This week Johan and Marcelo are joined by James Geshwiler, Chief Strategy and Investment Officer at Catalyze. Catalyze builds and operates solar, battery storage and electric vehicle (EV) charging systems for commercial and industrial customers. The three discuss how to optimize energy use and add resilience to energy facilities and how to generate passive revenues by producing clean energy. Listen in to find out more about how to integrate renewable energy into real estate assets to tackle climate change while lowering the carbon footprint.
Catalyze’s homepage:
https://catalyze.com
This week Johan and Marcelo are joined by James Geshwiler, Chief Strategy and Investment Officer at Catalyze. Catalyze builds and operates solar, battery storage and electric vehicle (EV) charging systems for commercial and industrial customers. The three discuss how to optimize energy use and add resilience to energy facilities and how to generate passive revenues by producing clean energy. Listen in to find out more about how to integrate renewable energy into real estate assets to tackle climate change while lowering the carbon footprint.
Catalyze’s homepage:
https://catalyze.com
Broadcasting from the commodity capital of the world, Zurich, Switzerland, this is ‘Insiders Guide to Energy’.
This edition to Insiders Guide to Energy is brought to you by Fidectus. Go to www.fidectus.com for more information.
| Timestamp | Speaker | Transcript
| 00:38.58 | Johan | Welcome to a new week and another episode of insight is guide to energy. My name is Johan Oberg and I'm the co-host today joined by and one of our colleagues from stories. Marcelo Ortega how are you.
| 00:57.53 | Marcelo | Hi Johan it's going well. How about you?
| 01:03.51 | Johan | It's been a fantastic week summer is coming here in Switzerland the weather is boiling almost obviously not compared to where you guys are but thrilled to be on another show but maybe before we start. You've been part of the team for quite some time you've been running our stories which has been really interesting to to listen to where we where we go a little bit more into depth in terms than the people but maybe quick introduction Marcelo who are you.
| 01:29.28 | Marcelo | Yeah, definitely. Ah, first of all I just want to say that your your boiling weather in sort of is nothing compared to the boiling weather that we actually have here in Texas where I'm located. Um, so to anyone who hasn't listened to stories.
| 01:38.85 | Johan | Um.
| 01:49.23 | Marcelo | Um, my name is Marel Ortega I'm a host of our sister podcast where we you know so highlight? Um, the track of certain people and how they're traversing their careers in the energy industry and as a day job I'm a market analyst. For us and Mexico specifically I track policy and developments and solar wind and energy storage markets.
| 02:15.43 | Johan | Which which is a perfect combination of today's show of course and we're really happy to have the real experts on here to to do this one and we have a really interesting topic today where we're combining a lot of these applications of of solar and and batteries and also electric vehicles. Ah, which is what we've discussed on this show many many times the future of this. But how do you combine it. So ah, part of what I'm really looking forward to to hearing today more around is energy companies are talking about this transition into solar. We're talking about evie from the automotive parts. But. How do you combine this and what is the impression by the actual customers. How do they affect this have they changed in the last couple of years you know this is my business hat coming on. This is what I'm really looking forward to to hear more about from our guest is there anything specific and oral that you are kind of curious about of the next hour.
| 03:10.29 | Marcelo | Well I I think that what I'd like to call the smaller side of solar in this case, commercial and industrial projects always have very interesting financing mechanisms I think people get more creative in this space than they would and. Traditional energy or even utility scale. Ah solar Project. So I'm very curious to hear um that side of catalyzes business.
| 03:36.44 | Johan | Which is a broad spectrum from interest from us. But we'll see where we're gonna head but with that I think it's better than to bring on the expert and our guest of honor today which is janee gs with us from co-founder from podlife welcome.
| 03:53.95 | James Geshwiler | Well thank you very much for having me and us today and yes, um, this is James Gesweiler and thank you Johan for pronouncing my name in the original swiss um german way I love the spzel deutsch pronunciation of gedefielder. Um, my family is very proud now.
| 04:03.00 | Johan | Um, ah.
| 04:12.19 | James Geshwiler | Um, but yes, I'm in Boston and catalyze is a commercial and industrial scale solar battery storage ev charging developer. But but very much your point we founded the company five years ago with the vision that not only was c and I going to finally take off. Um, it been a bit of the orphan stepch child between rezi and utility scale but that it really needed a new approach a new company because these are integrated solutions. Um, and we do a lot of things differently there and look forward to chatting about them.
| 04:45.40 | Johan | Sounds great I'll shoot my first question right? away 1 of the one of the things we see. My experience is that you looked at the utilities as one part which is direct relationship with the customers you have facilities the course which is 1 thing but. Also have the oems that are now trying to dip into the energy a little bit test. Obviously gone a little bit further but also the other ones we see with eb charging and and all the rest. How do you How does this? How do you see this pan out because everyone seems to be a little bit everywhere right now is that is that a. Assumption that is fairly all right.
| 05:24.56 | James Geshwiler | Yeah I Well I think it's a very fair characterization of any early market that everyone's just a little bit everywhere. You have a lot of people nibbling at the edges or trying to have incremental change I think the the honest answer.
