time.
We saw that at Mars, we saw, you know, really a reverse brain drain. If countries like the US are going to make or are going to appear to be unfriendly, you know, to really smart people from around the world who are looking for a place to be innovators. And we were happy to be that place. So I think we've got, we've had a reverse brain drain.
There's actually, capital's become a lot more mobile, so it didn't matter whether the capital was here or somewhere else. VCs have discovered Canada and are plowing dollars into it. And it's a great place to build from right. We're beside the world's biggest market, easy to travel to, easy culturally. So Ontario, Canada, Toronto: great places to build companies from.
[00:27:31] Andrea Bain: Yeah. And we got a lot of talent here. All right. In the very beginning of this conversation, you kind of gave us the roadmap of how you came to this, to this career path that you're on now. So what is it, what does it mean to you to be a climate challenger?
[00:27:45] Ron Dizy: So to me, that means figuring out this adoption question. There's lots of inventors. There's fewer people who know how to drive adoption at scale. I think that usually means finding seams in the way things already work and finding ways to bring new technologies, new solutions.
Adoption happens really fast, if you can find a way to bring things to people that are just demonstrably, better, cheaper, faster, et cetera. Right. When we think about things like mobile phone adoption, it is actually really fast, it was never mandated. Nobody told you how to do it. You just wanted to do it. And you know, people have been upgrading things like that all the time.
That at some level that's a lot of change, but it's happened, you know, in many age groups, across different cultures. If you think about it, that has been a textbook case in how to drive adoption really quickly. We have to find ways to do the same things in energy. And so that means, I think bringing solutions to the built environment that are just better, cheaper, faster than what people have. I think it means, you know, changing the way we think about transportation. I think it means changing the way we think about even how we eat.
But it's got to feel better for people. It can't, I don't think it will be successful if it comes from a place of taking away things or not doing what people want to do. We have to find ways to do it, so they’re happier, better off ,and are creating a greener climate for our children and their children.
[00:29:23] Andrea Bain: And that is the key and the perfect way to end this conversation, Ron, I can't thank you enough. Thank you so much for your time. Great conversation. Lots to think about. Once again, I want to thank you so much for your time, Ron.
[00:29:37] Ron Dizy: Thank you, Andrea.
[00:29:39] Andrea Bain: I want to thank my guest, Ron Dizy for a fascinating conversation about the technologies of the future. I hope that like me, this discussion has left you feeling optimistic about the challenges ahead. We know that fighting climate change is not going to be easy, but with the innovators at OPG and throughout Ontario who are working every day to bring new carbon reducing solutions online, we can be confident that we will continue to lead the way to a better cleaner tomorrow.
Thanks for joining us today. And we'll see you next time.[00:30:11]
The information, statements, comments, views and opinions expressed during this podcast are solely those of the program participants and do not necessarily represent those of Ontario Power Generation Inc. or its affiliates.
The Climate Challengers is a Podium Podcast Production [https://www.podiumpodcastco.com/]