title: 218. Climate Tech Battle Royale (Shayle Kann vs. Gerard Reid) - Mar26
author: Redefining Energy
contenttype: podcast
publication: Redefining Energy
published: 2026-03-02T01:45:05+00:00
sourceurl: https://dts.podtrac.com/redirect.mp3/api.spreaker.com/download/episode/70295711/218climatechbattle_royale.mp3
word_count: 9947
1 With a round segle and from London and Gerard read 2 from Berlin. This is redefining Energy. 3 Today. 4 On Redefine Energy, we're going to talk about climate tech 5 and what we've done is that we have compiled an 6 extraordinary debate between Gerard our co host, and Shale Can, 7 the managing partner at Energy in part Partners. Both of 8 them had been invited to a conversation organized by Carbon 9 Equity that's a fund of fund led by its co 10 founder Lisa Rubinstein Manamoud. Originally there was their guest with 11 the turn of Johan Venture, but we have fully edited 12 his contribution in order to keep the length at reasonable 13 thirty minutes. Our produgies to Will and to your listeners 14 enjoy the better Rayale for climate tech. But first of 15 all from our partner. 16 A Local Energy is Europe's premier liser of ten thood 17 container mobile batteries built in Europe with coatl best LFP cells. 18 A Bloco Energy serves fourteen European countries, including France, Germany 19 and the UK. Our Bloco's batteries can be leased for 20 any duration between six weeks and six years and they 21 are monitored by the Dutch award winning platform, school a 22 block o energy, make your life easier, make your business 23 more flexible. 24 Back to the shows. 25 Good afternoon everyone, to the Climate Tech Outlook twenty twenty 26 six webinar. We're so excited to have you. I'm Lisa. 27 I'm one of the founders karminactcy a leader strategy on 28 the platform. And then our climate approach Carbon equity. What 29 do we do. We believe capital can be a force 30 for good and we think capital can help solve climate 31 change by investing in climate solutions. And we do that 32 by building private equity, fun and fund. We currently have 33 about four hundred million assil managements. We are working with 34 thirty investment managers so far, and in total we'd helped 35 fund two hundred and seventy five companies. First, we'll quickly 36 talk about twenty twenty five highlights, and then we'll talk 37 a little bit about the drivers of climate tech, go 38 a bit into funding, what's been happening, what we think 39 will happen, and then all the families prepare some hot takes, 40 some strong opinions on what might happen in twenty twenty six. 41 Now with me here today with the incredible guests, I'm 42 so honored to have them first there. Shill can he 43 leads the EERP Frontier Fund, which is one of the 44 first ones we invested in doing really exciting deep tech, 45 mostly in US and a bit in Europe. And he 46 also hosts one of my favorite podcasts, Catalysts, which is 47 really for the climate tech nerds amongst us, diving in 48 deep and all sorts of technologies. There with Gerard Reed, 49 really pronounced energy expert, works with a few of the 50 big instituced world economic form Energy Transition Forum, also does 51 a lot of advisory for founders and investors on fundraising 52 and how to scale up. And he has another incredible 53 podcast called Redefining Energy, which I think is really the 54 best European energy transition podcasts out there. So Gerard Shill, 55 so glad to have you here. Let's start with a 56 few hot quick takes on what happened in twenty twenty five. 57 So first of all, let's go to Shill. What was 58 and according to you, the biggest technological breakthrough in twenty 59 twenty five in climate. 60 Sech First of all, thanks for having me and great 61 to beer with such distinguished co guests. I would say 62 the biggest technological breakthrough for me was not a single technology, 63 but maybe a category of technologies, which is grid enhancing technologies. 64 This is a class of technologies that basically allow you 65 to run more power through existing transmission lines. And the 66 context is that, like, we need an enormous amount of 67 additional power and transmission, both to deal with all of 68 the increased load that we're seeing from electrification and from 69 AI data centers, but also just to integrate all the 70 new renewables, largely that we're building on the grid. Building 71 new transmission in both the US and Europe has become 72 a really hard problem and one that's difficult to solve 73 a technology alone. But this class of technologies that are 74 called gets allow you to get significant, sometimes up to 75 thirty percent more capacity on an existing line with pretty 76 low cost solutions. We have one company in our portfolio 77 that is called asset Cool, which deploys robots to deploy 78 a line coding on transmission lines that makes them more 79 reflective and that basically allows them not to heat up 80 as much, and you can run fifteen to thirty percent 81 core capacity on an existing line. It's super simple when 82 you think about it, and it's basically a no brainer 83 from an economic perspective. The reason for me, it's that 84 twenty twenty five technological breakthrough is just that a class 85 of these technologies that one included, but a few others 86 as well, really all reached a pretty critical proof point, 87 Like they all deployed on act of lines, showed that 88 they could increase capacity, and so basically all of them 89 are exiting the pilot phase and entering the full scale 90 commercial phase. And it's hard to overstate the impact. If 91 you could deploy those things widely, it would just get 92 you the equivalent of tens of thousands kilometers of additional 93 transmission without actually having to build more transmission. 