October 16, 2025 • 38 mins
There's always big ideas in the climate technology space, but it can be hard to get your head around all the different types of technologies making waves. What’s real and what’s low-carbon smoke and mirrors? This week on Zero, Akshat Rathi teams up with venture capitalist and Catalyst podcast host Shayle Kann to talk about which climate technologies are working, and which are going nowhere.
Explore further:
- Listen to more episodes of the Catalyst podcast, hosted by Shayle Kann: https://www.latitudemedia.com/podcasts/catalyst/
Zero is a production of Bloomberg Green. Our producer is Oscar Boyd. Special thanks to Eleanor Harrison Dengate, Siobhan Wagner, Sommer Saadi and Mohsis Andam. Thoughts or suggestions? Email us at zeropod@bloomberg.net. For more coverage of climate change and solutions, visit https://www.bloomberg.com/green.
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Episode Transcript
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Speaker 1 (00:01):
Welcome to Zero. I am Akshatarati. This week Hyped just Right.
Whatever the mood on climate these days, there's always big
ideas in the climate technology space, but it can be
(00:24):
hard to get your head around all the different types
of technologies making waves and to separate what's real and
what's low carbon smoke and mirrors. So this week I'm
teaming up with Shale Khan to play a game of overhyped,
under hyped, or hype just right. Shale is a venture
capitalist at Energy Impact Partners. This episode is a collaboration
(00:45):
with the Catalyst podcast that Shale hosts, where he interviews
tech experts about decarbonization. Together, we're going to talk about
some of the climate technologies that are working, the ones
that are going nowhere, and some that we can't wait
to see their full potential. Chill, Welcome to Zero.
Speaker 2 (01:07):
Thank you, Akshat, Welcome to Catalyst.
Speaker 1 (01:09):
Well, this is a different kind of podcast and we're
making it across an ocean, but with similar politics in
the background.
Speaker 2 (01:18):
Yeah's what's going I mean, I have a question for
you. You're in London, right yep? Okay, so and you 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
(01:40):
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.
Speaker 1 (01:49):
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
(02:10):
the main two parties Labor and Conservatives, and they are
against net zero. So we are usually a step behind America,
but then eventually catch up.
Speaker 2 (02:22):
Well in this case, I'm not sure I want you
to catch up, but let's see what happens, all right,
So this is going to be fun. What's our plan here?
Speaker 1 (02:30):
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 under hyped, 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,
(02:52):
but specifically within that, What do you think about distributed
energy resources? What are they and where do you land?
Speaker 2 (03:00):
And 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,
(03:22):
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, and is distributed energy resources. On the question
of deer's for meeting load growth, which is a question
(03:45):
here is it over hyped, under hyped, or hype just right?
I think my argument here would be 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 way of announcements that are inexorably coming
where there are going to be partnerships between hyperscalers or
(04:07):
data center operators and third parties who do aggregations of
drs 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 my world is a pretty
small portion of the world, and broadly, I think even
(04:28):
in data center 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 under
hyped as of today.
Speaker 1 (04:44):
Yeah, that's an interesting perspective. I would say in my world,
which is a little bit broader because I talked to
policy folks, and I talked to big businesses and I
talked to vcs, is that it actually used to be
more hyped because it was way in which everybody was
justifying having all these big renewables goals being set up
(05:05):
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 under
hyped because it's not something people talk about that much.
But those solutions are actually starting to bubble up. So
(05:28):
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 bid Lee's program where you
can just pay monthly to get a bid electric car
and they would give you twelve thousand miles of free
range in a year as long as you make sure
(05:49):
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 Octopacology saying, hey,
twelve pm to two pm today, free electricity, use all
you want. And so I feel like, now those technologies
(06:13):
are here and they can actually be put to use
and so they're kind of underhype because you could actually
now see those things out there.
Speaker 2 (06:20):
Yeah, I think that DRS 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 DRS, 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 the frame of the question here, which is
(06:43):
is it overhyped, under hyped, or hype just right for
the purpose of meeting load growth? And that was that
was not a thing we cared about a decade ago
when DRS first emerged. So I think this second wave
that we're seeing now DRS as a solution to managing
load growth is interesting. It's one of the things that
makes it more attractive now, alongside a bunch of other
(07:05):
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 will think it's currently under hyped. Let me ask
you another one that I've talked about a little bit
before on this spot, which is putting collocation with generations,
so basically putting generation largely gas on site with data centers.