| 05:28.97 | Johan | And.
| 05:41.68 | James Geshwiler | Your question is to actually take a significant step back and say what actually is generation and and what is actually load. Um, the way we actually think about this is we're changing 100 years of history. So.
| 05:48.30 | Johan | Step.
| 06:00.20 | James Geshwiler | Back one hundred years ago whether you were in europe or whether you were in the northeast United States you had a factory this was the dawn of the industrial revolution and it had a power plant associated with it. Be it a mill a coal-boiler and that powered the factory the means of production. And then it also powered generally the store. Ah maybe the workers' homes here in new england and back then we called it a factory te today. We'd call that same thing if it were being built from scratch a renewable energy micro-grid and the reason of highlighting that and going back 100 years is the generation and the means of production we're right next to each other we broke them apart one hundred years ago because people thought hey this electricity thing is a really good idea. Everybody should have it so we built these really big central power plants. And people said well I don't want it next to my house I want it over there. Oh no, no no farther out farther out and then we brought in transmission lines to bring it in back where people would use it and then for a century we've had one set of people generate the electricity and another set of people use it and the reason why we got to come back and like let that sink in.
| 06:56.93 | Marcelo | I Have no.
| 07:12.85 | James Geshwiler | Is you know to? Marcelo's point the economics would be different if we were putting them right next to the economic activity simple concepts like resiliency that I get to keep my factory up and continue to manufacture things that my hospital doesn't have to invest as much in backup power that the. I don't need to um, have higher levels of infrastructure when I'm adding load through like e v charging because I'm generating on-prem that can that can feed those vehicles straight makes you begin to rethink that maybe redesigning from the get go. Ah, something. That's a bit more contained is going to be better than saying well hey a hundred years ago we made a decision. It was a ah a coal plant and now a gas plant way out. There. How do we make that work for today's today's society today's cost to land today's existing infrastructure. Both have their places but I think what we'll get into is there's not necessarily a simple answer There's a lot of a lot of both there but we got to kind of come back and rethink what it where is generation and where is load and how are those 2 going to work together.
| 08:14.81 | Johan | He.
| 08:15.10 | Marcelo | Oh.
| 08:24.61 | Marcelo | I think ah, that's an an excellent point and I've never seen it. You know as going back to me that debate of centralized versus decentralized. Um I thought it was you know maybe going forward, but as as you put it. It's probably you know, just rethinking. And going back to some of the system characteristics that we used to have and I'm really glad that you touched on that point because that was one of the questions that I wanted to ask you? Um, you're working at the c and I space and for a lot of folks. Especially here in the United States states like California there's this debate of ah. Should power renewable power cleaner power come from centralized, big scale utility farms or um, should it. You know should residential and c and I that also net meter to the grid be given a priority where did you sit in in in that that debate.
| 09:18.66 | James Geshwiler | Well again I think we need to re frame the question and I don't think it's so much of a debate as it is a little bit of a discussion. Um I mean the simple truthful answer is yes you need all of it. Um I think the reframing. Is that it's the wrong question when it becomes either or or Gee. How is that going to work with then and then begin your parade of horribles of duck curve intermittent generation clouds. Whatever um, a lot of that. Debate frankly is framed around people who either have trouble thinking about change or they're looking at covering their debt service and losing revenue through frankly competition. Um the grid of the future and the utility of the future. Has a really important role. We need to embrace which is being a market maker if we stop thinking about this is like a big hub with lots of spokes coming out of it right? A radial network system I can use that word on this podcast. That's where energy people right? So the radial radial system with basically unidirectional power.
| 10:22.23 | Johan | Um.
| 10:30.23 | James Geshwiler | And think of it more as a mesh in a network. You've now kind of again to go back in time said hey in the United States forty years ago we had this thing called the at and t monopoly and you paid for long distance and you had a dumb phone that you paid them to use and you got charged for long distance. And then we broke up the at and t monopoly and then you paid less for long distance because there was competition and we went to ¢25 a minute and ¢15 a minute and ¢10 a minute and then oh well wait, you know what? if you call after seven zero p m or on weekends except mother's day. That's a utility scale ppa and that's the race to the bottom with volumetric consumption and that's time of use shifting that you're seeing in utility tariffs today we don't even know what a telephone is. Mobile phones we have are more powerful than the supercomputers that call it so-called supercomputers. We had twenty thirty years ago and they're interoperable providing all sorts of data and load balancing and quality of service and multiple forms of communication this is where we're going with electricity folks. This is where we're going to multiple products and when we start talking about resiliency quality of power ev load balancing. We also should be really talking about dispatch neighborhood of mutual assistance and think about you know the grid now as a network of networks and to conclude on this point you know the. Biggest case study that we should look at is Texas look what happened last year at Texas the vulnerability of central power plants that literally froze up whether they be natural gas or some people pointed hey the wind turbines got ice on them I don't really care if they did or didn't centralized assets or centralized assets. What would have happened if we had a bunch of distributed assets interstitially there or um, ah renewables were on rooftops in residences and could be able to detach from the grid and just keep the houses up with basic heat. So you start looking at something that's a lot more of a network. Rather than you know 1 big power plant that pushes out to everyone. A lot of things begin to change.
