Catalyst Live at SF Climate Week

Latitude Media, podcast at the frontier of climate technology. I'm Shao Kahn, and this is Catalyst. Okay, audience. Carbon removal overhyped. Reasonable votes there, carb removal underhyped. I feel like that was less people but with stronger opinions. Which I respect. Carbon removal hyped just right. Okay. Coming up, we're live. Or we were live anyway.

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All right, this was a fun one. Uh our friends at JP Morgan and DLA Piper offered to sponsor a live recording of the Catalyst Podcast. Last week at San Francisco Climate Week, which I'm sure many of you were at or heard about. Um, we haven't done a lot of live episodes of this show in the past, not for any particular reason, except that we just haven't done it.

So we decided to make this one a little bit more fun. I had two great guests and we did a little bit of a normal panel type conversation, albeit less panel-y, and then we spent some time playing some games. Hopefully you'll enjoy it. Hello everyone! So before I introduce my venerated guests here, uh, we do have to prove to the listeners of the podcast that this is actually live and real. So I'm gonna ask you to make some noise for just two seconds.

Proof that we are actually live. Welcome to Catalysts. All right. So I've got two great guests with me today. Uh the first one used to cost me a lot of money. That is Nick Chassett. Uh Nick was previously the CEO of Ava Community Energy. Ava is the community choice aggregator, the California specific phenomenon that allows you to select your own retail electricity provider in a non-retail choice market.

He was the uh CEO of the the CCA in the East Bay, which is where I live. I live in in Berkeley. Uh so Nick used to sell me really expensive power. I will I'm sure he will blame PGE for that, but Nonetheless. Uh nowadays Nick is the CEO of Octopus Energy US. I'm sure many of you have heard of Octopus. Octopus is

a uh behemoth climate tech company based in the UK. Nick runs the US operation there. Uh they do lots of different things and they have really cute pink octopuses as their spokesmen. Another guest Today is Mike Shrepfer. Mike used to cost me a lot of my time. Mike had a long career as successful entrepreneur in the tech industry, but then spent a really long time as the CTO of a little company you might have heard of called Meta, Nay Facebook.

Uh and then I guess three years ago, Mike, when did you leave? Three years ago, left Meta and decided to dedicate himself to climate tech for reasons unbeknownst to any of us. Um, and started a firm called Gigascale Capital, which is an early stage venture capital firm that has become a great partner to to me and Energy Impact Partners where I work. So Nick Shrep, welcome to both of you. Glad to be here.

So here's the topic I want to talk about with both of you before we get into into games. I was thinking about this. One of the things that I think is a knock on the climate world. is that there just are not that many examples of big you know, sort of generational success stories from a startup perspective. There just aren't that many of them. Um, from an investor perspective, there aren't that many fund returners, right? But to the extent that there are proven ones.

I think that a disproportionate share of them to date have been consumer products, consumer companies. So the obvious examples of this being like Tesla, obviously, or you could say Nest, maybe Octopus is going to be one of these as well. Um And so that is interesting because I find that in ClimateSec World actually it's the minority share of companies.

today, but maybe the majority share of historical big outcomes. And both of you have different and interesting experience selling cons or sort of building consumer products. So I don't think we talk enough about that. Um Shrep, I guess I'm gonna ask you this first. What have you taken like what are the lessons from all your time at at Meta building Facebook and Instagram and WhatsApp and so on? What are the lessons that you think apply in the world of climate?

Well in the consumer space I'd say the the lesson is it is really, really hard to build a great consumer product. And I think anyone who hasn't built it will really underestimate how difficult it is. Your average consumer is like quite a demanding customer. Um, the flip side of that coin is if you can cross that chasm and build a product that people love, uh, then you have just like a runaway success.

And I think that's the thing you're seeing. You know, in in the climatech space, I think the up-and-comer there is Mill. You know, they they make a home composting device that sort of makes your trash not stink. Um but the thing that really caught my attention is when I looked at their net promoter score. When they share with like how much do our customers like it. And I it's in the zone of like, you know, you'll know if your friend has one because they will tell you about it.

