Solving Solar’s Biggest Problem
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Hey everybody, it's your favorite play cousin Junior from the Steve Harvey Morning Show. You know, the Toyota Tundra and Tacoma are designed to outlast and outlive, backed by Toyota's legendary reputation for reliability. So get in a Tundra with available i-Force Max Hybrid engine, delivering exceptional torque and towing capacity. Or check out a Tacoma.

with available off-road features like crawl control. It can take you beyond the trails. Toyota trucks are built to last year after year, mile after mile. So don't wait. Get yours today. Visit buyatoyota.com. For deals and more, Toyota, let's go places. Today's show is a good show, and I can give you several reasons why. One, it's a show about the energy transition. So we got the high stakes of climate change.

Two, it's more specifically about long-duration energy storage, which may be the key problem to solve in climate change, now that solar power is so cheap, but also so intermittent. The sun's not always out. You've got to store the energy. Three, the story has some very clever, fun technical insights. Four, we get some real moments of harrowing drama. And finally, five, perhaps most surprising,

Today's show includes a defense of fighting in hockey. I'm Jacob Goldstein, and this is What's Your Problem? My guest today is Curtis Van Wallingham. He's the co-founder and CEO of a company called HygroStorm. Curtis's problem is this. How can you store energy by compressing air in giant underground caverns? And how can you do it efficiently almost anywhere in the world?

The idea of compressed air storage has been around for a long time, but it's had some fundamental problems that have limited its use. As you'll hear, Curtis thinks he and his colleagues have solved those problems. Since co-founding the company 15 years ago, HydroStor has built a fully functioning plant and has recently signed multiple billion-dollar contracts to build facilities around the world. Curtis told me he got interested in compressed air back in 2008 when he had kind of a weird problem.

He was working at a power plant that was generating more energy than anyone could use. So I was the head of planning at a nuclear plant. I think it's the world's second largest single-site nuclear plant in Ontario called Bruce Power. And

Because we have so much hydro and nuclear in Ontario, when we started adding wind and solar, we started to see we had too much power. We couldn't export it. And so we would have to shed power, which for a nuclear plant, it means essentially dumping steam into the Great Lakes. But it required a lot of manual labor, moving valves and doing stuff that it wasn't designed to do. So it was driving up maintenance costs. And also it's a bummer, right? Like you're generating, you want to make energy. You don't want to dump steam into a lake. Right.

Exactly. And so then I tried to build a pumped hydro plant because back there, this is 2008. The only real common place to store power was through pumped hydro. So I tried to find a site and it was just impossible to see how you could find a site, get permits and build something in anywhere near a timeframe. And just to be clear, sorry, but pumped hydro is...

is sort of the classic kind of long-duration energy storage, right? Where you pump water essentially up a hill from some lower level to some higher level when you have the power. And then when you want to discharge the battery, you just let it flow downhill and spin a turbine, more or less, right? Exactly. Any hydroelectric dam, just stop the dam from producing and start pumping water back up to the top reservoir. Got it.

And so I tried to do that and realized there was no possible way of doing it. So I had a team of five or six people at the time and I asked them to research, is there other ways of storing power? And that's when I came across my co-founder, Cam, who had this idea. And it's essentially the opposite of pumped hydro put air under water and get the buoyancy. So instead of lifting water and air, why don't you sink air underwater and get the buoyancy?

And, you know, as an engineer, it was kind of intriguing to me. So I thought about it, ran some numbers and, you know, lo and behold, I said, Hey, this is compact. It can be easier to cite. Um, it has all the advantages of pumped hydro, much easier to permit. So took the plunge, quit my job and threw some money in and 15 years later, here we are.

So your co-founder's idea, it was a variation on this old idea of compressed air, right? When you have more energy than you need, use it to compress air underground. And then when you need the energy, sort of blow the air back up and use that to generate energy, right? That's the basic idea. It's an old idea. And in its basic form, it's pretty limited in what it can do, right? Like what are the classic problems with compressed air?

The first one is around how you manage heat. In traditional compressed air, they would compress the air, it gets hot, they would lose that heat, but put the compressed air underground. And when you need it to discharge... When you say they would lose that heat, what does that mean?

