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Power Onward is the podcast that unveils how power technology shapes your everyday life.
From the tech powering your daily life to the innovations driving industries forward, we talk about it all.
Brought to you by Cummins, each episode explores what’s fueling the future and why it matters for your mission, business, and community.
Welcome to Power Onward,
the podcast that pulls back the
curtain on the technologies, people,
and partnerships shaping
the future of power.
How do you design power systems in
a world that's constantly changing?
Grid constraints, evolving regulations,
and rapidly changing customer needs have
made designing reliable power systems
more complex than ever. So what
combination of solution actually works?
The answer isn't the same for every
customer, but that's exactly the point.
The real advantage comes from how
those technologies work together,
not any single technology. Today,
we're exploring how battery storage,
renewables,
and other power solutions come
together to help customers navigate an
increasingly complex
energy landscape. I'm Kim.
Hello everyone. I'm Lucio, senior director
at NewEnergy Solutions for Cummins.
And I'm Aaron, and I'm a marketing manager
for New Energy Solutions at Cummins.
Aaron, welcome back to
the Power Onward Podcast.
Last year you joined us and you gave us
the download on BESS when it initially
launched. So before we dive
deeper into this episode,
could you give us the top three things
we should know about BESS today?
Sure. Well, first of all, thanks for
having me back. It's been a pleasure.
BESS is an energy management device.
It is not an energy creating device.
So it allows you to
pair with, for example,
renewables and use that
energy more efficiently.
It allows you to really drive
your whole system to have peak
efficiency with all of
the energy that you have.
And we're starting to see use cases
across commercial and industrial,
large things like data center, AI.
I think the use cases just keep growing
and we're going to continue to see
BESS really playing a leading role in
these large systems that are coming out.
It's good to see that it's been so
encouraging to see the growth because last
time we spoke, we talked
about how safe, scalable,
and reliable the energy storage is.
And I love that you present BESS
as not just the missing piece,
it's the actual piece that
makes everything else fit
together and work together
better.
Absolutely. It allows you to have
energy when you want, where you want,
and very quick access to it right
under 100 milliseconds in access to.
It. So truly plug and play. Awesome.
So now that we have a baseline on BESS,
let's open the aperture a bit. Lucio,
what are you hearing from customers
today and how have those conversations
evolved over the last few years?
Thanks for the question, Kim.
It used to be about choosing
the right technology.
Now the market evolves and it's all about
designing the right solution,
which involves multiple technologies.
So customers are no longer
relying on a single technology.
Now the market requires
a integrated system.
I think the key word here is integration.
We know that BESS is easy
to install, transport ready.
It works on grid and off grid,
and now our customers are finally
seeing it's not just about we need BESS.
It's we need BESS to
improve our operations.
Exactly. BESS contributes with
improving the system performance,
improve with cost savings,
improves by adding
flexibility to the system.
So it becomes a critical component
in a power generation solution.
So when customers partner with Cummins,
they're trying to solve a specific
challenge. I'm hearing about reliability,
operational costs, sustainability.
At what point do they realize that the
bigger opportunity isn't just solving
that one specific challenge,
it's redesigning their entire power
system to optimize their operations?
You're right. Historically,
customers, they think about,
"I need to solve a particular problem.
Oh, I need better reliability.
I need to address sustainability targets.
I need to address cost
savings." So the conversation
evolves or the conversation changes
once they realize that it's not
about one problem. You can
address multiple problems.
They're all connected, so
they're all intertwined.
So you can develop a solution that you
don't have to make a decision between
one over another.
So you can actually design a solution
that tackles multiple issues.
So you don't have to choose between
sustainability or cost savings or
reliability versus sustainability.
So you can design a solution
that tackles multiple
problems. So the key is the integration,
and that's one area where
Cummins adds tremendous value
because we can design the proper solution,
a fully integrated solution
that involves generator sets,
involves storage or
BESS, involves controls,
and then on that solution will
be capable of tackling multiple
issues that the customer
might be dealing with.
So we're mitigating them
having to evaluate trade-offs.
You're saying there are
really no trade-offs then.
Yeah, exactly. I mean,
there's a lot of flexibility depending
on what solution you are looking for,
but you don't have to make data.
How I compromise my cost because
I'm going for more reliable systems.
