Calibrating hype with Akshat Rathi

In the climate space, every idea sits somewhere along the hype continuum. Some command outsize attention. Others fly under the radar despite big potential. And a rare few hit the sweet spot, earning exactly the buzz they deserve. But how do you tell which is which? In this episode, Shayle teams up with Akshat Rathi, senior reporter for climate at Bloomberg News and host of the Zero podcast, to sort it out. Akshat and Shayle run through a list of hot topics and place each one on the hype continuum. They cover topics like: Using DERs to meet load growth Co-locating generation with data centers Infrastructure bottlenecks like generation, transmission, and transformers The roles of venture capital and the Paris Agreement in shaping markets A grab-bag of other topics like sodium-ion, advanced geothermal, and advanced nuclear Resources: Catalyst: The new wave of DERs Catalyst: When to colocate data centers with generation Zero: The Device Throttling Our Electrified Future Zero: The Gas Turbine Shortage Might Be a Climate Problem Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor. Catalyst is brought to you by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform, by visiting energyhub.com. Catalyst is brought to you by Bloom Energy. AI data centers can’t wait years for grid power—and with Bloom Energy’s fuel cells, they don’t have to. Bloom Energy delivers affordable, always-on, ultra-reliable onsite power, built for chipmakers, hyperscalers, and data center leaders looking to power their operations at AI speed. Learn more by visiting BloomEnergy.com.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

  Latitude Media, covering the new frontiers of the energy transition.

• 0:08Shayle Kann?

  I'm Shayle Khan, and this is Catalyst.

• 0:11Speaker 02

  I have been reporting on gas turbines, which are currently, as my editor put it, "the la boo-boo of climate solutions."

• 0:21Shayle Kann?

  That's a first.

• 0:22Speaker 02

  Very-

• 0:23Shayle Kann?

  I get it. That seems right.

• 0:26Speaker 02

  Very high in demand, and there's a year's waiting list before you can get the one you want.

• 0:32Shayle Kann?

  Coming up, just a whole bunch of things with Akshat Rathi from Bloomberg.

• 0:46Speaker 00

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• 1:29Speaker 00

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• 1:43Speaker 03

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• 2:18Shayle Kann?

  I'm Shayle Khan. I lead the early-stage venture strategy at Energy Impact Partners. Welcome. All right. So this week is a fun one. My friend Akshat Rathi is a senior reporter at Bloomberg News and also the host of his own podcast called Zero. So he covers climate and energy stuff at Bloomberg. And he has an interesting, different perspective in the world from me in that he, one, is more plugged into this sort of high-level government stuff. We talk, for example, in this podcast about Paris, the Paris Accord, which I don't think I've really ever talked about on this podcast before. And also, he has a more global perspective. He's based in the UK himself, but he's also looking

• 3:00Shayle Kann?

  at global dynamics in a way that I'm admittedly, and I've said this before, always a little bit too US-centric or US and Europe-centric in things that I tend to see and talk about. So he and I got to chatting and thought it'd be interesting to compare notes. So we do it through a fun game show-style approach, and we covered a whole bunch of interesting things. So this is a fun one. Here's Akshat.

• 3:27Speaker 02

  Shayle, welcome to Zero.

• 3:29Shayle Kann?

  Thank you, Akshat. Welcome to Catalyst.

• 3:31Speaker 02

  Well, this is a different kind of podcast, and we're making it across an ocean, but with similar politics in the background.

• 3:41Shayle Kann?

  Yeah. Let's go. I mean, I have a question for you. You're in London, right?

• 3:45Speaker 02

  Yep.

• 3:46Shayle Kann?

  Okay. So, and you work for Bloomberg Green. And one thing that I have found is that in the US, places where like green or clean or climate is in their name have been having an interesting set of discussions around nomenclature. Is that true? For, I mean, Bloomberg is obviously based in the US, but, so I'm curious how you see it from the Bloomberg perspective, high level, but also in the UK and in Europe.

• 4:12Speaker 02

  Yeah, so Bloomberg News is a global news organization. But yes, it is US headquartered. I would say there isn't that much muzzling of terms as it's happening in the US government. But there's certainly a backlash on the politics here. So there is a party called the Reform Party that's on the rise over here, doing in the polls better than the main two parties, Labour and Conservatives. And they are against net zero. So we are usually a step behind America, but then eventually catch up.