They would essentially just compress and then hot air would get sent underground and it would dissipate into the earth. And then when it comes up and you want to expand that air, then the opposite happens. It gets very cold. And because there's moisture in the air, it'll cause icicles and snow and it'll freeze up your turbine going cryogenic, we call it. So that's the problem. It's fine you put it down in the earth and the heat dissipates. That's actually okay. The problem is when you want to...

blow it back up to spin a turbine, it basically freezes the turbine and the turbine snaps or whatever. That's why it's bad. Exactly. It'll ice it up and it won't spin. And so to prevent that, they have to preheat it so they would burn some natural gas so when the air comes up from the cavern, they would heat it up so that once it expands, it doesn't drop below zero. So A, that's inefficient, it costs money, and then B, now, when we're talking about doing this to fight climate change...

It's totally not what you want. Yeah, you have less emissions in a gas plant, but you still have half the emissions, call it. Okay, so that's problem number one, is you've got to burn natural gas to heat up the air when you're blowing it because it gets really cold. What's problem number two with sort of classic compressed air?

Problem number two is just where can you build them? And traditionally, you would only build them where there are salt caverns, and salt caverns are as rare to find as good pumped hydro sites. So once you overlay where does the grid need storage, where is there transmission, the odds that there's a salt cavern there are very, very de minimis. So it just didn't have sites. Why traditionally did it have to be a salt cavern? That seems so random. Yeah.

Because you need so much air and for the air to be at quite high pressures, because it's, um, it gets kind of complicated, but as you think of a scuba tank, you pumping air in, um, the pressure starts rising very dramatically. Well, to get a sufficient amount of air, you've got to go to really high pressures to

that's too high a pressure in most rocks that it would just, you would lose all of the air and force its way out. So it just dissipates. You pump all this air in there and it just goes through whatever cracks or whatever little tiny holes there are. The air just kind of blows out and you don't have compressed air anymore. Exactly. Where salt is airtight. And so that's why you would typically do it in salt. That's why they store a lot of the natural gas in salt. But they're just, the salt formations aren't that common and they're, you know, not where the grid needs them.

Okay. So these are two problems and you encounter this guy who seems to have solved them. Who is the guy and what has he figured out?

So the guy's name is Cameron Lewis, and he's a serial entrepreneur, engineering technician. He worked in the oil patch in Canada, repurposing compressors and turbines for use in the oil patch. Then he moved to Ontario to start developing wind farms. And that's when he realized, look, this wind is so intermittent, I need storage.

And then he was like, how do I make storage? And that's when his mind started going because he is a true entrepreneur. It reminds me, I should have had the name at hand, but I talked to that guy who worked as an engineer in the...

In Texas, Texas and Oklahoma, and sort of brought the technologies of the fracking boom to geothermal energy. Tim Latimer. Yeah, Tim Latimer, Tim Latimer. Some parallels, right, to the story. Very similar. So there are these two problems. One, you have the problem of when you decompress, when you use your compressed air, it gets really cold. Right.

And two, you have the problem that you can only put the compressed air in a few places. Otherwise, it just sort of dissipates. How does using water solve each of those problems? First of all, how does it solve the cold problem? So what we do is when the air comes out hot, it comes out about 230 degrees Celsius.

From the compressor. We run it through a heat exchanger to pull that heat out and we store it in hot water. So on the surface, we have a water tank. Think of an LNG sphere. Okay. Filled with water now at 200 degrees C. So we've captured that energy and that heat that otherwise would have dissipated and we store it and wrap it in insulation. Okay.

Then when the air comes back up, we go in reverse through those heat exchangers and use that same heat to preheat the air so that it doesn't go cryogenic and it eliminates the need for natural gas. Yeah, it's elegant, right? It's so elegant because that heat is actually energy that in conventional compressed air was just getting lost, right? And then you had to provide more energy to heat the air back up. So in your model, you capture that energy...

By heating up water, and then you use the hot water to heat up the air when you're blowing it through the turbine so you don't have to burn gas. Exactly. Moving the round-trip efficiency from 35% to 70%. Satisfying. Very satisfying. Okay, so the other problem is, in the conventional version, you need a salt cavern so that your air doesn't just dissipate through whatever, the little tiny holes in the rock. Right. And why does using water mean you don't need that? You can do it in a lot more places. Right.

So the way our cavern works is if you think of a cavern where 2,000 feet underground, we hollow out, think of a cubic football field.

We backfill it with water, a one-time fill. When you finish construction, you fill it up with water. Now when you're pushing air in, it's moving the water down and lifting it all the way to the surface. Aha. So you just did a hand motion that I want to explain for people listening. So basically, it goes down like whatever, in a sink, in your kitchen sink, it goes down, but then it turns back up. It's like a J, right?

