Green Giants – Episode 118

Mike Richter (01:28)

The minute that I couldn’t play hockey anymore, everything else became far more interesting, I guess. And all kidding aside, I’ve had an interest in the environment writ large my entire life. in some ways, I don’t know quite why. In other ways, it’s perfectly obvious. It’s the basis for our… society or culture or livelihoods or existence, right? You know, we rely on the environment in which we live to breathe, to eat, to exist. And, you know, as there’s more people, we passed the 8 billion mark, I think, a year ago on the earth. There’s just more pressure on what is limited resources. And pick your resource. It could be energy. It could be food. It could be fresh water.

But there’s a lot of downward pressure on these resources no matter what they are. Even with the efficiency that we’re trying to bring to bear, more people means more consumption. And to the extent that we can be more efficient with these things, more thoughtful about these things, I think you have a moral responsibility and ethical kind of challenge we all have. We all have an environmental footprint. But there’s also a great intersection in terms of economics, right? If you find a way to do anything with more efficiency, you’re probably going to come out on top. And that goes from playing goal to turning on a light bulb. So there is an overlap there, but I think it’s perhaps the challenge of our time, so a great place to be.

Wes Ashworth (02:53)

Yeah, I agree. love that. And I agree to challenge of our time and need as many people as we can helping solve that issue. You know, and just one thing to care about client is another thing to actually take that effort and build your career around solving it. I love that you’ve done that. Anybody else has done that as well. You’ve drawn this connection, which I really like. I’m a previous athlete, not at your level, but a previous athlete. And you’ve drawn this connection between athletic performance and building performance. And so when you look at a building, what does healthy or high performing actually mean to you?

Mike Richter (03:21)

We’re changing the infrastructure of commercial industrial buildings here at Brightcore and make them function better.

We skirt around it a bit. I mean, that is being sustainable, that is supporting the environment. But what are we in fact doing? We’re trying to optimize the operations of a building. So if I need a certain number of lumens to be able to see my desk during the day and night, how many electrons do I need to have those lights function the way I need them? Can I put in a more effective, efficient light bulb and actually get the same quality light in terms of color temperature, know, not those terrible white ones that used to be, and the same number of lumens, the same brightness. If you start to diminish the amount of energy that you use to create that effect, you’re saving money and you’re saving the environment. And just look in every direction, whether it’s an automobile, a light bulb in your ceiling.

data center, we need that compute power. That’s the of the boogeyman right now. Can you get that same compute power with less electrons used? this is zero sum game, even clean electrons. I can put solar everywhere on these, say, data centers, but you’re still going to need them to power the rest of society. So the more we can be efficient about this, everybody does benefit. And specifically, that facility that puts in the energy efficiency is going to just create less waste and that type of optimization, efficiency, sustainability benefits everyone.

Wes Ashworth (04:48)

Yeah, agreed. think it’s really helpful way to think about it. And I like the framing, you know, makes a building feel less like a box, you know, and more like a system that either works well or really fights against itself every day, which we’ll get into as we go here. But that’s another question for we move forward. So, you know, a lot of people may hear formal NHL goalie turned climate executive and wonder how do these worlds connect? Like what did hockey teach you about just pressure systems and preparation that still show up and how you lead Brightcore today?

Mike Richter (05:16)

Great question. I think you’re moving from one world to another and just on a personal level, you really mourn the loss of that.

Ultimately is an inability to continue to play at that level. I still love the sport. I’m still playing men’s league. I’m pretty terrible. I’m a sort of roving defenseman, no longer a goalie. And I get a great deal of fun out of it. But the satisfaction of being at the top of your game is something that anybody in that league, and we all do, are… respective careers, we take seriously, right? You try to be as good as you can possibly be at whatever you do, and there’s a certain satisfaction at whatever level you attain. And like any other kid, I just, wanted to play. I loved it. I played football, track and field. I was good at some things, bad at others, and became quite good at hockey. And I think when you leave that kind of top of the pyramid that…

is a 700 or so people that are in the NHL, that’s a very rare place to be and you have a level of competency, but then you have to have the humility to understand, man, there’s some really smart people on Wall Street, smart people in this sustainability zone, and I’ve got to apprentice myself to learn the ropes here. now, I’m almost 60 years old, I’ve been out of this sport as long as I was in it. It’s been 20 years, basically, since… I retired and I spent that time going back to school and applying myself in this green space. So I do finally feel like I’m getting a level of proficiency and never enough, of course. And how do you move from one world to another? You hopefully follow your passion. I love playing sports. I love that personal challenge. And if I could play forever, would have. I always say that.

But in a way, it’s a gift because now One life is over and you have to create a new one. And I think as long as you’re growing, I was just reading an article the other day about apprenticing yourself or just trying something that you’re not particularly good at. And the author of this book talking about being a novice was thinking about his child, a four-year-old that’s learning how to play games and walk and ride bikes and play chess and all these more complicated things as they go on. He said he would sit in the corner and kind of just watch her. grow and he’s like, what am I doing? I’m stagnating, you know, so it’s okay to learn new things that keeps young and it keeps your brain going.