Six times. Like, have I told you about my mill? Do you want to see my mill? Right? That's how much people love this product. And once you get a product like that, you get consumer word of mouth, right? And you get influencers and you get a whole bunch of other things that just self-reinforce. And then you have just a just a just a runaway success. So the lesson there is like high bar because it's difficult because consumers are discerning. But when you cross the bar, like the rewards are Yes.

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

Yeah, I mean it needs to it needs to cross two chasms actually. One is is it it has to be something people love and it's like solves a problem that people really care about. Um and then the that problem in that class of people has to be big enough to build a great business.

'Cause I built an awesome consumer hardware product that people loved that wasn't a big enough business. We built this thing at Meta called the or Facebook at the time called the Portal and it was a video chat device and it was amazing. It w it was basically center stage.

before you had it. You could stick it in the corner and video chat with your kids and it would follow you around. If you talk to people who love this b bought this product, they love it and they tell all their friends about it. But a like dedicated video chat device just wasn't a big enough market. Right? Everyone's like, well I can kind of use my iPad. It's like good enough.

Right. So that that cost one but not the other. Um so but if you can get both of them and say like, is this a problem like literally every consumer has and it's a like top three problem that they really care about?

And this is like when I first was looking at joining Facebook, it was just kind of like the basic process I went through my head of like, what problem is this company solving? And at the time it was keeping in touch with my friends and family. It's like, well, who on earth cares about that?

It's like, well, basically everyone, right? So this is a universal product. So the most extreme version of that. I think that's hard to find in Climatech, but I think like who here likes taking out their trash? Anyone? You have to get a hand raised on that one, right? Um and who likes to like have their trash be stinky and smelly?

Nobody. Right. And so like Mill sorta solves that problem and it's pretty high up and people's like taking the trash out sort of sucks and you do it every day. So so I think you've got to get into that zone if you love it and it's a big enough problem.

That's a good bridge to talking about consumer products and energy, where Nick you have an interesting experience there because I can make an argument, I think, of either thing. One one which is people really do care about it a lot. I mean, certainly we see rising rates all over the place. We all three of us live in the Bay Area and PGE territory, not to keep knocking on PGE, but but the rates are

crazy, right? So people care about it. It like affects it's a decent chunk of their their monthly spend in their house. On the other hand, like notoriously nobody cares about it at the same time. And it's like invisible to everybody. So so Nick, you used to Sell retail electricity, but also you were getting involved in a bunch of behind the meter solar and storage and EV charging and all that kind of stuff.

How do you think about that question of like uh g getting above that threshold? Is it a big enough thing that people care enough about that you can actually get adoption? Right. I I think you actually actually solve a real problem, right? So some of the most successful sort of true climate tech companies have been solar, rooftop solar companies that, you know, obviously are sort of on the the downslope perhaps now, but have had some some some quite high highs.

And it's because they were solving that problem. My bill is too damn high. Okay, I can save 25% on my electric bill that I feel is too high by. Signing on an iPad, some construction crew will come, put some panels on a roof. Cool. I don't have to think about it. I just save money, right? So I think they're uh

The the challenge in energy is that largely energy is invisible. You don't interact with it, right? So, you know, the mill is a great example, great product, solves a tangible problem that I interact with on a daily basis. I, for instance, uh am really In when I was at Ava, less interaction now, but was really excited about some of these really interesting um induction cooktop technologies, right? Because you're actually solving problems. It is better to cook with induction than gas.

Once you do it, you're like, this is easier. Like I come home, my kids are hungry. It takes me seven minutes to boil water for pasta with my uh, you know. Typical, not super crazy BTU gas stove. I induction, it's three minutes. So that five minute period that I get food on the table faster.

Is like the five minute period that's the difference between me having a pleasant evening with my family or like an evening where my kids are like, I'm hungry, I'm screaming, and I've like crossed that threshold of no return. Um and so I think in in in energy or electricity specifically, like there are not too many of the climate tech products are not really products that people interact with in their daily days. Yeah. That solve daily life problems.

So the companies that have done really well, Tesla, they made a product that was just better than internal combustion. The car is better. Now we're in a place where lots of EVs are better. Once you drive an EV, you don't go back to driving an ice car. Uh, mill as people I I would be interested to see what the stats for mill are. Once you actually have a mill, will you ever be like, I don't want this anymore. I'm gonna go back to like having compost. I open the bin and it smells.