• 4:46Shayle Kann?

  Well, in this case, I'm not sure I want you to catch up, but we'll see what happens. All right, so this is going to be fun. What's our, what's our plan here?

• 4:54Speaker 02

  So we're going to do something different where we're going to go through a number of topics that our producers have selected, where we're going to say whether we think it's underhyped, overhyped, or hyped just right, and explain our positions for why we think so. Let's start with meeting load growth for electricity, which is a hot topic everywhere. But specifically within that, what do you think about distributed energy resources? What are they and where do you land?

• 5:25Shayle Kann?

  Right, so distributed energy resources is like a grab bag category of a bunch of different things. I would say the way I define it is anything that you deploy at a customer site, so it's sitting behind the meter, the customer side of the meter, that either generates energy, stores energy, or shifts load. So canonical examples generates energy, think rooftop solar. Stores energy, think power walls and batteries, home batteries, batteries of buildings. Shifts load, think smart thermostats, right, where you can shift it. And there's a broader array of things that fall within that, but they get grouped together as distributed energy resources. On the question of DER's for meeting load growth, which is the question here,

• 6:10Shayle Kann?

  is it overhyped, underhyped, or hyped just right? I think my argument here would be, in, in the circles that I travel in, which are pretty like wonky energy tech circles, it's becoming increasingly hyped because we're just starting to see this wave of announcements that are. Inexorably coming, where there are going to be partnerships between hyperscalers or data center operators and third parties who do aggregations of DERs to deliver capacity to get data centers on the grid and things like that, like that's coming, no question. And so it's starting to bubble up into the hype world. But I think that is a, my, my world is a pretty small portion of the world. And broadly, I think even in data center

• 6:53Shayle Kann?

  universe, it has not really been considered very much yet. Like mostly it is, we're going to build a data center. Can we get grid capacity? If not, can we build a big gas turbine? And so my argument is because of all that, it is still underhyped as of today.

• 7:09Speaker 02

  Yeah, that's an interesting perspective. I would say in my world, which is a little bit broader, because I talk to policy folks and I talk to big businesses and I talk to VCs, is that it actually used to be more hyped because it was one way in which everybody was justifying having all these big renewables goals being set up because, look, don't worry about it. I know it is variable, but we'll have these technologies that are just going to come online within the next few years and they'll make it easier to manage this variability in renewables. At that time, it was pretty hyped. Now, I would say it's underhyped because it's not something people talk about that much, but those solutions

• 7:50Speaker 02

  are actually starting to bubble up. So we had the CEO of Octopus Energy, which is the largest utility here in the UK on the pod. And this year, they've launched a BYD lease program where you can just pay monthly to get a BYD electric car. And they would give you 12,000 miles of free range in a year, as long as you make sure that you put your car into the charging port whenever you're home, because they'll use the car for a virtual power plant, essentially. That sort of thing is now becoming very frequent. Like I get text messages from Octopus Energy saying, hey, 12 PM to 2 PM today, free electricity, use all you want. And so.

• 8:36Speaker 02

  I feel like now those technologies are here and they can actually be put to use. And so they're kind of underhyped because you could actually now see those things out there.

• 8:45Shayle Kann?

  Yeah, I think that DERs are a second, we're in a second wave now, right? Like I've talked about this before on the pod, but there was a wave of excitement around DERs, which I think is what you are referring to maybe a decade ago. And at that point, it was like, oh, we're going to decentralize the grid. And maybe this is going to disintermediate utilities and none of that happened. But I think what is interesting that's different is, is the frame of the question here, which is, is it overhyped, underhyped, or hyped just right for the purpose of meeting load growth? And that was not, that was not a thing we cared about a decade ago when DERs first emerged. So I think this second wave that we're seeing now, DERs as a solution to managing load growth is interesting.

• 9:26Shayle Kann?

  It's one of the things that makes it more attractive now alongside a bunch of other factors. As you mentioned, like the rise of EVs and EV chargers as a significant DR source of capacity is another one. Okay, so we're on the same side here. We both think it's currently underhyped.

