Catalyst Live at SF Climate Week

It’s a Catalyst first-of-a-kind: our very first live event! We hosted it last Wednesday at San Francisco Climate week. In this episode, Shayle talks to Mike Schroepfer, co-founder and partner at Gigascale Capital and former CTO of Meta, and Nick Chaset, CEO of Octopus Energy US. Together they cover: Lessons on building products that consumers love Over and under hyped trends, including data center load growth, carbon removal, and fusion What areas will benefit most from the current administration The most important, least appreciated category of climate tech The craziest idea that just might work Recommended resources: Catalyst: A skeptic’s take on AI electricity load growth Catalyst: The geopolitics of rare earth elements Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor. This special Catalyst Live was sponsored by JP Morgan Chase and DLA Piper. Catalyst is brought to you by Anza, a platform enabling solar and storage developers and buyers to save time, reduce risk, & increase profits in their equipment selection process. Anza gives clients access to pricing, technical, and risk data and tools that they’ve never had access to before. Learn more at go.anzarenewables.com/latitude. 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.

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

• 0:01Speaker 00

  Latitude Media, podcast at the frontier of climate technology.

• 0:07Shayle Kann?

  I'm Shail Khan and this is Catalyst.

• 0:11Shayle Kann?

  Okay, audience, carbon removal, overhyped.

• 0:17Shayle Kann?

  Reasonable votes there. Carbon removal, underhyped.

• 0:22Shayle Kann?

  I feel like that was less people, but with stronger opinions, which I respect. Carbon removal, hyped just right.

• 0:31Shayle Kann?

  Okay, not a lot of moderates in this audience, which I appreciate. Coming up, we're live, or we were live, anyway.

• 0:47Speaker 02

  Catalyst is brought to you by Antenna Group, the communications and marketing partner behind the most influential companies in energy, climate, and infrastructure. For three decades, Antenna has helped ambitious companies stand out, build market leadership, and become category-defining brands. From breakthrough startups to global industry leaders, their team brings the expertise, relationships, and track record to accelerate your momentum. Learn more at antennagroup.com.

• 1:13Speaker 03

  The power plant for the modern grid isn't a building, it's a network. Energy Hub's derm platform connects batteries, EVs, thermostats, and commercial and industrial sites into virtual power plants that over 230 utilities dispatch as reliable grid capacity day in, day out. VPPs deploy in 60 to 100 days at 40% to 60% less cost than traditional infrastructure, and they perform like conventional generation from day one. Learn about the flexibility platform for the modern grid at energyhub.com.

• 1:45Speaker 02

  Demand flexibility is now an essential part of the data center's speed-to-power playbook. But how do data centers actually curtail load? GridBeyond is the end-to-end solution for flexible energy management. GridBeyond's advanced derm and VPP platform is tailored to what data centers care about most: maximizing reliability, intelligently meeting curtailment obligations, reducing costs, and managing all your distributed resources in one place. Ready to transform your distributed energy management? Get started at gridbeyond.com.

• 2:20Shayle Kann?

  I'm Shayle Khan. I lead the frontier strategy at Energy Impact Partners. Welcome. All right, this was a fun one. Our friends at JP Morgan and DLA Piper offered to sponsor a live recording of the Catalyst Podcast last week at San Francisco Climate Week, which I'm sure many of you were at or heard about. We haven't done a lot of live episodes of this show in the past, not for any particular reason, except that we just haven't done it. So we decided to make this one a little bit more fun. I had two great guests and we did a little bit of a normal panel type conversation, albeit less panel-y. And then we spent some time playing some games. Hopefully you'll enjoy it.

• 2:59Shayle Kann?

  Hello, everyone. So before I introduce my venerated guests here, we do have to prove to the listeners of the podcast that this is actually live and real. So I'm going to ask you to make some noise for just two seconds to prove that we are actually live. Welcome to Catalyst.

• 3:23Shayle Kann?

  All right. So I've got two great guests with me today. The first one used to cost me a lot of money. That is Nick Chaset. Nick was previously the CEO of Ava Community Energy. Ava is the community choice aggregator, the California-specific phenomenon that allows you to select your own retail electricity provider in a non-retail choice market. He was the CEO of the CCA in the East Bay, which is where I live. I live in Berkeley. So Nick used to sell me really expensive power. I'm sure he will blame PG&E for that, but nonetheless. Nowadays, Nick is the CEO of Octopus Energy US. I'm sure many of you have heard of Octopus.

• 4:05Shayle Kann?

  Octopus is a behemoth climate tech company based in the UK. Nick runs the US operation there. They do lots of different things and they have really cute pink octopuses as their spokesmen. Another guest today is Mike Shrempf. Mike used to cost me a lot of my time. Um, Mike had a long career, successful entrepreneur in the tech industry, uh, but then spent a really long time as the CTO of a little company you might have heard of called Meta, nay, Facebook. Uh, and then I guess three years ago, Mike, when did you leave? Three years ago, left Meta and decided to dedicate himself to, to climate tech for

• 4:47Shayle Kann?

