The new wave of DERs

लाटिट्ट्ट्ट्ट्ट्ट्ट्ट्ट्ट्ट्ट्ट् covering the new frontiers of the energy transition. I'm Shail Khan, and this is Catalyst.

It's gone from this really kind of only extraordinary moment when the resource is used to being super ordinary, in fact quite dull sometimes, if you think about it that way. I don't even know why you're having me on this pod if that's the case, but like Super boring. Yeah. So boring. Like but like in all in all seriousness, that's that's the evolution that I've watched. Coming up, the Expansion of Demand Response with Dana Guernsey.

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When utilities need flexible capacity they can count on, they turn to energy hubs. Energy Hub works with more than one hundred and seventy utilities, coordinating over two point five million devices to manage three point four gigawatts of flexibility built for the moments when utilities can't afford uncertainty.

Energy Hub builds and operates virtual power plants that utilities actually stake their grid planning on, coordinating EVs, batteries, thermostats, and more through a single platform built for utility scale, predictive, verifiable, and designed to perform when it counts. Learn more at energyhub.com. I'm Shail Khan. I lead the early stage venture strategy at Energy Impact Partners. Welcome. So you may have noticed that I'm on a bit of a distributed energy resource kick on this podcast of late.

Well, it continues today and honestly next week as well. Uh, but this week we're talking demand response, which honestly is what most of these conversations have really been about. Flexibility, VPPs, et cetera, they're all new spins on or expansions of the OG form of distributed energy resource grid services, which is demand response.

Demand response was demand flexibility before it was cool. Let me make another point here that will maybe feel a little bit like a tangent for a second, but stick with me. For all the talk that uh I often hear, I'm sure many of you hear, from many of my peer venture capitalists about asset light, low capital intensity startups in this space.

The reality, in my humble opinion, is that there's actually very little historical evidence that that type of company, that profile of company, can produce really big outcomes, or at least very few of them have. In fact, I think you can count those success stories on one hand, most likely. But one of those success stories, and one that I think has been somewhat forgotten in the annals of history, is Enernoch.

Which was really the pioneer of demand response and went public in 2007 during the cleantech 1.0 wave, kind of the early days of that wave. Ultimately, Enternoch was acquired by NL, the big Italian energy company, uh is now known as NL X. Which is part of why it's not as well known today to folks who are newer to the sector. But my point is that demand response as a category can, I think, accurately claim to have actually produced a venture-backed IPO, not even a spec.

Which is not true of many other categories that you see in vogue today. So it's interesting from historical context, but it's also very interesting in today's context because a lot of what we are seeing happening in the market right now with the ability of distributed energy resources to start to provide grid services of one kind or another. is born out of basically an evolution of that DR market. Anyway, Dana Guernsey, who is the CEO of Vultist

and my guest today, started at Enternoch in 2008, I believe, and then ultimately co-founded Vultus in twenty sixteen. So she's got almost eighteen years in this space, which means that she has all of the right experience, the right battle scars. and the right current context to help us understand where we are now in this moment. Here's Dana.

Hey Shill. Thanks for having me. All right. So I want to start by uh having you walk me through your lens of a history on demand response in in the US at least, because you've been in it for mm the majority of the time that that market has existed, I would say, or at least at any meaningful scale.

And it's going through some pretty interesting evolutions right now where there are like macro factors that I think are driving it into a whole new category. But But I think a lot of people are waking up to it now and they're either using that term demand response or a variety of other terms, demand flexibility, VPPs, maybe whatever. Forget the term for a second. You know, paint me the arc of the history of this market as you've seen it. Sure.

And actually I'm gonna even go back a little prior to my time, not to date myself here too much, but even before we had aggregators, which was really my entry into the space. utilities had interruptible programs. And so the very, very early days of demand response and whatever we want to call it across the course of time began as this kind of blunt emergency only tool.

in those utility interruptible programs. So imagine like making manual phone calls to very large industrials and then they would curtail their energy use typically during a crisis. And so it was this like almost like fire extinguisher used only in a crisis, a lot of times not used at all.

