Green Giants – Episode 59

James Richmond (01:49)

Sure, well, my past I had a large engineering firm that was global. We were doing a lot of projects for the names such as Caterpillar, Cummins, John Deere, and we had a lot of work that we were doing at that time in the emissions space. So, because of the emissions with the advent of the tier two, tier three, tier four emissions regulations, we just spend a lot of time in the power generation space.

So that was really kind of the big introduction to heavy industry and diesel particulate and all those crazy things that we are kind of leaving behind kind of at this point. On the way out at this point. From there, we started the new company after I had sold that company off, and we really were focused on, how do we get retrofits in the marketplace? And so, we started really doing emissions technology. And the emissions technology, the customers who really wanted that were the customers who were interested in participating in grid programs. So, if you wanted to participate in demand response or frequency response, capacity reserve, all these crazy programs that have a ton of different names that all do the same thing, really, you had to retrofit your existing engine to meet the emissions compliance and re-permit it from emergency status into non-emergency status so that you could actually participate in these programs.

So with that, really were doing, you know, we actually did several thousand retrofits of engines of what used to be called stranded assets or emergency backup generators in the marketplace for participation in grid programs. That was the focus of the company for the first several years.

Wes Ashworth (03:23)

Yeah, so cool. And when you were kind of like first shaping the idea for e2Companies, what was broken in the energy system you felt compelled to fix, and how’d that shape your founding mission?

James Richmond (03:35)

What was broken at that time was really accountability, right? So, as emissions were evolving, so was permitting, and your ability to hit the permit conditions. So, the uniqueness that we brought to the table at that time was really we indemnified the permits that we put together with the emission systems on engines, meaning if we put it on, we did all the work. We were monitoring that system in real time, so we had a continuous emissions monitoring system. When we were doing that, we would then take the liability. We put together an E &O policy, which is now $15 million associated with air permit violations. I still think we’re the only company in the US that does that. So, if we were doing this for a customer, they literally had the comfort in knowing, hey, this thing’s permitted, these guys got their name behind it.

If there are any issues with the EPA, they’re going to jump in, help us out. And if there are fines and penalties because they didn’t do something right or didn’t notify us not to run something of that nature, they’re going to take care of it. And that’s really how we got into the compliance piece of what was going on. And so that was kind of the genesis of how we are doing it differently? How do you put something that nobody else is doing into the marketplace? And so that was kind of step one for us.

And that step really led into the next piece of the puzzle for us, which was related to connection agreements. So, what happened is these systems were taking a long time because of interconnection agreements. At that time, you would consider it cheap today, right? It was about $50,000 in a year and a half to two years to get an interconnection agreement. And we had customers who thought that was crazy back then.

And now, you know, it’s $100,000 a megawatt to put in the application. And then as you’re doing that, the price goes even up further. And it takes anywhere from three to seven years to get an interconnection agreement now. And so, our customers started asking us, can you help us solve this interconnection problem? Because this is really causing us a bottleneck in getting our products out to market.

Wes Ashworth (05:45)

Yeah, absolutely. And thinking a little bit about the virtual utility side of it that I mentioned a little bit in the intro, there. What’s the core idea behind the virtual utility, and how does it challenge the traditional grid model?

James Richmond (05:57)

Well, the traditional grid models have always been to get this interconnection agreement, which we call parallel sync. And the reason why people do that is because they don’t want to have what we call the dreaded blip, right? So, in a backup generator, we have this thing called an ATS, right? An automatic transfer switch. And the problem is from the startup of your engine, and then this ATS switch goes off, you have about an eight to 10-second delay, and your building goes dark.

Well, if you’re having events that are happening, you really don’t want to put your customers or employees in the dark for 10 seconds. And I’ve actually, you know, been on stage and had the audience go silent for 10 seconds. It’s been a long time, right? And if you’re in the dark, it’s a really long time. So, you go through that. So, to stop that, you had to get this interconnection agreement. And that’s really where the engineering comes into play because what the utility worries about is, are you going to kill somebody upstream because you could actually back feed the grid when they don’t want power on the grid, and you can cause other issues associated with what they’re doing on their side of the meter.

So that’s really the paradigm that we went to switch to. And, we said, hey, we no longer need an interconnection agreement. I no longer need to be parallel with the grid. I can go on and off instantaneously without being connected to the grid. So that’s really the paradigm shift that happened for us.

It just so happens that in doing that, we solved a lot more problems than we thought. Not only did we solve this engineering problem, but the future of what’s been happening with inertia on the grid, the advent of robotics coming out at customers, AI chips coming out at customers, high compute, high density power systems. All of these things have special property needs that the utility is really struggling to supply and meet the demand of those customers. So that’s really been the paradigm shift of the problem we set out to solve, we solved, but we didn’t even know about the future problems and how effective we were going to be at solving the future problems.