• 9:44Shayle Kann?

  Let me ask you another one that I've talked about a little bit before on this pod, which is putting colocation with generation. So basically putting generation, largely gas onsite with data centers. Is that as far as meeting the load growth challenge? Do you think that is overhyped, underhyped, or hyped just right?

• 10:01Speaker 02

  I think it is hyped because I have been reporting on gas turbines, which are currently, as my editor put it, the La Boo Boo of climate solutions.

• 10:14Shayle Kann?

  That's a first. I get it. That seems right.

• 10:18Speaker 02

  Very high in demand and there's a year's waiting list before you can get the one you want. And so sure, you know, in principle, if you could get a gas turbine, you would build it close to where the data center is. But can you even get a gas turbine?

• 10:36Shayle Kann?

  Yeah, there is that. So you think it's hyped just right because like it is, it is a thing that would happen a lot, but the supply chain bottleneck is the, is the rate limiter. I think that is generally true. I do think, as I've talked about a little bit before on my pod, I think it is a little bit overhyped, the degree to which, not to say that we don't need a ton of new generation and not to say that we don't need a ton of new capacity on the grid, but the degree to which that capacity needs to be co-located with the data center, to me, is a little bit overhyped. We will see it happen. It's already happening in some places, right? You're seeing this. In the US, we have the XAI Colossus Data Center has a bunch of gas turbines. Meta is building a big facility that's going to have a bunch of gas. And a number of these projects

• 11:19Shayle Kann?

  will, but I think it's going to end up being the minority of new data centers, not the majority of new data centers. I think the implications from what you would see in the news is that like every new data center is going to come equipped with a bunch of gas turbines. Again, not to say that we won't build a ton of new gas generating capacity. I just don't think it's all going to be co-located with the with the data centers.

• 11:44Speaker 02

  Yeah, I mean, the reason we are bringing this up is because building the grid has been so hard, right? The goal would be with co-location, you don't have to wait for a grid connection to come through before you can build your data center. And sure, if you can pay really high prices for the gas turbines, which some tech companies can, then you might be able to do it, but most places won't.

• 12:09Shayle Kann?

  It's also, there's an interesting embedded question in that too, which is, at some point, will costs matter? Well, no, actually, two questions. At some point, will costs matter? And at some point, will uptime not matter quite as much, right? Because if you have the same uptime requirements for your AI data center as cloud data centers have historically, and you want to front-run your grid connection by installing generation, you can't just build gas turbines, right? You have to build a lot of infrastructure because you have to have really, really high reliability. So you're going to build your gas turbines, you're going to build, you're going to oversize some batteries. That's going to be really high capex. You might add, you know, additional layers to your UPS system. Like, there's a lot that you would build, and that comes at a real cost.

• 12:53Shayle Kann?

  Now, where we are in the cycle right now, You know, the reality is that the energy, total embedded energy cost in compute is small compared to the CapEx of the, of everything else, but mostly the chips. So maybe energy cost doesn't really matter, even if you're deploying a bunch more CapEx into that stuff, but there's an interesting question of will that ultimately matter, which would dictate the degree to which this equation of speed to power versus cost of power shifts a little bit. I think inevitably it will shift. I just don't know when that is.

• 13:28Speaker 02

  There's also the chance that, you know, these guys would go and build the power capacity where the grid connection is available, which there are many parts of the world where there is grid connection available. So yeah, I think it is a little too hyped with colocation for data centers. Some will get it, but most people won't. Let's come to the next topic, which is following on from trying to build the grid. Here at Xero, we've done a series called bottlenecks because we are seeing these bottlenecks to build the grid, especially in Europe and North America, show up in so many places. There are so many bottlenecks

• 14:08Speaker 02

  that it's not just about permitting and politics, but about actual objects. So where is generating capacity on your hype meter?

• 14:18Shayle Kann?

