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Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.
Welcome to episode 174 of the Energy Talks podcast. I'm energy and climate journalist, Markham Hislop. Today, I'm gonna be talking to Rod Matthews. He's the cofounder and CEO of Brevion Energy, a renewable energy technology company based in California and an experienced microgrid solution provider. So we're gonna talk microgrids.
Markham:And welcome to the, to the show, Rod.
Rod:Thank you very much. I'm I'm very happy to be here today.
Markham:Well, we're happy to have you, and and I'm very sorry to hear that, Southern California, where you're, where you live and you're talking to us from, is, gloomy and overcast. What's going on in Southern California? That's not the norm. Right?
Rod:No. Well, traditionally, here in, San Diego where I am, we have what's called May gray or June gloom, where usually around the halfway point of May to about the halfway point of June, We don't get a lot of sunshine, but we do get some, with this year. I mean, the sun has just been absent. I think it's on a break. It's taking a vacation right now.
Markham:Well, you know, I worked in Bakersfield for 3 years, and, the the winters there were a revelation because I and I assume it you know, there's so much agriculture around and it's irrigated that they would create fog, and it was the most it's thickest, most impenetrable. London had nothing on this fog, and, you know, people would get pretty foggy. Yeah. And people would drive to work and in the fog, and they could hardly see 10 feet in front of maybe not couldn't even see 10 feet in front of their cars, and there would be, you know, smash ups and and accidents, and and that scared the hell out of me. Anyway, be that as it may, we're happy to have you.
Markham:Now we are going to talk about microgrids and
Rod:My favorite subject?
Markham:Indeed. Because you are an expert in the planning and building of microgrids, and, previously, all my interviews have been with analysts. But I wanted to we're I think we're at the point now. My sense is that we're at the point in the industry now where microgrids are becoming a viable option for, industries, commercial businesses, communities, cities, towns, neighborhoods. I mean, it's and we're all worried about energy security and and blackouts, or we're we're worried about cost.
Markham:How are we gonna how are we going to scale up clean clean electricity as we electrify everything? And I'll give you just a little a little background. This is context of where I come from. So I live on Vancouver Island in a little town called, well, a little city called Parksville, 10,000 people. And the regional government is looking at, creating a local clean energy strategy, because the idea is if as we electrify everything, heat pumps, electric cars, and so on, we know we're gonna need 2 to 3 times the the electricity we generate today.
Markham:And the the British Columbia, system is great as I said. It's all hydro. It's 9 and a half cent I think 9 and a half cents a kilowatt hour. I mean, that's crazy cheap. Right?
Rod:That is.
Markham:And there's lots of it. It's reliable. It it's really a great system, but we don't know how to scale it up 2 or 3 times. At least I don't think we do. And so the city this area is looking and saying, well, you know, what if we add some solar and wind and geothermal or whatever and maybe maybe microgrids are an option and, you know, that can supplement the existing grid from BC Hydro.
Markham:And I'm thinking, well, if Parksville, which is not the most progressive place on the planet, is thinking about that, what's it like in California? What's it like in other places? And so is our situation here, a common one, Rod, in your experience?
Rod:Absolutely. We have a lot of, locations really thinking about this. Here in California, you know, cost really drives that. Here in San Diego, we are we have our, investor owned utility is San Diego Gas and Electric, and they have the highest utility rates in the entire country. Oh.
Rod:So cost is really kind of driving, the the onus to, you know, move in a direction of microgrids. In some areas like, you know, where you are or in Texas, perhaps they are looking at, resiliency really driving the microgrid initiatives, because they have issues with, grid stability. They lose their connection to the grid, a little bit more frequently than they care to. And, you know, microgrids is certainly a way to mitigate that as well. So, you know, with the micro grids, we look to reduce costs and provide that resiliency.
Rod:And for us, we wanna have generate power more responsibly. So it doesn't emit as many greenhouse gas emission, you know, have those greenhouse gas emissions.
Markham:What, if you don't mind me asking, what do you pay for a kilowatt hour of electricity down in San Diego?
Rod:See, the funny thing you say you pay a 9 and a half cent per kilowatt. For us, it depends on what time you use that, kilowatt determines what you pay for it. So we have really 3 different rates. We have what's called, off peak, which is between 7 AM and 359. You're probably paying around 20 cent or so per kilowatt hour.
