12:00

who were betting on that and they actually

12:02

invested in companies expecting that and I think

12:04

they've done really well because of that. So

12:07

we've had some big windfalls,

12:09

big opportunities, but on

12:11

the flip side, I don't think

12:13

the corporate consensus is

12:16

as tight as it even was

12:18

four years ago. I think that

12:20

people are hedging their

12:22

bets, hemming and hawing, and the latest version

12:24

of that that I'm very worried about is

12:26

large tech companies acknowledging, hey,

12:29

we're not going to lose

12:31

this AI thing. I think they're going to blame it

12:33

on China and say, hey, it's a national security thing

12:35

we can't lose and therefore we will

12:37

hit our climate goals. We're just going to be a

12:39

little bit delayed. We're going to go back and build

12:41

a bunch of natural gas plants to power a massive

12:44

build out of our gigacenters. That

12:47

may not happen, but that's a future that

12:49

I'm not looking forward to because if that

12:51

were to start to happen, they

12:53

were the leaders that showed the rest of the corporate

12:55

world that you could stake these claims

12:58

and you could go down this

13:00

path. I really laud them for it.

13:02

It's extraordinary what they've done. For

13:04

them to unwind that in any way would

13:06

be politically really dangerous and I think it

13:08

would start to give permission to other people

13:10

who have been far less

13:13

focused and committed to

13:16

start to backpedal easily. I'm talking

13:18

about oil and gas majors,

13:20

infrastructure people for whom that transition

13:22

is just very, very costly and

13:25

difficult. It's existential, but

13:28

it also includes maritime

13:30

shipping companies, large industrial companies,

13:33

commodities, steel, cement, agriculture, whatever.

13:35

All of these companies are

13:37

trying to figure out how

13:40

to make this transition while I suspect many of

13:42

them at the same time are maybe hoping it

13:44

goes away a little bit, this pressure. Without

13:47

that pressure, I think some of our objectives

13:50

are just slipping out of reach. I

13:52

want to slice off that AI piece

13:54

a bit. That brings us to one

13:56

of the first topics that I wanted

13:58

to chat about, your investment on

14:00

AI and climate tech specifically. I mean,

14:02

clearly the power demand issue is a

14:04

problem. We just saw in Microsoft sustainability

14:06

report emissions have gone up 30% in

14:09

the last year, energy

14:11

demand is up 20% and they're basically saying it's

14:13

all AI in their

14:15

data center expansion. And

14:18

they're gonna double the amount of data

14:20

center capacity they have in the next

14:22

year. So it's a big deal, but

14:25

I am a believer that the net

14:27

benefit to the energy system in society

14:29

will be positive. It'll unlock all sorts

14:31

of new and interesting applications in the

14:33

power sector and beyond. And I know

14:36

that you are really focused

14:38

on the AI space. You

14:41

know, in talking to a lot of investors,

14:43

like many don't see AI as a standalone

14:46

category. It's sort of like, it fits into

14:48

other climate tech classes. How do you at

14:50

a broad level think about AI and climate

14:52

tech? AI and climate tech

14:54

is just a fascinating discussion because

14:56

I think for sure in

14:59

some ways, AI is driving this

15:01

explosion of electricity demand that could

15:03

set people back in their climate goals. At the same

15:06

time, many aspects of AI as

15:08

an enabling technology are going to

15:11

help us present solutions to these

15:13

challenges. So it's pretty circular, pretty

15:15

complex, but let's

15:17

see a couple of things. I think the

15:20

explosion of demand for electricity is

15:24

a good thing. It can

15:26

help drive a transition to cleaner generation,

15:28

but there's a matching and a speed

15:30

problem in terms of catching up to

15:32

that demand. And I think that that

15:34

is what people are fretting over. It's

15:37

not just AI, it's also electric vehicles, it's

15:39

also crypto, it's also onshoring in the case

15:41

of America. So these are

15:44

big challenges that are not gonna

15:46

go away. What

15:48

we need to focus on is, you

15:50

know, I would say unlocking gridlock. You

15:52

know, gridlock for me is this concept

15:55

of not being able to get

15:57

more clean base load power generated.

