Latest / Energy Empire / What If Data Centers Paid You?

Transcript

What If Data Centers Paid You? · Energy Empire

0:00
So much of the energy conversation for consumers is
0:03
about how much they pay. And if bills weren't going up, I
0:07
just don't think there'd be such a big outcry against large
0:10
loads, data centers and the like coming online.
0:13
But bills are going up. People are feeling stressed.
0:20
Hi, my name is Jagger Shah and I'm a clean energy entrepreneur.
0:25
And I'm Jamie Nolan, a clean energy communications executive.
0:28
And this is Energy Empire. What's up?
0:31
I like it. Now that it's been the second
0:33
week you've used that intro, like, I think I like it.
0:35
I think we're going to have to keep using it.
0:37
I'm working on it. The more I say it, the more it's
0:40
feeling real. And you know, thanks to this
0:44
podcast and you know, just a natural growth in my business,
0:48
which you've been such an incredible mentor and
0:50
encouragement for me. I got my first speaking
0:53
engagement request. Has nothing to do with you.
0:55
I didn't tell you this. I love it, I love it.
1:00
So that was really exciting and I also I'm going to be a guest
1:03
on another podcast. Wow, I also thought you crushed
1:07
it with Rosie. I did not know all of that back
1:10
story on Rosie. It's like so inspiring.
1:14
But I'm excited about this episode.
1:16
I have been good friends with Nick Chassett for such a long
1:20
time and it's been extraordinary to see his growth from the
1:24
governor's office to running. I think it was at the time East
1:27
Bay CCA, which is now Ava Clean Energy and now, you know,
1:32
running octopus here in the United States.
1:34
And I mean, just so much stuff going on.
1:37
I'm really excited because Octopus is a very buzzy company
1:41
and I particularly think they do a great job with their marketing
1:45
and PR and their branding is very unusually creative.
1:50
And I mean, their logo is pink like you.
1:52
It's not what you usually expect to see from an energy company.
1:55
One of the things I find fascinating is it, as you and I
1:58
have been working on like grid utilization, right through our
2:02
work with Deploy Action, Octopus has really defined the category
2:06
of grade utilization, particularly in the UK.
2:08
And now they're bringing all of that here to the USI saw that
2:12
Octopus just, you know, like announced a big deal with Lunar
2:15
Energy. They announced a big deal around
2:18
providing low cost electricity paired with batteries in Texas.
2:22
And so it feels like they're putting together a bunch of
2:26
solutions that can be paired with data center load growth to
2:30
figure out how we use the grid, you know, that we've already
2:32
paid for more efficiently. They're definitely one of the
2:35
most exciting companies in that space right now, and so I'm
2:38
really excited to learn from Nick today.
2:46
It is so good to see you, Nick. You have been on a tear.
2:49
I think I interviewed on you on stage at Dervos last year and
2:53
then since that time you have just made been making
2:57
announcement after announcement after announcement.
2:59
Like it feels like you must be like living on a plane or
3:04
something. Something, something like that.
3:06
Yeah, we're, we're keeping real busy here at Octopus.
3:09
There's just so much to do, right?
3:10
We got to put batteries in every house and we got to work with
3:14
every utility to make that actually remunerative for the
3:17
consumer. Well, it's a weird thing, right?
3:20
Because I mean, right now there's all this hatred for data
3:22
centers, right, in places like Loudoun County, Memphis, you
3:27
know, Tucson, basically everywhere a major hyperscaler
3:30
is trying to build. There's a lot of local concerns,
3:32
right? People are worried about their
3:33
electricity bills going up and what, you know, a massive data
3:37
center would do. But you guys basically have
3:39
turned the entire argument on its head, right?
3:42
You're sort of saying the fight structure the wrong way, right?
3:45
So for somebody who's skeptical of data centers, what is upside
3:49
down about the way that they currently connect to the
3:52
American power system? And you know, how do we design
3:55
those connections so the data centers improve grid
3:57
utilization? Because that's really what you
4:00
guys did in the UK, right as you turned all of this stuff upside
4:04
down. Yeah.
4:05
Look, everything we do, it's about putting the consumer at
4:09
the heart of the transaction, at the heart of the design.
4:12
And the way we think about data centers largely today is 1,
4:16
where it's a big data center developer working with a big
4:19
utility to connect the big piece of infrastructure and the impact
4:25
downstream are sort of a secondary in the design.
4:30
You know, that's not necessary because the utility doesn't want
4:32
to take the consumer into account.
4:34
It's just that's the regulatory construct of, you know, large
4:37
loads put a connection request in and they build around it.
