WEBVTT 1 00:00:04.960 --> 00:00:07.799 With a round segle and from London and Gerard read 2 00:00:07.879 --> 00:00:10.800 from Berlin. This is redefining Energy. 3 00:00:11.320 --> 00:00:11.679 Today. 4 00:00:11.880 --> 00:00:16.679 On Redefine Energy, we're going to talk about climate tech 5 00:00:17.879 --> 00:00:23.399 and what we've done is that we have compiled an 6 00:00:23.440 --> 00:00:28.800 extraordinary debate between Gerard our co host, and Shale Can, 7 00:00:29.839 --> 00:00:34.560 the managing partner at Energy in part Partners. Both of 8 00:00:34.600 --> 00:00:39.840 them had been invited to a conversation organized by Carbon 9 00:00:39.840 --> 00:00:44.280 Equity that's a fund of fund led by its co 10 00:00:44.399 --> 00:00:50.840 founder Lisa Rubinstein Manamoud. Originally there was their guest with 11 00:00:51.000 --> 00:00:54.439 the turn of Johan Venture, but we have fully edited 12 00:00:54.520 --> 00:00:58.320 his contribution in order to keep the length at reasonable 13 00:00:58.399 --> 00:01:03.679 thirty minutes. Our produgies to Will and to your listeners 14 00:01:04.319 --> 00:01:08.280 enjoy the better Rayale for climate tech. But first of 15 00:01:08.359 --> 00:01:09.239 all from our partner. 16 00:01:09.840 --> 00:01:13.200 A Local Energy is Europe's premier liser of ten thood 17 00:01:13.280 --> 00:01:18.280 container mobile batteries built in Europe with coatl best LFP cells. 18 00:01:18.840 --> 00:01:24.159 A Bloco Energy serves fourteen European countries, including France, Germany 19 00:01:24.239 --> 00:01:27.439 and the UK. Our Bloco's batteries can be leased for 20 00:01:27.480 --> 00:01:30.680 any duration between six weeks and six years and they 21 00:01:30.719 --> 00:01:34.519 are monitored by the Dutch award winning platform, school a 22 00:01:34.599 --> 00:01:37.959 block o energy, make your life easier, make your business 23 00:01:37.959 --> 00:01:38.640 more flexible. 24 00:01:38.840 --> 00:01:39.920 Back to the shows. 25 00:01:40.159 --> 00:01:43.599 Good afternoon everyone, to the Climate Tech Outlook twenty twenty 26 00:01:43.640 --> 00:01:47.159 six webinar. We're so excited to have you. I'm Lisa. 27 00:01:47.280 --> 00:01:50.359 I'm one of the founders karminactcy a leader strategy on 28 00:01:50.400 --> 00:01:53.959 the platform. And then our climate approach Carbon equity. What 29 00:01:54.000 --> 00:01:56.439 do we do. We believe capital can be a force 30 00:01:56.480 --> 00:01:59.359 for good and we think capital can help solve climate 31 00:01:59.439 --> 00:02:02.560 change by investing in climate solutions. And we do that 32 00:02:02.719 --> 00:02:06.359 by building private equity, fun and fund. We currently have 33 00:02:06.359 --> 00:02:10.360 about four hundred million assil managements. We are working with 34 00:02:10.479 --> 00:02:13.759 thirty investment managers so far, and in total we'd helped 35 00:02:13.800 --> 00:02:16.719 fund two hundred and seventy five companies. First, we'll quickly 36 00:02:16.759 --> 00:02:19.400 talk about twenty twenty five highlights, and then we'll talk 37 00:02:19.400 --> 00:02:22.520 a little bit about the drivers of climate tech, go 38 00:02:22.560 --> 00:02:24.719 a bit into funding, what's been happening, what we think 39 00:02:24.719 --> 00:02:28.039 will happen, and then all the families prepare some hot takes, 40 00:02:28.800 --> 00:02:32.240 some strong opinions on what might happen in twenty twenty six. 41 00:02:33.199 --> 00:02:36.000 Now with me here today with the incredible guests, I'm 42 00:02:36.039 --> 00:02:39.000 so honored to have them first there. Shill can he 43 00:02:39.120 --> 00:02:41.240 leads the EERP Frontier Fund, which is one of the 44 00:02:41.240 --> 00:02:44.400 first ones we invested in doing really exciting deep tech, 45 00:02:44.560 --> 00:02:47.039 mostly in US and a bit in Europe. And he 46 00:02:47.080 --> 00:02:50.240 also hosts one of my favorite podcasts, Catalysts, which is 47 00:02:50.240 --> 00:02:53.039 really for the climate tech nerds amongst us, diving in 48 00:02:53.080 --> 00:02:56.240 deep and all sorts of technologies. There with Gerard Reed, 49 00:02:56.639 --> 00:02:59.800 really pronounced energy expert, works with a few of the 50 00:02:59.800 --> 00:03:03.680 big instituced world economic form Energy Transition Forum, also does 51 00:03:03.719 --> 00:03:06.960 a lot of advisory for founders and investors on