Um and I think that is probably one of the fundamental challenges is uh Like the the consumer sentiment of like, is this making my life better? There's a lot of products that don't really make people's lives better in a tangible way day to day.

What's interesting is there's two there's two archetypes that you've described there. Um, and I guess success stories in both, right? One I think of as being like, uh you're delivering a delightful consumer experience. It's better than whatever other thing is. I'm boiling my water in three minutes, or I get to throw my my thing in what would have gone to a compost and it just eats it up and turns it into dust, which is basically what Mill does.

um or I get to drive a Tesla. That's the like you know, delightful consumer experience. The rooftop solar example is a different one, right? It's not a delightful consumer experience. It's basically no consumer experience. What it is is is an economic experience. It's a savings. And the thing that unlocks Residential solar was the introduction of the lease in the PPA model, where at that time, like SolarCity and Sunrun and Sungevity and the companies that were pioneering that.

We're able to offer you basically savings on day one. So you could just save money on your bill, you get solar on your roof and feel good about it. But the question that I have. There's like I think there's a trope in in climate tech, which is if you're developing a consumer product, you shouldn't sell the climate benefit. Like that that shouldn't be at least not your primary

Sales pitch. It should be something else. And if it happens to be good for climate, great, right? Nest didn't sell that you were saving energy. Nest sold the experience of it. D do you bel I guess I'll ask Shrep first. Do you believe that to be true? Should you not put climate at the or environment, energy at the front and center?

Actually, say it even slightly stronger, which is we use this word climate tech like it's an actual good definition of a market segment. When we we just talked about like I sell products to consumers that save them money. I'll sell products to consumers that make their life better in the kitchen, you know, trash or or peeding water. I, you know, sell products to businesses that save them money, sell products to businesses that uh help them grow. Like

Those are businesses. Like and the be tech, hard tech, or others. So I think that like Adding the word climate on it actually confuses the equation because at the end of the day, somebody is paying you for this and they have to pay you for it because they really want it, because it saves them money, makes them lives easier, solves a problem for them. You can put whatever word you want in front of it, but it's a business.

And so um so I think that that is the thing that you just can't lose the threat on is that that at the end of the day you have to deliver that value, otherwise people aren't gonna pay for it Well no, Nick, when you were uh out there shilling residential solar or batteries or whatever it might be, what's the pitch?

Resilience. So if you live in the East Bay and you know you're you're out in uh Dublin or Pleasanton and you live on a feeder line where you're getting fifteen times a year the power's going out because of a shutoff, you're like, I don't like that. I just lost. $200 worth of food in my fridge because I lost power for two days. So, like, how do I solve that problem? Well, if I can put solar and storage on, great, I solve that problem. So it's resilience and it's built safety. Дааа.

The the number of consumers we would engage with who are really focused first and foremost on why I wanna be green was actually pretty low. That's a side benefit. And you know, they want to talk about it, but really they're talking about as long as it does this first two things, you know, sort of the hierarchy of needs. Uh, then I'm happy for it to be green. And maybe it being green is why I might do it relative to putting a diesel gen set or a gas gen set if the price is about the same.

Yeah, I would just like throw out the very simple like if you go back and do it, if if the Tesla Roadster and Model S were ugly and slow. Would they have been so successful? It's gotta be a delightful consumer experience or save you money, something. Yeah, that's right. If we just had the Nissan Leaf and that was sort of what introduced people to E Vs, I think we'd all be driving

I had one, the first one I could buy, a tester of it here in San Francisco. Fair enough. And I almost didn't make it back and forth to the to a to a Giants game. So I definitely had range anxiety on that one. But um but I'm a very special snowflake. This segment's sponsored by Nissan. Um

All right, let's get to a game. We're gonna play a game of overhyped, underhyped, or hyped just right. So I'm gonna name some. This is a Goldilocks game. I'm gonna name some. Trends, categories, Prizes, by the way. Uh there may be some prizes. Okay, great.

Yeah. Um, and you guys each have to decide whether they this thing is currently, so this is obviously your subjective determination as to how hyped it is today, but relative to your determination as to the current hype, is it currently overhyped, currently underhyped? Are currently hyped just right. We're gonna start with the topic of the year, I guess, data center driven load growth. Electricity load growth. Overhyped, underhyped, hyped just. Overright. Overheist, yeah.