4:41
The Octopus strategy is actually the consumer can be part of the
4:44
solution. And being part of the solution,
4:46
you get to the core of what they're concerned about, which
4:49
is the rate affordability, what their bill is going to be.
4:53
So if we say every household has a role to play in increasing the
4:59
ability to connect a large load and that large load is going to
5:02
create good construction jobs. So like there's the secondary
5:04
effects, but we're also going to drive down the consumer bill
5:08
because we're going to put a battery in every household and
5:10
we're going to connect every device in the home and flex that
5:12
device in a way that is really indiscernible to the consumer in
5:16
a day, in their day-to-day life. But is it going to save 1020
5:19
thirty, $40 a month on their bill?
5:21
Suddenly you've turned something that seemed like a real
5:23
inconvenience at best and potentially, you know, kind of A
5:27
cause of concern at worst into something people want.
5:30
The octopus model, they are really started before the data
5:34
center boom, the renewable boom in the UK.
5:38
It was the case that it was impossible to build an onshore
5:41
wind turbine in the UK because of community opposition in rural
5:45
parts of England. Nobody wanted to see a big wind
5:48
turbine go, you know, in their neighbors land and you know,
5:52
ruin from their perspective, their view shed.
5:55
We flipped it on a tent by saying there's a wind turbine in
5:58
your community. You see that wind turbine and
6:00
you sign up for Octopus Energy as whenever that wind turbine is
6:03
spinning, you get a discount on your bill and the faster it
6:06
spins, the bigger the discount. Suddenly we went from bid being
6:10
nearly impossible to site onshore wind to 10,000 rural
6:14
communities across the United Kingdom asking for Octopus to
6:17
put wind turbines in their community because they saw a
6:20
tangible benefit. They saw a lower bill.
6:23
And we think that's the same dynamic that needs to be, you
6:25
know, implemented across this country and frankly globally.
6:29
We think about the data center build out.
6:31
Well, that's a really compelling story, and I don't think
6:34
something like a concept that's familiar to most Americans.
6:37
So I definitely want to get into that.
6:39
But for a listener who hasn't heard this term before, talk to
6:42
us a little bit about virtual power plants.
6:45
What are they? So instead of 1 giant power
6:47
station churning out electricity for the whole country, talk
6:50
about like how virtual power plants work with all these smart
6:54
devices. How does it work in practice?
6:57
What types of devices are we talking about?
6:59
And how does that all come together to be something that
7:03
can compete with a gas plant? Energy is actually fairly
7:07
simple, right? You know, there's MW hour of
7:10
supply and there's a MW hour of demand and utilities are
7:13
constantly trying to find that balance between the demand for
7:17
megawatts and their ability to supply those megawatts.
7:20
What a virtual power plant does is it plays on the reduction
7:23
side of the Ledger. It reduces the demand for
7:25
megawatts and MW hours during key points of tension and stress
7:32
on the grid or or frankly any time of the grid, frankly,
7:34
because a virtual PowerPoint can be, you know, a solution to
7:37
almost any grid challenge that you have.
7:39
And it's, but it's a reduction in demand that then allows for,
7:43
you know, the supply that needs to be put on the network to be
7:47
reduced as well. And a reduction of a MW hour is
7:49
just as good as, you know, the supply of that MW hour if the
7:53
utility has confidence that that MW hour is not going to be used.
7:58
And that's where, you know, scaling the virtual power plants
8:01
comes into play and wanting a diversity of different assets
8:03
where it's thermostats, where it might be more of a statistical
8:07
approach where you say, all right, a 5010 thousand 50,000
8:10
thermostats, 5 flex, 10,050 thousand thermostats down to
8:15
degrees. That's going to save X number of
8:17
MW hours. And I'm confident that that
8:20
reduction is going to happen to 95% probability.
8:23
I like to pair that though, with lots of batteries and lots of
8:27
solar storage where I know it's a metered kWh of production from
8:32
the solar into the battery. The battery stores it and
8:35
discharges it when the system needs it.
8:38
And then I might pair that with electric vehicles that are very
8:42
easy to manage charging around. And then there's complementarity
8:45
over the course of the day. Thermostats are really good at
8:48
reducing consumption, you know, in that 4 to 9 period.
8:51
Batteries give you a lot of flexibility maybe from 6:00 to
8:55
9:00 PM. And then EVs, you start managing
8:58
charging from 8:00 to 10:00 PM because you can charge them
9:01
overnight and still give people the experience they want, which
9:04
is a fully charged car at six O clock in the morning.
9:07
So you you feather these different asset classes, you
9:09
deliver what the utility really wants, which is a reduction that
9:13
is contracted and they're confident about in MW hour
9:16
demand and then it looks no different than a traditional
9:20
power plant that's injecting supply into the grid.