Rod:You have a super off peak, which is, you know, that 10 o'clock AM till, you know, 6:59 AM, you know, where you're paying around, which you're paying 9 and a half 10¢ per kilowatt. But then you have what's called peak. That's 4 o'clock PM to 9 o'clock PM when everybody's home, everybody's washing clothes and cooking and, you know, have all the electronics on watching television. You're paying in up to 54, 55¢ per kilowatt hour.
Markham:Oh, wow. That's
Rod:wild. And really, really for us, when we talk about particularly to our c and I or commercial and industrial customers, you know, which is the market that we kinda, focus on, we talk about that time period in particular. If you're doing business, during those times and if you're a retail location, if you're a restaurant, if you're a manufacturing that has, you know, 2 to 3 shifts, you're doing business during that time and you are paying, you know, 5 to, 6 times more for your power during that time than you are in the evenings. So we can do things to mitigate that, by shifting your load. And instead of you drawing your load from the utility.
Rod:Now you can draw your load from battery systems or hydrogen fuel cells that are centrally deployed, to keep you from a, drawing drawing those power at that per kilowatt charge. But b, there is a component of the bill, your electricity bill called a demand charge. So every 15 minutes they call, they, they measure what's called an interval. And so they measure how much energy is provided for you to use. Right?
Rod:So at your highest 15 minute interval of energy provided for you to use that as a charge. So you're charged for the energy made available to you and you're charged for the consumption of that energy. So if we can shift it to where your peak load is drawn from your own resources, then it makes it a lot easier, for you when it comes to pay that bill, because you're not paying that high demand charge and you're not paying, for consuming the power during those peak times, which can significantly, reduce your your bill.
Markham:So is the per kilometer rate in, is there on top of that transmission and distribution charges as well, or other kinds of charges?
Rod:That is that is correct. That gets wrapped into that demand charge.
Markham:Oh, see. That's crazy because the 9 and a half cents, that I gave you, is our all in cost.
Rod:Oh, no. Not for us.
Markham:Wow. So your your actual charge is let's say you got 55¢ per kilowatt hour, And then what would be the demand charge on top of that?
Rod:It would depend on, your highest 15 minutes of demand made available to you. So in that case
Markham:Give me a number just, as an example.
Rod:It could be about a third of your bill.
Markham:So it would be 55, cents plus another third of a 55¢ on Well, you would
Rod:well, that's a consumption charge. That's 55¢ per kilowatt hour during that peak time. Then you get another charge of whatever interval. That interval could be you know, if you turned on all of your stuff at midnight one day, you had you you know, you you were consuming 10 kilowatts of power, and that that was your highest digit, usage at that time for demand. That would be a 15 minute interval at midnight.
Rod:But so their demand charge is is is somewhat separate from a time of day charge. You're getting charged a demand charge for whatever time that is is being provided for you for having that much power made available for you. It's really the consumption charge that is the per kilowatt.
Markham:Okay. I got it. So demand charge, consumption charge, and, all I all I see is dollar signs going off in my head. That's, you know, compared to what we we,
Rod:we see here. We see here in California, sometimes your energy charge is gonna be, like, 25% of people's, net income, which is amazing.
Markham:Wow. Wow. Okay. Well, let's talk about businesses because, next door to us is the Texas of, Canada, Alberta, and there was a, their independent system operator, and this is really Mhmm. There's only 2 of them in the country, and they've got one of them.
Markham:Did a report 2, 3 years ago, and, you know, they they they know distributed energy resources are coming. Right? You know, the stuff we're talking about is on its way, and so they're trying to get out ahead and they're surveying their, you know, stakeholders, in the electricity system. And one of the biggest concern that came back was that commercial and industrial, customers that are big enough will self generate. They'll have their own micro grids, and they'll they'll have their own solar panels and their own wind turbines or whatever it is that they need that they'll do it themselves.