94 And save tens of billions of dollars in process. 95 Yeah, enormously economically efficient. 96 Yeah, you almost wonder why wasn't it inventive before? 97 Well, we didn't have as much of a need before. 98 You know, we've been living in a world in the 99 West where electricity load growth has largely tracked GDP growth, 100 and so till just a couple of years ago, we 101 saw two percent per annum in the North America and 102 Europe sort of average annual load growth for like a 103 couple of decades. So we just didn't have the need 104 to expand our transmission capacity nearly as much. It's also 105 it takes a long time to kind of restart that momentum, 106 and so now we're in the phase where clearly we 107 do need to expand it, but it's going to take 108 a long time before we actually candled new transmission. So 109 we're just at a sweet back from a timing perspective. 110 The other thing is robotics because a lot of these 111 things they're hard to deploy with manual labor for a 112 variety of reasons, especially on energized lines. So the technology 113 of robotics is coincided with the need in a way 114 that's sort of a perfect storm. 115 Jerard, I feel like I have to give you the 116 next question, which is what was the most exciting funding 117 round in twenty twenty five and is it the company 118 in your background or another one in. 119 My background is Cracking I absolutely do that for those 120 who are Doda who Kracken is. This is part of 121 the Opticus group, which is a UK utility and this 122 is the I suppose maybe the best in class sort 123 for a platform for managing frustumity in Europe. Let me 124 talk a little bit about you asked me really about 125 what went on last year. What's an interesting situation is 126 that there are certain areas where there's massive amounts of 127 money going Okay, just take the case of nuclear nuclear figiffusion, 128 huge amounts of model dot into that space. And then 129 there's certain areas software area where again huge amounts of 130 money going on. But I would also say I'm portionately 131 aside and I'm really put my Europeanto that on here. 132 What you do see is an not of stress in 133 the climate change area. And this is not a political thing. 134 This is reading with the businesses just not being able 135 to scale, and I see a lot of European venture capitals. 136 If I many say under pressure, Listen, I'm att E World, 137 which is the biggest electrical energy conference for a trade 138 show in Europe, and that's what I'm getting out of 139 this as well. It's just stress. And actually the stress 140 is an interesting thing to talk Then why is it 141 the system stressed? In the European perspective, that stressed because 142 we've got too much renewables in the system. There's too 143 much renewables on the large scale system, which means you 144 sort of go from a financing perspective, why would I 145 build more solar when I'm going to get negative prices first. 146 And actually there's another thing happening, which is that we're 147 building so much renewable in the middle that that's also 148 stress in the system as well. And it's actually back 149 to the whole point that that's why I actually really 150 please technology, which is from the wings the system, because 151 of the fact that system stress. And so I wouldn't 152 single out one big cap on thevent last year, but 153 I would say that you also have to look at 154 that the money that is going in in general into 155 infrastructure that I know we're not just talking about infrastructure, 156 but what he saw last year was record on stalls 157 the solar across the world, record and solved the PAS 158 storage across the world. And it looks like we also 159 had record install the wind across the world. Why is 160 this happening? This has happened just because the cost production 161 that you're seeing particular and solar are literally off the chart. 162 So we talked about the best technology change last year, 163 but we're done for me, I go and I say, 164 it's the ongoing continuous reduction in prices and solar and 165 storage and also then the pieces of performance and if 166 I was he asked me, what's the technology of the year. 167 The technology of the year for me is Balcony solar. 168 And for those who don't know what Falcony solar is, 169 Balcony solar is plugging play sol. You don't need an electrician, 170 you don't need to put it in your roof. You 171 can plug it in anywhere. And in Europe this has 172 been regulated at an email level and certain countries have 173 putting in. One of them is Germany. And so to 174 give you an idea, what you're doing is when you 175 put Balcony solar in, you're generating electricsitm below the wholesale POWERUS. Okay, 176 this is a revolution because this technology cannot be stopped. 177 And so they asked me to look at what really 178 has excited me. It's that it's really the beginning of 179 this plug and play solar. And also you'll have to 180 plug and play storage at touched it and those two 181 technologies will revolutionize our world. Yeah. 182 I couldn't agree with you more. The cheaper seller gets 183 some more tracks that gets to buy, and the more 184 creative we get on how to get it on the grid. 185 We're already touching on a lot of important teams where 186 the renewals are here to stay the greatest under pressure. 