There's basically a pipe that goes down out of the bottom of the cavern and then makes a U-turn and goes up to the surface? That's right. And then at the surface, we have a little pond with enough volume that once the air is full of the cavern, i.e. the cavern's filled with air, all that water that used to be in the cavern has now been lifted up to the surface. And why does this solve that problem? Why does that mean you don't need a salt cavern?

Because the air pressure will move the water down that J-hook and lift to the surface before it would protrude through the rocks. Okay. So this is a very elegant idea. You're still, you're working for a nuclear power plant. You come across this idea, but you don't decide to try it for the nuclear power plant. Like what happens next?

Well, that was my, my desire. And so I asked him, I said, well, what if we wanted to pilot one or build one with you? And he basically said, I have a company name and a patent and that's it. And I don't really know what to do next.

And then I started looking for other options. There was no other options. And I said, look, we're kind of a canary in the coal mine. Every utility is going to ultimately see these challenges eventually. So I saw the opportunity. So I quit my job, drained some savings and joined as the co-founder. And we started HydroStorm. And, you know, now in the past few years, basically since solar took off,

Everybody has been talking about long-duration storage, right? Long-duration energy storage. Everybody was not talking about it then. What solar power cost? What did it cost then? Ten times what it costs now? I don't know. It was not at all like it is now, right? It was not at all obvious that solar power was going to be everywhere and the problem was going to be storage. Like, what were you thinking about at that time in that context?

It kind of comes back to the nuclear power plant because we had half of Ontario's grid was nuclear that can't turn down and 40% of the rest was hydro that can't turn down. So once we added wind and solar, you really started to see the swings.

And I realized that Ontario's grid is very unique. But once you take away your base load, once intermittency is a decent portion of what's left, everyone needs storage. And so I realized that Ontario's grid was just seeing it first, but that every grid will eventually see it when wind and solar penetration rose. Interesting. Basically, you saw it first because...

Nuclear and hydro are uniquely difficult to turn on and off really fast, whereas most other places they're using natural gas, they're using coal, which you can basically turn on and off. So the intermittency was not such an acute problem so early. Exactly. Interesting. You were right about that.

And then once wind and solar started coming on, they started saying, well, we need storage, but we only need 15 minutes. And then that turned to half hour, then an hour, then two, then four. Now it's eight in a lot of markets. Now they're moving to 12. They're even talking 40, 50 hours of storage. And it's true that as the wind and solar penetration rise, your duration of storage keeps growing. And right now,

I'd say roughly a third of the world needs eight-hour storage, and the other two-thirds still aren't there yet. But it's coming. And it's basically the more wind and solar...

you have the larger a share of your power they represent, the longer duration you need for storage. Exactly. And you can firm it up with natural gas to a point, but then you start curtailing so much solar, burning so much natural gas, you stop putting solar on. Whereas with long-duration storage, we allow you to keep adding more solar, more wind, and that's how you get to 100% renewable. I mean, long-duration storage is clearly the...

The problem at this point, right, at least in places where there's a decent amount of solar or wind or wires going to places where there's a decent amount of solar or wind, it does seem like storage in general and long duration storage in particular is the bottleneck.

Yes. And I think that technologies are there now, but we don't have the market structures to properly pay for it and compensate it, which is holding it up from really taking off. So California, Australia, they've been pretty innovative. The UK is doing some stuff now, Ontario and Canada, but it requires you to change market reform. Yeah. I want to get to that. I feel like there's a fair bit to talk about in terms of policy. Yeah.

But first, I want to get you from 2010 to 2025. So you have essentially an idea, right? You have intellectual property and a name and two guys and a dream. Like what, and I don't want to do every day of the last 15 years, obviously, but like what are a few of the key points, like the few key marks you had to hit?

The first one was we worked with the university, University of Windsor, to validate the engineering that it would work, the heat mass balance and all the basic physics were sound. So we did that. Then we ran pool tests. So using underwater structures, we were able to show it at a very small scale to validate the models in real world.

Then we moved to a bigger pilot out in a lake and we built that to further validate. We had a truck with a compressor in it, heat exchangers, big balloons sunk by concrete out in the lake with a hose coming back. Seems cool. Yeah.