Uh and so that was the very, very beginning. And then my entry into the space came uh when I joined a company called Enternoch, which was one of the first aggregators I joined back in two thousand seven, eight timeframe. And that was when things started to evolve. So I would say we went from the one point oh or the zero point oh when it was the utility programs into more of a one point five oh or two point oh

uh where the concept of aggregation became prevailing. The notion that a technology platform could do something started to emerge and the folks that have been in the industry for a long time

Uh you find a lot of people who used to work at Enernoch or C Power and now of course Enernoch is an LX. So that was really where I quote unquote cut my teeth, I guess. I was there for a while. Uh and I watched the market evolve and I used to just think Gosh, like If only more things could be connected, if only more things had an on-off button that could be used with technology, if only pricing signals were more obvious.

This stuff would get used more. And so there's a bunch of stuff that happened along the way, including some pretty wonderful FERC orders that opened up markets and We can go into any of those if we want to. I'm assuming many listeners are familiar with orders like 719 and 745 that basically started to value the demand side.

the same way as a typical generation resource. So the signal started to be, uh, yeah, if you could reduce a megawatt of demand, you should be paid the same as a megawatt of supply. And more and more aggregator and aggregation models came to be recognized that one plus one can be three sometimes and that the value of a portfolio was there. And so over time, fast forward to today, uh

I I I think I think Shell, my favorite part about our business these days is that at any given moment we're being dispatched. If I opened up our platform right now, there would be one to twenty different dispatches going on. And so it's gone from this. really kind of only extraordinary moment when the resource is used to be a Super ordinary, in fact, quite dull sometimes, if you think about it that way. I don't even know why you're having me on this pod if that's the case, but like super boring.

So boring. Like but like in all in all seriousness, that's that's the evolution that I've watched. And so I um Posted on LinkedIn a couple months back or a month back that, hey, you know, by the way, one thing you might not know about our business is we're dispatched. Every day, three hundred and sixty five of the last three hundred sixty five days. And I got this really overwhelming response of wow, I d I didn't really know that and maybe that's the wake up call that you're talking about. But

I'd I'd love to unpack with you the reasons why that's true, because it's a number of things. It's it's new use cases, it's market maturity, it's technology maturity, it's rising electricity prices. declining cost of the DERs themselves. It's like all of those things.

Um, but the market's having a real moment now and and so that evolution has been really cool to watch. It's been really cool to be part of. Uh and I'm really grateful that more people are coming into the space and realizing that maybe maybe we're at another inflection point now.

Yeah. So I think of there being, you could tell me there might be more than this, but there are like three or four vectors through which the the market has broadened over time since those early days of Enternoch or even before the aggregators, right? It started off as being a pull switch in case of emergency situation that was called upon almost never. So now being called upon often in many different contexts. That's one.

Two is uh you said, you know, anywhere with an on off switch, but actually that was like that's been a shift, right? Because initially, as you said, it wasn't even I guess it was an on off switch, but it's super manual. It was like utility calls large industrial. uh plant manager, large plant and plant manager says okay and like goes over to I imagine some some uh switch in their factory and like pulls a dial and turns the thing down to it being much more automated now.

The third is the resources themselves, the demand side resources themselves, which as you said started with just like a small number of large industrials manufacturing facilities and now is is much broader. And sort of relatedly the resources that are at those sites. So it's it's you know, it's not just straight demand reduction now. Maybe it's dispatching storage or

whatever. So there's there's at least multiple and in each of those ways, like it started from this kernel of a very, very specific thing and it's become this much broader thing. I guess I want to ask on those on those last two in particular. How have you seen the evolution of who participates in these programs on the demand side? Like what did it used to look like and what does it look like today?

Okay. So to reframe, I think what you just asked me, there's there's both more stuff. So to your point, there's more things with the on off button and importantly we should say that are connected to the internet, right? Right. So there's yeah. So there's just more stuff. There's more technology enabled stuff and stuff's a very technical term. Uh, there's more things to do with that stuff. In other words, there are more use cases. So we've graduated from capacity emergency only.