  reasons unbeknownst to any of us. Um, and started a firm called GigaScale Capital, which is an early-stage venture capital firm that has become a great partner to, to me and Energy Impact Partners where I work. So Nick Shrep, welcome to both of you. Thank you. Glad to be here. Yeah. Okay. So here's the topic I want to talk about with both of you before we get into, into games. Um, I was thinking about this. One of the things that I think is a knock on the climate tech world is that there just are not that many examples of big, you know, sort of generational success stories from a startup perspective. There just aren't that many of them. Um, from an investor perspective, there aren't that many fund

• 5:31Shayle Kann?

  returners, right? But to the extent that there are proven ones, I think that a disproportionate share of them to date have been consumer products, consumer companies. So the obvious examples of this being like Tesla, obviously, or you could say Nest, maybe Octopus is going to be one of these as well. Um, and so that is interesting because I find that in climate tech world, actually, it's the minority share of companies today, but maybe the majority share of historical big outcomes. And both of you have different and interesting experience, um, selling or sort of building, uh, consumer products. So I don't think we talk enough about that. Um, Shrep, I guess I'm going to ask you this first. What have you take,

• 6:16Shayle Kann?

  like, what are the lessons from all your time at, at Meta, building Facebook and Instagram and WhatsApp and so on? What are the lessons that you think apply in the world of climate tech? Well, in the consumer space, I'd say the, the lesson is it is really, really hard.

• 6:34Speaker 04

  Hard to build a great consumer product. And I think anyone who hasn't built it will really underestimate how difficult it is. Your average consumer is like quite a demanding customer. The flip side of that coin is if you can cross that chasm and build a product that people love, then you have just like a runaway success business. And I think that's the thing you're seeing. You know, in the climate tech space, I think the up and comer there is mill. You know, they make a home composting device that sort of makes your trash not stink. But the thing that really caught my attention is when I looked at their net promoter scores. When they shared with like, how much do our customers like it? It's in the zone of like, you know, you'll know if your friend has one because they will tell you about it. Six times, like, have I told you about my mill? Do you want to see my mill? Right, that's how much people love this product.

• 7:19Speaker 04

  And once you get a product like that, you get consumer word of mouth. Right, and you get influencers and you get a whole bunch of other things that just self reinforce. And then you have just a runaway success business.

• 7:28Shayle Kann?

  So the lesson there is like, high bar. Because it's difficult because consumers are discerning. But when you cross the bar, like, the rewards are enormous.

• 7:37Speaker 04

  Awesome, yes.

• 7:38Shayle Kann?

  And how do you think about getting the attention of the consumer in the first place? Right, like, there's one thing which is, I guess this is your point on net promoter score, which is, is it word of mouth that drives? Like, are we looking for viral adoption of climate tech products driven by word of mouth? Is that the path to glory here?

• 7:56Speaker 04

  Yeah, I mean, it needs to cross two chasms, actually. One is, it has to be something people love. And it's like solves a problem that people really care about. And then that problem and that class of people has to be big enough to build a great business. Because I built an awesome consumer hardware product that people loved that wasn't a big enough business. We built this thing at Meta called the, or Facebook at the time called the Portal. And it was a video chat device and it was amazing. It was basically center stage before you had it. You could stick it in the corner and video chat with your kids and it would follow you around. If you talk to people who love this, bought this product, they love it and they tell all their friends about it. But a like dedicated video chat device just wasn't a big enough market. Right, everyone's like, well, I can kind of use my iPad, it's like good enough. Right, so that cost one but not the other.

• 8:39Speaker 04

  So, but if you can get both of them and say like, is this a problem like literally every consumer has? And it's a like top Three problem that they really care about. And this is like when I first was looking at joining Facebook was just sort of like the basic process I went through my head of like, what problem is this company solving? And at the time it was keeping in touch with my friends and family. It's like, well, who on earth cares about that? It's like, well, basically everyone, right? So this is a universal product. The most extreme version of that, I think that's hard to find in climate tech, but I think, like, who here likes taking out their trash? Anyone? Have you yet to get a hand raised on that one? Right? Um, and who likes to like have their trash be stinky and smelly? Nobody, right? And so like mill sort of solves that problem. And it's pretty high up in people's like taking the trash out sort of sucks and you do it every day. So, so I think you've got to get into that zone of you love it and it's a big enough problem.

• 9:23Shayle Kann?

  That's a good bridge to talking about consumer products and energy where Nick, you have an interesting experience there because I can make an argument, I think of either thing. One, one, which is people really do care about it a lot. I mean, certainly we see rising rates all over the place. All three of us live in the Bay area and PG&E territory, not to keep knocking on PG&E, but, but the rates are crazy, right? So people care about it. It like affects, it's a decent chunk of their, their monthly spend in their house. On the other hand, like notoriously, nobody cares about it at the same time. And it's like invisible to everybody. So, so Nick, you used to sell retail electricity, but also you were getting involved in a bunch of behind the meter solar and storage and EV charging and all that kind of stuff.

• 10:07Shayle Kann?

  How do you think about that question of like, uh, getting above that threshold? Is it a big enough thing that people care enough about that you can actually get adoption?