Quick Zag. Yeah. So overhyped because um There's only so much connection capacity in the system, and the ability to sort of expand connection capacity is reliant on utilities. who are then in turn reliant on their regulatory commissions to give them authority to build new things. And uh the timescales at which they operate are uh designed to be slow timescales. It's not necessarily that the utilities fall. I'm sure the utilities would love to put more capital. Faster.

But they just are not allowed to do it by their regulator and they have to go through a rate case. And so the idea that we have Tens of gigawatts of capacity, they're somehow going to bypass these planning processes that have been in place for decades. Uh I think is a reflection of like maybe a lack of understanding of like how utilities build things and how regulators evaluate how and when you things get built.

You're saying that the actual amount of new capacity we get is overhyped, right? But you're not necessarily saying the demand isn't there. You're saying we're just not gonna be able to build enough. Correct. Okay. Shrep, overhyped, underhyped. Um I'm gonna be annoying and say it is both. Um, and here's what I mean. I'm gonna qualify. Um, so uh yeah, we're just getting started. Buckle in. There's no early exit from this podcast. Um

So uh um overhyped in the sense that people overattribute data center load growth with electricity demand inside the United States. You know, manufacturing and EVs are are are a huge portion of that. So people think it's all data centers, it's not. So that's the overhyped part. I would say underhyped in the sense that I like respectfully disagree um with Nick, which is just look at Nvidia's earning calls. Like people are buying those chips and powering them up.

So and I think companies are I spent a lot of time being incredibly creative about finding ways around getting power all across the world and figuring out how to do it. So these are well resourced companies with lots of money, very smart engineers. um trying to figure these problems out. So I think that a lot of stuff is gonna get built. All right. This is the last time you get to say overhyped and underhyped. You get one. That was not in the rulebook.

All right. I'm going to do a quick audience poll on this. You have to you have to clap or shout with this. Who thinks that data center driven load growth in electricity is overhyped? Okay. Respectable showing. How about underhyped? Less people? How many people think it's hype? Just right. All right. Hyped's just right, I think, is a winner there, surprisingly enough.

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Okay, we're gonna move on to another one. Overhyped, underhyped, hyped just right. Nuclear fusion. Let's go fusion. Shrep, you go first on this one. I'm gonna say it's po mm uh Just one. Uh I'm gonna go with underhyped. Underhyped. Make your case. Um, I think the time frames are hard to define exactly, but um y you know, the idea that you can give me forty hundred acres of land and I can make you gigawatts of power with almost no inputs and outputs and no other sighting requirements.

And I can do this like right next to a major highway and all the people around me are cool with that because it's an inherently safe thing, uh, I think is just uh utterly transformation. And so I think this is a very binary thing that if we can actually hit unit economics that are competitive in fusion, it'll create the largest companies we've ever seen. That was an important and big if at the end of that sentence. Yeah, overhyped, under hype.

I think if you say like there's a ten percent chance that it actually works, but if it works, it is so massively uh transformational that the ten percent is sort of worth the bet. Then I would say maybe I would agree with the under hype because I uh I struggle a little bit with the again the timescale on which these companies are gonna be able to build and deliver and Maybe safe.

But like I don't think local communities are necessarily gonna buy into the idea that it is safe. It's gonna take a while to get people to sort of be comfortable in the US, in other parts of the world, perhaps that's not as much of an issue. Um but if it does work. It's a total sort of game changer. Now I will say I was having a uh a conversation with a uh fusion founder uh a month or so ago, and uh I was sort of saying, my biggest concern about fusion is

Um, this is really the catalyst for, you know, AI to really take over. Once you have fusion and AI, they don't need the humans anymore because they don't need like to build solar panel factor factories. Fair enough. We just have to tell the AI that fusion came from us and that's why they should be treating us well for the foreseeable future. And I was kinda like I'm not. Yeah.

