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I'm Shail Khan. I invest in early-stage companies and energy impact partners. Welcome to Catalyst. All right, we've got a quick one for you this week. My producer, Max Savage-Levinson, who you've heard his name if you listen to the end of this podcast. Thank you if you do that. But you haven't heard him otherwise. You haven't heard him directly. He popped on with me to ask a bunch of questions, some that were on his mind, some that we've gotten from listeners, just a bunch of things that are happening in the market right now. It was a good conversation. Listen up, and we'll be back with regular programming next week. Here's Max. Demand flexibility is now an essential part of the data center speed to power playbook. But how do data centers actually curtail low? GridBeyond is the end-to-end solution for flexible energy management. GridBeyond's advanced DERMS 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. Catalyst is brought to you by Antenna Group, the communications and marketing partner behind the most influential companies in data science and technology. 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. The power plant for the modern grid isn't a building. It's a network. Energy Hub's DERMS platform connects batteries, EVs, thermostats, and commercial and industrial systems to the grid. It's a network. It's an network. It's a network. data, right? And so that applies to reciprocating engines and other things things, but also to Bloom's fuel cells, which have the benefit of a lot of operating data and then also have the benefit of somewhat easier air permitting, which is air permitting become, you know, is quickly becoming like one of the couple of big barriers to getting this stuff built. So Bloom's been around for forever and they've had a long ride and they're one of these companies that just like kind of was in the right place at the right time and then has been taking advantage of it and has been able to, they're scaling up substantially. They're winning these massive orders from Oracle and others. And so they're like a, they're sort of a darling of the moment, but like they've been through, Bloom's been around since before the cleantech 1.0 cycle. And then they rode that wave up and down, managed to go public. We're kind of sitting there as a small cap public company for quite a while. And then boom, this thing hit and, you know, they're killing it. Okay. So switching gears a bit, looking towards the rest of 2020. And beyond what's a, what's a technology, a trend you've got your eye on? Well, I've talked about this on a couple of episodes before, but I'll put a finer point on it now, which is, are we going to see a data center and a utility announce a new tariff that substantially and like in a, in a big way subsidizes electricity prices for other customers? We've seen it in a small way. I'm wondering, are we going to see it a big way? And, uh, you know, I, I said, I think on the last episode of this podcast that when I was talking to Andy Lubershain that I hadn't run the math yet to figure out, was that really possible? I've run the math now and it is entirely possible in a small utility territory in particular. So if you have the combination of big data center plus small utility, that's what you need for this to really play out. But if you have big data center, small utility, um, given the expectations for the revenue and the margins that these gigascale data centers are going to be able to attain, I think you can reasonably assume that there could be a really, really big subsidy, uh, perhaps all the way to what Vivek Ramaswamy is proposing in Ohio, which is to subsidize everybody's electricity prices down to zero, probably not for the full state of Ohio, but you know, in these smaller utility, utility territories, it's not crazy to imagine that something like that could happen. I don't think it's likely to go all the way there. But 20% subsidy, 50% subsidy, I don't know, um, the math works. There's a lot more complexity to actually enacting it, but I'm watching to see whether that happens. Cause I, I don't see why it can't. Right. Wasn't one of the things that came up in the conversation with Andy that like, you can't apply the rate to just one county within the territory. That's why this doesn't work for a big utility. Yeah. For a small utility. If you are a, if it is a, this is a utility that has like a, let's say a three gigawatt peak load and you're throwing another gigawatt onto the system. Now there's like practical reasons why that's hard. You have to find a site, you have to still, and this only works, the subsidy is only gonna do the trick if, uh, if you can energize that thing pretty quickly. So it's like, you know, you're looking for a unicorn set of circumstances where you, you actually can interconnect a gigawatt scale load on a three gigawatt. System. Now, to be fair, like that is things that are of that order are happening already. So it's not totally impossible, but if you have a three gigawatt total system, then what I'm talking about is a tariff that subsidizes every customer in that territory, not trying to single out the county or something like that. For data centers, connecting