Um, that was enough to get, um, enough data to get enough grant money. We secured about eight, 9 million of grant money. Then we were able to attract the venture capital investor, our turn ventures and Toronto hydro was willing to host a pilot plant. So a grid connected one megawatt, one megawatt hour pilot plant. So we took that grant money and the venture money, and we're now six, seven people. And we built this pilot plan.

grid connected and it was pretty neat. We sunk giant structures offshore in the lake. So instead of digging a cavern and filling it with water, we sunk essentially a structure within a lake and connected it back with drill pipe. Like a bubble sitting there on the bottom of the lake? Like a caisson? It was massive. Yeah. And so that data, it proved that everything worked. We optimized the heat exchangers, the control system, and filed a lot more intellectual property. Yeah.

And then, so that was a five year temporary pilot. Once we had that data, then the, an IESO was running a procurement for piloting long duration storage. What's an IESO? Um, electricity system operator here in Ontario. So they ran a pilot. We submitted a bid. We won the contract to build a plant that had a 10 year revenue contract. Okay. A real thing. So you're, that's a real thing. Yeah.

And so that was called our Goderich facility. And we turned that on in 2019 and have been running it ever since. So then we had, we call that our commercial reference facility. So it references our technology, albeit at a fairly small scale. It's two megawatts, eight megawatt hours. But we ran that and then we brought insurance companies through.

and engineering construction companies and said, go through this and tell us why this wouldn't work at a larger scale. And they were able to then give us insurance products and different things that would make a larger project bankable. It's like you're in the infrastructure business, basically, right? And so you need like tons of capital, tons of insurance, right?

Like, right. You got to spend a lot of money now and you'll get paid back every year for whatever, 20 years or something, whatever is the life of it. It's like a big, hard, complicated. Ultimately, you want it to be boring, although I'm sure it's not boring yet business, right? Right. So this was setting us up for that. So then this plant kind of got us all the financial instruments that we would need to do a big one.

So then we went and started developing big plants. We now are about to start construction in Australia for a $1 billion plant and in California for about a $1.5 billion plant. And because we had the pilot plant, we have the insurance, the confidence of the constructors, and we're able to get debt and project level equity and project finance those first two big plants. So now we're in the process of constructing those. And once they're operational, we're

then the technology should be boring and completely de-risked, which would then allow utilities to start building it on their own balance sheet without us having to mobilize all the capital. We would say, you know, UtilityX or a Google or Microsoft or a data center, if you want one, you can pay for it and build it, and we'll just take a technology license fee. So you don't want to be in the infrastructure business. You want to be in the intellectual property business, and you're just in the...

in the infrastructure business to prove that it's a good idea? Yes. I think we'll always stay in the infrastructure business. It's just the opportunity is so huge and these plants are so big. Like we have 18 we're developing. Oh, wow. But each one is a billion and a half. Well, that's, you know, $25, $30 billion. And we're only in a handful of markets. The idea is you're going to finance all of those? Like in the current model, they're yours? Yeah.

They're ours. We're backed by some pension funds, Goldman Sachs. And so we've got a decent amount of capital. We'll keep bringing partners in. But we're not doing anything in India, Japan, China. I can't do that globally. And so the model is allow other people to build it on their balance sheet and become that IP licensing company while we still do the core infrastructure in the markets that we choose to operate in.

Still to come on the show, competing against lithium-ion batteries, making 300 failed pitches, and also what political change in Washington might mean for Hygrostorm. Okay, business leaders, are you playing defense or are you on the offense? Are you just, excuse me, hey, I'm trying to talk business here.

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I was joking with my producer Jacob the other day, who's one of Pushkin's most valuable employees. I hired him to be my assistant years ago in the most random manner possible. I think he saw a message board posting somewhere and I interviewed him for basically 10 minutes and said, go for it. I made a wild gamble on someone and got incredibly lucky.

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I'd heard Curtis talking in other interviews about how hard it was to build his company. And of course, founders always talk about how hard it is to build a company. But somehow when Curtis talked about it, I really felt it, really believed him. And so I asked him to tell me about some of the moments when it got really hard. There were quite a few, to be honest. I mean, one

Certainly was when that structure sunk when we were building that first pilot plant. Yeah, so tell me about that. So this is the first time you're actually doing it. What's happening there? Like you're towing, just what's it look like? It's about the size of a basketball court, maybe 20 feet high. And it's all concrete. Think of a culvert pipe when you're under the highways. Yeah, yeah, okay. A bunch of those.

strapped together, essentially filled with air. So it would float itself almost as a barge. Okay. There was then to be lowered down onto the ground. And then that would serve as our air cavity with water moving in and out. Okay.