Markham:And and and it makes perfect sense because if the you know, with solar particularly in California, with solar getting so cheap and energy, storage coming down so much, it's on that learning curve that solar and solar and wind were on, My understanding now is that, you know, solar paired with batteries is so much cheaper than, you know, buying it from the utility. You can stand on its own. So or is that who's driving this, this your c and I customers as you call
Rod:Absolutely. That's really again, they're probably only about 20% of the entire market, but they probably use about 80% of the of the energy.
Markham:Right.
Rod:Right? So they're driving the market. Absolutely. You know, that's really that's why we our core focus is really that, SMB market or small and medium sized businesses that below 1 kilowatt market, we really see them really driving that market, because we have a lot of small and medium sized businesses. In California and in San Diego in particular, we're like the home of the small and medium sized business, so that below 1 kilowatt excuse me, that 1 megawatt customer.
Rod:You know, we have, you know, a few larger companies, large institutions or, large college campuses and things of that nature. But, primarily, we see, you know, business parks or, smaller office buildings, are prevalent here. And that's the market that we're trying to serve because we feel they're underserved, number 1, and there is so much opportunity in that particular market space.
Markham:Okay. Walk me through how you start a project. I mean, do you do you look at an area and say, hey. This is a right for a microgrid, and then go around and recruit, businesses to become part of that microgrid, and then you and then you build it? Or is it they come to you?
Markham:How how does this work?
Rod:A little bit of both. It's really an education campaign, number 1. So we target customers that fit a kind of a profile. Again, that 150 kilowatt, to about a megawatt. So we know what kind of size they are, like a warehouse or a business complex.
Rod:We we kind of target them, because you you can drive around any business park or, you know, business area in in the in the area. And, you know, you probably see less than 5% of them have any sort of solar or anything deployed. So there are great opportunities as far as that goes. So we reach out to them. We have our salespeople, you know, reach out to them, you know, set an appointment.
Rod:And from there, once we can, get a copy of their bills, or we have an application that we use that we can really pull their, usage information over the past year or 2 years that allows us to kinda model, what their usage is. And then from there, we can, we have systems that we can put in their location and really get what their shading is, and we can design a system for them. And then we come back and tell them because most of the things that we are done, they're financed through a a vehicle called a power purchase agreement.
Markham:Yeah. Sure.
Rod:So, they don't have to, you know, put out any capital expenditures. We take on that responsibility. We build the system locally. We start generating power, and they just start saving money day 1. Once they enter the contract, the system gets commissioned.
Rod:Now they're they're getting resilient power. Most of the time when there's an outage in the area, they won't even know about it because they're generating their own power. And then they're saving about a third all without having to, you know, put out any money. They just commit to purchasing power from us for the next 20 to 25 years.
Markham:What so, I would've, think that, industrial parks, you know, big parks, commercial parks with with, as you say, warehouses and, you know, there's a number of ports
Rod:in Mhmm.
Markham:On on the in California. Is that is is that the low hanging fruit in your market?
Rod:Absolutely. Again, we pay here in Southern Cali in San Diego with our utility. We have the highest utility rates in the country. So any anything we can do to offer customers a reduction in that, that cost. And on top of that, giving them resilient services, giving them a better service for a lower cost, it's it's really low hanging fruit.
Rod:It's for us, it's really an education campaign because most of the time when you, talk with a business owner or a building owner and you say microgrid, they have a there's like a glazed look that comes over their eyes. Eyes.
Markham:Yeah.
Rod:Sure. Sure.
Markham:I I
Rod:can imagine. We have to do it. Once we educate them on the benefits of microgrids, it's really a no brainer at that point.
Markham:So let's say that you've agreed with the customer you're gonna put in a microgrid. Walk us through what a microgrid looks like there, and what are the the various components, how they fit together, how the whole thing works.
Rod:I mean, well, there's a saying in this industry. You know, you've seen 1 microgrid, you've seen 1 microgrid because they're all different based on, you know, a lot of different requirements based on your load requirements, based on your mission criticality. You know, you may be someone that, you know, you can't afford to be down. If you're a hospital, you know, you can't afford to be down for, you know, 5 minutes. But if you are a bakery, you know, maybe you can take 5 minutes of downtime.