to the grid quickly means two things, building distributed energy and having a plan for demand flexibility. GridBeyond helps with both. GridBeyond's DERMS and VPP platform unlocks the potential of distributed assets and dispatches flexibility into the right market at the right time. And this is more than software. GridBeyond supports developers every step of the way. From modeling your highest ROI energy mix to orchestrating the full set of assets around a data center. The track record speaks for itself. GridBeyond manages over 1,400 sites and more than 3.7 gigawatts of load across Europe, the UK and the US. You can learn more at gridbeyond.com or click the link in the show notes. If you work in energy or climate, you already know the company's Antenna Group has helped build. For three decades, they've been the communications and marketing partner behind the industry's breakout companies, category creators, and market leaders. Today, their team is working across the most consequential areas of the energy economy, from data centers and grid modernization to nuclear, geothermal, storage, critical materials, and next generation technologies. Antenna helps ambitious companies and companies that are looking to expand. These companies become the names everyone in the market knows, trusts, and wants to work with. They build reputation, elevate executives, drive demand, and turn momentum into market leadership. If your company is ready to lead its market, Antenna is ready to help you get there. Visit antennagroup.com. When you harness the power of millions of DERs in a VPP and put artificial intelligence behind the dispatch, the outcomes exceed conventional generation. Energy Hub's DERMS platform has been trained on years of real dispatch data. Data from over 2.6 million DERs, so utilities can plan with confidence. That means consistent load reduction across a four-hour event window, even during the widest, most uncertain peak periods. Utilities target, shape, and verify capacity down to the meter. Unlock flexible capacity that costs 40-60% less to deploy than traditional infrastructure in a fraction of the time it takes you to break ground on a peaker plant. Learn more at energyhub.com. You obviously, at the beginning of the show, were talking about the AI backlash that I feel like, especially over the course of the past few days, has really ramped up a lot or felt more zeitgeisty. And on top of that, there is this like sentiment shift that we've been talking about. Do you see all of those factors actually adding up to slowing down the data center build out? You know, it's all relative. But relative to what would have happened had we not had all of this, you know, hubbub? Certainly. Yeah, for sure. Right? Just look at Texas, because I think that's probably the most indicative example. Like, we're still going to build a lot of large load capacity in Texas. I have no doubt about that. But it will be delayed. A lot of it is already being delayed because of this process that Governor Abbott has pushed through. But will it be delayed by five years? I don't think so. But will it be delayed by six months or a year or something like that, then yes. So on a relative basis, compared to like the counterfactual of if there had been no guardrails whatsoever and no restraints on building other than what we had seen historically, we'll build less. I don't think that is going to translate to, you know, that is not going to be what slows down the pace of frontier AI, it may be something more like the regulatory body that some of our leaders seem to want to have created. But I don't think that the inability to build data centers is going to be that thing. So not in your most recent conversation with Andy Lubbershain, but the one before it, you guys were talking about the electric super cycle. And I get the sense that you're pretty bullish on solar capacity as a component of that. Just last week, SIA and WoodMac came out with an analysis of current. On forward looking solar capacity and from stalking you on Twitter, I got the sense that you thought that was still a bit low and I was hoping you could unpack that argument. Sure. Yeah. I mean, first one could say that the safest bet, possibly the safest bet to make in all of electricity is to look at whatever the dominant forecast is for solar growth and then bet the over on it. Because. Over the course of. Like 20 years now, everyone, whether it's on a U S basis or a global basis, generally under predicts how much solar we're going to build. It just like keeps happening over and over again. So there's that. But also I'm, I think we're just going to build a ton of solar in the U S over the next five or 10 years. What that forecast from, from SIA and WoodMac said, okay, we were, we built a lot so far this year and it's up a fair bit year over year. And that is partially because of the timing of the tax credit expiration. And so people are rushing to get projects. Bill. As they said, it's going to be flat now for the next, the rest of the decade. And I, I am at high confidence that it is not going to be flat. It is going to increase, we're going to build a lot of solar for a variety of reasons, right? The capacity is needed. The generation is