• 10:16Speaker 04

  I, I think you actually actually solve a real problem, right? So some of the most successful sort of true climate tech companies have been solar, rooftop solar companies that, you know, obviously are sort of on the, the down slope perhaps now, but have had some, some, some quite high highs. And it's because they were solving that problem. My bill is too damn high. Okay, I can save 25% on my electric bill that I feel is too high by signing on an iPad, some construction crew will come, put some panels on our roof. Cool. I don't have to think about it. I just save money, right? So I think they're, uh,

• 10:51Speaker 04

  The challenge in energy is that largely, energy is invisible. You don't interact with it, right? So, you know, the mill is a great example, great product. Solves a tangible problem that I interact with on a daily basis. I, for instance, am really, when I was at Ava, less interaction now, but was really excited about some of these really interesting induction cooktop technologies, right? Because you're actually solving problems. It is better to cook with induction than gas. Once you do it, you're like, this is easier. Like, I come home, my kids are hungry. It takes me seven minutes to boil water for pasta with my, you know, typical, not super crazy BTU gas stove. I induction, it's three minutes. So that five-minute period that I get food on the table faster

• 11:36Speaker 04

  is like the five-minute period that's the difference between me having a pleasant evening with my family or like an evening where my kids are like, I'm hungry, I'm screaming, and I've like crossed that threshold of no return. And so I think in energy or electricity specifically, like there are not, too many of the climate tech products are not really products that people interact with in their daily life, that solve daily life problems. So the companies that have done really well, Tesla, they made a product that was just better than internal combustion. The car is better. Now we're at a place where lots of EVs are better. Once you drive an EV, you don't go back to driving an ice car. Mill, as people, I would be interested to see what the stats for mill are. Once you actually have a mill, well, you're like, I don't want this anymore.

• 12:20Speaker 04

  I'm gonna go back to like having compost. I open the bin and it smells. And I think that is probably one of the fundamental challenges is

• 12:32Speaker 04

  like the consumer sentiment of like, is this making my life better? There's a lot of products that don't really make people's lives better in a tangible way day to day.

• 12:42Shayle Kann?

  What's interesting is there's two, there's two archetypes that you described there. And I guess success stories in both, right? One, I think of as being like, You are delivering a delightful consumer experience. It's better than whatever other thing is. I'm boiling my water in three minutes or I get to throw my, my thing in what would have gone to a compost and it just eats it up and turns it into dust, which is basically what Mill does. Or I get to drive a Tesla. That's the like, you know, delightful consumer experience. The rooftop solar example is a different one, right? It's not a delightful consumer experience. It's basically no consumer experience. What it is, is, is an economic experience. It's a savings. And the thing that unlocked residential solar was the introduction of the lease and the

• 13:25Shayle Kann?

  PPA model where at that time, like SolarCity and Sunrun and Sungevity and the companies that were pioneering that were able to offer you basically savings on day one. So you could just save money on your bill. You get solar on your roof and you feel good about it. But the question that I have, there's like, I think there's a trope in, in climate tech, which is if you're developing a consumer product, you shouldn't sell the climate benefit. Like that, that shouldn't be at least not your primary sales pitch. It should be something else. And if it happens to be good for climate, great, right? Nest didn't sell that you are saving energy. Nest sold the experience of it. Do you, I guess I'll ask Shrep first. Do you believe that to be true? Should you not put climate at the, or environment, energy at the front and center?

• 14:10Speaker 04

  I would actually say it even slightly stronger, which is we use this word climate tech like it's an actual good definition of a market segment. When we, we just talked about like, I sell products to consumers that save them money. I'll sell products to consumers that make their life better in the kitchen, you know, trash or, or peating water. I, you know, sell products to businesses that save them money. Sell products to businesses that help them grow. Like, those are businesses. Like, and they be tech, hard tech or other. So I think that like, adding the word climate on it actually confuses the equation because at the end of the day, somebody is paying you for this and they have to pay you for it because they really want it, because it saves them money, makes them lives easier, solves a problem for them. You can put whatever word you want in front of it, but it's a business. And so, um, so I think that that is the thing that you just can't lose the thread on is

• 14:55Speaker 04

  that, that at the end of the day, you have to deliver that value. Otherwise people aren't going to pay for it.

• 15:00Shayle Kann?

  Well, Nick, when you were, uh, out there shilling residential solar batteries or whatever it might be, what's the pitch?

• 15:11Speaker 04

  Resilience. So if you live in the East Bay and you're out in Dublin or Pleasanton and you live on a feeder line where you're getting 15 times a year, the power's going out because of a shut off, you're like, I don't like that. I just lost $200 worth of food in my fridge because I lost power for two days. So like, how do I solve that problem? Well, if I can put solar and storage on, great, I solve that problem. So it's resilience and it's bill savings. The number of consumers we would engage with who are really focused first and foremost on why I want to be green was actually pretty low. That's a side benefit. And you know, they want to talk about it, but really they're talking about as long as it does this first two things, you know, sort of the hierarchy of needs, then I'm happy

• 15:54Speaker 04

  for it to be green. And maybe being green is why I might do it relative to putting a diesel gen set or a gas gen set if the price is about the same.

• 16:04Speaker 05

  Yeah, I would just like throw out the very simple, like if you go back and do it, if the Tesla Roadster and Model S were ugly and slow, would they have been so successful?

• 16:13Shayle Kann?

  Right. It's gotta be a delightful consumer experience or save you money, something.

• 16:17Speaker 04

  Right. If we just had the Nissan Leaf and that was sort of what introduced people to EVs, I think we'd all be driving.