(07:30):
Is that as far as meeting the load growth challenge?
Do you think that is overhyped? Under hyped? Drype just right?
Speaker 1 (07:36):
I think it is hyped because I have been reporting
on gas turbines, which are currently, as my editor put it,
the la booboo of climate solutions.
Speaker 2 (07:48):
That's a very I get it.
Speaker 1 (07:51):
That seems right, 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?
Speaker 2 (08:10):
Yeah, there is that. So you think it's hyped just right,
because like it, it is a thing that would happen
a lot. But the supply chain bottleneck is the is
the rate limitter. I think that is generally true. I
do think so 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
(08:32):
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 will. But I think
(08:56):
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 collocated with the with the data centers.
Speaker 1 (09:18):
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 ensure if you can
pay really high prices for the gas turbines, which some
tech companies can, then you might be able to do it,
(09:41):
but most places won't.
Speaker 2 (09:43):
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
(10:04):
you want to front run your grid connection by installing generation,
you can't just build gas turbans, 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 turbans.
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
(10:25):
a lot that you would build, and that comes at
a real cost. 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
(10:46):
deploying a bunch of 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 it it will shift. I just don't know
when that is.
Speaker 1 (11:03):
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 co location for
data centers, some will get it, but most people won't.
Let's come to the next topic, which is falling on
(11:25):
from trying to build the grid here at zero. 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's so many bottlenecks
that it's not just about permitting and politics but about
actual objects. So where is generating capacity on your hype meter.
Speaker 2 (11:51):
And the hype meter as a bottleneck. Right, So the
question is basically, are we overly and like over hyped
would mean we're too worried about it. Under hype would
mean we're not worried enough about it. I think that,
you know, the long lead times or gas turbans in
particular is very well established and reported and understood by everyone,
(12:11):
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
(12:33):
to deliver the kind of load growth for the next
few 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
cues are long if you want to build new gas turbans,
but I don't think that is going to be the
rate limitter on load growth at least through like twenty thirty.
Speaker 1 (12:56):
I think that is right. We spoke to a utility
CEO the next or CEO in the US, who said,
you know, if gas turbines are going to be that expensive,
that's just going to make solar prose batteries so much
more attractive, and we will build those instead. So there
is certainly no reason to think all forms of generating
(13:19):
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.
Speaker 2 (13:31):
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.
Speaker 1 (13:42):
I think it's super under hyped. Let me give you
a European example, which is that the Netherlands has twelve
thousand businesses waiting for an electricity connection. Companies like ASML,
which is like the Netherlands' biggest company, most valuable company,
isn't a to build extra factory because it cannot get
(14:02):
an electricity connection for the next few years.
Speaker 2 (14:05):
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
and in Netherlands or in Europe in general, or is it?
Speaker 1 (14:22):
No, 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
(14:42):
the transmission hasn't been able to keep up with the
demand that is showing up.
Speaker 2 (14:47):
And I don't think of that. 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?
Speaker 1 (14:55):
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.
Speaker 2 (15:08):
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.
Speaker 1 (15:23):
There is the aspect of dr 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, it'll 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
(15:44):
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. Transformers are this object that said, between
(16:08):
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
are going to attach to it. Where do you land
on whether transformers are over hyped, under hyped, just right hype.
Speaker 2 (16:24):
So again, if the question is overhyped, under hyped 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,
(16:46):
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 so shorter
than they are for gas turbines. 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
(17:09):
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 hair and 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
(17:29):
growth from getting met. So I'm going to say overhyped
on that one.
Speaker 1 (17:33):
I would go under hyped 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
eighteen months because they're missing this one object that they
need before they can power the area, and so it
(17:56):
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
reputting says, these companies are very conservative. They will invest,
but only if they have surety that there will be
(18:17):
demand for transformers for twenty years or so, which they
are not yet sure will. No.
Speaker 2 (18:23):
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, twenty twenty one, twenty
twenty two. It's not a new thing, and it has
been persistent for longer than I think a lot of
people expect it, in part because of the conservatism of
that industry, who, to be fair to them, they've gone
through cycles before where they've overinvested and then been underutilized
(18:46):
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
Karen is doing. I think they're going to fill in
a lot of the supply gap in the next few years,
even if the hitachies of the world, you know, expand
(19:09):
capacity slower than you would want them.