| 12:41.29 | Marcelo | Um, I just gotta to say um I love that answer um and specifically in the Texas grid. It seems like being an operator right now is is a healthy job There's always a once in a lifetime meteorological event happening every other month. Um. So yeah to your point. Um, the search for resilience is is a big priority. Um I just want to take you back to something that you said on this transition which is a different one that we always kind of talk about from this raial. Um, schematic tool network um. Where does catalyze play a role dosset play a role.
| 13:20.22 | James Geshwiler | so yeah so Cat Catalyze has an interesting overlay to this? Yeah let's let's talk about our business model because when we started the company five years ago as I was saying we we set out on a mission to really try to scale the commercial industrial sector. And ah, perhaps out of naivete or a little bit of foolishness. Ah, we thought that we could apply software and technology to do that because obviously that had already been happening in residential and my co-founder Steve Atherton was the Vp of engineering at sunevity at the time and previously. He'd been the cto and Vp of engineering of Sunru. So he and his team had built 2 of the large largest data platforms to really drive the proliferation of residential systems and utility scale systems had already begun to slow down. So. It's sort of an obvious that like we'll see and I was ready to take off. Um. The naivete there is that um c and I um the very nature of c and I commercial industrial is you have many different interests on the property right? It's the it is the the very definition is that there is economic activity going on. And they're people who whether they have revenues through a factory I gave a hospital example even multifamily right? You have all these different stakeholders and you also have all sorts of different rights and overlays they're very complex. Um, and what we came to appreciate was there a couple things that were necessary here. 1 Was you really had to work with partners who were the local influencers and so we wound up working with 2 sets of parties. 1 is large national commercial real estate groups and the other the local developers who have all the local knowledge relationships and expertise. Um, technology is very important because it could deal with all the different combinations and complexities. But then you still need a human being and someone who has those relationships to help do the negotiations or get things done and then the other was you needed a heck of a lot of money to do this um. Because now you you just can't like give people the tools you have to fund procurement of Panels equipment and really the fundamentals change here with storage which we've alluded to a couple times so we wound up acquiring our own battery supply chain. So we bought a battery systems integrator. Had the good fortune of being backed by what became the ncap energy transition fund which has one point two billion under management were they the largest single company. We also have other um private equity groups behind us including Yorktown and inosphere plus additional sources beyond that.
| 16:05.99 | James Geshwiler | We're also very fortunate to have multiple large tax equity partners which is another issue you have to bring in um, as well as debt providers now creating a complete capital stack. But then you can use that technology and that procurement power to basically buy at Utility Scale pricing. But then deploy. Locally ah through your partners and I I Joke a little bit with some of our renewable energy local developers. Um, our job is to do ah to give them freedom from and freedom to freedom from all the headaches of procurement and finance and overhead and operations. Give them freedom to go and do that specialized work locally and's that's really that magic that happens at C and I because now you can be Creative. You can listen to that customer. You can find out what their needs are locally and then you can configure not customize. Configure a solution to that combination of Technologies We talked about that suits their needs including remote offtake so we provide community solar as kind of mini utility scale to feed and and comp Complement. What isn't. Available on-prem So then is that integrated solution of all 4 of those components on-prem solar battery storage ev charging and then remote offtake that that then you dial and adjust but then you work with other people to get it done.
| 17:35.63 | Marcelo | Um, let me see I have a question for you. Um, if you can maybe help us simplify. Um the business model which is very interesting by the way. But ah, um, what are say Catalyzers revenue streams What are people giving you the dollars.
| 17:45.47 | James Geshwiler | Me.
| 17:54.91 | James Geshwiler | Yeah, so the the simplest answer is we saw electricity right? We're an independent power producer. We make electricity through solar panels and then the solar On-prem versus Os-prem is just location battery storage is you know way to.
| 17:55.37 | Marcelo | 4
| 18:14.77 | James Geshwiler | Store it make it available when it's needed and then ev charging is frankly, just another way to sell the same product just in a differentiated form. Um, so the simple answer is we saw electricity now. The reason why I go back to that telecommunications example of back you know forty years ago ah phone company just sold long distance for the most part and then they had like a fixed charge for a subscriber charge. It's just if you go back to an old phone Bill. It looks a lot like a utility bill of electricity bill today where you have ah a long distance charge a local charge a phone rental charge like it almost lines up. Um, so what you're seeing is moving ah an evolution from just volumetric ppas where you know you're paying a cents per Kilowatt hour for your generation to now you're starting to look at these other revenue sources that. Ah, you were alluding to you know sometimes we call this the value stack but 1 of the big things is demand response to the utility. These assets these distributed assets are friends to the utility half the costs in general of the grid are to serve the top peak events each year so the fact that people like us are going out and funding battery storage. Is absolutely to the benefit of the utilities like hey people are making free. No cost to you dispatchable power plants just pay them a little extra to now reduce those peak events and do it right by the load um either on so the load never hits your grid or kind of in the neighborhood. Destresses the whole system reduces avoided costs and can make the system last longer I already mentioned eb charging. That's an upsell and a crossell but there are other revenue streams that then make that sale electricity just a little bit different depending on the use.