  On the hype meter as a bottleneck, right? So the question is basically, are we overly, like overhyped would mean we're, we're too worried about it. Underhyped would mean we're not worried enough about it. I think that, you know, the, the long lead times for gas turbines in particular are, is very well established and reported and understood by everyone, which I guess argues that it's, it's hyped because people do appreciate that that is a real challenge. There also though, has been a lot of good. Data to suggest that generating capacity in the next few years is not the dominant bottleneck. Like, there is enough capacity in enough places to deliver the kind of load growth for the next few

• 15:03Shayle Kann?

  years that the grid will need. So I think this will get to the next one where I think there is a real concern, but I would say generating capacity to me might be a little bit overhyped. The, you know, the queues are long if you want to build new gas turbines, but I don't think that is going to be the rate limiter on load growth, at least through like 2030.

• 15:27Speaker 02

  I think that is right. We spoke to a utility CEO, the NextEra CEO in the US, who said, you know, if gas turbines are going to be that expensive, that's just going to make solar panels, batteries so much more attractive and we'll build those instead. So there is certainly no reason to think all forms of generating capacity is in a bottleneck. And so all sorts of other things could be built. But there are other challenges in bottlenecks, which are much more severe to me that we need to worry about.

• 16:02Shayle Kann?

  So that maybe gets to the next one, I think, which is, which is transmission. Deliverability, basically, is the way to put it. Do you think that is overhyped, underhyped as a bottleneck?

• 16:13Speaker 02

  I think it's super underhyped. Like, give, let me give you a European example, which is that the Netherlands has 12,000 businesses waiting for an electricity connection. That company is like ASML, which is like the Netherlands' biggest company, most valuable company, isn't able to build extra factory because it cannot get an electricity connection for the next few years.

• 16:39Shayle Kann?

  And is the Netherlands in the same situation as the US where we just basically stopped building new transmission lines years ago? Like, we, I mean, not zero, but effectively zero for the past few years? Is that the situation in, in Netherlands or in Europe in general? Or is it different there?

• 16:56Speaker 02

  No, it's not that severe because a lot of European countries are interconnected and they have been building more interconnections between them. It's more like there are places around Europe where there is more generating capacity and there are demand centers which are typically further away from those generating capacity that aren't getting the power supply as it's needed. So the transmission hasn't been able to keep up with the demand that is showing up.

• 17:22Shayle Kann?

  And I don't think of, maybe I should know better, but I don't think of the Netherlands as having been a big data center hub historically. Do you know?

• 17:30Speaker 02

  No, I don't think so. I mean, it certainly has some industry, a lot of it is, you know, oriented towards electricity because it's high-end manufacturing. But no, I don't think it's a big data center hub.

• 17:43Shayle Kann?

  Yeah, which I mean is even more concerning if you think about the context of there's this big, long queue to get grid connected in a market that hasn't yet seen the boom in like very large load interconnection requests that we're seeing in lots of other places.

• 17:58Speaker 02

  There is the aspect of DER, like distributed energy resources, that is affecting the grids in Europe. So Netherlands has the highest per capita rooftop solar in the world, which, you know, for a European country, you'd be like, oh, that's odd. But, you know, that's what you get. You get cheap solar panels and you get some policy available and you'll deploy a lot of solar panels. But it's causing real problems at the transmission and distribution network locally because the grid has been built over the last hundred years and many of the objects of the grid are much, much older. So that brings us to the next topic, which is transformers.

• 18:41Speaker 02

  Transformers are this object that sit between generation, between a power plant and your home because they have to make sure that the voltage at which power is delivered is just right for the devices that you're going to attach to it. And where do you land on whether transformers are overhyped, underhyped, just right-hyped?

• 19:04Shayle Kann?

  So again, if the question is overhyped, underhyped as a bottleneck to load growth, to meeting load growth, then I think that they're overhyped. I want to clarify transformers are incredibly important and there is a bottleneck and the lead times are very long. And I've witnessed it firsthand, both from the utility side and the load side. It is a problem. I don't think it is the rate limiting factor even today with long lead times. It's an annoyance to get anything built. Things will still get built and certainly those lead times for transformers are still shorter than they are for gas turbines.

• 19:43Shayle Kann?