And so we get it out to the deep depths of Lake Ontario and we're towing it and a kind of a rogue waves hits and something pops and it starts filling with water where it's not supposed to. And it drops down and smashes on the seafloor. Are you, are you watching it? Where are you when this is happening? Yeah.

I'm at home. Our team is on a barge trailing it and they've got drones down there and cameras. But as you can imagine, when it hits all the plume of sand and stuff comes up. So it's not till the next morning where we see how catastrophic it is, but we knew when we lost it, you're not going to be able to lift this thing up. It's so deep divers can't even go to access it.

I was on the phone, like speakerphone two in the morning, um, at sitting in my son's bedroom, um, while he was sleeping with my wife. Cause I was pulling an all nighter working and yeah. And it was, so then we all just kind of looked at each other and I, you know, told people safely wrap up the work, go home. We had a meeting the next day called the board in and it was essentially we're toast. Um, it was good run, but I think we're done. Um,

And that's when we said, well, we got all risk insurance. Surely this counts as all risk. And to the, to the insurance company's credit, they, they said, yeah, you had all risk. Here's $4 million. Try again, however you want, but we're not insuring the second time. Oh, huh. And we pulled it off the second time we changed design and we got it built. And so we had our plant operational and,

which was a great, great milestone for the team. There was another time when we realized we had to be a developer. We couldn't just jump to that licensing model that we would have to build the first big plan. So was that your initial... So your initial idea was like, let's just do a pilot and show that it works and then license the technology because who are we? We're not going to get billions of dollars to build a gigantic hole in the ground that's got to last for 20 years. That's not us. Exactly. And so then I...

We realized that after talking to dozens of utilities and developers, and everyone said, there's no way I'm building the first one on my balance sheet. Well, that's the nature, right? I mean, it's a famously conservative industry, right? It's highly regulated. They're not going to take a billion dollar risk on a thing that plausibly might not work, right? It wouldn't be crazy if it didn't work.

Yeah, exactly. And so then I had to call my board at the time in and say, we have to be a developer. And they're like, well, that means we got to spark letters of credit. We need tens of millions of dollars and we got to staff up a team that looks completely different than the team of engineers we have. Yeah. So, um,

Then I got on my bike and tried to find an investor that would back that new model. And it took me six months. When you say got on your bike, are you speaking metaphorically or literally? Speaking metaphorically. I was hoping you went on some crazy ride. Well, it was. 300 investors. And I think it was 316th said yes. So it was a long road. We ran out of capital. I had to mortgage my house.

My wife was saying, you're not drawing a salary. You've put in our savings. Now you've mortgaged our house. How do you know the investor is going to come? You've already been rejected a couple hundred times. And then we eventually found an investor that saw the vision and was willing to put that risk capital in to become a developer. I then got a team that was working at Brookfield Renewable. Wait, before you keep going, what did you say when your wife said, why are you doing this? You spent all of our money and more on

And hundreds of people have said no. Like she, I mean, in retrospect, I guess you were right. But like in any kind of expected value, rational universe, she's right at that point. Yeah. What I said was I believe in it.

When I look at first principles, the technology makes perfect sense and the world's going to need it. Like, and so I said, there's no fundamental reason. The whole, the reason the investors were saying no was I'm not the right one. It's too much risk for me. It's too much capital. The timeline's too long. No one said, I don't think it'll work or I don't think long duration storage is needed. So to me, I just had to find the right

fit more so than there was a fundamental problem with what I was doing. And I wasn't willing to give up because I felt so passionate about climate change, but also it was so many people had invested money already at that point. And the team members that had joined me, I didn't want to let everyone down. So I was wanting to turn over every stone until there was absolutely no possible other option. Yeah.

And luckily an investor that had said no before I picked up the phone and called him back and said, you sure you don't want to take a harder look? And he had just received a big payday from another investment. I caught him while he was in a good mood that, you know what? Sure. Let's rekindle these conversations. Uh, and that resulted in an investment, really our series B from Warham partners, uh,

And that allowed us to staff up a development team, gave us the capital to start investing in our Australian project in California. And that's really when the ball started rolling. We had that Goderich facility done and then we started winning contracts and getting interconnect. And now, you know, the team's close to 140 people and in multiple countries and going really well at the moment.