Speaker 1 (19:10):
To join us after the break for more of my
conversation with Shilkhan, and Hey, while I've got you here,
fancy writing us a review on Apple podcasts or Spotify. Recently,
Jfred nineteen eighty eight wrote zero will prompt even mildly
interested listeners to get pumped about green politics and technologies.
(19:32):
Thanks to you, Fred.
Speaker 2 (19:47):
Let's take at version 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. You're gonna grill me on
something here.
Speaker 1 (20:01):
I just don't know what I would happily really on
many many topics, but this one. I wanted to put
us on the hype or under hype, because you know
it's your business. But from the perspective of venture capital
helping scale climate solutions. I think VC is overhyped because
(20:23):
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 BVID
wasn't a VC backed company while it became an electric
(20:45):
car giant. 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 idea is that would allow maybe existing
companies to pivot towards climate solutions, which also can happen.
Speaker 2 (21:07):
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
right like from the lab to the market. And usually
(21:30):
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 bid, like what would bid be
if Tesla hadn't been Tesla. It's an interesting question. If
there had never been a Tesla, would BID still be
what it is today? Would it have scaled as quickly?
Or was the existence proof of a company like Tesla
(21:52):
the thing that caused BID in the Chinese government to
deploy a lot of capital into it. You've seen versions
of that, I think a lot of times. Yeah.
Speaker 1 (22:00):
Other example would be CTL, which is the largest battery company.
You know, what would it be if LFB lithimyin phosphate
had not been invented in America and then first commercialized
by E one to three, which is a venture back company.
Speaker 2 (22:13):
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 investors, the venture investors, and the
companies that they invest in, reap the full reward of
that invention and commercialization? And A one two three is
a perfect example of like, that company went public and
then went bankrupt pretty quickly. So maybe the answer to
(22:34):
that is no, although some early investors did make some
money on it, So 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 thirty thousand 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 total volume, they're either getting deployed into
(22:55):
the bids and c atl's of the world, or they're
getting deployed in infrastructure. Right, the real goes to building
big solar projects and things like that. But on an
impact two dollars invested ratio, I would still claim venture
capital plays an outsized role.
Speaker 1 (23:11):
I would just put it 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 hundred, 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
(23:35):
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
V see enables, which is translation of this immense amount
of basic science into a usable product, becomes harder.
Speaker 2 (23:57):
Yes, I agree with that, and I think it is
incumbent to power on the US to do everything that
we can to maintain that position as the part of
the world that is best at going zero to one
and then arguably competing for the one to one hundred
as well. But I don't think it's a foregone conclusion
that we will. I'm saying historically, it is clear to
(24:17):
me that that is true. Looking forward, you know, we've
got work to do there.
Speaker 1 (24:21):
I have another weird one that I've picked for you,
which is, what do you think about the hype on
the Paris Agreement helping shape businesses towards climate solutions? Under
hype are just hyped, right?
Speaker 2 (24:35):
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 my world it's not hyped. I can tell you that,
but I couldn't tell you whether it should be hyped
(24:55):
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.
Speaker 1 (25:11):
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, Parasagreement is this document that was agreed
(25:35):
on in twenty fifteen by all countries in the world,
which is in principle voluntary, but sets a goal of
one point five or two degrees celsiaful warming that all
countries must keep to. It was twenty five years in
the making, That's how long it took to come to
a conclusion, and then what you got was a voluntary agreement.
(25:58):
And a lot of the people in Diploma see are
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 COP thirty, and we'll talk a lot more about
those words. And the people in that world continue to
(26:21):
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
(26:43):
it's because of government policy. And every government has its
own policy, but its tentacles have far reaching impact, even
if most people don't see the direct connection.
Speaker 2 (26:54):
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 parents 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.
(27:15):
All right, 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 over hyped, under hyped, hype just right. All right,
So let's start with a battery chemistry, sodium ion batteries
over hyped, under hyped, hype just right.
Speaker 1 (27:32):
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
(27:54):
ion chemistries have fallen in price and the amount of
manufacturing capacity that's been built the world. If I look
at Bloombaginif projections, sodia mine will make an impact, but
such a sliver even after twenty thirty years, that I
feel like today sodia mine is overhyped because people think
(28:14):
it could make a big difference, but really it may not.