187 I hear a lot of stress. I'd love to hear 188 from you that going into twenty twenty six, do you 189 expect that stress to continue? Very specifically, what do you 190 think will be the biggest headwind and we'll will be 191 the biggest tailwind for climate tech? 192 Shill? 193 Do you want to take it first from a headwind perspective. 194 I guess I'll speak as our resident United States citizen here, 195 which is that we underwent and are continuing to undergo 196 a pretty big c change from a political standpoint in 197 the US with regard to climate change policy, which is 198 becoming lack thereof as of it sounds like this week 199 the EPA in the US is going to kill the 200 endangerment finding, which is like the underlying principle for the 201 EPA or Environmental Protection Agency regulating carbon emissions. That's obviously 202 one of many, many things that this administration has done 203 to try to tamp down on the concept of climate 204 change is something that needs policy action in the first place. 205 That's a headwind in the US. Certainly it's a bigger 206 headwind for some subcategories of climate tech than others, and 207 so I think it's important not to paint climate tech 208 with too broad a brush here, because we really are 209 seeing the tale of two cities right now, where if 210 you are in one of the subcategories in the US 211 that is completely reliant on either sort of new government 212 policy or voluntary corporate action, which is kind of downstream 213 of policy in the US, that's challenged. On the other hand, 214 we have and this will be the tailwind. I guess 215 for me, we have by far the most dynamic and 216 rapidly evolving energy sector that we have had in decades. 217 The amount of demand growth, the need to get. Term 218 of art in this industry right now is speed to power. 219 That's basically all that matters. It just so happens that 220 a lot of the technology that can deliver speed to 221 power are the ones that you've been talking about. The 222 fastest new generation to get online is solar, and fastest 223 new capacity to get online as batteries. Actually, anything that 224 is attached to that trend, whether it be generation, storage, transmission, distribution, 225 load side management, all these things sees this enormous tailwind 226 that is sort of it's not driven by the fact 227 that it is decarbonized, but it benefits from that fact 228 because a lot of the biggest customers in that market, 229 Google it probably the forefront, but including the other Hyperscale 230 do still have these commitments that they intend to keep 231 to the extent that they can. So there's a headwind 232 for companies that are not attached to this macro factor, 233 and there's a tailwind for any company that is. 234 Which of the two would you say is a stronger driver? 235 The tailwind is the stronger drive. I mean, it's hard 236 to overstate how big a deal it is. We haven't 237 seen this type of a capex cycle. Actually, we've never 238 seen this type of a capex cycle as far as 239 total capex going into data centers relative to GDP, we 240 have never seen that. Back to like the way you know, 241 we look at data back to the eighteen hundreds, there's 242 never been this kind of a capex build out. And 243 that capex build up happens to be very energy oriented, right, 244 It's not a coincidence that the size of a data 245 center is measured in megawatts. That's an energy term. So 246 the entire world of tech and AI and all the 247 financial infrastructure that underpins it has woken up to energy 248 being basically the core challenge to get this capacity online. 249 And that means if you have a solution that has 250 something to offer, you can just ride onto this wave 251 and it's an enormously powerful force. 252 It's so fascinating how these two things are happening at 253 the same time. Where As we're seeing policy support and 254 certent geographies decrease, there is this utter bigger driver emerging. 255 Is right, would you say biggest headwind, biggest steel wind. 256 I'm not going to actually answer the question, rapt. The 257 reason is is because a lot of the headwinds are 258 also tailwinds. But I let you frame it a different way. 259 The way I'd frame it is we're in the biggest 260 industrial revolution in the history amount of and every industrial 261 revolution needs an energy source. So geral combustion engine, it 262 needed all that light, AI needs electrystal, and it needs 263 really quick So that's the revolution. But the revolution is 264 that it doesn't just impact the way the energy world. 265 It all is going to radically impact the way we 266 work and the way our lives are run in the future. 267 It's also going to impact I call that the economic 268 power of countries. It's already impacted geopolitics across the world, 269 so it's far ranging That's really what we're in the 270 positive about it is it's a technological revolution. And what 271 happens with technologies is they get cheaper otherwise they're not good. 272 Technology will look to market and we've got great technologies. 