Wes Ashworth (08:02)

Yeah, that’s incredible. It’s cool to see that come together as well too. And like you said, just solve for the future problems that maybe you didn’t even know that was going to go that way, but that’s great. And just thinking about your founding vision, it becomes even more critical when we look at the system, which is challenging. Our grid isn’t just aging, it’s misaligned with how modern power is consumed, generated, and priced. So, I want to turn to what’s broken and really why we’ve tolerated it so long.

I know you’ve argued a little bit, well, while we still rely on the same AC power model from 140 years ago, the system hasn’t really kept up for at least 25 years. What are the core design flaws or limitations of the grid today, and why are they no longer workable in a modern context?

James Richmond (08:45)

So, the core design flaws are really the communication of what’s happening with the grid, right? So, when you think about response times, an incandescent light bulb actually comes on pretty slowly compared to an LED light bulb, right? You will see an LED light flicker in your house long before an incandescent bulb might go a little bit dim and come back up, but LEDs, they just blink, right? If there are any power disruptions.

Well, think about an LED and then think about processors and transistors and things that are happening within a computer that just didn’t happen 20 years ago, right? 20 years ago, we didn’t have the speed of computing we have today. We didn’t have the motor, VFDs, and things running on motors to actually help with energy efficiency and other things that are happening.

And so the whole grid conditions of plus or minus 5 % on voltage and plus or minus 5 % on frequency, a data center wants plus or minus 1 % on frequency. You can’t get that from a utility supplier. So, they’re having to do other things to actually meet these requirements. And so, for the average person, this is not affordable. So, we really went down the path of how do you put in a pre-engineered solution, right?

So, you go back to think about the internet in your house and the WIFI in your house, right? years ago, it was pretty complicated to bring out a router and plug it into your house and make it work. So those routers that we had back then were pretty sophisticated with setting up your HTTP, your proxy. If you remember, you had to put in all these IP numbers, and so a lot of people didn’t have routers.

They just went; I’m just going to plug mine into this fixed outlet for my internet because it’s way easier than trying to figure out wireless. You don’t think about that at all now. Now, you plug in your wireless device, it goes and finds everything, and you put in a password, and you’re pretty much good to go, right? That’s what we’re trying to bring to the power side of the customer’s meter of I’ve got high compute in my office building, or I’ve got servers in my building. I got robotics. I’ve got a car charging. I’ve got all these things going on. The utility causes me problems. I have outages. I’ve got flickers, computers rebooting, speakers that are going down, all these kinds of things are happening. And unfortunately, they happen over time. They don’t happen right away. So, you’re just thinking, I just replaced this thing a year ago. I cannot believe it’s going out again, right?

LED bulbs, I’ll go back to that. You know, they’re supposed to last, everybody’s like, oh, they’re going to last 25 years. I would like to know the people who’ve got their bulbs to last 25 years, because it’s not me. I don’t think they last any longer than an incandescent bulb because there’s just the power requirements to make that last on that time frame, just isn’t there. So, we’re trying to bring this clean condition power, as we call it, behind the meter, which means you’re getting perfect power all the time.

And when you’re getting perfect power all the time, your maintenance goes down and your efficiency goes up, and your costs go down. So that’s really the idea behind the ready and the virtual utility is that you need something that can actually help deliver the power that you need. So, we all have heard of transmission and distribution, and I’m adding the third layer now called delivery.

Now, utilities today think they have delivery, but their delivery is like the UPS guy or the paper guy throwing your box on your front porch. It’s not the same as taking it into your house, opening it up, and setting it on the shelf. We take it out of the box, put it on the counter so you can actually use it. So, think of it in that kind of context of what we think delivery is as compared to what transmission and distribution really are. And so, the 140-year-old system is a big power plant. They are transmitted over high-voltage lines to a distribution substation, which then sends them to the meter at your house. And it worked for 100 years. It just doesn’t work anymore, right? It’s very inefficient. It’s very cost-prohibitive. It’s expensive to expand. And quite frankly, it’s not that good. I mean, the tolerances of old are not the tolerances of today.

A great example is if you bought a Ford Mustang in the ’60s, you had this V8 302 motor that produced about 400 horsepower. You now buy the same Mustang with a four-cylinder motor that produces 500 horsepower. That’s what you have to think about with the grid. They’re still trying to run on the V8 Mustang instead of the new four-cylinder that uses half as much energy and gives you a lot better torque to get down the road.

The same with the suspension system, all those things, the grid hasn’t changed, it’s very little that the grid has changed, coming to your house, in the meter.