To the vast majority of use cases, sometimes being economic or balancing of renewables and ancillaries and local congestion management and things like that. We even have carbon-based. use cases. And then there's more need for the stuff because of what pricing is doing today and the fact that we've entered a new paradigm where we're we are in a low growth environment. Um, but to expand your question, I think you were asking

Were you asking you were asking about the customers themselves and and and why they care more? Well well it's no longer a vitamin, it's a painkiller. So maybe this Uh that too, but actually before that, who are the customers that participate? I mean, I think that uh the expansion from it's, you know, uh Jill Schmoe running a factory to like a pretty wide array today is interesting. So like if I look if I were to look at the Voltus platform.

today and the customer set on the platform. Like how would you How would that pie be split? It'd be so to give you a sense, there'd be over fifty different verticals just within commercial and industrial. And then there'd also be residential. So going maybe smallest to largest, you'd see everything from an electric vehicle in a home to a smart thermostat.

to uh mom and pop kind of retail shops, big box stores, any kind of commercial load, school districts, wastewater treatment plants, on up through larger industrials. Maybe first larger real estate building, commercial real estate is huge in particular in areas like New York. on up through industrials and on and on, steel manufacturing facilities, massive loads. Those are as a sidebar, the original large loads in my mind were like the paper mills, paper mills and the steel mills.

And then there was crypto and now we're seeing the there was always data centers of the quote unquote traditional sort and then cloud compute and now we're seeing the AI data centers kind of at the top. So that's the it really runs the gamut and in many ways that's the strength of the portfolio. You can take things that maybe have operating parameters and constraints and pair them with other things.

or other customers that have similar but different constraints, and now you can respond to what the grid needs by tetrising these things all together.

Maybe staying within the CNI world for a minute, because I know this will be different for for residential. Um, talk a little bit about the resources, like what is being dispatched, generally speaking. Yeah, so it's still a lot of load control if uh on top of things that are now what we would call behind the mean or assets.

So let's just talk load control for a second. It the first thing we'll often do when we talk to a customer is take a look at their electricity bill with them and run through it and make sure that we're understanding right well how much energy are they using, what are their demand charges, which are y sometimes a f a shockingly high portion of the bill.

Uh and so anything that's drawing energy is eligible to be something that can use less energy. And the more that things are connected to things like building management systems, the easier and more technology-enabled this becomes. So there's still a lot of

load control as a DER itself as part of the VPP and now we're starting to throw around the acronyms. But I'm I'll I fall into the like all inclusive category. And so there's a lot of that. And then there's behind the meter assets and that can be a a a generator behind the meter. It can be battery storage. Increasingly energy s uh battery energy storage systems are one of our top growing verticals and that just relates to the basics of the cost curve coming down.

So that's that's everything. It really runs the gamut.

Can you talk a little bit about geographies today? Like where uh it's sort of national to an extent now, and thanks in part to those FERC orders that you described that happened a few years ago. But is there significant concentration in some regions over others? Is there a significant pricing differential? in terms of the value capture in some reason o regions over others, or is it all pretty uniform?

Let me answer volume first and we'll come back to pricing because they're slightly different answers. Uh we very intentionally built the company thinking that we wanted to be in every wholesale market in every territory eligible across North America. So that is true today. We have some markets that have emerged as just larger than others, but it's it's by and large owing to the size of those markets.

So you'll have your PJMs and ERCOTs and New York and SPP being bigger than, for example, the Canadian markets. But that's because of percent penetration against the peak load, not because that we've really seen that one market is where we're going to concentrate. And that's a business choice for us. There's other aggregators you'd ask that say they're heavy in one market or another. Um But because of the second part of your question, pricing, pricing can get a little crazy out there.