I think, you know, the added benefit of there’s so much need out there to get this right, you know, battery storage is coming online, solar cost curve is coming down. You’re starting to talk about small modular reactors. There’s just infinite need for energy and for clean energy at that.

Now you’re starting to see some solves that are price competitive. And so to be part of that evolution, you know, we were burning whale oil at some point and we moved to oil and then we moved to electricity. Like we are moving society ahead and I think that’s a really great place to be. It’s an honorable thing to want to do and I think it, you can make money doing it. So I do have a passion for this and I’ve surrounded myself, which is the key to anything. with really smart people and they have a great deal of passion with the kind of engineering prowess to go with it. I think if you’re trying to change the world, you really better get some of the best and brightest and just be ready for challenges and setbacks just like an athletic career. But I think the thing for me is I have a passion for it and you’re never really done learning.

And so that to me helps me get up in the morning and feel really, motivated to keep going.

Wes Ashworth (08:42)

Yeah, I love all of that. You so much of what you said there. And I think it I’ve always thought it translates really well, you know, from athletics to a career and a lot of those, you know, big projects like big games come down to preparation, trust, getting the little things right. But I love that thought process and just continue to grow and learn and all of that goes into there. And I think that translates so well. So I’m sure, part of your success.

Mike Richter (09:04)

You know, and sorry to interrupt, but there’s kind of two aspects of this that I do think maybe merchandise in with the old career. And the first one is, I tell the story a fair amount, but it left an impression on me. I remember retiring from hockey and you’re really good at what you’re doing. You’re one of 700 in the world can do it at that level. But then you’re moving into this area where there’s lots and lots of people that have lots and lots more experience than you. And it’s purposeful, right? I focused on my athletic career when I was an athlete and You know, I would go to summer school when I was younger and didn’t have children and was unmarried and, you know, had time. But more and more, if you’re truly being a professional, you are prepping for that season almost from the moment you take off the pads from last season.

so I did feel like I owed it to myself to go back and finish the degree that I started. I left after my sophomore year and that was great. It was a good segue. But I think… That connective tissue between the athletic world and the sustainability world is health. So think about it as an athlete, right? What you eat, how much you sleep. I would keep charts of this. know, if you’re an Olympic athlete and you could be blowing off records and everything else, but you get a head cold the two weeks that the Olympics take place. It might be the end of your opportunity and so your health is absolutely your vehicle. You can play through injuries, can play through sickness. We’re talking about trying to be optimized here.

And so I think athletes have a great deal of understanding that connection between the environment in which you live, the food you eat, the sleep, you know, the level of particulate matter in the air. I mean, that was shutting down outdoor marathons in the China games a few years ago.

So there’s that connection. And I think that’s fair enough to say, look, I do have a standing. I do get that. Because what you eat, how we produce our food, the agricultural system that we have is either neutral or poisoning or enhancing the environment. And so I think there is that kind of immediate intuitive understanding that athletes have between the environment and health, health and performance.

The other thing is just that idea of performance. mean, if you really want to break it down, what are we doing to a building like this? This is a 1970s, 1980s office park that we happen to house ourselves in Armoire, New York. Is the building optimized? And, you know, as an athlete, the single thing, worse than being hurt, is not reaching your potential. And if you walk away, and, you know, I was not a particularly good… track athlete, but you I pole vaulted one year and to get from eight feet to eight six was a big deal. And if you can never get more than that’s understandable, but don’t get less than that. And so I think we all, whatever we do, we want to feel like you’re hitting that potential. There’s walls you have to break through and all the challenges and plateaus that come with the training.

But I mean, when we look at this building, if you have a poorly run, operations and maintenance. If you have a car that you haven’t tuned up, it’s never going to perform right. There was a coach I had that said, wouldn’t take a Ferrari and put in watery gas or poor, dirty oil and expect that thing to max out. Why would you ever do that when you’re eating? And why would we ever do that to our buildings?

The air quality that was circulating, think a lot of people made that connection during COVID. You’re saying, oh, wow, this air stale and somebody coughing on the next floor is somehow being recirculated into my office

Mike Richter (12:19)

space. Then you started thinking about clean air intakes and heat transfers and being more efficient, a bit more. And we’ve got to think about that. spend, I don’t know what it is, 80%, I’ll make up a number, but it’s a high number inside the four walls of your office. your place of work and your home. If these things aren’t clean, if they’re not efficient, probably affecting your health and it’s certainly affecting your performance. You know, whatever your chosen profession, if it’s thinly lit, there’s the Well Institute did a white paper on the state of K through 12 schools, public schools in America and man, it is cringe-worthy. You look at that and you’re going, my gosh, you know, we’re expecting that kid.

boy or girl to try to get through a day in the classroom when there’s no air conditioning and it’s 95 degrees in the Bronx in early June and take tests that are competing with a kid that’s in a private school with air conditioning and well lit. But these are moldy, damp, hot, crappy places, cold, breezy in the winter. That’s the environment in which we live. If you can optimize that building, the human beings within that space will perform better, be happier. and certainly be healthier. So I think we need to better define this idea of green and sustainability. And it’s more of an optimization in the case of the built environment of buildings. And who is it for? We love the birds and fishes, but it’s for humans. It’s for people. And so we all have a stake in getting this right.