So you can design the perfect solution
depending on the customer needs
that addresses multiple issues.
Aaron, do you have anything
to add to that? Well.
That was a wonderful answer.
I think just the context to add to it
is I think we're kind of experiencing a
paradigm shift in the market
where people used to see
energy as just something
that was part of business.
And I feel like we're getting to the
part now where people are realizing,
customers are realizing they can
really be in charge of their own energy
situation or journey.
And so working with Cummins allows them
to have all of the different DERs that
we offer in a really well
thought out solution that,
like you said, checks out a lot
of boxes, not just one or two.
That's a great point. I
think a lot of times for me,
especially outside looking
in, it's like, well,
the grid constraints are there and it
feels like we're helpless and there's
nothing that we can do to help
our customers. But truthfully,
that's not the case at all.
And you're saying they have the keys
now to integrating fast into their power
systems and changing
the game for themselves.
Absolutely. Yeah,
really being in charge of their
own destiny as far as that goes.
So with so many options available today,
how do you help customers feel confident
that they're making the right decision?
I think confidence is the key.
So they are dealing with us
and then we are proposing to
them very complex systems
involving multiple assets,
multiple equipment. So very
likely in their minds are,
how do I know this is going work?
Right.
It feels theoretical because we're just
looking at spec sheets and brochures,
right?
It looks complicated.
So that's the one key
aspect that Cummins has as a
major differentiator is we have
something in our Frievely Minnesota
manufacturing facility. We
have a lab, it's called PIC.
PIC stands for Power Integration
Center. So in their lab,
we can prove to our customers that the
solution will work. And how we do that,
we can replicate their site conditions,
we can replicate the load
profile, we can test,
we can validate,
and we can demonstrate to them how
the system that we are recommending
will perform. So that
gives them confidence,
that gives them a peace of mind
that what they are considAarong will
perform as expected.
So at the Power Integration Center,
we are actually capable of simulating
that catalog of products they
were hoping to see together and just
seeing how they could be orchestrated
together.
Exactly. And you can even
simulate some unexpected events.
What if there is a power outage? Oh,
what if this system doesn't work?
It's a very, very flexible
lab and I'll used to simulate
their loads,
but also some events that they
have to deal with as they are
running the project. Right.
Any unexpected matters could be weather,
could be outages, whatever it is.
So do you think they leave the PIC
lab then feeling confident like,
oh, Cummins is a trusted advisor.
They're not just supplying my equipment,
they're making sure it's foolproof.
It makes a huge difference.
So being able to going from theory to
something practical that they can see it,
they can witness how it's going to work,
how it's going to perform is a game
changer. Since we have the lab,
we always bring customers,
do the demonstration,
and that actually helps them to build
their confidence level on our solution.
The lab is a brilliant idea.
I'm thinking in terms of sports because
you guys know me, I love my sports.
You said it's a game changer.
Now coaches can make plays that
theoretically look great on the clipboard,
but when you actually see
the play running in action,
that's when you can see the
differences and even optimize.
So I'm sure you might see something
in the PIC lab that you say, oh,
didn't expect that to happen.
Let us show you how to mitigate
that or avoid that in itself.
Exactly.
Very cool. Very cool. So Aaron,
do you think that the customers then
reach a point where they're like, okay,
battery energy storage systems or
BESS aren't just a nice to have.
It's kind of a strategic advantage. I.
Think that we are really to that
point now. I think that really,
if you don't have BESS or your own access
to power,
if you're relying on the grid or you're
relying on renewables that are only
available part-time,
you're really constraining
the whole of your business.
But if you are, let's call it
energy independent, so to speak,
then you really can start to have
some serious strategic advantages over
competitors. You have less
downtime, you have less expense,
maybe you're selling some
energy back to the grid.
There's a lot of opportunities with this
that when added together really become
a substantial difference maker.
It's incredibly encouraging just because
in the news I do feel like there's this
shadow on our industry right now,
but I think it's brilliant that customers
aren't just buying products with us.
We take them to the
power integration center.
They're investing in the confidence
that their system will not just perform,
but will really help their
businesses bottom line.
Yeah, absolutely.
I think it's actually really a competitive
differentiator for those companies
going forward.
Aaron, you have to tell me more. Why
is it a competitive differentiator?