9:22
I've been shocked actually at like just how good Octopus has
9:26
been in simplifying this for the consumer, right?
9:30
I mean, I think one of the things you guys launched in the
9:32
UK recently was the partnership with BYD where you sort of said,
9:37
hey, you know, here's a car and you can basically fuel it for
9:40
free if you let us fuel it during the times when the wind's
9:43
blowing really hard or, you know, the sun shining, right?
9:46
And so it does feel like you guys have made all of this
9:50
complex stuff much more accessible, right?
9:54
So how does that work in the UK? The.
9:56
UK and your broadly have an advantage most of the US doesn't
10:00
have which is consumers can choose their electricity
10:02
supplier. So Texas is the one state in the
10:05
US that has the conditions like Europe around a real free choice
10:10
for residential consumers. But that ability to choose your
10:14
supplier unlocks a lot of opportunity and that's really
10:17
what we've leveraged right, the building block of the Octopus
10:21
businesses. We provide consistent,
10:25
trustworthy and great experience to the customers who buy 6/12/18
10:30
month energy supply plants. When you build that trust, the
10:34
consumer starts to say, all right, well, I'm willing to go
10:36
beyond just buying a commodity service from you.
10:39
Maybe I will buy a car from you or a heat pump or a battery.
10:44
So we've built that trust. We start to be able to move
10:47
deeper into the relationship with the consumer and that has
10:50
led to offers like Power Pack where we lease the consumer ABYD
10:55
car. We install a charger in their
10:57
home and we give them unlimited free charging of their EV within
11:01
certain parameters for £399 a month.
11:06
That's really amazing. I mean, one thing I'm curious
11:08
about though is how have you guys, you know, targeted low
11:13
income communities? Because obviously a lot of these
11:16
things you find, you know, when you say the word EV, you're
11:18
really focused on, you know, higher income communities,
11:22
etcetera. Like how, how have you guys
11:23
really, you know, focused on serving all residents in the UK?
11:29
Well, I think in the UK with EVs, right, EVs are now just the
11:32
least expensive cars to operate by a long way.
11:35
And that's, you know, even more magnified right now with the
11:39
significant rise in the price of gasoline across the world, but
11:43
particularly in places like the United Kingdom.
11:46
We've actually started leasing used EVs.
11:49
So we're bringing the price point of getting into an EV down
11:54
so that it's accessible to all consumers.
11:58
That's, you know, I'd say probably one of our marriage
12:00
areas focus. And look, the Octopus business
12:02
operates at a scale. Today, more than 8 million
12:05
households in the UK are served by Octopus Energy where we're
12:09
serving every slice of the, you know, the income pie from, you
12:14
know, the highest income to the, to the lowest income and
12:17
everyone in between. And the solutions that we offer
12:21
are participated in by all those households.
12:23
If anything, the flexibility rates that we offer that allow
12:27
people in some cases to save fairly small amounts of money on
12:30
their bill attract more low and moderate income households.
12:35
Because saving a couple of dollars a week, 5/10/15 dollars
12:41
a month is going to mean a heck of a lot more for somebody who
12:45
is working hard to make ends meet than somebody who's really
12:47
high income. And so we, we see that right.
12:49
We we actually see a lot of participation in these programs
12:53
from our moderate income customers.
12:56
So as you and I talked about earlier in the conversation, you
12:59
guys have been pretty active. So for the PGM states, you
13:02
partnered with Voltas, right, Voltas will sign a contract with
13:05
the hyperscalers across a number of, you know, measures, Octopus
13:09
being one. And then that gives you the
13:11
revenue certainty to go forward and give people a better price
13:15
on retail power, right, which is great.
13:17
And then you separately took a majority stake in up light in
13:20
March. Up light is a service provider
13:23
to a lot of electric utility companies that are investor
13:25
owned utilities. So now you have this ability to
13:29
work through the bureaucratic investor owned utility and say,
13:33
hey, you should provide this as a speed to power for the data
13:37
centers that you're trying to bring online, right?
13:38
Like, I'm curious, just like whether the US just makes it too
13:44
hard to do business or whether the prize is big enough for you
13:47
guys to be able to, like, you know, go through three different
13:51
business models to serve the United States.
13:54
Look, the US is a massive set of markets, right?
13:57
It's at least 50 different electricity markets.
13:59
And you know, you have Washington, DC that has its own
14:02
Regulatory Commission, so that's 51.
14:04
And then you have electricity co-ops and muni.