I mean I'm just there. You know, I'm trying to like think about how do we uh how do we align AI and I think like fusion being from our gift to you is that. Yeah, I don't know what your answer was to the question. So underhyped. Oh you agree. I underhyped. You're taking points off, right? Okay. Oh it's noted. Uh okay. Audience gets to vote on this one as well. Nuclear fusion overhyped. Thank you. Okay, fairly strong vote for overhyped nuclear fusion underhyped.

Just a lot of strong opinions about nuclear fusion, I think. Nuclear fusion hyped just right. No one thinks that.

That actually kind of makes sense to me. No one thinks that. Okay. Um all right, carbon removal. Carbon removal, overhyped, underhyped, hyped just right. Nick, you're up first. I think it's overhyped. I think uh it's overhyped sort of to the conversation we were having about sort of the consumer uh pull for big investments. Um Unless you can really drive down cost to such a sort of meaningful point that consumers are sort of comfortable paying for it.

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

That was good. Oh, you want some more? Sure. Um I think we will be shocked at how fast low cost, particularly nature based carbon removal solar systems and when I say nature based, I don't mean planting trees. I mean enhanced rock weathering, I mean ocean alkalinity enhancement. I mean biochar, uh these are systems that we can do actual real good MRV so we know that we're actually sequestering carbon in a multi-hundred year um timeframe and we'll be able to do it, you know, sub hundred dollars.

And I think once you do that, you just like the market explodes. I don't think consumers give a crap, but I think governments in the long run actually do. And we have plenty of places and it's a hundred percent an economics problem. You can't pay three, four, five hundred dollars a ton. People can't afford that. Um, under 100 out of ton, you start to get to the place where you can start affording it. And so I think our ability to scale these things out is gonna be way faster than people realize.

I will say one thing that for me uh gives me some pause about carbon removal as at the highest level as a broad category is is geoengineering, which like Look, if things get bad enough that we're in a situation where we're doing we should be doing gigatons a year, tens of gigatons a year, I don't know, of carbon removal.

We could probably do the equivalent cooling effect of geoengineering for like one one thousandth the cost, probably. Now it has its own challenges, of course, but you know, do you So about ten billion a year to like lock in current current temperatures.

Right. But I mean, relative to a hundred dollar a ton, ten gigatons, we're talking, what's that, a hundred billion dollars a year? So, you know, it's a it's an order of magnitude at least different. Um, so yeah, I it's an interesting question of like, you know, it it speaks to do you believe

The world's governments will get their act together fast enough to do carbon removal instead of waiting too long and needing to do geoengineering, which is cheaper. Uh okay, audience. Uh carbon removal overhyped. Reasonable votes there. Card removal under hyped. Thank you. I feel like that was less people but with stronger opinions. of it. Which I respect. Carbon removal hyped just right.

Okay. Not a lot of moderates in this audience, which I appreciate. Okay, we're gonna do uh we're gonna do one more. No, we'll do two more. All right. Virtual power. Virtual power plants. Now this is an interesting one because I would say the hype cycle on virtual power plants has has

gone through a full hype cycle, certainly, as of I don't know, a decade ago, and then came back and now it's kind of back. So you have to you have to calibrate the current level of hype around virtual power plants here before you give your answer. They're both deep in thought. All right, Nick, virtual PowerPoint.

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

Managing when you charge an EV is essentially free. You just go to like we at Octopus, we uh 50% of our customers that have EVs have signed up to allow us to manage when we charge their EV in the last 18 months. That's 250, 300,000 EVs because it doesn't cost them anything. They say, I plug my car in and by six o'clock in the morning, it's 80, 90, 100% charged.

I don't really care what happens between 9 PM and 6 AM. And as long as the user experience to like enroll my car is easy and I get some benefit or I get some cheaper charging, I'll just give it to you. That's fine. Um, I actually think the hardest uh flexibility uh at least in the US is is a thermostat because you're actually asking somebody to be less comfortable. But EVs, batteries.

uh water heaters, pool, like there's so many lows. That's just residential in commercial, it's the same dynamic. So I think the challenge is the consumer side is that we actually have built up a ton of systems within our utilities. to make it really hard for consumers to actually like make the decision to make

to allow their flexibility to be accessible and to have some level of monetization. When you make it easy for the consumer, it uh it's gonna scale. So that's my argument for being under hype because we have some work to do to make it easy. Underhyped. Mike?