fundraising 52 00:03:07.080 --> 00:03:09.479 and how to scale up. And he has another incredible 53 00:03:09.479 --> 00:03:13.199 podcast called Redefining Energy, which I think is really the 54 00:03:13.280 --> 00:03:18.960 best European energy transition podcasts out there. So Gerard Shill, 55 00:03:19.319 --> 00:03:22.120 so glad to have you here. Let's start with a 56 00:03:22.120 --> 00:03:25.719 few hot quick takes on what happened in twenty twenty five. 57 00:03:26.000 --> 00:03:30.879 So first of all, let's go to Shill. What was 58 00:03:31.039 --> 00:03:33.639 and according to you, the biggest technological breakthrough in twenty 59 00:03:33.680 --> 00:03:35.240 twenty five in climate. 60 00:03:34.960 --> 00:03:37.759 Sech First of all, thanks for having me and great 61 00:03:37.759 --> 00:03:40.639 to beer with such distinguished co guests. I would say 62 00:03:40.639 --> 00:03:43.639 the biggest technological breakthrough for me was not a single technology, 63 00:03:43.639 --> 00:03:46.840 but maybe a category of technologies, which is grid enhancing technologies. 64 00:03:47.120 --> 00:03:49.800 This is a class of technologies that basically allow you 65 00:03:49.840 --> 00:03:53.360 to run more power through existing transmission lines. And the 66 00:03:53.400 --> 00:03:55.639 context is that, like, we need an enormous amount of 67 00:03:55.639 --> 00:03:58.800 additional power and transmission, both to deal with all of 68 00:03:58.800 --> 00:04:02.120 the increased load that we're seeing from electrification and from 69 00:04:02.319 --> 00:04:05.039 AI data centers, but also just to integrate all the 70 00:04:05.080 --> 00:04:08.280 new renewables, largely that we're building on the grid. Building 71 00:04:08.319 --> 00:04:11.319 new transmission in both the US and Europe has become 72 00:04:11.439 --> 00:04:14.280 a really hard problem and one that's difficult to solve 73 00:04:14.319 --> 00:04:17.560 a technology alone. But this class of technologies that are 74 00:04:17.959 --> 00:04:21.720 called gets allow you to get significant, sometimes up to 75 00:04:21.800 --> 00:04:25.000 thirty percent more capacity on an existing line with pretty 76 00:04:25.040 --> 00:04:27.879 low cost solutions. We have one company in our portfolio 77 00:04:27.920 --> 00:04:32.120 that is called asset Cool, which deploys robots to deploy 78 00:04:32.240 --> 00:04:34.879 a line coding on transmission lines that makes them more 79 00:04:34.879 --> 00:04:37.759 reflective and that basically allows them not to heat up 80 00:04:37.759 --> 00:04:39.600 as much, and you can run fifteen to thirty percent 81 00:04:39.639 --> 00:04:43.240 core capacity on an existing line. It's super simple when 82 00:04:43.279 --> 00:04:45.399 you think about it, and it's basically a no brainer 83 00:04:45.399 --> 00:04:47.959 from an economic perspective. The reason for me, it's that 84 00:04:48.040 --> 00:04:51.759 twenty twenty five technological breakthrough is just that a class 85 00:04:51.800 --> 00:04:54.480 of these technologies that one included, but a few others 86 00:04:54.680 --> 00:04:58.319 as well, really all reached a pretty critical proof point, 87 00:04:58.560 --> 00:05:01.519 Like they all deployed on act of lines, showed that 88 00:05:01.519 --> 00:05:03.959 they could increase capacity, and so basically all of them 89 00:05:04.040 --> 00:05:06.519 are exiting the pilot phase and entering the full scale 90 00:05:06.519 --> 00:05:09.720 commercial phase. And it's hard to overstate the impact. If 91 00:05:09.720 --> 00:05:12.000 you could deploy those things widely, it would just get 92 00:05:12.040 --> 00:05:15.279 you the equivalent of tens of thousands kilometers of additional 93 00:05:15.319 --> 00:05:18.360 transmission without actually having to build more transmission. 94 00:05:18.319 --> 00:05:20.680 And save tens of billions of dollars in process. 95 00:05:21.120 --> 00:05:23.160 Yeah, enormously economically efficient. 96 00:05:23.519 --> 00:05:26.240 Yeah, you almost wonder why wasn't it inventive before? 97 00:05:27.399 --> 00:05:29.160 Well, we didn't have as much of a need before. 