Rod:So you're missing criticality. Criticality really kinda determines that as well. So we, again, we use a tool that can analyze your consumption over the past year or 2 years to see what your trends are in the wintertime, in the summertime, to see how much power that you actually require at your peak. Right. And then we design then we design the system to meet your peak loads, and, based on what your mission criticality needs are, design a system that can sustain your load, in the event of an outage or a loss of power during a a particular time.
Markham:So do you install your own solar panels? Do you install your own battery storage? Do you install your own wires? Do you install your own meters? Do all of that equipment is is that you would find in the grid.
Markham:Do you install that in addition to the grid? Do you do you or do you, piggyback on the grid? How does that work?
Rod:No. So we designed the the microgrid itself is essentially you're designing your own grid. Right? That is hyperlocal, with these all of these distributed energy resources. We use panels.
Rod:We don't make the panels, but we have a partnership, with a company called Energy America that has some of the most efficient panels, on the market. We have a a partner for our battery. We use, lithium phosphate batteries instead of Oh, okay. A lot of, you know, batteries that you see out there now are lithium ion batteries, which have somewhat of a fire hazard associated with them. The lithium phosphate batteries operate at room temperature, so there's no fire hazard associated with them.
Rod:And they also can cycle a lot more times in the lithium ion batteries. So we have a 15 year warranty, through our batteries with through our partnership with a company called Blue Planet Energy. Also, we will work with hydrogen fuel cells, in the event that they require more base load power or we have, limited space to provide the the power sources from. We use, work with a company called Bloom Energy to provide hydrogen fuel cells to supplement that. There is, at this point, a natural gas component to that, but is there's about a 55 50 to 55% reduction in greenhouse gas emissions by deploying services like that, and that can provide base load power.
Markham:I'm very curious about the hydrogen component of this because I've I've had proponents and opponents of, of hydrogen on. In fact, I just interviewed, Michael Lieberk, the guy who started Bloomberg and and New Energy Finance, to talk and he's a a very vocal opponent of widespread use of of hydrogen. And the the I guess the concession he'll make, is that you hydrogen produced locally for local consumption makes sense. So if you've got a microgrid and you've got an electrolyzer or a little, I guess, a steam methane reformer or however it is that you're gonna make them the, the hydrogen, and then you're using it right there with a with a a fuel cell to produce electricity, he would argue, I guess, that that makes sense. And but if, you know, if you're gonna stick it in a pipeline and ship it across and then stick it on a boat and and ship it to Japan, forget it.
Markham:That that's the the physics and the economics aren't gonna work. So I'm very interested in this hyperlocal production and use of of, fuel cells. So can what can you tell us about that and particularly the economics, around it?
Rod:Well, as it stands right now, again, we tap into the, there is a natural gas component to the ones that we deploy, or, we can deploy with captured methane as well, which is our preferred method of doing that. So more along the lines of having green hydrogen. So with captured methane, you know, we could, on for for wastewater treatment or, you know, animal packing plants or things like that. We capture the methane, and we use that to provide the fuel for the hydrogen fuel cell for that process.
Markham:So that's kind of a biogas is really what it is.
Rod:Exactly. Correct. Correct. Or we can use, again, you know, just regular natural gas, compressed natural gas. That gives you the resiliency, number 1, because the whole compressed natural gas pipeline system is all underground.
Rod:So you never worried about you know, in times where you see loss of electricity, you know, it'd be very rarely see loss of gas to any residents. So that goes with the resiliency piece. But we are looking at ways, particularly here in in California, they're looking to almost ban natural gas in general.
Markham:Yeah. I've I've I've heard that.
Rod:In about 10 years, they're gonna be banning natural gas. So we are, you know, really looking at those, ways of producing biogas to run these. And that that's that's our solution for that. We don't believe in, you know, transporting the hydrogen from place to place, but, again, hyperlocal, on-site generation of it.