  But I do think we also will see a lot of new transformer manufacturing capacity come online in the next few years. It's the lead times are going to come down and I think we'll see a way of new technology. I'm an investor in a company called Heron Power, which is building solid state power electronics. You know, I think stuff like that is going to revolutionize that sector. But even in the absence of things like that, I don't think it is going to be the thing that stops the load growth from getting met. So I'm going to say overhyped on that one.

• 20:14Speaker 02

  I would go underhyped if I look at the non-data center crowd because transformers are needed for everything. And in my reporting, like I've come across many, many projects, like housing projects that are completely on hold for 18 months because they're missing this one object that they need before they can power the area. And so it is affecting a lot more people, but the people who can afford to pay for it can jump the queue and get the object, then yes, they can, they can get there. And then on the manufacturing side, again, my reporting says these companies are very

• 20:56Speaker 02

  Conservative. They will invest, but only if they have surety that there will be demand for transformers for 20 years or so, which they are not yet sure there will be.

• 21:07Shayle Kann?

  No, I totally agree with that. And it's already evident in the fact that we've had these long lead times for transformers back to, I don't know, 2021, 2022. It's not a new thing. And it has been persistent for longer than I think a lot of people expected, in part because of the conservatism of that industry, who, to be fair to them, they've gone through cycles before where they've over invested and then been underutilized and so on. And so they're reticent to do that again. I think that the expansion of capacity is not entirely going to come from the incumbents, though. I think there's going to be a wave of upstart companies, whether they're doing traditional oil-filled transformers or solid-state stuff like like Heron is doing. I think they're going to fill in a lot of

• 21:48Shayle Kann?

  the supply gap in the next few years, even if the Hitaches of the world, you know, expand capacity slower than you would want them to.

• 21:59Speaker 00

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• 22:41Speaker 00

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• 24:09Shayle Kann?

  Okay, so that's bottlenecks. Let's take a diversion for a second here. You had a thing that I have no context on, but you want to talk about this that's relevant to my day job, which is you wanted to talk about VC as a tool for scaling climate tech. What do you want to, you're going to grill me on something here, I just don't know what.

• 24:31Speaker 02

  I would happily grill you on many, many topics, but this one, I wanted to put us on the hype or underhype because, you know, it's your business, but from the perspective of venture capital, helping scale climate solutions, I think VC is overhyped because that model might work in America, and I don't know if it's working because there are not that many companies that have really been VC-oriented big climate champions right now. But rest of the world are building climate solutions, and a lot of those companies aren't VC-backed. Your BYD wasn't a VC-backed company while it became an electric car giant.

• 25:16Speaker 02

  So to me, that is one model. It can work in certain cases, and it's not working in so many cases that perhaps it's time to look at other forms of ideas that would allow maybe existing companies to pivot towards climate solutions, which also can happen.

• 25:35Shayle Kann?

  I think what we've broadly seen historically is that venture capital, particularly venture capital in the US, I will say, plays an outsized role relative to the dollars that go into it, plays an outsized role in getting new technologies into commercialization.

• 25:55Shayle Kann?

  Right, like from the lab to the market. And usually there's one or two pioneering companies that are venture backed that do that and are the first. So if you want to talk about BYD, like what would BYD be if Tesla hadn't been Tesla? It's an interesting question. If there had never been a Tesla, would BYD still be what it is today? Would it have scaled as quickly? Or was the existence proof of a company like Tesla, the thing that caused BYD and the Chinese government to deploy a lot of capital into it? You've seen versions of that, I think, a lot of times.

• 26:27Speaker 02

  Yeah, I mean, one other example would be CATL, which is the largest battery company. You know, what would it be if LFB lithium ion phosphate had not been invented in America? And then first commercialized by A123, which is a venture backed company.

• 26:41Shayle Kann?

  That's right. Now, that's a good example of there is a separate question that I think is a good question, which is, do the, do the investors, the venture investors and the companies that they invest in reap the full reward of that invention and commercialization? And A123 is a perfect example of like that company went public and then went bankrupt pretty quickly. So maybe the answer to that is no, although some early investors did make some money on it. So I, I don't know. That, that is a different question and that's one that I grapple with all the time. But if you're just taking the big step back 30,000 foot ecosystem view, I still think it is true that again, relative to the dollars deployed, because where are the dollars actually getting deployed? They're getting, you know, in, in total volume, they're either getting deployed into the

• 27:24Shayle Kann?