98 00:05:29.360 --> 00:05:30.759 You know, we've been living in a world in the 99 00:05:30.800 --> 00:05:35.439 West where electricity load growth has largely tracked GDP growth, 100 00:05:35.879 --> 00:05:38.319 and so till just a couple of years ago, we 101 00:05:38.360 --> 00:05:41.319 saw two percent per annum in the North America and 102 00:05:41.360 --> 00:05:43.720 Europe sort of average annual load growth for like a 103 00:05:43.720 --> 00:05:46.399 couple of decades. So we just didn't have the need 104 00:05:46.480 --> 00:05:49.560 to expand our transmission capacity nearly as much. It's also 105 00:05:49.639 --> 00:05:52.920 it takes a long time to kind of restart that momentum, 106 00:05:52.959 --> 00:05:54.480 and so now we're in the phase where clearly we 107 00:05:54.519 --> 00:05:56.279 do need to expand it, but it's going to take 108 00:05:56.319 --> 00:05:59.199 a long time before we actually candled new transmission. So 109 00:05:59.240 --> 00:06:01.279 we're just at a sweet back from a timing perspective. 110 00:06:01.759 --> 00:06:03.680 The other thing is robotics because a lot of these 111 00:06:03.720 --> 00:06:06.480 things they're hard to deploy with manual labor for a 112 00:06:06.519 --> 00:06:10.800 variety of reasons, especially on energized lines. So the technology 113 00:06:10.839 --> 00:06:13.600 of robotics is coincided with the need in a way 114 00:06:13.639 --> 00:06:15.800 that's sort of a perfect storm. 115 00:06:16.000 --> 00:06:18.120 Jerard, I feel like I have to give you the 116 00:06:18.160 --> 00:06:20.759 next question, which is what was the most exciting funding 117 00:06:20.800 --> 00:06:23.079 round in twenty twenty five and is it the company 118 00:06:23.079 --> 00:06:26.199 in your background or another one in. 119 00:06:26.240 --> 00:06:29.600 My background is Cracking I absolutely do that for those 120 00:06:29.600 --> 00:06:32.160 who are Doda who Kracken is. This is part of 121 00:06:32.199 --> 00:06:35.720 the Opticus group, which is a UK utility and this 122 00:06:35.879 --> 00:06:38.279 is the I suppose maybe the best in class sort 123 00:06:38.319 --> 00:06:41.959 for a platform for managing frustumity in Europe. Let me 124 00:06:42.000 --> 00:06:44.079 talk a little bit about you asked me really about 125 00:06:44.120 --> 00:06:47.800 what went on last year. What's an interesting situation is 126 00:06:47.800 --> 00:06:50.720 that there are certain areas where there's massive amounts of 127 00:06:50.720 --> 00:06:55.480 money going Okay, just take the case of nuclear nuclear figiffusion, 128 00:06:56.199 --> 00:06:58.519 huge amounts of model dot into that space. And then 129 00:06:58.560 --> 00:07:02.560 there's certain areas software area where again huge amounts of 130 00:07:02.560 --> 00:07:05.480 money going on. But I would also say I'm portionately 131 00:07:05.519 --> 00:07:08.480 aside and I'm really put my Europeanto that on here. 132 00:07:09.079 --> 00:07:11.480 What you do see is an not of stress in 133 00:07:11.519 --> 00:07:14.480 the climate change area. And this is not a political thing. 134 00:07:14.519 --> 00:07:16.800 This is reading with the businesses just not being able 135 00:07:16.800 --> 00:07:20.240 to scale, and I see a lot of European venture capitals. 136 00:07:20.279 --> 00:07:23.160 If I many say under pressure, Listen, I'm att E World, 137 00:07:23.160 --> 00:07:26.240 which is the biggest electrical energy conference for a trade 138 00:07:26.240 --> 00:07:28.079 show in Europe, and that's what I'm getting out of 139 00:07:28.079 --> 00:07:31.279 this as well. It's just stress. And actually the stress 140 00:07:31.319 --> 00:07:33.079 is an interesting thing to talk Then why is it 141 00:07:33.120 --> 00:07:36.480 the system stressed? In the European perspective, that stressed because 142 00:07:36.480 --> 00:07:38.800 we've got too much renewables in the system. There's too 143 00:07:38.879 --> 00:07:42.079 much renewables on the large scale system, which means you 144 00:07:42.160 --> 00:07:44.120 sort of go from a financing perspective, why would I 145 00:07:44.120 --> 00:07:47.199 build more solar when I'm going to get negative prices first. 