14:06
So, you know, it's a lot of variety, but it is a massive
14:10
prize. But in some sense, the fact that
14:13
it is broken up into different market structures in the
14:16
landscape is so diverse does create a big opportunity for us
14:19
to really get to the core of how do we solve massive problems for
14:23
consumers and how do we solve massive problems for utilities,
14:26
right? I think too much of the business
14:28
in the US today is around solving a very discreet or
14:32
regulatory box. Deliver me a 30 MW VPP program.
14:38
Deliver me a home energy report program where we're going to
14:42
send emails and mailers to 500,000 customers.
14:48
Those are discreet and you know, solvable, but you're not
14:52
delivering massive value 10,000,050 million, $100 million
14:56
of value every year to the utility or do the electricity
15:00
consumers. And I think we really need to
15:02
shift towards solving massive problems at scale for the wide
15:08
variety of utilities and large customers that are out there.
15:12
And so we have to do it, you know, in our case, through the
15:15
provision of, you know, best in class flexibility technology and
15:18
best in class of customer engagement around load
15:20
flexibility. Would it be easier to do that
15:23
under a single market construct? Yeah, probably.
15:27
But if we had a single market construct, there'd probably be
15:29
lots of players who are doing it already too.
15:31
So it has created a lot of white space to think expansively about
15:36
how do we actually turn flexibility into this multi
15:39
billion dollar solution to the challenge of our day, which is
15:43
low growth and rate affordability.
15:45
We think that between Uplight, our retail businesses,
15:48
partnerships like the one we have with Lunar, we're actually
15:51
positioning ourselves to be able to touch all of the different
15:54
entry points to deliver these huge solutions to utilities.
15:59
Nick, so Octopus is mostly active in Texas right now, but
16:03
you spent your whole career prior to this in California at
16:07
the California Public Utilities Commission and Governor Brown's
16:10
office and as the founding CEO of a company called Ava.
16:14
So talk us through how different those two markets really are.
16:18
What's working in Texas that doesn't work in California and
16:22
vice versa, what's working in California that Texas hasn't
16:25
figured out? So if you could take the best
16:28
parts of both, what would that clack?
16:31
Gosh, as a Californian, it's hard for me to acknowledge just
16:36
how right Texas is getting it these days.
16:38
But I have to say, I am loving living in California, but
16:43
working a lot in Texas because Texas has really understood that
16:49
we are at least in this moment, in a in a time when freedom of
16:55
market structure and freedom to go and build is what is going to
16:59
allow both clean energy resources to scale because they
17:03
are the best, fastest and cheapest type of electricity
17:06
generation available to us, while also seeing economic
17:11
development in low growth. So Texas is getting a lot right
17:14
right now. Texas is beating California in
17:17
storage deployment, in solar deployment and large low growth.
17:21
Those are all really sort of positive things.
17:24
And we're starting to see actually lots of Texans adopt
17:26
electric vehicles too. So Texas is getting a lot right.
17:31
I do think California tends to be a little bit stuck on its
17:35
past successes and likes to talk about all the great things that
17:39
it has done. And, you know, I don't want to
17:41
minimize those, right? We would not be where we are
17:44
globally in energy storage in particular without, you know,
17:48
the leadership that California played, you know, 10-15 years
17:52
ago and saying yes, we're going to deploy grid scale batteries
17:56
to solve, you know, the fact that we're retiring peaker
17:59
plants. The one thing I'm still
18:01
struggling with, though, is that, you know, if you take
18:05
some, you know, resident that it's pissed off about data
18:08
centers in Loudoun County, Virginia, in some ways, Octopus
18:11
looks like a tech company to them, don't they?
18:14
And so in some ways, you're saying, hey, you know, give us
18:17
access to your thermostat, give us access to your EV, give us
18:21
access to all this stuff. And trust us, we're way
18:24
different than the other tech companies who are building those
18:26
data centers that are across the street from your house, right?
18:28
And so I'm trying to figure out like, this person's protesting
18:32
the data center on this side, but on this side, you're saying,
18:36
trust me, like we're going to like negotiate a good deal for
18:39
you and something that's in your favor.
18:41
This is why the Texas model is so important, though, Jigger.
18:44
And it's that if you're just selling somebody's software to
18:47
manage their thermostat or their battery or their EV, it does
18:51
just feel like a tech company that is saying they're going to
18:54
give you these benefits. And then, you know, they may or
18:57
may not show up on my bill. But when I'm your electricity
19:00
supplier and I'm telling you, I'm giving you 50% off the cost
19:04
of charging your car, it's just on the bill.
19:07
The bill was going to be 150 bucks and now it's 120 bucks.
19:11
And you know, I, I show you on my bill that like you use this
19:15
many kilowaters to charge your car, the rate would have been
19:18
$0.15. And now I'm going to charge you
19:20
7 and a half cents. So having that billing
19:23
relationship, having that core retail electricity supply
19:27
relationship with the consumer does fundamentally change the
19:30
relationship between, you know, us, the tech company, and the
19:34
consumer. But it also changes the
19:36
perception of value. So much of the energy
19:39
conversation for consumers is about how much they pay.