Markham:Is that technology really falling in in price? We hear about the electrolyzers now being on the learning curve. And, what do you, I mean, you're the guy who would would buy them and deploy them, so you'd be, you know, intimately familiar with this. Is is is that where we're
Rod:going? Yes. You know, it's it's really moving from, know, bleeding edge technology to leading edge technology to, I think, in the next, you know, 18 to 36 months is gonna be widely accepted technology. Right now, you can still get it. It's still a little bit on the pricey side, but even in comparison to 2 years ago, you know, you're paying probably about a third less of what you would pay for a system like that, you know, even a couple years
Markham:ago. That that's that's that's just crazy. So the one thing I'm curious about is is when you were talking to microgrid, are we talking about a the a system for one, you know, like a business, or an industrial plant, or are we talking about a grid that incorporates numerous or multiple, businesses within a particular area, or maybe it's, you know, houses in a like, in a residential development, that kind of thing. What
Rod:So the answer would be yes to all of the above. It could be, hyperlocal. A one individual business could say, hey. Listen. I wanna generate my own power.
Rod:I have about a 1 megawatt, you know, need, come install me a system for that. Or it could be a complete business park with 8 or 9 or 10 different buildings in that business park, but they, you know, have a central fee, you know, for all of the buildings. There is a substation that's dedicated to them or something. We can build our services to support all of those buildings. Or, you know, a big thing.
Rod:Now there are moved to community solar projects, but we like to refer to them as community micro grid projects where you can provide service to an entire community, particularly these rural locations here in California. We are, you know, close to a lot of the tribal locations. Most of the tribal locations are in the mountains, and they are subject to what's called public safety power shutoffs, where in the past, we've had you know, because of the locations, we have high winds that generate and, sometimes can knock down power lines, which can start fires, which can spread damage, you know, for miles and miles and miles. So a lot of the investor on utilities have been sued because of fires that have started. So now anytime that the wind gets above, like, 20 miles per hour in an area, they shut the power off to make sure that if a line happens to fall, it's not electricity on the line, so it wouldn't start a fire.
Rod:But that really affects these communities that are out in the in the mountains and in the canyons that have these high winds that they live in these areas that sometimes they shut off power for, like, 3 to 4 days.
Markham:Okay. Well, I yeah. You can see their you can see their motivation. But that's, I mean, we've heard about the blackouts and the brownouts in California. So even in a place like San Diego, which is a major major city, you would think that then they have would have the same concerns because, I mean, you could have a fire outside, you know, someplace in a rural area, but, you know, if it brings the grid down, then you're just as affected as as a small community up in the mountains, a tribal community, that, you know, that sort of thing.
Rod:That is absolutely true. That's why we really believe in distributed production of it of electricity, to to get rid of that as an as an obstacle.
Markham:Now you've been in the business for a while, Rod. What's the are you finding that people are now much more accepting of the idea of microgrids, local solar, you know, storage, back than than they were a year ago, 5 years ago?
Rod:Absolutely. Number 1, you know, everybody knows now. You know? Solar is pretty widely accepted, as a generation asset. You know, everybody knows about solar.
Rod:Most people they know about, including batteries, but they don't really understand the term microgrid. So it's just a little bit education on that on that front. But once people get to understand what it is, it just makes sense. Right? It's it's not some foreign concept or, you know, you have to be sir Isaac Newton to understand it as a concept.
Rod:You know, you generate power and the x any excess power you don't generate, you you don't use at the time, you store in a battery. Everybody understands batteries. Everybody has a cell phone that they're that don't walk around connected to, so they understand how batteries keep things powered up in the event that, you don't have direct power. Like, when you're connected to your charger on your phone and you remove the charger, then you have your your your phone doesn't shut off. Same concept.
Rod:I know it's easy to just to give an analogy like that. Hey. Just like a cell phone. You know? When it's plugged to the charger, it's on.
Rod:And then when you when you wanna move around and take it with you, it the your phone stays on. Never goes off. Same kind of concept to get the resiliency.
Markham:This do your micro grids play nice with the, with the investor owned utility grids?
Rod:If they play nice with us. Yeah. Yeah. But
Markham:Of course.
Rod:Really, we we have we really have no if we're gonna be on their grid, if it's a microgrid. Some semantically, we'll go over this. A microgrid means that you are attached to the grid. A mini grid means that you are not attached to the grid.
Markham:Oh, okay. I didn't know that.
Rod:You are a microgrid. There are things that you have to conform to, and, you know, you have to go through interconnect requests. You have to conform to a certain standard, certain frequencies. You have what's called a micro grid controller to help keep all of that stuff in place. So, you have to play nice if you wanna be connected to the grid.