Wes Ashworth (13:50)

Absolutely. No, that is so good. Those parallels and analogies really just paint a picture and make it really easy to get your head around. So, I absolutely love that. And part of this image, we have that 1.2-million-megawatt grid, but we only use four hundred thousand megawatts on average. Why is that fully an efficiency problem? Maybe you’ve outlined it someday or anything. You covered a little bit of that, but not maybe a supply problem, which I think is what’s discussed probably more commonly. What’s the public not seeing with that?

James Richmond (14:19)

So, in power, we have these things called inrush currents, right? So, whenever you turn on a light switch, there’s this huge spike of power to get it turned on, and then it goes down and it levels off. The same happens with your air conditioners and your washers and dryers, and pumps, and all these things that run. And the best example to use is a house, right? So, your house typically has a 200- or 400-amp panel on it, right?

And if you go read anything from IEEE or FERC or anybody out there, you will see the average home uses one and a half to two kilowatts per hour for 8,760 hours per year. If you take that times the 110 or 240 volts, you’re actually at about six amps. So when you think about your house, it uses six amps on average every hour of the year, but your panel is two to 400 amps, the utility tariff requirement is to power your house at two to 400 amps. Because when the air conditioner kicks on and then the refrigerator kicks on, and if they do it at the same time, you’re going to see this hundred-amp spike. So, they have to make sure that the condition can start up.
Now, the downside of that is that all that power is sitting there waiting to be used. And if it’s not used, it’s traveling at the speed of light and dies. So, it’s wasted energy, right?

So that wasted energy is how do we fix the wasted energy that’s happening on the grid? So that’s why you see this small amount of average power compared to how much we actually have available on the grid for all of these conditions that are like popcorn, right? They’re just happening like this all the time. And the same issue of, you have 15 million meters running, it’s a little bit different than when you had one or two million meters running in a network. And so now the multiplicity of that with the size creates these buffers that they have to have, which are becoming large and uncontrollable.

So, when you think about it, I’ll go back to how do you solve this on a residential, right? Instead of trying to figure out how do I put a Tesla Powerwall to power my house for 12 or 15 hours, which is great if you don’t want to buy a backup generator, but think about this. If you have one that only lasts for an hour, just a small one, and you have an inverter, you can now run your house on 2KW 24/7 365 because the battery in the inverter will take all these spikes, and the grid no longer has to worry about supplying you 200 amps. They only need to supply you with six.

That’s the efficiency gains that can be made on the demand side, which is what we are focused on. So, when you focus on this demand side, it is the fix for the grid, and it will produce 25 to 35 % more power on the existing infrastructure without adding a dollar to it.

Wes Ashworth (17:07)

Yeah, that’s incredible. And again, so well explained there, and I’m just sure listeners are going to eat that up and just kind of like thinking about it, hearing it. It’s really illuminating. Like, it really does paint a picture. And you’re like, my gosh, wow.

James Richmond (17:19)

You set your cruise control in your car and you’re driving across the country, you’re going to get much better fuel economy than if you stomp and stomp on, right? It’s the same concept. That’s what we’re doing with the grid. We’re throttling this power all the time to everybody. And it’s just not efficient.

Wes Ashworth (17:28)

No, not at all.

James Richmond (17:37)

And that’s not even getting into the complexity of the loads, right? The complexity of the loads of AI chips and robotics, EV charging, and all this. When you put a high-capacity charger, you know, we have a 25,000 square foot building here. We have a demo charger that will do, I think it’s 180 kW. It’s four times the load of our entire building when we plug in a car to charge. So, you don’t think about that.

So, you think about it, I’ll go back to the residential, the little transformer that sits on the pole typically supplies about three houses. If everybody puts in a 50-amp charger and they all want to charge at the same time, you’ll actually burn up the transformer. Depending on, because it depends on the neighborhood and who’s putting in what size charger. If you put in the little charger that takes you 12 hours to charge your car, you probably won’t have a problem. So now the utilities, rather than fixing the energy problem at the house, they’re going to put in larger transformers or software that then controls the charger and how much it can charge.

So, I had these great examples at Distribute Tech, I was talking to some of these software guys, and they’re like, well, we just look at this guy has 85 % charge, this guy has 20 % charge. So we’re going to go ahead and let him have more charging power, so we don’t overload the transformer, and not going to give him as much. I said, That’s great. But how do you know that this guy’s staying at home tomorrow, and this guy has to go on a road trip? You don’t.

So, the utility is making a decision on your power that you pay for without having any choice. I don’t think that’s what we want as consumers. I think we want full choice of our power. I think we want to choose where we get our power. There are different philosophies out there, and I’m not going to get into politics because some people are all about being fully green and some people say fossil fuels are here to stay, and some people are in between, and it’s all over the place.

