Catalyst with Shayle Kann - Catalyst Live at SF Climate Week

Episode Date: May 1, 2025

It’s a Catalyst first-of-a-kind: our very first live event! We hosted it last Wednesday at San Francisco Climate week. In this episode, Shayle talks to Mike Schroepfer, co-founder and partner at Gigascale Capital and former CTO of Meta, and Nick Chaset, CEO of Octopus Energy US. Together they cover: Lessons on building products that consumers love  Over and under hyped trends, including data center load growth, carbon removal, and fusion What areas will benefit most from the current administration The most important, least appreciated category of climate tech The craziest idea that just might work Recommended resources: Catalyst: A skeptic’s take on AI electricity load growth Catalyst: The geopolitics of rare earth elements Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor. This special Catalyst Live was sponsored by JP Morgan Chase and DLA Piper. Catalyst is brought to you by Anza, a platform enabling solar and storage developers and buyers to save time, reduce risk, & increase profits in their equipment selection process. Anza gives clients access to pricing, technical, and risk data and tools that they’ve never had access to before. Learn more at go.anzarenewables.com/latitude. Catalyst is brought to you by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform, by visiting energyhub.com.

Latitude Media, podcast at the frontier of climate technology. I'm Shail Khan, and this is Catalyst. Okay, audience, carbon removal overhyped. Reasonable votes there, carbon removal underhyped. I feel like that was less people, but with stronger opinions, which I respect. Carbon removal hyped just right. Okay, not a lot of moderates in this audience, which I appreciate it. Coming up, we're live.

Or we were live anyway. When utilities need flexible capacity they can count on, they turn to Energy Hub. Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices to manage 3.4 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 Energy Hub.com.

Trillions of dollars are flowing into clean and critical infrastructure, but those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I talk with people deploying capital, shaping policy and building the clean economy. Tune in as we unpack how progress is actually made.

Listen to critical capital on Spotify, Apple, or wherever you get your podcasts. Catalyst is supported by Fish Tank PR, an award-winning PR firm focused on climate and energy tech, renewables, and sustainability. Fish Tank is known for generating prominent and effective media coverage for the brands they work with. If you want a PR partner that's thoughtful, shoots straight, and gets results, you'll like Fish Tank PR. To learn more about Fish Tank's approach, visit Fish, tankpr.com. That's F-I-S-C-H-Fish-Tankpr.com. I'm Shale Khan. I leave the Frontier Strategy at Energy Impact Partners. Welcome. All right. This was a fun one. Our friends at J.P. 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. 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, I'll be at 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, we do have to prove to the listeners of the podcast that this is actually live and real. So I'm going to ask you to make some noise for just two seconds to prove that we are actually live. Welcome to Catalyst.

All right. So I've got two great guests with me today. The first one used to cost me a lot of money. That is Nick Chassett. 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 CEO of the CCA in the East Bay, which is where I live. I live in Berkeley. So Nick used to sell me really expensive power. I'm sure he will blame PG&E for that, but nonetheless. Nowadays, Nick is the CEO of Octopus Energy U.S. I'm sure many of you've heard of Octopus. Octopus is a behemoth climate tech company based in the UK. Nick runs the U.S. operation there.

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, a 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. And then, I guess, three years ago, Mike, what did you leave? Three years ago left Meta and decided to dedicate himself to climate tech for reasons unbeknownst to any of us, and started a firm called Gigascale Capital, which is an early stage venture capital firm that has become a great partner to me and energy impact partners where I work. So,