146 00:07:47.600 --> 00:07:50.360 And actually there's another thing happening, which is that we're 147 00:07:50.360 --> 00:07:54.279 building so much renewable in the middle that that's also 148 00:07:54.319 --> 00:07:56.839 stress in the system as well. And it's actually back 149 00:07:56.839 --> 00:07:58.800 to the whole point that that's why I actually really 150 00:07:58.839 --> 00:08:02.600 please technology, which is from the wings the system, because 151 00:08:02.639 --> 00:08:06.560 of the fact that system stress. And so I wouldn't 152 00:08:06.639 --> 00:08:10.000 single out one big cap on thevent last year, but 153 00:08:10.079 --> 00:08:12.839 I would say that you also have to look at 154 00:08:12.959 --> 00:08:14.959 that the money that is going in in general into 155 00:08:14.959 --> 00:08:17.399 infrastructure that I know we're not just talking about infrastructure, 156 00:08:17.720 --> 00:08:20.000 but what he saw last year was record on stalls 157 00:08:20.040 --> 00:08:22.959 the solar across the world, record and solved the PAS 158 00:08:23.079 --> 00:08:25.839 storage across the world. And it looks like we also 159 00:08:25.879 --> 00:08:28.759 had record install the wind across the world. Why is 160 00:08:28.800 --> 00:08:31.639 this happening? This has happened just because the cost production 161 00:08:31.920 --> 00:08:36.240 that you're seeing particular and solar are literally off the chart. 162 00:08:36.440 --> 00:08:39.159 So we talked about the best technology change last year, 163 00:08:39.399 --> 00:08:41.679 but we're done for me, I go and I say, 164 00:08:41.799 --> 00:08:46.200 it's the ongoing continuous reduction in prices and solar and 165 00:08:46.279 --> 00:08:50.759 storage and also then the pieces of performance and if 166 00:08:50.759 --> 00:08:53.320 I was he asked me, what's the technology of the year. 167 00:08:53.759 --> 00:08:56.360 The technology of the year for me is Balcony solar. 168 00:08:56.639 --> 00:08:58.679 And for those who don't know what Falcony solar is, 169 00:08:58.759 --> 00:09:02.600 Balcony solar is plugging play sol. You don't need an electrician, 170 00:09:02.679 --> 00:09:04.480 you don't need to put it in your roof. You 171 00:09:04.519 --> 00:09:07.679 can plug it in anywhere. And in Europe this has 172 00:09:07.799 --> 00:09:10.960 been regulated at an email level and certain countries have 173 00:09:11.000 --> 00:09:13.559 putting in. One of them is Germany. And so to 174 00:09:13.639 --> 00:09:16.240 give you an idea, what you're doing is when you 175 00:09:16.279 --> 00:09:21.240 put Balcony solar in, you're generating electricsitm below the wholesale POWERUS. Okay, 176 00:09:21.440 --> 00:09:23.879 this is a revolution because this technology cannot be stopped. 177 00:09:24.519 --> 00:09:26.440 And so they asked me to look at what really 178 00:09:26.480 --> 00:09:29.600 has excited me. It's that it's really the beginning of 179 00:09:29.639 --> 00:09:32.679 this plug and play solar. And also you'll have to 180 00:09:32.679 --> 00:09:36.240 plug and play storage at touched it and those two 181 00:09:36.279 --> 00:09:38.679 technologies will revolutionize our world. Yeah. 182 00:09:38.799 --> 00:09:41.559 I couldn't agree with you more. The cheaper seller gets 183 00:09:41.559 --> 00:09:43.279 some more tracks that gets to buy, and the more 184 00:09:43.320 --> 00:09:45.159 creative we get on how to get it on the grid. 185 00:09:45.559 --> 00:09:47.720 We're already touching on a lot of important teams where 186 00:09:48.159 --> 00:09:50.759 the renewals are here to stay the greatest under pressure. 187 00:09:50.840 --> 00:09:52.759 I hear a lot of stress. I'd love to hear 188 00:09:52.799 --> 00:09:55.080 from you that going into twenty twenty six, do you 189 00:09:55.080 --> 00:09:58.200 expect that stress to continue? Very specifically, what do you 190 00:09:58.200 --> 00:10:00.200 think will be the biggest headwind and we'll will be 191 00:10:00.240 --> 00:10:02.200 the biggest tailwind for climate tech? 192 00:10:02.440 --> 00:10:02.679 Shill? 193 00:10:02.759 --> 00:10:05.440 Do you want to take it first from a headwind perspective. 194 00:10:05.440 --> 00:10:08.639 I guess I'll speak as our resident United States citizen here, 195 00:10:08.720 --> 00:10:11.879 which is that we underwent and are continuing to undergo 196 00:10:12.039 --> 00:10:14.960 a pretty big c change from a political standpoint in 197 00:10:15.000 --> 00:10:18.120 the US with regard to climate change policy, which is 198 00:10:18.120 --> 00:10:21.000 becoming lack thereof as of it sounds like this week 199 00:10:21.200 --> 00:10:22.799 the EPA in the US is going to kill the 200 00:10:22.879 --> 00:10:26.960 endangerment finding, which is like the underlying principle for the 201 00:10:27.039 --> 00:10:31.480 EPA or Environmental Protection Agency regulating carbon emissions. That's obviously 202 00:10:31.480 --> 00:10:33.960 one of many, many things that this administration has done 203 00:10:33.960 --> 00:10:36.000 to try to tamp down on the concept of climate 204 00:10:36.039 --> 00:10:38.799 change is something that needs policy action in the first place. 