Rod:Now if you're not connected to the grid, you really couldn't care less. So at that point, your grid controller, goes from grid following to to what's called grid forming to where it it acts, and your equipment thinks that it is the actual grid itself.
Markham:That is that is very cool. So do are utilities beginning to you know, especially in California where they're, you know, the investor owned utilities, the big ones have just had it's been a tough time the last 5, 10 years, what was the fires and blackouts and all of that. Are they now beginning to look at at folks like you and and, you know, and microgrids and go, hey. Maybe it might actually be to our advantage to work with these guys. 100%.
Markham:100%. They are. Finally.
Rod:Yeah. You know, because really, the actual cost and expenses are really in the energy generation. Right? They've already laid the lines, you know, for so as far as transmission and distribution, I mean, they're not paying additional cost for that because they already had the lines in the ground. So their costs are really in is in generating the electricity.
Rod:So if they can just outsource that, they can save a ton. They don't they're not liable, because, really, it's all about a liability in in a lot of cases for them. So So if they can remove that liability and still provide that service, then that's great. And there's also a move here in California in particular, to go with what's called, CCAs or community choice aggregators or community choice energy, where the actual municipalities are now joining forces and into joint partnerships where they are the actual energy providers, for these areas. Right now here in in San Diego, we have, 2 primary ones.
Rod:Now one that is generally, you know, in in the central area of San Diego and then the one that's in the north area of San Diego where where I live. And now they work together to set those rates and those policies and how much renewable they wanna have. And and as a consumer, you now have to opt out being with the CCA instead of, you know, joining it. So you're already a part of that, already.
Markham:Yeah. I I listened to a podcast, a couple weeks ago with, Jigger Shaw, Department of Energy, well known well known energy expert, and they were talking about virtual power plants, which is another way of, you know, describing these CCAs. And, Jiggersha's opinion was that this, you know, virtual power plants, are primed to be a major player in the modernization of the US power
Rod:grid. Absolutely.
Markham:Yeah. Give me your take on that.
Rod:Well, one with the recent passing of the inflation reduction act here in America, we're gonna have a total reshaping of our grid over the next 15 years in particular. You see a lot of organizations, now having mandates to particularly by 2030 or 2035 or 2 common dates. They wanna be either 100% or 75% all renewable. You know, so they wanna get rid of fossil fuels. By 2035 here in California, you can't even they won't even, be allowed to sell a car that, runs fossil fuel.
Rod:So all new cars from that point on will be electric. So we are seeing a total shift in the grid fueled by about, you know, a few $1,000,000,000 poured in by our government to make this happen in tax incentives and, grant monies that are available. So that's really the fuel that's, feeding this, is that the dedication from our our federal government to make it happen. Prior to that, it was kind of difficult to get some of these projects financed. But now because of not only the additional funding, but the fact that they make, all of these tax credits transferable now, has really incentivized it as well.
Markham:Let's talk battery storage for a while. I've I've interviewed a number of, you know, startups who are working on zinc ion would be 1. Mhmm.
Rod:Yep. I'm looking at that.
Markham:So, read of of flow batteries, redox flow flow batteries for long long term storage. We're looking at you know, there's some, as you know, the some exotic stuff out there, like gravity storage and
Rod:Yeah. Gel batteries and sound state.
Markham:But my take because batteries are so ubiquitous in the clean energy system that, you know, we we talk about it in terms of transportation. We talk about it in all sorts of applications. And so I spend a a fair amount of time interviewing people about battery technologies. And once you get your head around the fact that this is such an innovative space right now. There's so much coming down the pike that
Rod:Yes.
Markham:And it and it will and there will be very, very specialized forms of storage whether, you know, like, you know, one fellow was telling one CEO was telling me, well, look, I mean, you know, in your house, you could have literally a a battery, the size of a freezer sitting next to your freezer, and you could be on a a local microgrid or community solar kind of an arrangement, or you could have panels on your house depending on where you are. All of that, you can just you can configure. It can be configured to your local circumstances. Yes.
Rod:Absolutely.
Markham:And so tell me about the role that that where storage plays now in your microgrids, and where you think it's gonna play in the next, like, 2 to 5 years, 10 years?