I've heard you mention this moment in, was it 2020? Like in the intense COVID era of COVID when you got the contract in Australia, which was that your first like big contract? That's right. Tell me about that moment.

Yeah, so we started investing in Australia. It was a really creative solution. My commercial team came up. So we offered the utility something they weren't really asking for, but they saw the benefit of it using storage instead of transmission to essentially connect this remote community.

And they won that by the regulatory rules wasn't allowed. So then we had to change the regulatory environment. So it was a long road, but their light came on and said, wow, this is dramatically cheaper, no emissions. So then they became an ally for us, Transgrid, to help change the rules in Australia to allow projects like this to go ahead.

And so we're going through the rules and then, then, um, they say, here's the contract. And so it's a 40 year contract. Um, like I say, a billion dollar plant and, um,

We're starting the permitting work and engaging the stakeholders and then COVID hits and Australia shuts their borders. So then we had to strike a deal with a local team so that they would be our boots on the ground until the border restrictions lifted. And then we ultimately bought that partner back out. So it was a bit of an expensive foray, but allowed the project to keep moving. Did you think it was, was there a minute where you thought COVID was going to mean it wouldn't work?

COVID was another time that I had to mortgage the house because we needed some bridge financing. No investors were investing. Had you paid back the other mortgage or is the value going up? How do you keep mortgaging your house in this story? No, I...

Got paid back that one. And then we were running out of capital again. And we had a bunch of interested investors. But then when COVID hit, they said, look, until I figure out where the world goes, I'm not putting new money to work. So we had to find a way of bridging ourself for a year, which essentially me and some board members did.

loaned the company money from our personal balance sheets to get us through and then we ultimately struck a new investor came in and then ultimately Goldman Sachs and the Canadian pension plan gave us a Very large check at the end of 21 just so I'm not missing any how many times have you mortgaged your house to keep the company going? It would be three or four three or four. Okay, so

I mean, the bigger the company gets, the less helpful it's going to be, unless you keep buying bigger houses, right? Exactly. I'm still in the same house, so it ain't getting any bigger. It's not going to do much if you've got 140 people working for you and you're building billion-dollar plants. Unless it's an amazing house, in which case, congratulations. Yeah.

So I found out about your company when I read that you had been awarded a provisional loan of I think it was $1.7 billion from the U.S. Department of Energy. That was, I don't know, a month ago or something? Yeah.

Which, congratulations. But also, the federal government's a lot different now than it was a month ago. And I'm curious what that means for you. I mean, what political change in the U.S. in particular means for you?

Yeah, I think there's still a bit of uncertainty out there, but we started working with the loan program office three plus years ago. So they've done a tremendous amount of diligence. And this is exactly what this program is set up for is newer technologies that have a ton of domestic content and are going to show a new technology adding to grid resiliency in the U.S.,

So that's what the loan is for. It's to provide the debt for our project in California. And we're putting in a lot of equity into the project and the debt covers obviously the debt to construct and the interest during the construction period.

Um, so we're really excited about the loan. It's a, you know, a legally binding loan. Um, but you know, with the new administration, there's a lot of things moving around, but I think it's aligned with their agenda. It's actually in a Republican County, but it drives, um, grid resiliency and, um,

uh, lowers energy costs for, um, you know, the energy dominance that is required for all the data centers and, and load growth out there. So I think it, and like I said, it's virtually 100% domestic, uh, labor and content that goes into the project. So I think it's, it's consistent with the newest administration's goals and it's a

like I say, a binding loan commitment. So we've got a couple of condition precedents we got to get through before we can start drawing on the loan. But really excited, and it's been great working with the Department of Energy and their tremendous staff. I want to note that you said energy dominance. That's good, right? You got that one. And Republican District is interesting, right? My sense is with the Inflation Reduction Act, you know,

A ton of money for the energy transition, basically. A lot of it has been going to projects in Republican districts. So, I mean, it'll be interesting to see how that plays out politically, right? You mentioned there's a couple conditions. I mean, is it basically if you do certain things, you get the money? Is that what that means? That's right. What are the things?