19:42
And so much of the tension that we're facing today in the US is
19:45
about bills going. If bills weren't going up, I
19:48
just don't think there'd be such a big outcry against large
19:52
loads, data centers and the like coming online.
19:55
But bills aren't going up. People are feeling stressed.
19:58
And so as a retailer, because we own that billing relationship,
20:01
we're able to communicate the benefits and actually deliver
20:04
the benefits of flexibility directly to the consumer.
20:07
And that's actually one of the challenges we observe a lot of
20:10
big utilities have. So getting back to the question
20:12
about California, the California utilities.
20:15
Are struggling today communicating the benefits of
20:19
virtual power plants. You know there's an alphabet
20:21
soup of programs, ELRP, etcetera to help consumers participate in
20:28
VPPS, but consumers don't really see those benefits clearly
20:31
articulated on their bill. I signed up for something, the
20:34
sign up process was too complicated, took too long.
20:37
Maybe I did it and they said I was going to save 50 bucks, 100
20:42
bucks on my bill. And you know, it probably is
20:44
there somewhere, but I don't know how to read my PGD bill
20:47
anyway. So I don't even know if the
20:49
benefit came or not. And so I think that's where
20:51
there's a huge opportunity in how we communicate the benefits
20:54
of flexibility to the consumer. The flip side of that is we have
20:58
more EVs in California than we have in any other state.
21:00
We have more solar and storage in California than any other
21:05
state, so the potential is just so massive.
21:08
We just have to figure out a way to help consumers actually see
21:13
what's happening and see what the benefits of managed charging
21:18
are or VPP participation are in a way that they can actually
21:21
understand and like actually accept as being good for their
21:25
lives. This is why I'm always yelling
21:27
in my other podcast. It's such a great point, Nick.
21:29
And like, I feel like we're constantly circling back to this
21:32
point about the importance of excellent communications,
21:35
marketing and branding. And I want to make sure that we
21:39
spend some time talking about the brand for Octopus because I
21:42
think you guys just do such a fantastic job with it.
21:45
Most energy companies are pretty.
21:47
Yeah. It's your brand ambassador over
21:52
there is Constantine the pink octopus lifted up so we can see
21:56
it on the are you friends on YouTube want to see?
21:57
It's so cute. Octopus is anything but boring
22:00
on branding You, your there's your mascot.
22:04
You have an actual fan club, which I love and I can't wait to
22:07
talk about tariffs where customers payless the time the
22:10
wind is blowing hardest. So what role has this branding
22:14
and comms work played an octopus's success?
22:17
And what does Octopus do operating operationally with
22:20
regards to branding that an investor owned utility CEO
22:24
literally can't? I mean, it's one of the
22:26
differentiators in our space that I want to see more CE OS
22:30
embracing like you have. Look, what does octopus do
22:35
right? We, we think first and foremost
22:37
about, you know, what the, the experience needs to be.
22:40
And Constantine is a great sort of articulation of sort of the
22:44
playfulness of how we want the experience to be, but it starts
22:48
really with the way we treat our customers and the experiences
22:53
that we create. So I'll give one great example.
22:56
When you call an energy specialist in the UK and you
22:59
might have to wait for a minute or two on hold, the song that is
23:03
being played is the number one chart song from when you're 14
23:09
years old. Because when you're 14 years
23:13
old, that's sort of typically sort of when like your taste in
23:15
music is starting to shift and you, you know, we, we know that
23:19
people have sort of fond nostalgic memories for sort of
23:22
music of that era of their life. Is it?
23:24
Magic. How do you do such a thing?
23:29
AI No, I mean look, I think you know, if the recognized phone
23:32
number it connects to the account, the account that knows,
23:35
you know the the year that the consumer was born.
23:38
So brilliant. It ties back, but it's a design
23:41
choice that's made, right? That's a design choice that is
23:44
made for how people are going to interact with the brand.
23:47
And I think that particular example is so emblematic of sort
23:51
of every sort of choice that is made along the way of, you know,
23:54
from when someone visits the website to when they use the
23:57
app. So when they see our ads on
24:01
billboards, it's always with what is the customer experience
24:04
going to be? So getting back to the point
24:05
around US utilities, why couldn't AUS Utility
24:09
fundamentally change the whole experience for a customer to
24:13
make it actually fun and enjoyable and not something
24:18
that's a burden? There's no regulator that says
24:20
you can't do that. Certainly it's not sort of the
24:23
normal course of business, but I do think this is where there's
24:26
such massive opportunity for our US utilities to really rethink
24:30
customer experience. Dominion Virginia power would
24:34
never it's so funny. I want to go a little bit deeper
24:38
on your fan club because it's a really interesting model.