205 00:10:39.039 --> 00:10:42.120 That's a headwind in the US. Certainly it's a bigger 206 00:10:42.159 --> 00:10:45.919 headwind for some subcategories of climate tech than others, and 207 00:10:45.960 --> 00:10:48.200 so I think it's important not to paint climate tech 208 00:10:48.240 --> 00:10:51.039 with too broad a brush here, because we really are 209 00:10:51.120 --> 00:10:53.639 seeing the tale of two cities right now, where if 210 00:10:53.679 --> 00:10:55.720 you are in one of the subcategories in the US 211 00:10:55.720 --> 00:11:00.000 that is completely reliant on either sort of new government 212 00:11:00.080 --> 00:11:04.279 policy or voluntary corporate action, which is kind of downstream 213 00:11:04.360 --> 00:11:08.120 of policy in the US, that's challenged. On the other hand, 214 00:11:08.639 --> 00:11:10.360 we have and this will be the tailwind. I guess 215 00:11:10.360 --> 00:11:14.240 for me, we have by far the most dynamic and 216 00:11:14.639 --> 00:11:18.919 rapidly evolving energy sector that we have had in decades. 217 00:11:19.480 --> 00:11:22.720 The amount of demand growth, the need to get. Term 218 00:11:22.759 --> 00:11:25.080 of art in this industry right now is speed to power. 219 00:11:25.159 --> 00:11:28.120 That's basically all that matters. It just so happens that 220 00:11:28.159 --> 00:11:30.720 a lot of the technology that can deliver speed to 221 00:11:30.799 --> 00:11:33.679 power are the ones that you've been talking about. The 222 00:11:33.720 --> 00:11:36.679 fastest new generation to get online is solar, and fastest 223 00:11:36.720 --> 00:11:40.080 new capacity to get online as batteries. Actually, anything that 224 00:11:40.159 --> 00:11:44.039 is attached to that trend, whether it be generation, storage, transmission, distribution, 225 00:11:44.240 --> 00:11:47.919 load side management, all these things sees this enormous tailwind 226 00:11:47.919 --> 00:11:50.360 that is sort of it's not driven by the fact 227 00:11:50.360 --> 00:11:54.120 that it is decarbonized, but it benefits from that fact 228 00:11:54.159 --> 00:11:57.080 because a lot of the biggest customers in that market, 229 00:11:57.120 --> 00:12:00.000 Google it probably the forefront, but including the other Hyperscale 230 00:12:00.679 --> 00:12:03.240 do still have these commitments that they intend to keep 231 00:12:03.320 --> 00:12:05.960 to the extent that they can. So there's a headwind 232 00:12:06.000 --> 00:12:09.799 for companies that are not attached to this macro factor, 233 00:12:09.919 --> 00:12:11.720 and there's a tailwind for any company that is. 234 00:12:12.200 --> 00:12:14.080 Which of the two would you say is a stronger driver? 235 00:12:14.720 --> 00:12:17.440 The tailwind is the stronger drive. I mean, it's hard 236 00:12:17.480 --> 00:12:19.759 to overstate how big a deal it is. We haven't 237 00:12:19.799 --> 00:12:22.519 seen this type of a capex cycle. Actually, we've never 238 00:12:22.559 --> 00:12:24.679 seen this type of a capex cycle as far as 239 00:12:25.399 --> 00:12:29.799 total capex going into data centers relative to GDP, we 240 00:12:29.879 --> 00:12:32.720 have never seen that. Back to like the way you know, 241 00:12:32.759 --> 00:12:34.840 we look at data back to the eighteen hundreds, there's 242 00:12:34.840 --> 00:12:37.039 never been this kind of a capex build out. And 243 00:12:37.080 --> 00:12:40.759 that capex build up happens to be very energy oriented, right, 244 00:12:40.759 --> 00:12:43.080 It's not a coincidence that the size of a data 245 00:12:43.080 --> 00:12:46.759 center is measured in megawatts. That's an energy term. So 246 00:12:47.039 --> 00:12:50.320 the entire world of tech and AI and all the 247 00:12:50.320 --> 00:12:54.200 financial infrastructure that underpins it has woken up to energy 248 00:12:54.279 --> 00:12:57.679 being basically the core challenge to get this capacity online. 249 00:12:57.720 --> 00:13:00.919 And that means if you have a solution that has 250 00:13:01.399 --> 00:13:04.519 something to offer, you can just ride onto this wave 251 00:13:04.559 --> 00:13:06.519 and it's an enormously powerful force. 