Investor Shayle Kann is asking big questions about how to decarbonize the planet: How cheap can clean energy get? Will artificial intelligence speed up climate ...
Every data center company is after one thing right now: power. Electricity used to be an afterthought in data center construction, but in the AI arms race access to power has become critical because more electrons means more powerful AI models.
But how and when these companies will get those electrons is unclear. Utilities have been inundated with new load requests, and it takes time to build new capacity.
Given these uncertainties, how do data center companies make the high-stakes decisions about how much to build? How sustainable is the rate of construction? And how much will these data center companies pay for electricity?
In this episode, Shayle talks to Brian Janous, co-founder and chief commercial officer at data center developer Cloverleaf Infrastructure. Brian recently explained how he thinks about these questions in a LinkedIn post titled “The Watt-Bit Spread,” which argues that the value of watts is incredibly high right now, and the cost of those watts is too low. Shayle and Brian cover topics like:
The unclear data center demand and high costs that are making data center companies hesitant to build
How the skills required for data center development have shifted from real estate and fiber to energy
Why higher power prices are needed to incentivize new generation
Potential solutions for better pricing electricity and speeding up the construction of new generation
Recommended resources
Latitude Media: AES exec on data center load: 'It's like nothing we’ve ever seen'
Latitude Media: Mapping the data center power demand problem, in three charts
Latitude Media: Are we thinking about the data center energy problem in the right ways?
Catalyst: Can chip efficiency slow AI's energy demand?
Catalyst: Under the hood of data center power demand
Sequoia Capital: AI’s $600B Question
Catalyst is brought to you by EnergyHub. EnergyHub is working with more than 70 utilities across North America to help scale VPP programs to manage load growth, maximize the value of renewables, and deliver flexibility at every level of the grid. To learn more about their Edge DERMS platform and services, go to energyhub.com.
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42:59
Frontier Forum: Why utilities should go big on VPPs
In the next five years, Arizona Public Service estimates peak demand will grow by 40%. In order to meet that peak, the utility is increasingly turning to demand-side flexibility.
A few years ago, APS started working with EnergyHub to experiment with smart thermostats as a resource to manage peak demand. The initial resource was modest – a few megawatts, and then 20 megawatts.
That program eventually turned into a 190-megawatt virtual power plant made up of smart thermostats, behavioral demand response, commercial and industrial demand response, and some batteries. And the APS operations team now treats the VPP as a valuable resource.
“We had to really build trust in this as a real resource. As it got bigger and you could see a noticeable difference when we called on these devices, that trust really began to build,” explained Kerri Carnes, director of customer-to-grid solutions at APS.
This week, we’re featuring a conversation about the value of VPPs with APS’ Kerri Carnes and Seth Frader-Thompson, co-founder and president of EnergyHub. It was recorded as part of Latitude Media’s Frontier Forum series.
What does APS’ experience tell us about what is working in VPP program design? How do we convince utilities that VPPs are reliable? And what is their role as load growth rises?
“A VPP is actually more capable in some ways than a traditional power plant,” explained Frader-Thompson. “My guess is that over the next few years we'll probably come up with some more nuanced things to call VPPs.”
This is a partner episode, produced in partnership with EnergyHub. This is an edited version of the conversation. You can watch the full video here that includes audience questions about VPP design and implementation.
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27:43
From biowaste to “biogold”
Editor’s note: In honor of all the frying oil used this Thanksgiving, we’re revisiting an episode with Julio Friedmann, chief scientist at Carbon Direct, on the possibilities and perils of using biowaste for biofuels. Since it was published in June 2022, there has been increasing investment in biofuels from oil majors, especially for sustainable aviation fuel.
Biomass. It's the organic matter in forests, agriculture and trash. You can turn it into electricity, fuel, plastic and more. And you can engineer it to capture extra carbon dioxide and sequester it underground or at the bottom of the ocean.
The catch: The world has a finite capacity for biomass production, so every end use competes with another. If done improperly, these end uses could also compete with food production for arable land already in tight supply.
So which decarbonization solutions will get a slice of the biomass pie? Which ones should?
In this episode, Shayle talks to Julio Friedmann, chief scientist at Carbon Direct. They cover biomass sources from municipal solid waste to kelp.
They also survey the potential end-uses, such as incineration to generate power, gasification to make hydrogen, and pyrolyzation to make biochar, as well as fuel production in a Fischer-Tropsch process.
In a report from Lawrence Livermore National Laboratory, Julio and his co-authors propose a new term called biomass carbon removal and storage, or ‘BiCRS’, as a way to describe capturing carbon in biomass and then sequestering it. Startups Charm Industrial and Running Tide are pursuing this approach. Julio and his co-authors think of BiCRS as an alternative pathway to bioenergy carbon capture and storage (BECCS).