Anyone who's watched the PJM auction for years knows that well one year you think it's happening and then the next year it's this and it goes back and forth and you might find a trend line over time. But if you're trying to run a business, it's really, really, really hard. And so the best way is to adopt more of a portfolio. So we have a portfolio of portfolios and that's how we've built the business is approaching it through the lens of

the actual risk management of the fact that we are exposed to the pricing and that things can change. And long ago I gave up the game of trying to predict where auctions would land. It's just it's just not. Instead we have a saying internally that we just would like to be happy with our participation in all outcomes. So whether it's up, down, left, right, Uh certain things are outside our control, but the way we manage it is being everywhere. So we're everywhere, Shale.

Everywhere. Point taken. Is this a market this is going to vary by region too, but is this the type of thing where you earn most of your money on a few days out of the year. I mean, maybe this is yet true in ERCOT, not true in somewhere else, but like to what extent is this a you need to be there to dispatch on the hottest days or the peakiest?

load days versus a you're like the the cash flow is steady daily over the course of the year or seasonal or something? Like what does the profile look like? Okay, so brace yourself. I'm gonna answer with a lot of it depends. So it depends. Uh I'm braced. It's it it depends, it depends.

I'd say over time the trend is that this stuff is getting smoother for a couple of reasons. One, like this notion that like the summer hottest, peakiest day is like the end all be all, that that's gone. That was 1.0. So we have winter peaks, we have shoulder issues because of outages and things like that. Uh and so just even like across the year seasonally, we are seeing

A spreading, a smooshing out of the of the value. And so when you're talking capacity or even reserves, and let's put energy aside for a second, when you're talking capacity or reserves, both of which are more or less call options on energy. You're getting paid for being there during the time of need and the option Right, and that's like an annual auction. Right.

Annual, biannual, there's seasonal, even even talking reserves, uh, if you just let's go to operating reserves for a second, that's that's daily. It's a day ahead or real time market in some markets. Uh but you're still and so there's an there's a hourly price associated with providing reserves to a market. That is pretty spread out. It's a little bit ebbs and flows here and there. Reserve markets actually can sometimes be higher uh in those in those

Shoulder seasons because of shortages of other resources. So that spreads it out. And then when you're talking about like the energy payments themselves, we have a lot of customers who respond economically. And so it's only when pricing goes above X that they want to curtail because that's their threshold. That's their what we call strike price. And so for those

That's like you're clipping the peaks of pricing. And so you gotta look at like yes, if you're gonna have a heat wave in the summer, there's gonna be a lot of money made there. If you have a polar vortex in the winter. But as a general trend, as a gener general observation, these things are getting spread out. Now layer on top of that, we're also seeing more of the what we would call quote unquote traditional capacity programs being dispatched.

regularly. I lost count. It used to be that that would be crazy to not know how many times PJM dispatched DLRP this summer or New York dispatched their SCR special case resources capacity program. But it's again and again and again and again. And so the payments associated with those, the exercising of the capacity, uh, those also become a little more spread out. So that's that's the trend in like

That's part of why I come back to like I love that we're being dispatched all the time for a number of reasons. One, it spreads out the payments, which is good. But two, like, think about exercising. This is a muscle that now becomes well used. well exercised. You want to keep it that way because the

At the end of the day, the thing that's most important is that we deliver. So as an industry, showing that not only does this stuff exist, not only can we build it, but when you call on it, it will show up is so incredibly important to us. we have these North Star principles internally and one of them is just deliver on our commitments to grid operators. It's very basic. And so the more we get used, uh the the more of a f well-oiled machine it can be.