What are the conditions? If I had to bubble it down to two was we've got one more revenue contract that we've got to sign and then our permits. Our permits are working through the California Energy Commission. We expect roughly Q3, Q4, we would have that permit. So we need those. We need the permit to construct and then the last revenue contract to be signed. So let's talk a little bit about long duration storage kind of more broadly, right? Like

It's a huge problem, as you said. It's a bigger problem the more there is wind and solar power. Lots of people are trying lots of different ways to solve it. Like, give me a sense of the landscape more broadly and where you fit. Like, what are other people doing? And then what are you particularly good at? What's the one thing that you can do more reliably, more cheaply, whatever? Yeah.

Yeah, you almost have to look at it in a kind of a two by two quadrant. Okay. On the one axis is like scale. Is it really big, like city size or is it for the home? Okay. You know, and then on the Y axis, if you would, um, is duration. Okay. So do you need an hour or two of storage or do you need many days or a season of storage? Okay.

We kind of fit in the really large scale. So we are hundreds of megawatts. To give you a sense, it's like a quarter of a city's load. That's the sort of scale. Much bigger than any individual wind farm or solar farm. So we are pretty big scale. Quarter of a city meaning like 100,000 homes? Like something like that?

Hundreds of thousands, if not a million homes. Oh yeah, okay. Yeah, so quite large. And then we tend to do eight hours to 24 hours. So we'll cover you for through the night if you're a solar dominant region, if you got a day or two with low winds, that's where we fit in. We're not seasonal. Like we won't do your spring shoulder season and we're definitely not an hour or two. So lithium ion at both large scale and home

for like six hours and less is dominated by lithium ion. Okay. So they own shorter durations, six hours and less. And then in large scale, really long duration, that's really been the pumped hydro. Yeah. Um, but they're quite limited in what other solutions are out there. And then people are talking hydrogen for seasonal. Yeah. Um, I'm not sure if that's going to make sense or not. Um, but we kind of have a clear where we play now there's, you know, four or five different technologies going at

the other pockets of that grid that I haven't mentioned. So lithium-ion batteries are getting cheaper fast, which is good news for the world. What does it mean for you? I mean, is it the case that the cheaper lithium-ion batteries get, the longer the duration they can economically provide?

Yes. We used to think it was two to four hours. Now they've pushed to six. If the costs keep coming down and tariffs don't kind of reverse the declines, that could move to eight. I can't really see them moving too much farther beyond that. To give you a sense, when today's cost is...

If you install the lithium ion battery, it's about $300 per kilowatt hour of storage capacity. Okay. And it lasts maybe 10 years with degradation and everything in there. Okay.

to add one hour of our system is $50 a kilowatt hour. And it lasts 50 years with no degradation. So it's a pretty, you know, on the marginal basis, it's a pretty high bar. They would have, they would have to drop by an order of magnitude and then they still would have to extend their life by five X to kind of get into the same realm. Um, that's compelling. So what's next? Like, what are you working on now?

construct those two plants. So in Australia and California, construct them on time, on budget, show the world what they can do at scale. While we take those other 18 that we're developing and stack them up ready for construction and

Um, that'll then allow us to start licensing to utilities. And we'd like to partner with groups in Japan and China and India and Europe to start offering the solution in those markets, as opposed to us standing up development teams all around the world. We're predominantly focused in North America and Australia and the UK as a development platform. What are you worried about at this point? Like what might go wrong?

No, I think it's just general team building, culture, project management. You know, there's nothing fundamental with our technology, supply chain, policy environment that I'm really worried about. It's really just execution from our team. I guess there is a bit of the pace for long duration storage will be set by policymakers. Do they fix the rules of the road for the grids? Do they allow...

queue reform so you can get interconnection spots? Will they properly pay for long duration storage? How long do permits take? You know, that sort of thing will dictate the pace of the build out, but I'm confident it's coming. It's just a matter of the pace that it accelerates at. We'll be back in a minute with The Lightning Ring.

I was joking with my producer Jacob the other day, who's one of Pushkin's most valuable employees. I hired him to be my assistant years ago in the most random manner possible. I think he saw a message board posting somewhere and I interviewed him for basically 10 minutes and said, go for it. I made a wild gamble on someone and got incredibly lucky.

But let's be honest, you can't rely on getting lucky when it comes to hiring people. Lightning's not going to strike more than once. You need a system and you need tools. And that's why LinkedIn is so important. LinkedIn is more than just a job board. They help connect you with professionals you can't find anywhere else. Even people who aren't actively looking for a new job.