252 00:13:07.080 --> 00:13:09.279 It's so fascinating how these two things are happening at 253 00:13:09.320 --> 00:13:11.879 the same time. Where As we're seeing policy support and 254 00:13:11.919 --> 00:13:15.559 certent geographies decrease, there is this utter bigger driver emerging. 255 00:13:16.399 --> 00:13:19.080 Is right, would you say biggest headwind, biggest steel wind. 256 00:13:20.039 --> 00:13:22.480 I'm not going to actually answer the question, rapt. The 257 00:13:22.519 --> 00:13:25.279 reason is is because a lot of the headwinds are 258 00:13:25.279 --> 00:13:27.799 also tailwinds. But I let you frame it a different way. 259 00:13:28.440 --> 00:13:30.480 The way I'd frame it is we're in the biggest 260 00:13:30.600 --> 00:13:34.759 industrial revolution in the history amount of and every industrial 261 00:13:34.799 --> 00:13:39.600 revolution needs an energy source. So geral combustion engine, it 262 00:13:39.679 --> 00:13:43.480 needed all that light, AI needs electrystal, and it needs 263 00:13:43.559 --> 00:13:47.559 really quick So that's the revolution. But the revolution is 264 00:13:47.840 --> 00:13:51.240 that it doesn't just impact the way the energy world. 265 00:13:51.759 --> 00:13:54.559 It all is going to radically impact the way we 266 00:13:54.600 --> 00:13:57.759 work and the way our lives are run in the future. 267 00:13:58.080 --> 00:14:01.159 It's also going to impact I call that the economic 268 00:14:01.360 --> 00:14:05.200 power of countries. It's already impacted geopolitics across the world, 269 00:14:05.279 --> 00:14:08.600 so it's far ranging That's really what we're in the 270 00:14:08.639 --> 00:14:12.519 positive about it is it's a technological revolution. And what 271 00:14:12.600 --> 00:14:15.720 happens with technologies is they get cheaper otherwise they're not good. 272 00:14:15.799 --> 00:14:19.159 Technology will look to market and we've got great technologies. 273 00:14:19.200 --> 00:14:23.159 And again AI is also in a neighbor of electrification, 274 00:14:23.759 --> 00:14:27.840 and AI also leeds electricity. I'm not actually worried about 275 00:14:27.879 --> 00:14:30.440 the AI local. The reason or not is because we're 276 00:14:30.440 --> 00:14:33.000 going to electrify everything going forward anyway. So guess what 277 00:14:33.279 --> 00:14:35.080 if it's not used for AI and was a bubble 278 00:14:35.120 --> 00:14:38.320 in it, then electricity will be used for other things 279 00:14:38.360 --> 00:14:41.519 going forward. But I would add that the revolution go 280 00:14:41.679 --> 00:14:45.159 back to the technological revolution. It's solar storage. And there's 281 00:14:45.200 --> 00:14:48.759 another technology as well, which is semis because all of 282 00:14:48.799 --> 00:14:51.600 this AI revolution would not be possible with the revolution 283 00:14:51.679 --> 00:14:56.120 that we're seeing in and around and video chips, etcetera, etcetera. Yes, 284 00:14:56.240 --> 00:14:59.399 they use massive amounts of power, but if you look 285 00:14:59.519 --> 00:15:03.120 at the amount maid amounts data that is being processed 286 00:15:03.120 --> 00:15:05.120 on a daily basis. If you look at Google and 287 00:15:05.159 --> 00:15:07.960 you compare Google what they're processing today to a year 288 00:15:08.000 --> 00:15:10.600 and a half ago, it's like one hundred times more. 289 00:15:11.039 --> 00:15:13.159 This is like we've never seen anything like that at it. 290 00:15:13.480 --> 00:15:15.759 And so the point I'm making is I look at 291 00:15:15.759 --> 00:15:19.919 it quite positive as these technologies you can't block them 292 00:15:20.080 --> 00:15:23.039 because the low cost of them is such that we 293 00:15:23.120 --> 00:15:26.080 are going to electrify our system. And by electrifying our system, 294 00:15:26.399 --> 00:15:29.399 this is how you're going to decarbonize quickly. And you're 295 00:15:29.399 --> 00:15:32.159 going to do this because electricity is the cheapest way 296 00:15:32.159 --> 00:15:34.600 to do it, and we have these technologies that are 297 00:15:34.639 --> 00:15:37.279 also cheap and becoming cheaper. So I actually look really 298 00:15:37.320 --> 00:15:40.600 positively about it. But it's not an easy revolution because 299 00:15:40.679 --> 00:15:43.799 the revolutions, people die, and what I mean by that 300 00:15:43.919 --> 00:15:47.840 is incumbnance die, and