Speaker 2 (28:18):
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 you're talking about, 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
(28:39):
a degree of hype that is warranted, largely because it
seems pretty clear that some of the big Chinese manufacturers
c ATL included are investing a lot is sodiumyan 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. The question to
me is is you know sort of the one you're
(29:01):
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 lf 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 niche solution because it's lower energy density and
(29:22):
so on. I don't think we know that yet, but
it's coming from from c at L and its cohort,
So let's just see what happens.
Speaker 1 (29:30):
The next one is advanced geothermal. Where do you land
on hype, under hyped, just right?
Speaker 2 (29:36):
So in the US, advanced geo thermal is very hyped.
I would say it's hype for a bunch of reasons.
Some of them you know, legitimate success of companies like
Fervo Energy, you know, sort of pioneering it. But also
there's a political lens to that because our new administration
are our Secretary of Energy in particular, Chris Right is
(29:59):
super bowlish on g thermal in general. He likes geothermal
and nuclear and those are the two sort of like
overlapping clean energy things that I think he's full throatedly
in support of. And so as a result of that,
it is highly hyped that maybe warn't like, let's see
where it goes. But it's very early days. Like you know,
Fervo is hoping to have its first hundred megawatts of
(30:20):
its first big project 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 has talked about.
Speaker 1 (30:37):
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 shiel drilling type technology could make
many other parts of the world, which don't always have
(30:59):
great geotone 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 geo thermal exists in the US, but will
take a long time in other parts of the world
to build. So engineers who can manage shale type drilling,
(31:22):
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.
Speaker 2 (31:40):
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 of this expertise from oil and
gas that is being leveraged for advanced geothermal. But of
course 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
(32:02):
same vein of technologies that Secretary of Energy Chris Right likes,
advanced nuclear over hyped, under hyped hype.
Speaker 1 (32:10):
Just right, 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 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.
(32:31):
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. And the countries who have
been building nuclear not just domestically but also around the
(32:54):
world are Russia, and China and Asia if you want
to include os like eight thousands, right, agreed, Yes, South
Korea too. And so do suddenly imagine that you know
a new technology will unlock nuclear in Europe and North
America to me is overhyped.
Speaker 2 (33:14):
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 frame up to 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 eight one
(33:36):
thousand from Westinghouse and maybe the br X three hundred
from Gatachi, which is an SMR that's a you know,
three hundred megawatt reactor. Those are the furthest along. They're
bankable OEMs. Forget all this other noise. We need to
go deplay 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
(34:00):
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 had
if either. One thing I do worry about is that
I personally think in the long run, nuclear probably ends
up looking like gas turbans look today, which is there.
(34:21):
You know, in the gas turban world, there are basically
three OEMs that control like seventy seventy five percent of
the market. It's an oligopoly essentially, 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 call the herd a little bit to get to
the point where we're deploying enough number of individual reactors
(34:44):
to get down that cost curve, and that's going to
be a messy process to get there. 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
(35:06):
what we actually need to do in that market.
Speaker 1 (35:08):
Yeah, that's an interesting one. I mean on gasterbinds. Yeah,
it's semens, ge and Mitsubushi, which are the three giants
to the extent where China has been trying to make
a gasterbine 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
(35:31):
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 Atomic Energy Agency,
(35:54):
That makes it much harder for me to see just
the sort of market forces that drove gasterbine MNA happening
in nuclear.
Speaker 2 (36:02):
Does that argue in what you're saying for their actually
being more OEMs than there are in gas service?
Speaker 1 (36:09):
I think there will be national champions and more of them,
whereas siemens G and Mitsubushi are more than national champions. Yeah,
sure their country support them, but they also have such
large customers in other countries.
Speaker 2 (36:21):
It's interesting because 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,
(36:44):
but I could see that being an argument for maybe
there aren't three, maybe there's really one or two, rather
than they're being thirty.
Speaker 1 (36:51):
Well, you're imagining a more peaceful world than I think
we are going into. But I hope you're right.
Speaker 2 (36:57):
All right. I think we covered a bunch of stuff here.
This was fun. Thank you Akshav for doing this with me.
Speaker 1 (37:02):
Yeah, this is great fun. Thank you for suggesting the idea,
and thank you for listening to zero And now for
the sound of the week. That is a machine making
(37:26):
a copper heat Sinc. Which helps remove heat from chips
running in AI data centers. They require huge amounts of
electricity to run, much of which is wasted as heat,
and that's why data centers are transforming power demand around
the world. This was the subject of a recent Bloomberg
Big Take linked in the show notes. If you like
this episode, please take a moment to rate and review
(37:48):
the show on Apple Podcasts and Spotify. Share this episode
with a friend or with someone who thinks their technology
is underhyped. This episode was produced by Oscar Boyd and
Daniel Waldorf. Our theme music is composed by wonder Le.