Rod:I mean, just think of the role storage plays now in our lifetime. Like, I just gave you the example of the cell phone. You know, everything runs off. You know, you have a battery in your car right now to run all of your electronics. So batteries in particular, you know, we are very familiar with their importance, and they're really gonna be the primary unlock, for these micro grids.
Rod:Number Okay. Number So
Markham:so they really they unlock it. They make everything
Rod:Oh, absolutely.
Markham:Cost effect. Okay.
Rod:Because, you know, like I said, most people are every you know, everybody's familiar with solar, but, you know, we are a firm believer that people need power at night.
Markham:So, yes. I'll go along with that.
Rod:So batteries are what's going to really facilitate that. That's gonna be the most cost effective. Now there are other technologies. Of course, you know, you can go with a diesel generator, can provide power, you know, when the solar is not generating. But we think the most cost effective and the most responsible way to do this is gonna be through batteries.
Rod:You're seeing the price come down with some of these technologies. Now we're we're we're closely following these technologies as well. We've we've been looking into company made it. Matter of fact, they're a Canadian based company who's really into the zinc, the zinc batteries. Zinc 8 is a, is a company, that we've really been following pretty closely.
Rod:They're doing some some projects right now with the state of New York. So we're we're following them very closely. Like you said, the solid state batteries, which we feel are gonna be more towards the automotive sector Sure. Than us. Then they got gel batteries, flow batteries.
Rod:There's gonna be an issue. Although right now, we feel that we're using the most efficient, form of lithium battery technology using a lithium ferrous phosphate instead of the instead of the lithium ion, but there's gonna be an issue with, discarding those at some point. Right? Which we haven't really given a whole lot of thought about, but, trust me, in the next few years, there's gonna be some issues around that. So we're we're following these technologies pretty closely because, again, batteries, we feel, is the key unlock for these technologies until we get, you know, generation sources like cold fusion or something like that.
Rod:But as of right now, batteries are gonna be the thing.
Markham:Yeah. Gotcha. I'll I'll just note in passing because I don't wanna get sidetracked on the recycling thing. But, you know, there's a company in Toronto called Lifecycle. It just raised almost $700,000,000 in in the US and it's a or b series offering, And they claim that their system can recycle 95% of a lithium ion battery, and then you can, you know, reuse the all of that material.
Markham:So I
Rod:That's great.
Markham:Yeah. My my take is we're getting there. It's it's maybe early days on the recycling side, but Mhmm. I think it looks promising, which, you know, it's gotta be good news for for companies. Absolutely.
Rod:I mean, again, our whole issue is about, you know, saving the planet. So, you know, we've just chosen the the route of, you know, energy to do that, but, you know, if recycling and, you know, there are so many other things that that that, play a part in that. So anything that we could support in that effort, I'm certainly all behind.
Markham:Yeah. I wanna ask you that question. Maybe we'll and we use this to wrap up the interview. I mean, this has been fascinating, Rod. But I'm one of the things that appeals to me or occurs to me in the in as I'm looking at the you know, these various clean energy technologies, is there's never one technology.
Markham:It's a suite of technology, a bundle of technologies, and there's there's all of these really crazy enabling technologies like artificial intelligence and and without this, this is like the, you know, the the the the the the the the the the the the
Rod:the the the the the the the the the the the the
Markham:the the the the the the the the the the the the the the the the the the the the the the the the the the And and without this, this is like the, you know, the this is the the non sexy stuff that just goes and makes everything else all work together at a low price and is reliable. And and I I just I'm curious about your views of, your opinion about that.
Rod:I mean, all of these, you know, this really is a technology solution that we provide with the microgrid. So technology certainly makes all of these things possible. You know, AI is gonna play a big part of that to, you know, make the decisions, the optimal decisions of when to switch, what generating capacity or generating asset, you know, when to, you know, you know, make adjustments to the to the load, when to make adjustments to, you know, your grid frequencies, it can think a lot faster than we can in certain instances. So AI is gonna take a big part of that. And, also, you know, advanced computing systems are gonna take a, play a big role in that.