Nick is probably gonna really disagree with me on this one. I'm gonna say consumer sort of demand response is overhyped. It's just like so damn hard to get consumers to sign up for these things and it's such a fragmented market that getting to reasonable scales is hard. And I I think um enterprise and commercial demand response is is sort of underhyped. There's just so much there's big money there to be saved. When you're when I'm operating many hundred megawatt plants.

Like I can save a lot of money. And so it really starts to be relevant. also I mean, there's so much more at those scales, whether it's aggregated from residential or commercial, it's easier to get there with commercial industrial data center, et cetera. But like there's so much more need for it now because the grid is so constrained.

But it gets down to this thing of like the market mechanisms have to be there, the economics have to be there, and it relies upon your belief about this the the evolution of the electricity market and the regulatory compact. And that's always where things tend to get more complicated. I'll just say though in Texas One gigawatt of peak load is attributable to pull pump.

These are pool pumps that don't have to run during peak periods. It doesn't affect the consumer experience of like the peating and cooling of their pool. But it's really hard, to your point, it's really hard to get them engaged. I think the the unlock for residential flexibility is the consumer experience. At Octopus, we've figured out how to make it really easy. And as a result, we have built massive

low costs flexibility portfolios. The challenge is, you know, a lot of utilities don't have the consumer systems in place to do it.

I think the one place that I'm optimistic is like the if like large enough consumer demand is EVs, because EV charging is like a huge load source and you can you can integrate at the car level, so it's a lot easier. Like good luck integrating with the pool automation systems. My understanding is that the state motto of Texas is don't step on my pool pump. Um okay, audience, virtual power plants, or whatever you want to call it, load flexibility, uh, if you prefer, underhyped. Thank you.

All right. Strong vote overhyped. Yes, I love the one, whoever the one person is, brave enough to hate on virtual power plants, hype just right. Just a few. All right. A lot of lovers of of load flexibility here. All right, last one. AI for climatech. This is applications of AI that will solve big problems in decarbonization. Shrep, this is up your alley. Yeah, all right. Overhyped, go on. You should know.

Um, I I think that the I look, I'm a huge believer in AI is gonna transform a lot of stuff. Obviously a huge believer in climate tech. I think that you always have to ask yourself a very simple question. We talk about AI for X Which is if you show me a pie chart of the most valuable parts of these problems, the most difficult parts of the problem, and then you overlay another pie chart, which like what part of this problem does AI solve? Many climate tech.

Things fail. So AI for material science, great for discovering new materials. The manufacturing scale-up is usually the hard part. So great, I've got this new moff. I've got to make a lot of it very cheaply. The AI doesn't really help me very much with that. Like in theory, maybe I'd make something that's slightly easier to manufacture, but I've still got all these massive scale problems.

AI for cancer therapeutics, it's real hard for me to find the exact right protein that will target, you know, something, but once I do the scale-up manufacturing is relatively straightforward and I'm producing a very high value molecule.

per you know per unit made. So I I think that like it works very well there, but I'm I think it's massively people just slapping AI on top of something without having a good explanation of why AI is like a state change in the most important part of the problem for whatever they're trying to solve. Well, but neck I I'll go un I'll go overhyped and I will sort of uh Add

limited comment because I think Mike uh covered a lot of it, but it's that I don't see AI as being uniquely uh suited to solving climate tech problems. These are we're businesses solving business challenges, be it uh manufacturing or software development or discovery of molecules. So to the degree that AI is a good fit for this particular business use, irrespective of the climate use case.

it's gonna be helpful and to the degree that it's not useful today for um scaling up manufacturing, then it's not gonna be helpful. So I don't think it's some anything unique to climate that AI is particularly attributable to. All right. I suspect we have some AI climate founders in the audience. So let's see what you all think. Uh AI applied to climate tech overhyped. Thank you. All right, Team Shrap, uh underhyped. A few hypes just right. Thank you.

All right. I think overhyped wins it. I must say I I tend to agree with that. Um, it'll do lots of things in lots of companies and climate tech, right? We all agree there. Okay. We're done with overhyped, underhyped, hyped just right.