• 16:22Speaker 05

  I had one, the first one I could buy. I test drove it here in San Francisco.

• 16:26Speaker 04

  Fair enough.

• 16:26Speaker 05

  And I almost didn't make it back and forth to a Giants game. So I definitely had range anxiety on that one. But I'm a very special snowflake.

• 16:35Shayle Kann?

  This segment's sponsored by Nissan. All right, let's get to a game. We're gonna play a game of overhyped, underhyped, or hyped just right. So I'm gonna name some, this is a Goldilocks game, I'm gonna name some trends, categories.

• 16:51Speaker 05

  Do we get prizes, by the way?

• 16:52Shayle Kann?

  There's some prizes, right? There may be some prizes.

• 16:54Speaker 05

  Okay, great.

• 16:54Shayle Kann?

  Yeah. And you guys each have to decide whether they, this thing is currently, so this is obviously your subjective determination as to how hyped it is today, but relative to your determination as to the current hype, is it currently overhyped, currently underhyped, or currently hyped just right? All right, we're gonna start with the topic of the year, I guess, data center driven load growth, electricity load growth. Nick, overhyped, underhyped, hyped just?

• 17:23Speaker 04

  Overhyped.

• 17:24Shayle Kann?

  Overhyped.

• 17:25Speaker 04

  Yeah.

• 17:25Shayle Kann?

  All right, quick zag.

• 17:27Speaker 04

  Yeah, so overhyped because.

• 17:31Speaker 04

  There's only so much connection capacity in the system. And the ability to sort of expand connection capacity is reliant on utilities, who are then in turn reliant on their regulatory commissions to give them authority to build new things. And the time scales at which they operate are designed to be slow time scales. It's not necessarily that the utilities fall. I'm sure the utilities would love to put more capital to work faster, but they just are not allowed to do it by their regulator and they have to go through a rate case. And so the idea that we have tens of gigawatts of capacity, they're somehow going to bypass these planning processes that have been in place for decades, I think is a reflection

• 18:16Speaker 04

  of like maybe a lack of understanding of like how utilities build things and how regulators evaluate how and when you things get built.

• 18:23Shayle Kann?

  You're saying that the actual amount of new capacity we get is overhyped, right? But you're not necessarily saying that demand isn't there, you're saying we're just not going to be able to build enough.

• 18:32Speaker 04

  Correct.

• 18:33Shayle Kann?

  Okay. Shrap, overhyped, underhyped?

• 18:35Speaker 05

  I'm going to be annoying and say it is both. And here's what I mean. I'm going to qualify. So, yeah, we're just getting started. Buckle in. There's no early exit from this podcast. So, overhyped in the sense that people over attribute data center load growth with electricity demand inside the United States. You know, manufacturing and EVs are a huge portion of that. So people think it's all data centers. It's not. So that's the overhyped part. I would say underhyped in the sense that I like respectfully disagree with Nick, which is just look at Nvidia's earning calls. Like people are buying those chips and powering them up. So, and I think companies are, I spend a lot of time being incredibly creative about finding ways around getting power all across the world and figuring out how to do it.

• 19:18Speaker 05

  So these are well-resourced companies with lots of money, very smart engineers, trying to figure these problems out. So I think that a lot of stuff is going to get built.

• 19:26Shayle Kann?

  All right. This is the last time you get to say overhyped and underhyped. You get one. All right. This is your mulligan.

• 19:33Speaker 05

  That was not in the rulebook.

• 19:34Shayle Kann?

  All right. I'm going to do a quick audience poll on this. You have to, you have to clap or shout with this. Who thinks that data center-driven load growth and electricity is overhyped? Okay. Respectable showing. How about underhyped?

• 19:52Shayle Kann?

  Less people? How many people think it's hype? Just right.

• 19:58Shayle Kann?

  All right. Hype's just right, I think, is a winner there. Surprisingly enough.

• 20:05Speaker 02

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• 20:49Speaker 03

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• 21:31Speaker 02

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• 22:17Shayle Kann?

  Okay, we're gonna move on to another one. Overhyped, underhyped, hyped just right. Nuclear fusion. Let's go fusion. Shreep, you go first on this one.

• 22:26Speaker 05

  I'm gonna say it's

• 22:30Speaker 05

  You said one, is that what you said?

• 22:31Shayle Kann?

  Just one.

• 22:32Speaker 05

  I'm gonna go with underhyped.

• 22:34Shayle Kann?

  Underhyped. Make your case.

• 22:38Speaker 05

  I think the timeframes are hard to define exactly, but you know, the idea that you can give me 40, 100 acres of land and I can make you gigawatts of power with almost no inputs and outputs and no other siting requirements. And I can do this like right next to a major highway and all the people around me are cool with that because it's inherently safe thing. I think is just utterly transformational. And so I think this is a very binary thing that if we can actually hit unit economics that are competitive infusion, it'll create the largest companies we've ever seen.

• 23:10Shayle Kann?

  There was an important and big if at the end of that sentence.