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You talked about PJM dispatching. I'm curious, um I guess there's a broader question here, but it's sort of PJM specific. So PJM and the capacity auction that everybody started talking about a few months ago, you know, prices spiked again. Total demand response. or load side participation in that market, I think was relatively flat and year over year anyway. I guess my question is at the high level, like what do you what is the rate limiter on the growth of

whatever modern version of demand response there is. Is it I think what changed in PJM in part was like the rules around capacity accreditation. You could probably tell me all the details there. But is the rate limiter like Achieving sufficient value from the grid operator? Is the rate limiter finding enough of the right customers on the demand side? Or what stops this from 10xing tomorrow? It's all the above. It's all the above. So Some of it is

Yes. The higher the pricing goes, the greater the adjustable market because now things pencil out for nearly one hundred percent of things, right? There's also just time. So how quickly I get asked this all the time, like well well if you just had endless resources, how quickly could you do things? But there's still just a limiting factor of the time to to to just go out and do it. Uh there's the rules you alluded to the uh

the ELCC and all the accreditation changes. And so there was a there was a lot behind the scenes more than meets the eye around, well, more total megawatts showed up, but because of the way they counted it. Fine. Um, I can't really speak for others. I mean, we grew year over year. So one of our takeaways was uh, okay, well, well, well, that's great. Like we have more space now, and so we're gonna go out and and have more to offer customers.

And the last thing is, I do think people don't always keep in mind that it's not like one, it's not a one bite at the apple moment. So PJM has. the forward auction, which is one way to procure capacity, and then they have their incremental auctions. So as you approach the delivery year, what will happen to pricing and are people kind of I don't want to use the word withholding, that's a you know bad word in the industry, but are people kinda just waiting?

to see uh and then go into the incremental auction. There's an and this will come up as we get to the bring your own capacity con concept, but there are others there are other ways to procure capacity. And so I I wouldn't like also over rotate on that one signal that DR was flat year to year for one auction because of all this other stuff in the mix. I think in general, the sentiment in the market is one of huge optimism and excitement. I just came from some time at Climate Week last week where

Uh folks who like are adjacent to the industry asked me like, ooh, how was that? Like, is everyone okay? It's like everyone's great. Everyone's great. There's a ton of optimism. Uh Like I said, the market's having its moment and people are just excited to get to work. Now, are there things we could do? Yes. If I had like a magic wand, I would have Better data access and some basic stuff that I think is within our power to enable even more growth in the sector.

Better data access on the customer side, like load data, better access on the utility side to know when it's going to be dispatched. What's the data that would unlock something for you? Yeah, so when we think about like the residential portfolio, for example, um, so C and I, we go and we install uh either I either there's a way to tap in through APIs and and get customer data through something the customer already has.

uh leveraging our API platform or we go and we install what we what we lovingly call our VOTLET device, which sits on top of the utility meter and Streams real-time data to our platform. But data is very important. When I think about the growth of our residential portfolio and what's I think you use the term rate limiting there. It's it's the lack of access to and I'm gonna air quotes here for the listeners, smart meters, right? So we deployed all these smart meters, we rate based them.

And and then it's like, well, can we please use the data from them? But no, uh, in a shocking amount of territories, it's actually quite hard to gain access to that, even if you are the consumer. And so there's some basic stuff around data access uh and unlocking some of the smaller assets that now pencil out. So some of the s for it's now really worth it for smaller assets because of where pricing is.

And so how do we make that happen? What's the rate limiters? There are still some some regulatory uh tweaks, if you will, that I would like to see.

So we've talked about this or versions of this a little bit before on on the pod, but um but you made an announcement just this week of a new product, basically, this bring your own capacity product that you're offering, which is uh suited, I think, to any large load, but pres presumably predominantly aimed at data centers where the the problem is the most acute. Um why don't you start by just describing what it is and then I have a bunch of thoughts and questions about it. Sure.

So yeah, so we've been really excited about this. We've been talking about it to many folks for a while, but we kind of officially launched the product today. We had everything all buttoned up. And what it is said most simply is Offering a way that increases time to power for large loads, and yes, in this case we're really thinking about data centers, but nothing says it couldn't be other large loads by allowing them to pay for and fund and bring their own capacity to the table.

How? Okay. So that's the qu that's the next question. I I took the words out of your mouth, but basically The markets are already have very mature, well-defined rules for what it means to be capacity. What is capacity in PJM is not the same as what is capacity in MISO or SPP or or you name it.