To put it simply right,
if I were going out to
buy a project or buy,
let's say I'm buying a massive
manufacturing order and I'm aware of
the grid constraints,
and maybe I'm aware that one
supplier I'm talking to is relying on
the grid and another supplier is
completely in charge of their own energy,
then I know that, first of
all, there are way less risks.
There's almost certainly going to be
significantly less downtime if something
does happen.
They're probably thinking more thoroughly
about the cost of everything they're
doing. And just overall,
I think it shows an attentiveness
to being able, I guess,
to control your controllables
for that company.
And so it makes you feel more confident
in going to them because they are going
to have less questions, less random
pop-up issues that may occur.
In addition to what Aaron's mentioned,
access to power is directly correlated to
business growth and business
continuity. If you don't have power,
you won't be able to run your business.
And if you don't have enough power,
you won't be able to grow your business.
So I think I like his analogy when I
say if you're relying on a supplier,
one of the suppliers is rely on the
grid only and the other one has an
integrated system that relies on
the grid but has a system that can
compliment the grid and
works with the grid.
You know that you're not going to have
issues with the second one because he's
perfected.
So that means when you need
your supplies from them,
you're going to get it.
While the other one,
all it takes is a fire outage then delays
your delivery. So it is, like I said,
power is directly tied to business
continuity and business growth.
Is this similar to what I keep hearing
about bring your own power or it's a
different concept?
It's related.
Bringing your own power is
a way for you to not only
rely on the grid.
So there is a difference between
being completely in island mode
versus having power in
parallel to the grid.
The demand for power is
increasing exponentially,
data center boom,
unprecedent power demand.
So that means the utility cannot keep up.
I'd say they are investing,
but they cannot keep up with
the growth of the industry.
So companies kind of don't have a choice.
In order for them to ensure
business continuity and business
growth,
they have to make some investments on
their own power generation solutions.
Otherwise,
some of their investments might have to
be delayed because the utility cannot
keep up.
Thank you for the clarity. I think
that paints a beautiful picture.
So it's clear that it always comes down
to the bottom line for our customers as
it should.
So how do we continue to drive that
business value for them driving towards
their outcomes or business outcomes?
I think one of the things that we do
that adds to our package at Cummins
is we do a lot of modeling for customers,
and so we're able to see where their
benefits really look like they might come
before we actually do the project.
But a lot of times things
we're looking at are,
the most obvious one I think is downtime.
People are afraid of downtime
because it is probably the single
biggest not random factor that can affect
Your business
or your overall production.
I think that there are a lot of other
things that come with best that people
don't always consider because I think
we've almost been trained to see,
like mentioned earlier, that there's
one problem that we're fixing,
but really this can solve a lot of them.
So one of them is something
like energy arbitrage.
So let's say you have your
own massive microgrid,
your own integrated system or you're
generating a significant amount of power.
You actually, if you have excess power,
assuming you're contracted
with the utility,
you can sell power back to them.
So there's an even additional,
traditionally that power would
just disappear into nothingness.
So now not only are you essentially
making some money for that,
but if you want to
think on a bigger scale,
you're easing the burden for the people.
You're producing more energy for
people to consume and hopefully keeping
household prices down a little bit.
I think there are some challenges with
loads now. So the loads that we are
seeing are becoming more and more unique.
So data center loads are very different
from a commercial or industrial
manufacturing site load,
and BESS allows you to
smooth either of those loads.
It allows you to keep
your energy generation
as efficient and effective and
turned off as much as possible too.
So it allows you to really take all the
energy you have, put it to its best use.
It also allows you to change some of the
other assets that you might be using.
So if you're using a gen set
plus BESS, traditionally,
if you have something that
has an extremely peaky load,
you need to size the
gen set for that load.
So you may have a gen set that's way
overqualified for 95% of its use,
which means it's going to run
less efficiently, use more diesel,
et cetera. And this really allows you
to take a step back and say, "Actually,
this is what I need,
and now I have two variables to play
with to make the perfect solution.".
Well said. Well said.
I would compliment the example on the
gen set I think is perfect. Historically,
you have to size the gen
set to the highest load.
Now with BESS complementing the gen set,
you can then allow the gen set to run
at the optimal load, not at the peak.