But what I will tell you is that it doesn’t matter if you want to support the consumer. I want to give the consumer the choice of you’re going to put in a pre-engineered solution. I don’t care whose product you choose. That electron is going to work for you whether you want to choose your, you have an ESG heart, you have a pricing heart, you have an efficiency heart, you have a reliability issue that you’re concerned about because you have somebody on a pacemaker, or who knows what the condition is.

And so, I want to build an environment that says, hey, I’m agnostic to what makes the electron, and I’m agnostic to what the customer’s ultimate reason for running on power. I just want to be able to I can supply anything they need when they need it at the price they’re willing to pay, because that’s what the customer wants in the end. I might buy a Ferrari, and you might buy a Volkswagen. That’s our choice, right?

So, the price you pay for that is independent, and it’s an individual decision, and the utilities today are taking away the individual decision. If you buy from a utility, and this will get into the phone, how does this work with the phone business, right? Like in Texas and ERCOT, you have your local utility, and they let you choose who supplies the electricity. But you’re still buying from that guy who’s controlling that in the area, right? He’s controlling the power to your house.

Well, the telephone companies did this some time ago as well, right? You had a copper line phone in your house. They supplied you with the telephone line, and you could choose whatever long-distance supplier you wanted. That sounds familiar. It’s exactly where we’re at today with the grid. 40 years later, that grid is still trying to do the same thing that Ma Bell did. And we know how that worked for Ma Bell. And so, when you think about your cell phone and you think about, you could pick multiple suppliers for myself.

I could pick whatever kind of cell phone I want. I want a smartphone, I want an Apple phone, do I want Samsung, do I want whoever’s phone? It doesn’t matter; you get to choose that. I can charge it in my car, I can charge it in my house, I can charge it on induction, I can charge it Wi-Fi with another person, I can transfer files around, I can be on Wi-Fi, I can be on Bluetooth, or I can be on cellular, or all three at the same time. That’s the choice that we’re trying to bring to power.

Do you want to be on the wind? Do you want to be on solar? Do you want to be on gas? Do you want to buy directly from the grid? Do you want to not buy from the grid? I don’t care. But now you have the choice that you get to make the decision of how you want to buy your electricity to make yourself as comfortable as you want to be. And that’s the difference between what we’re trying to do and what we call Grid 3.0 and Demand Side Management.

Wes Ashworth (21:55)

Yeah, that’s good stuff right there. You’ve done such a great job just painting the picture, I think outlining the problem, even getting into the solutions as well too. And it’s super fascinating just to hear it. And I’m sitting here smiling, it’s enlightening as you learn more and hear it more. I do want to touch on a little bit, just a couple of different topics as we go through, but we dug into a bit of the grid’s weaknesses, outlined some of the problems there, too. The urgency of the problem really does come into focus, but with AI, massive data loads, electrification of everything, they’re pushing energy demands to extremes. And so, you’re at the forefront of solving one of today’s biggest energy headaches, which is the massive power draw of AI and data centers. I think we hear on a daily basis now, but how serious is this surge, and can you tell us a bit about it just from your perspective?

James Richmond (22:47)

Well, I caution people not to panic with some of this stuff because what you hear about a data center is three years to get in the ground, so it’s kind of out. But the real issue that we have, in my opinion, is that we kicked the can for 20 years on what generates power on the grid. And I’ve had this conversation with people in the past, you know, when we have our coal, our nuclear, and our hydro, which makes up 60 plus percent of all the power production on the grid today, is all at end of life, right? They’re all past 40 years old. Some are in the 45- and 50-year range of life, right? And although I can applaud the data center industry, which is trying to help this by saying, we’ll spend the money to keep these nukes running. They’re 50 years old, right?

So, the question is, how do we get past the 60 % retirement that’s going to be happening on the grid? A few years ago, we were worried about how we were going to charge all these electric cars. Cause if you remember, the last administration was we’re to be all electric cars by 2030, and everybody’s like, geez, how are we charging all these cars? And here we are in 2025. And by the way, we still haven’t figured out how we’re going to charge the cars. Even without the EV mandate anymore. The current ones we have, we’re going. Hey, the consumers don’t like this because they can’t figure out how to charge their cars.

It’s a problem unless you’re in a certain income bracket that allows it to be convenient for you. It’s not very convenient. That’s just the fact. So, if you’re on the higher level of the income scale and you can afford to put your own charger in your garage, you’re okay with EVs. If you live in a multifamily unit of 200 apartments, it’s not such an easy task. And we’re not going to see things happen at scale until we solve these kinds of problems. So, all I’m cautioning is the exasperation of we need more power, whether it’s EV, AI, robotics, you name it, doesn’t matter, we’re gonna need more. If we think the world’s getting hotter, we’re gonna need more air conditioning too. If we wanna bring manufacturing to the US, we’re gonna need more power for that too. And manufacturing creates a three-to-one job ratio. So, when you think about power for that manufacturer, think about the other three jobs that that creates, the people doing maintenance, and all those kinds of things, those people need power too.