273 And again AI is also in a neighbor of electrification, 274 and AI also leeds electricity. I'm not actually worried about 275 the AI local. The reason or not is because we're 276 going to electrify everything going forward anyway. So guess what 277 if it's not used for AI and was a bubble 278 in it, then electricity will be used for other things 279 going forward. But I would add that the revolution go 280 back to the technological revolution. It's solar storage. And there's 281 another technology as well, which is semis because all of 282 this AI revolution would not be possible with the revolution 283 that we're seeing in and around and video chips, etcetera, etcetera. Yes, 284 they use massive amounts of power, but if you look 285 at the amount maid amounts data that is being processed 286 on a daily basis. If you look at Google and 287 you compare Google what they're processing today to a year 288 and a half ago, it's like one hundred times more. 289 This is like we've never seen anything like that at it. 290 And so the point I'm making is I look at 291 it quite positive as these technologies you can't block them 292 because the low cost of them is such that we 293 are going to electrify our system. And by electrifying our system, 294 this is how you're going to decarbonize quickly. And you're 295 going to do this because electricity is the cheapest way 296 to do it, and we have these technologies that are 297 also cheap and becoming cheaper. So I actually look really 298 positively about it. But it's not an easy revolution because 299 the revolutions, people die, and what I mean by that 300 is incumbnance die, and other businesses won't to buy. The 301 biggest tailwind I'll go to say what I say, and 302 being a little bit controversial is China. And the reason 303 I say to China is the is the tail rent 304 is because China is at the full hunt of developing 305 all these technologies. Again, those three cork technologies I talked about, 306 and they're not far behind an AI as well, and 307 they're pushing these products to market in their own market 308 and pushing them abroad at a scale that we've never seen. 309 We have never seen, you know, an energy technology again, 310 come to markets quickly a solar and I'm very positive 311 about all common energy, but just comparing nuclear solar, good luck, chill. 312 The first SMR comes on in twenty twenty nine. By 313 twenty thirty three, the amount of solar that's put on 314 the system is enough to power in the United States 315 and South America put together, right, just to pull the scale. 316 That's the technology for me. So again I just want 317 to make that point is that we are that technology 318 revolution and it's very difficult to predict what happen. That's 319 the concern I would. 320 Had sounds like a very good tipping point to move 321 into twenty twenty six, but generally I hear stronger till 322 Winston headwinds, which is an exciting moment. Let's quickly jump 323 a little bit into funding. So I think twenty twenty 324 five was a fiftil year because for the first time, 325 after a few years of decreases, Climate tech VC funding 326 went back up. It was a modest increase with eight percent, 327 but still we hit forty and a half billion. At 328 the same time, we saw the deal coon was down, 329 and that's because much more capital is going to growth 330 versus early stage. And we also see quite a bit 331 of concentration of capital in a few sectors, specifically nuclear batteries, 332 great tech evs. Schill, I'd love to hear from you. 333 How are you reading these trends and is this good 334 news or bad news? 335 I think it's reflective of sort of what I was 336 saying before. The Mostly what is happening is that the 337 energy sector, and particularly the parts of the energy sector 338 that are sort of tied to this load growth AI trend, 339 are seeing enormous interests. You are seeing generalist investors look 340 really hard at that space. It's been an interesting cycle 341 there where there was a big wave of generalist investors, 342 the sort of Silicon Valley folks getting into climate tech 343 in and around like twenty twenty. A lot of them 344 disappeared because AI showed up and it was sexier, and 345 climate tech was in the sort of downcycle part of 346 the hype curve, So they disappeared from climate tech and 347 they would still tell you they don't do climate tech, 348 but they would also tell you that they definitely do energy. 349 Classic example of that in the US Base Power. It's 350 a company that's run by Zachdel, who's the son of 351 Michael delf Throader of Dell Computer. They are basically a 352 combination of a residential electricity retailer and a virtual power 353 plant company, so they deploy big batteries at people's homes. 354 They're only in Texas so far today. They've been scaling 355 very quickly. They raised a billion dollar venture capital around 356 in twenty twenty five from actually almost no energy investors. 357 There's an interesting dynamic in this market. If you look 358 at the list, it's basically a who's who in Silicon Valley, 359 and none of the energy specialists were in that cap team. 360 So that tells you something kind of interesting about how 361 the market is playing, which is to say that again, 362 if you are attached to that trend, the pool of 363 capital is broader for you, valuations are higher, There's a 364 lot that you can benefit from. If you are not 365 attached to that trend. I still think it's actually a 366 pretty tough market to fundraising. 