They then zoom in on a promising source of biomass: waste. Example projects include a ski hill built on an incinerator in Copenhagen and a planned waste-to-hydrogen plant in Lancaster, California.
Shayle and Julio also dig into questions like:
How to procure and transport biomass, especially biowaste, at scale?
How to avoid eco-colonialism, i.e. when wealthy countries exploit the resources of poorer countries to grow biomass without meaningful consent?
If everyone wants it, when is biowaste no longer waste? And when there’s a shortage of waste—like corn stover, for example—what’s the risk of turning to raw feedstocks, like corn?
How to pickle trees? (yes, you read that right)
Catalyst is brought to you by EnergyHub. EnergyHub is working with more than 70 utilities across North America to help scale VPP programs to manage load growth, maximize the value of renewables, and deliver flexibility at every level of the grid. To learn more about their Edge DERMS platform and services, go to energyhub.com.
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42:23
TEA breakdown: green ammonia and synthetic methane
Shayle and his team at Energy Impact Partners (EIP) review a lot of climate-tech pitches. The best kind of pitch uses a solid techno-economic analysis (TEA) to model how a technology would compete in the real world. In a previous episode, we covered some of the ways startups get TEAs wrong — bad assumptions, false precision, focusing on parts instead of the system, etc.
So what does a good TEA look like?
In this episode, Shayle talks to his colleagues, Dr. Melissa Ball, EIP’s associate director of technology, and Dr. Greg Thiel, director of technology. They apply their TEA chops to two technology pathways — green ammonia and synthetic methane. EIP hasn’t invested in either area yet because both struggle with challenging economics. Shayle, Greg, and Melissa talk about what would have to change to make those economics work, covering topics like:
The basics of ammonia and methane production
The cost stack of ammonia production and the surprisingly large role transportation plays
The challenges of integrating ammonia production with renewables, like buffering hydrogen
Novel approaches to ammonia synthesis, including scaling down the existing process, lower temperature, and pressure
Recommended resources
U.S. Department of Energy: Clean Hydrogen Commercial Liftoff
Catalyst: Ammonia: The beer of decarbonization
Catalyst: Climate tech startups need strong techno-economic analysis
Catalyst is brought to you by EnergyHub. EnergyHub is working with more than 70 utilities across North America to help scale VPP programs to manage load growth, maximize the value of renewables, and deliver flexibility at every level of the grid. To learn more about their Edge DERMS platform and services, go to energyhub.com.
On December 3 in Washington, DC, Latitude Media is bringing together a range of experts for Transition-AI 2024, a one-day, in-person event addressing both sides of the AI-energy nexus: the challenges AI poses to the grid, and the opportunities. Our podcast listeners get a 10% discount on this year’s conference using the code LMPODS10. Register today here!
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42:26
Getting heat pumps right
Oh, the heat pump — a climate tech darling that still hasn’t hit the big time yet. One challenge for heat pumps is that the customer experience can be difficult, involving a complex installation process, poor installation jobs, and even technicians that don’t want to sell you one.
What’s it going to take to get heat pumps right?
In this episode, Shayle talks to Paul Lambert, founder and CEO of the heat-pump company Quilt. They talk through the nuts and bolts of the customer experience and how to improve it. (Shayle and Energy Impact Partners invest in Quilt). They cover topics like:
Why many technicians are ambivalent or resistant to selling heat pumps
The cost stack for heat pumps, including the surprising cost of materials
The complex labor involved that ratchets up the total price of installation
Lessons from other industries, such as solar and auto
Whether users actually save money on heat pump installations
The challenges of vertical integration of the value chain
Recommended resources
Latitude Media: We have more data on the energy benefits of heat pumps — and they’re big
Catalyst: Ramping up the pace of home electrification
Catalyst: Unleashing the magic of heat pumps
Catalyst is brought to you by EnergyHub. EnergyHub is working with more than 70 utilities across North America to help scale VPP programs to manage load growth, maximize the value of renewables, and deliver flexibility at every level of the grid. To learn more about their Edge DERMS platform and services, go to energyhub.com.=
On December 3 in Washington, DC, Latitude Media is bringing together a range of experts for Transition-AI 2024, a one-day, in-person event addressing both sides of the AI-energy nexus: the challenges AI poses to the grid, and the opportunities. Our podcast listeners get a 10% discount on this year’s conference using the code LMPODS10. Register today here!
Investor Shayle Kann is asking big questions about how to decarbonize the planet: How cheap can clean energy get? Will artificial intelligence speed up climate solutions? Where is the smart money going into climate technologies? Every week on Catalyst, Shayle explains the world of climate tech with prominent experts, investors, researchers, and executives. Produced by Latitude Media.