Special thanks to shil Khan, Samersati, Moses Andem, Laura Milan
and Sharan chen i'm Akshatrati back soon.
Welcome to Zero. I am Akshatarati. This week Hyped just Right.
Whatever the mood on climate these days, there's always big
ideas in the climate technology space, but it can be
(00:24):
hard to get your head around all the different types
of technologies making waves and to separate what's real and
what's low carbon smoke and mirrors. So this week I'm
teaming up with Shale Khan to play a game of overhyped,
under hyped, or hype just right. Shale is a venture
capitalist at Energy Impact Partners. This episode is a collaboration
(00:45):
with the Catalyst podcast that Shale hosts, where he interviews
tech experts about decarbonization. Together, we're going to talk about
some of the climate technologies that are working, the ones
that are going nowhere, and some that we can't wait
to see their full potential. Chill, Welcome to Zero.
Speaker 2 (01:07):
Thank you, Akshat, Welcome to Catalyst.
Speaker 1 (01:09):
Well, this is a different kind of podcast and we're
making it across an ocean, but with similar politics in
the background.
Speaker 2 (01:18):
Yeah's what's going I mean, I have a question for
you. You're in London, right yep? Okay, so and you 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
(01:40):
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.
Speaker 1 (01:49):
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
(02:10):
the main two parties Labor and Conservatives, and they are
against net zero. So we are usually a step behind America,
but then eventually catch up.
Speaker 2 (02:22):
Well in this case, I'm not sure I want you
to catch up, but let's see what happens, all right,
So this is going to be fun. What's our plan here?
Speaker 1 (02:30):
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 under hyped, 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,
(02:52):
but specifically within that, What do you think about distributed
energy resources? What are they and where do you land?
Speaker 2 (03:00):
And 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,
(03:22):
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, and is distributed energy resources. On the question
of deer's for meeting load growth, which is a question
(03:45):
here is it over hyped, under hyped, or hype just right?
I think my argument here would be 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 way of announcements that are inexorably coming
where there are going to be partnerships between hyperscalers or
(04:07):
data center operators and third parties who do aggregations of
drs 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 my world is a pretty
small portion of the world, and broadly, I think even
(04:28):
in data center 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 under
hyped as of today.
Speaker 1 (04:44):
Yeah, that's an interesting perspective. I would say in my world,
which is a little bit broader because I talked to
policy folks, and I talked to big businesses and I
talked to vcs, is that it actually used to be
more hyped because it was way in which everybody was
justifying having all these big renewables goals being set up
(05:05):
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 under
hyped because it's not something people talk about that much.
But those solutions are actually starting to bubble up. So
(05:28):
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 bid Lee's program where you
can just pay monthly to get a bid electric car
and they would give you twelve thousand miles of free
range in a year as long as you make sure
(05:49):
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 Octopacology saying, hey,
twelve pm to two pm today, free electricity, use all
you want. And so I feel like, now those technologies
(06:13):
are here and they can actually be put to use
and so they're kind of underhype because you could actually
now see those things out there.
Speaker 2 (06:20):
Yeah, I think that DRS 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 DRS, 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 the frame of the question here, which is
(06:43):
is it overhyped, under hyped, or hype just right for
the purpose of meeting load growth? And that was that
was not a thing we cared about a decade ago
when DRS first emerged. So I think this second wave
that we're seeing now DRS as a solution to managing
load growth is interesting. It's one of the things that
makes it more attractive now, alongside a bunch of other
(07:05):
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 will think it's currently under hyped. Let me ask
you another one that I've talked about a little bit
before on this spot, which is putting collocation with generations,
so basically putting generation largely gas on site with data centers.
(07:30):
Is that as far as meeting the load growth challenge?
Do you think that is overhyped? Under hyped? Drype just right?
Speaker 1 (07:36):
I think it is hyped because I have been reporting
on gas turbines, which are currently, as my editor put it,
the la booboo of climate solutions.
Speaker 2 (07:48):
That's a very I get it.
Speaker 1 (07:51):
That seems right, 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?