By running at the optimal load,
you are saving on fuel and you are
extending the life of the gen set
while BESS will handle the peaks.
So it's kind of what
we say load smoothing.
And so that's one of the benefits
of BESS. The other thing,
when you have solar, so let's say
you deploy solar in your roof,
solar is going to use or
lose. So if you're not using,
you don't have BESS, you are going
to be losing the excess power.
So when you combine solar with BESS,
now you can use the
excess that you have from
solar production and then store
in Navari and then eventually
use that later in the day.
We actually have a really good example
of this in one of our use cases in Dubai.
Okay.
Tell me more.
We put BESS in a corporate site there
and they have intentions to add
solar, but they didn't have solar yet.
They have a grid that was kind of weak.
And even though it was a bunch
of sort of unique variables,
we were still able to figure
it out and make it work.
And I think they ended up with
a three or four year payback.
So keep in mind,
this is a 10-year asset life in
terms of at 10 years you're at 80% of
that of state of health.
So there's still life even
after our state of life.
It's incredible how an investment in
such a beautiful design and making sure
you have all the right pieces becomes
very lucrative and provides that
convenience.
Because I do remember having a couple
of meetings with some folks in Dubai and
their wifi goes out, AC goes out. It's
incredibly hot and it's incredibly dark,
but with BESS, especially
at that corporate site,
they don't have to worry
about those issues anymore.
There is another project
that's quite interesting,
a little bit different use case, but
I think it's also relevant to share.
We have a site, this particular site,
it could not afford even
a very quick power outage.
The moment we have the power outage,
you lose your entire production batch.
So that means the time is,
even if you have a gen set as a
backup, time it takes for the gen set,
which is usually within 10
seconds, you lose the entire,
you have to restart over.
So when you add BESS,
BESS reacts in milliseconds,
so the problem is gone.
So you still have the gen set if you
need a very long extended power outage,
but for that very quick reaction, BESS,
it's way superior than a gen set.
That's flexibility at its finest, truly.
Absolutely. That's why we talk about
them as great partners too, right?
Genset handles the long need,
BESS handles the interim period.
Right. Again, those unexpected moments.
A lot of times people ask
if BESS replaced Genset.
I think they compliment each
other. They're not like,
"Do I need to choose Gensets or BESS?"
I think BESS solution combines both.
Dynamic duo. Absolutely. It
makes all the sense in the world.
When we talk about savings,
are you able to throw out any values of
how much we're seeing our customers save
using BESS?
So going back to that same use case,
they had three prime diesel generators
that they were using for their
facilities throughout the day.
By implementing one small BESS,
by the way, this is a
small BESS, a 200. Oh, I.
Was going to say, tell me
a little bit more by small.
BESS. At 400 kilowatt hour,
we were able to reduce
diesel consumption by 67%
across those three units. So that
was something like $30,000 a year.
There's also typically with Gensets
maintenance overhaul that occurs every X
amount of time.
I feel like the more we talk about BESS
and integrating BESS within our power
systems, it just keeps
getting better and better.
And so now we spent a lot of time
talking about BESS in the industry today,
but what do you guys think will define
the next few years of power generation?
I would say it's all about
integration and flexibility
because as you asked,
your first question is what is
different today versus five years ago?
Now people are no longer
relying on a single technology.
They are integrating
multiple technologies.
And then one thing that we see that's
common across the board is BESS.
So you might have a gen set and
likely going to have BESS as well.
You might have solar, you're going to
have BESS, you might have all the above.
So it's a lot of equipments to be
integrated and that's not going to change.
It's going to become more
and more technologies that
as technology evolves and
new technologies come up, you
have to do that integration.
BESS has a tremendous momentum,
is gaining a lot of adoption across.
The industry. Easy to see.
Why.
Because of how flexible it
is and how many different
benefits it offers.
This high growth that we're seeing
from BESS is not a temporary thing.
It's going to continue for many
years to come. And as I mentioned,
as other technologies evolve
and are being released,
I still believe that BESS is
going to be part of the solution.
Could not agree more. So you're seeing
improvements in BESS too, right?
Energy density, size footprint,
all of that. Totally.
But a lot of the energy
generating devices,
we're seeing a lot of improvements.
And I think as maybe in 10 years
there's some new energy generation
device that is just far
superior, maybe not, but maybe.