needed more than the capacity because solar obviously doesn't offer that much capacity value unless you have batteries, which by the way they are, most of these solar projects also have batteries. It's deployable. It's fast. We're going to get a lot. We're going to get a lot more domestic manufacturing capacity pretty soon. You know, we already have some, and we're going to get a lot more. So even though tariffs are becoming a real challenge, it's still it's still going to be reasonable. There are inflationary cost pressures on solar, but there are inflationary cost pressures on everything. So on a relative basis, doesn't hurt solar anymore. And we really know how to build a lot of it very quickly. And we are not in the same gummed up supply chain situation that we are with gas. So, yeah, I think we're going to build. record amounts of solar probably each year for the next five years and you know i think the market i actually think the market generally does appreciate that that that forecast notwithstanding you've also written recently about cni solar specifically fizzling that it just hasn't really built momentum um from your perspective like what can be done to change that i mean so we had a conversation a while ago on this podcast with um with tim hayden uh who's now at voltis but was at brightfield which was talking about commercial industrial storage not solar but i think the the bet you would have to make on cni solar finally taking off is pretty similar to the one you'd have to make on cni batteries taking off which is basically like a two-fold bet one being that just the relative economics are better than they've ever been in other words you know commercial electricity prices are you know rising a lot and solar is becoming cheaper question mark question mark but if that is true then you know it just makes more economic sense i think that is necessary but not sufficient um and then the other condition has to be that you can radically reduce the soft costs associated with cni so the problem with cni is you're kind of in this nether region where you can't just like stamp out thousands of these things that look the same and automate everything historically like you can for residential solar but you can't just like stamp out thousands of these things that look the same and automate everything historically like you can for residential um your transaction costs are high but you don't amortize them over a large project as you do with utility scale so you're in this like stuck in between zone wherever you're the worst of both worlds there is a bet to make that you that ai will allow so much automation that much of those soft costs can be driven down to you know virtually nothing and then the fact that you're in that nether region may not hurt quite as much so i think the bet you'd have to make for cni solar to really take off is like economics look great plus you can radically reduce the cost stack via ai and derivative stuff in the last question for you we're gonna do uh we're gonna do a catalyst version of subway takes what is your hot take on energy right now i think people are under counting the grid and and utilities particularly in the nether region i think people are under counting the grid and and utilities particularly in the nether region i think people are under counting the grid and and utilities particularly in ai world like there's this narrative that has arisen that um you know the grid can't keep up and it's slow and so everybody's gonna build everything behind the meter and to be clear like i think we're gonna see a ton of behind the meter capacity get built yeah but i also think that um i think it's worth appreciating the decision cycles that occur in electricity and how you know it is not the fastest reacting sector because there's this whole process utilities go through with their regulators and they submit integrated resource plans and so on and that those are multi-year cycles so it takes a while but once that all ramps up once the gears are turning and the momentum is built we can't actually build quite a lot of new stuff so i think the market does not fully appreciate that like those gears have really only gotten spun up over the past couple of years and if you look out now a couple years from today i think we will be building more capacity and we will be building more capacity and the grid in two years from today than we have in any year since i don't know since certainly before the turn of the century and probably a couple decades before that so i think i think you know give the grid more credit just uh he's gonna be a little bit patient nice um well those are all the questions we have for you today this was fun thanks very much thanks for doing it this show is a production of latitude media you can head over to latitude media.com for links to today's topics this episode is produced by max savage levinson mixing and theme song by sean marquand ann bailey edits the video version of the show steven lacy is our executive editor all of our episodes are on youtube subscribe to latitude media for episodes of this podcast and open circuit and you can find the audio version of the show anywhere you get your podcasts i'm shale khan and this is catalyst you