We're gonna give out some awards to finish out this conversation. The first award is the climate tech sector or the sector of whatever you want to call this. this market that we're in that stands to benefit the most from the current political environment in the United States. Benefit the most from the current political environment. This is a multiple choice, or you can name your The multiple choice options are geothermal power, nuclear power, critical minerals. Carbon capture.

You name any of those four or go off on your own. I'm gonna go with C critical minerals. Critical minerals. Why? I mean we're embarking on a trade war. China just, you know, banned the export of six major critical minerals. We make none of these in the United States. Uh so that seems like a real big problem. Sure does.

One of the one of the challenges I do with One of the challenges of critical minerals is that there's a uh is that there's like a real difference in the timeline between when you can impose an import tariff or a ban.

on the import of something and how long it takes to actually build a new mine or refining project or whatever it might be. And so one of the risks here is like, yeah, we're gonna We're gonna stop the flow of graphite from China into the US for anode materials, but like standing up a new graphite operation in the United States is gonna go it's gonna run past Trump's first second uh current term. Um so anyway, the point being like

The that I think it is it is undeniably true that that is a uh cornerstone of the current geopolitical wars that are that are underway. The question is, does it actually sufficiently galvanize? uh investment in domestic mining and refining and so on to make the difference.

Yeah, the timescales here are tough, but uh sorry Nick. But um I'll let him get it too. Um but I do think that they're we've seen lots of companies have very creative, fast to deploy ways to make graphite, to uh precision mine cop. Bye.

um to to to to refine rare earths in a way that, you know, a lot of the problems of these these techniques, we wouldn't actually be able to permit them in the United States. Like they're too dirty and messy. And so it's not just like you need to build exactly what they're doing there here. It's it's a real

real challenge. But I think the opportunity then is if you have new techniques that are both faster, easier to build and cleaner, then that they might be able to run that window. It's it's a tight window. Yep. So so I would say none of them because they all require uh large capital investments that require certainty. Uh and we are in a period of massive uncertainty uh across the board. So I would actually say I'm fairly bearish on all of those in the near term because I actually

I I think we are going to uh continue to see sort of a uh shift one way and then another way, tariffs. Oh, actually fewer tariffs, oh, actually tariffs. Uh interest rates they're gonna come down. Oh they're not. Yes they are. Yes, oh no they're not. Uh So uh so forth, uh so forth and so forth. So I I'm actually much more uh bullish on um this is sort of gets to flexibility. We gotta squeeze more out of what we have.

because uh we're not going to be able to attract or make big investments or get things permitted because actually we've fired all the people who work in the agency to actually do the uh the the the entitlements for the the land. It's not that we don't want to permit the thing uh at Department of Interior. There's are no people that actually go through the exercise of approving the permit. Um

So I would say flexibility or resource efficiency, squeezing more out of what we already have in the near term. I think in the long term, I I think I generally agree with you because of the geopolitics though. I don't remember listing Debbie Downer as a option. But that's I'll allow it this time.

I I would say that the the retort that I I I agree with your concerns that the one thing that I think we don't talk enough about is domestic sourcing from the Defense Department for critical things. Everyone is

figured out that the, you know, Ukraine war is a war of drones. And if you want to have US manufactured drones with batteries and electric motors in them from US source materials, there's there's some departments in the government who are going to really want to do that. And I think you see similar things in energies. uh with with fission and others. So I think there's a opportunity to start building that infrastructure with a buyer who's a little bit longer term. I hope you're right.

says Debbie Downer. Okay, so next award that we're gonna

Vicer than I expected. Did you know we were gonna be oppositional on all of these things? I planned for it. Um Next award, most important, least appreciated category of climate tech, what deserves more love than it gets? I list I'll list a few, but again, you can name your own or just, you know, shit on all of it like Nick probably will. Um All right. Most most important, least appreciated category of climate tech, energy efficiency.

I guess that's what kind of you were saying on the last one, resource efficiency, public transit. Natural gas? Question mark? Forestry and land use or name your own? Shrap you go. Wave power. Wave power, most important, least appreciated. Certainly least appreciated. Go on. Wave power.