In a given month, over 70% of LinkedIn users don't visit other leading job sites. So if you're not looking on LinkedIn, you're looking in the wrong place. Hire professionals like a professional and post your job for free at linkedin.com slash gladwell. That's linkedin.com slash gladwell to post your job for free. Terms and conditions apply.

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Let's finish with a lightning round. It'll just be sort of random questions is basically what it's going to be. So I read that you spent many years as an energy consultant living in different parts of the world. And I'm curious, of all of the places you lived, what was the most underrated? It's the place that's great that nobody knows is great. Seoul, South Korea. Oh, interesting. Tell me.

Yeah, I got to spend five months in South Korea. Just, it was a, for a guy that grew up in Northern Ontario and a rural background, being in a city that dense and that intense from a, just a stimulation perspective, I found very compelling and just a very unique culture, unique food, and just a great experience. What's one thing I should do if I go to Seoul? Karaoke. Of course.

What's your go-to karaoke song? Oh, it was the Beatles. I can't remember which one. Hey Jude, I think. Ah, it's a winner. I bet you killed with Hey Jude in Seoul. What's one thing I should do if I go to Kenora, Ontario, your hometown? MS Kenora, a little cruise ship around Lake of the Woods. Beautiful. I cooked there growing up, helping to pay for my fun on the weekends.

You played hockey at the University of Toronto, and I'm curious. I have a friend who's into hockey, and I said, I'm talking to a guy who played hockey. What should I ask him? And he said, ask him what his view is on fighting in hockey. What's your view on fighting in hockey?

It's a bit complicated, but I, it, it keeps everyone honest. So, uh, I'm a supporter. Uh, and you know, there's a, there's a code. If someone doesn't want to fight, you don't fight. Um, but it is a way of keeping things honest. What does that mean? That is in fact, really interesting to me. What does it mean that it keeps everyone honest?

It can be a very dangerous sport. You think of the stick. You can wind up and smash someone in the ankle and smash their ankle and blow out their career. Someone does that, the ref just throwing them in the penalty box isn't fair retribution for something like that. So no one runs around swinging their sticks because they know what would happen if they did such a thing. That's really interesting. What's one thing you tell somebody who's becoming a CEO for the first time?

You know, I don't know that I'm at the stage where I'm giving advice yet. I'm still figuring it out. 15 years is a long time, man. Yeah, I guess so. I still feel like I'm learning as I'm going, but I guess I would say it's about the team more than anything. You can only do so much in the early days. You're doing a lot, but then it's about the team, team, team. Surround yourself with the best possible people, and it's amazing. I wake up every day just amazed with what the team does and gets accomplished and

You just start realizing the power of other people and how much strength there is in the numbers and in the team. So I'd just be focused on getting the right team. I heard you say that if you had known when you started the company how hard it was going to be, what you know now, you wouldn't have done it. And so I'm curious, like, do you think 15 years from now, if you look back at 2025, you would say, man, if I'd have known how hard that 15 years would be, I would have got out in 2025? Yeah.

No, I think I've made it through the J curve, if you will. Like your pipe. You're on your way up to the surface. That's right. Yeah, no, it's now, because I think if it would have failed, call it four or five years ago, I wouldn't have had much success.

pride in it. Like there's some pride, but we didn't accomplish much. We didn't, we, it wasn't that big of a team. We didn't accomplish many milestones. We didn't raise that much money. So I basically just burned my personal capital and years of my life. And I think people would have scoffed because a lot of people were scoffing at us saying, what are you guys doing? This doesn't make any sense. And it just would have fulfilled those. And I think I would have been pretty embarrassed to be honest.

Whereas now I think we've accomplished a lot. I would be proud and I'd look back and say, you know, we made a really good go at it. And, but I think moving forward, it's just, it's just up from here. So I'm excited for the next 15 years. Great. Thank you for your time. It was great to talk with you. Thanks, Jacob. It's been a pleasure. Curtis Van Wallingham is the co-founder and CEO of HygroStorm.

Today's show was produced by Gabriel Hunter Chang. It was edited by Lydia Jean Cott and engineered by Sarah Bruguier. You can email us at problem at pushkin.fm. I'm Jacob Goldstein, and we'll be back next week with another episode of What's Your Problem?

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Don't wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash P-O-D-K-A-T-Z 13. Just go to Indeed.com slash P-O-D-K-A-T-Z 13 right now and support our show by saying you heard about Indeed on this podcast. Terms and conditions apply. Hiring? Indeed is all you need.