367 Gerard have to hear from you. Do you think overall 368 funding for climate SECH would it go up or down 369 in twenty twenty six and why, Well, I. 370 Think it's going down, and I'd be a little bit 371 pessimistic about it, and I'd explain why it's going down. 372 The reason's going down is because one nobody wants to 373 talk about climate anymore. And it starts there, and it 374 starts in the United States, but it's also spread into 375 Europe as well. I've been in the climate area for 376 twenty years. I don't mention clients because it's defined, so 377 I'll call it something else, right, I'll say we need 378 to invest in energy security or whatever. So I would 379 just say there's definitely a change. You see this from 380 the political level, That's the first thing i'd say. The 381 second thing I would say from a European perspective is 382 that Europe what's happened is the venture capitalist in Europe 383 have had it really easy for a decade because what's 384 happening is there's been more capitalive from the into climate 385 areas and prices can go up and up and up. 386 And now what we're seeing is businesses not performing and 387 we're seeing down rounds, restructure of business and stuff like this. 388 And if I go and just take the wider situation, 389 which is definitely do have certain times of the day 390 too much solar, too much renewable, it's too much electricity 391 in the system. You know, you need to build batteries. 392 He's changed laws to be able to make flexibility come 393 into the market, and that takes a little bit of 394 a while, which means a lot of the climate tech 395 businesses just and scale and so what you're seeing is 396 valuations from the pressure. So I think this year is 397 going to be a difficult year, I would say from 398 a certainly from a European. 399 Respective, maybe should love to hear a US this perspective. 400 Do you think up or down? 401 Up? 402 Pretty confidently, I think it's gonna be up. I might 403 I think it might triple this year. Like I'm willing 404 to say, it's going to be way up. But it's 405 going to be very concentrated in a specific set of categories. 406 You know, you could list subcategories. If we're talking about agtech, 407 we're talking about carbon removal, things like that, they're going 408 to fall through the floor. There will be very little. 409 But again, if you look at the sectors that are 410 benefiting from this AI wave, and I think the money 411 that's flowing is going to surprise everybody. 412 He needs to just to add to that because I 413 think it is important for me. There's a difference between 414 climate technology and what's going into ALI. I know there's 415 a lot of business shifting across. But if you're looking 416 at businesses can be climate technologies, these businesses that are 417 reducing demand for energy that are teaming up cobbon. But 418 I think that's going to be very difficult. So it's 419 there's no doubt the certain areas where and anything related 420 to AI there's massive money going, there's no doubt about that. 421 But there's a whole part of other areas where there's 422 just got a very little capital. 423 Final question on value of funding, because it's an important one. 424 What will happen in the exit markets? So the exit 425 bark's been tough for a few years, especially IPO's been 426 very low, which means that a lot of companies have 427 been spending a lot of time in private markets. What 428 do you think for twenty twenty six will we see 429 the IPO market open up? 430 It's hard to know, a guy. I don't pretend to 431 know where the macro environment is going to go in 432 the overall markets. If the market holds up as it 433 has so far, if it continues to look like it 434 does today, or even if it heats up a little 435 bit more, we're going to see a wave of climate 436 tech IPOs this year. There are some companies. Fervo has 437 filed an S one already confidentially, but that was reported, 438 so we know they're trying to go in the next 439 few months. They're a bunch more sitting behind them that 440 are likely to go as well. And even you know, 441 we've re entered twenty twenty one and there are a 442 bunch of SPACs that have been announced with companies that 443 are looking to d SPAC that are in the climate 444 tech world. You could discount those to some extent, but 445 even just in a traditional IPOs context, there's a line. 446 And as long as the market's hold up and remain 447 favorable to this trend, we'll see a lot of exit activity. 448 Exciting here to watch. I think it's time to dive 449 in a little bit deeper into climate technologies and twenty 450 twenty six, and I've asked you all to prepare a 451 few hot takes, so strong opinions on what will happen 452 with specific technologies in twenty twenty six. Gerard love to 453 hear one of your hot takes well. 454 I think my hot take is that we will definitely 455 say AI data centers in space missile and I think 456 you're going to make a point that at some point 457 once we go, well, one a day, that's one of. 458 A one data space per day in wait six are 459 in the future beyond. 460 Six, the end of the the end of twenty six, 461 by the end of one. I also make a point 462 just to explain why what you've got up there is 463 you need no Cooley and guess what you've got twenty 464 four electricity from the sum Pretty simple, okay, So your 465 operating costs are The challenge is can you make these 466 AI data plaps the way we make in an iPhone, 467 In other words, that there is zero problems, because obviously 468 if there's a problem, under repair of them is not easy. 469 Can I ask a clarifying question before we vote yes? 470 You know on this one, when you say one a day. 471 One spaceship will go every day with a data So. 472 This is this is a starship and Starship launch per 473 day is what. 474 You starship lampoo exactly? Okay? 475 All right, thumbs up, thumbs down? 476 Oh, I mean I think Starship will end up doing 477 a launch today. There's a zero percent chance that it 478 is this year for launch per day for Starship optimistically 479 five years. They have so far to go before they 480 hit that cadence of one frequency I was also going 481 to say orbital data centers, by the way, as like 482 my twenty twenty six trend. I mean, we've already seen 483 one of the company's Starcloud already deployed a GPU and 484 Nvidia GPU into space and they made, you know, like 485 it's not a real data center, but it's a proof 486 of concept. By the end of the year, we might 487 see something that actually can do some compute in the 488 you know, hundreds of killowatts type scale. It's going to 489 take quite a while before you could do math on this. 490 Right. 