Never know.
Either way, BESS is critical
in either situation,
even if it remains exactly the same,
even if it evolves into something where
everyone has their own handheld nuclear
power plant,
having the ability to
time and condition the
power that you have is going
to be critical for I think
everybody.
Do you think it will continue to expand?
I know we are playing in a lot of
different industries now with mission
critical, industrial. Do you think
the use cases will further expand?
Absolutely. Yeah. AI training, data
centers with this unprecedented growth.
There is obviously cloud computing.
We're using data all the time,
taking pictures, taking selves,
watching videos on YouTube.
So the data is growing exponentially,
which means they need more power
and they need more data centers,
they need more power. On the top
of the typical cloud computing,
you also have AI training, which
they are developing those AI models.
And on the top of this,
you have the AI inference,
which is when the models are already
released. All this needs power.
And then we start seeing
quite a lot of opportunities,
a lot of data centers approaching
us requesting quotations to include
BESS in those sites. Historically,
our company used to sell a
lot of agen sets for standby
applications. Now we
continue to do the same,
but also we start now offAarong BESS
to those customers. So that's another
massive market that is growing.
100%.
Growing very quickly, and now they are
adopting BESS. Why do they need BESS?
Because BESS reacts very
quickly and then AI,
if there is one thing that is very
common in AI sites is frequent
peaks, a lot of peaks and
then they happen all the time.
So the utility,
it's pretty problematic for Utility to
handle all those variations in the load
and also for a Genset because
it takes times to react.
BESS can handle those in milliseconds.
It's incredible. Expanding into
data centers is a huge opportunity.
I can't stress that at all.
So for customers trying to
navigate industry complexities,
but maybe they don't want to over
commit to a single product or a single
concept, what is the best advice
that you can give them today?
I think my honest best advice would be
come with a bit of an open mind when
you're looking for a solution.
I think solutions have evolved
significantly in the last decade or two
decades even, but even
in the last couple years,
the incorporation of
BESS or higher natural
gas engines, things like this,
people originally would come with a
problem or two maybe in mind that they
want to solve. It would be
kind of wild to go in thinking,
"I have five problems.
I'm going to solve all five of them
with this solution." Now you can.
You just need to be a
little bit more creative.
I would also say work with somebody like
Cummins who can walk you through that.
We're here, we've been
here for a hundred years.
We've done a lot of projects in that time.
Oh yeah.
We have a lot of different
assets that we can add,
and we're very thoughtful about
the way we put stuff together.
And we really, really want
to see our customers succeed.
It's really time to consult an expert
because it's more complicated and you're
going to get more value out of your
solution than probably ever before.
Okay. So partner early and design for
flexibility, major keys to success.
I would say quite often, Kim,
we see projects that begin
with a technology mind,
trying to find a problem to solve.
So you kind of already
approach a customer with,
"I need to sell this to them." So you
are trying to find how can I sell this
solution to them? That's
the wrong approach.
You need to understand what
the customer's challenge are
and then design the solution, not trying
to, "I have this technology in mind,
so let me figure out a problem
that I can solve." So start with
understanding what are the challenges,
what the customer is trying to
accomplish, then you design.
That's why I like his answer about
being open-minded on this solution,
not trying to say, "I'm here
today to sell a gen set." No,
you're here today to solve the customer
problem. It might involve gen set.
It might not. Very likely
we involve BESS, but anyway,
that's my recommendation.
I like that listening. Listening
is where we actually get the most.
It's like the customers are
then telling us the recipe,
the ingredients for how to
actually better serve them.
Yes, exactly.
All right. Well, before I let you guys go,
I do want to play a quick
game of this or that.
And the idea is just to see where you
stand on some of the biggest trade-offs in
the industry today.
So I'll give two options and then you
each tell me which one wins. Ready?
Reliability or flexibility?
I would say reliability because if
you don't have a reliable system,
nothing else matters.
Aaron?
I think short term it's reliability.
I think long-term it's flexibility.
Okay.
And I think people, going back to
the last question a little bit,
people need to maybe also zoom out on
what is the length of time that
this solution is fitting, right?
Maybe this is something that solves a
lot of problems for 15 years for you
rather than just the next few.
Okay. Okay. Speed to power
or long-term optimization?