  BYDs and CATLs of the world, or they're getting deployed in infrastructure, right? The real money goes to building big solar projects and things like that. But on a, you know, sort of impact to dollars invested ratio, I would still claim venture capital plays an outsized role.

• 27:42Speaker 02

  I would just point back on one thing, which is there's a phrase that Dan Wang, this guy who wrote Breakneck, used, which I liked, which is, America is good at going from zero to one, like creating something that didn't exist. But China is good at going from one to 100, really like giving you the solution at the cheapest price possible. But a lot of that zero to one in America happens because of the level of science funding and the talent that it has and the basic sciences and the research. Which in the current administration is going to go down or is going down already. And so there is a risk that that thing that VC enables, which is translation of this immense

• 28:24Speaker 02

  amount of basic science into a usable product, becomes harder.

• 28:29Shayle Kann?

  Yes, I agree with that. And I think I think it is incumbent upon the US to do everything that we can to maintain that position as the as the part of the world that is best at going zero to one and then arguably competing for the one to 100 as well. But I don't think it's a foregone conclusion that we will. I'm saying historically, it is clear to me that that is true. Looking forward, you know, we've got work to do there.

• 28:53Speaker 02

  I have another weird one that I picked for you, which is, what do you think about the hype on the Paris Agreement, helping shape businesses towards climate solutions? Hype, underhype, or just hyped, right?

• 29:07Shayle Kann?

  So I don't think I have a good answer to this one, because, to be totally honest, I don't hear about or think about the Paris Agreement at all, like basically zero. So maybe that tells you something. It's certainly in in my world, it's not hyped, I can tell you that. But I couldn't tell you whether it should be hyped or not. Do you have a view? Are there things that are like downstream of the Paris Agreement that are affecting my world that I just don't know, you know, came from Paris? Or is it just sort of a it's there and it's a big geopolitical thing, but it's not really affecting business?

• 29:43Speaker 02

  Yeah, I would say this is the bit as a journalist that I find fascinating because I see many worlds. And the Paris Agreement actually works, as I've seen, across all these worlds. But some people have very strong views and other people have no views. So let me explain. In climate diplomacy, Paris Agreement is this document that was agreed on in 2015 by all countries in the world, which is in principle voluntary, but sets a goal of 1.5 or 2 degrees Celsius for the warming that all countries must keep

• 30:21Speaker 02

  to. It was 25 years in the making. That's how long it took to come to a conclusion. And then what you got was a voluntary agreement and a lot of the people in diplomacy are

• 30:36Speaker 02

  Happy and sad at the same time. Like, we have something, but it's not good enough. And they think about it a lot. We meet at COP meetings every year, which we're going to do in Brazil next month, in November, at COP30. And we'll talk a lot more about those words. And the people in that world continue to be frustrated by Paris. But Paris's impact on businesses is actually quite big because it has become translated into government policy. And then government policy gets translated into all forms of directions that businesses are taking, which they may not always explicitly tell you it is because of Paris. They'll say it's because of government policy, and every government has its own policy.

• 31:21Speaker 02

  But its tentacles have far-reaching impact, even if most people don't see the direct connection.

• 31:30Shayle Kann?

  I believe that. And I also think probably I'm colored by the fact that I'm in the US, where, you know, our relationship to Paris has been fraught and back and forth over the years, as opposed to like Europe, where it's been consistent. And so probably the policies have had more time to take hold. But it is interesting, your point, that like people either have very strong opinions about Paris or no opinions. I'm clearly in the latter camp there. All right, we're, we're short on time, but I think we should do a quick grab bag of additional, we could just do a few technologies and decide whether we think they are overhyped, underhyped, or hyped just right. All right, so let's start with a battery chemistry. Sodium-ion batteries, overhyped, underhyped, hyped just right?