| 20:01.32 | Johan | Which which obviously is part of part of transition which I like I think if we go back a little bit in terms. You mentioned the the analogy with at and T and and the mobile or the Telecom network probably before mobile but with my background and this I also capitalized a little bit On. On this and and and and also use the the functionality of it. But what I think is quite interesting is that if you go back X amount of years ago. It was communication. Okay, it was critical but probably not as business critical as energy at least not back then now you can always debate especially if you ask my son I think why. Connectivity is more important, but the important the the question here is that as a new startup company coming out in the market in this transition. Even if customers are saying yeah we want to go for Renewables. We Want to be part of this journey but you have some do you see the utilities as competitors. Ah, how how were you approached and how was the feedback from customers when you start approaching them as a new kind of a newcomer on this market where you know nothing can go wrong because if it does the the kind of the business goes down. But how was that kind of the early days meeting customers to Discussion. What was the impression and has that changed a lot in the in the since 17 when when you kind of kicked off.
| 21:21.33 | James Geshwiler | Yeah, well ah I think there are a couple different questions there. Um yeah, start starting with today. Um, key question or utilities competitors or um, somehow enablers or friends.
| 21:24.65 | Johan | Yes, probably.
| 21:39.70 | James Geshwiler | I Think that's the utilities own decision. Um, there's certain utilities that are absolutely enablers and have already embraced the world of being market Makers and that distributed generation is is part of the future. It's really just a question of the rate of change. Not if there's change.
| 21:40.94 | Johan | Yeah.
| 21:59.50 | James Geshwiler | Um, there certainly are other utilities who haven't made that choice yet. Um, and frankly, many of them may be forced to ah through the financial consequences of where the markets are going. We're looking at an inflationary environment. We're looking at a lot of load defection. Um, and we're looking at technologies that are making it harder and harder for utilities to control what end users um makes the choices they make and and and whether or not they self-generate. So I think utilities are eventually in the United States eventually going to come around um to the idea of being market makers. It's certainly. Where the future is going to be um, as to the early days um I've always said the number 1 thing we're selling around here is trust to your point this is infrastructure. It is not done likely and there are several things that have happened along the journey. Um, that I think have really um, helped establish and engender trust first of all the people around here who joined the company early and even through recently bring themselves decades of experience. So it wasn't like it was it may have been a new company.
| 23:07.90 | Johan | Me.
| 23:09.96 | James Geshwiler | But the people doing it were already in many ways known to the market but it was a new thing and the market's changing have certain customers offtakers real estate groups. Other developers said you know no I don't like this or I just don't you know, not for me now. Absolutely of course you're always going to get that. Some of the earliest customers got the vision and said oh we see where the future is going. We want to be part of it because the biggest motivation with our real estate groups is not saving money on an electric bill. Most of the time they don't pay the electric bill. It's their tenants. Or their operation side or their customers for the products they're making on-prem saying we want to see you make your environmental sustainability and and governance goals and not do it by just buying Texas wind wrecks we want you to point to a physical asset. That's coupled with what you're doing and you can attribute your activity because we have a choice of where we buy our products or where we rent our space or what type of real estate we occupy and we want those esg goals met so really. This is their revenue and once it touched their revenue. It was a question of how can you do it? Not if you're going to do it.
| 24:34.90 | Marcelo | That's very that's a very interesting point. Um, so you'd say that your major clients This are real estate nationwide corporations Their their main driver Doorals Catalyze is not necessarily. A desire for sustainability. It's It's the bottom line that they see um after they approach you.
| 24:58.77 | James Geshwiler | Um, yes, so we have 2 sets of of customers or partners. Um, but they do meet at the same point at the other end. The first are medium to large commercial real estate groups. Um, industrial multifamily. Healthcare care um, cold storage people who tend to have fairly large properties complex properties but a very very important point is they're multi-risdictional. All of them are spread across many states and the very common theme has been. Yeah, we did 1 or 2 with a local contractor developer and then we asked them to go down the street and they couldn't they couldn't go to the next state they couldn't go to the next utility jurisdiction. Um, and we said that's right, all developments local. You need to bring in that expertise and one of the great things around here is catalyze is operating in 20 different states today we built from the the get go and and again had the good fortune of having the money to do it a nationwide platform the other key partner are those local developers and epcs. Who said wow we have people we're working with who we either can't cope with or we're too small to get batteries our customers want batteries I can't even get 1 of the vendors to return a phone call I said well that's procurement's not really your core competence. Procurement something you have to do it's necessary evil for you to serve your customer and develop that project. So let us work with you and be your partner and let you focus on development because we want to be the long-term owner and operator because both those parties have said. Hey you know five years ago maybe even four years ago building a solar array and walking away from it made sense like you're going to sign a long-term ppa clip coupons but Marcelo this goes to your point about forms of revenue. Our view is every project is not. Ah, destination c od commercial operations for it is the start of the journey we are overwhelmingly expecting these projects to evolve be added on to change. They're going to be living at living organisms. Adding storage adding a second array. Um time shifting um adding in more controls going inside the building I thought that would be something that would take longer. We're already getting requests. Can you please.