Um there's a tremendo I mean, wave power is basically concentrated wind energy. Um, and there's a tremendous amount of it out there and we're harnessing very little of it. So it is probably the largest single untapped energy source on the planet. Okay. There's a Zach. Nick, you're also going to say wave power, I assume? I think we're sort of down right now in the US on electric vehicles. And I think uh You know, we're down on Tesla because For a variety of reasons. Uh we're down on uh Suck out.

I I I uh you know, we're we're down on US auto, uh OEM's ability to scale up manufacturing. And I think getting to the the thing that sort of opened this conversation about just better product. consumers wanting better products. I think electric vehicles, uh Ford is making uh, you know, mock E's that are just better to drive than the alternative uh Ford and uh Hyundai and Kia, like they're just better vehicles.

And I think uh we're sort of in sort of a down sort of view from a s uh down cycle from a sentiment perspective for EVs. And I just think consumers are gonna keep buying them. And like w when you buy one, then you tell your neighbor, This is just so great. The neighbor buys it and like you have the referral cycle and suddenly like You're Norway and you have ninety percent of new vehicles, REVs, just because they're better and it's

Uh there's a lot of flexibility opportunities. So I'm actually think that's uh That's what I'll say. Yes. Suddenly your Norway is exactly what the other side is worried about happening. Um all right. So n none of my answers resonated with any of this. That's fine. That's fine. I didn't spend much time. They were awesome. Thank you. Thank you so much. I appreciate that. Okay. We're going to do one more.

Craziest idea that just might work. Okay. Here's my list, but of course, come up with your own. Wave power. There's one. Um okay. Craziest idea that just might work. Space-based solar power. A lot of these are space related, I found as I was thinking about it. I don't know why that is space-based solar power, data centers. And so I by by the way, I will say every one of these has at least one and generally multiple startups doing this. So these are these are real attempts.

Space Bay solar power, data centers in space. Deep geothermal, geothermal anywhere, let's call it. Drill deep enough, you get geothermal power literally anywhere. Deep sea mining of critical minerals. Asteroid mining. Or name your own. I'm gonna name my own I I love all those. I just don't know very much about them. So I uh while I'm excited, I'm gonna uh sort of focus on the lane that I'm in. And the the the the company I'm really excited about is a company called Water.

I knew it. You texted me about this last week. So water is uh they put two NVIDIA GPUs on top of a water heater. And uh, you know, creates heat. They suck it into the water, it heats the water, and it creates a 10x ratio of uh compute revenue to electricity costs. So they can actually give water heaters away for free. They monetize the compute. And uh It's a Bitcoin mine water heater. Yeah, but it can be from Bitcoin. Yeah. Exactly. A big point.

It's not necessarily just for Bitcoin, it can be for sort of AI uh AI workloads as well. Everyone says that. And... I as a retailer, as a re as a retailer, the idea that I could go to a consumer say, I'm going to give you fixed price electricity. uh irrespective of consumption for say fifty dollars a month as long as you install this water heater and then we split the compute revenue. I'm kinda like this is a real differentiator compared to, hey, I'm going to give you five bucks to let me uh

uh manage your thermostat or uh I'm gonna install a battery. I'm gonna lose a bunch of money on that battery that's being installed and hopefully I'll figure out how to manufacture batteries and get my costs down. I'll go with the water heater with the Bitcoin. I feel like there's some risk if they give you your you they give you two NVIDIA GPUs, like you're just gonna take those and resell them. But that's maybe part of the you know the the strategy there.

This is good selection. That's a it's a real company. You texted me their website. It's interesting. All right. Mike, craziest idea that just might work. I mean, if if I say offshore uh open ocean data centers, is that reusing my answer to the last question? Do you want me to do something different? Okay. Great. So well th that's sort of my answer, but then I'll go with uh um uh super deep geothermal. Super deep geothermal. Yeah. Yeah.

Okay, this was a lot of fun. Please, everyone, join me in thanking my guests, Mike and Nick, for Nick Chassett is the CEO of Octopus Energy US. Mike Schrepfer is the founder and a partner at GigaScale Capital. The show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics.

Latitude is supported by Prelude Ventures. Prelude back to visionaries accelerating climate innovation that will reshape the global economy for the betterment of people and planet. Learn more at Preludventures.com. This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquan, Stephen Lacy is our executive editor. I'm Shale Khan, and this is Catalyst.