• 23:13Speaker 05

  So

• 23:14Speaker 04

  Overhyped, underhyped. I think if you say like there's a 10% chance that it actually works, but if it works, it is so massively transformational that the 10% is sort of worth the bet. Then I would say maybe I would agree with the underhype because I struggle a little bit with the, again, the time scale in which these companies are gonna be able to build and deliver. And local communities, it may be safe, but like I don't think local communities are necessarily gonna buy into the idea that it is safe. It's gonna take a while to get people to sort of be comfortable in the US. In other parts of the world, perhaps that's not as much of an issue. But if it does work,

• 23:53Speaker 04

  it's a total sort of game changer. Now, I will say, I was having a conversation with a fusion founder a month or so ago. And I was sort of saying, my biggest concern about fusion is this is really the catalyst for, you know, AI to really take over. Once you have fusion and AI, they don't need the humans anymore because they don't need like to build solar panel factories. And he's like, fair enough. We just have to tell the AI that fusion came from us and that's why they should be treating us well for the foreseeable future. And I was kind of like,

• 24:23Shayle Kann?

  This is a real bank shot.

• 24:24Speaker 04

  Yeah, I mean, I'm just there. You know, I'm trying to like, think about how do we, how do we align AI? And I think like fusion being from our gift to you is that.

• 24:33Shayle Kann?

  Yeah, I don't know what your answer was to the question.

• 24:38Speaker 04

  So, underhyped?

• 24:39Shayle Kann?

  Oh, you agree.

• 24:39Speaker 05

  I underhyped.

• 24:40Shayle Kann?

  You're taking points off, right? Just to clarify, okay. Oh, it's noted. Okay, audience gets to vote on this one as well. Nuclear fusion, overhyped.

• 24:51Shayle Kann?

  Okay, fairly strong vote for overhyped. Nuclear fusion, underhyped.

• 24:56Shayle Kann?

  Just a lot of strong opinions about nuclear fusion, I think. Nuclear fusion, hyped, just right. No one thinks that. Wow. That actually kind of makes sense to me. No one thinks that. Okay. All right, carbon removal. Carbon removal, overhyped, underhyped, hyped, just right. Nick, you're up first.

• 25:16Speaker 04

  I think it's overhyped. I think it's overhyped sort of to the conversation we're having about sort of the consumer pull for big investments.

• 25:29Speaker 04

  Unless you can really drive down costs, such a sort of meaningful point that consumers are sort of comfortable paying for it and consumers having sort of a short-term view, you know, like carbon removal is really a long-term view. I need to remove carbon now so that in 10, 15, 20 years catastrophic things don't happen. That's not how most people think. You need governments to be bought in and I think we're in a space today where most governments are sort of pivoting away from making those investments. So I would say it's overhyped, at least for the time being.

• 26:02Shayle Kann?

  Trip?

• 26:02Speaker 05

  I'm gonna go underhyped.

• 26:06Shayle Kann?

  That was good, concise.

• 26:08Speaker 05

  Oh, you want some more?

• 26:09Shayle Kann?

  Sure.

• 26:09Speaker 05

  I think we will be shocked at how fast low-cost, particularly nature-based, carbon removal systems. And when I say nature-based, I don't mean planting trees. I mean advanced rock weathering. I mean ocean alkalinity enhancement. I mean biochar. These are systems that we can do actual, real good MRV. So we know that we're actually sequestering carbon in a multi-hundred-year timeframe and we'll be able to do it, you know, sub hundred dollars. And I think once you do that, you just like, the market explodes. I don't think consumers give a crap, but I think governments in the long run actually do and we have plenty of places. It's 100% economics problem. You can't pay 300, 400, or 500 dollars a ton. People can't afford that. Under a hundred a ton, you start to get to the place where you can start affording it.

• 26:50Speaker 05

  And so I think our ability to scale these things out is going to be way faster than people realize.

• 26:56Shayle Kann?

  I will say one thing that for me gives me some pause about carbon removal at the highest level as a broad category is geoengineering, which like, look, if things get bad enough that we're in a situation where we're doing, we should be doing gigatons a year, tens of gigatons a year, I don't know, of carbon removal, we could probably do the equivalent cooling effect of geoengineering for like one, one thousandth the cost, probably. Now it has its own challenges, of course, but, you know, do you sort of...

• 27:22Speaker 05

  About 10 billion a year to like lock in current, current temperatures.

• 27:25Shayle Kann?

  Right, but I mean, relative to $100 a ton, 10 gigatons, we're talking, what's that, $100 billion a year? So, you know, it's an order of magnitude at least different. So yeah, it's an interesting question of like, you know, it speaks to, do you believe the world's governments will get their act together fast enough to do carbon removal instead of waiting too long and needing to do geoengineering, which is cheaper. Okay, audience, carbon removal, overhyped.

• 27:55Shayle Kann?

  Reasonable votes there. Carbon removal, underhyped.

• 28:00Shayle Kann?

  I feel like that was less people, but with stronger opinions, which I respect. Carbon removal, hyped just right.

• 28:08Shayle Kann?

  Okay, not a lot of moderates in this audience, which I appreciate. Okay, we're gonna do, we're gonna do one more. No, we'll do two more. All right, virtual power plants. Virtual power plants. Now, this is an interesting one because I would say the hype cycle on virtual power plants has, has gone through a full hype cycle, certainly as of, I don't know, a decade ago, and then came back, and now it's kind of back. So you have to, you have to calibrate the current level of hype around virtual power plants here before you give your answer. They're both deep in thought. All right, Nick, virtual power plants.