So, while a data center is a condensed source of power, which may be easier to do actually from a utility standpoint, a manufacturer is a dispersed group of power, which is even more difficult to deal with. So, the costs associated with manufacturing power versus data center power are not equal. even though the data center dwarfs in a number concept, it may not dwarf in a price concept, if that makes sense.

So, I think about that in the economic formula. But what I really am most concerned about is the argument over renewables, knowing that 60 % of the grid needs to retire. I think people need to get over this. We need everything we can get. And we need to figure out how to make it all work. Because the reality is, as we start to shut down nuke and we start to shut down more coal, because there’s a lot of coal shutting down, and it will continue to shut down because of the age of it regardless of what people say about cleanliness and scrubbers and all these kinds of things, reality is they’re just old and they need shut down.

So, as you’re shutting these things down, what is the replacement? Now we can argue natural gas will help, but there’s not enough natural gas infrastructure either to replace 60 % of the grid, right? And natural gas is coming on fast.

And natural gas has been the largest CO2 reduction in this country for the last 20 years because it has gotten us off of coal, which is a very comparably dirty source of power compared to natural gas. So, natural gas is a good bridge fuel, I believe, if we can figure out a lower CO2-intensive power source, and I laugh about no CO2 because we breathe out CO2.

So, ultimately, we’re always going to have some CO2, or we won’t be here. So, we’ve got to keep that in mind. So, I think the bigger issue for the US, and actually quite frankly most of the world is where’s the power coming from? And you have the transmission and distribution, which we already talked about, but the data centers will come.

And what gets lost in the conversation about AI and data centers is the efficiency of human activity that happens because of AI, right? So, if I figure something out and it makes me more efficient and I don’t have to drive to the store, right? Or I don’t waste my time in my vehicle or trying to do something because AI has given me a quick answer, the power that the AI is using there hasn’t been enough studies yet to tell you the offset of what it’s saving on the other side. Now we’ll figure that out over time.

If you remember, I’ll go back to the phone slogan, phone first, it’s a real time saver for all of us that are older, right? And so that even was an efficiency gain in the 80s when fuel was expensive, right? When gas was very expensive, it was cheaper to spend a dime to call and see if somebody’s there or it’s open than it was to drive there. So, I think AI hasn’t really gotten to that stage of information yet, but I think we will find the knowledge gain that we’re getting and the efficiency gain that we’re getting due to AI will be offsetting CO2. And time will tell on that, but I am positive there will be effects on the efficiency of AI.

Wes Ashworth (28:19)

Yeah, great perspective there. I haven’t really heard anybody talk about some of those offsets as well, too. So that’s good, just thought process and thinking about that as well, too. I want to transition a little bit to some of the things E2 is doing as we get into it. So, tell us a little bit about that, the Corescale data center deal. What makes the partnership so significant, and what will E2 be delivering?

James Richmond (28:40)

Well, we’re the new kid on the block, right? So, we have a new product. We’re effectively replacing diesels and UPSs at data centers with a better, more efficient technology. Data centers, as cutting edge as they are with AI and all those things, from a power infrastructure standpoint, they like new stuff so long as it’s 10 years old. So, there’s a little bit of this conflict that we have between getting our product, even though this product’s been around for eight years now. So, we’re trying to be at the cusp of where they like us to be. You know, we’ve had them out in the field for a couple of years. And so, getting through that cycle of comfort with the data centers has been a challenge for us.

So, the Corescale agreement for us is a, is a great initiative. there’s a lot of study and engineering that goes into the due diligence of our product, and what is our mean time between failures, and what is our engineering process, and what do we think our uptime ratings are, and all those kinds of things. So, the Corescale has been very good about coming in and saying, we’ll integrate the design in, we’ll go present this, we can keep the old design if we need to.

But they like the pre-engineered concept. They believe it is the future as well. Something has to change in the data center space. Especially in Europe, you’re not going to be able to use diesels in the future, even in the US. Virginia has changed the rules. It’s going to be very difficult to use a diesel engine in the future. So, they have to change. And so, they’re really helping us be a change agent in the industry. And I think that’s an important piece applaud the team there for believing in us and we’re working very closely together to meet the needs of the hyperscale’s and the other customers that are out there that together, and we’re not gonna force anything on anybody, but we’re gonna put our guarantees behind it. I’m gonna ensure the electrons, which is something nobody else in the industry is doing, just like on the emissions side. So, that’s more than you’ll get from your utility company.