15:59

but then moved and then removed

16:01

from the grid itself. And

16:03

all of that, those are three big

16:05

things, make it, move it,

16:08

and then use it. Those are

16:10

all ripe for innovation and investment.

16:13

I have no doubt that

16:15

innovation and investment and AI

16:17

itself will be extremely helpful

16:19

in solving those problems. We

16:21

are very, very good when

16:23

we focus enough. We're very

16:25

good at solving these deeply

16:27

technical challenges. I am worried

16:29

about the timing of it. And

16:31

that's why I would sequence, just to take

16:34

the generation side, I would sequence it in

16:36

three phases. What are the things we can

16:38

do right now? What are the

16:40

things we can do in the near term? And

16:42

then what's the long-term future? And to me, the

16:44

long-term future, I think it's very

16:47

likely that it involves fusion

16:49

as a generation source. Fusion,

16:53

even if, or even when we make it

16:55

work, it still will be very expensive. It's

16:57

an expensive process to

17:00

build out this infinite power

17:02

source. It's pretty cool that it's infinite

17:04

and maybe has essentially no fuel,

17:06

but the sun has no fuel and is infinite

17:08

or close to infinite for, as a power source.

17:10

And we've been using that for a long time.

17:12

It was very expensive. It took a long time

17:15

to make it cheap. That's gonna

17:17

happen with fusion too. It's got better characteristics.

17:19

It's base load, we could put it all

17:21

over, but it's gonna take a

17:23

long time to make that cost effective. That's a 20 to

17:25

50 year benefit that

17:27

we should be focused on now, investing research

17:30

dollars in now. I'm not convinced we should

17:32

invest venture in now. In

17:34

the near term, mid-term, I

17:36

think nuclear fission is gonna have a renaissance and

17:38

come back in a big way. Hopefully

17:41

that involves small modular reactors. It

17:44

may just involve a whole bunch of AP 1000, big

17:47

light water reactors around

17:49

the world. Every one, most other people

17:51

in developed countries and

17:54

some emerging economies are doing that today

17:56

and we're not. So I hope we

17:58

can get back. on that train and

18:00

I hope we can do it more

18:02

cost effectively than we did in Vogel

18:04

or the Carolinas. So there's

18:06

work to be done there. I think that

18:08

that's an interesting midterm solution. In the near

18:11

term, we have recently

18:13

made an investment in Zanscar, which

18:16

really brings all of these things

18:18

together. Zanscar is a very exciting

18:20

geothermal technology company but it's really

18:22

an AI company. They are just

18:25

using software to deliver what

18:28

we would call generative science.

18:30

There's generative media, large

18:32

language models have been doing incredible things

18:34

to make great chatbots

18:37

and enable a lot of

18:39

co-piloting across the business world.

18:43

I think generative science is the next

18:45

phase where we're still using the similar

18:47

algorithms but the inputs are much more

18:49

about physics and much more about chemistry

18:51

and biology and the outputs are

18:54

about breakthroughs within those areas. And that

18:56

generative science is gonna shorten

18:59

the distance to some of

19:01

these massive solutions. Zanscar is

19:03

generative science at work. They

19:05

take physics-based models, physics-based

19:07

data sets, train models on

19:10

them and then output, basically

19:12

a treasure map for where

19:14

we should look for large

19:16

deposits of heat, of shallow

19:18

deposits of heat that are

19:21

accessible for geothermal electricity generation.

19:23

Today, geothermal is a great source of

19:26

energy but it's hard to find. Unless

19:28

you see steam shooting out of the

19:30

ground, we actually have trouble locating big

19:32

areas of heat that aren't super deep.

19:34

Super deep heat is- And are you

19:36

talking about just heat or are you

19:38

talking about hydrothermal resources or just hot

19:40

rock? Yeah, great question. So I'm talking

19:42

about super critical areas

19:44

where you have enough heat that

19:46

either using liquid that's in the

19:48

ground or using above ground liquid,

19:51

you can do a thermal transfer

19:53

and make electricity. So this is

19:55

not about heating and cooling. There

19:57

are a bunch of great companies, Dandelion and Bedrock.