• 28:45Speaker 04

  Underhyped, but I wouldn't call it a virtual power plant. I would say like flexibility as a category. I don't even know what a virtual power plant is. I talk to 10 people, they'll give you 10 sort of slightly different answers. I think load flexibility, though, is massively underhyped, because a lot of the flexibility is free.

• 29:04Speaker 04

  Managing when you charge an EV is essentially free. You just go to, like, we at Octopus, we, 50% of our customers that have EVs have signed up to allow us to manage when we charge their EV in the last 18 months. That's 250, 300,000 EVs because it doesn't cost them anything. They just say, I plug my car in and by 6 o'clock in the morning, it's 80, 90, 100% charged. I don't really care what happens between 9:00 PM and 6:00 AM. And as long as the user experience to like enroll my car is easy and I get some benefit or I get some cheaper charging, I'll just give it to you. That's fine. I actually think the hardest flexibility, at least in the US, is a thermostat because you're actually asking someone to be less comfortable. But EVs, batteries, water heaters, pool, like, there's so many loads.

• 29:49Speaker 04

  That's just residential. In commercial, it's the same dynamic. So I think the challenge is the consumer side, is that we actually have built up a ton of systems within our utilities to make it really hard for consumers to actually like make the decision to make, to allow their flexibility to be accessible and to have some level of monetization. When you make it easy for the consumer, it's going to scale. So that's my argument for being underhyped because we have some work to do to make it easy.

• 30:15Shayle Kann?

  Underhyped. Mike?

• 30:17Speaker 05

  Nick is probably going to really disagree with me on this one. I'm going to say consumer sort of demand response is overhyped. It's just like so damn hard to get consumers to sign up for these things and it's such a fragmented market that getting to reasonable scales is hard. And I think enterprise and commercial demand response is sort of underhyped. There's just so much, there's big money there to be saved. When I'm operating many 100-megawatt plant, like, I can save a lot of money. And so it really starts to be relevant.

• 30:45Shayle Kann?

  There's also, I mean, there's so much more at those scales, whether it's aggregated from residential or commercial, it's easier to get there with commercial industrial data center, et cetera. But like, there's so much more need for it now because the grid is so constrained. But it gets down to this thing of like, the market mechanisms have to be there, the economics have to be there, and it relies upon your belief about the evolution of the electricity market and the regulatory compact, and that's always where things tend to get more complicated.

• 31:13Speaker 04

  I'll just say, though, in Texas, 1 gigawatt of peak load is attributable to pool pumps. These are pool pumps that don't have to run during peak periods. It doesn't affect the consumer experience of like the peating and cooling of their pool. But it's really hard, to your point, it's really hard to get them engaged. I think the unlock for residential flexibility is the consumer experience. At Octopus, we've figured out how to make it really easy. And as a result, we have built massive, low-cost flexibility portfolios. The challenge is, you know, a lot of utilities don't have the consumer systems in place to do it.

• 31:49Speaker 05

  I think the one place that I'm optimistic is like, if like, large enough consumer demand is EVs. Because EV charging is like a huge load source and you can, you can integrate at the car level. So it's a lot easier, like, good luck integrating with the pool automation systems.

• 32:02Shayle Kann?

  My understanding is that the state motto of Texas is "Don't step on my pool pump." Okay, audience, virtual power plants, or whatever you want to call it, load flexibility, if you prefer, underhyped.

• 32:18Shayle Kann?

  All right, strong vote, overhyped?

• 32:22Shayle Kann?

  Yes, I love the one, whoever the one person is, brave enough to hate on virtual power plants. Hyped just right.

• 32:31Shayle Kann?

  Just a few, all right. A lot of lovers of, of load flexibility here. All right, last one. AI for climate tech. This is applications of AI that will solve big problems in decarbonization. Shrep, this is up your alley.

• 32:45Speaker 05

  Yeah, overhyped.

• 32:47Shayle Kann?

  Overhyped, go on, you should know.

• 32:49Speaker 05

  I, I think that the, I look, I'm a huge believer in AI. It's going to transform a lot of stuff, obviously a huge believer in climate tech. I think that you always have to ask yourself a very simple question. We talk about AI for X, which is if you show me a pie chart of the most valuable parts of these problems, the most difficult parts of the problem, and then you overlay another pie chart, which like, what part of this problem does AI solve? Many climate tech things fail. So AI for material science, great for discovering new materials. The manufacturing scale up is usually the hard part. So great, I've got this new moth, I've got to make a lot of it very cheaply. AI doesn't really help me very much with that. Like, in theory, maybe I make something that's slightly easier to manufacture, but I've still got all these massive scale problems. AI for cancer therapeutics. It's real hard for me to find the exact right protein that will target, you know,

• 33:33Speaker 05

  something, but once I do, the scale of manufacturing is relatively straightforward, and I'm producing a very high value molecule for, you know, per unit made. So I think that like, it works very well there, but I'm, I think it's massively people just slapping AI on top of something without having a good explanation of why AI is like a state change in the most important part of the problem for whatever they're trying to solve.

• 33:53Shayle Kann?

  Well put, Nick.