| 27:46.45 | James Geshwiler | Control the the consumption of electricity and time it with the generation because we have particular requirements. So now we have another universe that was all by itself. The energy services companies now beginning to say oh wow, we need to couple with generation. And now that I'm actually controlling load and designing load be with it now. We're back to that you know 1870 s factory right? It's all together. It's all beginning to operate but now it's computer controlled. It's solid state. You're not running a boiler the solar panels just sit there and you write software to to manage it all. It's it's really exciting. But um, you you gotta be taking it. This is a 20 to 30 year journey
| 28:28.78 | Marcelo | That's ah something very interesting I think I wouldn't have assumed that you were you know so invested in the long term evolution of this project and that word to me sort of stood up. Um, stood out. Um, and I wonder. How much of because because you do solar and solar plus storage and eb charging and I wonder how much of your current business is what of each segment how much of it's solar versus solar plus batteries versus solar plus batteries and ev charging um stations and what do you see. Ah, you know in 105 years catalyzes you know, share how much of you know in 2030? How much of your business is gonna be e charging or you see those segments still keeping you all the same market shares.
| 29:17.51 | James Geshwiler | Well there there. Yeah, there are a couple easy answers and then there's the crystal ball answer um you know to that? Um, the easy answer is that you know today in most jurisdictions you're looking at mostly solar still.
| 29:21.98 | Johan | A.
| 29:32.91 | James Geshwiler | However, whenever we're building any project. We're investing in all the connections right? because we're looking at being the long term owner we want to go into what a property once to put in the the smart infrastructure and then add on so we will put in extra conduit for batteries we will lay in for extra ev chargers. Several of our partners. Um one. We made an announcement last week is stream realty they do about a billion dollars of industrial warehouse construction new construction a year so we actually design in with them this future vision. Of what the energy infrastructure is going to look like not day one which is what an Epc coming in to put up a solar array is going to do. We're designing for year twenty and so we will put in the right size service panel bring in the right service we're redesigning services with them in order to accommodate. Modularity expansion. There. Also when you really start getting into this There are all sorts of details that you begin to address when you start trying to future proofof you know as a common engineering term designing for the future instead of well I'm going to do this one project and maybe you get called back or or later. So. Um, in some ways your answer is well. Every project is solar storage and ev right now the majority of what's being used and installed are is you know, solar panels and direct solar generation. Battery storage is very much a thing on the coasts. Where we have very high transmission distribution charges and demand charges so batteries we are deploying at multiple sites including ah community solar sites to support the grid um ev chargers. We currently budget in about 10% of the vehicles in a parking lot. But we're future proofing and forecasting for a hundred that hundred percent may come a lot faster than we expect.
| 31:31.27 | Johan | So Maybe follow up on and this because I think it's quite Interesting. We're talking about you mentioned Also when the new built and in in order to to build Sustainable. So So that's obviously a main part now from anything on the material to to what you use, Etc. And. It's a smaller market I can understand versus a retrofitted solution to to an existing one but where where do you see? Do you see any differences in terms of growth and opportunities. Even if the markets are slightly skewed to towards size. But do you see any differences in terms of take up on the the new bills before. But catalogs versus kind of the Retro ah fit if that's the right word to use.
| 32:14.18 | James Geshwiler | Yeah, So um, well again when you're working with commercial real estate as your partner you you will come in and do a retrofit right? They'll say we want our existing portfolio or existing operations. Um, and in those cases. You know your costs are higher and it's a little bit more delicate and a little bit more um you know the way things have been done because most renewable energy has been retrofits.. It's just the nature of it. But the other thing is when you're. When you form a national partnership and again this is just one of these things that we're able to do because we we spread across the country is a lot of these groups they have scheduled maintenance or so or rebuild so we're actually working in with these parties not just on new build. But when they acquire new properties For example, which a lot of them are doing has been a very hotmark real estate Market. One of the things that some of these groups will do when they acquire a set of properties is they're immediately going and doing retrofits themselves well and they're doing upgrades right? They've bought this to be more successful. Real estate Groups. So. They're going in and doing a set of of features and enhancements based upon their strategy and they've gone out to buy undervalued properties right? Buy low sell high nothing New. You know in business here. So They all kind of pride themselves in buy low and they want to improve them and whether they're long-term holder then they sell. Often They're going in and touching so you may come in and do some retrofits but then you just want to get on their schedule and draft with them because then you're both going into the building and you have one set of electricians of one set of Civil plants. Um I think the hardest ones and this is back where you know it comes back to the importance of of. Ah, utilities and centralized generation are things like dense Urban vertical buildings right here On-premise self-generation doesn't work really well at all right. You got a big load big vertical building. It's very expensive to bring things in and this is really the utility strength. And especially when you're looking at vehicle electrification in Urban settings. Um, that's when again, your partnership is really um, beginning to build because you know some of our discussion actual discussions with utilities have been along lines of. Hey if you focus and solve a problem over here. We can devote resources and solve this one over there again. This is just a differentiated role. You know the big um campus out in the suburbs or in a rural area very much our strength especially if there's limited infrastructure because now you can start off with smart infrastructure.