It’s not a kind of political thing where liberals like it and conservatives don’t. We all want that for our kids.

Wes Ashworth (13:51)

Oh, absolutely. I love all those parallels. you’ve made so many great connections there and I agree. I mean, I think it does all connect and we have to start looking at it that way. And I think that idea just of performance in general is just a great bridge into the building side of this because, you know, once you stop looking at a building, it’s just four walls. You start considering all the things you’ve just shared and really start looking at it as a system. You also begin to see where the waste, costs, and opportunity really are. And so We’ll shift a little bit back to geothermal, which is having a moment right now, especially as a power story. Your work is focused on heating and cooling buildings. What is the part of the geothermal conversation you feel is currently being missed?

Mike Richter (14:30)

Wow, great question. I run into that every day. It is almost so large that it’s hard to articulate. Just the education of it. Let’s just start with the basics. Geothermal energy. There’s two types. One is the hot rocks geothermal out west where you’re going deep into the ground, thousands of feet into the ground to get either hot rocks and enhance it by putting water in it and get steam that comes up and turns turbines no different than a coal plant, a gas peaker, or really a nuclear power plant. You’re creating steam through heat and water mixing, turning a turbine and making electrons. We don’t do that. What we basically have is we’re going more shallow, which is usually less than 2,000 feet. It’s more often 500 to 800 feet into the ambient temperature of the Earth, which I’m in New York.

four or five feet down, the ambient temperature is 55 degrees. So what does that mean? We put a closed loop system and it’s no different than your warm hand holding a cold beer. There’s a heat transfer. BTUs are gonna go from my warm hand to the cold beer. The beer heats up, my hand cools down. It’s why you put ice on your head in the summertime and it’s why you like to have a nice hot tea or whatever it is in the winter. What’s beautiful about it is it’s pretty stable four feet down. And so when you put linear footage of tubing down there that is a closed loop. It just has a U-bend and comes back up. We never interact with the environment other than thermal transfer and you cement it with some kind of, you know, crazy cement that has great thermal properties so you can really transfer that heat well.

The more linear your feet you have, if you can imagine, if you’re putting heat in the ground as you would now, the air condition is truly pulling heat from that liquid. putting it down the ground and as it travels across that, basically the cold beer, it comes up at 55 degrees. And so you’re getting, in a sense, almost free air conditioning. In the wintertime, that same thermal conductivity is pulling 55 degree air. Why is that good? Because it could be 12 below zero outside on a polar vortex here in the Northeast. And so now thermal lift, the mechanical lift that you have to do in order to get 70 or whatever you want your internal temperature is only 15 degrees.

Air source, for example, which has really, really come a long way and very, very good, and we use them too, but that’s pulling that ambient temperature out of the air, which could again be 12 degrees below zero, and that’s the lift it to 70. So it’s just an efficiency play, and we now hybridize systems so that you have a certain number of boreholes for the extremes of heat and cool, you know, when the temperature outside is that. and you can rely on that ground temperature and on a, know, shoulder seasons when it’s 50 degrees out there, you can just use the air temperature. The communication between the two forms of heating and cooling is really where the secret sauce is and we have some incredibly interesting software that we’ve developed in-house that makes this incredibly efficient.

Not just, hey, here’s a map that we’ve drawn on, we think you’re gonna get these BTUs, we have… digital twins and real-time data that know precisely what the air temperature is out there, what the ground temperature is, and what your system is doing and how to adjust it to optimize it going forward. But it’s in a way so compelling because it is a simple system, warm hand, cold beer, and that heat transfer. And everybody has a refrigerator in the house. feel in the summertime it’s quite cold in your fridge, but it’s blowing hot air down at your feet if you walk there.

And that’s what’s happening. It’s a heat pump that pulls the heat out, sticks it in the ground, comes back cold. In the wintertime, it pulls that heat, throws it in the house, and comes back cold in the winter. And what’s fascinating is some of the cutting edge technology that’s happening in Europe. We have an office in Stockholm, Sweden where they may be two decades ahead of what we have in the United States. you ask the question, what’s the hurdle? It’s the education. We have a 1 % market penetration here. In Europe, it’s closer to 20%, 25%, at least in Scandinavia. So people are familiar with it. If you look down in construction sites, it’s going in a number of places. Here, you really have to dig to find it. So many people are only assuming it’s the hot rock geo out west. It’s not. Many people say, well, we have an urban environment.

Can’t drill here? You can. We’ve had really sophisticated engineers say, well, we’re in Manhattan, and that’s on.

You can’t drill through that. It’s ideal. thermal properties are great. It’s stable. So a lot of it is us coming and really knocking down a lot of the preconceived notions that are out there. And as we get scaled, the familiarity will be there and the conversation will be easier. But right now, I think it’s just the unfamiliarity. People don’t like risk. They don’t like things they’re not familiar with. The great news is it’s been commercially proven. in the ground all over the world and it’s really coming here with a great deal of I guess momentum right now.