24:41
So on last week's episode, we focused on wind power and the
24:45
local opposition that stopped a lot of US projects for wind
24:48
power. Octopus has flipped that in the
24:51
UK, as you, as you were explaining to us earlier, and
24:53
the your fan club is essentially a tariff that drops the price
24:57
for customers who live near a wind farm.
25:00
So tell us a little bit more about the wind fan club.
25:02
How does that work and what effect do you do you think it
25:06
has had on public attitudes towards wind power in the UK?
25:10
Well, I'll answer that last question 1st And has
25:12
fundamentally changed public perception towards hosting wind
25:18
turbines in your community because it's created this
25:21
tangible benefit not just for the landowner who's getting a
25:25
lease for having the turbine on their particular plot on land,
25:29
but for everybody in the community.
25:31
And, you know, that's reflected by the fact that so, you know,
25:33
thousands, 10s of thousands of communities have been asking to
25:37
host a fan club wooden turbine. I love it.
25:41
Who do you know who was responsible for that epic pun?
25:47
Do you know who first came off the?
25:48
Bell I I I I I don't want to say a name and get it wrong so.
25:52
Well, I want to meet your creative team.
25:54
Please introduce me because they're brilliant and I love
25:57
what they've done. I, I would like the beating
25:59
heart of Octopus. The beating heart of Octopus are
26:03
the, you know, the marketing and creative team and they're some
26:05
of the most brilliant people I've ever worked with.
26:09
And it's actually sort of not something you would expect in an
26:11
energy company that we would have multiple people in our
26:15
executive leadership team who come from a marketing and
26:19
creative background in what is typically viewed as a fairly
26:24
like boring and state industry. I want a master class.
26:28
I want them to be on the stage at RE plus teaching a master
26:31
class to all of the other fellow marketing and communications
26:35
professionals about what the process was like in developing
26:38
this brand and all of the fun elements of this brand.
26:42
Because I really think that we need to see more of that from
26:45
your peers. So kudos.
26:47
I'm so serious. Please please introduce me.
26:50
Absolutely, Jimmy. And look, we actually are
26:51
launching A consultancy to do just that, right?
26:54
There's the the marketing, but there's also sort of a whole
26:57
operating model around how we provide customer service.
27:00
And we've been getting lots of inbound from utilities,
27:04
governments, how do you operate like an octopus?
27:10
And so we're actually launching, launching a consultancy to work
27:14
with those folks to do just that.
27:16
So I'll make that introduction, but I'm sure my consultancy
27:21
folks would love to hear from any listeners who would like to
27:24
operate like an octopus. Sign me up.
27:27
Sign me up. I'd, I'd love to operate like an
27:30
octopus. You know, I'm curious, though,
27:33
just to circle back a little bit, you know, the part of what
27:38
I don't understand in this moment, and maybe I need to talk
27:42
to your your marketing team. Is that right?
27:47
Now what the Trump administration's really pushing
27:50
is we should build a natural gas power plant right behind your
27:55
data center and put all that pollution right into your local
27:58
community because that's what achieves speed to power, right?
28:02
And I think what you guys are pushing instead is why don't you
28:06
fund 10,000 home batteries and in Ohio or Tennessee County,
28:11
right? I'm just trying to understand
28:14
like, why this message has been so hard to breakthrough in the
28:20
United States. And I think first and foremost,
28:23
it's a reticence of your system operators to allow that
28:32
distributed solution to displace, you know, gas behind
28:36
the meter. Actually, we we know that the
28:40
evidence is that distributed batteries have lower failure
28:43
rates than a single large gas plant that has, you know, that's
28:46
a single point of failure. So the actual reliability
28:49
dynamic really does suggest that that distributed solution is
28:53
going to be more reliable asset. But you know, utility planners
28:58
and operators just aren't used to it.
29:01
We do in the UK have the great luck of having, I would say the
29:06
most forward-looking distribution network in the
29:10
world, UK Power Networks that has really leaned into
29:13
understanding how can distributed flexibility operate
29:19
with their control room to be able to deliver these outcomes.
29:22
And that's what's allowed us to pursue these distributed speed
29:26
to power solutions that really create win wins.
29:29
And you know, I, I think community opposition is just
29:32
going to force it, right. You may want to put a power
29:36
plant behind the data center, but that Board of Supervisors in
29:39
that county is just going to say no.
29:42
And it's that that local sort of power is just going to be such a
29:47
barrier to development that utilities and the hyper scales
29:51
are going to need to engage differently.