Nick Shrepp, welcome to both of you. Thank you. Glad to be here. Yeah. Okay. 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 tech 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. 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. And so that is interesting because I find that in climate tech 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 or sort of building

consumer products. So I don't think we talk enough about that. Shrep, I guess I'm going to ask you this first. What have you take, like, what are the lessons from all your time at Meta building Facebook and Instagram and WhatsApp and so on? What are the lessons that you think apply in the world of climate tech? Well, in the consumer space, I'd say 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 quite a demanding customer. The flip side of that coin is if you can cross that chasm and build a product that people love, then you have just like a runaway success business. And I think that's the thing you're seeing. In the climate tech space, I think the up-and-comer

there is mill. You know, they make a home composting device that sort of makes your trash not stink. But the thing that really caught my attention is when I looked at their net promoter scores, when they share with like, how much do our customers like? And 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 meal? 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-reinforced. And then you have just a runaway success business. 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 enormous? Yes. 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, I'm not promoter score, which is, is it word of mouth that drives, like, are we looking for viral adoption of climate tech products driven by word of mouth? Is that the path to glory here? Yeah, I mean, it needs to cross two chasms, actually. One is it has to be something people love, and it solves a problem that people really care about. And then that that problem in that class of people has to be big enough to build a great business. Because I built an awesome consumer hardware product that people loved that wasn't a big enough business. We built this thing at Metacal or Facebook at the time called the portal, and it was a video chat device. And it was amazing.

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, we 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. Everyone's like, well, I can kind of use my iPad. It's, like, good enough, right? So that cost one, but not the other. 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. It's the most extreme version of that. I think that's hard to find in Clement Tech. But I think who here likes taking out their trash? Anyone? You have to get a hand raised on that one. Right. And who likes to have their trash be stinky and smelly? Nobody. Right. And so like Mill sort of solves that problem. And it's pretty high up in people's like taking the trash out sort of sucks and you do it every day. 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. All three of us live in the Bay Area and PG&E territory, not to keep knocking on PG&E, but the rates are crazy, right? So people care about it.

It affects, it's a decent chunk of 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, Nick, you used to sell retail electricity, but also you were getting involved in a bunch of behind-the-neeter solar and storage and EV charging and all that kind of stuff. How do you think about that question of, like, getting above that threshold? Is it a big enough thing that people care enough about that you can actually get adoption? 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, roofed-up solar companies that, you know, obviously are, sort of on the downslope perhaps now, but have had 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 there, 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, when I was at Ava, less interaction now, but was really excited about some of these really interesting induction cook top technologies, right? Because you're actually solving a problem. 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, by 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 for 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. And so I think 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 life, 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. Mill, as people, I would be interested with the stats for mill. Once you actually have a mill, well, you're ever like, I don't want this anymore. I'm going to go back to having compost. I open the bin and it smells. And I think that is probably one of the fundamental challenges is 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 archetypes that you've described there and I guess success stories in both, right? One I think of as being like you are 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 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, 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 an economic experience. It's a savings. And the thing that unlocked residential solar was the introduction of the lease in the PBA model, where at that time, like Solar City and Sun Run and Sungevity and the companies that were pioneering that, were 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 you feel good about it. But the question that I have, I think there's a trope in climate tech, which is if you're developing a consumer product, you shouldn't sell the climate benefit. Like 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 do you I guess I'll ask shrepped first do you believe that to be true should you not put climate at the

or environment energy at the front and center I would 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 just talked about like I sell products to consumers that save the money I'll sell products to consumers that make their life better in the kitchen you know trash or or peeding water I sell products to businesses that save the money, sell products to businesses that help them grow. Like, those are businesses. And they be tech, hard tech, or other.

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 I have to pay you for it because they really want it, because it saves them money and makes them life easier, solves a problem for them. You can put whatever word you want in front of it,

but it's a business. And so I think that that is the thing that you just can't lose the threat on. is that at the end of the day, you have to deliver that value. Otherwise, people aren't going to pay for it. Well, Nick, when you were 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're out in Dublin or Pleasanton and you live on a feeder line where you're getting 15 times a year, the power's going out because of a shut off, you're like, I don't like that. I just lost $200 worth of food in my fridge because I lost power for

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 bill savings. The number of consumers we would engage with who are really focused, first and foremost, on why I want to 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 the first two things, you know, sort of the hierarchy of needs, then I'm happy for it to be green. And maybe 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 the Tesla Roadster and Model S were ugly and slow, would they have been so successful? Right. It's got to be a delightful consumer experience or save you money, something. Right. If we just had the Nissan Leaf, and that was sort of what introduced people to EVs, I think we'd all be driving. I had one. The first one I could buy, I test her over here in San Francisco. Fair enough. And I almost didn't make it back and forth to a Giants game. So I definitely had range anxiety on that one. But I'm a very special snowplake.