Wes Ashworth (19:09)

Yeah, yeah, it’s great. Great context. I think it’s really useful for listeners to hear. It just helps us really understand like geothermal, you know, kind of the different facets, different aspects of what we’re dealing with here and really, you know, talking about, you know, buildings that we were in and we use every day, how relevant that is. And part of that too, maybe a little misconception wise, like everyone likes the idea of this like beautiful, you know, new, net zero building. But most of the buildings that really matter are already standing. Why is that retro? fit market, the real battleground. us understand that.

Mike Richter (19:39)

Great question. Well, look, if I’m building a building from scratch, I design everything in. Very efficient, very effective, and pretty clean. We put the boreholes in, you pour cement, we can actually do it at the same time so you’re not losing time on that. We connect to a manifold, you put the mechanicals inside, building goes up, everybody’s happy. Then you come to an old school building or a building like this and you say, boy, we want to drill. Where?

Uh oh, in this case, it’s somewhat suburban. We can do a parking lot. We have the ability to go inside buildings and we can talk about this if you want to get into specifics later, but the Barris for downtown New York City is on Central Park and 81st Street, right across from the Museum of Natural History. know Manhattan, very dense.

We were able to go inside a building with one of our mini rigs and literally drill in the subfloor of 125 year old premier co-op and that with when you think about it the amount of infrastructure that’s buried under a Manhattan Street the old cables the new cables water tunnels subways little things like that you don’t want to hit so you have to have great precision on you know perforating that ground and be able to come up and tie these things off but really cool metaphor that was initially a coal room which was converted, evolved into an oil room, which is more efficient. And now it is the geothermal room. And they’re saving about 40 to 45 % on their common areas because of the geothermal. Quiet, clean, just fantastic stuff. So it’s a really cool job.

We’ve been able to take that technology again, developed in Europe, these mini rigs that go inside of buildings and the retrofit market. When you think about Manhattan, you’re not taking down the Empire State Building and putting up a new one. Say, look.

It’s LEED Platinum. That building has been there for close to 100 years, I think. It’ll be there for hopefully another 100 years. But somebody has to address the energy infrastructure inside. And that’s what continues to get improved. And Malkin’s, the owners, they’ve changed some of the envelope and the windows and the lighting. But the geothermal is something that you’d want to take a look at and say, what is the energy system here? How can we make this more efficient?

80 % of Manhattan and most big cities like Chicago will have those same 80 % of the buildings will be standing in the next two or three decades. You’re not ripping them down. that is the biggest challenge because there’ll be new buildings going up and they’ll be with the new building standards. But what do you do with the older ones? What do you do with a 1980 building like this? And if you can come in and retrofit those things, now you have a real solve. And I think keeping the building there so you’re not putting that on a landfill, but also just the expense of it. You have a shell of a building. Can we gut that thing and take it out and put in a new heat system? Or end of useful life is a really an important time.

We do a lot of work with higher education and you think of the number of buildings on a college campus, even a small college campus, multiple buildings. So at any given time, if the life expectancy is 20, 25 years to that oil system, you have 20 buildings there, someone’s at the end of useful life. They’re going to have to put in a new system there. If you have a little bit of understanding that there’s other options, now you start asking questions. have engineers come in and start doing the evaluation. What’s the load of this building, as in how much heat and cooling do I need? What’s the square footage? What is the distribution system? Do they have forced air? Is it hydronic? What is it?

So it’s complicated because you are beholden to the current limitations of the building, but it’s absolutely doable and it’s crucial that we figure out how to do it because if we’re just relying on new builds, that is going to be centuries. This can be done in decades.

Wes Ashworth (23:20)

Yeah, exactly. You know, and that’s where I think that, as you said, like the real work is, you know, it’s not always glamorous, but the retrofits are where a lot of the climate impact is going to happen and needs to happen. So I agree completely. So we’ve talked before and, you’ve said the elephant in the room is HVAC. Why is heating and cooling such a hard emissions problem? And maybe why is it taking so long for owners to treat it as a strategic issue instead of just a maintenance issue?

Mike Richter (23:46)

I think when you start to see problems with it, people raise their hand and say, do something with this. But I walked into this office this morning. It was perfectly comfortable. It felt the right humidity. It felt the right temperature. It was well lit. I’m not paying the bills necessarily, so I don’t think about it. I’m not the guy with the wrench downstairs going, man, I’m holding this thing together with duct tape and band-aids and need to change it. I think… Under the best of circumstances, when we come in and retrofit, it’s a messy operation. It’s very serious construction. But when you’re gone, you don’t even know we’re there. You cover the floor up, or you cover up the parking lot, or you cover up your front lawn, and it’s like you were never there. It’s all buried underground. It’s very stable and resilient.

These things are rated 75 to 100 years, so they’ll be going long after I’m gone. What you should only notice are two things. your bill should get smaller. That’s really what we’re selling is the value of operational efficiency, lowering costs. And you should feel and witness a better internal environment. It’s more quiet, it’s more stable. There’s not the high, you know, kind of the heat goes on in my old house when it was an oil furnace, man, it came out hot and it was great when it did. but my bathroom on the first floor was hotter than my kitchen and my den was cold all the time. This is very much electronically controlled, zoned. You can do it on your phone. You’re bringing a hundred year old building, in my case, my house, up to the moment standards.