Speaker 2 (08:10):
Yeah, there is that. So you think it's hyped just right,
because like it, it is a thing that would happen
a lot. But the supply chain bottleneck is the is
the rate limitter. I think that is generally true. I
do think so 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
(08:32):
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 will. But I think
(08:56):
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 collocated with the with the data centers.
Speaker 1 (09:18):
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 ensure if you can
pay really high prices for the gas turbines, which some
tech companies can, then you might be able to do it,
(09:41):
but most places won't.
Speaker 2 (09:43):
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
(10:04):
you want to front run your grid connection by installing generation,
you can't just build gas turbans, 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 turbans.
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
(10:25):
a lot that you would build, and that comes at
a real cost. 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
(10:46):
deploying a bunch of 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 it it will shift. I just don't know
when that is.
Speaker 1 (11:03):
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 co location for
data centers, some will get it, but most people won't.
Let's come to the next topic, which is falling on
(11:25):
from trying to build the grid here at zero. 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's so many bottlenecks
that it's not just about permitting and politics but about
actual objects. So where is generating capacity on your hype meter.
Speaker 2 (11:51):
And the hype meter as a bottleneck. Right, So the
question is basically, are we overly and like over hyped
would mean we're too worried about it. Under hype would
mean we're not worried enough about it. I think that,
you know, the long lead times or gas turbans in
particular is very well established and reported and understood by everyone,
(12:11):
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
(12:33):
to deliver the kind of load growth for the next
few 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
cues are long if you want to build new gas turbans,
but I don't think that is going to be the
rate limitter on load growth at least through like twenty thirty.
Speaker 1 (12:56):
I think that is right. We spoke to a utility
CEO the next or CEO in the US, who said,
you know, if gas turbines are going to be that expensive,
that's just going to make solar prose batteries so much
more attractive, and we will build those instead. So there
is certainly no reason to think all forms of generating
(13:19):
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.
Speaker 2 (13:31):
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.
Speaker 1 (13:42):
I think it's super under hyped. Let me give you
a European example, which is that the Netherlands has twelve
thousand businesses waiting for an electricity connection. Companies like ASML,
which is like the Netherlands' biggest company, most valuable company,
isn't a to build extra factory because it cannot get
(14:02):
an electricity connection for the next few years.
Speaker 2 (14:05):
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
and in Netherlands or in Europe in general, or is it?
Speaker 1 (14:22):
No, 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
(14:42):
the transmission hasn't been able to keep up with the
demand that is showing up.
Speaker 2 (14:47):
And I don't think of that. 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?
Speaker 1 (14:55):
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.
Speaker 2 (15:08):
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.
Speaker 1 (15:23):
There is the aspect of dr 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, it'll 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
(15:44):
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. Transformers are this object that said, between
(16:08):
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
are going to attach to it. Where do you land
on whether transformers are over hyped, under hyped, just right hype.
Speaker 2 (16:24):
So again, if the question is overhyped, under hyped 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,
(16:46):
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 so shorter
than they are for gas turbines. 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
(17:09):
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 hair and 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
(17:29):
growth from getting met. So I'm going to say overhyped
on that one.
Speaker 1 (17:33):
I would go under hyped 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
eighteen months because they're missing this one object that they
need before they can power the area, and so it
(17:56):
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
reputting says, these companies are very conservative. They will invest,
but only if they have surety that there will be
(18:17):
demand for transformers for twenty years or so, which they
are not yet sure will. No.
Speaker 2 (18:23):
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, twenty twenty one, twenty
twenty two. It's not a new thing, and it has
been persistent for longer than I think a lot of
people expect it, in part because of the conservatism of
that industry, who, to be fair to them, they've gone
through cycles before where they've overinvested and then been underutilized
(18:46):
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
Karen is doing. I think they're going to fill in
a lot of the supply gap in the next few years,
even if the hitachies of the world, you know, expand
(19:09):
capacity slower than you would want them.
Speaker 1 (19:10):
To join us after the break for more of my
conversation with Shilkhan, and Hey, while I've got you here,
fancy writing us a review on Apple podcasts or Spotify. Recently,
Jfred nineteen eighty eight wrote zero will prompt even mildly
interested listeners to get pumped about green politics and technologies.
(19:32):
Thanks to you, Fred.
Speaker 2 (19:47):
Let's take at version 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. You're gonna grill me on
something here.