Rod:Communications, because a lot of these things are gonna be remote, and they're gonna be managed remotely. So we gotta find a secure way to do that. So, you know, eliminate the at least significantly reduce the chances of getting hacked or something like that. So they gotta be done in a smart and secure way as well. So technology is gonna play a major role in facilitating these advances.
Markham:The I've had an interview, recently with a well, he's now a CEO of Solar Morgan in Toronto, and it's Mike Andrade. He's he's he'd been 30 years in the electronics manufacturing business. And and the, interview, which is done I think it's just a few episodes ahead of this one, is is energy as a technology versus energy as a commodity. And once you you know, so if you're burning coal, you're burning oil, you're burning natural gas, you you know, it's a fairly straightforward thing now. You got a like, it's coal, you got a coal plant, you've got the wire you have transmission system, you got the distribution, and, and and, really, you can't squeeze much more cost out of that.
Markham:You you you can't there aren't a lot of more efficiencies to be had. But once you start, you think of, energy as a technology. As you just said, this is all about this is a technology play, not a commodity play. And then all of those technologies jump on a learning curve. And so that every time you double the production of them, the cost goes down 15% or point whatever whatever it happens to be.
Markham:And and they keep driving efficiencies out. And my favorite example of this is when I was a kid, and I I hate to say this, like, in the early seventies. Okay? This is a long time ago, man. You know, I had to buy a calculator, and it was, I don't know, 60, 70, $80.
Markham:I mean, it was it was a crazy price.
Rod:Right.
Markham:And now you couldn't give away a calculator.
Rod:Exactly. Everybody has one on their phone. Yeah. Everybody has one on their phone and everything now. Yeah.
Markham:And and so that those kind of, ability to squeeze cost out of the supply chains, bring down the bring down the cost per unit, bring up the efficiencies is very unique to electronics, very unique to a technology approach. And everything I've heard you say today would would back up that idea.
Rod:Absolutely. You can apply to what Moore's law, where the capacity of, you know, the electronics and computing systems double every 18 months.
Markham:So Yes. There's actually there actually is a law for this one, and I it escapes me now. He was, an engineer at, in California, I think, actually, that their labor costs went down, 15%.
Rod:Mhmm.
Markham:And and became and so he he proposed this as a law. That's not Moore's law. But I think it starts his last name started with, oh, now it's bugging me. I wish I could remember. Doesn't matter.
Markham:His idea that he proposed in the mid thirties became the basis of learning curve theory.
Rod:Mhmm.
Markham:And so we know now that the more you deploy of energy as a technology, the cheaper it gets per unit.
Rod:Absolutely. Absolutely. But I question, I mean, it it that's pretty undisputed at this point.
Markham:Yeah. And so that bodes well. Man, I I think you're on, like, the you're on the the perfect place, you know, for, for, if you're gonna grow your business. And all the best of luck to you, Rod. This is fascinating.
Markham:I, you guys are clearly way ahead of where we are in Canada. It's I I I say this all the time. Every time we come we do an episode about some aspect of the power sector, I'm bemoaning how far behind Canada is on regulatory issues, on adopting of renewable energy of all of these other technologies, because my my take in this is electricity is the foundation of the 21st century economy. Absolutely. If you haven't got reliable, low cost, clean electricity, you do not you're not gonna be able to compete with China, with California, with wherever.
Markham:And, that's I'm that's my drumbeat for Canada, and I'm not sure anybody's listening, but I'm gonna keep on beating the drum. So Right. But thank you very much for this. This has been fascinating.
Rod:It is my pleasure. You know, I heard once in a documentary just to lead you with this. I was watching the documentary once, and, basically, the gist of it was the presence of electricity doesn't necessarily guarantee success, but the absence of electricity absolutely guarantees poverty and strife, any location. So if you have a somewhere who they don't have electricity, you can guarantee there's going to be poverty there. Guarantee.
Markham:There you go. And we might have, we might amend that to say, if you don't have if you don't have, you know, clean, low cost, reliable, electricity, you may not be as competitive as your neighbors in other states or provinces or or regions.
Rod:That is absolutely correct. Well,
Markham:sir, good luck to you. It's been a pleasure chatting.
Rod:Thank you. It's been a great conversation. I really appreciate it.