And so to be able to touch it on your smartphone and say, you know what, we’re going away for the weekend. I can put the temperature down or whatever it is crucial. So I think it’s… Kind of twofold. You should consider it when you’re at the end of useful life and you could expect that there’s operational savings in a pretty significant manner. I mean, we’re talking 30, 40 % sometimes, but you should also have an improvement, I guess, anticipate an improvement in just the quality of your experience for the workers and the clients that are in these four walls.

Yeah, I think we undersell that aspect of it. We talk about BTUs and we talk about greenhouse gas, avoid it. And these are crucially important things. But again, there’s people that live in these buildings and are they happier or not? And I think that to me is one thing that we really have to move away from in any green conversation. In the 70s, was such an important moment when Jimmy Carter was saying, turn down thermostat, you’re gonna be a little cold, put on a cardigan sweater and sacrifice. We have this gas crisis. Now I don’t think you do need to sacrifice. In fact, you’re gonna have an improvement. I think where you saw that in really stark terms is when Elon Musk came out with his first Tesla. And you go, hmm, it’s an electric car, good for the environment. But then you sit in it and you drive in it.

And my partner here at work said, you just gotta be in this car. I’m like. what’s the difference you’re getting from point A to point B? And I had an efficient car and he said, no, it’s a different driving experience. This direct drive and the acceleration and the low center of gravity and the lack of oil and gas smelling up your garage and the ability just to plug it in at home and be full every day. There’s downsides, range anxiety and all this kind of stuff. But that is, the downsides are really dissipating and the upsides just keep growing.

And then people start looking and say, wow, this car, which we thought was just a glorified Prius that is energy efficient but horrible in performance, is anything but. It can beat a Ferrari off the line. And so I always like to say we should change the term green and sustainability to just better, the term better. This is a better mousetrap. It’s better infrastructure in your building. It’s a better car to drive.

It’s better for people, whether you knew or didn’t know how much you’re paying to use that transportation or heat that building. The beautiful aspect of it is once you do know, you find that you’re saving.

Wes Ashworth (27:37)

Yeah, it’s powerful points there, obviously. And I love that connection and looking at it that way. I think that’s what gives you a lot of hope for everything related to this industry is not just, you’re, oh, you’re making all these sacrifices for, you know, the betterment of the environment. It’s you’re actually getting, in most cases, a better, higher quality product and experience and things like that as well, too. So that’s a powerful moment. I’ll move forward a little bit as we continue to go through. we’ve talked a bit about the building problem.

I want to get into what Brightcore is actually doing because it’s not just this big idea on paper. comes down to drilling design, financing controls, getting real projects done in real buildings. so Brightcore describes this geothermal as one of the most efficient heating and cooling technologies for commercial institutional government buildings. guess explain the physics very simply. You’ve done that a bit. Anything else to add there in terms of like what’s happening underground? Like anything else people should know about the technology itself?

Mike Richter (28:32)

Yeah, that’s a good question. We’re trying to open up the addressable market. And a good example is I can do a new build and everybody can do that. just so you understand, I need props here. But if this pen was a borehole, you normally would have, I don’t know, 50 to 100 of these things on a good sized building. And they’re about 25 feet apart.

So start doing the math. If these things are 25 feet at center, you need to basically a rugby field size, you know, thermal mass to punctuate these holes, draw them into the building. And so as, as technology has got more sophisticated, these drill rigs have gotten smaller and much more precise. And so now instead of using this enormous area, which starts to diminish the addressable market substantially. The urban environment, you couldn’t do that. Now we start doing directional drilling where we can be five and a half feet at center, but you go off an angle. And the terminus of these things is the size of a rugby field, a football field, 800 feet down. But the perforations on the surface can go right down a sidewalk.

So in a college campus in an urban environment, which we did at Yale, we can put these tiny little holes in the surface on a sidewalk. so as to not interfere with buildings or even lots that you may want to build on in the future and still get that thermal mass to have that transfer. So that’s a beautiful thing to open up the market. Another thing that started happening was, okay, look, we can do a normal building. I take my house. What do I do in the summertime? I’m throwing heat in that thermal mass, the ground. I’m pulling out the 55 degree ambient temperature. But at some point there’s a little bit of temperature creep. I keep pulling out the cold and put in the hot. But then what happens? Well, thankfully, fall comes around and I turn on my heat.

I don’t turn on, I just leave it at 70 or whatever I wanted to, but it automatically starts doing the same thing. It starts pulling heat from the ground now and sticking cool back in. And you’ve already had almost a thermal battery. But traditionally, historically, it’s been a over the course of a year, 365 days, has been a balanced system. Throw in something like an ice hockey rink, a cooling center that is a industrial building, or a data center, and what do you got? You basically have a heat factory. Heat is going one way, and that’s very difficult, because if I keep throwing heat in the ground and pulling the cool out, at some point, it’s not 55 degrees ambient temperature, it’s 57, then it’s 60, then it’s 80. and suddenly you’re not cooling anymore.

You’re throwing heat into your building and it really starts to put a tax on the system. What we’ve been able to do is through software understand where you can do thermal storage. They literally call this BTES, borehole thermal energy storage, where we’re sticking heat in the ground and with pretty sophisticated algorithms and controls and AI-aided algorithms, we can start to get 15 minute interval that.