• 33:55Speaker 04

  I'll go, I'll go overhyped, and I will sort of add limited comments, I think Mike covered a lot of it, but it's that I don't see AI as being uniquely suited to solving climate tech problems. These are, we're businesses solving business challenges, be it manufacturing, or software development, or discovery of molecules. So to the degree that AI is a good fit for this particular business use, irrespective of the climate use case, it's gonna be helpful. And to the degree that it's not useful today for scaling out manufacturing, then it's not gonna be helpful. So I don't think it's something, anything unique to climate that AI is particularly attributable to.

• 34:39Shayle Kann?

  All right. I suspect we have some AI climate founders in the audience, so let's see what you all think. AI, applied to climate tech, overhyped. All right, Team Shrep, underhyped. A few hyped, just right. All right, I think overhyped wins it. I must say, I tend to agree with that. It'll do lots of things, and lots of companies in climate tech, right? We all agree there. Okay. We're done with overhyped, underhyped, hyped just right. We're gonna give out some awards to finish out this conversation. The first award is the climate tech sector,

• 35:23Shayle Kann?

  or the sector of whatever you want to call this, this market that we're in, that stands to benefit the most from the current political environment in the United States. Benefit the most from the current political environment. This is a multiple choice, or you can name your own. The multiple choice options are geothermal power, nuclear power, critical minerals, carbon capture. You can name any of those four, or go off on your own. Mike?

• 35:53Speaker 05

  I'm gonna go with C, critical minerals.

• 35:55Shayle Kann?

  Critical minerals. Why?

• 35:58Speaker 05

  I mean, we're embarking on a trade war. China just banned the export of six major critical minerals. We make none of these in the United States. So that seems like a real big problem.

• 36:08Shayle Kann?

  Sure does. One of the challenges I think with critical minerals.

• 36:14Shayle Kann?

  One of the challenges of critical minerals is that there's a is that there's like a real difference in the timeline between when you can impose an import tariff or a ban on the import of something and how long it takes to actually build the new mine or refining project or whatever it might be. And so one of the risks here is like, yeah, we're gonna we're gonna stop the flow of graphite from China into the US for anode materials. But like standing up a new graphite operation in the United States is gonna go it's gonna run past Trump's first, second, Jesus, current term. So anyway, the point being like that I think it is it is undeniably true that that is a cornerstone of the current geopolitical wars that are that are underway.

• 36:59Shayle Kann?

  The question is, does it actually sufficiently galvanize investment in domestic mining and refining and so on to make the difference?

• 37:08Speaker 05

  Yeah, the timescales here are tough, but I'm sorry, Nick. But I'll let him get it too. But I do think that there we've seen lots of companies have very creative, fast to deploy ways to make graphite, to precision mine copper, to to refine rare earths in a way that, you know, a lot of the problems of these techniques, we wouldn't actually be able to permit them in the United States. Like, they're too dirty and messy. And so it's not just like you need to build exactly what they're doing there here. It's a real, real challenge. But I think the opportunity then is if you have new techniques that are both faster, easier to build and cleaner, then they might be able to run that window. It's a tight window.

• 37:43Speaker 04

  Yep. So I would see none of them because they all require large capital investments that require certainty. And we are in a period of massive uncertainty across the board. So I would actually say I'm fairly bearish on all of those in the near term because I I think we are going to continue to see sort of a shift one way and then another way. Tariffs, oh, actually fewer tariffs, oh, actually tariffs. Interest rates, they're going to come down. Oh, they're not. Yes, they are. Yes. No, they're not. So forth and so forth. So I'm actually much more bullish on, this is sort of gets to flexibility. We got to squeeze more out of what we have because we're not

• 38:27Speaker 04

  going to be able to attract or make big investments or get things permitted because actually we've fired all the people who work in the agency that actually do the entitlements for the land. It's not that we don't want to permit the thing at Department of Interior. There's are no people that actually go through the exercise of approving the permit. So I would say flexibility or resource efficiency, squeezing more out of what we already have in the near term. I think in the long term, I think I generally agree with you because of the geopolitics, though.

• 38:58Shayle Kann?

  I don't remember listing Debbie Downer as an option, but that's, I'll allow it this time.

• 39:04Speaker 05

  I would say that the retort that I agree with your concerns, that the one thing that I think we don't talk enough about is domestic sourcing from the Defense Department for critical things. Everyone has figured out that the, you know, Ukraine war is a war of drones. And if you want to have US manufactured drones with batteries and electric motors in them from US sourced materials, there's some departments in the government who are going to really want to do that. And I think you see similar things in energy with vision and others. So I think there's an opportunity to start building that infrastructure with a buyer who's a little bit longer term.

• 39:37Speaker 04

  I hope you're right.

• 39:39Shayle Kann?

  Says Debbie Downer. Okay, so next award that we're going to give out.

• 39:45Speaker 05

  Spicer than I expected. Did you know we were going to be oppositional on all of these things?

• 39:48Shayle Kann?

  I planned for it. Next award, most important, least appreciated category of climate tech. What deserves more love than it gets? I'll list a few, but again, you can name your own or just, you know, shit on all of it like Nick probably will. All right. Most important, least appreciated category of climate tech, energy efficiency. I guess that's what kind of you were saying on the last one, resource efficiency. Public transit? Natural gas? Question mark? Forestry and land use? Or a name your own? Shrap, you go.

• 40:24Speaker 05

  Wave power.