Speaker 1 (20:01):
I just don't know what I would happily really on
many many topics, but this one. I wanted to put
us on the hype or under hype, because you know
it's your business. But from the perspective of venture capital
helping scale climate solutions. I think VC is overhyped because
(20:23):
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 BVID
wasn't a VC backed company while it became an electric
(20:45):
car giant. 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 idea is that would allow maybe existing
companies to pivot towards climate solutions, which also can happen.
Speaker 2 (21:07):
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
right like from the lab to the market. And usually
(21:30):
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 bid, like what would bid be
if Tesla hadn't been Tesla. It's an interesting question. If
there had never been a Tesla, would BID still be
what it is today? Would it have scaled as quickly?
Or was the existence proof of a company like Tesla
(21:52):
the thing that caused BID in the Chinese government to
deploy a lot of capital into it. You've seen versions
of that, I think a lot of times. Yeah.
Speaker 1 (22:00):
Other example would be CTL, which is the largest battery company.
You know, what would it be if LFB lithimyin phosphate
had not been invented in America and then first commercialized
by E one to three, which is a venture back company.
Speaker 2 (22:13):
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 investors, the venture investors, and the
companies that they invest in, reap the full reward of
that invention and commercialization? And A one two three is
a perfect example of like, that company went public and
then went bankrupt pretty quickly. So maybe the answer to
(22:34):
that is no, although some early investors did make some
money on it, So 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 thirty thousand 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 total volume, they're either getting deployed into
(22:55):
the bids and c atl's of the world, or they're
getting deployed in infrastructure. Right, the real goes to building
big solar projects and things like that. But on an
impact two dollars invested ratio, I would still claim venture
capital plays an outsized role.
Speaker 1 (23:11):
I would just put it 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 hundred, 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
(23:35):
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
V see enables, which is translation of this immense amount
of basic science into a usable product, becomes harder.
Speaker 2 (23:57):
Yes, I agree with that, and I think it is
incumbent to power on the US to do everything that
we can to maintain that position as the part of
the world that is best at going zero to one
and then arguably competing for the one to one hundred
as well. But I don't think it's a foregone conclusion
that we will. I'm saying historically, it is clear to
(24:17):
me that that is true. Looking forward, you know, we've
got work to do there.
Speaker 1 (24:21):
I have another weird one that I've picked for you,
which is, what do you think about the hype on
the Paris Agreement helping shape businesses towards climate solutions? Under
hype are just hyped, right?
Speaker 2 (24:35):
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 my world it's not hyped. I can tell you that,
but I couldn't tell you whether it should be hyped
(24:55):
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.
Speaker 1 (25:11):
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, Parasagreement is this document that was agreed
(25:35):
on in twenty fifteen by all countries in the world,
which is in principle voluntary, but sets a goal of
one point five or two degrees celsiaful warming that all
countries must keep to. It was twenty five years in
the making, That's how long it took to come to
a conclusion, and then what you got was a voluntary agreement.
(25:58):
And a lot of the people in Diploma see are
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 COP thirty, and we'll talk a lot more about
those words. And the people in that world continue to
(26:21):
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
(26:43):
it's because of government policy. And every government has its
own policy, but its tentacles have far reaching impact, even
if most people don't see the direct connection.
Speaker 2 (26:54):
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 parents 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.
(27:15):
All right, 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 over hyped, under hyped, hype just right. All right,
So let's start with a battery chemistry, sodium ion batteries
over hyped, under hyped, hype just right.
Speaker 1 (27:32):
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
(27:54):
ion chemistries have fallen in price and the amount of
manufacturing capacity that's been built the world. If I look
at Bloombaginif projections, sodia mine will make an impact, but
such a sliver even after twenty thirty years, that I
feel like today sodia mine is overhyped because people think
(28:14):
it could make a big difference, but really it may not.
Speaker 2 (28:18):
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 you're talking about, 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
(28:39):
a degree of hype that is warranted, largely because it
seems pretty clear that some of the big Chinese manufacturers
c ATL included are investing a lot is sodiumyan 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. The question to
me is is you know sort of the one you're
(29:01):
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 lf 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 niche solution because it's lower energy density and
(29:22):
so on. I don't think we know that yet, but
it's coming from from c at L and its cohort,
So let's just see what happens.
Speaker 1 (29:30):
The next one is advanced geothermal. Where do you land
on hype, under hyped, just right?