This segment is sponsored by Nissan. All right, let's get to a game. We're going to play a game of overhyped, underhyped, or hyped just right. So I'm going to name some, this is a Goldilocks game. I'm going to name some trends, categories. Do we get prizes, by the way? There are some prizes. There may be some prizes.

Okay, great. Yeah. And you guys each have to decide. 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, or currently hyped just right? All right. We're going to start with the topic of the year, I guess, data center driven load growth,

electricity load growth. Nick, overhyped, underhyped, hyped, hyped just. Overhyped. Overhyped, yeah. All right, quick zig. Yeah, so overhyped because 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 the timescales at which they operate are designed to be slow timescales. It's not necessarily that utilities fall.

I'm sure the utilities would love to put more capital to work 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, I think is a reflection of maybe a lack of understanding of how utilities build things and how regulators evaluate

how and when things get built. You're saying that the actual... amount of new capacity we get is overhyped, right? But you're not necessarily saying that demand isn't there. You're saying we're just not going to be able to build enough. Correct. Okay. Shrepp, overhyped, underhyped. I'm going to be annoying and say it is both.

And here's what I mean. I'm going to qualify. So, yeah, we're just getting started. Buckle in. There's no early exit from this podcast. So overhyped in the sense of people over-tribute data center load growth with electricity demand inside the United States. You know, manufacturing and EVs 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 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 spend 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,

trying to figure these problems out. So I think that a lot of stuff is going to get built. All right. This is the last time you get to say overhyped and underhyped. You get one. All right. This is your mulligan. That was not in the rule book.

All right. I'm going to do a quick audience poll on this. You have to clap or shout with this. Who thinks that data center driven load growth and electricity is overhyped? Okay. Respectable showing. How about underhyped? Less people?

How many people think it's hyped just right? All right. Hyped just right, I think is a lot. a winner there, surprisingly enough. Virtual power plants are becoming a reliable way for utilities to manage capacity, but enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched and being able to prove it, from the control room to the living room.

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delivering 3.4 gigawatts of flexible capacity. See what that looks like at energy hub.com. We're living through a profound economic shift, and energy sits at the center of all of it. Trillions of dollars are flowing into power plants, transmission lines, battery factories, data centers, but the future of energy isn't shaped by technology alone. It's shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, the capital platform for the clean economy. Join me for my

brand new show, Critical Capital, as I talk with people deploying capital, shaping policy, and building projects. Together, we unpack how risk is priced, how incentives are structured, and how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts. Are you tired of overpaying for big-name PR firms, but not really knowing what they're delivering? Is your comms team wasting time reviewing lengthy messaging briefs and decks, instead of engaging journalists or producing content? Are you wondering why your competitors are getting press and you aren't? Fishtink PR is an award-winning climate and energy tech, renewables, and sustainability focus PR firm dedicated to elevating the work of both early stage and a

established companies. Whether you need to position yourself as a thought leader in between project announcements or translate complex ideas and technologies into tangible, compelling stories that resonate with the media, Fish Tank can help. Check out fish tankpr.com. That's F-I-S-C-H-Fish-Tankpr. We're going to move on to another one. Overhyped, under-hyped, hype just right. Nuclear Fusion. Let's go fusion. Shreap, you go first on this one. I'm going to say it's... You said one? Just one.

I'm going to go with underhyped. Underhyped. Make your case. I think the timeframes are hard to define exactly, but the idea that you can give me 40, 100 acres of land, and I can make you gigawatts of power with almost no inputs and outputs

and no other siting requirements, and I can do this right next to a major highway, and all the people around me are cool, with that because it's an inherently safe thing, I think is just utterly transformational. And so I think this is a very binary thing that if we can actually hit unit economics that are competitive infusion, it'll create the largest companies we've ever seen. Does it important and big if at the end of that sentence? So I, I, right, underhyped.