other businesses won't to buy. The 301 00:15:47.879 --> 00:15:49.759 biggest tailwind I'll go to say what I say, and 302 00:15:49.879 --> 00:15:53.080 being a little bit controversial is China. And the reason 303 00:15:53.120 --> 00:15:55.519 I say to China is the is the tail rent 304 00:15:56.039 --> 00:15:58.120 is because China is at the full hunt of developing 305 00:15:58.120 --> 00:16:01.840 all these technologies. Again, those three cork technologies I talked about, 306 00:16:02.200 --> 00:16:04.960 and they're not far behind an AI as well, and 307 00:16:05.320 --> 00:16:09.080 they're pushing these products to market in their own market 308 00:16:09.480 --> 00:16:12.200 and pushing them abroad at a scale that we've never seen. 309 00:16:12.240 --> 00:16:15.440 We have never seen, you know, an energy technology again, 310 00:16:15.480 --> 00:16:18.440 come to markets quickly a solar and I'm very positive 311 00:16:18.440 --> 00:16:23.039 about all common energy, but just comparing nuclear solar, good luck, chill. 312 00:16:23.200 --> 00:16:26.240 The first SMR comes on in twenty twenty nine. By 313 00:16:26.279 --> 00:16:29.360 twenty thirty three, the amount of solar that's put on 314 00:16:29.399 --> 00:16:31.960 the system is enough to power in the United States 315 00:16:32.039 --> 00:16:35.039 and South America put together, right, just to pull the scale. 316 00:16:35.080 --> 00:16:37.759 That's the technology for me. So again I just want 317 00:16:37.799 --> 00:16:39.919 to make that point is that we are that technology 318 00:16:39.919 --> 00:16:43.120 revolution and it's very difficult to predict what happen. That's 319 00:16:43.159 --> 00:16:44.360 the concern I would. 320 00:16:44.240 --> 00:16:47.399 Had sounds like a very good tipping point to move 321 00:16:47.440 --> 00:16:50.559 into twenty twenty six, but generally I hear stronger till 322 00:16:50.600 --> 00:16:54.879 Winston headwinds, which is an exciting moment. Let's quickly jump 323 00:16:54.919 --> 00:16:57.440 a little bit into funding. So I think twenty twenty 324 00:16:57.440 --> 00:16:59.440 five was a fiftil year because for the first time, 325 00:16:59.480 --> 00:17:02.600 after a few years of decreases, Climate tech VC funding 326 00:17:02.679 --> 00:17:05.480 went back up. It was a modest increase with eight percent, 327 00:17:05.519 --> 00:17:08.279 but still we hit forty and a half billion. At 328 00:17:08.279 --> 00:17:10.440 the same time, we saw the deal coon was down, 329 00:17:10.599 --> 00:17:13.039 and that's because much more capital is going to growth 330 00:17:13.279 --> 00:17:15.519 versus early stage. And we also see quite a bit 331 00:17:15.559 --> 00:17:19.279 of concentration of capital in a few sectors, specifically nuclear batteries, 332 00:17:19.359 --> 00:17:22.359 great tech evs. Schill, I'd love to hear from you. 333 00:17:22.400 --> 00:17:24.400 How are you reading these trends and is this good 334 00:17:24.400 --> 00:17:25.319 news or bad news? 335 00:17:25.839 --> 00:17:27.920 I think it's reflective of sort of what I was 336 00:17:27.960 --> 00:17:32.240 saying before. The Mostly what is happening is that the 337 00:17:32.400 --> 00:17:35.640 energy sector, and particularly the parts of the energy sector 338 00:17:35.680 --> 00:17:38.240 that are sort of tied to this load growth AI trend, 339 00:17:38.839 --> 00:17:42.880 are seeing enormous interests. You are seeing generalist investors look 340 00:17:42.960 --> 00:17:46.279 really hard at that space. It's been an interesting cycle 341 00:17:46.359 --> 00:17:49.079 there where there was a big wave of generalist investors, 342 00:17:49.119 --> 00:17:51.640 the sort of Silicon Valley folks getting into climate tech 343 00:17:51.839 --> 00:17:54.079 in and around like twenty twenty. A lot of them 344 00:17:54.079 --> 00:17:57.000 disappeared because AI showed up and it was sexier, and 345 00:17:57.160 --> 00:17:59.640 climate tech was in the sort of downcycle part of 346 00:17:59.640 --> 00:18:02.240 the hype curve, So they disappeared from climate tech and 347 00:18:02.240 --> 00:18:04.160 they would still tell you they don't do climate tech, 348 00:18:04.480 --> 00:18:06.920 but they would also tell you that they definitely do energy. 