20:00

and others who are working on

20:02

that. This is about power generation

20:04

systems that have power plants topside

20:06

that can pump tens or hundreds

20:08

of megawatts of power onto the

20:10

grid. So Zanscar doesn't have

20:12

special drilling technology. They don't have

20:14

new fluids or new Rankin

20:17

cycle systems on the top. They literally

20:19

just have a better way to look

20:21

for geothermal because in America, there's only

20:24

a few sites and those sites were

20:26

where we like geysers in Northern California

20:28

where we see stuff coming out of the

20:30

ground. In Iceland and Indonesia, there

20:32

are a bunch of sites because you can

20:34

see the steam coming out everywhere. It's very

20:37

accessible to get to that very,

20:39

very hot area underground. Today,

20:42

when we drill wells looking for

20:44

geothermal, we'll drill 10 wells

20:47

and get one hotspot and

20:50

that's not cost effective. Those wells are very

20:52

expensive. With Zanscar, they have been

20:54

proven that they can drill 10 wells and get 90%

20:57

hit rates. So 9 out of

20:59

10 instead of 1 out of

21:01

10. That flips the switch on

21:03

geothermal being an extraordinary power source.

21:05

This is like a here and

21:07

now nuclear power source that we

21:09

can turn on anywhere with no

21:11

waste and a lot less regulatory

21:13

approval needed. So I see

21:16

a world where these conversations

21:18

are happening now where the major tech

21:20

companies, they'll go and buy

21:22

more merchant nuclear facilities like Amazon

21:25

did. There's only, I think there's

21:27

nine or 10 of those in America. There's

21:29

90 nuclear facilities, but only a few of

21:31

them are merchant. That'll work.

21:33

That's a net zero

21:35

game. So that'll take power from other people

21:37

and I think that's going to create some

21:39

challenges. But building de

21:42

novo facilities to power either

21:44

clusters or giga sites

21:46

for massive data centers, I think is

21:49

going to be much, much harder and

21:51

they're going to try with small modular

21:53

reactors. That's a 10 year kind of

21:55

process, but doing it with geothermal, I think

21:58

we could do in three or four years. very,

22:00

very easily. And that's what I'm excited about in

22:02

the near term. Mark

22:09

your calendars for June 13th at noon

22:11

Eastern. That's when Latitude Media and GridX

22:14

will host a live, interactive discussion on

22:16

implementing modern utility rates. Dynamic rates are

22:18

vital for motivating customers to electrify, adopt

22:21

DERs, and embrace demand flexibility. Utility rates

22:23

could make or break the energy transition.

22:25

So how do we do it right?

22:28

Join Latitude Media's Stephen Lacy, GridX CCO

22:30

Scott Ingstrom, and economist Ahmad Farooqi for

22:32

an in-depth discussion on the future of

22:35

rates on June 13th. Register

22:37

for free by clicking the link

22:39

in the show notes or go

22:41

to latitudemedia.com/events. I'm Julia

22:43

Piper. I'm Brandon Herbert. And I'm Emily Dominich.

22:46

A little over a year ago, political climate

22:48

took a break so we could focus on

22:50

the groundwork of implementing America's biggest ever climate

22:52

bill, the Inflation Reduction Act. I'm excited to

22:55

say political climate is back. And I'll be

22:57

joined by my two co-hosts to riff on

22:59

the top political stories and insider scoops, from

23:01

state houses to the halls of Congress to

23:04

regulatory agencies and even international climate talks. We'll

23:06

explain how those developments are driving industry

23:08

decisions today. Political climate is a show

23:10

for people who want authentic conversations and

23:12

to learn about how energy and climate

23:14

policy is shaped within both political parties

23:16

from the people who have actually helped

23:18

shape it. So join me, Brandon, and

23:20

Emily every other week, starting in April,

23:22

for fresh episodes of Political Climate. Subscribe

23:24

to the show wherever you listen to

23:27

podcasts. So

23:33

back to the AI piece, I'm particularly intrigued

23:36

by the use of

23:38

AI for things like materials discovery

23:40

or exploration, which we've been

23:42

talking about. Not just geothermal, but

23:45

stuff like geologic hydrogen.

23:48

There's a lot of interesting applications of AI

23:50

there to find these pockets of

23:53

hydrogen deposits. Grid

23:55

planning and grid modeling. Where

23:58

are you? What other areas of?