• 40:25Shayle Kann?

  Wave power, most important and least appreciated. Certainly least appreciated. Go on.

• 40:33Speaker 05

  There's a tremendous, I mean, wave power is basically concentrated wind energy. And there's a tremendous amount of it out there and we're harnessing very little of it. So it is probably the largest single untapped energy source on the planet.

• 40:45Shayle Kann?

  Okay. There's a zag. Nick, you're also gonna say wave power, I assume?

• 40:53Speaker 04

  I think we're sort of down right now in the US on electric vehicles. And I think, you know, we're down on Tesla because, for a variety of reasons. We're down on, you know, we're down on US auto OEM's ability to scale up manufacturing. And I think getting to the thing that, to open this conversation about just better products, consumers wanting better products, I think electric vehicles, Ford is making, you know, Mach-Es that are just better to drive than the alternative Ford. And Hyundai and Kia, like, they're just better vehicles. And I think we're sort of in sort of a down sort of view from a, down cycle from a sentiment

• 41:38Speaker 04

  perspective for EVs. And I just think consumers are gonna keep buying them. And like, when you buy one, then you tell your neighbor, this is just so great. The neighbor buys it and like, you have the referral cycle and suddenly like, you're Norway and you have 90% of new vehicles are EVs just because they're better. And it's, there's a lot of flexibility opportunities. I actually think that's, that's all I'll say, EVs.

• 42:01Shayle Kann?

  Suddenly you're Norway is exactly what the other side is worried about happening. All right. So none of my answers resonated with any of that. That's fine, that's fine. I didn't spend much time putting together.

• 42:12Speaker 05

  They were awesome.

• 42:13Shayle Kann?

  Thank you, thank you so much. I appreciate that. Okay, we're gonna do one more. Craziest idea that just might work? Okay. Here's my list, but of course, come up with your own. Wave power, there's one. Okay, craziest idea that just might work? Space-based solar power? A lot of these are space-related, I found, as I was thinking about it. I don't know why that is. Space-based solar power, data centers. By the way, I will say every one of these has at least one, and generally multiple startups doing this. So these are real attempts. Space-based solar power, data centers in space, deep geothermal, geothermal anywhere, let's call it. Drill deep enough, you get geothermal power literally anywhere.

• 42:55Shayle Kann?

  Deep-sea mining of critical minerals, asteroid mining, or in your own.

• 43:02Speaker 04

  I'm gonna name my own. I. G.

• 43:07Speaker 04

  I love all of those. I just don't know very much about them. So while I'm excited, I'm gonna sort of focus on the lane that I'm in. And the company I'm really excited about is a company called Water.

• 43:18Shayle Kann?

  I knew it. You texted me about this last week.

• 43:21Speaker 04

  So Water is, they put two Nvidia GPUs on top of a water heater, and creates heat. They suck it into the water. It heats the water. And it creates a 10x ratio of compute revenue to electricity costs. So they can actually give water heaters away for free. They monetize the compute and...

• 43:47Shayle Kann?

  It's a Bitcoin mine water heater.

• 43:48Speaker 04

  Yeah, but it can be for Bitcoin. Yeah, exactly.

• 43:51Shayle Kann?

  Just trying to keep it concise here.

• 43:53Speaker 04

  It's not necessarily just for Bitcoin. It can be for sort of AI, AI workloads as well.

• 43:58Shayle Kann?

  Everyone says that.

• 44:00Speaker 04

  And as a retailer, as a retailer, the idea that I could go to a consumer and say, "I'm going to give you fixed-price electricity irrespective of consumption for, say, $50 a month, as long as you install this water heater, and then we split the compute revenue." I'm kind of like, this is a real differentiator compared to, "Hey, I'm going to give you $5 to let me manage your thermostat, or I'm gonna install a battery. I'm gonna lose a bunch of money on that battery that's being installed, and hopefully I'll figure out how to manufacture batteries to get my costs down." I'll go with the water heater with the Bitcoin miner there.

• 44:35Shayle Kann?

  I feel like there's some risk if they give you your, they give you two Nvidia GPUs, like you're just gonna take those and resell them.

• 44:42Speaker 04

  But that's maybe part of the, you know, the strategy there.

• 44:45Shayle Kann?

  All right, that's good selection. It's a real company. You texted me their website. It's interesting. All right. Mike, craziest idea that just might work.

• 44:53Speaker 05

  I mean, if I say offshore, open ocean data centers, is that reusing my answer for the last question? Do you want me to do something different?

• 44:59Shayle Kann?

  Yeah, because it's the wave power company.

• 45:00Speaker 05

  Great. So, well, that's sort of my answer, but then I'll go with the super deep geothermal.

• 45:05Shayle Kann?

  Super deep geothermal. Yeah. Okay. This was a lot of fun. Please, everyone, join me in thanking my guests, Mike and Nick for the rest of the night.

• 45:19Shayle Kann?

  Nick Chassid is the CEO of Octopus Energy US. Mike Schroepfer is the founder and a partner at GigaScale Capital. 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. Prelude backs visionary is accelerating climate innovation that will reshape the global economy for the betterment of people and planet. Learn more at preludeventures.com. This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquand. Stephen Lacy is our executive editor. I'm Shayle Khan and this is Catalyst.