| 34:58.14 | James Geshwiler | Some downtown vertical building that's in the same portfolio. Hey let's work with the you know utility and maybe we feed the community solar into that and support that maybe we put some battery storage and maybe we run the Ev chargers to but then we're partnering with the utility to give them benefit to I think this is totally win win win but you know it's not.
| 35:17.26 | Johan | It.
| 35:17.29 | James Geshwiler | There's not one size. It's all you got to dial those um attributes appropriately.
| 35:23.94 | Marcelo | So you mentioned that you sometimes work with utilities. Um to see what's the best solution for your portfolio and a couple questions ago. You also mentioned that and correct me if I'm wrong catalyz is now operating 20 out of the 50 states in the Us. Um.
| 35:27.69 | James Geshwiler | Months.
| 35:39.20 | James Geshwiler | Correct yes and Puerto Rico yeah
| 35:43.80 | Marcelo | So and I don't know which states but why why what's different in those states and not the other 30 is said more less infrastructure less density easier relationships with utilities is it a policy. Thing that makes 1 state more attractive than the other to your business model.
| 36:02.73 | James Geshwiler | Um, it's where our real estate partners asked us to go so they will typically give us whenever we start a relationship a list of. Two hundred to one thousand properties these are the the scale of parties that we work with um, the first thing we do is we run that through our software platform. So we're very technology enabled now we running over ten terabytes of data that has ownership information parcel information topography radiance data we actually auto design in the software rooftop arrays. So there's auto detection to remove like obstructions elevator shafts air handling equipment shading. There's automatic shading analysis. And in a very short period of time. Not only can we come back and generate. Well here's the size of the rays but we also have 785000 archetypical buildings with 30 years of empirical load data. So we actually generate an automatic pretty close. 87 60 load profile so we can look at those 2 and say well here's here's without pulling utility bills without you giving us anything else besides an address here's our sense of where the economics are falling for those buildings. Here's a ranking by the utility zones based upon some of the other things like bright value of energy transmission and distribution net metering costs incentive programs. Um, whether or not that area may be and for example in a study and kind of on a hold. And then we will jointly prioritize and they often say hey that list looks really good, but these you got to move up to the top of the list we have tenants who want them. There's particular demand and we say okay well how are we again going to. Phase this? Maybe it doesn't make sense to do a two Megawatt array with battery storage and a whole bunch of ev charging for a fleet which is a real example. They said? Yeah the prospective tenants said they're probably going to go to fleet electrification but not for a year or two who's just say that's good. Why don't we just do one array right now for the building load and then we'll we'll just lay out and be all ready to get going with the second one as soon as they want it and you know again that day may come sooner than we expect when gas is.
| 38:37.30 | James Geshwiler | 4 to $5 a gallon in the United States I mean again, the winds are at our back pun intended on this when you've got you know increased inflation electricity prices inflation and fuel and both the massive consumption of electricity for commercial use and transportation fuel. Converge at c and I properties so we are getting a lot of you can't move fast enough right now.
| 39:07.61 | Johan | So if we look at switching gear a little bit from actually the the generation on the software and and and talk a little bit about the the Ev and and the charging which as as the European it's.
| 39:18.85 | James Geshwiler | Um, no.
| 39:23.34 | Johan | I don't know interesting to heroes in the us where where you see the differences but first question maybe what kind of what role do you play in in that kind of ev charging is it is it the installation or the energy is it that the charging incidence is there. You know the app. So whatever it needs to be done but quite interesting just to hear your role around this and then that the follow-up question is then who do you work with in terms of you mentioned the customer saying that they're not ready for for this Do you also work with with kind of the fleet managers to to see when they're ready or how does this work because it's. Infrastructure for evs is wherever you are a big topic and it's lagging behind it's lagging behind by far so you'll be interesting just to hear your first of all what what is your role today on this and and how do you kind of match this also with then the tenants but be in that sleep manager. For example.
| 40:01.69 | James Geshwiler | Um, yeah, oh absolutely.
| 40:15.94 | James Geshwiler | Yeah, well the the simple business model answer is we saw electricity right? We generate electricity. We sell electricity. That's how we make our money. Um, now evs start turning into a special type of electricity this is where we start looking at.
| 40:25.49 | Johan | Um.