Speaker 2 (29:36):
So in the US, advanced geo thermal is very hyped.
I would say it's hype for a bunch of reasons.
Some of them you know, legitimate success of companies like
Fervo Energy, you know, sort of pioneering it. But also
there's a political lens to that because our new administration
are our Secretary of Energy in particular, Chris Right is
(29:59):
super bowlish on g thermal in general. He likes geothermal
and nuclear and those are the two sort of like
overlapping clean energy things that I think he's full throatedly
in support of. And so as a result of that,
it is highly hyped that maybe warn't like, let's see
where it goes. But it's very early days. Like you know,
Fervo is hoping to have its first hundred megawatts of
(30:20):
its first big project 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 has talked about.
Speaker 1 (30:37):
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 shiel drilling type technology could make
many other parts of the world, which don't always have
(30:59):
great geotone 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 geo thermal exists in the US, but will
take a long time in other parts of the world
to build. So engineers who can manage shale type drilling,
(31:22):
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.
Speaker 2 (31:40):
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 of this expertise from oil and
gas that is being leveraged for advanced geothermal. But of
course 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
(32:02):
same vein of technologies that Secretary of Energy Chris Right likes,
advanced nuclear over hyped, under hyped hype.
Speaker 1 (32:10):
Just right, 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 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.
(32:31):
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. And the countries who have
been building nuclear not just domestically but also around the
(32:54):
world are Russia, and China and Asia if you want
to include os like eight thousands, right, agreed, Yes, South
Korea too. And so do suddenly imagine that you know
a new technology will unlock nuclear in Europe and North
America to me is overhyped.
Speaker 2 (33:14):
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 frame up to 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 eight one
(33:36):
thousand from Westinghouse and maybe the br X three hundred
from Gatachi, which is an SMR that's a you know,
three hundred megawatt reactor. Those are the furthest along. They're
bankable OEMs. Forget all this other noise. We need to
go deplay 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
(34:00):
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 had
if either. One thing I do worry about is that
I personally think in the long run, nuclear probably ends
up looking like gas turbans look today, which is there.
(34:21):
You know, in the gas turban world, there are basically
three OEMs that control like seventy seventy five percent of
the market. It's an oligopoly essentially, 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 call the herd a little bit to get to
the point where we're deploying enough number of individual reactors
(34:44):
to get down that cost curve, and that's going to
be a messy process to get there. 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
(35:06):
what we actually need to do in that market.
Speaker 1 (35:08):
Yeah, that's an interesting one. I mean on gasterbinds. Yeah,
it's semens, ge and Mitsubushi, which are the three giants
to the extent where China has been trying to make
a gasterbine 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
(35:31):
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 Atomic Energy Agency,
(35:54):
That makes it much harder for me to see just
the sort of market forces that drove gasterbine MNA happening
in nuclear.
Speaker 2 (36:02):
Does that argue in what you're saying for their actually
being more OEMs than there are in gas service?
Speaker 1 (36:09):
I think there will be national champions and more of them,
whereas siemens G and Mitsubushi are more than national champions. Yeah,
sure their country support them, but they also have such
large customers in other countries.
Speaker 2 (36:21):
It's interesting because 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,
(36:44):
but I could see that being an argument for maybe
there aren't three, maybe there's really one or two, rather
than they're being thirty.
Speaker 1 (36:51):
Well, you're imagining a more peaceful world than I think
we are going into. But I hope you're right.
Speaker 2 (36:57):
All right. I think we covered a bunch of stuff here.
This was fun. Thank you Akshav for doing this with me.
Speaker 1 (37:02):
Yeah, this is great fun. Thank you for suggesting the idea,
and thank you for listening to zero And now for
the sound of the week. That is a machine making
(37:26):
a copper heat Sinc. Which helps remove heat from chips
running in AI data centers. They require huge amounts of
electricity to run, much of which is wasted as heat,
and that's why data centers are transforming power demand around
the world. This was the subject of a recent Bloomberg
Big Take linked in the show notes. If you like
this episode, please take a moment to rate and review
(37:48):
the show on Apple Podcasts and Spotify. Share this episode
with a friend or with someone who thinks their technology
is underhyped. This episode was produced by Oscar Boyd and
Daniel Waldorf. Our theme music is composed by wonder Le.
Special thanks to shil Khan, Samersati, Moses Andem, Laura Milan
and Sharan chen i'm Akshatrati back soon.
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