So we have an accreditation process and we have a a way to evolve that over time. And at the end of the day, if the problem is generation capacity, let's define the problem. Let's say the problem is generation capacity. We don't have enough of it. Well okay, great. Well so let's build it and let's allow the markets to govern how we're building it and how we're operating it and what it means to be capacity to meet the needs of that market reliably. And let's let

the load pay for it. So that's what it is. It's it's kind of taking like what would traditionally be a bilateral agreement where load serving entities for a long time have purchased out of market. They they've run procurements for capacity out of market and reduced what they need to go and buy in market. This is a is trilateral a word, but i it it's allowing the funding to come from the load itself. And so you're you're offloading the burden.

the financial burden of the load coming to that area, but you're also offloading the risk. Cause I hear a lot, well, like what if it doesn't get built? Or you know, so the concerns are we don't have enough capacity, what if it doesn't get built and why should ratepayers pay for the large load coming to town? And so this Allows it's a win-win in my mind because it allows the large load to come to town. The utility wants that.

And it gives the utility the capacity that it needs, accredited by the market it's sitting in. Let's let's for a moment put on hold vertically integrated utilities. And it's putting the funding on the part of the hyperscaler or data center developer. At the same time, it's providing a signal to, in this case, VPP developers or Voltus to build exactly in the area of the problem. And so That's why I love it. It's really an innovation on top of the markets today.

The markets today which work for many, many things, but are struggling to accomplish all of these things all at once with the new large loads everywhere.

So like versions of this, the bring your own capacity thing have happened with data centers before, right? I think uh but it's it tends to be grid scale generation, right? So you'll have a data center and this has been going on for years, data center will go

there isn't sufficient generating capacity, the data center will or the operator hyperscaler or whatever will will pay for new generation to get built, not necessarily on site. I think what's distinct in what we're starting to see now, what what you're pursuing is a version wherein that's not like it's unlikely to be, at least in your program, a single CCGT natural gas plant that is that new capacity. It may instead actually be

An aggregation of a bunch of demand side resources in that region, right? And that's what's sort of distinct here from what we've seen historically. That's what's distinct. That's what's distinct. And so that would be bring your own new power plant. And that would that would be subscribing to the notion that

if you're going to be bringing a new 24-7 load that somehow you need to like build new twenty-four-seven generation exactly on that land parcel. So the other thing I'm trying to do is a little bit like broaden our minds on the term co-location. So sometimes it might be that you need to build exactly on that land parcel because you need a substation upgrade or something like very physical.

Put that aside for one minute because increasingly what I see is um that it's more the constraint is a little broader than that geographically. So let's define the constraint. Let's just say it's at the balancing authority. So that's your constraint. So that's where you want to co-locate.

So this notion of like on-site versus off-site can be a little bit more flexible if you're willing to take into account the fact that as long as you're co-locating at the constraint, that's solving the problem. And now you have more tools in your toolkit. Inclusive of VPPs, inclusive of deploying more storage in that entire area where you need it.

Um and that's like the spark fund model of what they're trying to do, right? So so these concepts are all things that I think we're all talking about and we're all loosely agreeing that we need to solve these problems and And we're loosely agreeing that the burden and the risk should lie on the large load coming to town. And like what we're struggling with is how.

And so rather than point fingers and say like, oh well it's you know, this per this, that or the other entities faults, like I just wanted to we we wanted to introduce another solution that works today. And so that's why we that's why we finalized the product and launched it and are psyched to be talking about it. How does it actually work mechanically, right? Like data center uh operator, developer,

Going into a particular region, talking to the utility, trying to figure out what capacity there is there. At what point Do you bring in the bring your own capacity concept? And then is it a okay, we volt to say, all right, you need a hundred megawatts of additional capacity in order to set your data center at the size that you want in this location?

utility or load serving entity, you tell me the aperture that matters. Is it the balancing authority? Is the deliverability window smaller than that? And We Vault just will go originate a hundred megawatts of capacity from a variety of types of resources in the region or is it some other process?