491 Elan is talking about trying to get one hundred gigawatts 492 per year of data center capacity in this space. If 493 you do the math on how much that is, that 494 does require a full starship full of data center, full 495 of data center satellites basically to be launched at least 496 once a day. I think it's actually a little bit 497 good once today, so I don't think we're anywhere near that. 498 But you know, he's selling a longer term story than that, 499 So I agree on the trend. I just don't think 500 it's going to happen that quickly. Can I make one 501 additional points on this as exciting and hype as it 502 is in the long term. The reality is that the 503 predominant driver of the cost of an orbital data center 504 ends up being launched cost get delivering something into space 505 is the cost. As you said, op X could be 506 really low, though I should know operations and maintenance is 507 an unsolved problem these things. Stuff breaks inside terrestrial data 508 centers all the time. We have no idea how to 509 fix that in space at this point, So let's kick 510 that can down the road. Launch cost is what matters. 511 In order for orbital data centers to be on the 512 same order of magnitude in terms of total costs as 513 terrestrial data centers are today, we need launch costs to 514 be down in the like one hundred dollars per kilogram range, 515 which is where SpaceX intends to be from a cost perspective, 516 I should say, not from a price perspective. By the 517 end of the decade or so, it's where they say 518 they're going to be. So any data centers that we 519 launch in this space right now, we're going to be 520 purely uneconomic. It's like worth noting that, and so the 521 only argument to do it is sort of to your point, 522 will we have to hit such a ceiling we have 523 to be so limited in terms of terrestrial data centers 524 that we're forced and it relative to demand for compute, 525 that we have to send this stuff into space, and 526 we definitely have a problem in getting new data center 527 capacity online terrestrially on the grid. But my twenty twenty 528 six trend was going to be I think there will 529 be a trifecta of potential solutions to that that are 530 all going to gain lots of attention this year. One 531 is orbital data centers, but that to me is third 532 in line. The other two are edge data centers, where 533 you build a network of small nodes that take advantage 534 of access capacity that already exists on the grid, and 535 that's not going to get you one hundred gigawatts right away, 536 but it's going to get you something relatively meaningful. And 537 then off grid, you can build off grid data centers 538 much cheaper than you can build an orbital data center. 539 We have no shortage of land, so it's not clear 540 to me why we need to go off world rather 541 than off grid. 542 And off grid. Will it be solar winds and a 543 little bit of gas back of power? How do you 544 envision that? 545 Realistically? It's going to be mostly gas backup power with 546 a little bit of batteries initially, and then some of 547 them might add some folks are going to build solar 548 alongside that as well, and that'll add up to some 549 meaningful amount to the capacity. You become a land constrained 550 if you add up that much solar as well. So 551 I think a lot of them, what you're gonna end 552 up seeing is a lot of natur gas and they 553 usually will have some storage. 554 It does lead to another topic, which is what we 555 were not sure about, and I just was the question 556 I'm asking really is what happens if elam's large language 557 models get commoditized. So if they get commoditized, there could 558 be a view in the world that actually they get commoditized, 559 And actually what really happens is everything becomes open source 560 and then companies basically develop their own models, which means 561 that all these data centers are not big centralized AI 562 data centers the way we're anything in the US, but 563 actually become grid age. Now this is very interesting because 564 the European perspective will be we've actually got a really 565 good electricity system, very good grid, and we've got spare 566 capacity across a lot of it. So could be Europe's 567 chance to actually really jump on AI if it does 568 go that decentralized route. Now I'm not sure we're going 569 to go that route. It's an interesting question to do that, 570 and I will say the point about the US, there's 571 no doubt when you say we're going off with it, 572 they're not going off with it. What they're doing is 573 they're going off the electricity grid, right, because that what 574 you do is you have to connect to ask for it, 575 because you need to make sure these are twenty four seven. 