And understand that let’s just say we’re in February. It’s 45 degrees as it is rainy. Well, we also know that there’s a polar vortex coming. There’s going to be a dip down of the Gulf Stream or whatever, you know, the Arctic blast is coming. It’s going be four days of below zero. We can start thermally enhancing some of those boreholes and act as a thermal battery. Literally, it stays underground. It’s very, very, we call it, you know, basically it’s a thermos.

And if you ever seen that boomy march of the penguins, the ones in the middle are insulated by all the ones around them. And in fact, that happens here. You put that heat in the ground and it dissipates, but much slowly, because there’s an awful lot of mass around it. We can pull that out right when the peak time of need is, because of the cold coming down. We’re actually getting time of use pricing and saving money on the building downtown. And that can… only happen if you have very sophisticated controls. And so what we’ve done is started to just add layers of sophistication to this very kind of straightforward borehole in the ground, warm hand cold beer. But now we’re starting to say, wow, tomorrow’s going to be much colder. Can we keep some of that heat for when we need it?

Or can we find ways of dissipating that heat in a much more effective and efficient manner through hybridization? And we’ve now… had the ability to do that where if it’s a cold day outside and you’re trying to dissipate heat, I don’t need to throw it in the ground anymore. But if it’s 94 degrees as it is today, happens to be outside, that’s a big strain on the heat pump. To get that outside and try to get rid of that heat, I can throw it where it’s 55 degrees in the ground. So that communication is absolutely key. And so what we’ve done is two things. We brought this technology, different rigs, different drill bits. different software to understand what’s going on.

But we’ve done a turnkey approach where we’re designing the system, we’re procuring and building the system, and then we have the ability to either operate or at least help the new client. In your case, it might just be your home. How do I run this thing? What’s optimizing it? Because we want to see this thing hit the mark. And in fact, we give a we have a 10 year performance guarantee. So we’re on the hook if we don’t have this system perform the way it can. You can only do that with very, very nimble controls. And so I think we’ll continue to innovate and layer on things and totally change this, which honestly makes it difficult. I’m very much in sales. so someone will come back to us after two years and go, well, I know you can’t do it here. I’m like, actually we can now.

Mike Richter (33:52)

It’s moving very quickly. You think of how quickly AI is moving and some of the technology coming out of Silicon Valley, a lot of this green tech and real estate technology is equally as rapid in terms of its ramping up. And so we all benefit from that, but it does make the conversation more difficult because things are changing quite quickly.

Wes Ashworth (34:11)

Absolutely. I appreciate going into that. It’s amazing to see the technology changes and what was maybe not even possible a few years ago now is possible today. And I think that’s one thing I always try to dispel. So many people make these assumptions based on what was true a couple years ago, three years ago, five years ago. It’s like you’ve got to be current and looking at what’s happening today that it is still possible. You can do it in these really busy, dense environments

Wes Ashworth (34:34)

that most people would think, there’s no way you can do that there. But it’s becoming possible. How much more of the market is available because of that?

It’s absolutely incredible. And I’ll talk about just one maybe quick project we can hit on this quickly, but, you may have actually mentioned this earlier, but the Beresford, it’s historic New York City apartment building for those who don’t know, but it’s almost kind of the perfect objection breaker. It’s historic, it’s occupied, it’s dense, complex, it’s aging. What did that project prove about what is possible in legacy buildings today?

Mike Richter (35:04)

I think the big thing is it was one of the first major retrofits that was done successfully. The numbers are fantastic in terms of diminished greenhouse gases, operating expenses, but there’s these anecdotal things that really proved to be, I think, important. At one point, there’s a dentist office on the first floor and we have to mobilize, set up drills, have containment bins for water and tallings and all this kind of stuff. We were able to bring this little mini rig on a gantry system that went through the freight elevator then down. I mean, we’re talking subfloors. And you wouldn’t even know it was there. We’re down there drilling 500 feet under this through the subfloor of the building. And… One of the doctors’ office, the doctor came and said, you know, I hear you guys are going to be drilling. This is really exciting to me.

I’ve heard about this before. I’d love to see it. And he said, when do you start? I’m like, we’ve been going for three days now. And he hadn’t even heard it, right? And so I think, again, for someone, if they weren’t told that we were there, we’d be out of there. they just get the same heating and cooling, fact, hopefully better heating and cooling, but you’re saving money. So it was kind of this quiet thing and it’s very different than solar because you can’t look at that building. You go by it now and it looks no different. There’s no wounds. There’s no solar panels hanging on the outside. There’s just a bill that is significantly lower. so that’s great for the building, but there’s also air quality surrounding that building that it’s now electrified and incredibly efficient doing that. So.

You know, here’s a thing that we don’t talk about much. you talk about those asthma alleys and whatnot, these peaker plants and everything else, very, very dirty, usually cited in historically, you know, underprivileged areas or underinvested areas. And it’s, you know, ultimately just unfair. Why am I breathing the soot coming from that peaker plant that’s, you know, creating electrons for your building that’s five miles away and you don’t have any of those externalities. But you can start to look at these thermal loops. We’re doing these across some major cities. We just had a small one outside of Washington, DC. And you’re connecting these buildings in a true thermal loop that just adds a lot more efficiencies because of the scale.