| 40:35.59 | James Geshwiler | Electricity is a differentiated good because the value of that electricity has to also now factor into what is that vehicle used for how long is it going to be there. How far does it have to go on a single use case. That's relatively easy to address. When you start talking about a fleet it starts getting really complicated so they answer your question. Do we work with flet managers. Absolutely they're coming to us saying hey we know we? Ah, we're worried about our fuel prices gases through the roof diesel's even higher. Um, we've been talking about um fleet electrification. Because we've heard not only these electric trucks in particular coming but that they're lower cost per mile because they just they have no maintenance right? There's like no parts to them. There's no transmission. There's no water pump. You know you basically replace tires. Um. And so we'd love to go ev but we run into a whole bunch of problems. So when we talk to these fleet managers or these property owners they say a couple things First of all is we talk to the utility and it's going to cost this huge amount of money to bring in a total new service to support everything. 2 well we have to use all the put all these chargers in and that's going to cost a lot of money and we don't actually really know what's going to happen like like it just seems complicated in which we say you're right? It can be It doesn't have to be so we made an investment. As a company strategic investment last year in a company called microgrid labs and couple solutions here. They're sort of joint here. First of all, again, we're generating as much electricity as possible on-prem to minimize. What the utility has to bring in and especially in in the existing expensive infrastructure like California or the northeast bringing in new service is really expensive. So if we can alleviate that or reduce that expense. It's a huge win that then turns into. Um, making it possible and generation plus storage takes care of it. But on the ev side directly now you start saying? Well, let's think about how to optimize it. So do all those trucks have to charge at the same time. Well no, some of them are out for delivery. Some of them are aren't. And well do you have a route optimization software today. Oh yeah, of course we do. That's what we do. We're a logistics business. Well great. What if we coupled that with the generation and um timed the fuel with the truck. So what micro-grid labs does and we've incorporated it in our solution now is to say.
| 43:15.13 | James Geshwiler | Well, you've got a let's say two Megawatt array on this logistics warehouse it generates so much electricity. You've got these 10 trucks for simplicity some are going summer back. Why don't you start changing the routes and changing the time to match not just the deliveries they have to do but now adding in the fuel. And here's your schedule for today. So that outputs a joint schedule that now not only as delivery as if fuel were totally available to say well let's now optimize this with the fuel and some cases you say you know what this delivery is so important or this mission is so important. We want to pay extra for that. Okay, great. We'll draw from the grid. We'll use dcfc. We'll upgrade the infrastructure to support that because now it's all cost benefit. These are the type of calculations and advice we give fleet managers to say hey we're looking at a new kind of whole system. And we just need to find out what your optimum is and if you outgrow it, you've you've made it modular to then just expand as you need it in some ways. It's very simple and in some ways. It's a lot of math.
| 44:21.70 | Johan | So So what are you views then because this this is I think is is moving in the right Direction. So you you produce the the energy you use it for the buildings you you connected it to someone that installed the the Ev chargers and the software in terms of the app and and and. Charging elsewhere. It's done by someone else, but the energy is is definitely flowing you through this.. What are you views then on vehicle to grid but maybe before vehicle to grid vehicle to building if that's kind of the word to use How how do you utilize the battery. Yes.
| 44:50.94 | James Geshwiler | It's just another option. Yeah, so yeah, so so that's still extremely emergent. Um, it is a topic around here and a requirement again in future proofing. So we but we buy our chargers from a variety of third parties. We run them.
| 45:04.14 | Johan | Yes.
| 45:07.61 | James Geshwiler | And we run the software. So 1 of our requirements is that all our partners in ev charging have the open standard because we're going to do things like say well does your vehicle need to be charged right now. Or does it need how fast does it need to be charged so we may you know vary the electricity and the rate going to that charger. So again, that's part of where it's a little more complicated but this is also one of the big changes we've seen in the market again a few years ago people would say I'll do it myself. You know.
| 45:23.68 | Johan | Yes.
| 45:36.89 | James Geshwiler | Let me just pay a contractor put solar up on net meter like how hard this can be today. You start getting to these examples and a commercial property that says we can't we can't wing it. We have class a tenants investment grade. Top tier tenants who want to rent our space. They want smart infrastructure and they say that's not our business. Our business is being a real estate company or our partner is hey we're the local developer and knows how to get things done in our area this long term like. Keep it running optimize it evolve it That's what catalyze does so catalyze will take on all that responsibility and say hey we're going to keep those trucks running on time we're going to make sure that array works and we're going to do things like maybe buy wholesale electricity to to supplement if we need to do it. Um, but again, that's the beauty of of of an interopable interoperable complex network you know I think this is a bit of a head scratcher for people when we talk about electricity because we're so habituated this hundred year history of big power plants if we're having the same conversation about computers. Nobody would be saying what are you going to do about the mainframe. You know we still have this mainframe I don't you got this like personal computer here I don't understand how it's going to work with like your mobile phone and you know the other computers and like how is the data going to move on the ne I just boy this is just so complicated I just't. We have people who specialize this and you have companies provide routers and the phone just works with the computer right? It took us 55 years um electricity is moving faster but the fact that my house might be powered by my neighbor's house today. Is invisible to me it should be invisible to me I really shouldn't care and someone whether it's a utility or an independent power producer is supposed to be a network manager making sure it happens catalyze is just being the network manager on that parcel. And we want to work with the utility to be the network manager in the neighborhood and the the service territory.