576 What the big thrash like to ask is do you 577 see Llm's moodetizing? And then we move to that decentralized 578 world where it is all about if I'm a government, 579 I'm going to go I want to have my own 580 AI system and I want to have it close to 581 where I am. I don't want to have it sitting 582 in another country, etcetera, etcetera. You know, because it's an 583 interesting question about the future of how AI bose. 584 It's a really interesting question and also brings me to 585 a question where we see an AI data center boom 586 in Europe in twenty twenty six. 587 This is a really important thing about data. I mean 588 now This may change, right if bubble bursts, energy costs 589 starts to matter. But in the context of the levelized 590 cost of compute energy is actually pretty small. It's all chips, 591 it's all capax basically. So the problem in Europe is more. 592 It takes forever. I mean, I heard a hyperscaler told 593 me that they put in an interconnection request for a 594 new data center in the London area and they got 595 a twenty thirty eight estimated interconnection timeline. So I worry 596 about time more than I worry about cost. 597 As exciting as AI and data centers are, I think 598 it's important that we touch on a few more utter 599 topics that at least the audience has been asking a 600 lot of questions about and very curious get your views 601 on Chill. Looking from a US perspective, what do you 602 think europic sales at a collectrification. 603 That's like the clear answer to me. You know, in 604 the US we have started to go a little bit 605 flat in terms of the ev penetration of new vehicle sales. 606 I think it's going to bend back upward again, but 607 it'll take some time. We've had a big policy change here. 608 The Trump administration removed the big text credit that we 609 had at the federal level. Meanwhile, Europe is still seeing 610 EV penetration that it spans well beyond anything that we've 611 seen here in the US in some countries obviously in 612 the Nordics, like really really high penetration, So that seems 613 to me like an area. And then like all the 614 business models that surround that as well, I think are 615 more mature in Europe than they are in the US. 616 Are every Beth charging or what are you thinking about? 617 Yeah, everything to do with charging and payments and clever models. 618 Octopus has a sort of bundled six monthly EV plus 619 retail electricity type of products. All these types of things 620 that tie like homeowner experience with evs and payments for evs. 621 All that is more mature and interesting I think in 622 Europe than it is in the US. 623 I heard the Octopus model also allows the battery to 624 deliver back to the grips, and that is one of 625 the key components of it. 626 That's more of a well, it's a combination of a 627 market challenge and a technical challenge. Most selectric vehicles don't 628 allow you to do bi directional charging. Yet there's a 629 small number of models, small but growing number of models 630 that do. But those that do a pretty interesting I 631 mean anecdotally. I drive a Key EV nine which has 632 one hundred kilot hour battery in it. I mean I 633 have like, what is a five Tesla power walls worth 634 of power sitting in garage right now, and I currently 635 can't use it to power my home if I have 636 an outage. And I live in northern California where we 637 have wildfires and outages, so it sure would be valuable 638 for me, exactly. 639 Sure. 640 Art, where should Europe invest in? What kind of technology 641 niches can you upe win it? 642 Well? I think where Europe leads, Europe leeds and everything ridge, okay, 643 whether it's cable manufacturers, transformer manufacturers, software, and actually I 644 would say cutting edge technologies as well, because one thing 645 that Europe has is it has an open power market, okay. 646 And the result of this is that ultimately you can 647 generate electricity in Finland and sell it to someone in Spain, 648 and you've got the German power market. For example, we 649 have twenty million trades a day. Just to give you 650 an idea, this is all automized, it's all AI. This 651 is not human beings sitting there because you can't manage 652 to move this electricity around and trade it without technology. 653 So that's where Europe leads and Europe needs to really 654 build on that and going back to the grid space 655 so I not to charge it to I'm certainly here 656 this conference area. The global leader in vehicles good is 657 called Mobility House. They've been doing it for many, many 658 years and pole big roll out in France with Renold, 659 and this is the type of thing that Europe is 660 really big and the business models that come around that, 661 because that's the interesting thing is the business models that 662 come around it. And these are next generation energy services businesses, 663 technology enable service platforms, all this type of stuff. You 664 take the case of renewables. What we need to be 665 able to do is to make sure the good is balanced. 666 You need to be able to predict what the wind 667 is going to be like the next day. Well guess 668 what the leading whether prediction countrypanies are in Europe. That's 669 where Europe is really good. In Europe needs to really 670 focus on those core areas rather than trying to chase 671 and compete with the Chinese five years after they need 672 a particular area that doesn't make sense. 