The earlier the better. So the sooner you can get in on the planning process, the better. You wanna be like past the point of understanding what the problem is. So to your point, like let's just say for sake of example today, the problem is some zone, pick an ISO. PJM, ISO, um So let's just pick PJM. So the problem is in some zone uh and we're talking to a data center who wants to develop something in zone A.

Uh well the utility there says, Well, I just don't have enough capacity in this zone. Um and the alternative is that they'd have to go buy it in the auction and it's gonna be very expensive for everybody. Okay, great. Well what if we built an incremental VPP in that territory and transferred the accredited the the PJM accredited market UCAP megawatts. So that was a mouthful, but like After all the accreditation stuff, after the who's it, what's its of what type of resource it is, outpop.

A UCAP megawatt. And it's called something different in every territory, but that's that's like the unit here. And so we go and we build those units and then we transfer it to the utility. for f and there's no finite there's no financial transaction there. The financial transaction is that the data center's paying for it. So the utility gets the capacity, the data center funds it. We go out and we build it. And incidentally longer term price signals are great.

uh for building out VPPs just like any other resource. If you can have a five to ten year price signal, you can do a lot with that. You can start financing more energy storage. There's just a lot of creative things you can do with that signal. Uh, and then the utility also gets to say yes to that load being cited in their in their in their state or in their region. Is the expectation that Your answer to this is gonna be it depends. I know. Yeah. You don't even need to have me on this.

If I think about a resource stack, right, of like what the um the data center operator can do to generate sufficient capacity to get their thing built. Um, should VPPs be lower cost to them than new generation? In principle I would think so, but there's a customer acquisition a cost as associated with it. I mean there's there's infrastructure there that's non obvious, so I'm curious how it ends up stacking up for them. And is it and and do you think of this as being a product that is

Uh attractive largely because it is cheaper than whatever alternative they would have to get that capacity in that region? Or is it faster is it is it can you actually build it where realistically you're not gonna build any new generation? Like what's the thing that makes this slot cleanly into the resource stack? Yeah, so it is faster. It should be more affordable. Like so the so the way we would price it is always looking at the alternative and being cheaper than that. Um, it is cleaner.

Uh and at the end of the day, if you follow the money, the money goes back to the consumers and ratepayers themselves by participating in this program. So not only are they not there to go out, not only are they not like kind of receiving it on their bill, but they're also optionally participating in something that then pays them. So the whole experience gets better if you are the consumer or the ratepayer.

Um, but it absolutely should be more affordable if the alternative is going out and building uh a new natural gas power plant. For one, not only are you gonna like open up the catalog and see that it's back ordered till twenty twenty or sorry, not twenty twenty, twenty thirty, whatever. uh, which is a problem. Uh, you know, like that's on hold for many years. B but they're expensive and so it should be more affordable.

quicker, which is what everybody wants right now, and more sustainable, kind of better for the community. So it's just checking all those boxes. It is more complicated to talk about. So so I think that that's part that that's the big challenge here. Is it's more complicated to talk about. It's more complicated to say, hey, like Why would we solve uh even if you could? I don't think we should solve what's fundamentally a utilization problem by just adding more steel, more steel.

Um, I really think it's critical that we start thinking about like there are existing resources on this grid already that we should be using. And this goes back to the Tyler Norris paper and and all the great work out of Duke. It's it's It's the same thing as it was years and years and years ago when uh to come full circle I was first starting at Enernoch, which is we had these charts that showed, well

Yeah, like tw 10, 20% of the capacity is built for less than one percent of the time. That just doesn't make sense. So from a macro market design society point of view, even if you could open the catalogue and buy those power plants tomorrow, I still think that this would be a better outcome.

All right, Dana, this was a lot of fun. Thank you for finally coming on. Of course. Thank you for having me. Dana Guernsey is the co-founder and CEO of Vultus. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquand. Stephen Lacy is our executive editor. I'm Shale Kahn, and this is Catalyst.