29:54
And, you know, we're really excited to partner there to
29:58
demonstrate what is possible. I mean, absolutely, we know that
30:02
the polling data is backing up everything that you're saying.
30:05
We know that if these data centers are powered with clean
30:08
energy, they are more likely to earn, to earn the public
30:12
support. And that's where our favorite
30:15
acronym, Beyoncé, Bring Your Own New Clean Power comes into play,
30:19
which is essentially what you're talking about.
30:21
And I think this is such a creative solution.
30:24
And I'm, I'm excited to see this model proliferate.
30:27
And no one wants an old like jet engine and powering a data
30:32
center behind their house. Like no one wants that.
30:35
And, and when those assets are built, no one's going to want to
30:40
run them either because they're just really expensive to run.
30:42
So even when we build reciprocating gas or, you know,
30:49
other, you know, simple cyclic turbines behind the meter, they
30:54
may be relatively low CapEx, but they're really high marginal
30:57
costs. So you're going to have this
30:59
ongoing effect that they're going to drive electricity
31:03
prices up, which is going to create a recursive loop of the
31:06
benefits of flexibility because we're going to dispatch
31:09
flexibility to keep prices down. So you don't dispatch those
31:12
engines. And then those asset owners are
31:15
left with stranded assets that are sitting on their balance
31:17
sheets. And they're like, why did I make
31:18
this investment in the 1st place?
31:19
I could have gotten the double benefit of relying on
31:22
flexibility. Absolutely.
31:25
Great point, Nick. All right, let's wrap it up
31:28
here. It's May 2026, five years from
31:31
now, May 2031. Tell me, what does this look
31:34
like in your perfect world? Is every American household with
31:38
an EV connected to AVPP? Are we even halfway there?
31:42
And throw out a number, How many gigawatts of VPP capacity do you
31:49
think we have delivering to the grid by then?
31:53
Well, I'll throw out a number first to like, you know, be able
31:57
to like. Put back in five years and tell
31:59
you if you're wrong. So in the DOEVPP Liftoff report
32:04
written by the famous Jen Downing, it says that we're
32:08
going to be at 160 gigawatts of VPPS that are subscribed into a
32:14
VPP by. 23rd if you still stand by that, that was a Biden era.
32:20
Because you've got Carrier, you've got all the appliance
32:22
manufacturers, they're all in, right?
32:24
So like, I think and frankly, I think Trump is forcing us there
32:27
because this DOE is doing such a poor job of, of organizing the
32:32
data centers to integrate into the utilities that they're being
32:35
forced into VPPS because it's the only thing that can show up
32:39
and solve the problem in months and not years.
32:42
I'm going to think about it in the context of the numbers of
32:44
households, right? I believe we'll see 10s of
32:47
millions of households will have batteries.
32:50
So if you have 10 million, fifteen, 20 million households
32:53
each have a 10 kWh state standalone battery, you know,
32:57
that's 20 gigawatts right there. We're going to see 10s of
33:02
millions of EVs on the road. Every single one of them will,
33:05
you know, in the one shape or form be participating in a
33:09
flexibility program. Every new air conditioner will
33:13
be connected and optimized. So you know what's the math
33:17
there? Is it 160 gigawatts I am taking
33:21
over? But damn, you heard it here 1st.
33:23
And don't forget how the water heaters, my friend.
33:26
And the water heaters. And the water and then and we're
33:30
not even in, you know, commercial industrial, I, I
33:32
think the trajectory that we're on for load flexibility is
33:37
really unbeatable. And it, it's not going to be
33:40
driven by policy one way or the other.
33:42
It's going to be driven by the progress forward adoption of
33:47
technology that is just better and cheaper.
33:52
And when things are better and cheaper, consumers buy them.
33:54
Well, Nick Chassett, thank you so much for being here and look
33:58
forward to seeing you soon. Yeah, great.
34:02
And I'm going to keep an eye out for my Constantine in the mail
34:04
next I have. 22 follow-ups here, Jamie Constantine and then going
34:08
to connect you with Pete Miller, the Creative Director of
34:10
Octopus. Thank you so much.
34:13
Great. Thanks Nick.
34:19
Energy Empire is supported by S2G Investments.
34:22
If you haven't checked out their podcast, I highly recommend it.
34:26
They have a great recent episode on the long term effects of the
34:30
Iran war and the blockade of the Strait of Hormuz.
34:33
In the episode, Sanjeev Krishna and Frank O'Sullivan and Bala
34:38
Nagarajan make a compelling case that this disruption could be
34:42
the most powerful accelerant for renewable energy in a
34:45
generation. And in future episodes, they'll
34:48
be exploring how those forces are reshaping our food systems
34:51
and ocean intelligence. Sound interesting?