673 Yeah, No, I think it's a very interesting point. Mber 674 does some really interesting work there where the value pie 675 of the profits that you can make renewable to the 676 vast majority is in the software and the layer in between, 677 and not the hardware itself. Yes, Gerard, the question from 678 the audience Love the Area review. Will industry electrification accelerate 679 in twenty twenty six? 680 Oh yeah, yeah, absolutely. Well, First, obviously, because of AI, 681 it does straight away. AI is in the streets. It's 682 the new twenty first century industry, right, it does straight away. 683 But the other trend you're definitely going to see, and 684 I'm seeing this in projects that are the beginning. What 685 you're doing is you're building an AI data center and 686 because you've got access heat, guess what you can do. 687 You can actually do other stuff around and you can 688 do food processing or something where they need that heat 689 and you can integrate it in. So I definitely see 690 the AI aification of our world allows us to actually 691 industrialize in a different way than before. I'd be very 692 very positive. And I see a lot of projects starting 693 with this, and now, don't get me wrong, they take 694 a few years to come to fruition, but that's definitely 695 very exciting. And the next thing I would say as 696 well is that from a European perspective, we have to 697 get away from gas. And this is just it's the 698 addiction to gas is not good for economy, whether it's 699 the Russian gas we all know that, or expensive LG 700 gas that doesn't help us either. So the alternative is 701 to electrified. And what you're going to see is more 702 and more government incentifies an expectation for industry. So take 703 the case of Germany. A heavy industry in Germany does 704 not pay any good charge. Okay, that's a clear incentive 705 for them to electrify. They're saying, guys, electrify that, let's 706 to do so. I can see more and more countries 707 in Europe doing that, because that's the way forward from 708 a geopolitical perspective, but also from an economic perspective and 709 also from an environment. 710 Jill and a question from the audience, which technologies do 711 you think will become investible for your strategy in twenty 712 twenty six. 713 We're spending a lot of time in the physical AI 714 world applications of this new wave of AI technology into 715 physical industries. I think robotics being the sort of cutting 716 edge of that that there's a bunch of other things 717 AI for materials discovery as an example. The first wave 718 of AI that we've seen in this past few years 719 has been around bits, not atoms for the most part, 720 because you can train in LLM on the entire corpus 721 of the Internet and build an incredibly powerful model. And 722 the next thing that is a harder problem, but there 723 are a lot of smart folks working on it right now, 724 is trying to build sufficient training data to be able 725 to do things in the real world and the physical world. 726 And that's where it starts to matter in the categories 727 that I spend time on and focus on. So lots 728 of opportunities there. We've made a few investments already in 729 robotics companies. I think there's a lot more to be done. 730 There, sure, Aran one question, I love your view on 731 which technologies will become bankable in twenty twenty six in 732 the climate space. 733 Well, actually, the key technology that's gon become a bank 734 of is battery storage, because if you think of it, 735 really we've had batteries, but like I'm going to say, 736 from a European perspective, we've had the UK market. We've 737 also had batteries in the techa market, but it's now 738 becoming wide scale and it's becoming an asset class of 739 itself where people are doing tolling arrangements, people are able 740 to put death in and around them. So I think 741 that it's really the big changes. People are getting their 742 heads around the business models and how it works. And 743 I think this is very, very important because batteries are 744 are critical enabler of future electricity system and also getting 745 electricity fast to bat centers and the like. So that's 746 what I would say. 747 I'd love to hear forty audience, like, if you would 748 give them one message you want them to take away 749 from this webinar about investing in climate tech in twenty 750 twenty six, what would it be, Gerard? 751 So go back to what I said earlier, which is 752 that we're in a revolution. In a revolution, there's huge opportunities, 753 but you also need to be really careful. That's what 754 I would just say. Investing in the. 755 Space, Yeah, where should you be careful? 756 Sorry, I'd be very careful in the fossil fuelds area 757 straight away, So some of the other areas. But if 758 I'm talking about in the carbon area in particular, I 759 would say carbons demuestration. I'd say hydrogen, there's a whole 760 pilot technologies, whether we like it or not, have been 761 pushed by a fossil full lobby, and they're there to 762 slow things down, and you have to be really careful 763 the tap. 764 That's what I would say, chill, what's your key sake away? 765 Climate tech was never really a category. It was always 766 just a theme amongst a bunch of different categories, and 767 it's important to remember it that way, because if sentiment 768 is negative about climate tech, that also doesn't really mean anything. Actually, 769 what it's important is the categories that have the theme 770 of climate tech and what's happening in each of them individually. 771 So don't over index on the overall market sentiment on 772 climate tech. I should say that doesn't really have any 773 direct impact on the actual markets. 774 I fully agree with you there, and I think that's 775 the biggest thing that happened in twenty twenty five where 776 we shaped up the narrative. Thanks so much for joining. 777 Thank you audience for joining, and I wish you a 778 great evening. Thank you for listening to Redefining Energy. 779 Don't forget to rate the show and subscribe on Apple podcast, 780 Spotify or the platform of your choice,