But now you can start, it’s a democratization of sustainability. it opens up the market to people that historically couldn’t participate in it. And even if I’m not participating in it, I am benefiting it because Upper West Side has a lot less of fossil fuels being burned to keep their building heated and cooled. So the repercussions of this, the positive benefits are enormous and not limited to those who are actually participating in it directly.

Wes Ashworth (37:40)

Yeah, I love it. I think those project examples are so powerful and really show what’s possible today. And I think the added benefits of how many different people it can reach and benefit and help. And so I think that’s absolutely incredible. I want to shift kind of as we get closer to time, just really around maybe a bigger market picture a bit. I think this technology matters, but adoption also depends on policy, incentives, financing, proof points and whether building owners start to trust the geothermal as a normal option. So.

In New York City, local law 97 turns building emissions into a compliance and asset value issue. How much of the market is being pulled by maybe regulation now versus owners simply wanting to lower operating costs?

Mike Richter (38:19)

Great question. think Local Law 97, I can thoroughly understand if I’m a building owner how, what a hurdle that must be. It’s very difficult. It’s, you know, visit upon you quickly. You’re going, how do I do this? I’ve got legacy, you know, infrastructure. Do I just tear it out? It’s changed my business model. But in the long run, you’re going to be saving a lot of money and everybody’s going to be better for it. I think It’s almost like, you rip off that bandaid and do it all at once? And I think it’s been incrementalized, but it’s making people think about it. Where can I start to the savings? How can I diminish my carbon footprint? Well, every time I replace a light bulb, I’ll tell you a story. I moved into a house here in Connecticut when I had young kids. I mean, moved in August. By January, my hot water heater went out.

couldn’t have predicted it, but I had no plan whatsoever. And what do you do? You call the guy that was, he was servicing it. Hey, Bill, my hot water heater’s out. Could you get me a new one? Bill comes on Thursday and puts… maybe a 1 % more efficient version of what you just had there. I had no plan, no anything. My kids can’t shower, they smell, do this. And sure enough, you have hot water and it’s done and that’s great. But I’ve just locked myself in for another 10 or 15 years of pretty inefficient infrastructure and that is a shame. So if you can anticipate a little bit in local law 97, I would say helps, but it certainly coerces you to think about it. So that system you have may be less than five years remaining in it. Are you just going to wait for it to snap and then replace in kind?

Or are you going to say, What are the potential here for new and improved systems that have less carbon footprint, sort of diminish my fines from local 97, but also just makes the building optimize, more efficient, more up to date. And so I think that conversation, the time to have it is before the emergency happens in the middle of the night on a cold January and… It’s, I think, forced that a little bit, which is really good thing. Look, if we go into your building and you say, well, what would geothermal cost here? And it’s going to be twice what’s already there. I understand it. We don’t have clients decide to go green and lose their shorts on the transaction. it really should be a financial win. And you gotta figure out, you have to have somebody, not oversized this thing, but certainly not undersized it.

It’s gotta be property size, so then the quantity of money that you’re putting out in capex is, I guess, relative to the savings you’re gonna get over time. And when you’re about municipal buildings, houses of worship, schools, Their timeline is a heck of a lot longer than the average person holds their house. And so the calculation really can be different. So for, you know, that project we’re doing at Yale University, if the radiator that we’re effectively putting in the ground… is scheduled to last 75 years, Yale’s 300 years old. That’s a benefit. They don’t have to re-up this thing every 10, 15 years. So I think you have to start thinking about those timelines. No one wants to be that politician that says, hey, I’m going to change all the infrastructure. We pay for it. And future gets the benefits.

But at end of useful life, you don’t have a choice. And so if there’s a little forethought there, it makes a massive bit of difference. I’m not saying you… close your eyes and put it everywhere, it has to make economic sense. But you can’t know that until you do the evaluation. You can’t do the evaluation unless you’re a little bit more aware.

Wes Ashworth (41:36)

Yeah, absolutely. if nothing else, like you said, at least makes that awareness happen a little bit sooner, makes people start thinking about it and having these conversations and probably, you know, a lot of cases find that this is beneficial and more cost efficient and all that as well, too.

Mike Richter (41:48)

The beautiful thing is there are better mouse traps out there, both for transportation, for heating and cooling, for lighting. And so if you can at least kick the tires a little bit and start to understand what’s going to work best. And I think that’s a really important point. When it comes to heating and cooling buildings and putting in geothermal, I used to get so frustrated listening to my engineer. I’m like, Dave, how’s it work in this school building? He said, well, it depends. I’m thinking, is it ever a yes or no? And the answer is no.

These are bespoke, these are customized, which is why it can be difficult. if XYZ University comes to me and says, can I put geothermal here? Well, I have to do some evaluation. My answer, we kind of know with the mapping, the geological surveys that are all over the East, we’re based here, we kind of know. But specifically, what is thermal conductivity under your feet? We have to drill down and find that out. What is the distribution in your building? What do you have in there now that we can use as infrastructure to tie into? These things all come into play on how feasible it is and how expensive it will be.