• 32:08Speaker 02

  So I know you've done a couple of episodes, so you probably have a better, more informed view on this. My view is that, as somebody who's written about batteries for the last decade, getting new chemistries out to a commercial use case is really hard. When companies do that, kudos to them. But given the pace at which lithium-ion chemistries have fallen in price and the amount of manufacturing capacity that's been built around the world, if I look at Bloomberg NAF projections, sodium-ion will make an impact, but such a sliver, even after 20, 30 years, that I feel like today sodium-ion is overhyped because people think it could

• 32:51Speaker 02

  make a big difference, but really, it may not.

• 32:55Shayle Kann?

  I think it's hyped just right largely. First of all, I don't think it's that hyped. To be honest, people talk about it, but you know, I think for all the reasons you described and everybody having had the same history that that you're talking about, you people are reticent to like go all in on this is the next big battery chemistry, apart from clickbaity articles. But I think there is a degree of hype that is warranted largely because it seems pretty clear that some of the big Chinese manufacturers, CATL included, are investing a lot in sodium ion and are actually deploying. I mean, your point about getting new battery technologies into the field is true. They're doing it though in China and so it's coming.

• 33:36Shayle Kann?

  The question to me is, you know, sort of the one you're alluding to, like what portion of the market does it take up, right? And the last version of a big chemistry shift, which is a smaller chemistry shift than this one that we saw was the rise of LFP. And that has been a huge deal, huge deal, right? Will sodium ion be the next wave of the same type of a thing? Or is it going to be a more nichey solution because it's lower energy density and so on? I don't think we know that yet, but but it's coming from from CATL and its cohort. So let's just see what happens.

• 34:08Speaker 02

  The next one is advanced geothermal, where do you land on hype, underhype, hyped just right?

• 34:14Shayle Kann?

  So in the US, advanced geothermal is very hyped, I would say. It's hyped for a bunch of reasons. Some of them, you know, legitimate success of companies like Furvo Energy, you know, sort of pioneering it. But also there's a political lens to that because our new administration, our Secretary of Energy in particular, Chris Wright, is super bullish on geothermal in general. He likes geothermal and nuclear. And those are the two sort of like overlapping clean energy things that that I think he is full throatedly in support of. And so as a result of that, it is highly hyped. That may be warrant, like let's, let's see where it goes, but it's very early days. Like, you know, Fervo is hoping to have its first 100 megawatts of its first big project

• 34:59Shayle Kann?

  online sometime next year. So I guess my argument here would be it's somewhere in the hyped just right to maybe slightly overhyped stage in the US. I'm curious, though, from your sort of more global perspective, the degree to which advanced geothermal is talked about.

• 35:16Speaker 02

  So this is one where typically the rest of the world is following the US on its hype cycle. And so clearly there's a lot more talk about advanced geothermal because US has shown some success already. And surely, you know, being able to apply shale drilling type technology could make many other parts of the world, which don't always have great geothermal resources, suddenly more valuable. The difficulty I feel like is that it's overhyped because the level of other types of talent and infrastructure that you need to deliver on advanced geothermal exists in the US, but will take a long time in other parts of the world to build.

• 35:58Speaker 02

  So engineers who can manage shale type drilling or like a study of the subsurface that would allow you to do it in the right way, all of that just takes a long time. And I don't think that expertise exists in the rest of the world quite as much. And so we are going to see not as many projects built as many people think there might be.

• 36:20Shayle Kann?

  It's an interesting point, right? Because one of the reasons that it is so attractive in the US is that we do have all this expertise from oil and gas that is being leveraged for advanced geothermal. But of course, we are, we are a country that has that expertise, has the resources, has been drilling, has been doing horizontal directional drilling for a long time, invented it, in fact. So yeah, that's a good point. Okay, last one, continuing on the same vein of technologies that Secretary of Energy Chris Wright likes, advanced nuclear, overhyped, underhyped, hyped just right?

• 36:51Speaker 02

  Yeah, it's got the similar vibe as advanced geothermal in that, you know, in principle, wouldn't it be nice if we could build a small modular nuclear reactors? Because then we could make many of them and try and then lower the price of nuclear, which has been going up and up and up in Europe and North America. And again, the hype is following on from America where, you know, countries like the UK are now asking Rolls Royce to make a small modular reactor. But the reality is the only countries that have functioning civilian small modular reactors are Russia and China.