34:54
Go find the S2G podcast and start with the global energy
34:59
order has changed. Now what?
35:06
I love Nick. I mean, it's, it's hard to get
35:09
him to like laugh, I have to say.
35:12
Like he's a little serious for me.
35:14
But like, we got him laughing, which I think was good.
35:17
And like he, it's just, you know, it's one of those things
35:19
where he is so driven to figure this out and it's great to see.
35:25
Yeah, it was great to finally meet him.
35:27
I've heard his name so much for the last couple of years.
35:30
And so it was nice to have this deep dive into what he's trying
35:33
to do and and the lessons learned in the UK, how they
35:36
apply here. I'm really excited to see how
35:39
these solutions get actually applied in the market by some of
35:42
these hyperscalers. It's also interesting to see
35:46
ACEO where marketing and comms is woven into their like
35:51
corporate DNA. And so it's not something that's
35:54
other for him, right? It's right in the middle of
35:57
exactly what his remit really is.
36:00
Absolutely. I think the the creative
36:02
branding of their quote UN quote fan club where they pay their
36:06
customers when the wind blows the hardest is just so
36:09
brilliant. I would love to see that type of
36:12
like very B to C focused marketing applied more by other
36:17
companies in the space. I just think they have a really
36:19
fresh take and they they've clearly been very thoughtful
36:22
about it and invested, you know, the creativity and the resources
36:26
that it takes to do a really great job in that area.
36:28
So that's definitely a big differentiator and one of the
36:31
reasons that I think that they're going to be very
36:34
successful. It's also fantastic to see them
36:36
as a partner for us on the podcast.
36:39
You know, they have been an early supporter of the podcast
36:43
and recently came in as a sponsor and we're going to, you
36:47
know, do a really cool new feature with them.
36:49
So I'm super excited about rolling it out.
36:56
So with the support of our friends at Octopus Energy, we're
36:59
launching a new segment called Ask Jigger.
37:02
Yeah, the idea is exactly what it sounds like.
37:05
You send in your energy questions, and I answer them on
37:09
the show. And the ones I can't answer,
37:11
Jamie answers. And, like, it's stuff you've
37:14
actually been sitting with. Like, why is my bill double what
37:17
it was yesterday? You know, should I go solar now
37:20
or wait? Like, what the heck is going on
37:22
with nuclear? Right?
37:23
Why would people possibly, you know, value a company with no
37:27
revenues at $10 billion? Like whatever is bugging you,
37:30
I'll give you a straight answer. Awesome.
37:32
Well, since I'm here, I'm just going to go ahead and go 1st and
37:35
ask you the first question. With all the talk about
37:38
switching to electric everything, heat pumps, EVs,
37:41
induction stoves, that's the one thing I haven't done.
37:44
Where do you actually start? Like say someone wants to
37:47
electrify their life, what's the first thing that they should do?
37:51
Well, I think the first thing I tell people is not to throw out
37:54
stuff that works. Like it's amazing to me how many
37:57
people are like, but I'm guilty, like, I just want to like
38:00
replace my, my stuff with electrify everything.
38:03
And I was like, your car still works.
38:05
Don't get rid of it until you're ready to buy a new car, right?
38:08
Your, your air conditioning and heating system still work.
38:12
Don't get rid of it until you're ready to get a new one.
38:15
Right on the stove thing. You know, I think that's a
38:18
personal choice. I don't know if the stoves ever
38:19
break. At least I've never had one that
38:21
broke. But like the induction sale
38:23
thing is hard though. Like, it took my, it took me 3,
38:25
three years to convince my wife that an induction stove wouldn't
38:29
make the food taste different. And we have that vacation house
38:33
up in Deep Creek Lake, MD. And so we started with induction
38:37
stove there and she loves it. And so now she's like, this is
38:40
great. But we have this like really
38:42
fancy Wolf stove at in our Bethesda house and so like,
38:47
she's not moving away from that anytime soon.
38:49
Awesome. Thank you.
38:50
Great answer and thank you for relieving me and my guilt about
38:53
my my only gas appliance I have in my house.
38:56
I'm going to it is a newer stove.
38:58
I think I'm going to hang on to it.
39:01
All right, so we want your questions.
39:03
Submit your question at octopusenergy.com/ask Dash like
39:09
Hyphen Jigger and the link is in the show notes.
39:12
Thanks so much, as always for tuning in.
39:14
You can find Energy Empire wherever you get your podcasts,
39:17
Apple Podcasts, Spotify. We're also on YouTube.
39:21
The best thing you can do to support the show is rate review
39:24
or subscribe. Thanks so much.