I think if you say like there's a 10% chance that it actually works, but if it works, it is so massively transformational that the 10% is, you know, it's a 10% that the 10% is, is sort of worth the bet, then I would say maybe I would agree with the under hype because I struggle a little bit with the, again, the timescale in which these companies are going to be able to build and deliver. And local communities, it may be safe, but like, I don't think local communities are necessarily going to buy into the idea that it is safe. It's going to take a while to get people to sort of be comfortable in the U.S.

in other parts of the world. Perhaps that's not as much of an issue. But if it does work, it's a total sort of game changer. Now, I was having a conversation with a fusion founder a month or so ago, and I was sort of saying, my biggest concern about fusion is 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, actually. And he's like, 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 kind of like, I'm with that. This is a real bank shot. Yeah, I mean, I'm just there. You know, I'm trying to, like, think about 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 under-hyped.

Oh, you agree. You're taking points off, right? Yeah. Oh, it's noted. Okay. Audience gets to vote on this one as well. Nuclear fusion overhyped. 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. Wow. That actually kind of makes sense to me. No one thinks that.

Okay. All right. Carbon removal. Overhyped, underhyped. Hiped. Just right. Nick, you're up first. I think it's overhyped.

I think it's overhyped sort of to the conversation we're having about sort of the consumer pull for big investments. unless you can really drive down costs such a sort of meaningful point that consumers are sort of comfortable paying for it and consumers having sort of a short-term view. You know, like 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 governments to be bought in.

And I think we're in a space today where most governments are sort of pivoting away for making those investments. So I would say it's overhyped, at least for the time being. Shrep. I'm going to go underhyped. That was good, concise. Oh, you want to more? Sure.

I think we will be shocked at how fast, low cost, particularly nature-based carbon removal 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. 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 time frame, 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. It's 100% economics problem. You can't pay three, four, $500 a ton. People can't afford that. Under $100 a 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 going to be way faster than people realize.

I will say one thing that for me gives me some pause about carbon removal 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 serve about $10 billion a year to like lock in current temperatures? Right. But I mean, relative to $100 a ton, 10 gigatons, what's that $100 billion a year? So, you know, it's an order of magnitude at least different. So, yeah, it's an interesting question of like, you know, 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. Okay, audience. Carbon removal overhyped. Reasonable votes there. Carbon removal underhyped. I feel like that was less people, but with stronger opinions, which I respect. Carbon removal hyped just right.

Okay, not a lot of moderates in this audience, which I appreciate. Okay, we're going to do one more. We'll do two more. All right. Virtual power plants. Virtual power plants. Now, this is an interesting one because I would say the hype cycle on virtual power plants has gone through a full hype cycle, certainly, as a,

of, I don't know, a decade ago, and then came back. And now it's kind of back. So 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 power plants. Underhyped, but I wouldn't call it a virtual power plant. I would say, like, flexibility as a category.

I don't even know what a virtual power plant is. I talk 10 people to give you 10 sort of slightly different answers. I think load flexibility, though, is massively underhyped. because a lot of the flexibility is free. Managing when you charge an EV is essentially free. We at Octopus, we, 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 250,000, 300,000 EVs because it doesn't cost them anything.

They just say, I plug my car in and by 6 o'clock in the morning, it's 80, 90, 100% charged. I don't really care what happens between 9 p.m. and 6 a.m. And as long as the user experience to, like, enroll my car is easy and I get some benefit. All right, get some cheaper charging. I'll just give it to you. That's fine. I actually think the hardest flexibility, at least in the U.S., is a thermostat because you're actually asking something to be less comfortable.

But EVs, batteries, water heaters, pool, like, there's so many laws. 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 make the decision to allow their flexibility to be accessible and to have some level of monetization. When you make it easy for the consumer, it's going to scale. So that's my argument for being underhyped because we have some work to do to make it easy.