I think it depends on the customer.
Okay. If.
You talk to any data center today,
speed to power, this is what matters.
They need power today, not three to
seven. They needed it yesterday. Yeah.
However, as soon as you
address the speed to power,
then they want, right?
Yep. They want the long-term
optimization. Exactly.
Because the long-term optimization is
what's going to drive the total cost of
ownership.
Right.
But in the short-term, if you say I
can give you the perfect solution,
but have to wait two years,
then no, they meet today.
We're not waiting. They're not waiting.
So it's need to power, but eventually
the long-term optimization.
I totally.
Agree. Yep, totally agree. You
don't have to pick anymore.
You might be able to get both. You
might be able to get all of these.
Crazy. I want to go
shopping with you guys.
I feel like then I get everything I want.
As long as it's not sale. Yeah.
It's done. All right. Got it. Okay.
Couple more. Grid power or onsite.
Generation? I think you need both.
I know that's not why you ask, but
- I'll take both. You need both.
You can stand on business
as to why. I'm all ears.
The demand for power is
outpacing how fast grid
can provide power. If you
just rely on the grid,
pretty risky because at certain point
you might have to deal with a frequent
power outage. Will grid
never catch up? Hard to say.
They are working hard to do so, but we
don't know how long it's going to take.
So I think you need both.
You need to rely on the grid in
combination with our onsite generation.
I would again say I agree.
I would push a little bit
towards independence because I
think we're in a time now where
everything is so intertwined
and -.
It's like a domino effect.
If one thing goes wrong,
you're kind of just uncertain.
Right.
And a lot of companies have made a lot
of improvements in a lot of the things
they do, so you're looking for
competitive advantages for your company.
And I still think that this is something
that can provide a serious competitive
advantage going forward. And
so I think that's where I land.
Okay. And the final one, proven
technology. Or emerging innovation?
Well, we have a hundred
years of proven technology,
so I would be amiss to say that
doesn't matter. Like I said,
I think we're in a bit
of a paradigm shift.
I think we're in a time period where what
was working for a really long time is
not going to be enough anymore. And so
we shouldn't get rid of those old
technologies and maybe we use that as a
foundation. So this is a perfect
application for gen set plus BESS.
So you have the foundational
that we know has -.
The tried and true.
Yeah, exactly.
And now we have this additional piece
that we can tie in with it and make them
both better. So I think very
slightly emerging technologies,
but you need to have a foundation.
Lucio, what's your positioning on this?
Proven tech or emerging innovation?
I actually go the other way around.
I would say let's go with
a proven technology as the
foundation and then using the
innovative technologies where
it clears add value because
innovative technologies,
they have some risks.
They're still not proven. So
I'll go that way.
Proven and adding the
innovative technologies when you
absolutely convinced
that's going to add value,
unless you are willing to take some risks.
Not sure how many people are willing
to take risks. So I'm actually,
if I may put my two cents in, I
want to go with proven tech as well.
But I do know that at Cummins we have an
uncanny ability to really fortify those
frontier technologies and then making
them proven themselves. So both,
but I'm going to say proven.
You know what I'm saying?
If you add the pic lab to it, right?
Absolutely. Then is it proven already?
Maybe we're all in agreement anyway.
See, we swayed him. We persuaded
Aaron. All right. Well, Lucio, Aaron,
thank you so much for joining us today
and showing us that Cummins helps
customer kind of navigate that complexity
by offAarong more paths forward than
they initially thought, the many
paths forward approach, if you will.
Thanks for having us. Thank
you. Pleasure having us.
Thank you. All right. So what's
the big idea for this episode?
In a world where demand is growing,
regulations are evolving and
uncertainty is becoming the new norm.
Customers don't need more
complexity. They need confidence.
And confidence comes from knowing your
power system is designed to adapt today,
tomorrow, and onward.
Thank you for listening to Power Onward.
Your support means the world to us.
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If you want to dig deeper
on what we covered today,
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links or go to cummins.com/podcast.
Until next time, Power Onward.
We're from Cummins,
the company that's been innovating
toward the future for more than a hundred
years. We're no strangers to
rapid change, global shifts,
and economic uncertainty.
We want to be your constant during
the energy transition whenever,
wherever, forever, Power Onward.