| 47:46.91 | Marcelo | That's ah, that's very interesting and I like to um, pick your brain out on something specific because you talk about you know, future proofofing which is a concept that I find fascinating So it seems to be that you're getting ready for the next step right now. Catalyzes main business is still. Solar on its own. Ah but you're preparing for you know this incoming tsunami of evs that it just seems that at any moment youre just gonna come in and there's gonna be a step change in the industry I Wonder who who takes the risk for that future proofing. You bake in your relationship like well we'll put in the cabling for when you want to do batteries and evs or you assume that and then ah you know through your trust Development. Expect them to then come back and say okay, we're ready for the evs or the tenants now. They want expand the ebs. What think is a risk for that future pool.
| 48:43.70 | James Geshwiler | So um, frankly, we take the risk and I don't really view it as a lot of risk. Um I think what we have the benefit of is some private equity and you know I really should give him credit. Um, to sharing this vision. Um, you know when you introduced yourself Marcelo you were talking about being in Houston and becoming a cowboy are principal private equities in Houston and they're very proud to be bunch of cowboys and cowgows. Um, it is not a coincidence that we are largely backed by Houston based. Upstream and midstream oil and gas money. This is not an unfamiliar conversation to them. You know this is all about leaning in and um, developing infrastructure for the future and um. You know it's only recently we've even been able started to use debt around here and I realize that's that's a privilege that gives us tremendous flexibility and the ability to invest in the future. Um, whereas a lot of people in industry have been heavily capitalized with debt is the lowest cost to capital which is good but then you have to. Point and maybe limited to those immediate revenue streams and you say oh but I want to make this investment for five or ten years from now. Well not our money you know so we have been making those investments and um, um, you know they're already. We're looking at. Some expansions are coming faster than we expected and again I think the current situation in the world. Whether it's inflation higher oil prices or or frankly, sadly go global conflict are reminding people that hey distributed generation or renewable generation. Has some real benefits and we want to see more of it.
| 50:37.20 | Johan | Which I think is interesting and I think we're also running a little bit out of time. We're coming up to the hour summarizing a little bit. What I've heard today I thought it was really good to have you on. James and I really appreciate. Not only the topic expertise but also the enthusiasm you have. We always like when gets have enthusiasm that means that something is driving. Like the analogy between where we were one hundred years ago and that we're actually coming to this again which I thought was really really interesting that this is actually new technology. Maybe it might be new ways of of utilizing digital. But it's actually an infrastructure that we had before before we changed it about one hundred years ago I thought that was quite interesting I also like the way. In terms of the interest and also not just the interest from the and facility owners but also from the tenant that this is going and start producing it through solar and then connecting it through through the evs. We'll see where the evs goes I'm still very interested in terms of. The vehicle to house a vehicle to buildings and and and all and utilizing the batteries. But that's another story I would love to talk more about the investment part. But unfortunately that's because energy is capital intense and and it's also around a lot of that investment. But I really really enjoyed this show but i. Maybe Marcelo and last few words or last question we squeeze in.
| 51:59.68 | Marcelo | Oh I just I want to say that I love that statement about Tean investors. Um, you know there's a reason why Texas is the second largest entrepreneur open market and it's not specifically because.
| 52:06.70 | Johan | Um.
| 52:15.42 | Marcelo | Of sustainability concerns or desire to push you know the envelope when it comes to the energy energy transition. There was money to be made because there was a lot of wind there and you know Texas when there and it so I am no financial analyst. But if they're investing in catalyzed it means they're smelling the money so that's a good sign for my. Point of view.
| 52:37.65 | Johan | It's great and I think that on the show quite a few times being a little bit of an outsider sitting in in Europe looking into the american market and hearing a lot about Houston Texas and I know Chris went there. Not long ago I have to start booking my trip I need to see what actually goes on there. But. Fantastic to have you on and James any any final words from you.
| 52:58.90 | James Geshwiler | Well thank you again for having me and yeah, a couple parting comments to our fellow energy professionals here. Um one which is something I say around here all the time is the only thing certain is change and personally I find that exciting. I realized to certain the people that somewhat horrifying and frightening but um, energy transition is a word that started being used after we started the company and and it really sort of hit on what we were doing and I'm really glad we're embracing it because it really is energy transition. And the other is something that my mother's always said to me she says James you know why are you complaining about something. It's the hard problems that are worth solving other people go solve the easy ones. Everybody says they want to solve the hard ones. But most people gravitate towards the easy ones. So. Take on the really hard ones because no one's ever going to shame you for trying so go try energy transition. There are a lot of things to solve but they are for the most part solvable and that's what's going to make this an exciting and and better world and we need to thank you.
| 54:10.69 | Johan | Thank you and I think that also wrapped up a little bit of the insider guide of energy of the topic. What we want to hear and what we want to bring on to the show to actually try this one for our listeners. You've been listening or watching to another episode of insider guide to energy. As we always do at the end of the show make sure that you promote our show on social media tell your friends and until next week have a great week and see you next week bye bye