Underhyped. Mike? Nick is probably going to really disagree with me on this one. I'm going to say consumer sort of demand response is overhyped. It's just like so damn hard to get consumers to sign up for these things. such a fragmented market that getting to reasonable scales is hard. And I think enterprise and commercial demand response is sort of underhyped. There's just so much, there's big money there to be saved. When I'm operating many 100 megawatt plant, like, I can save a lot of money. And so it

really starts to be relevant. There's 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 relies upon your belief about 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 pool pumps. 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 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-cost flexibility portfolios. The challenge is 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 large enough consumer demand is EVs,

because EV charging is like a huge load source. and 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. Okay, audience, virtual power plants

or whatever we want to call it, load flexibility, if you prefer, underhyped. All right, strong vote, overhyped. Yes, I love the one, whoever the one person is, brave enough to hate on virtual power plants. Hyped just right. Just a few. All right, a lot of lovers of load flexibility here. All right, last one, AI for climate tech. This is applications of AI that will solve big problems in decarbonization.

Shrep, this is up your alley. Yeah, overhyped. Overhyped. Go on. You should know. I think that the, look, I'm a huge believer in AI. I'm going to 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 moth. 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 make something that's slightly easier to manufacture, but I've still got all these massive scale problems. AI for cancer therapeutics is real hard for me to find the exact right protein that will target, you know, something. But once I do, the scale of manufacturing is relatively straightforward, and I'm producing a very high value molecule per, you know, per unit made. So 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 put, Nick. I'll go overhyped, and I will sort of add limited comments, I think Mike covered a lot of it. But it's that I don't see AI as being uniquely suited to solving climate tech problems. These are businesses, solving business challenges, be it manufacturing or software development or discovery of molecules. So to the degree that AI is a good bit for this particular business use, irrespective of the climate use case. it's going to be helpful and to the degree that it's not useful today for scaling up manufacturing, then it's not going to be helpful. So I don't think it's 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. AI applied to climate tech overhyped. All right. Team Shrepp underhyped. A few hyped just right. All right. I think overhyped wins it. I must say, I tend to agree with that. It'll do lots of things and lots of companies and climate tech cars. We all agree there.

Okay. We're done with overhyped, underhyped, hype just right. We're going to 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 own. It's a multiple choice options are geothermal power, nuclear power, critical minerals, carbon capture. Can you name any of those four or go off on your own?

Mike? I'm going to go with C, critical minerals. Critical minerals. Why? I mean, we're embarking on a trade war. China just, you know, ban the export of six major critical minerals. We make none of these in the United States. So that seems like a real big problem. Sure does. One of the challenges I do with critical minerals, one of the challenges of critical minerals is that there's a, 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 going to stop the flow of graphite

from China into the U.S. for anode materials, but like standing up a new graphite operation in the United States is going to go, it's going to run past Trump's first, second, Jesus, current term. So anyway, the point being like, I think it is undeniably true that that is a cornerstone of the current geopolitical wars that are that are underway, the question is, does it actually sufficiently galvanize investment in domestic mining and refining and so on to make the difference? Yeah, the timescale are tough, but I'll let him get it too. But I do think that there, we've seen lots of companies that have very creative, fast to deploy

ways to make graphite, to a precision mine copper, to refine rare earths in a way that, you know, a lot of the problems of 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 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 they might be able to run that window. It's a tight window. Yes. So I would see none of them because they all require large capital investments that require certainty. And we are in a period of massive uncertainty across the board. So I would actually say I'm fairly bearish on all of those in the near term because I think we are going to continue to see sort of a shift one way and then another way. Tariffs.

Oh, actually, fewer tariffs. Oh, actually tariffs. Interest rates, they're going to come down. Oh, they're not. Yes, they are. Yes. Oh, no, they're not. So forth and so forth.