349 00:18:07.240 --> 00:18:10.240 Classic example of that in the US Base Power. It's 350 00:18:10.240 --> 00:18:12.240 a company that's run by Zachdel, who's the son of 351 00:18:12.240 --> 00:18:15.920 Michael delf Throader of Dell Computer. They are basically a 352 00:18:15.960 --> 00:18:20.079 combination of a residential electricity retailer and a virtual power 353 00:18:20.079 --> 00:18:22.920 plant company, so they deploy big batteries at people's homes. 354 00:18:23.279 --> 00:18:25.400 They're only in Texas so far today. They've been scaling 355 00:18:25.480 --> 00:18:28.559 very quickly. They raised a billion dollar venture capital around 356 00:18:28.680 --> 00:18:32.480 in twenty twenty five from actually almost no energy investors. 357 00:18:32.519 --> 00:18:34.640 There's an interesting dynamic in this market. If you look 358 00:18:34.640 --> 00:18:37.480 at the list, it's basically a who's who in Silicon Valley, 359 00:18:37.960 --> 00:18:40.759 and none of the energy specialists were in that cap team. 360 00:18:41.200 --> 00:18:43.039 So that tells you something kind of interesting about how 361 00:18:43.079 --> 00:18:45.279 the market is playing, which is to say that again, 362 00:18:45.319 --> 00:18:48.400 if you are attached to that trend, the pool of 363 00:18:48.400 --> 00:18:51.799 capital is broader for you, valuations are higher, There's a 364 00:18:51.839 --> 00:18:54.200 lot that you can benefit from. If you are not 365 00:18:54.279 --> 00:18:56.160 attached to that trend. I still think it's actually a 366 00:18:56.160 --> 00:18:57.640 pretty tough market to fundraising. 367 00:18:59.000 --> 00:19:01.720 Gerard have to hear from you. Do you think overall 368 00:19:01.720 --> 00:19:03.960 funding for climate SECH would it go up or down 369 00:19:04.039 --> 00:19:06.640 in twenty twenty six and why, Well, I. 370 00:19:06.599 --> 00:19:08.799 Think it's going down, and I'd be a little bit 371 00:19:08.799 --> 00:19:11.400 pessimistic about it, and I'd explain why it's going down. 372 00:19:11.960 --> 00:19:14.880 The reason's going down is because one nobody wants to 373 00:19:14.920 --> 00:19:17.680 talk about climate anymore. And it starts there, and it 374 00:19:17.720 --> 00:19:19.880 starts in the United States, but it's also spread into 375 00:19:19.920 --> 00:19:22.079 Europe as well. I've been in the climate area for 376 00:19:22.160 --> 00:19:25.000 twenty years. I don't mention clients because it's defined, so 377 00:19:25.079 --> 00:19:27.200 I'll call it something else, right, I'll say we need 378 00:19:27.200 --> 00:19:30.160 to invest in energy security or whatever. So I would 379 00:19:30.240 --> 00:19:32.799 just say there's definitely a change. You see this from 380 00:19:32.799 --> 00:19:35.519 the political level, That's the first thing i'd say. The 381 00:19:35.559 --> 00:19:38.599 second thing I would say from a European perspective is 382 00:19:38.599 --> 00:19:41.200 that Europe what's happened is the venture capitalist in Europe 383 00:19:41.200 --> 00:19:43.599 have had it really easy for a decade because what's 384 00:19:43.640 --> 00:19:46.119 happening is there's been more capitalive from the into climate 385 00:19:46.119 --> 00:19:47.960 areas and prices can go up and up and up. 386 00:19:48.880 --> 00:19:52.200 And now what we're seeing is businesses not performing and 387 00:19:52.440 --> 00:19:55.880 we're seeing down rounds, restructure of business and stuff like this. 388 00:19:56.640 --> 00:19:59.960 And if I go and just take the wider situation, 389 00:20:00.119 --> 00:20:03.319 which is definitely do have certain times of the day 390 00:20:03.599 --> 00:20:06.640 too much solar, too much renewable, it's too much electricity 391 00:20:06.640 --> 00:20:08.920 in the system. You know, you need to build batteries. 392 00:20:08.960 --> 00:20:12.319 He's changed laws to be able to make flexibility come 393 00:20:12.359 --> 00:20:14.359 into the market, and that takes a little bit of 394 00:20:14.400 --> 00:20:17.000 a while, which means a lot of the climate tech 395 00:20:17.079 --> 00:20:20.440 businesses just and scale and so what you're seeing is 396 00:20:20.480 --> 00:20:22.319 valuations from the pressure. So I think this year is 397 00:20:22.319 --> 00:20:24.240 going to be a difficult year, I would say from 398 00:20:24.279 --> 00:20:26.200 a certainly from a European. 399 00:20:25.720 --> 00:20:29.440 Respective, maybe should love to hear a US this perspective. 400 00:20:29.519 --> 00:20:30.440 Do you think up or down? 401 00:20:31.160 --> 00:20:31.319