So, some of that helps kind of ease the pain to get the data centers into the space and understand the technology. But ultimately, I think the time that we’re in where you just can’t get the power fast enough helps ease that burden a little bit on us because it lets the data center go, well, we’ve got to do something because we’re not getting any power for five or six years if we don’t. So that’s really been at the forefront of our thought process with Corescale, and we are very appreciative of the relationship with them.

Wes Ashworth (31:09)

Yeah, it’s an incredible partnership. I want to dig a little bit more into your technology. Uniquely handles load spikes and surges. You touched on that a little bit in the beginning, I believe. But what’s different about your solution versus other microgrids or other backup systems that are on the market today?

James Richmond (31:24)

So, the biggest difference is, we call it the time factor of the power, right? So, because we have dual inverters, we’re effectively managing the supply and demand at the same time, but independently. So, I can control voltage, frequency, and current on the input and the output independently of each other. So effectively, if you think about the Hubble telescope, right? The Hubble telescope, you’re looking at history when the light hits, right? Because light is traveling through time. We’re trying to create that travel through time space that I can adjust the electrons in the power so that I make sure the load has the right condition, no matter what’s coming on the input side.

So, by doing that, I’m actually taking and changing the electron from one side of the system to the other to meet the demand requirement. At the same time, I’m taking the demand side and all this equipment that can do all these different things and have all these different requests, I can dynamically adjust for them and dynamically adjust to the utility or the input of generators or turbines or whatever, wind and solar as the voltage changes across the field. So, we can adjust for both of those independently to act like the bus of the grid. We call it an infinite bus because it’s just a big bus, right? So that bus we consider infinite. So, we effectively created our own bus, which is what we call a synthetic bus, meaning we emulate the grid for the size of load condition that the customer has told us they need. So, if they say they need 100,000 amps at a big data center, we make sure that we can instantly give them 100,000 amps up and down, which is effectively what the grid tries to do, and we do it in a tighter tolerance than the grid can actually do.

Wes Ashworth (33:20)

Yeah, it’s incredible.

James Richmond (33:22)

We actually are working with Ireland, and in Ireland, our correction factor was so fast they said, can you guys slow it down because we can’t react as fast as you’re reacting so we actually need you to slow your responses down so you don’t mess us up.

Wes Ashworth (33:37)

No kidding. That’s a good example of success right there. It’s awesome.

James (33:40)

Right. That’s the dynamics of how well we’ve engineered a system, and we have a patent on this system, and we think it’s very unique in the market. But other people are trying to solve this with super capacitors and single inverters and batteries, and there are batteries that do a lot of stuff, but there are no batteries that complete the whole package. There are batteries that can do 25 percent load steps, maybe even a couple that can do 50 percent load steps, but we do 100 % load steps instantly. So, it’s a much different type of power system. That’s why I said we designed for power, we didn’t design for storage.

Wes Ashworth (34:19)

Yeah, it makes all the sense in the world. Transitioning a little bit away from technology and engineering, there’s a deeper layer of the story, just one about inequality, misaligned incentives, and structural resistance. I wanna explore how today’s policies and utility models may be reinforcing the very problems they claim to solve. So, you brought up maybe a provocative point, maybe not, but that corporate renewables may actually be driving. Can you explain, thoughts behind that and how that actually works?

James Richmond (34:44)

Yeah, so I start from where I grew up. I grew up, my father was a factory worker, and we had a lot of kids in the family. So, we had, we couldn’t afford high utility bills. And when it was cold, my dad would tell us to put on more clothes. And if we were hot, he would say, take your clothes off, right? I mean, we didn’t get to adjust the thermostat up and down like kids do today. We didn’t have Nest thermostats. It was pretty much set really low in winter so that you could be warm enough that you didn’t die of hypothermia, but it wasn’t walk around in your shorts either. So, having lived through that and having a lot of family members who are concerned about their utility bills, right?

The inequality that gets created is that the same customers who can cause the grid issues the most have the ability to affect to take it on to their costs, which disperses it onto everybody else. So now I’ve made a lot of money in the demand response world, right? And so, there are customers who participate in demand response, and the more money you can make in demand response is because your loads are worse. So, if you’re having high-capacity issues, so like in PJM, five hours a year make up your entire capacity charge for the whole year.

So, when you think about 30 to 50 % of your bill is five hours a year, right? If you run a system like we make, you can hit most of those peaks in 40 hours. So, in 40 hours of operation, I can reduce my bill by 30%, no brainer, right? The guy who doesn’t have a generator, who’s probably a small business owner, can’t do that. He’s now paying a full boat charge for capacity charges because he doesn’t have the ability to offset that. Probably doesn’t even know he can, to be honest with you. And so, there’s kind of a small business angle to that inequality that happens. And then you get down to the residential piece, right? So, residential rates are going up faster than commercial rates. And a lot of that has to do with the utility will tell you, it’s just a lot more infrastructure for a lot lower revenue.