So I'm actually much more bullish on this is sort of gets to flexibility. we got to squeeze more out of what we have because 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 that actually do the entitlements for the land. It's not that we don't want to permit the thing at Department of Interior. There's our no people to actually go through the exercise of approving the permit. 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 think

I generally agree with you because of the geopolitics, though. I don't remember listing Debbie Downer as an option, but I'll allow it this time. I would say that the retort that 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 has figured out that the, you know, Ukraine war is a war of drones. And if you want to have U.S. manufactured drones with batteries and electric motors in them from U.S. source materials. There's some departments in the government who are going to really want to do that. And I think you see similar things in energy with with fission and others. So I think there's an 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 going to give up. It's a spicer than I expected. Did you know we were going to be oppositional on all of these things? I planned for it. Next award, most important, least appreciated category of climate tech. What deserves more love than it gets? I'll list a few, but again, you can name your own or just shit on all of it like Nick probably will. All right. 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 and least appreciated. Certainly least appreciated. Go on.

There's a tremendous, I mean, wave power is basically concentrated wind energy, 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 zag. Nick, you're also going to say wave power, I assume? I think we're sort of down right now in the U.S. on electric vehicles. And I think, you know, we're down on Tesla because, for a variety of reasons.

We're down on... Sometimes. I, you know, we're down on U.S. Auto OEM's ability to scale up manufacturing. And I think getting to the thing that they've opened this conversation about just better products, consumers wanting better products, I think electric. vehicles. Ford is making, you know, Machis that are just better to drive than the alternative Ford and Hyundai and Kia. Like, they're just better vehicles. And I think we're sort of in sort of a down, sort of view from a down cycle from a sentiment perspective for EVs. And I just think

consumers are going to keep buying them. And like 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 90% of new vehicles are EVs just because they're better. And there's a lot of flexibility opportunity. So I actually think that's, let's what I'll say, EVs. Suddenly your Norway is exactly what the other side is worried about happening. All right. So none of my answers resonated with anything.

That's fine. It'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. Okay. Here's the 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. By the way, I will say every one of these has at least one and generally multiple startups doing this. So these are real attempts. Space-based 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 going to name my own

I gee I love all of those I just don't know very much about them so while I'm excited I'm going to sort of focus on the lane that I'm in and the company

I'm really excited about It's going to be called Water. I knew it. You texted me about this last week. So water is, they put two Nvidia GPUs on top of a water heater and creates heat. They suck it into the water. It heats the water. And it creates a 10x ratio of compute revenue to electricity costs.

So they can actually give water heaters away for free. They monetize the compute. And it's a big. Bitcoin mine water heater. Yeah, but it can be for Bitcoin. Yeah, exactly. It's not necessarily just for Bitcoin only. It's not necessarily just for Bitcoin.

It can be for sort of AI workloads as well. Everyone says that. And as a retailer, as a retailer, the idea that I could go to a consumer say, I'm going to give you fixed price electricity, irrespective of a consumption for, say, $50 a month, as long as you install this water heater, and then we split the compute revenue. I'm kind of like, this is a real differentiator compared to, hey, I'm going to give you five bucks to let me manage your thermostat or I'm going to

install a battery, I'm going to 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 mine there. I feel like there's some risk. If they give you two Nvidia GPUs, like you're just going to take those and resell them.

That's maybe part of the strategy there. All right. This is a good selection. That's a real company. You texted me their website. It's interesting. All right. Mike, craziest idea that just might work.

I mean, if I say offshore open ocean data centers, is that reusing my answer for the last question? Yeah, because it's the way. Okay, okay. Great. So, well, that's sort of my answer. But then I'll go with a super deep geothermal. Super deep geothermal. Yeah.

Yeah. Okay. This was a lot of fun. Please, everyone, join me in thanking my guest, Mike and Nick for the night. Nick Chastit is the CEO of Octopus Energy U.S. Mike Shrepfer is the founder and a partner at Gigascale Capital. This show is a production of Latitude Media. You can head over Latitude Media.com for links to today's topics.

Latitude is supported by Prelude Ventures. Pralud Backs Visionaries, Accelerating Climate Innovation that will reshape the global economy for the betterment of people and planet. Learn more at Preludeventures.com. This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquan. Stephen Lacey is our executive editor. I'm Shail Khan, and this is Catalyst.