• 37:30Speaker 02

  And the countries who have been building nuclear, not just domestically, but also around the world are Russia and China.

• 37:38Shayle Kann?

  And South Korea, if you want to include.

• 37:40Speaker 02

  Oh, South Korea.

• 37:41Shayle Kann?

  Like AP one thousand, right?

• 37:42Speaker 02

  Agree, yeah, South Korea too. And so to suddenly imagine that, you know, a new technology will unlock nuclear in Europe and North America to me is overhyped.

• 37:56Shayle Kann?

  I think there's an interesting question we're heading into in nuclear world, which is sort of between, I don't know what to call advanced nuclear and not advanced nuclear. But let me just like, I'll, I'll frame up two groups. Group one says, we need to just, we have a couple of technologies that are kind of the front runners from large OEMs, right? So this would be the AP one thousand from Westinghouse and maybe the B W R X three hundred from GE Hitachi, which is an SMR. That's a, you know, three hundred megawatt reactor.

• 38:27Shayle Kann?

  Those are the furthest along, they're bankable OEMs. Forget all this other noise, we need to go deploy as many of those as possible, right? And then the other argument is there's a whole bunch of new technologies coming from a whole raft of companies that could be deploying SMRs or microreactors or whatever. And some of those need to go win as well. And, you know, I don't think it's clear yet which direction we head, if either. One thing I do worry about is that I, I personally think in the, in the long run, nuclear probably ends up looking like gas turbines look today, which is there, you know, in the gas turbine world, there are basically three OEMs that control like seventy, seventy-five percent of the market. It's an oligopoly essentially.

• 39:12Shayle Kann?

  And I don't see a really strong reason why it would be different in nuclear. So we need to get through this winnowing. We need to cull the herd a little bit to get to the point where we're deploying enough number of individual reactors to get down that cost curve. And that's going to be a messy process to get there. So I guess my answer is that I think advanced nuclear, if I. Broadly define it to include all of those things seems hyped about right to me. But I worry that we are overhyping too many individual technologies, reactor types, companies relative to what we actually need to do in that market.

• 39:51Speaker 02

  Yeah, that's an interesting one. I mean, on gas turbines, yeah, it's Siemens, GE, and Mitsubishi, which are the three giants, to the extent where China has been trying to make a gas turbine manufacturing industry, and it's not really succeeding because it's just so specialized and the supply chains are so tight. And the supply chain also ends up being one where the same parts are used by jet engines, for example. So like real complications. Nuclear, to me, it's hard to see if it comes down to those three, especially with the kind of political layer attached to nuclear, where transfer of fuel and which country can build in which country is tightly coordinated by the IAEA, the International

• 40:35Speaker 02

  Atomic Energy Agency. That makes it much harder for me to see just the sort of market forces that drove gas turbine M and A happening in nuclear.

• 40:45Shayle Kann?

  Does that argue in what you're saying for there actually being more OEMs than there are in gas turbines?

• 40:52Speaker 02

  I think there'll be national champions and more of them, whereas Siemens, GE, and Mitsubishi are more than national champions. They are sure their countries support them, but they also have such large customers in other countries.

• 41:05Shayle Kann?

  It's interesting because I could, I could see an argument for what you're describing, sort of pushing in the reverse direction, which is that actually it's going to be getting through the gauntlet of being a nuclear reactor OEM is going to be so hard because of all the additional layers, that even fewer companies are going to get through it. Adding the national lens to it maybe complicates it a little bit, but, but I could see that being an argument for maybe there aren't three, maybe there's really one or two, rather than there being 30.

• 41:35Speaker 02

  Well, you're imagining a more peaceful world than I think we are going into, but I hope you're right.

• 41:41Shayle Kann?

  All right. I think we covered, we covered a bunch of stuff here. This was fun. Thank you, Akshat, for doing this with me.

• 41:47Speaker 02

  Yeah, this is great fun. Thank you for suggesting the idea.

• 41:51Shayle Kann?

  Akshat Rathi is a senior reporter at Bloomberg News and the host of the Zero Podcast. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquand. Stephen Lacey is our executive editor. I'm Shayle Khan and this is Catalyst.