And once again, I’ll go back to our conversation earlier. We’ll put a battery there, and that same transformer could supply 25 houses instead of three.  So that’s just the utility not trying to change their infrastructure that they’ve used forever, which is causing the residential rates to go up faster than they should be going up. And then take in the credit trading that’s going on. Right? So, if somebody goes and builds a renewable field, they can take all the credits off of that, right? They then sell the energy into the marketplace that they’ve stripped the credits off of because they want to say they’re burning clean power. The reality is that the people who are getting that power now are paying an inflated price because that economy has been stripped of that.

So, when the economics get stripped off by corporate, right, corporate is trying to be good corporate citizens, right? They’re trying to do the right thing by saying, hey, I built this solar field. I want the credits for it. But when they do that, that charge is being passed on to the people who are actually using that power. So, the question is, how do you make sure all that stays fair and legit? if the electron is, so this person had to put wind and solar in their backyard, they have to live with it and see it every day, and they’re getting to use those electrons, but they’re paying more for it, even though it’s in their backyard. Is that a fair and economic system? I’ll let the politicians and everybody else figure that out. I don’t want to be in the middle of that argument. What I’m saying today is that the trading of credits for corporate responsibility will create inequality for the end user, and it’s not possible for it not to do that.

Wes Ashworth (38:35)

Yeah, absolutely.

James Richmond (38:38)

And once again, IRA ITC, which I know is going to be changed under the current administration. There were a lot of big programs that went around, and then we had these net metering programs, where people bought into solar on their roofs, and they signed these 20- to 25-year agreements that are all being broken now. So now we’re changing the tariff rules. So, a guy who thought he was going to have a system that now we’ll get into corporate economics here again, a little bit. If you sell a guy a 25-year solar panel that pays for itself in 20 years, right? But 10 years into it, I changed the tariff. This guy is now paying for a solar panel and his electric bill. And by the way, the way they were sold, the benefit went to the utility company, right? So, when the power goes out on a net meter solar program, you don’t have any power in your house, right?

If you buy it independently for your house outside of the utility, if the utility goes down, you still have at least four or five hours a day of power because the solar panels are going to provide you with power. So, the creation of these programs and how they were implemented, and not holding to the economics of the people who signed up, for those who are now getting stuck with bills that they never intended.

When you think about a 20-year PPA, if you bought these when you’re in your 40s, you’re not gonna be on retirement income, and you’re gonna have your utility bill go up. It just doesn’t make economic sense to me. For people who are in my seat in the world of my income, it’s not an issue for me, but I am concerned for the people for whom $50 a month more matters, right? It’s a prescription, it is food on the table, all those things that we should really be concerned about that and not let corporate financial programs squander money away from people who are paying for it the most because that incremental price increase to a residential person is a much bigger actual effect on their income than it is the corporate entity. And so, I’m all about corporations making money. I’m in business. I’m an entrepreneur. I have been for 30 years.

What I don’t want to do is make my money at the demise of somebody else who can’t afford it. I do not think that’s a good system. And unfortunately, I think the way the programs were spun up and put into practice was more about short-term profit taking under the renewable hype than it was practical business standards. And unfortunately, there’s millions of people who are now going to pay the price for that. And I think that’s unfortunate. And I think if we don’t get a handle on that, it will continue in the future.

Wes Ashworth (41:19)

Yeah, kind of just hearing through all the barriers and all that happening, and it’s so great to like just really again, it paints a picture of what’s going on and some of the repercussions kind of long term. But I do want to focus a little bit on some of the things that you’re doing in terms of, kind of a new grid paradigm that is emerging, and thinking about grid 3.0 as you call it. A call to really re-imagine, you know, how we produce, distribute, manage, power globally.

You frame the current moment as the beginning of Grid 3.0. I guess, what does that mean? What defines the next chapter of energy infrastructure? And tell us a bit about that.

James Richmond (41:54)

Yeah, I think Grid 3.0 is really an independent energy position for everybody, right? I think ultimately, and I’ll start at the residential level since we just finished that discussion, I think ultimately, we’re headed and we’re probably five years away, I would say on a horizon, but I believe we’re a $10,000 unit away from being able to put a device on a house and they never needed a utility again.

And when that happens, and I can tie that to the property, from a property ownership standpoint, and you say, okay, this is $10,000. So, it’s going to pay itself back in five to seven years, but I never have to worry about the utility, and I always have my own power. And it’s in my control how this happens. I think utilities are going to be in trouble. And I think we’re five years away from that. On the business side, I’m telling you, I can do it today.