But yeah, we found that just putting holes in the ground isn’t, it’s not an easy part, but it’s not the only part. And we were starting to design systems to solve very specific problems for very specific clients.

But the sophistication of our design wasn’t being met with the same sophistication in terms of drilling. So we brought that in-house and we’re really leaning a lot on that Office of Excellence we have in Stockholm. They’ve been doing this for 20 years, more than we have, and we’re starting to have real solves that handle almost every eventuality. So it comes down to a financial equation. If this makes financial sense, there’s a conversation to be had. And if it’s not, that’s on us. Show us the door.

Very, very excited and we think, know, if I’m talking to this time next year, we’ll probably have more options because innovation will not stop.

Wes Ashworth (43:41)

Absolutely. And kind of on that innovation side, like from your perspective, what you’re seeing and the Excellence Center in Stockholm and some of those new technologies, like what’s next for geothermal from your side of it? Like, what are you seeing in the future? What’s going to be possible, you feel like, in the next even 20 years?

Mike Richter (43:57)

I think the business model will… tend toward this more integrated approach where you can have your design team sitting right across from the drill team and really figuring out a solution rather than this disaggregated thing where Larry is going to design it, he’s going to hand it to the CM, the CM runs an RFP and finds a driller and the driller says, I did what you told me to. And now the client’s left handling going, I’m not getting the BTUs that you said I was going to get. And everybody’s pointing at each other, You know, we design it, we build it, we run it if you need us to, or at least we’ll show you how through our integrated O&M platform. So I think there’s going to be a movement toward that.

I think there’ll just be more and more technology that will lower the cost of putting the boreholes in, which is extraordinarily expensive and time consuming. I’m not so sure AI is going to take over any of that. mean, truly, it’s going to be… a long evolution to lower the cost of a linear foot.

But I do think the adoption is gonna just continue to skyrocket. Look, when you’re 1 % market penetration, it can double and you’re still small. But I think the robustness of the solution, we just need more wins out there to understand. So someone can say, what the heck is this? Go look at this. When I can bring you to a site and show you it being drilled, I can show you the final result. When you can walk into a place and actually have the… quality of the conditioned space as high as it is and the quiet nature of it and frankly the savings alone. Nobody wants to be that kind of guinea pig and I think there’s a lot of perceived risk out there but you don’t want to be the laggard either and I think there’s going to be enough examples where people will get on board very quickly because this is a real solve.

Wes Ashworth (45:35)

Yeah, absolutely a lot to be hopeful for there and seeing that happen and a lot of potential, know, 1%. You got a long ways to go and I think we can get there. I guess that so after everything sort of you’ve seen from your sports world to climate advocacy and to selling real projects in complicated buildings, what gives you the most hope that we can actually get this done?

Mike Richter (45:54)

You know, maybe back to the sports world. People are competitive. We’ve got great competitors in the marketplace and when we come up with an innovation, others come up with innovations too. If we start to fall behind, you can bet that we will sprint to get back up in front.

There’s just a lot of clever people out there and it’s satisfying to solve the issues that are in our face. Right now, it’s an extraordinary time. When you think about putting aside the conflict in the Middle East, the amount of energy that’s being demanded is more than we have at hand. And really, the systems that have worked in the past work beautifully. Fossil fuels, they don’t need to be vilified. They’ve given us this incredible know, society that we have. But with eight billion people on the earth and global warming happening and the science that is showing the need to clean up not just how we transport and how we heat buildings, but across everything from agriculture to the way cities are constructed, we need some of the best minds to be. really digging down on this and they are.

There’s a real upside for those that take market share. There’s just an enormous need for it and you’re seeing that movement take place. So it’s incredibly exciting. It’s scary because we can’t get this wrong. We have to get it right because it’s, you know, what’s at stake? The very foundations of our society when it comes to the environment. So these are really interesting times. We’ve mobilized before to get on the moon, to handle World War II. It is that big and more. And so it’s going to take the capital markets for sure. It’s going to take government for sure. And it’s going to just take individual creative people to be pushing the envelope left and right. all those three things are happening.

Thank God they are because you have to displace the incumbents. That may mean incentives. You’re trying to, as they say in the tech world, fail quickly. Try these things out. If that doesn’t work, try the next thing. We don’t have time to just sit back and see what happens. We have to create that future, and that’s happening.

Wes Ashworth (47:55)

Yeah, absolutely. I agree completely with all of that. It’s an incredible time and an opportunity as well. And agreed, very passionate about it. We need all the bright minds that we can get in the industry as well too. So overall, just a great place to end. I think because looking at this, it’s hard work, but it’s meaningful. It’s possible. We have the people and we’ll continue to bring those people in, but it does feel like the path is getting clearer. It’s a lot to be hopeful for there. But Mike, this was really just a fantastic conversation. Thank you for.

Helping us see geothermal, not just as an energy story, but as a building performance story for everyone out there listening. And this episode gave me a new way to think about buildings, retrofits, or geothermal heating and cooling. Share it with somebody in energy, real estate, facilities, finance, or climate policy. Thanks for tuning in Green Giants as always, Please subscribe, rate the show, and we’ll see you next time.