There are many markets. I can go deploy our product today and get the customer at 12 cents, which is less than the natural pricing in the marketplace today, as on average in the US. It’s about 14 cents. And if you take real-time pricing, it’s worse than that, right? You’re seeing 20 cents, 30 cents in the evenings. And so, you could get really picky and arbitrage and get yourself even better numbers. But I think ultimately, today on average we could do 12 cents all day long and have people unplug from the utility. Now, do I think that’s in the best interest of the grid? I absolutely do not. But I’m just telling you, I think that can happen. What I do think is in the best interest of the grid is to make the grid the base load. And if we make the grid the base load, the pricing from the utility will drop drastically, and you handle all the variability on the other side of the demand. And that is grid 3.0.

So now I have a choice, and I have it in a very affordable fashion. And I think that is the future of the grid. And I think in 20 years, when I probably won’t care about this anymore, I’ll be shocked to see what a utility looks like if there are even any at all.

Wes Ashworth (43:54)

Yeah, that’s incredible stuff. I’m definitely excited to see how that all develops and where it goes and thankful for companies like you that are making those changes and making those strides to make it a better world overall and help everyone involved with that. as we get really close to time here, bring this conversation home, I wanna zoom out a little bit beyond tech, deals, grid architecture.

For industry newcomers, veterans unsure where to plug in, what’s your advice on where to focus energy and talent right now?

James Richmond (44:24)

I really think geothermal is going to be a big play in many parts of the world. We’re going to figure geothermal out. Because of the oil industry, we figured out how to drill in all kinds of directions now. And so, I think geothermal will be a big piece in the future. I think nuclear will be a big piece in the future. SMRs are going to take 10 to 20 years. It just will, it’s nuclear, and there are safety factors that nobody wants that in their backyard till it’s proven. So, I think it will get there, though. And nuclear is still the cheapest, most affordable power that you can put out there. It’s just that that’s the reality. It’s just getting comfortable with it, I think, is the number one issue, making sure it’s safe. I think there is new battery technology that is coming out very fast. Sodium is coming along very fast.

And when we figure out the infrastructure with batteries and the ability to now levelized all these loads, right, that I’m talking about behind the meter, and that can be very affordable. That’s where I’m really talking about these $10,000 appliances that you could put in small businesses, commercial buildings, and residential. That’s going to change pretty significantly, I think, the dynamics of the future. And I would definitely be focused on those areas.

I think natural gas will be here for the rest of my life. I think it is not only a transitional fuel, but I think it’s a backup fuel, right? If something’s going wrong or you need maintenance and things of that nature, I think it’ll be around for a long time. I think the battery evolution will help EVs. I think that, in the future, the ability to charge vehicles will change pretty drastically.

We can get to where we can charge a car in three minutes, which is about the same time it takes to fill it up with gas. We’ll see a transition. But until then, I think, we’ll still let the people who like it as a second comfortable car to drive around town. We’ll let them keep doing it. I have one, so we have an electric vehicle, for driving around town, there’s nothing more comfortable with more, I mean, I just have to tell you the comfort and safety I think you feel in an electric car driving around is not very comparable to other vehicles.

Wes Ashworth (46:32)

No, without a doubt. Final question, kind of any other parting words of advice, things you didn’t get to share, the floor is yours for a couple of minutes, anything else that we didn’t hit on.

James Richmond (46:41)

I would tell you that I think energy is the topic of the next five to ten years. There’s just no doubt about it. There is nothing happening until this energy crisis, I would call it, is solved. And it is a crisis because of the retirement of power that’s on the grid. We haven’t really figured out what we’re replacing it with, nor have we figured out how to make energy more efficient. I think energy is what built America, and energy is what will make America move ahead again. And I also think that the rest of the world deserves energy. The number one way to eliminate poverty, increase education, and reduce medical costs is energy. So, we should not be a world that says third-world countries don’t deserve power 24 hours a day.

And I think these Markets will be the people who can adapt to the new stuff the fastest, right? It’s easier to go somewhere where there isn’t a hundred-year legacy and put in the new stuff, and so I like that standpoint. My father was a minister. So, I have somewhat of a soft heart, but I do like to see you know us take care of the whole world, not just the US, in our backyard, so I really think energy is something that everybody should have access to, and I think it should be affordable for everybody. So, my goal is really affordable, accessible energy for everybody. That’s really what my goal and mission are.

Wes Ashworth (48:10)

Yeah, well said and very powerful, great way just to wrap it up. So, with that, we’ll conclude today’s episode of Green Giants. Huge thank you to you, James, for just joining us and sharing your insights and how we can rethink the grid and meet rising energy demand, and build more resilient systems. If you enjoyed this conversation, please share the episode with your network. Subscribe to the show. Check the show notes as well, too. Leave us a review. It really helps us grow and bring these powerful stories to more listeners. And thanks for tuning in. We will see you next time.